Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1045898
32 LEXPERT MAGAZINE | NOVEMBER/DECEMBER 2018 GLOBALNET MANAGEMENT SOLUTIONS INC. V. CORNERSTONE CBS BUILDING SOLUTIONS LTD DECISION DATE: JULY 23, 2018 In the Court of Appeal of British Columbia's decision in Globalnet Management Solu- tions Inc. v. Cornerstone CBS Building Solu- tions Ltd., 2018 BCCA 303, the Court held Cornerstone CBS Building Solutions Ltd. and Linwood Homes Ltd. liable for damages, and that the trial judge erred in ruling that the plaintiffs had suffered no loss due to the defendants' breach of contract and negligence. BACKGROUND OF DISPUTE In early 2005, Globalnet Management Solu- tions ("Globalnet") purchased property in Barriere, British Columbia and entered into a contract with Cornerstone CBS Solutions Ltd. ("Cornerstone") who in turn retained its parent company, Linwood Homes Ltd. ("Lin- wood"), for the construction and design of a house. is house was to be for use by Global- net's two principals and their families. Aer the house was completed, Global- net discovered water damage due to a leak- ing roof and cracks in the retaining walls. Globalnet retained third-party advice from an engineering firm to assess the damage and monitor these issues. Later, a construction firm was contracted to carry out suggested repairs to remediate the damage. In late 2008, Globalnet transferred the subject property to two trusts established for the benefit of the principals' families, on a "roll-over" basis for "fair market value." In 2009, Globalnet and the trusts com- menced action against Cornerstone for breach of contract and negligence, and Lin- wood for negligence. In 2010, the suggested remedies for the property issues proved unsuccessful, and eventually, Globalnet re- tained a construction firm to carry out sig- nificant repairs, including having to replace the retaining wall at a considerable expense. In the proceeding, the trial judge found in favour of the plaintiffs that breach of contract and negligence were proven and that Global- net took appropriate measures to replace the retaining walls, as they posed a danger to the health and safety of the home's occupants. e defendants argued that Globalnet was under no obligation to arrange and pay for the remedial work aer the property transfer and that "voluntary" payments are not re- coverable. ey held that since the property had been sold to the trustees for "fair market value," Globalnet suffered no loss. e de- fendants also argued that the trusts suffered no loss as Globalnet had carried out the re- pairs at its own expense. In this instance, the trial judge denied recovery, as the plaintiffs were found to have suffered no loss. DECISION On appeal, the Court held that the trial judge erred in ruling that the plaintiffs suffered no loss by reason of the defendants' carelessness. e Court held that the repairs were required and Globalnet had a moral duty to remediate the damages. e Court emphasized at least the importance on holding wrongdoers re- sponsible for their carelessness. e Court of Appeal allowed recovery by the plaintiffs in the amount of damages fixed by the trial judge. Counsel for the plaintiffs was Lawson Lundell LLP, with a team including Mi- chael B. Morgan and Laura L. Bevan. Counsel for the defendants was Borden Ladner Gervais LLP, with a team of D. Ross McGowan and Lindsey von Bloedau. BRITISH COLUMBIA V. PHILIP MORRIS INTERNATIONAL INC. DECISION DATE: JULY 13, 2018 In 2000, the Legislature of British Columbia enacted the Tobacco Damages and Health Care Costs Recovery Act (the "Act"), which created a statutory right of action enabling British Columbia to sue tobacco manufac- turers to recover the cost of health care bene- fits related to disease caused or contributed to by exposure to a tobacco product. e Act contemplates recovery for: (a) the cost of health care benefits for particular individual insured persons; and (b) the cost of health care benefits on an aggregate basis. British Columbia elected to pursue a statu- tory action on an aggregate basis in an action commenced January 24, 2001. Proceeding by aggregate action meant that the Province would not be required to disclose the "health care records and documents of particular individual insured persons" under the Act. Such records would be compellable in an ac- tion for the cost of health care benefits for particular individual insured persons. In pursuing its aggregate action, the Prov- ince indicated that it would rely on a number of health care databases containing health care information of millions of British Col- umbians, and spanning a number of decades, in order to prove causation and damages. e Province's position was that the data- bases constituted "health care records and documents of particular individual insured persons" and were therefore not compel- lable under the Act. However, it offered the defendants access to the information stored in the databases through an agreement with Statistics Canada, which would have allowed them to view the databases at a Statistics Canada Research Data Centre. One of the defendants, Philip Morris International, Inc. ("Philip Morris"), declined this proposal on the basis that its access to the data would be fettered and require it to waive litigation privilege. It brought an application for the production of the databases. THE DECISIONS BELOW e application judge held that the Act did not protect the databases from disclosure, be- cause the databases were distinct from the in- dividual health care records of an individual, and ordered production of the databases in an anonymized form. e British Columbia Court of Appeal unanimously upheld this determination, finding that the databases were both highly relevant to the litigation and "of a very different character" than in- dividual clinical records, which it acknow- ledged were non-compellable under the Act. BC APPELLATE COURT HOLDS CONSTRUCTION COMPANIES LIABLE FOR DAMAGES; SUPREME COURT OF CANADA ALLOWS BC'S APPEAL IN BIG TOBACCO CASE; QUÉBEC INDUSTRIAL AUCTIONEER RECEIVES $17 MILLION FROM CONSORTIUM OF COMPETITORS FOR USURPATION OF ASSET RIGHTS; ALBERTA BREWERS WIN ACTION AGAINST ALBERTA GAMING AND LIQUOR COMMISSION BIG SUITS