The Vancouver Golf Club v. Staschuk Date:, 2011 BCPC 426

Citation: The Vancouver Golf Club v. Staschuk Date: 20111202 2011 BCPC 0426 File No: C10606 Registry: Port Coquitlam IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: THE VANCOUVER GOLF CLUB CLAIMANT AND: ROBERT STASCHUK DEFENDANT ORAL REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE T.S. WOODS Appearing for the Claimant: D. Dalke Appearing on his own behalf: The Defendant, R. Staschuk Court Recorder: J. McIntyre Transcriber: S. Wilson Place of Hearing: Port Coquitlam, B.C.

Date of Hearing: December 2, 2011 Date of Judgment: December 2, 2011 [ 1 ] THE COURT: These are my reasons for judgment in Provincial Court of British Columbia Action No. C10606, Port Coquitlam Registry. [ 2 ] The claimant is The Vancouver Golf Club (the "Club"); the respondent is Dr. Robert Staschuk. This is an action in debt brought by the Club against Dr. Staschuk having to do with membership in the Club. [ 3 ] There is some history regarding the dealings between Dr. Staschuk and the Club prior to the formation of the contract that ultimately defined their respective rights and obligations.

I will touch on that only briefly. [ 4 ] When he first took an interest in possible membership in the Club, Dr. Staschuk found the entrance fee to be beyond his comfort level, if I can put it that way, and his interest waned for a period of time until it came to his attention that the Club had devised an innovation to bring new members in who were sensitive to the cost of initial membership.

That innovation had to do with classifying new male members as female members. [ 5 ] The costs of initial admission to the Club and the costs of ongoing dealings with the Club, as an amenity, for women were lower than those for men, but there were also corresponding restrictions and limitations on their rights as club members. The innovation the Club devised was to notionally bring male members in under the rubric of female membership at a substantially lower cost. On that footing, Dr. Staschuk made application to become a member.

The documentation that he executed in respect of that application is, in all of its essentials, replicated in the documentation that he later executed when he became a member and that later documentation really defines the rights and obligations to which I will turn momentarily. [ 6 ] Not long after Dr. Staschuk made his application to become a notional full-play woman member, the Club revisited this innovation and discerned in it a possible conflict with its by-laws. One might think that it also saw other potential frailties in the innovation, and, as a consequence, it approached Dr.

Staschuk and a number of other people who had completed their applications under the innovation and advised them that the Club was no longer able to provide membership to men notionally under the rubric of female membership.

[ 7 ] At that point, the alternative was for men to join as men and pay the full price of initial entrance and all of the associated fees and dues thereafter: that is, the dollar figures that had been seen as problematical by Dr. Staschuk at the outset. [ 8 ] Dr. Staschuk and those who found themselves in the same situation took issue with what was, in the words Dr. Staschuk used today in his evidence, "the reneging of the Club on the initial terms of membership." They pressed the point. They pressed the point forcefully.

A letter was written to which all of the individuals in that situation subscribed their signatures. The letter is in evidence. The letter speaks forcefully about the disappointment of the individuals affected and it characterizes the conduct of the Club in legal terms. The letter originates with a number of people, including Dr. Staschuk. It adverts to a contractual relationship. It adverts to an alleged breach by the Club of that contract with Dr.

Staschuk and his colleagues in the group. [ 9 ] The Club went back to the drawing board and sought to find under this pressure a way to bring these individuals into the Club on financial and other terms that would be tolerable to them. [ 10 ] A compromise was arrived at. Dr. Staschuk and the five others who had found themselves disappointed by the earlier dealings were given an opportunity to join with a required entrance fee of $27,000, substantially below the $40,000-some figure that full-play men members at that time had to pay.

This, coupled with the structure of fees and expenses, represented a somewhat more expensive proposition than the first innovation involving men being notionally classed as full-play women, but it was a substantially better deal than what full-play men were paying in the ordinary course. [ 11 ] Dr. Staschuk, and others who were in the disappointed group who had raised their objections and made forceful representations to the Club about breach of contract and so forth, accepted these new terms. [ 12 ] These new terms emulated in other respects the terms that existed in the first innovation.

Among them was a provision that permitted new members on the second innovation platform, if I can put it that way, to finance all but a 15 percent down payment of their entrance fee. That financing option was attractive in part because it deferred the obligation to pay the entrance fee in full up front and because it took the form of an interest-free loan. No interest was charged on the unpaid outstanding balance.

In effect, everything over and above the down payment was amortized over a period of ten years or 120 equal instalments. [ 13 ] So those, in essence, are the terms upon which the six disaffected former full-play men notionally categorized as full-play women were able to gain admission to the Club on the second innovation. [ 14 ] Documentation was completed in order to give effect to that arrangement with, among others, Dr. Staschuk. Dr. Staschuk's documentation has been placed in evidence.

It speaks to the terms I have just described and, importantly for the purposes of this case, the documentation is clear and unequivocal on the question of what happens in the event that a person who gains membership in this manner chooses at some point in the future to cease to be a member. [ 15 ] Reading from the membership application form completed by Dr Staschuk, para. 3 says -- and I am bringing the initial language in -- I agree that if admitted to membership in the Club … 3.

The Club may cancel my election to membership at any time within 12 months of the date of my election without giving any reason for cancellation on giving notice together with a refund of all entrance fees paid by me to the Club without interest. Other amounts paid by me to the date of cancellation will not be refunded. [ 16 ] So there was a discretion in the Club to terminate the relationship at its end at its discretion. No such event occurred in this case. [ 17 ] In the membership application, Dr.

Staschuk acknowledges that he had chosen an entrance fee associated with the full-play men category in the amount of $27,000 plus GST of $1,890, the total being $28,890.

The application acknowledged the down payment requirement which, being 15 percent of the entrance fee, came in at $4,333.50. [ 18 ] The application form makes reference to another document that supports and forms part of the contractual documentation here -- that being a promissory note -- and the application says this: I have signed and attach a promissory note for the full amount of the entrance fee by payments and on terms as set out in the note. I understand that: (

a) if I have selected an instalment payment option [which I pause to say Dr. Staschuk did] I must pay the full amount of the entrance fee regardless whether I cease becoming being a member of the Club for any reason prior to completing the instalments, and (

b) if at any time I cease to be a member of the Club for any reason I will not be entitled to any refund of any portion of my entrance fee. [ 19 ] There is another provision written in by hand into this membership application that adjusts the down payment to reflect monies that changed hands by way of a down payment in respect of the original innovation as I have described it. [ 20 ] This membership application is signed by Dr. Staschuk. He does not dispute that he signed it. It is witnessed by Mr. Goth, a representative of the Club.

In all respects its essential terms are as I have read them into the record here. [ 21 ] As I mentioned, the application makes reference to a promissory note which is also in evidence. In that promissory note, Dr. Staschuk acknowledges his obligation to the Club for the full amount of the initial entrance fee plus GST. He acknowledges the down payment amount as I have read it out moments ago. He acknowledges that the deferred portion of his entrance fee will be paid in 120 equal monthly instalments of $204.63 inclusive of GST.

[ 22 ] Importantly, the promissory note contains this language: If … (

b) I resign my membership in The Vancouver Golf Club or my membership is otherwise terminated then the entire unpaid balance shall at the option of The Vancouver Golf Club immediately become due and payable. [ 23 ] Quoting again from the promissory note: I promise to pay on demand all costs incurred by The Vancouver Golf Club in collecting any of the amounts hereby secured including legal fees and disbursements as between a solicitor and his own client whether or not any action or judicial proceedings has been commenced and such fees and disbursements shall be added to the principal balance hereby secured and bear interest at the rate set forth herein. [ 24 ] This promissory note bears Dr.

Staschuk's signature. [ 25 ] These documents were signed in May of 2005. These are the documents and these are the contractual terms upon which the Club relies in asserting its claim now against Dr. Staschuk. [ 26 ] Dr. Staschuk ceased making any payments on account of his entrance fee as of August of 2009. He did so, on his evidence, because of an intention to leave the immediate proximity, the community where The Vancouver Golf Club is located in Coquitlam. He ceased making instalment payments on account of his entrance fee from and after August of 2009. [ 27 ] In his evidence before the court today, Dr.

Staschuk explained that it had been a concern to him that he not be tied to an obligation to continue to pay entrance fee instalment payments in circumstances where he and his family may relocate to an area that is of sufficient distance from the Club to make it inconvenient to continue to access the Club's offerings. [ 28 ] Importantly, Dr. Staschuk testified that this issue came up in his dealings with Mr. Goth surrounding the execution of the application for membership and the associated promissory note. [ 29 ] Dr.

Staschuk testified that he raised concerns about having to continue to pay should he leave the area and got comfort and assurances from Mr. Goth that he ought not to worry about that. [ 30 ] Whether that exchange occurred lies at the centre of controversy in this case. [ 31 ] In law, that oral exchange might be argued to be of contractual force constituting oral terms supplementing and merging into the written terms of the contract. [ 32 ] There is another legal characterization that might be given to those words. They may at law be susceptible of an

interpretation that would characterize them as representations that induced Dr. Staschuk to enter into a contract with the Club. [ 33 ] But, of course, before we start down the pathway of analyzing those or other legal characterizations, it must first be established that the exchange as described by Dr. Staschuk in fact occurred between Dr. Staschuk and Mr. Goth, and here, the evidence of the claimant and the evidence of the defendant are entirely irreconcilable. [ 34 ] Mr. Goth, the representative of the Club who was responsible for all of the dealings with Dr.

Staschuk, was adamant in his testimony that he did not say anything to Dr. Staschuk of the nature spoken to by Dr. Staschuk in his testimony today. Dr. Staschuk's testimony reflects specific allegations found in the Reply he filed to the Club's claim. [ 35 ] Mr.

Goth's testimony was that he has no authority, in an oral exchange with a new Club member or an intending Club member, to waive on behalf of the Club its entitlement to expect a new Club member to abide by the terms of the contractual provisions that define the rights and obligations of the Club and its members. [ 36 ] His testimony included a reference to the fact that he would not say, and could not ever imagine himself saying, anything that was so manifestly contradictory of the very contractual language that was the subject of their dealings at the time Dr.

Staschuk signed the membership application and the promissory note. [ 37 ] Dr. Staschuk, for his part, is equally adamant that that exchange did happen. His testimony was that he believed that there was a substantial likelihood that he and his family may leave the area at some point in the future and that making a commitment of this nature, which would continue to burden him in circumstances where it was foreseeable that he would not be able to enjoy the benefits associated with the economic burden, caused him to hesitate about becoming a member at all.

He testified that he was able to get past his hesitation and go forward with the plan and ultimately enter into the contractual relationship with the Club only because he heard words of comfort from Mr. Goth to the effect that the Club would not go after him because it does not go after other people who do not continue to pay their entrance fee instalments. [ 38 ] So, as I say, we have irreconcilable accounts of the same events, and the court is called upon to make a determination as to which account it can accept. [ 39 ] This is a civil case.

Civil cases involve evidence being adduced for the purpose of proving facts. Facts are proven in civil cases according to a standard known as the balance of probabilities. The facts that I must find in this case will be the facts that the evidence establishes on a balance of probabilities. That is to say, the facts I will find will be those that the evidence shows are those that are more likely than not to be the true facts. [ 40 ] We have conflicting evidence about the same question, that is, did the conversation occur?

Did the conversation that may constitute parol evidence that may be merged into the other evidence of the contract and change its character or that may constitute a

representation that induced the contract to happen -- did that conversation happen or did it not? [41] I had before me two witnesses who as I have said, are equally adamant on their conflicting accounts. I must look to othermaterial then to assist me in determining which account I can accept and which I cannot accept. [42] Mr. Dalke, in his cross-examination of Dr. Staschuk, covered some aspects of Dr. Staschuk's business acumen, his sophistication,his experience as a business person and as a professional. Dr.

Staschuk's testimony confirmed that he is a sophisticated, intelligentprofessional who has considerable experience in the ways of the world and the ways of the business world. He has been involved in thesales and purchases of real property. He is a dentist with a practice that he has recently sold to an associate. He has entered into leaseagreements for places where he has resided in the recent past. All of these contractual relationships were set out in writing and Dr.Staschuk signed them. [43] I find it difficult to accept Dr.

Staschuk's account in circumstances where he emphasizes he was deeply concerned to havecomfort from Mr. Goth concerning non-enforcement by the Club of its claim for the payment of all entrance fee instalments. I find itdifficult to accept that Dr. Staschuk would not insist that that promise be reduced to writing and that the contractual documentation beadjusted to reflect that promise. There is no written record of the promise upon which Dr. Staschuk testified he placed so muchimportance. [44] I find that that evidence cuts against the testimony of Dr.

Staschuk regarding the conversation and the assurance given to him byMr. Goth. [45] When Dr. Staschuk notified the Club of his resignation, he made reference to his changed address, but he made no mention of thepromise that he testified he received from Mr. Goth and upon which he now claims to rely in expecting that the Club would not enforceits entrance fee instalment payment requirements of him. It is simply not mentioned. [46] I find that that evidence is supportive of Mr. Goth's account of events in which Mr. Goth denies any such promise was given. When Mr. Goth telephoned Dr.

Staschuk to enquire about his situation having received the letter of resignation, no mention was made inthe course of that telephone conversation of the promise upon which Dr. Staschuk places so much reliance in his evidence andarguments today. [47] I find that the absence of any mention of that promise, at a time when one would expect a person to raise the subject of thepromise, to be peculiar. It causes me to look with scepticism upon Dr. Staschuk's contention that the promise was given. [48] There followed, in the wake of the resignation and a telephone discussion with Mr. Goth, two letters alerting Dr.

Staschuk of theClub's intention to hold him fully to account for the outstanding amounts owing for his entrance fees. [49] The evidence at trial was that Dr. Staschuk did not reply to either of those letters, did not make any telephone calls in respect ofeither of those letters, did not answer the Club's assertion that it was entitled contractually to see full payment of the outstanding entrancefee with a counter-assertion that for the Club to so insist upon payment was contrary to the promise given by Mr. Goth. [50] I find the absence of any such steps taken by Dr.

Staschuk to be irreconcilable with his contention that he received the promiseand relied upon it. [51] There is an old case in this Province dating back to the early 1950s called Faryna v. Chorny, reported at (1952) (BC CA), 2 D.L.R. 354. It is a decision of the Court of Appeal where Mr. Justice O'Halloran offered some helpful guidance with respectto credibility assessments in cases where, as here, we find witnesses offering conflicting accounts of the same events. Mr. JusticeO'Halloran said this at p. 357 of Faryna v.

Chorny: … the real test of the truth of the story of a witness … must be its harmony with the preponderance of the probabilities which a practicaland informed person would readily recognize as reasonable …. [52] Measured against that yardstick, the contention of Dr. Staschuk simply is not credible.

A person who commits in contractualdocumentation that is clear and unequivocal to pay 120 equal instalments to cover off the balance of an entrance fee and then claims tohave been promised that the entrance fee expectations will not be enforced would not in the ordinary course be expected to sit silentwhen enforcement steps are taken by the party entitled to assert the claim. [53] I would expect in those circumstances that Dr.

Staschuk would raise the issue of the alleged promise swiftly, would make thepoint repeatedly, would not miss any opportunity to make the point, would not allow contractual documentation to be finalized withoutcorrections and changes to the written language to align with the oral promise, would not allow letters sent demanding the outstandingbalance to go unanswered, would not have a telephone conversation with Mr.

Goth upon his resignation having been received and notraise the subject of the promise, would not write a letter of resignation without making mention of what he says is the contractual basisupon which he considered himself relieved of having to continue to perform his instalment payment obligation. [54] There is divergence in the evidence about the Club's actual practice in enforcing the same obligations against other members. Mr. Goth gave testimony that was not shaken on cross-examination that the Club has not invariably pursued every defaulting member.

Ithas indeed taken legal proceedings to enforce the obligations of at least one defaulting member. Mr. Goth also made reference in histestimony on that point to the fact that not all Club members' promises and obligations were secured by promissory notes. That raises ofcourse the question of the enforceability of the obligation perhaps not being uniform across all members. [55] Mr. Goth gave testimony that the one member who was being pursued and was pursued through the courts in respect of a similardefault was being pursued in 2004, right around the time Dr. Staschuk was having his early dealings with the Club.

This furnishes yetanother reason why I find it not credible for Dr. Staschuk to contend that, against the background of active enforcement efforts beingmade by the Club against another member, Mr. Goth would with a nudge and a wink suggest in some way through his words or gesturesor whatever that the Club was not minded to enforce the obligations that its members undertook when becoming members.

[ 56 ] For all of those reasons, I find as a fact that no oral representation or promise was made by Mr. Goth to Dr. Staschuk that Dr. Staschuk would not be held to the terms of the bargain that is reflected in the writings that Dr. Staschuk freely admits he signed. Those writings, and most particularly the portions that I read into the record earlier, are clear and unambiguous and they very plainly impose an obligation upon Dr.

Staschuk to make good his promise to pay the full $27,000 entrance fee, including the instalment payments that represent the part of the fee that he was permitted to defer over a ten-year period at no interest. [ 57 ] No issue has been taken as to the quantum of the claim in this regard, and as to that, the outstanding payments and their associated GST totalling $14,056.88 are due and owing as a debt under the promissory note to the Club, and I grant judgment to the Club in the amount of $14,056.88 on account of that portion of its claim. [ 58 ] I pause to say that the evidence that Dr.

Staschuk gave that touches upon his view that membership was in some sense capable of being resold to another member misconceives and misconstrues the nature of the interest that he acquired with his membership purchase money. Membership is a chose-in-action. [ 59 ] Mr. Goth gave evidence that the financial planning of the Club is predicated as to capital expenditures upon the monies that come in by way of membership fees and that sets memberships apart from objects or things that might be viewed as susceptible of being resold. [ 60 ] A right passed to Dr. Staschuk in exchange for a promise to pay money.

The Club predicated its capital spending and business planning on lawful compliance on the part of all of its members with their entrance fee payments and any steps that the Club may have taken in the wake of a defaulting member's failure to honour those obligations to admit a new member does not alter the essentials of the relationship that the Club had with Dr. Staschuk as a member. [ 61 ] Mr. Dalke raises arguments having to do with mitigation not being a relevant consideration in debt claims. The law upon which Mr.

Dalke premises those submissions is sound and fully and entirely applicable to this aspect of the case and so no part of the $14,056.88 for which I have given the Club judgment against Dr. Staschuk is susceptible of off-setting or diminution on the theory of mitigation which has no place in a debt claim. [ 62 ] The Club seeks to recover $11,461.08 in legal fees.

It does so on the basis of an express contractual right found in the promissory note. [ 63 ] Were it not found in the promissory note, were there not to be a contractual entitlement, of course under the Small Claims Act and Rules solicitor and own client fees would not be recoverable. But on the authority of MacLean Distribution v.

Miles , 2007 BCPC 98 , contractual claims for legal fees and expenses are recoverable in the Small Claims Division of the Provincial Court and so, as to there being a basis in law upon which the claim can be asserted, the Club is on solid ground. [ 64 ] That said, the evidence that the Club has tendered before the Court in support of that claim is problematical.

What the Club has introduced into evidence in support of its $11,461.08 claim for legal fees is a succession of invoices or accounts rendered by its legal counsel, Davis & Company (Davis LLP as it is now known) to the Club with regard to this matter. [ 65 ] The totals of all of those invoices come to $11,461.08. However, the invoices have been redacted for solicitor/client privilege.

That is precisely the language that appears in the header, if you will, to the parts of these invoices that have been blanked out. [ 66 ] The fact that there is no detail that speaks to the actual services rendered and the charges that are individually allocated to those services poses a difficulty for the defendant and for the court.

It removes the ability of both the defendant and the court to make a reasoned assessment of the fairness and the reasonableness of the charges and to permit a process of verification to ensure that indeed all of these invoices contain only references to work done in respect of this case. [ 67 ] No live witness gave testimony about the character of the work done and the reasons the work took as long as it took and how the fees and disbursements correspond to the actual work done in respect of this file. [ 68 ] I hasten to say that this is not to say that there is not a way that it could be done, but in this trial with the evidence before me, that is all I have to work with, and all that I can work with.

I find myself hampered in my ability to make a sensible appraisal of this aspect of the claim and I consider that Dr. Staschuk has been similarly hampered in his ability to test that aspect of the claim. [ 69 ] Mr. Dalke raised a good point about a concern that early disclosure of these invoices, unredacted, might have given Dr. Staschuk a window onto the strategy of the Club and its legal advisors in terms of how they were going to prosecute the claim. That is a fair point, but there are ways to get around that that could have been in my judgment pursued but were not. [ 70 ] Mr.

Dalke, for example, might have brought the unredacted copies of the accounts to court today, provided them to Dr. Staschuk, given him an opportunity to review them and digest them and consider them for the purposes of cross-examination while the court stood down to afford him that opportunity. The concerns about loss of control of some privileged information about strategy and so forth would have essentially been overcome inasmuch as Dr.

Staschuk would be getting this information too late to be able to make any use of it, in effect. [ 71 ] I am also concerned about the steps taken to amend the Club's Notice of Claim and the extent to which they are reflected in the quantum of the legal fees. [ 72 ] Mr. Dalke has drawn to my attention the fact that Davis & Company stepped into this case, not from the very outset but around the time the settlement conference occurred. He has also indicated that Davis & Company is not seeking in its $11,000 claim any fees or disbursements for any work done subsequent to the beginning of November.

That, of course, would include in the waiver, so to speak, all of Mr. Dalke's efforts on his feet today in trial. So the number that is reflected in the claim under-represents the actual exposure of the Club to legal fees in that regard, but I do take note of the fact that a good deal of time and effort went into the question of amending the pleadings.

[ 73 ] The pleadings, as initially filed, asserted no claim for legal fees. The club made an application to the Court to obtain leave to amend the notice of claim to include legal fees. That application came on before Judge Pothecary. Dr. Staschuk was on notice of the application but did not attend so the application was brought before Judge Pothecary without Dr. Staschuk present to raise his voice against it if he was minded to do so. Judge Pothecary declined to make the order granting leave to amend the pleadings. [ 74 ] That decision was made the subject of a judicial review application in the Supreme Court.

The application was heard in Supreme Court and it was successful. The disposition of costs in the Supreme Court in that regard is unknown to this point. [ 75 ] The Club returned to the Provincial Court and made application in the wake of its success in the Supreme Court to have leave to amend its notice of claim to include a reference to legal fees and that application was granted. Judge de Couto said something at the end of that hearing about some aspect of the costs falling at the feet of the claimant although his words are very cryptic and I have to say not entirely clear to me.

But, among those words was a reference to something being attributable to the claimant's own conduct in not having set out its claim as fully when it initially pleaded its case as it saw fit to set it out later. [ 76 ] That, coupled with the inscrutable evidence relating to amounts by reason of the redaction of the accounts, leaves me unable to simply award judgment in favour of the Club in the amount sought. The evidence is simply incapable of supporting, in a clear way, the claim for legal fees. [ 77 ] Implicit in the contractual right to recover legal fees and disbursements is a requirement of reasonableness.

While the word reasonable does not appear in the promissory note, the law supplies that condition and that requirement by necessary implication. I am not able to assess the reasonableness in the way that I could if I had unredacted accounts. I am not able to find that all of the expenses that are associated -- and they are unliquidated -- with the pursuit of amendments to the notice of claim can reasonably be passed on to Dr.

Staschuk pursuant to the language in the promissory note. [ 78 ] Taking all that into account and bearing in mind the waiver, I am going to make a global award under this head of claim of $6,500 on account of legal fees recoverable under the promissory note. [ 79 ] There is a claim for interest under the Court Order Interest Act . The Club accelerated the outstanding amounts that Dr. Staschuk was paying by instalment payments in a letter sent to him on November 2nd, 2009 and so court order interest on the $14,056.88 runs from November 2nd, 2009.

There will be no interest on the legal fees recoverable under the promissory note. [ 80 ] The claimant, The Vancouver Golf Club, shall have its filing fees of $156.00 and its service fees of $20.00. (PROCEEDINGS ADJOURNED) (PROCEEDINGS RECONVENED) [ 81 ] THE COURT: That essentially brings me to the conclusion of my judgment. It is judgment in favour of the claimant, as I said, in the amounts that I have said. Madam Registrar has probably written that out in the form of an order. [ 82 ] Dr. Staschuk, would you require a

schedule of payments to pay this judgment? You will just pay it and clear it off? [ 83 ] THE DEFENDANT: Yes. [ 84 ] THE COURT: All right. The registry will calculate the court order interest and will inform you of that in due course. [ORAL REASONS FOR JUDGMENT CONCLUDED]