Bilhete v. Wong, 2013 ABQB 514

Court of Queen ’ s Bench of Alberta Citation: Bilhete v. Wong, 2013 ABQB 514 Date: 20130913 Docket: 0603 11175 Registry: Edmonton Between: Clinton Louis Bilhete and Louis Manuel Bilhete Plaintiffs (Respondents) - and - Vincent Wong, Material Processing Canada Inc., and Canrose Mining (Alberta) Ltd. Defendants (Applicants) Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _ ________________________________________ ______________ Reasons for Judgment of the Honourable Madam Justice D.C.

Read _________________________________________ ______________ Factual Background: [ 1 ] The Defendants brought an application to have the Plaintiffs found in contempt for failure to answer undertakings, for dismissal of the action for delay, or alternatively for the Plaintiffs to give security for costs. [ 2 ] This is an action for damages which alleges that the Plaintiffs advanced certain funds to the Defendants which funds were used to purchase lands.

The lands are held in the name of Material Processing Canada Inc. (“MPCI”) and the Plaintiffs alleged in their Statement of Claim that, Louis Bilhete instructed Vincent Wong to incorporate two corporations, MPCI and Canrose Mining (Alberta) Ltd. (“Canrose Alberta”). Louis Bilhete instructed Wong to make Clinton Bilhete, his son, the sole shareholder of both corporations, and

Louis Bilhete provided the funds to Wong to purchase lands which were to be owned by MPCI. The Plaintiffs claimed that Wong was acting as their agent and, in breach of his fiduciary duty, failed to make Clinton Bilhete 100% shareholder of MPCI. [ 3 ] The action was commenced by Statement of Claim on September 8, 2006. A Statement of Defence was filed on October 6, 2006 and amended on September 29, 2010.

The Defendants allege that the last thing done by the Plaintiffs which materially advanced this action occurred on March 24, 2009 when the Plaintiffs examined Wong for discovery. [ 4 ] The Defendants allege further that the Plaintiffs have failed to answer all of the undertakings given at examinations for discovery (questioning) of Louis Bilhete held on November 12, 2009, notwithstanding two orders requiring answers to undertakings – one made by Master Smart on January 11, 2010 and a second granted by Master Wacowich on September 21, 2010. [ 5 ] The Plaintiffs assert that all undertakings have been answered to the best of Louis Bilhete’s ability given the passage of time and the unavailability of certain documents.

In respect to the application to strike, the Plaintiffs say that in September 2010, they made a cross application in an application made by the Defendants to remove a lis pendens filed by the Plaintiffs and obtained a preservation order and this was something that advanced the action. In any case they say the Court may but is not required to dismiss the action for delay. Issues: [ 6 ] Three issues are raised by the Applicant Defendants in their written materials. However, at the hearing, they acknowledged that sufficient time had not elapsed for them to be successful on the application to strike.

These reasons deal with the Applicant’s two remaining applications: a. Is the Defendant Louis Bilhete in contempt of Court for failure to answer undertakings, and if so, what remedy should be granted? b. Should the Plaintiff have security for costs? Analysis: Contempt issue: [ 7 ] The Applicant says that the outstanding undertakings, given by Louis Bilhete, are the four outlined at paragraph 4 of Master Wacowich’s September 21, 2010 order. These are set out below together with the responses received: i.

Louis Manuel Bilhete shall forthwith use his best efforts to obtain documentation evidencing the alleged loan from Mr. Christofferson, including obtaining documents relating to this loan and the receipt and the disbursement of funds pursuant to the loan in the possession of either Mr. Christofferson or Mr. Bilhete’s counsel, Mr.

Hodgson, and will request any banking information with respect to the receipt and disbursement of these funds and will provide counsel for the Defendants with any such documentation received and copies of the requests for this information; Response: “Our client has no documentation of any loan with Mr. Gregg Kristofferson but Mr. Kristofferson has confirmed the loan orally to our client and has provided the telephone number of 1-801-232-7316 for you to speak to him directly regarding the same. He advises that you may call after 2:00 pm.” A copy of a letter addressed to David J.

Hodgson, Attorney at Law dated October 4, 2010 was also provided together with a letter dated March 23, 2012 from an entity called ‘Patriot Title’ and signed by David J. Hodgson, Manager. This letter says in its entirety “Pursuant to your inquiry, the funds held in escrow by Patriot Title Insurance Agency LLC, in 2004 and 2005 were under the power and control of Louis Bilhete and were transferred at his request.” ii.

Louis Bilhete will provide copies of the leases that were alleged to have been forged by Michael Oscar with legible signatures; Response: By letter of October 4, 2010, copies of leases were provided but with their signatures blacked out. iii. Louis Bilhete will identify in the bank records for 730569 Alberta Ltd. For the years 1999 and 2000, which funds were received from either Mr. Bilhete’s personal bank account at Bank One America, or the Canrose Mining Ltd.

Account at Bank One America; Response: Some bank records had already been provided in response to another undertaking prior to the order made by Master Wacowich, together with a response “As the bank statements are clear on their face, such identification is superfluous”. No further response was provided after the Wacowich order. iv. Louis Bilhete will identify the source of any deposits shown: 1. In the bank accounts of Canrose Mining Ltd. at Bank One America; 2. Account no. 20861[...] at Bank One America; 3. The bank records for 730569 Alberta Ltd.

Response: Some bank records had already been provided in response to another undertaking prior to the order made by Master Wacowich, together with a response “As the documents in undertaking 11 are clear on their face, such identification is superfluous”. No further response was provided after the Wacowich order. [ 8 ] None of the Respondents filed an affidavit in response to the application. In their written brief, their counsel argues that Mr.

Bilhete has provided the documents in his possession and has requested the documents not in his possession and says that due to the passage of time, some documents are simply unavailable. It is argued that Mr. Bilhete has provided answers to all the undertakings given to the best of his ability and his behaviour does not warrant the “grave finding” of contempt of court. [ 9 ] With the exception of the first, the unanswered undertakings as outlined in Master Wacowich’s order were not to be answered on a best efforts basis. They were unambiguous and required not just efforts but also responses.

There is no doubt that the answers provided to the undertakings given are unresponsive and incomplete and with respect to the latter two, completely unanswered. [ 10 ] Failure to obey court orders constitutes civil contempt. I direct therefore that Mr. Louis Bilhete be served with Form 47 in accordance with Rule 10.51 and appear before me to show cause why he should not be declared in civil contempt for failing to answer the undertakings he was ordered to answer.

Counsel are directed to set this matter before me for one hour at a date and time within six weeks of the date of issuance of this order, to be agreed to between counsel, and scheduled with the trial coordinator’s office. Security for Costs issue: [ 11 ] The factors to be considered in an application for security of costs are set out in R. 4.22 which reads as follows: 4.22 The Court may order a party to provide security for payment of a costs award if the Court considers it just and reasonable to do so, taking into account all of the following: (

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta; (

b) the ability of the respondents to the application to pay the costs award; (

c) the merits of the action in which the application is filed; (

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the action; (

e) any other matter the Court considers appropriate. [ 12 ] The Applicant Defendants argue that the Plaintiffs’ claims are weak. The Plaintiffs have provided little documentary evidence and none with respect to some of their claims. The basis of their claims has changed over time and particularly, in respect to their claim for an interest in the lands, because they have provided no written document, memorandum or note relating to it, they are caught by the Statute of Frauds, as has been pleaded by the Defendants.

They have delayed and failed to pay costs ordered by Master Smart as far back as 2007. [ 13 ] The Plaintiff Respondents argue that their case in conversion against the individual Defendant Wong is strong. They say that any delay can be dealt with by imposition of deadlines through a litigation plan and say that they are all resident Albertans and there is no evidence that they are impecunious or otherwise unable to pay costs. [ 14 ] I am not the trial judge and none of the evidence has been weighed. Nonetheless, I have read the transcripts of large portions of the discovery evidence given by Louis Bilhete.

His evidence is confusing and often contradictory to what has been plead. Additionally, the Statute of Frauds provides a strong defence to a claim against land which is unsupported by any written documentation. I conclude that the Plaintiffs’ case is not a strong one. Further there has been long delay and because the order made by Master Wacowich discharging the lis pendens filed against the land disables the land from being sold or otherwise dealt with, the land has essentially been frozen since the original caveat was filed.

As the Applicants point out, essentially, they have had to provide security, in the form of the land, since this action was commenced. Further there is the undisputed fact that the Plaintiffs have failed to pay some $800 in costs ordered by Master Smart. No evidence has been provided by the Plaintiffs to show their ability to pay or that security is otherwise not necessary. [ 15 ] In these circumstances, an order for security for costs is appropriate. The Applicants ask for $37,500 which they say is a reasonable estimate of the amount of the costs which might be ordered if the action is dismissed.

The Respondents say that a cost order of that magnitude would disable them from continuing with the lawsuit. [ 16 ] The purpose of an order for security for costs is not to disable the plaintiffs from pursuing their claim. Still less should it create delay in this action which has already been much delayed. I will therefore order that security be posted in stages. Before the Respondents may request any further questioning of the Defendants, assuming this is necessary they must post $5000 in costs.

Before they set this matter down for trial, they must post a further $5000 or, if no further questioning has been requested, then $10,000 must be posted. These funds must be held in court until the action is discontinued, tried, or otherwise finalized and will then be disbursed in accordance with any order for costs or by agreement of the parties. Heard on the 28 th day of August, 2013. Dated at the City of Edmonton, Alberta this 12 th day of September, 2013.

D.C. Read J.C.Q.B.A. Appearances: Jason R. Thomas Hladun & Company for the Plaintiffs (Respondents) Patrick D. Kirwin Kirwin LLP for the Defendants (Applicants)