Sekhon et al v. Armstrong et al, 2003 BCCA 186

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Sekhon et al v. Armstrong et al, 2003 BCCA 186 Date: 20030321 Docket: CA029827 Between: Tejwinder Singh Sekhon, 489652 B.C. Ltd. and Sussex Insurance Agency (Newton) Inc. Appellants ( Plaintiffs ) And Kenneth William Armstrong, Sussex Insurance Agency Incorporated, Sussex Insurance Agency (Royal Oak) Inc., Auto Plus Insurance Agency Inc., Gary Mann, Gurbaldev Mann, Gurkmukh Singh Mann and Ricky Mann Respondents ( Defendants ) Before: The Honourable Mr. Justice Hall (In Chambers) S. R. Chamberlain, Q.C. Counsel for the Appellants P.

Roberts Counsel for the Respondents Armstrong and Sussex Place and Date of Hearing: Vancouver, British Columbia 17 March, 2003 Place and Date of Judgment: Vancouver, British Columbia 21 March, 2003 Reasons for Judgment of the Honourable Hall: [ 1 ] This is an application by the appellants for an order pursuant to the Court of Appeal Act and Rules for an order extending the time periods to the present time for filing the appeal record, the transcript, the factum and the appeal book in this appeal.

This is an appeal from an order made by Edwards, J. in Supreme Court on 29 May 2002 refusing to grant to the appellants (applicants) an order for an interim injunction to prevent the opening of an insurance agency at the Real Canadian Superstore in Guilford, Surrey. As I understood the situation from the comments of counsel, it appears that the new agency at this location was to be operated by individuals named Mann, who are named as defendants in the style of cause.

For whatever reason, it appears that these individuals were not before Edwards, J., perhaps because they had not at that stage been yet served with process. [ 2 ] I think that to elucidate the background facts it would be helpful to set out hereafter a portion of the judgment of Madam Justice Huddart of 9 September 2002 when she acceded to the application of the appellants to grant leave to appeal from the judgment of Edwards, J.: [1] On 29 May 2002 E.R.A.

Edwards J. refused to grant the applicants an interim injunction to prevent the opening of a franchise that day at the Real Canadian Super Store in Guildford, Surrey. The applicants seek leave to appeal from that decision. If I grant leave they seek an injunction to require the closing of that franchise pending the hearing of the appeal.

[2] The fundamental question in this litigation is whether the applicant 489652 B.C. Ltd is entitled to enforce a right of first refusal contained in a franchise agreement it made with the respondent Sussex Insurance Agency Incorporated on February 3, 1995. [3] It is common ground that Sussex granted a franchise to operate an Autoplan agency within the City of Surrey to the respondent, Gurbaldev Mann without first giving notice to 489652.

It is also common ground that 489652 had been struck from the register of the Registrar of Companies on 10 July 1998 and was not restored until 24 December 2001, six days after Sussex granted the franchise to Mr. Mann. [4] The applicant Tejwinder Singh Sekhon admits he learned of the franchise agreement on 18 April 2002.

On 23 April 2002 he wrote to Sussex seeking an explanation “as to what you intend to do to remedy this situation” and advising that “the company intends to seek damages in respect of lost profit or benefits to be obtained from the operation of a franchised insurance agency [at the Guildford location].” On 27 May 2002 489652 filed its motion seeking an interlocutory injunction. [5] At the conclusion of his oral reasons the chambers judge summed up his reasoning this way: [13] To reiterate, the outcome of this litigation can be adequately reflected in an appropriate award of damages to the successful party or parties.

I find that the plaintiffs have not shown that on a balance of convenience that the injunction should be granted. In short, there is no demonstration of irreparable harm. Any harm caused the plaintiffs is reparable with an appropriate award of damages should the action succeed. [6] The applicants consider the chambers judge ignored the “negative covenant” in so finding and thus erred in law. In their view the existence of the contractual obligation to give a right of first refusal was the functional equivalent of the negative covenant in Gulf Islands Navigation v.

Seafarers’ International Union (1959), 1959 CanLII 291 (BC SC) , 27 W.W.R. 652 (B.C.S.C.), affirmed 28 W.W.R. 517 (B.C.C.A.), that obviated any need to prove irreparable harm: Montreal Trust Company v. Montreal Trust Company of Canada (1988), 1988 CanLII 3020 (BC CA) , 24 B.C.L.R. (2d) 238 (C.A.) at 245-6. [7] Whether the contractual obligation is enforceable, whether it is the equivalent of a negative covenant, and whether the existence of a negative covenant deprives the chambers judge of discretion, are issues worthy of leave to appeal.

In accordance with the practice of this Court I will say nothing further on that issue. [ 3 ] As can be seen from the above excerpt, Huddart, J.A. concluded that it would be appropriate to grant leave to appeal from the trial judgment and she did grant leave to appeal. However, due to some mix-up in communications, she went on to conclude that she would not grant an injunction pending the resolution of the appeal. It turned out that no argument had been advanced on that particular subject before her.

Upon this being subsequently drawn to her attention she issued supplemental reasons on 8 th November 2002 in which she effectively retracted her comments concerning the issue of an interim injunction and left that matter outstanding. That matter has not been resolved to this date although I have been told that there may be an application in the near future concerning that.

That issue, in any event, is not before me on this application. [ 4 ] Although as I noted, the application for leave to appeal was granted by Huddart, J.A. in early September, perhaps some delay was occasioned because of the misapprehension I have noted above relative to the application in this Court for an interim injunction. We are now upwards of six months after the date of the granting of leave. Further delay appears to have ensued because of controversy between counsel as to the contents of the order made by Huddart, J.A. Counsel appear to have had differing views as to the possible costs disposition.

While all this delay has been regrettable, in the view I take of the matter, I do not consider that the delay alone would necessarily be dispositive of this application. I suppose it could be said that the delay has some significance in that in cases involving injunctions, normally the matter should be dealt with fairly expeditiously. That is so because circumstances may change over time and the equities could be affected.

Of course, the equities concerning the balance of convenience between the parties is a factor always to be considered in granting or not granting equitable relief by way of an injunction. [ 5 ] As I observed above, it does not appear that the individuals named Mann and what I would infer from the style of cause is their operating company were before the learned chambers judge in Supreme Court. Neither does it appear that they are before this Court. In cases of equity, it was always considered desirable that all parties who might be affected by any order be before the Court.

There were sensible and understandable historical reasons for this because equity, always being the product of a "court of conscience", as it was called, was a system acutely aware of and solicitous of the interests of justice. It would have been usually reckoned to be against the interests of justice to issue orders that might affect parties who had not had an opportunity to be heard.

[ 6 ] In this case, it does not appear that the Mann defendants, (respondents), were before the Supreme Court judge nor are they before this Court. It is a very clear case of what equity would have described as “want of parties”. I cannot see how it could be considered appropriate for this Court to make an order for injunctive relief of the sort sought here in the absence of persons vitally interested in that head of relief. What I would describe as the Mann defendants would appear clearly to be within such category. Of course, if the case concerned damages only, then other considerations would arise.

Since the question of damages is extant before the Supreme Court this Court need not be concerned about that particular head of relief at this stage. But as regards the injunctive relief, the matter on which leave to appeal was granted, it seems to me, to be a very salient consideration that the Mann defendants are not before this Court (and were not before Edwards, J.). While as I have observed, the delay in itself here has been undesirable and would complicate the difficulties of properly adjudicating the appeal because of the passage of time, I am not inclined to dismiss the application on that ground alone.

Counsel for the respondent Sussex urged me in argument to dismiss this applicaton because of the significant passage of time, bearing in mind that the order of Edwards, J. was made about ten months ago. Having regard to that circumstance, which cannot be entirely overlooked and what in my view is the more salient circumstance of what I have termed the want of parties it seems to me that it would not be a proper exercise of my discretion to now permit the filing of this material out of time. On a general overview of the case, and having regard to the principles set out in the line of cases of which Davies v.

Canadian Imperial Bank of Commerce (1987), 1987 CanLII 2608 (BC CA) , BCJ No. 1479 is representative, it seems to me that this is an appeal with no hope of success. In view of that conclusion I have reached it seems to me that the result must be that I ought not to accede to the present application and that the application should be dismissed. Accordingly I dismiss this application for an extension of time to file material. _______________________________ The Honourable Mr. Justice Hall