Vancouver Real Estate Board v. Moscrop Realty Limited

RITCHIE J.:-This is an appeal brought by leave of this Court from a judgment of the Court of Appeal of British Columbia' allowing the appeal of Moscrop Realty Limited (hereinafter referred to as "Moscrop") from the judgment of Maclean J., and directing that the action be referred back to the Court below for a new trial confined solely to the assessment of damages. This action was originally brought by both Moscrop and E. C. Wyman claiming damages for wrongful expulsion from the appellant Board and for loss of business and profits arising therefrom, and also for an order restoring them to membership in the Board, but Wyman's membership was not alleged in the pleadings, and his appeal having been dismissed by the Court of Appeal on the assumption that he was not a member, he is not a party to this appeal.

The appellant Board is a society incorporated under the Societies Act, R.S.B.C. 1948, c. 311, for the purposes of promoting the interests of real estate agents in the city of Vancouver and establishing and maintaining proper standards of conduct by its members. Real estate agents in the city of Vancouver are not obliged to be members of the Board but it is apparent that such membership enhances an agent's prestige and, in particular, that it makes available to him a system of multiple listings maintained by the Board which is considered to be of value in the conduct of the real estate business.

Moscrop was duly admitted to membership on November 22, 1951, on the application of G. Gamble, its then manager-owner, and from that date until the expulsion complained of it paid all membership dues and subscriptions for group insurance, was listed on the official list of members and treated in every respect by the Board as an active member in good standing.

In January 1953 Gamble, who was then Moscrop's representative on the Board, sold his interest in that company to Wyman who, as it must be assumed, did not become a member of the Board although his name appears to have been entered in the Board's register as the Moscrop representative. The change of ownership was communicated orally to the secretary of the Board but no new application for membership was made when Wyman acquired his interest.

In January and February 1956 the Board received two letters of complaint from former clients of Moscrop, alleging that an employee of that company had taken secret commissions in respect of two mortgage transactions. There followed a hearing before the Complaints and Discipline Committee of the Board at which the employee admitted taking the commissions, but stated that this was done without the knowledge of either Moscrop or Wyman. The decision of this Committee having been communicated to the Board of Directors, the latter body recorded a resolution in its minutes of March 1, 1956, which read in part as follows:

The action taken by the Secretary pursuant to these instructions was to write a letter to Wyman saying: It does not appear that either Wyman or anybody else on o. behalf of Moscrop was ever advised that the recommendation of expulsion might be waived if corrective action were taken nor does the kind of corrective action contemplated J. by the directors appear to have been communicated to Moscrop notwithstanding the fact that the by-law authorizing the directors' action reads in part as follows:

It is true that the secretary did tell Wyman in a telephone conversation that he thought the Board might withdraw the expulsion if the offending employee was dismissed by Moscrop but he did not commit himself and this conversation did not constitute an instruction to the member "to take such remedial action as may be required . . .".

An appeal was taken to an appeal board composed of seven directors on the ground, inter alia, that the penalty of expulsion was too severe in light of the fact that neither Wyman nor Moscrop was implicated in the employee's misconduct, and upon this appeal being dismissed a further appeal was taken without success to the membership as a whole.

The present action was then brought, alleging that the proceedings before the committee, the directors and the full Board and the resultant expulsions were contrary to law, natural justice and the constitution and by-laws of the Board. The defence was threefold in that the Board denied all allegations whereby the regularity of any of its proceedings or those of its directors or committees was impugned and pleaded also that the plaintiffs were not members of the Board "at all times relevant to the proceedings or at all", and, in the alternative, that if they were such members they were barred from bringing this action by reason of a waiver of all rights of action arising out of the disciplining of members, which waiver is contained in the by-laws of the Board.

In his decision, the learned trial judge, after a very lengthy review of the evidence, concluded that there were no irregularities in the proceedings of the Board, its directors or its committee of such a character as to invalidate the expulsion which he found to have been lawfully imposed and directed. Having reached this conclusion, the Ritchie J. learned trial judge did not find it necessary to deal with the allegation that the plaintiffs were never properly elected to membership or the alternative defence that if they were members their right of action was barred by the by-laws. In the course of his decision, rendered on behalf of the Court of Appeal of British Columbia, Davey J.A., having found that Moscrop was a member of the Board at all relevant times, went on to say:

But, in my opinion, this appeal must be determined against the Board upon the invalidity of -the order of expulsion itself, resulting from serious violations of the bylaws in respect of the form the order took and the notice given the Company. It will not be necessary to consider the validity of the appeal proceedings, except to say that these initial violations of the bylaws vitiated all that followed.

Later in the same judgment it is said:

Thus the directors' failure to specify on March 1st, 1956, the corrective action that they recommended and upon which they might waive the expulsion, and the appellants' ignorance that the expulsion might be waived if they took the appropriate action dogged the appellants throughout all appeal proceedings and nullified them.

In my opinion, the expulsion order cannot stand against the Company and must be set aside, and the Company restored to full membership in the Board.

The Court of Appeal further held that the allegation that Moscrop was barred from bringing the action by the terms of its membership could not be supported because the requirement for members to sign a waiver of claim against the Society at the time of their election did not come into existence until the enactment of the by-laws of 1955 and was only referable to and binding upon members who were elected subsequent to that date.

Although in its pleadings Moscrop described its claim as one for "general damages", (a) for wrongful expulsion; and (b) for loss of business and profits arising out of such wrongful expulsion, the Court of Appeal nevertheless held, following its own decision on an interlocutory appeal (see Estate Board No. 4)1, "that in the circumstances of this case there was a sufficient allegation of and prayer for special damages" and accordingly ordered a new trial confined

Mos nor solely to the question of damages which were not assessed by the learned trial judge.

Ritchie J. In the factum filed on behalf of the appellant, it is alleged that the Court of Appeal erred in manner following:

Board and wrongfully expelled, that it had waived its claim to damages.

Art. 1(1):

In the case of firms or corporations, in order that a firm or corporation may be deemed a member of the Society, it shall be necessary that a partner of such firm, or an official of such corporation, be elected as a member of the Society

It was argued that Moscrop's compliance with the terms of this by-law at the time of its initial election only accorded it the status of being "deemed a member" and that this did not constitute active membership and in any event that it lost the status of being "deemed a member" when it ceased to have an official as its nominee on the Board and that it certainly could not be said to have continued to be "deemed a member" after the new by-laws were enacted in 1955 because those by-laws contemplate the election of individuals only to membership on the Board.

1 (1959), 27 W.W.R. 476.

91996-9-42

Great stress was laid by appellant's counsel on the meaning to be attached to the word "deemed" as used in the above-quoted article of the by-law, and it was urged that should be given the meaning attributed to it by Cave J. in Regina v. Norfolk County Council', where, in construing the phrase "the following areas shall be deemed to be highway areas .", he said:

that

The word "deemed" is obviously capable of more than one meaning depending upon the context in which it is used. In the present circumstances, although far from saying that the quotation is of general application, I am of opinion that the word bears the meaning assigned to it by Coleridge J. in Wolton v. Gavin , where he was construing the phrase "deemed to be enlisted as a soldier in Her Majesty's Service" and said:

I am accordingly of opinion that Moscrop, having been duly elected to active membership in the appellant Board in 1951, remained a member at all times relevant to these proceedings. It does not appear that any steps were ever taken to terminate Moscrop's membership on the ground that it had no individual representative as a member of the Board, and as the by-laws make no provision for automatic expulsion of a corporation on this ground, the validity of the membership to which it was initially admitted remains undisturbed.

In construing these by-laws, it is to be remembered that they are the by-laws of the very Board which now seeks to invoke them against the respondent and that this same Board recognized the respondent's membership for four years and endorsed this recognition by ordering its expulsion.

1(1891),

[19611 The allegation that Moscrop was barred from recovering any damages by the terms of its membership was based on the following provision of the 1955 by-laws of the appellant Board:

Article 2-Membership

LTD. Part A-Qualifications

... Section 2-Qualification for Membership ...

Ritchie J. The Directors may elect to membership, in accordance with the terms of these By-laws, any individual who is eligible for membership in the Society ...

and signs an irrevocable Waiver of Claim against the Society, or any member or agent for any act in connection with the business of the society, and particularly as to its or their acts in electing or failing to elect or disciplining him as a member . . . .

As Moscrop had, in my opinion, already been elected to membership at the time when this by-law came into effect, it cannot, in my view, be construed as being in any way bound by the "irrevocable Waiver of Claim against the Society" which persons seeking election after 1955 were required to sign. I agree with the Court of Appeal that Moscrop's claim for damages is in no way affected by the terms of the by-law last referred to.

On the question of damages the appellant contends that the respondent's pleadings have been designedly limited to a claim for "general damages" and that only nominal damages are recoverable under this heading in an action for breach of contract.

This very point was the subject of an appeal to the Court of Appeal of British Columbia from the dismissal of an application to strike out the claim for "general damages" in the respondent's statement of claim, and in the course of delivering the reasons for judgment of that Court which have heretofore been referred to (see Wyman and Moscrop Realty Limited v. Vancouver Real Estate Board No. 4) supra, Coady J.A. read:

It is contended that this should be claim for special damages and not general damages. I think that submission finds some support in the cases to which counsel for the appellant has referred, but in that connection the observations of Atkinson J. in Aerial Advertising Co. v. Batchelor Peas Ltd. All E.R. at are to be noted. In this case, however, since particulars of what was claimed under this heading were upon demand supplied to the appellant and since counsel for the appellant admits that he is not therefore embarrassed by this pleading of general damages, if the action proceeds to trial in the form it now appears, it would therefore appear that the learned Judge below was right, in the