COURT OF APPEAL FOR BRITISH COLUMBIA

Transcription

1 COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Between: And Before: Hik v. Redlick, 2013 BCCA 392 John Hik and Jennie Annette Hik Larry Redlick and Larry Redlick, doing business as Larry Redlick Enterprises The Honourable Madam Justice Saunders The Honourable Mr. Justice Groberman The Honourable Mr. Justice Hinkson Date: Docket: CA Appellants (Plaintiffs) Respondents (Defendants) On appeal from: An order of the Supreme Court of British Columbia, dated November 13, 2012 (Hik v. Redlick, 2012 BCSC 1684, Vancouver Docket S097250) Counsel for the Appellant: Counsel for the Respondent: Place and Date of Hearing: Place and Date of Judgment: L.J. Alexander J.B. Thompson Vancouver, British Columbia June 6, 2013 Vancouver, British Columbia September 6, 2013 Written Reasons by: The Honourable Mr. Justice Groberman Concurred in by: The Honourable Madam Justice Saunders The Honourable Mr. Justice Hinkson

2 Hik v. Redlick Page 2 Summary: The defendant entered into an oral contract to place fill on the plaintiffs property. The project was completed to the satisfaction of the parties, but the municipality was not satisfied with certain aspects of the work and demanded that remedial action be taken. Contrary to the plaintiffs instructions, the defendant performed additional work on the property in an attempt to satisfy the municipality s demands. The additional work caused damage to the property. The trial judge dismissed the plaintiffs claim for breach of contract, finding that the defendant had been in a difficult position, and that his actions were not unreasonable in the circumstances. Appeal allowed. The defendant had no legal authority to perform the work, and it was in breach of his contractual obligations. His anxiety over the municipality s demands did not entitle him to unilaterally make alterations to the land. The matter is remitted to the trial court for assessment of damages. Reasons for Judgment of the Honourable Mr. Justice Groberman: [1] This is an appeal by the owners of a parcel of farmland from a judgment dismissing their claim against the defendants, who had contracted to place fill on their land. The appellants say that Mr. Redlick breached the contract by spreading and grading fill on the land in a manner that was contrary to Mr. Hik s instructions, and they seek damages for remediation of the land. [2] The trial judge found that Mr. Redlick performed certain work on the land that was contrary to Mr. Hik s instructions. He found, however, that Mr. Redlick was entitled to do the work because he perceived it as necessary in order to prevent the Township of Langley from taking legal action against him. [3] For reasons that follow, I am of the view that the trial judge erred in finding that Mr. Redlick had legal authority to do the impugned work. To the extent that that work caused damage to the land, Mr. Redlick is liable to compensate the appellants. The Agreement and Initial Work on the Project [4] Mr. Redlick worked as a grader operator for many years until his retirement in He sought to earn money in his retirement by operating a business placing and spreading fill on rural properties. In early 2006, Mr. Redlick was driving in the Langley area, looking for properties that might benefit from the deposit of fill. He saw

3 Hik v. Redlick Page 3 Mr. Hik working in his field, and approached him and asked whether he would be interested in having fill placed on the land. Mr. Hik said that he wished to improve the drainage on his land to increase its agricultural value, and was interested in having a substantial amount of fill placed in certain areas of it. [5] Mr. Hik and Mr. Redlick reached an agreement as to how the work would be done. As found by the trial judge, the oral agreement required Mr. Hik to obtain a permit from the Agricultural Land Commission. Mr. Redlick took responsibility for obtaining and paying for a municipal permit from the Township of Langley. Mr. Redlick, using his own machinery, agreed to scrape the topsoil from the portion of the parcel to be filled and to stockpile it. He was then responsible for obtaining, placing and spreading fill. Both the locations to be filled and the amount of fill to be placed were to be determined by Mr. Hik. Once the fill was in place, Mr. Redlick was required to spread the stockpiled topsoil overtop of it. Mr. Redlick was not to be paid by Mr. Hik, but was entitled to collect dump fees from persons who wished to dispose of fill on the Hik property. [6] The Township of Langley permit required that the material to be deposited consist of good quality soil, relatively stone free which is suitable for agricultural purposes. The trial judge accepted that those requirements were also terms of the contract between the parties. [7] Mr. Redlick commenced work on the site in the summer of Work was suspended for the winter around the beginning of November and recommenced in early March The last load of fill was delivered in July In all, over 100,000 m 3 of fill was placed on the land, representing over 7,000 truckloads. Mr. Redlick earned between $230,000 and $240,000 from dump fees. [8] Relations between Mr. Hik and Mr. Redlick became strained by the summer of Nonetheless, Mr. Redlick continued to work on the property until September It appears that the parties considered the work to be complete or almost complete at that time, and that Mr. Hik was satisfied with it.

4 Hik v. Redlick Page 4 Demands by the Township of Langley [9] In November 2007, Mr. Redlick arranged for a representative of the Township of Langley to attend at the property for a site inspection. He anticipated that after a satisfactory inspection, the Township would release funds on deposit on account of the permit. [10] The site inspection was not, however, satisfactory from the standpoint of the Township. It wrote to Mr. Redlick on December 3, 2007 (with a copy to Mr. Hik), raising two issues about the state of the project. First, it was concerned with the placement of fill on a slope leading down to a railway right-of-way at the northern boundary of the parcel. It demanded that the parties obtain a letter from the railway authorizing the placement of fill on the right-of-way, or, in the alternative, that they remove the fill from the right-of-way. The Township also required further work to be done on the slope to ensure that it was stable, and to provide for silt control. [11] Second, the Township was concerned about a stockpile of fill that remained on the property. During the project, Mr. Redlick learned that a substantial quantity of fill which included topsoil was available from an area nursery. The fill contained a significant amount of contamination, however, in the form of plastic, large rocks, wood, roots and other material including a bent and rusty metal culvert. The trial judge found that Mr. Hik directed Mr. Redlick to allow the material to be brought to the property and placed in a large pile. Mr. Hik planned to use the pile as a source of topsoil at some point in the future. It is clear that, unless the contaminating material was removed from the pile, it was not suitable as fill material, and did not comply with the permit conditions imposed by the Township of Langley. In its December 3, 2007 letter, the Township requested information as to the parties intentions in respect of the stockpile. [12] On January 30, 2008, the Township followed up with a second letter, this one addressed to Mr. Hik, with a copy to Mr. Redlick. It noted that in the event of any disagreement between Mr. Redlick and Mr. Hik, the Township would ultimately hold the Hiks, as the property owners, responsible for compliance with the permit

5 Hik v. Redlick Page 5 requirements. The letter reiterated the demands of the December letter with respect to the railway right-of-way slope. It also required that the stockpile of fill on the property be removed or used to grade the site. The letter set a deadline of March 31, 2008 for completion of the work. [13] The Township placed the matter in the hands of its lawyers in March In a letter to the parties dated March 18, 2008, the lawyers repeated the Township s demands, and threatened legal action in the event that the work was not completed by the end of the month. The letter again emphasized that the Hiks, as owners of the land, were ultimately responsible: Although Mr. Redlick made the soil permit application to the Township as authorized agent for the registered owners of the Lands, it is the owners of the Lands, John Hik and Jennie Hik, who are ultimately responsible for ensuring compliance with the Permit. [14] The record indicates that Mr. Hik s solicitors had discussions with the lawyers for the Township in April They do not appear to have reached agreement at that time with respect to remedying the deficiencies identified by the Township. In particular, Mr. Hik was of the view that the stockpile posed no hazard, and should remain on the property. [15] On June 25, 2008, representatives of the Township met with Mr. Hik and Mr. Redlick on site. Among other items, the meeting agenda included discussion of the deficiencies mentioned in the Township s letters. The Township offered to extend its deadline to July 31, It is not clear whether agreements on all matters were reached at the meeting in particular, it is not clear that Mr. Hik agreed to the removal or spreading of the stockpiled material. Mr. Hik did, however, agree to remove fill material from the railway right-of-way and install silt fences. Further, he agreed to commission an engineering report to establish appropriate measures for slope stabilization on the slope leading to the right-of-way. [16] Mr. Hik followed up with the Township on June 27, 2008, advising that a geotechnical engineer would be visiting the site during the week of July 7. He stated

6 Hik v. Redlick Page 6 that work could begin, in the meantime, by removing material that had been pushed onto the railway right-of-way and installing a silt fence at the mouth of two culverts. Subsequent Work by Mr. Redlick [17] On July 3, 2008, Mr. Hiks lawyer sent an to Mr. Redlick s lawyer in the following terms: I have received a copy of [the Township of Langley s] Deficiency Meeting Agenda dated June 25, 2008, but no notes from the meeting. My client is presently away, but has asked that your client commence work by July 10, 2008, failing which Mr. Hik will do the work himself. I understand that the deadline for finishing the work has been extended to July 30, I am also advised that [the geotechnical engineer] will visit the site next week to provide a report as to slopes and grading that is required along the North property line. [18] It is not apparent from the itself what work Mr. Redlick was being instructed to do. Counsel have advised us, however, that the parties understood that the only work that Mr. Hik was instructing Mr. Redlick to commence involved the removal of fill material from the railway right-of-way and the installation of a silt fence. [19] During Mr. Hik s absence in July, a Township official met with Mr. Redlick on site. After the meeting, Mr. Redlick substantially re-graded the slope leading to the railway right-of-way, pulling the slope back, and installed a silt fence. In August, he spread the fill from the stockpile on the property without removing the contaminating material. [20] Mr. Hik had not authorized Mr. Redlick to perform that work, and was angry that it was done. He considered that the pulling back of the slope resulted in the loss of an area of useable agricultural land. He also was upset that the stockpile had been spread over the property without his permission and without screening out the contaminating material. [21] At trial, Mr. Redlick said that he performed the work on the instructions of the Township official. The trial judge rejected that explanation. He preferred the

7 Hik v. Redlick Page 7 evidence of the Township official, who testified that he had told Mr. Redlick that it was up to Mr. Hik and Mr. Redlick to decide what to do. Analysis [22] While the trial judge accepted that Mr. Redlick s work on the land in July and August 2008 was neither authorized by Mr. Hik nor performed on the instructions of the Township, he nonetheless found that Mr. Redlick was not liable for any damage occasioned thereby. [23] The trial judge s analysis of the issue is connected to an implied contractual term contended for by the plaintiffs. The purported term, as quoted by the trial judge at para. 45 of his judgment, is as follows: Where there were alternative means of performing aspects of the work required under the contract, including alternate means of complying with the conditions of applicable permits or bylaws, [the defendant] would make best efforts to defer to and comply with the reasonable instructions, directions or expressed wishes of [Mr. Hik] as to which means to employ. [Bracketed words inserted by the trial judge] [24] Mr. Redlick argued that this was not an implied term of the contract, and that the express term of the contract to the effect that Mr. Redlick would follow the instructions of Mr. Hik made such an implied term unnecessary. The trial judge did not reach a firm conclusion as to whether the alleged implied term formed part of the agreement, saying: [61] I have some difficulty accepting that the parties in the case of this very informal, oral contract would have included this complicated and, in some ways, contradictory term in their contract if they put their minds to it in spring I will nonetheless assume it is applicable to the evidence. [25] The trial judge then found that the term placed Mr. Redlick in a difficult situation in 2008, facing the possibility of legal action by the Township and by Mr. Hik and in the circumstances, his actions were justified and not contrary to the contract: [67] Returning to the term of the contract that the plaintiffs claim to have been implied, it is a complicated one that requires the defendant to balance

8 Hik v. Redlick Page 8 his responsibilities to the regulatory agencies with his best efforts to defer to and comply with the reasonable instructions, directions or expressed wishes of [Mr. Hik] as to which means to employ. [T]he defendant was facing legal action from all parties, he had assembled the equipment to do the work, Mr. Hik had been given more than one opportunity to provide alternatives based on a Geotechnical report but he had not done so and Mr. Hik was absent. In these circumstances I conclude that the defendant applied his best efforts to a difficult situation. Clearly the plaintiffs believe the defendant should have made a different decision, presumably to remove his equipment and run the increasingly likely risk of legal action. However, that is not the test to be applied under this implied term. [26] I am unable to agree with the trial judge s analysis. First, there does not appear to be any basis in law or in the evidence to justify implying the term into the contract. The judge was correct in his initial view that the purported implied term was out of keeping with the nature of the contract and that it was unnecessary, given the clear understanding that Mr. Hik was to direct all work. In the circumstances, the judge erred by proceeding on the assumption that the purported implied term formed part of the contract. [27] Even, however, if the term were part of the contract, it could not have had the effect of allowing Mr. Redlick to unilaterally undertake the work that he did on the land. [28] It is clear that under the contract, Mr. Hik was to direct all work. Mr. Hik did not authorize any work by Mr. Redlick in July 2008 beyond the removal of some fill from the railway right-of-way and the installation of a silt fence. In particular, Mr. Hik did wish to have the parcel s northern slope re-graded instead, he was commissioning a geotechnical report to deal with alternative slope stabilization measures. He also did not direct the spreading of the stockpile, and was contesting the Township s authority to require its removal. [29] Mr. Redlick s anxiety over the Township s threats of legal action (which, in any event, appear to have been directed primarily at Mr. Hik) does not provide a legal justification for his actions. His actions were not in accordance with his contract with the Hiks, and amounted to a breach. To the extent that they caused damage, Mr. Redlick is liable to them.

9 Hik v. Redlick Page 9 [30] Unfortunately, several difficulties make it impossible for this Court to determine the amount of damages occasioned by Mr. Redlick s breaches of contract. [31] The Hiks had substantial work performed to remediate the property, and claim that they are entitled to be reimbursed for the expenses. In particular, they paid a contractor to stabilize the northern slope of the property through the construction of a retaining wall. They also had a contractor screen a large volume of soil that included the contaminated fill from the stockpile that Mr. Redlick had spread over the land. [32] The trial court did not make findings of fact with respect to the reasonableness of the measures undertaken by the Hiks to deal with the damage to the land. Mr. Redlick contends that the construction of a retaining wall was not a reasonable solution for stabilizing the northern boundary of the property. He also says that the screening of fill undertaken by the Hiks went far beyond what was required. It will be necessary for the trial court to make findings of fact on these issues in order to assess damages. [33] Further, it is not clear that the Hiks are entitled to claim the entire cost of the work, as they would have faced some expenses even absent Mr. Redlick s unauthorized work in July and August The stockpile of contaminated material would eventually have had to be screened or removed, and there would have been costs involved in doing so. Given the trial judge s finding that Mr. Hik directed Mr. Redlick to bring the stockpiled material onto the land and to leave it there, the screening or removal of the stockpile would not have been Mr. Redlick s responsibility. [34] As well, some measures would have been needed to stabilize the northern boundary. I do not read the trial judge s reasons as suggesting that Mr. Redlick had any responsibility to take those measures. Indeed, it appears that Mr. Redlick s only remaining contractual obligations after September 2007 involved some fine grading. As I read the trial judge s findings, any problems along the northern boundary were

10 Hik v. Redlick Page 10 Mr. Hik s responsibility he had directed the placement of the fill, and had failed to obtain the contemplated permission of the railway to place fill on its lands. [35] This Court is not in a position to assess the reasonableness of the remedial measures taken by the Hiks, nor to determine the degree to which the Hiks would have had to expend funds on remediation if Mr. Redlick had not undertaken the unauthorized work. Accordingly, the matter must be returned to the trial court for assessment of damages. [36] In the result, I would allow the appeal and set aside the order of the trial court. In its place, I would substitute a declaration that Mr. Redlick was in breach of his contract with the Hiks. The issue of the quantum of damages must be returned to the trial court for determination. [37] The appellants have had substantial success on this appeal, and, in accordance with the usual practice, are entitled to their costs of the appeal. It is not, at this point, clear whether the appellants will ultimately be able to claim substantial success at trial they have succeeded on some issues, but not on others. Until the issue of damages has been determined, it is premature to assess trial costs. Accordingly, I would leave the issue of costs to the discretion of the judge on determination of the damages issue. I agree: The Honourable Madam Justice Saunders The Honourable Mr. Justice Groberman I agree: The Honourable Mr. Justice Hinkson