A. & S. Lui Holdings Inc. et al. v. Slay et al. Date:, 2017 BCPC 416

Citation: A. & S. Lui Holdings Inc. et al. v. Slay et al. Date: 20171222 2017 BCPC 416 File No: 15-24859 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: A. & S. LUI HOLDINGS INC. AND WIESLAW MOTYKA CLAIMANTS AND: MARK SLAY, NORTH SHORE LAW LLP AND MALGORZATA JASZCZEWSKA DEFENDANTS RULING ON APPLICATION BY THE HONOURABLE JUDGE M.F. GIARDINI Representing the Claimants: J. Kostanski Counsel for Defendant, M. Slay and North Shore Law, LLP: J. Bryant Councel for Defandant, M. Jaszczewska L. Cruickshank Place of Hearing: North Vancouver , B.C. Date of Hearing: April 10, 2017 Date of Judgment: December 22, 2017 INTRODUCTION

[ 1 ] The dispute in this case arose following Malgorzata Jaszczewska’s decision to file a Notice of Family Claim (“the family claim”) against her common-law husband, Jerzy Kostanski, and to file Certificates of Pending Litigation (“CPLs”) against certain strata properties owned by the claimant A. & S. Lui Holdings Inc. Mr. Kostanski, and the personal claimant, Wieslaw Motyka, were the sole shareholders of 540888 B.C. Ltd., (“the numbered company”) that owned A. & S. Lui Holdings Inc. The family law claim between Ms. Jaszczewska and Mr.

Kostanski was dealt with in the Supreme Court of British Columbia, see: Jaszczewska v. Kostanski , 2015, BCSC 727 . However, in a Notice of Claim filed in Small Claims Court (‘the claim”) on July 20, 2015, the claimants A. & S. Lui Holdings Inc. and Mr. Motyka sued Ms. Jaszczewska, her lawyer Mark Slay, and the law firm in which he is a partner, North Shore Law LLP. [ 2 ] The bases for the claim filed in this court by A. & S. Lui Holdings Inc. and Mr. Motyka will be addressed in more detail below.

However, for the purpose of this introduction, it is sufficient to note that the claimants maintain the defendants engaged in wrongful actions including, but not limited to, joining A. & S. Lui Holdings Inc. as a party in the family claim initiated by Ms. Jaszczewska in the Supreme Court of British Columbia and filing CPLs against several strata properties owned by A. & S. Lui Holdings Inc. [ 3 ] This decision addresses applications filed by the defendants Ms. Jaszczewska, Mr. Slay, and North Shore Law LLP to dismiss the claim made against them by the claimants, A. & S. Lui Holdings Inc. and Mr. Motyka.

By way of their applications, Mr. Slay and North Shore Law LLP and Ms. Jaszczewska seek dismissal of the claim on the basis that it is statute barred as it was not filed within the time limit set out in the applicable limitations legislation. Further, they seek costs pursuant to s.20 (Fees and Expenses) of the Small Claims Rules, on the basis that the claim has no reasonable basis of success. They also seek dismissal on the basis that the principle of res judicata applies. [ 4 ] The claimants, A. & S. Lui Holdings Inc. and Mr. Motyka oppose the defendants’ applications to dismiss the claim.

They maintain their claim is not statute barred and is not res judicata . [ 5 ] With the permission of the court, and at Mr. Motyka’s express request, Mr. Kostanski was allowed to represent his friend and business partner Mr. Motyka and the corporate claimant on this application. ISSUES RAISED IN THIS APPLICATION [ 6 ] The following issues are raised as a result of the defendants’ applications to dismiss:

a) Had the limitation period expired when A. & S. Lui Holdings Inc. and Mr. Motyka filed the claim in Small Claims Court on July 20, 2015?

b) When did the claimants discover the claim against the defendants? MATTERS NOT IN DISPUTE [ 7 ] The following matters are not in dispute:

a) The initial filing of the CPLs occurred before June 1, 2013.

b) The CPLs were subsequently removed by a consent order.

c) The consent order was filed in the Supreme Court of British Columbia on July 22, 2013.

d) The CPLs were cancelled from the titles of seven strata properties on July 23, 2013.

e) On June 1, 2013, the Limitation Act S.B.C. 2012, c. 13 (“the current Limitation Act ”), came into force. Before that date the Limitation Act , R.S.B.C. 1996, c. 266 (“the former Limitation Act ”) applied to issues concerning the applicable limitation periods for commencement of a legal proceeding and how the limitation periods should be calculated.

f) The basic limitation period applicable to the claim filed by A. & S. Lui Holdings Inc. and Mr. Motyka is two years, no matter which of the two limitation acts apply.

g) The parties agree that the current Limitation Act applies to the claim before this court. In particular, the parties agree that s. 8 of the current Limitation Act sets out the general discovery rules which ought to be applied by this court in determining when the two-year limitation period began to run. BACKGROUND [ 8 ] In 2013, the claimant A. & S. Lui Holdings Inc. was a company registered in British Columbia. It was the registered owner of seven strata properties located at 2138 Old Dollarton Road, North Vancouver, British Columbia.

The seven strata properties were newly constructed and being marketed for sale by A. & S. Lui Holdings Inc. in the spring and summer of 2013. [ 9 ] The sole shareholder of A. & S. Lui Holdings Inc. was a numbered company, namely, 540888 B. C. Ltd. (“the numbered company”). The shares of the numbered company were owned by the claimant Mr. Motyka and Mr. Kostanski. Each one of them owned 50% of the numbered company shares. Mr. Motyka and Mr. Kostanski were the directors and officers of the numbered company and of A. & S. Lui Holdings Inc. Mr. Motyka was a professional engineer and a businessman.

At the time the events relating to this matter unfolded in 2013, he was 70 years old. Mr. Kostanski was a businessman. [ 10 ] The defendant Ms. Jaszczewska was the common-law spouse of Mr. Kostanski. On May 1, 2013, through her lawyer Mr. Slay, she filed the family claim in the Supreme Court of British Columbia. Mr. Kostanski and A. & S. Lui Holdings Inc. were named as respondents. On or about that time, Ms. Jaszczewska also instructed Mr. Slay to file a CPL against the former family home in West Vancouver. As well, on May 2, 2013, on her instructions, Mr.

Slay filed CPLs at the New Westminster Land Title Office against each of

seven unsold strata properties owned by A. & S. Lui Holdings Inc. [ 11 ] The defendant Mark Slay is a lawyer and a partner in the law firm North Shore Law LLP. At the time, Mr. Slay and his firm represented Ms. Jaszczewska. As noted above, Mr. Slay, on Ms. Jaszczewska’s behalf, commenced the family claim against Mr. Kostanski (Action Number E131314) in the Supreme Court of British Columbia on May 1, 2013. [ 12 ] In early May 2013, (the claimants could not remember the date) Mr. Motyka and Mr. Kostanski advised Jon Ardagh, the corporate lawyer for both A. & S.

Lui Holdings Inc. and the numbered company, that CPLs had been filed against seven strata properties owned by A. & S. Lui Holdings Inc. [ 13 ] On May 3, 2013, Mr. Slay sent a letter to David Batist, Mr. Kostanski’s lawyer, which advised that Ms. Jaszczewska had filed the family claim and asked whether Mr. Batist would accept/or effect service. Mr. Slay and Mr. Batist also had a telephone conversation that same day. [ 14 ] On May 8, 2013, Mr. Batist wrote to Mr. Slay advising he represented Mr. Kostanski, but not A. & S. Lui Holdings Inc., in respect of the family claim in the Supreme Court of British Columbia.

In that letter Mr. Batist referred to the fact that Ms. Jaszczewska had filed CPLs on the properties owned by A. & S. Lui Holdings Inc. Mr. Batist noted Mr. Kostanski was concerned about the effect the CPLs would have on draws under the construction mortgage and requested that the CPLs be cancelled immediately. [ 15 ] On May 9, 2013, Mr. Ardagh, on behalf of A. & S. Lui Holdings Inc., wrote a letter to Mr. Slay requesting the CPLs be removed forthwith. That letter was faxed to Mr. Slay’s office on May 9, 2013. Mr.

Ardagh wrote that various strata lots were listed for sale and two were specifically the subject of interest to prospective buyers. He noted that the presence of the CPLs, “…. could prove highly detrimental to the Company, not only for those lots presently subject to negotiation, but also for all the remaining units.” Mr. Ardagh also wrote that a lost sale or lowered sale price, together with the extended continuance of the outstanding mortgage loan, “…. will result in loss to the Company and could lead to a claim for damages against your client”. [ 16 ] On May 16, 2013, Mr. Batist, counsel for Mr.

Kostanski, wrote to Mr. Slay. That letter contained the following statements:

a) Mr. Kostanski was a director and officer of A. & S. Lui Holdings Inc. but not a shareholder.

b) The sole shareholder of A. & S. Lui Holdings Inc. was 540888 B.C. Ltd, the numbered company.

c) Mr. Kostanski was a 50% shareholder of the numbered company as well as an officer and director of that company.

d) The filing of CPLs by Ms. Jaszczewska will prevent A. & S. Lui Holdings Inc. from selling its assets which will result in damages to A. & S. Lui Holdings Inc., to 540888 B.C. Ltd., to Mr. Kostanski, and to the other shareholder. It will also deprive Mr. Kostanski and his partner of receipt of any proceeds of such sales.

e) If Ms. Jaszczewska did not agree with the resolution proposed in the letter, Mr. Batist’s instructions were to immediately proceed to court for an order to cancel all CPLs.

f) It was Mr. Batist’s understanding that A. & S. Lui Holdings Inc. would bring its own application seeking discontinuance of the action against it and cancellation of the CPLs. A. & S. Lui Holdings Inc. may also seek damages against Ms. Jaszczewska. [ 17 ] On June 3, 2013, Mr. Ardagh, the corporate lawyer for A. & S. Lui Holdings Inc., swore or affirmed an affidavit in the Supreme Court of British Columbia (Action Number E131314). In that affidavit Mr. Ardagh stated he had received instructions from the directors of A. & S. Lui Holdings Inc. to advise Mr. Slay, Ms.

Jaszczewska’s counsel, that the filing of the CPLs against the strata lots, “…. was detrimental to the Company’s attempts to sell the units and could result in damages and loss to the Company....”. [ 18 ] On June 3, 2013, Mr. Motyka swore or affirmed an affidavit in support of A. & S. Lui Holdings Inc.’s application in the Supreme Court of British Columbia (Action Number E131314). That affidavit was filed at the Supreme Court of British Columbia registry on June 5, 2013. In that affidavit Mr.

Motyka stated that the sale proceeds of the next one or two lots would be required to fully retire the related loan, which at that point continued to accrue interest. He further stated there was activity regarding pending sales on several strata lots and it had been necessary to advise potential buyers of the CPLs. He stated, “…. It is unknown at this point whether the sales will collapse.” [ 19 ] In the June 3, 2013, affidavit Mr. Motyka also specifically referred to strata lot 14 – suite 306. He noted the prospective purchasers had been informed of the existence of the CPLs. Mr.

Motyka commented, “…. which could result in this sale not completing, due to the property claims of the claimant advanced against the remaining seven strata lots….”. [ 20 ] In the June 3, 2013, affidavit Mr. Motyka further stated under oath or affirmation that he and Mr. Kostanski instructed the solicitor of A. & S. Lui Holdings Inc., Mr. Ardagh, to contact Mr. Slay, “…. for the purpose of trying to get the seven CPLs cancelled to avoid having the CPLs cause difficulties in the attempts of the Company to sell its seven strata lots.” [ 21 ] Attached to Mr.

Motyka’s affidavit of June 3, 2013, was an exhibit (Exhibit

L) which was an unfiled notice of application by A. & S. Lui Holdings Inc. against Ms. Jaszczewska. That notice of application was later filed on June 5, 2013. Under “Factual Basis” at paragraph 7 of the unfiled notice of application it states that Mr. Slay was advised, “.…that the presence of the filed C.P.L.’s could prove highly detrimental to the Company and could lead to lost sales or lowered sale prices resulting in losses to the Company and lead to a damages claim against the claimant.” [ 22 ] Under “Factual Basis”, at paragraph 8 (

d) of the unfiled notice of application attached to Mr. Motyka’s affidavit, it states that Mr. Batist wrote to Mr. Slay on May 16, 2013, and informed him, among other things, “That the filing of the C.P.L.’s on behalf of the claimant will prevent the Company from selling its assets which will result in damages to the Company, to 540888 B.C. Ltd., to Kostanski, and to the other shareholder in 540888 B.C. Ltd. and will deprive Kostanski and his partner of receiving any proceeds.” In

the same paragraph of the “Factual Basis” it states that, “The ongoing sale attempts by the Company may have been jeopardized or adversely affected by the refusal of the claimant to cancel the C.P.L.’s still registered against the strata lots of the Company.” [ 23 ] Under “Legal Basis”,

Part 3 at paragraph 4 of the unfiled notice of application attached to Mr. Motyka’s affidavit, there is reference to strata lot 14 – suite 306 and suite 202 and to the fact there were prospective purchasers for these units. In particular it is noted, “…these sales could be lost due to the CPL’s registered against these Strata properties.” [ 24 ] The CPLs were not removed. Accordingly, A. & S. Lui Holdings Inc. retained Robert Johnson as litigation counsel to make an application in the family claim for an order dismissing Ms. Jaszczewska’s action against A. & S.

Lui Holdings Inc. and for an order cancelling the registration of the CPLs. [ 25 ] On June 4, 2013, Mr. Johnson wrote to Mr. Slay to advise he would be representing A. & S. Lui Holdings Inc. with respect to the family claim in the Supreme Court of British Columbia. He also advised Mr. Slay that a

summary trial application would be filed on behalf of A. & S. Lui Holdings Inc. He attached a notice of change of lawyer to that letter. That notice of appointment was filed with the Supreme Court of British Columbia registry on May 29, 2013. [ 26 ] On June 5, 2013, Mr. Johnson filed an application on behalf of A. & S. Lui Holdings Inc. at the Supreme Court of British Columbia registry. The orders sought under that application were that all claims against A. & S. Lui Holdings Inc. made by Ms. Jaszczewska be dismissed, that the CPLs filed by Ms. Jaszczewska against seven strata lots on Old Dollarton Road be cancelled, and that special costs be awarded. [ 27 ] The “Factual Basis”

section of the notice of application contained background information including the following:

a) Since June 30, 1997, and continuing to the present time, the sole shareholder of A. & S. Lui Holdings Inc. was 540888 B.C. Ltd.

b) The only directors of A. & S. Lui Holdings Inc. were Mr. Kostanski and Mr. Motyka.

c) Since February 1, 2010, the only directors of 540888 B.C. Ltd. were Mr. Kostanski and Mr. Motyka.

d) Since February 1, 2010, the only shareholders of 540888 B.C. Ltd. have been Mr. Kostanski and Mr. Motyka. Each of them owned 50 Class A common shares in the numbered company.

e) A & S. Lui Holdings Inc. was the sole legal and beneficial owner of seven strata lots. It was in the process of marketing those lots. Once the CPLs were filed, it was necessary to advise potential buyers of the CPLs. [ 28 ] On June 10, 2013, Master Muir of the Supreme Court of British Columbia considered an application relating to a CPL Ms. Jaszczewska had filed on the former family residence owned by Mr. Kostanski. He directed the cancellation of the CPL on the former family residence on conditions. [ 29 ] On June 11, 2013, Mr. Slay wrote to Mr. Johnson to advise him that Ms.

Jaszczewska was seeking another lawyer to represent her in the family claim. Accordingly, Mr. Slay and North Shore Law LLP ceased acting for Ms. Jaszczewska. Shortly thereafter, Ms. Jaszczewska retained Paul Daltrop to represent her. In the meantime, a notice of intention to act in person was filed. [ 30 ] On June 12, 2013, Mr. Johnson wrote to Ms. Jaszczewska directly. He wanted to know Ms. Jaszczewska’s intentions regarding A. & S. Lui Holdings Inc.’s application to cancel the CPLs. In his letter to Ms. Jaszczewska, Mr. Johnson noted that, “…. the company should never have been made a party to this action….”.

Furthermore, he stated that registration of the CPLs against the seven strata lots, “.… has created significant legal difficulties in attempting to sell those strata properties.” [ 31 ] On June 13, 2013, Mr. Daltrop wrote to Mr. Johnson acknowledging he was representing Ms. Jaszczewska. He also asked if the

summary trial application to remove the CPLs could be moved to June 21, 2013. [ 32 ] On June 17, 2013, Mr. Daltrop wrote a without prejudice letter to Mr. Johnson. In that letter he stated Ms. Jaszczewska would agree to the removal of the CPLs and a dismissal of all claims against A. & S. Lui Holdings Inc. on certain conditions. [ 33 ] On June 18, 2013, Mr. Johnston replied, on a without prejudice basis, and advised that A. & S. Lui Holdings Inc. was prepared to settle the claims advanced against it on the following terms:

a) a consent order be entered into that Ms. Jaszczewska’s claims against A. & S. Lui Holdings Inc. be dismissed;

b) the seven CPLs against the strata lots of A. & S. Lui Holdings Inc. to be cancelled;

c) A. & S. Lui Holdings Inc. will abandon its claim for special costs against Ms. Jaszczewska;

d) Ms. Jaszczewska will pay $5000 in costs to A. & S. Lui Holdings Inc. [ 34 ] On June 19, 2013, Ms. Cruickshank, a lawyer in Mr. Daltrop’s office, accepted the conditions but counter-offered to pay only $4000 in costs to A. & S. Lui Holdings Inc. Later that same day, Mr. Johnson replied accepting the settlement proposal set out in Ms. Cruickshank’s letter of June 19, 2013. [ 35 ] On June 25, 2013, Mr. Johnson wrote to Mr. Daltrop and forwarded a draft consent “settlement” order for his review. The following day, June 26, 2013, Mr.

Daltrop replied and enclosed that consent order duly endorsed. [ 36 ] On July 16, 2013, Mr. Johnson wrote to Mr. Daltrop enclosing a replacement consent dismissal order. The replacement order had to be signed because the previously sent consent order omitted a provision that it was also being approved and consented to by

Mr. Kostanski’s lawyer, Mr. Batist. [ 37 ] On July 22, 2013, the consent order was entered at the Supreme Court of British Columbia registry. Pursuant to that consent order, Ms. Jaszczewska’s claims against A. & S. Lui Holdings Inc. were dismissed. As well, the CPLs against the seven strata properties were to be cancelled. A. & S. Lui Holdings Inc. abandoned its claim for special costs from Ms. Jaszczewska. She agreed to pay $4000 in costs to A. & S. Lui Holdings Inc. following the final settlement or determination of the family claim against Mr.

Kostanski. [ 38 ] On July 23, 2013, the CPLs were cancelled from the titles of the seven strata properties. [ 39 ] On May 5 to 9 and June 4 to 6, 2014, the family claim between Ms. Jaszczewska and Mr. Kostanski was heard in the Supreme Court of British Columbia. [ 40 ] On May 4, 2015, Baker J. issued a decision. The issues regarding the shares in the numbered company were addressed at paragraphs 110 to 114 inclusive. The court noted there was no dispute that Mr.

Kostanski’s 50% interest in the numbered company was family property because the shares were acquired during the relationship and were purchased with loans secured by a mortgage on the former family home. The court found that Ms. Jaszczewska’s interest in the shares and shareholder loans of the numbered company was valued at $321,152. That amount, as well as her interest in the former family home and another company, was taken into account in arriving at Ms. Jaszczewska’s share of the division of family property and family debt.

The 2015 Small Claims Court notice of claim [ 41 ] On July 20, 2015, the claimants filed the claim against the defendants for $25,000, plus filing fees, and service fees, for damages arising out of the alleged wrongful actions of the defendants in respect of certain strata properties located at 2138 Old Dollarton Road, North Vancouver, British Columbia.

The claimants sought exemplary damages, or aggravated damages or punitive damages, in addition to any other damages arising out of the alleged wrongful actions of the defendants. [ 42 ] In their notice of claim the claimants alleged, among other things, that the defendants abused court processes, joined A. & S. Lui Holdings Inc. to the family action for an improper purpose, and intentionally interfered with economic relations.

The claimants asserted that as a result of the defendants’ wrongful actions they sustained financial losses, including but not limited to, loss of market value in at least one of the strata properties and additional expenses, such as loan financing expenses. [ 43 ] The claimants asserted the damages arose from the loss of full market value of one of the units, delays in receipt of strata properties sale proceeds, and additional loan financing expenses arising out of the suspension of any sales of the strata properties for a period of three months in 2013.

Additionally, the claimants maintained that the wrongful actions of the defendants caused financial loss, namely, $22,908 for the legal work of litigation counsel, Mr. Johnson, and legal expenses of $2352 for the legal work of corporate lawyer, Mr. Ardagh. [ 44 ] The claimants also maintained that the personal defendant Mr. Motyka suffered mental distress and anxiety as a result of the defendants’ wrongful actions. [ 45 ] Further the claimants maintained that the wrongful actions of the defendants constituted an intentional interference with the economic relations of the claimants in various respects.

The defendants’ reply to the 2015 notice of claim [ 46 ] The defendant Ms. Jaszczewska, the former spouse of Mr. Kostanski, commenced the family claim against Mr. Kostanski on May 1, 2013. As noted, at the time, she arranged for CPLs to be filed against properties owned by A. & S. Lui Holdings Inc. She maintained the claim filed by the claimants did not support a case against her. Moreover, she maintained that pursuant to the Supreme Court of British Columbia order dated July 22, 2013, the matters between her and A. & S.

Lui Holdings Inc. were settled and therefore the claim against her is res judicata . [ 47 ] The other defendants, Mark Slay and North Shore Law LLP, maintained that Mr. Motyka and A. & S. Lui Holdings Inc. suffered no damages. With respect to Mr. Motyka they asserted that, as a shareholder of A. & S. Lui Holdings Inc., he had no personal claim against the defendants because all his rights as a shareholder were subsumed by the corporate claimant, A. & S. Lui Holdings Inc. Moreover, they also maintained the claim is statute barred by the two-year limitation period. [ 48 ] Further, the defendants Mr.

Slay and North Shore Law LLP, maintained the matter is res judicata by virtue of a consent order made by the Supreme Court of British Columbia (Action Number E131314) on July 22, 2013. Accordingly, they said the Supreme Court of British Columbia has exclusive jurisdiction over this matter pursuant to that consent order and its jurisdiction over land and CPL litigation in British Columbia. Additionally, the defendants Mr. Slay and North Shore Law LLP maintained the claim against them is an abuse of process and this court should award penalty costs against the claimants.

They submitted the claim should be dismissed immediately. The 2017 applications to dismiss [ 49 ] In late January and early February 2017, the defendants filed applications in Small Claims Court to have the claimants’ claim dismissed. Ms.

Jaszczewska filed an application on January 31, 2017, seeking an order that the claim against her be dismissed and a further order that the claimants pay her costs on the basis that they proceeded with the claim when there was no reasonable basis for success. [ 50 ] Mark Slay and North Shore Law LLP filed an application on February 10, 2017, seeking an order that the claimants’ claim against them be dismissed because it was statute barred by the two-year limitation period.

They also sought an order that the claimants pay them their costs on the basis that the claimants proceeded with the claim when there was no reasonable basis for success.

PARTIES’ POSITIONS ON APPLICATION TO DISMISS The defendants’ (applicants’) position [ 51 ] As noted at the beginning of this ruling, the applications by the defendants Mark Slay, North Shore Law LLP, and Ms. Jaszczewska now before this court require me to determine whether the claims made by A. & S. Lui Holdings Inc. and Mr. Motyka should be dismissed on the basis that the claimants failed to comply with the two-year limitation period. [ 52 ] The defendants, Mr. Slay and North Shore Law LLP, maintain the latest date on which the two-year limitation period began to run was May 9, 2013.

By that date the claimants were well aware of the statutory requirements set out in s. 8 of the current Limitation Act and those requirements had been met. These defendants deny any wrongdoing. They also maintain that neither Mr. Motyka nor A. & S. Lui Holdings Inc. suffered any damages. Further, they maintain the matter is res judicata . [ 53 ] The defendants Mr. Slay and North Shore Law LLP seek dismissal of the claim based on the claimants’ failure to comply with the current Limitation Act . They say the claimants are statute barred by virtue of s. 6 of the current Limitation Act .

The defendants argue that the claimants knew of the potential to seek damages against the defendants, at the very least, by May 9, 2013. However, the notice of claim was not filed in Small Claims Court until July 20, 2015, which was several months after the two-year limitation period had expired. [ 54 ] The defendant Ms. Jaszczewska seeks dismissal of the claimants’ claim based on their failure to comply with the current Limitation Act . In this regard, she raises the same points raised by Mr. Slay and North Shore Law LLP. She also relies on the principle of res judicata .

She points to the fact that by virtue of the July 22, 2013, consent order, she agreed to have the CPLs removed and to have the claim against A. & S. Lui Holdings Inc. dismissed. She also agreed to pay certain costs. Ms. Jaszczewska argues that the action filed by the claimants in this court is simply a way to seek a form of special costs. The claimants’ (respondents’) position [ 55 ] The claimants submit that the defendants’ application to dismiss should be dismissed and the matter should proceed to trial. They say the two-year limitation period has been met.

They also say the current Limitation Act , which came into effect on June 1, 2013, applies in this case. The claimants maintain the current Limitation Act is very specific when it comes to establishing the basic limitation period. [ 56 ] They rely on s.8 of the current Limitation Act which provides that, “a claim is discoverable by a person on the first day on which the person knew or reasonably ought to have known,” that injury, loss, or damage had occurred (emphasis added by claimants).

The claimants argue that in this case the damages occurred long after the July 22, 2013, consent order, regarding the removal of the CPLs, was entered into. [ 57 ] The claimants submit they did not discover that monetary damages had resulted until October 2013. It was in October 2013, on the date of completion of the sale of a strata property, suite 306, that the claimants knew what monies they would receive for the sale of that unit. Prior to that date, the claimants maintain the injury, loss, or damage identified in s.8 of the current Limitation Act had not occurred.

The claimants submit the injury that is the basis for their claim had to have actually occurred before the limitation period could start to run. It was not sufficient that an injury could occur at some future date. [ 58 ] With respect to the res judicata issue raised by the defendants, the claimants submit that principle does not apply because the issue resolved by the July 22, 2013, consent order is not the same issue as the one being pursued by the claimants in the matter before this court.

ANALYSIS Specific findings of fact [ 59 ] In order to address the issues raised in this matter and, in particular which factors should be considered to determine the trigger date, I will first summarize my findings of fact:

a) The claimant, Mr. Motyka, is an engineer and a businessman.

b) At the relevant time he was an officer and director of A. & S. Lui Holdings Inc.

c) The sole shareholder of A. & S. Lui Holdings Inc. at the relevant time was 540888 B.C. Ltd.

d) At the relevant time the only directors and officers of A. & S. Lui Holdings Inc. and 540888 B.C. Ltd. were Mr. Motyka and Mr. Kostanski.

e) At the relevant time the only shareholders of 540888 B. C. Ltd. were Mr. Motyka and Mr. Kostanski; they each owned one half of the class A common shares.

f) The corporate solicitor for A. & S. Lui Holdings Inc. at the relevant time and since June 1997 was Mr. Ardagh.

g) Mr. Slay was the lawyer for Ms. Jaszczewska. He was instructed by her to file the family claim and to file CPLs on seven strata properties owned by A. & S. Lui Holdings Inc.

h) On May 1, 2013, Mr. Slay filed the family claim.

i) On May 2, 2013, Mr. Slay filed CPLs on seven strata properties owned by A. & S. Lui Holdings Inc.

j) On May 3, 2013, Mr. Slay wrote to Mr. Batist, who he understood had previously represented Mr. Kostanski. He forwarded the notice of family claim filed on behalf of Ms. Jaszczewska. Mr. Slay and Mr. Batist also had a telephone conversation that day.

k) On May 8, 2013, Mr. Batist wrote to Mr. Slay confirming their telephone conversation of May 3, 2013. He also confirmed he represented Mr. Kostanski but not A. & S. Lui Holdings Inc. Mr. Batist acknowledged that Ms. Jaszczewska had filed CPLs against property owned by A. & S. Lui Holdings Inc. He advised Mr. Slay that his client, Mr. Kostanski, would be prejudiced and would suffer hardship by the registration of the CPLs and “could suffer damages as a result of same”. He requested that the CPLs be cancelled immediately.

l) On May 9, 2013, Mr. Ardagh, corporate counsel for A. & S. Lui Holdings Inc., wrote a demand letter to Mr. Slay requesting the immediate removal of the CPLs filed against the seven strata properties owned by A. & S. Lui Holdings Inc. Mr. Ardagh advised there could be consequences if the CPLs were not removed. In particular, he noted there could be a lost sale, lowered prices, and extended continuance of an outstanding mortgage loan. This, “…. will result in loss to the Company and could lead to a claim for damages against your client.”

m) In the May 9, 2013, letter, Mr. Ardagh also noted Mr. Motyka was prepared to engage his own lawyer to seek an order that the CPLs be removed.

n) A. & S. Lui Holdings Inc. was sufficiently concerned about the CPLs on its seven strata lots that it retained litigation counsel and by May 29, 2013, Mr. Johnson, filed a notice of his appointment as counsel at the Supreme Court of British Columbia registry.

o) On June 5, 2013, Mr. Johnson filed an application in the Supreme Court of British Columbia for an order dismissing Ms. Jaszczewska’s action against A. & S. Lui Holdings Inc. and for a further order cancelling the registration of the seven CPLs.

p) In an affidavit dated June 3, 2013, and sworn in support of that application, Mr. Ardagh, A. & S. Lui Holdings Inc.’s corporate lawyer, stated that the filing of the CPLs against the strata lots was detrimental to A. & S. Lui Holdings Inc.’s attempts to sell the strata units and could result in damages and loss to A. & S. Lui Holdings Inc.

q) Mr. Motyka also swore or affirmed an affidavit in support of A. & S. Lui Holdings Inc.’s application. His affidavit was sworn on June 3, 2013, and filed at the Supreme Court of British Columbia registry on June 5, 2013. Mr. Motyka stated there was sales activity with respect to several strata lots but it was unknown, at that point, whether the sales would collapse. However, he also said the existence of the CPLs could result in sales not completing. He also referred to the fact that he and Mr. Kostanski had instructed Mr. Ardagh to try to get the seven CPLs removed to avoid causing difficulties for the company in its attempts to sell the seven strata lots.

r) In the unfiled notice of application appended as an exhibit to Mr. Motyka’s affidavit it also stated that the presence of the CPLs could prove highly detrimental to A. & S. Lui Holdings Inc. and could lead to lost sales or lowered sale prices resulting in loss to A. & S. Lui Holdings Inc. and lead to a damages claim against Ms. Jaszczewska.

s) In the unfiled notice of application appended as an exhibit to Mr. Motyka’s affidavit is also stated that the filing of the CPLs will prevent A. & S. Lui Holdings Inc. from selling its assets which will result in damages not only to A. & S. Lui Holdings Inc., but also to the numbered company, to Mr. Kostanski, and to Mr. Motyka. It further stated that Mr. Kostanski and Mr. Motyka would be deprived of receiving any proceeds.

t) In the unfiled notice of application there is a specific reference to suite 306 and suite 202, to the effect there were prospective purchasers for these strata properties and the sales could be lost due to the CPLs registered against those strata properties.

u) On June 12, 2013, Mr. Johnson wrote directly to Ms. Jaszczewska, who at that point appeared to be representing herself. In that letter he stated that the registration of the CPLs against the seven strata lots had created significant legal difficulties in attempting to sell those strata properties.

v) In the decision in the family claim, Jaszczewska v. Kostanski , 2015, BCSC 727 , the court found that Mr. Kostanski’s 50% interest in the numbered company was family property and part of it could be taken into account in determining Ms. Jaszczewska’s share of the division of family property and family debt. [ 60 ] On the basis of the information and evidence provided to this court on this application, including submissions made by Mr. Kostanski, who was given leave by this court to represent Mr. Motyka and A. & S. Lui Holdings Inc. on this application, I have concluded that Mr. Kostanski and Mr.

Motyka have a close relationship. [ 61 ] I am satisfied on the basis of the submissions and the documents filed in these proceedings that no later than May 9, 2013, Mr. Motyka, Mr. Kostanski, and A. & S. Lui Holdings Inc. were aware that CPLs had been filed against seven strata properties owned by A. & S. Lui Holdings Inc. Further, at that time, but certainly no later than June 3, 2013, the defendants and Mr. Kostanski were aware that the filing of the CPLs against the seven strata lots was detrimental to A. & S. Lui Holdings Inc.’s ability to sell the units and could result in damage and loss to A. & S.

Lui Holdings Inc. and its principals. Limitation period [ 62 ] The current Limitation Act was assented to on May 14, 2012, but it did not come into force until June 1,

Section 6 of the current Limitation Act provides that subject to other provisions, “a court proceeding in respect of a claim must not be commenced more than 2 years after the day on which the claim is discovered”. The current Limitation Act further provides that the term “discover” in relation to a claim has the meaning set out in Divisions 2 and 3 of

Part 2 of that Act. Discovery of claim [ 63 ] The general discovery rules under the current Limitation Act are set out in s. 8 which provides that, except in certain special

situations, a claim is discovered by a person on the first day on which the person knew or reasonably ought to have known all of the following:

a) that injury, loss, or damage had occurred;

b) that the injury, loss, or damage was caused by or contributed to by

an act or omission;

c) that the act or omission was that of the person against whom the claim is or may be made;

d) that, having regard to the nature of the injury, loss, or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss, or damage. [ 64 ] It is clear that at the time Ms. Jaszczewska filed the family claim on May 1, 2013, the current Limitation Act was not yet in force.

Accordingly, given that the family claim and the CPLs were filed prior to the current Limitation Act coming into force, I need to consider whether, in this case, any transition issues arise and whether the applicable legislation is the former Limitation Act or the current Limitation Act . [ 65 ] In s.30 of the current Limitation Act the legislation addresses possible transitional issues. It defines a “pre-existing claim” as a claim that is based on

an act or omission that took place before the day on which the current Limitation Act came into force, and with respect to which no court proceeding has been commenced before the day on which the current Limitation Act came into force. In the matter before this court, there is no issue that the act or omission which led to the claim now before this court took place in early May 2013.

Furthermore, there is no issue that no court proceeding had been commenced before June 1, 2013, the day the current Limitation Act came into force. [ 66 ] Section 30 (4) provides that if a pre-existing claim was discovered before June 1, 2013, the former Limitation Act applies to the pre-existing claim as if the right to bring an action occurred at the time of the discovery of the pre-existing claim. However, s. 30 (4) (

c) of the current Limitation Act provides that, if a pre-existing claim was not discovered before June 1, 2013, the current Limitation Act applies to the pre-existing claim. [ 67 ] In reviewing the transition provisions of the current Limitation Act , I found the materials prepared by John G. Dives, Q.C. for the Continuing Legal Education Society of British Columbia, titled “ New BC Limitation Act: Transition Issues ”, May 2013, were particularly helpful. [ 68 ] I will paraphrase some background comments from Mr. Dives’ paper.

He noted that some of the differences between the two acts may give rise to complications during the transition period. Moreover, in any case, if the matters in issue arose before June 1, 2013, it is necessary to consider both acts to ensure that the appropriate limitation period is identified. [ 69 ] In the case before me, the parties acknowledged and specifically agreed that the applicable limitation period is two years. They also agreed that the applicable legislation is the current Limitation Act .

The point in issue between the claimants and the defendants is the trigger date to be used to determine when the limitation period began and ended. [ 70 ] In his paper, Mr. Dives noted that under the former Limitation Act , the trigger date was the first date upon which an action could be commenced. However, the former Limitation Act had provisions which allowed a claimant, who was unaware of her right to make a claim, to postpone the running of the limitation period. Under the current Limitation Act , the trigger date now does not depend on the date upon which an action could have been commenced.

Instead, the trigger date under the current Limitation Act is expressly stated to be the date of discovery.

Section 6 of the current Limitation Act specifically provides that, “a claim must not be commenced more than 2 years after the day on which the claim is discovered ” (emphasis added). [ 71 ] The wording of the provisions regarding discovery under the current and former Limitation Acts is not the same. However, Mr. Dives noted that the provisions in the two acts are sufficiently similar that it is likely they will be interpreted the same way. However, there is one important difference between the two acts.

Under the former Limitation Act , the burden of proving that the running of the limitation period had been postponed was on the claimant. Under the current Limitation Act, the burden of showing discovery more than two years before the commencement of the claim is on the defendant . [ 72 ] At this juncture it should be noted that the current Limitation Act applies to “claims”. In s. 1 of the current Limitation Act the term “claim” is defined. It, “means a claim to remedy an injury, loss, or damage that occurred as a result of

an act or omission”. In this case the claimants proposed claims against the defendants are based on alleged loss or damage that occurred as a result of CPLs being filed against seven strata properties. [ 73 ] The current Limitation Act makes it clear that the basic two-year limitation period begins to run on the day a person first discovered the claim or on the day the person reasonably ought to have discovered the claim. [ 74 ] Under the current Limitation Act , the criteria to consider in determining when a claim is discovered are set out, as already noted, in s. 8 .

Unlike the Limitation Act in Ontario, the current Limitation Act in British Columbia does not contain any presumption and does not place the onus on the plaintiff/claimant to establish why a claim could not be discovered. Instead, as noted by Mr. Dives in his paper, the current Limitation Act places the burden on the defendant to show that the claim was discovered or reasonably ought to have been discovered (in the particular circumstances) more than two years before the commencement of the claim in question.

The Transition Rules Flowchart [ 75 ] Prior to the coming into effect of the current Limitation Act , the British Columbia Ministry of Justice posted a Transition Rules Flowchart for the new (i.e. current) Limitation Act . The document was developed by the Civil Policy and Legislation office. The note accompanying the chart clearly states that it was not intended to constitute legal advice. However, it is a helpful tool because it sets out a framework of questions to consider in determining which Act applies.

[76] The first question is: Did the act or omission occur before June 1, 2013? In this case, there is no dispute that Ms. Jaszczewskabegan the family claim on May 1, 2013, and filed CPLs against seven strata properties owned by A. & S. Lui Holdings Inc. on May 2,2013. There is also no dispute that by at least May 9, 2013, both A. & S. Lui Holdings Inc. and Mr. Motyka were aware that CPLs hadbeen filed. [77] The second question is: Was a court proceeding, relating to the matter in question, commenced before June 1, 2013.

Thesimple answer to that question is “No”. [78] The third question is: Has a limitation period under the former Limitation Act expired? It is clear that at the time the claimantsfiled the claim in this matter the ultimate limitation period under the former Limitation Act had not expired but, depending on when theclaim was “discovered”, the two-year limitation period under the former Limitation Act may have expired.

If that were the case, theclaim would be statute barred. [79] Alternatively, if the claim was “discovered” on or after June 1, 2013, which is what the claimants maintain in this case, thecurrent Limitation Act applies as long as the claim is not an exempted claim under s. 3 of the current Limitation Act and is not a claimthat is governed by the 6 year ultimate limitation period under s. 8 (1) (

a) or (

b) of the former Limitation Act. In that case the currentLimitation Act applies and the two-year basic limitation period and the discovery rules in the current Limitation Act apply. [80] The parties did not provide detailed submissions regarding their positions that the current Limitation Act and the discoverabilityprovisions contained therein apply to this matter. As noted, their positions were that, irrespective of which Act applies, all the claimsadvanced by the claimants against the defendants had a basic limitation period of two years.

The issue on which the parties could notagree was the date from which the two-year limitation period began to run. Application of s. 8 in current Limitation Act [81] The first criterion to consider is, which was the first day on which the claimants knew or reasonably ought to have known, thatinjury, loss, or damage had occurred. [82] The claimants argue they did not discover monetary damage had occurred until long after the day the consent order regardingthe removal of the CPLs was entered into on July 22, 2013.

The claimants maintain they did not, in fact, discover monetary damage hadoccurred until the strata property, suite 306, was sold and then only on the day of completion. It was only on completion of the sale, theclaimants say, that they knew the amount of money they would receive from the sale of that particular strata property. Only at that pointcould they ascertain the loss they had sustained.

In other words, the claimants argue, the injury that is the basis for their claim did notoccur until the completion date of the sale of suite 306, which occurred on October 23, 2013. [83] Under the current Limitation Act, a claim is discovered by a person, “…. on the first day on which the person knew orreasonably ought to have known that injury, loss, or damage had occurred." In addition, in order to establish discovery of a claim, it mustbe shown that the person knew or reasonably ought to have known three other pieces of information [see the current Limitation Act s. 8,ss. (

a) to (

d) inclusive]. The burden is on the defendant to show discovery occurred two years before the claim was made. [84] The first point I will address is whether the defendants have established when the claimants in this case first discovered thatinjury, loss, or damage had occurred. The case law establishes that discovery of a claim is not dependent on knowing the exact extent ortype of loss that a claimant has sustained. When a claimant knows that “some damage has occurred” and has identified the personresponsible “the cause of action has accrued”. This point was made in Peixeiro v.

Haberman, (SCC), [1997] 3 S.C.R.549. In that case the court noted that, at common law, ignorance of or mistake as to the extent of damages does not delay time under alimitation period. In other words, a claimant does not need to know the full extent of damages incurred before he/she can file a claim incourt. I appreciate that the Supreme Court of Canada’s comments were made in relation to the accrual of the cause of action.

However,I am satisfied that it is appropriate to apply the same analysis when considering discoverability of a claim under the current LimitationAct. [85] A number of other cases have noted that there is a distinction between “damage” and “damages”. “Damage” is the loss neededto make out the cause of action. For example, some judges have described "damage" as the condition of being worse off than beforeentering into a transaction; whereas, "damages", is a monetary measure of the extent of the loss: Hamilton (City) v. Metcalfe & MansfieldCapital Corporation, 2012 ONCA 156, Lomer v. 809854 Ontario Ltd.(c.o.b.

Melody Homes (Brooklin), [2017] O.J. No. 2959. [86] In determining when the claimants knew or reasonably ought to have known that injury, loss, or damage had occurred, Iconsidered the materials presented to this court and the parties’ submissions. In particular I considered the following:

a) In the present case, Mr. Ardagh, the corporate solicitor for A. & S. Lui Holdings Inc. wrote to Mr. Slay on May 9, 2013. Hewas obviously aware that CPLs had been placed on the strata properties because he requested their removal forthwith.

b) Additionally, Mr. Ardagh prepared an affidavit dated June 3, 2013, wherein he stated that the filing of the CPLs against thestrata lots was detrimental to A. & S. Lui Holdings Inc.’s, “.… attempts to sell the units and could result in damages and loss to theCompany.…”.

c) It is clear from Mr. Ardagh’s affidavit that he had specific instructions from the directors of A. & S. Lui Holdings Inc. aboutthe effect of the filing of the CPLs on the strata lots. One of those directors was Mr. Motyka.

d) Mr. Motyka also prepared an affidavit dated June 3, 2013. In that affidavit he stated that the sale proceeds of the next one ortwo lots would be required to retire the related loan. That loan was accruing interest. He also stated it was unknown at that pointwhether sales would collapse. However, in respect of strata lot 14 – suite 306, he specifically said he had advised the prospectivepurchasers of the CPLs and noted this could result in the sale not completing.

e) In the affidavit dated June 3, 2013, Mr. Motyka also stated that both he and Mr. Kostanski had instructed Mr. Ardagh and

advised him to try to get the seven CPLs cancelled, “…. to avoid having the CPLs cause difficulties in the attempts of the Company to sell the seven strata lots.”

f) An exhibit (Exhibit L), attached to Mr. Motyka’s June 3, 2013, affidavit, was the unfiled notice of application by A. & S. Lui Holdings Inc. against Ms. Jaszczewska. Under the “Factual Basis” portion of that application it states that Mr. Slay was advised, “.… that the presence of the filed CPLs could prove highly detrimental to the Company and could lead to lost sales or lowered sale prices resulting in losses to the Company and lead to a damages claim against the claimant”. The reference to “claimant” was obviously to Ms. Jaszczewska.

g) Under the “Factual Basis” portion of the notice of application by A. & S. Lui Holdings Inc. against Ms. Jaszczewska, at paragraph 8, it also states that Mr. Batist wrote to Mr. Slay on May 16, 2013, and informed him that the filing of the CPLs, “…. will prevent the Company from selling its assets which will result in damages to the Company, to 540888 B. C. Ltd., to Kostanski, and to the other shareholder in 540888 B.C. Ltd. and will deprive Kostanski and his partner of receiving any proceeds.”

h) The reference to “the other shareholder” in the company and Mr. Kostanski’s “partner” is clearly a reference to Mr. Motyka.

i) On May 29, 2013, Mr. Johnson, who was retained by A. & S. Lui Holdings Inc. as litigation counsel, filed a notice of appointment as counsel at the Supreme Court of British Columbia registry. Further, on June 4, 2013, Mr. Johnson wrote to Mr. Slay to advise he would be representing A. & S. Lui Holdings Inc. and that a

summary trial application would be filed on its behalf. Moreover, on June 5, 2013, Mr. Johnson filed a notice of application at the Supreme Court of British Columbia registry.

j) On June 11, 2013, Mr. Slay stopped acting for Ms. Jaszczewska. Accordingly, Mr. Johnson wrote to Ms. Jaszczewska directly on June 12, 2013. In that letter he stated that the registration of the CPLs against the seven strata lots, “.… has created significant legal difficulties in attempting to sell those strata properties.” [ 87 ] I am satisfied, on the basis of the materials before me, that by June 3, 2013, and definitely by June 5, 2013, when A. & S. Lui Holdings Inc., through its counsel Mr. Johnson, filed a notice of application at the Supreme Court of British Columbia registry, both A. & S.

Lui Holdings Inc. and Mr. Motyka knew or reasonably ought to have known that injury, loss, or damage had occurred by virtue of Ms. Jaszczewska’s filing of the seven CPLs. [ 88 ] The materials and affidavits filed on behalf of A. & S. Lui Holdings Inc. clearly establish that Mr. Motyka and A. & S. Lui Holdings Inc. were very concerned, early on, about the effect the filing of the CPLs had on sales of the seven strata lots and related financial arrangements. Furthermore, they were also very concerned that they had been deprived of their ability to deal with the strata lots as they saw fit.

The materials do not expressly state the claimants’ concerns in these specific terms. However, based on the materials provided to this court, I find that the loss, injury, or damage the claimants were concerned about was not only financial loss arising from the registration of the CPLs, but also being deprived of their right to market the seven strata lots as they saw fit, and a loss of opportunity to be in the real estate market at the specific point in time when the CPLs were filed.

Accordingly, I find the claimants’ submission that the loss was only discovered on the completion date of the sale of suite 306 in October 2013, to be specious and disingenuous. [ 89 ] I am satisfied that the first day on which the claimants knew, or reasonably ought to have known that injury, loss, or damage was caused by or contributed to by

an act or omission, namely the filing of the CPLs, was at least June 3, 2013, and definitely no later than June 5, 2013. [ 90 ] I am also satisfied that the claimants knew, or reasonably ought to have known, by June 3, 2013, and definitely no later than June 5, 2013, that Ms. Jaszczewska gave instructions for the filing of the CPLs and that those instructions were carried out by Mr.

Slay who was a partner at North Shore Law LLP. [ 91 ] Last but not least, I am satisfied the claimants knew, or reasonably ought to have known, that a court proceeding would be an appropriate means to seek to remedy the injury, loss, or damage. The materials/information provided to this court indicate that both claimants have engaged in business in British Columbia for a period of years. The claimant A. & S. Lui Holdings Inc. was assisted by its corporate counsel and later by litigation counsel. In fact, A. & S. Lui Holdings Inc. retained litigation counsel Mr.

Johnson to make an application in the Supreme Court of British Columbia to have the CPLs cancelled. Mr. Johnson negotiated a consent agreement with Ms. Jaszczewska’s new counsel and therefore A. & S. Lui Holdings Inc.’s application in the Supreme Court of British Columbia did not proceed. [ 92 ] The claimant, Mr. Motyka, instructed corporate counsel for A. & S. Lui Holdings Inc. and was aware that he had the option of seeking legal advice. In fact, in a letter dated May 9, 2013, Mr. Ardagh, corporate counsel for A. & S. Lui Holdings Inc., noted that Mr. Motyka was considering retaining his own counsel. [ 93 ] In

summary, I am satisfied on a balance of probabilities, that the claimants knew, or reasonably ought to have known, the information set out in s.8, ss. (

a) to (

d) inclusive of the current Limitation Act as early as June 3, 2013, but in any event definitely no later than June 5, 2013. Accordingly, giving the claimants the benefit of the doubt, I conclude the running of the limitation period for their claim commenced on June 5, 2013. There is no dispute that the Small Claims Court notice of claim was filed July 20, 2015. A rough calculation of the time between these two dates is 2 years and 1 ½ months. Accordingly, I find the claimants filed their claim outside of the two-year limitation period set out in the current Limitation Act .

They are statute barred from proceeding with their claim. Given my findings and conclusion on the limitation period issue, I do not find it necessary to address the other bases for dismissing the claim advanced by the defendants. Mr. Motyka’s standing to sue [ 94 ] I wish to address one additional issue that relates to Mr. Motyka’s standing to advance the claim he made in this matter. Mr. Motyka owned 50% of the shares in the numbered company which in turn owned A. & S. Lui Holdings Inc. He was also a director of both the numbered company and A. & S. Lui Holdings Inc. The defendant Mr.

Slay argued that as a mere shareholder Mr. Motyka

has no basis for an independent cause of action for a loss incurred by the corporate claimant, A. & S. Lui Holdings Inc. [ 95 ] Mr. Slay relied on Pimentel v. British Columbia , [1998] B.C.J. No. 788 . In that case Mr. Pimentel described himself as a major shareholder of three mental health care facilities. He claimed damages on his own behalf and on behalf of three corporate plaintiffs.

He claimed he suffered embarrassment, anxiety, emotional trauma, mental distress, and physical upset as a consequence of a breach of contract, conspiracy, negligence, wrongful interference with contractual relations, and a breach of duty by certain defendants. [ 96 ] Satanove J. considered whether the statement of claim disclosed a reasonable cause of action. She concluded the law is very clear that an individual cannot sue for consequential damage to himself that results from damage inflicted on a corporation or corporations in which he holds shares.

The court further noted that for a shareholder to obtain a personal right of action there must be a relationship between him and the wrongdoer which is independent of that which the shareholder derives through his interest in the corporation. The court concluded that, because Mr. Pimentel’s personal claim did not disclose a reasonable cause of action in law, he had to be removed from the action as a named plaintiff. [ 97 ] In Robak Industries Ltd. v. Gardner , [2006] B.C.J. No. 2718 , Satanove J. commented on her earlier decision in Pimentel and the application of the rule in Foss v. Harbottle (1843), 67 E.

R. 189 (Ch.) . Satanove J. noted the rule in Foss v. Harbottle is a consequence of the fact that a corporation is a separate legal entity. The company is liable for its contracts and torts; however, the shareholder has no such liability. Conversely, the company acquires causes of action for breaches of contract and for torts which damage the company. However, no cause of action vests in the shareholder. At paragraph 5 of that decision Satanove J, wrote: The key to the application of the rule in Foss v.

Harbottle is that the gravamen of the cause of action alleged must arise as a result of wrongs done to the company, whether contractual or tortious, intentional or inadvertent. If the damage that flows is a direct result of the wrongs done to the company, then those damages can only be claimed by the company. [ 98 ] Satanove J. went on to note that, if there is a relationship between the shareholder and the wrongdoer which is independent of the relationship that the shareholder derives through his interest in the company, then a personal right of action accrues which is not caught by the rule in Foss v.

Harbottle . However, a shareholder in such a case must not only show that there is an independent relationship or duty between the shareholder and the wrongdoer, but also that the plaintiff shareholder has suffered a loss, separate from that of the company, that is closely linked to the personal wrong done to the plaintiff shareholder. In other words, the plaintiff shareholder must establish there is both an independent relationship and an independent loss before recovery will be allowed. [ 99 ] In Mr.

Motyka’s case, he has not established that there is an independent relationship between him and the corporate defendant which is independent of that derived through his interest in the company. Accordingly, even if I had found that the claim against the defendants was not statute barred, I am satisfied that, if Mr. Motyka has in fact sustained damages, those damages are not recoverable in law.

SUMMARY [ 100 ] For the reasons set out above, I conclude the claim made by A. & S. Lui Holdings Inc. and Mr. Motyka against Ms. Jaszczewska, Mr. Slay, and North Shore Law LLP is statute barred as it was not filed within the applicable limitation period under the current Limitation Act . In light of this conclusion, it is not necessary to address the other bases for dismissal of the claim raised by the defendants. However, with respect to Mr. Motyka, even if I had found that his claim against the defendants was not statute barred, I am satisfied for the reasons set out in this ruling that, if Mr.

Motyka has sustained damages, his personal claim did not disclose a reasonable cause of action in law. _____________________________ The Honourable Judge M.F. Giardini Provincial Court of British Columbia