IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150129

Docket: S159229

Registry:
New Westminster

Between:

Township of
Langley

Plaintiff

And

Kevin Witschel

Defendant

Before:
The Honourable Mr. Justice Blok

Reasons for Judgment

I.              
Introduction

[1]           
By way of summary trial, the defendant applies for a dismissal of the
plaintiff’s claim on the basis that it was filed out of time and is thus
statute-barred.

[2]           
The plaintiff, while acknowledging that the claim was filed beyond the
two year limitation period, argues that the cause of action was confirmed by
the defendant in two emails that were sent before the limitation period
expired.  The plaintiff also maintains this case is unsuitable for disposition
by summary trial.

[3]           
The defendant replies to this position by asserting settlement privilege
in the case of one of the emails, arguing that the email is not admissible by
reason of that privilege, and for both emails submits that disclaimers
contained within them or their language generally ought to result in the
conclusion that they cannot be read as admissions of liability.

[4]           
The parties joined issue on these points and their very capable counsel
cited various authorities in support of their respective submissions.

II.            
Background

[5]           
The background facts may be briefly stated.  The plaintiff alleges that
on October 13, 2011 a traffic signal controller owned by the Township of
Langley (the “Township”) was damaged as a result of being struck by a vehicle
operated by the defendant.  A replacement unit was installed at a cost of about
$30,000.

[6]           
The defendant’s insurer, ICBC, has established a unit of specialized
adjusters to deal with property claims by municipal and government agencies. 
The stated purpose of this unit is to have consistent handling of these
specialized claims.  A 2003 document from ICBC sets out the specific
information ICBC requires for the purpose of considering these types of claims
and indicates that these claims are to be directed to a specific department.

[7]           
On March 13, 2012 the plaintiff sent to ICBC an invoice for the
replacement of the controller.  Ms. Foxgord, the Township’s manager of revenue
and tax collection, wrote emails commencing in February 2013 to follow up on
the unpaid invoice.  The initial emails were inquiries to ascertain the
individual who was handling the matter.  Told it was a Mr. Linden, Ms. Foxgord
sent an email dated March 8, 2013 which said:

This invoice remains unpaid,
please advise when we can expect payment.  Also, please advise the date this
becomes ‘past limitations’.  Thank you.

[8]           
Mr. Linden replied by email of March 18, 2013.  He indicated he had
hired an electrical engineer to investigate the matter but certain inquiries the
engineer had made of the Township remained outstanding.  Mr. Linden
concluded his email as follows:

At this time I am unable to advise when it might be paid as I
am awaiting upon our investigation results.

Should you have any questions
please feel free to contact me.

[9]           
Mr. Linden’s email contained the following footer after his title
and address:

Nothing herein contained is or
shall be construed as either an admission of liability on the part of the
insured or a waiver of or extension of any applicable limitation period.

[10]       
That email is the first of the two emails in question.

[11]       
From the application materials it appears that there was some further
dialogue between the Township and ICBC’s engineer.  Mr. Linden then sent an
email to Ms. Foxgord on September 30, 2013.  This email is the second of
the two emails at issue.  After apologizing for his tardy response, Mr. Linden
made several comments that were generally to the effect that some of the
claimed expenses were excessive, part of the controller may have been salvageable
and that there was an element of betterment in replacing a used unit with a new
unit.  He concluded his email as follows:

I would be prepared to settle the
townships claim for [$XXX].

[12]       
Mr. Linden’s email contained the same disclaimer referenced earlier,
again as a footer to the email.

[13]       
Ms. Foxgord responded to that email on October 1, 2013, rejecting
the offer, then followed this up with another email in December 2013.  At that
point Mr. Linden informed Ms. Foxgord that the limitation period had expired.

III.          
Discussion

A.           
Suitability for Summary Trial

[14]       
The defendant submits that this matter is suitable for summary trial
because the facts are readily ascertainable and not in dispute, and there will
be no delay or disruption to the action or to any trial because no trial date
has yet been set.  The defendant also notes that disposition by summary trial
is appropriate given the amount involved and in light of the principle of
proportionality.

[15]       
The plaintiff submits that this matter is unsuitable for summary trial. 
While conceding that limitation issues are often dealt with in this manner, the
plaintiff, citing SmartCentres Inc. v. EBA Engineering Consultants Ltd.,
2014 BCSC 2271, says that because there are other issues in the case a summary
trial is not an efficient approach.

[16]       
In SmartCentres Inc. certain land developers sued their
engineering and environmental consultants for preparing reports indicating,
allegedly in error, that certain environmentally-sensitive lands were suitable
for development.  The defendants brought a summary trial application to
determine the applicability of a limitation of liability clause in a contract. 
Among other issues, the parties disputed whether there was a contractual
relationship at all between at least some of the plaintiffs.

[17]       
Butler J. outlined the problems associated with determining a single
issue in some cases:

[23] While the court will attempt to resolve the issues
placed before it and give judgment where it is appropriate to do so, special
considerations apply when a single issue is proposed for resolution by way of
summary trial. In Coast Foundation v. Currie, 2003 BCSC 1781, Groberman
J. summarized these difficulties with reference to the relevant authorities. He
noted that courts should be cautious about deciding cases in a piecemeal
fashion. The extent to which issues may be intertwined is not always obvious or
immediately evident when a single issue is placed before the court in
isolation. He highlighted two concerns which are relevant to the efficient
resolution of disputes; the allocation of a court’s own resources and the
efficiency of a partial determination from the standpoint of the litigation.
His comments at paras. 16-18 are particularly apposite:

[16] It must be borne in mind that
the primary purpose of Rule 18A is the efficient resolution of disputes.  Where
the court does not consider that the determination of an issue under Rule 18A
will assist in the efficient resolution of the dispute, it ought not to make
the determination.

[17] There are at least two aspects
to be considered in gauging the efficiency of the summary trial process. 
First, this court must be concerned about the allocation of its own resources: North
Vancouver (District) v. Lunde (1998), 60 B.C.L.R. (3d) 201 at 212 (C.A.)
(paragraph 33).  Summary trial applications that will not, even if successful,
reduce the length of trial, should, in general, be discouraged.  The court must
recognize the reality that judicial time is a scarce resource.

[18] Second, the court must
consider the efficiency of a partial determination from the standpoint of the
litigation itself.  Piecemeal decision-making is rarely an efficient manner in
which to resolve a dispute.  It raises the possibility of multiple appeals on
individual issues, and this will generally impede rather than hasten the
orderly determination of the action.

[24] In North Vancouver
(District) v. Lunde (1998), 60 B.C.L.R. (3d) 201 (C.A.), the Court
emphasized, at para. 33, that where the answer to an issue sought to be
tried by a summary trial will resolve the whole of the proceeding only if one
answer is given, the court must consider whether the orderly use of court time
will be enhanced by proceeding in that fashion.

[18]       
Butler J. concluded that a summary trial was not appropriate.  He said:

[26] First, I do not necessarily
regard the issue sought to be determined as a discrete issue. There is a
likelihood it is intertwined with other issues. In any event, the extent to
which the issues are intertwined can only be determined following a full
examination of all of the circumstances with the benefit of full argument at
trial. Second, in addition to the limitation of liability issue, EBA raises
many defences to the substance of the plaintiffs’ claims. These defences would
require consideration in the event the defendants were unsuccessful in this
application or if they were only partially successful. Both scenarios are
possible. In the event either scenario came to pass, there would be no benefit
in terms of court time or the parties’ resources. If the defendants are not
completely successful, determination of the single issue would not shorten the
length of pretrial proceedings or the trial itself. Finally, any decision on
the issue proposed by the defendants will invite an appeal. An appeal will
derail the trial and result in an inefficient use of court time.

[19]       
Here, the situation is different.  The issues are not intertwined and
the issue for determination is a discrete one.  As well, from the
representations of counsel I am satisfied that this is the one issue between
the parties that prevents a resolution and that deciding it will likely bring
the case to an end irrespective of the summary trial result.

[20]       
For those reasons I conclude that a summary trial is an appropriate
procedure in this case.

B.           
The Limitation Act

[21]       
It is common ground that the former limitation statute, the Limitation
Act, R.S.B.C. 1996, c. 266 [Limitation Act] applies in this
case (the new Limitation Act, S.B.C. 2012, c. 13, having come into
force after this accident) and that the applicable limitation period is two
years unless extended by s. 5 of the former act, which reads as follows:

5.(1) If, after time has begun to run with respect to a
limitation period set by this Act, but before the expiration of the limitation
period, a person against whom an action lies confirms the cause of action, the
time during which the limitation period runs before the date of the
confirmation does not count in the reckoning of the limitation period for the
action by a person having the benefit of the confirmation against a person
bound by the confirmation.

(2) For the purposes of this section,

(a) a person confirms a cause of action only if the person

(i) acknowledges a cause of action,
right or title of another, or

(ii) makes a payment in respect of
a cause of action, right or title of another,

…

(5) For the purposes of this
section, an acknowledgment must be in writing and signed by the maker.

[22]       
The Township submits that the emails of March 18, 2013 and September 30,
2013 serve to engage s. 5 of the Limitation Act by confirming the
cause of action.

C.           
Settlement Privilege

[23]       
The defendant submits that the September 30, 2013 email cannot be used
to confirm the cause of action because it is protected by settlement privilege. 
He submits that this privilege arises whenever there is a dispute or
negotiation between parties and terms are offered to settle that dispute or
negotiation.  On this point he cites Sekhon v. Sekhon (14 May 2004), New
Westminster Reg. No. S078338 (B.C.S.C.) [Sekhon], which in turn
relied on a test set out in Belanger v. Gilbert (1984), 58 B.C.L.R. 191
(C.A.) [Belanger].

[24]       
The Township says that the requirements for this privilege are not made
out because there must be a “litigious dispute” in existence, or at least
contemplated, and that was not the case here.  On this point the Township cites
Cytrynbaum v. Gineaut Holdings Ltd., 2006 BCSC 468 [Cytrynbaum], Hamalainen
v. Sippola (1991), 62 B.C.L.R. (2d) 254 (C.A.) [Hamalainen] and Blue
Line Hockey Acquisition Co., Inc. v. Orca Bay Hockey Limited Partnership, 2007
BCSC 143 [Blue Line Hockey].

[25]       
I digress for a moment to say that I find Hamalainen unhelpful
here as the issue in that case was not settlement privilege but litigation
privilege.  There, the dispute concerned the production of adjuster’s reports and
the specific issue of whether litigation was in reasonable prospect at the time
the reports were created.

[26]       
The issue about what kind or degree of dispute must be in existence to
invoke settlement privilege is a difficult one because the test has been stated
in different terms in different cases.  Several cases in the trial court have
relied on Sinclair v. Roy (1985), 65 B.C.L.R. 219 (S.C.), which appears
to be the source of the “litigious dispute” version of the test advanced by the
Township.  The question in that case was whether to set aside a subpoena that
was directed to a family court counsellor who had been involved in helping the
parties resolve their differences.  Huddart L.J.S.C. (as she then was) said at
p. 222:

The law has long excluded from evidence admissions by word or
conduct made by parties during negotiations to settle litigation: Pirie v.
Wyld (1886), 11 O.R. 422 (C.A.). The privilege attaching to such
communications belongs to both parties. The waiver of both parties is required
if any communication is to be admissible: Pais v. Pais, [1970] 3 W.L.R.
830, [1970] 3 All E.R. 491. For privilege to attach to communications made
during the course of settlement negotiations, two conditions must be met: there
must be a litigious dispute in existence or at least contemplated: Warren
v. Gray Goose Stage Ltd., [1937] 1 W.W.R. 465 at 472 (Sask. C.A.), and the
communication must be made for the purpose of effecting settlement or in
response to such a communication.

[Emphasis added.]

[27]       
The case cited within that passage, Warren v. Gray Goose Stage Ltd.,
[1937] 1 W.W.R. 465 (Sask. C.A.) does not seem to support the proposition
advanced in Sinclair v. Roy because the phrase “litigious dispute” does
not appear in either set of reasons given by members of the court.  I note that
Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 4th ed.
(Markham, Ont.: LexisNexis Canada, 2014) at 1039 similarly relies on Warren
v. Gray Goose for the proposition that a “litigious dispute” is required.  I
will digress for a moment to address this point.

[28]       
Warren v. Gray Goose, a motor vehicle accident case, was heard by
a panel of four judges.  Gordon J.A. wrote reasons with which two other judges
concurred, ordering a new trial on damages.  Mackenzie J.A. wrote separate
reasons, concluding that damages should simply be reduced to a certain figure
without having a new trial on damages.  Both the passage from Sinclair v.
Roy, quoted above, and the text of Sopinka, Lederman & Bryant reference
the reasons of Mackenzie J.A., not the majority reasons.  However, the two sets
of reasons do not differ substantially on the point that is relevant to the
present case, which was the admissibility of a portion of a “without prejudice”
letter in which an offer of settlement was made.

[29]       
The majority said that an earlier case, McLeod v. Pearson, [1931]
3 W.W.R. 4 (Alta. S.C.) was dispositive of the point.  In turn, McLeod v.
Pearson, a case concerning the admissibility of settlement correspondence
for limitations purposes, adopted a test from Halsbury’s [Halsbury’s
Laws of England, vol. 13, 1^st ed. (London, U.K.: Butterworths,
1907)], paras. 634 and 761, that reads in part as follows:

634. … Moreover, the law has always been particularly tender
in its treatment of efforts made by the parties to compromise their disputes,
and accordingly it will altogether exclude proof of negotiations entered into
for that purpose either expressly or impliedly “without prejudice.” In
order, however, to entitle communications to protection on this ground, it must
appear that there was a dispute or negotiation impending between them, and
that the letters were written, or interviews held, bona fide with a view
to settlement.

761. Letters written during a dispute or negotiation between
the parties, and expressed or otherwise proved to have been written “without
prejudice,”, cannot in general be admitted in evidence without the consent of
both parties.

But this rule is strictly confined to cases where there is
a dispute or negotiation, and terms are offered for the settlement thereof;

[Emphasis added.]

[30]       
Mackenzie J.A.’s reasons in Warren v. Gray Goose on the
admissibility issue reference several authorities (including both Halsbury’s
and McLeod v. Pearson) as authority for the following statement (at
p. 272):

The rule that letters written during a dispute or
negotiations between the parties proved to have been written without
prejudice cannot in general be admitted in evidence without the consent of both
parties but that this rule is strictly confined to cases where there is a
dispute or negotiations and terms are offered for the settlement thereof.

[Emphasis added.]

[31]       
This is the specific passage referenced both in Sinclair v. Roy
and by Sopinka, Lederman & Bryant.  As will be seen, the phrase “litigious
dispute” is not used and instead the required context is expressed as “a
dispute or negotiations”.  Indeed, through two sets of reasons all four judges in
Warren v. Gray Goose adopt a test involving “a dispute or
negotiation(s)”.

[32]       
I return to Sinclair v. Roy.  Although several cases have quoted either
the “litigious dispute” passage from that case (including Cytrynbaum,
and Blue Line Hockey referred to it indirectly by citing Cytrynbaum)
or have referred to Warren v. Gray Goose directly, purportedly
for that same proposition, so far as I can ascertain the “litigious
dispute” test has never been endorsed by our Court of Appeal.  Instead, the
test adopted by the Court of Appeal (in Belanger) appears to be a more
expansive one.

[33]       
In Belanger the question was whether a letter written before the
expiry of the limitation period confirmed the cause of action.  The Court of
Appeal said at pp. 192-193:

The letter was not written without prejudice, but counsel in
his able argument put to us that all conversations or communications with
respect to settlement must be deemed to be without prejudice. Even if the letter
had been marked as without prejudice it would not, in my judgment, assist the
appellant in this case. Not all letters so marked are to be held inadmissible.
I refer to the judgment of his court in Schetky v. Cochrane, 24 B.C.R.
496, [1918] 1 W.W.R. 821 (C.A.), and the judgment of Martin J.A. at p. 827.
On that page Martin J.A. referred to the case of Re Daintrey; Ex parte Holt,
[1893] 2 Q.B. 116 (Div.Ct.) in which he said:

…it was held that an admission of
bankruptcy may be proved in a letter from the debtor to the creditor, though
marked "without prejudice"

And he quoted from the judgment saying:

"In our opinion the rule which
excludes documents marked ‘without prejudice’ has no application unless some
person is in dispute or negotiation with another, and terms are offered for the
settlement of the dispute or negotiation …"

Martin J.A. went on:

This lays it down that before the
privilege arises two conditions must exist, viz.: (a) a dispute or
negotiation between two or more parties; and (b) in which terms are offered

The letter in question, even though it had been marked
"without prejudice", cannot meet that test. In my opinion the learned
judge was correct and I would dismiss the appeal.

[Emphasis added.]

[34]       
This is the same “dispute or negotiation” requirement that was applied
in Warren v. Gray Goose.

[35]       
As already stated, the test applied in Belanger is more expansive
insofar as it requires only that the parties be “in a dispute or negotiation”
and does not require the arguably more rigorous requirement that a “litigious
dispute” be either in existence or contemplated.

[36]       
As noted earlier, Belanger was applied in Sekhon.

[37]       
I consider the test set out in Belanger to be the more authoritative,
at least in the context at issue, that being the admissibility of settlement
communications for the purpose of defeating a limitations defence.  It is a
decision of our Court of Appeal, whereas cases in this province that use or
approve the “litigious dispute” test are all at the trial level.  The Belanger
test is similar in all material respects, if not identical, to the test that
was in fact applied by the Saskatchewan Court of Appeal in Warren v. Gray
Goose.

[38]       
I also conclude that the Belanger test is more in harmony with
the public interest in encouraging the settlement of disputes more generally,
not just “litigious” disputes.  This public interest has been articulated many
times by the courts.  I will refer to just two instances.  In Middelkamp v.
Fraser Valley Real Estate Board (1992), 71 B.C.L.R. (2d) 276 (C.A.),
McEachern C.J.B.C. said the following (on behalf of four judges of a five-judge
bench):

[2] I have no doubt that it is in
the public interest, that parties to disputes should be free to negotiate Competition
Act matters and other disputes freely, and without fear of later prejudice
arising out of the steps taken during efforts to arrange settlements.

[39]       
In Bellatrix Exploration Ltd. v. Penn West Petroleum Ltd., 2013
ABCA 10 [Bellatrix Exploration], the Alberta Court of Appeal put it this
way:

[21] Settlement privilege is
premised on the public policy goal of encouraging the settlement of disputes
without the need to resort to litigation. It allows parties to freely discuss
and offer terms of settlement in an attempt to reach a compromise. Because an
admission of liability is often implicit as part of settlement negotiations,
the rule ensures that communications made in the course of settlement
negotiations are generally not admitted into evidence. Otherwise, parties would
rarely, if ever, enter into settlement negotiations to resolve their legal
disputes.

[40]       
Applying the Belanger test, it is clear from the evidence that
the Township had made a claim and the claim was disputed.  The email from ICBC
of September 30, 2013 is ample evidence that the claim was disputed.  That
email contained an offer made in an apparent attempt to resolve the dispute, or
at least to embark on a negotiation.  These facts satisfy the Belanger
test.

[41]       
If I am wrong in my conclusion about the applicable test, then I
conclude that the email in question also meets the “litigious dispute”
criterion.  The Township submits that the claims format established by ICBC for
these types of claims suggested that payment was merely an administrative
process rather than an opposed, contentious, litigation-threatening exercise,
and so the Court should conclude that this was not a “litigious dispute”.  It
appears, however, that the claims format was merely to ensure that standardized
claims information was submitted to the proper department by governments or
municipalities.  There is nothing in the email to suggest that
properly-submitted claims would necessarily be paid.  As with any third-party
claim, there could still be a number of reasons to resist payment.

[42]       
It is clear that the Township was aware that litigation might be
necessary, in a general sense, because in her email of March 8, 2013 Ms. Foxgord
asked the adjuster about the limitation date, an inquiry to which the adjuster,
perhaps understandably, did not reply.  In the afternoon of September 30, 2013,
two weeks before the limitation period expired, ICBC made an offer of
settlement, an offer that was rejected by the Township early on the following
day.  Certainly, at least from an objective point of view, litigation had to
have been in prospect by this point because, at least in the usual case, an
action would shortly have to be commenced to preserve the claim.  It was also
obvious that the parties were in a dispute.  These matters are sufficient for
me to conclude that there was a “litigious dispute” that was then contemplated.

[43]       
I conclude that the email of September 30, 2013 is not admissible in
evidence as it is protected by settlement privilege.

D.           
Is There a Limitations Exception to Litigation Privilege?

[44]       
Lambert J.A. in Belanger, while agreeing with the Court’s
decision generally, mentioned a possible limitations exception to litigation
privilege.  He said at p. 193:

I agree with everything that has been said by Macdonald J.A. and
would dispose of this appeal as he proposes for the reasons that he has given.

I would like to add one additional point. In my opinion it
is possible for a letter to be considered as a "without prejudice"
letter and inadmissible in evidence in relation to its contents about the flow
of settlement negotiations either on liability or quantum, but at the same time
for the same letter to be admissible in evidence for the exclusive purpose of
s. 5 of the Limitation Act. It is not necessary to decide that
question on the facts of this case, and I explicitly do not do so.

[Emphasis added.]

[45]       
This obiter dictum has prompted much subsequent comment.  Lambert
J.A.’s statement, together with the subsequent cases that have discussed it,
forms the basis of the Township’s argument that even if the September 30, 2013
email is generally inadmissible due to settlement privilege, it is nonetheless
admissible for the more limited purpose of addressing s. 5 of the Limitation
Act.

[46]       
These subsequent cases are as follows:

a)   
Middelkamp, where McEachern C.J.B.C. said at p. 282:

I recognize that there must be
exceptions to this general rule [of settlement privilege].  An obvious
exception would be where the parties to a settlement agree that evidence will
be furnished in connection with the litigation in which the application is
made.  In such cases, the public interest in the proper disposition of
litigation assumes paramountcy and opposite parties are entitled to know about
any arrangements which are made about evidence. Other exceptions could
arise out of such matters as fraud, or where production may be required to
meet a defence of laches, want of notice, passage of a limitation period or
other similar matters which might displace the privilege.  As we did not have
argument on these matters I prefer to say nothing further about them.

[Emphasis added.]

b)   
Low v. Petro-Canada Inc., 2001 BCSC 251, where Macaulay J. said
(after referring to Lambert J.A.’s obiter in Belanger):

[44] … It is not necessary for me to rely on this extension
to the earlier reasoning in the case.  I recognize that Taggart J.A., in a
later decision, cast some doubt on the correctness of the assertion by Mr. Justice
Lambert.  See Farrell v. Tisdale (1987), 16 B.C.L.R. (2d) 230 (C.A.) at
241.  It remains to be seen whether it was this that the Chief Justice had in
mind when outlining the exceptions in Middelkamp.  Certainly if the
extension proposed by Lambert J.A. is correct, there can be no doubt that the
letters in question are admissible for the limited purpose of the s. 5
analysis even if I am wrong on the question of privilege.

c)    Berry v.
Cypost et al (No. 1), 2003 BCSC 1827, where Burnyeat J. set out an
extensive list of various exceptions to the privilege that attaches to
settlement discussions, including a list of five cases said to establish a
limitations exception.  Ultimately, however, the exception Burnyeat J. invoked in
that case was one applicable to fraud and not to a limitations issue; and

d)   
Dos Santos v. Sun Life Assurance Co. of Canada, 2005 BCCA 4,
where in an action against a disability insurer there was a question concerning
the amounts on account of income loss that the plaintiff had received in a
settlement with a third-party tortfeasor’s insurer; in other words, the issue
was possible double recovery.  The Court found that both relevance and
necessity militated in favour of recognizing an exception for the purposes of
that case.  In the course of considering the issue the Court said:

[17] In Middelkamp, supra,
Chief Justice McEachern said there must be exceptions to the blanket privilege
for settlement communications.  Notably, he referred to the proper disposition
of litigation (para. 20).

[18] In my view, Middelkamp did not close the door on
what might constitute a valid exception to the blanket privilege (see reviews
of types of exceptions to the rule in Berry v. Cypost Corp. (2003), 43
C.P.C. (5th) 275, 2003 BCSC 1827, and Unilever plc v. The Proctor &
Gamble Co., [2000] 1 W.L.R. 2436 (C.A.)).

[47]       
The defendant responds by submitting that these cases are very thin
support for the proposition advanced by the Township because, in each case, any
supportive statements are clearly obiter and, I would add, in some cases
the statements are obiter upon obiter.  The defendant cites
contrary cases, including cases in which the issue was squarely before the
court and the existence of a limitations exception was rejected.  These are:

a)   
Farrell v. Tisdale (1987), 16 B.C.L.R. (2d) 230 (C.A.), where the
Court of Appeal applied the test in Belanger and said the following
about Lambert J.A.’s obiter remark in that case (at p. 241):

Mr. Justice Lambert did not
state any legal or factual basis for his suggestion and none has been given us
by counsel for the plaintiff.

I can think of no legal basis, other than waiver of
privilege, for admitting as evidence letters which are privileged even if they
are admitted for the limited purpose of ascertaining whether there was
confirmation of a cause of action. The documents are either privileged or not,
and if privileged, cannot be used for or against either party.

Notably, Farrell v. Tisdale
was not referred to by the Court of Appeal in the later case of Middelkamp;

b)    Attorney
General of Canada v. Forsberg (1996), 27 B.C.L.R. (3d) 272 (S.C.) [AG
Canada v. Forsberg], where the only issue before the Court was whether
letters proposing settlement were admissible for the limited purpose of
defeating a time bar.  Lowry J. (as he then was) followed Farrell and
declined to follow Lambert J.A.’s obiter comment in Belanger.  He
concluded there was no limitations exception to settlement privilege;

c)    Sekhon,
where Bennett J. (as she then was) followed AG Canada v. Forsberg;

d)   
Meyers v. Dunphy, 2007 NLCA 1, where, interestingly, the
Newfoundland and Labrador Court of Appeal analysed most, if not all, of the
British Columbia cases already mentioned, concluding as follows:

[49] … Other than the obiter in Belanger v.
Gilbert which, as noted above, was considered but not accepted by the
British Columbia Court of Appeal in Tisdale v. Farrell, and the obiter
in Middelkamp v. Fraser Valley Real Estate Board, none of the
authorities mentioned by the appellant can be construed as lending support to
the appellant’s proposition that matters bearing on limitation issues
constitute, or should constitute, an exception to the settlement privilege.

The Court went on to discuss the five cases cited in Berry
v. Cypost that were said to establish a limitations exception, finding in
each instance that the case did not support the proposition.  The Court
concluded:

[52] Thus, despite the assertion of
Burnyeat J., in Berry v. Cypost Corp., I cannot agree that there is
any authority supporting the proposition that use of otherwise privileged
correspondence, for the purpose of establishing confirmation of a cause of
action pursuant to subsections 16(1) and (2) of the Limitations Act, is
an established exception to the settlement privilege.  I can envisage a
circumstance where use of “Without Prejudice” correspondence to establish
confirmation for purposes of the Limitations Act may well be an
exception where the circumstances also establish some blameworthy or
meritorious conduct, as a result of which, a “compelling or overriding interest
of justice” warrants admitting the correspondence, notwithstanding the
settlement privilege. I cannot, however, agree that absent some such
special reason, there is anything about confirmation, for purposes of the
Limitations Act, that would outweigh the public policy interest, in promoting
resolution of disputes by negotiated settlement, and justify admitting in
evidence communications protected by settlement privilege.  Relevance to
confirming a cause of action, for purposes of subsections 16(1) and (2) of the Limitations
Act is not, alone, sufficient.

[Emphasis added.]

e)   
Bellatrix Exploration, where the Alberta Court of Appeal rejected
the notion of a blanket exception for limitations purposes.  The Court said:

[39] We also respectfully
disagree that the privilege could or should be waived to answer the limitations
defence in these circumstances. The privilege should not normally give way to
answer a limitations defence. To recognize an exception in this case would
unnecessarily weaken and undermine the integrity of this important privilege,
and other mechanisms, such as a standstill agreement, are available for such
purposes. We do not say that the privilege may never yield for this reason,
though any proposed exception to settlement privilege must be justified on the
basis that it promotes an alternative policy objective that clearly outweighs
the underlying objective of the settlement privilege. There are no exceptional
circumstances to justify doing so here. Both parties are sophisticated
entities and could easily have invoked a tolling or standstill agreement to
stop the limitations clock while negotiations were ongoing.

[Emphasis added.]

[48]       
None of the cases cited by the Township actually invokes a limitations
exception.  Like the unicorn, or perhaps more charitably, like a subatomic particle
that would lie beyond the ability of science to detect, it is a concept whose
existence has been theorized but it has never actually been seen.  In contrast,
the cases cited by the defendant involve cases where the issue was squarely
before the court and the existence of an exception was rejected.  Two of the
cases, AG Canada v. Forsberg and Sekhon, are probably
binding on me by reason of judicial comity, but I need not decide that point
because I consider them to be correct in any event.  Finally, it is significant
that two appellate courts in other provinces have similarly rejected the notion
of a generalized exception for limitations purposes.

[49]       
As a result of this analysis I conclude that ICBC’s email of September
30, 2013 is inadmissible by reason of settlement privilege, and there is no
exception to this privilege for the purposes of arguing a confirmation of the
cause of action.

E.            
The March 18, 2013 Email

[50]       
There are two issues with this email: (1) whether the email contains an
acknowledgement of the cause of action, and (2) whether, viewed objectively,
the email as a whole can be taken to be an admission of liability or
confirmation of a cause of action in light of the disclaimer at the end of the
email.

[51]       
The Township, while acknowledging that the language of the March 18
email does not make for a very strong admission, submits that the email still
amounts to a confirmation of the cause of action as set out in Podovinikoff
v. Montgomery (1984), 58 B.C.L.R. 204 (C.A.).  In Podovinikoff a car
accident plaintiff argued that a series of letters written by the defendant’s
insurer amounted to a confirmation of his cause of action.  The pertinent
letters asked the plaintiff to contact the adjuster regarding the settlement of
his personal injury claim.  The Court of Appeal found at p. 209 that the confirmation
must involve the acknowledgement of some liability on the part of the
defendant.  The test is an objective one, that is, whether a reasonable person
reading the letters would take it that the defendant was going to settle the
claim.  The Court in that case found the letters to be an acknowledgement of
some liability.

[52]       
The defendant submits that the March 18 email does not meet the Podovinikoff
test because the email is no more than a “we’ll get back to you” type of
correspondence.

[53]       
I agree with the submission of the defendant.  The email merely says “… I
am unable to advise when it [the invoice] might be paid as I am awaiting upon
our investigation results”.  It does not even say the author is unable to
advise when the invoice will be paid, instead it says might be
paid.  I do not consider that the language used is sufficient to convey to an
objective, reasonable person that that the defendant was going to settle the
claim.

[54]       
In the event I am wrong in this conclusion I turn to the question of the
email’s disclaimer which, to repeat, reads:

Nothing herein contained is or
shall be construed as either an admission of liability on the part of the
insured or a waiver of or extension of any applicable limitation period.

[55]       
The specific issue here is the effectiveness of a disclaimer that has
the appearance, at least, of being an automatic addition or adjunct to the
communication.

[56]       
In Podovinikoff the Court of Appeal indicated that its conclusion
in favour of an acknowledgement was “strongly supported” by the absence of any
language in the correspondence indicating any reservations about settlement. 
The Court said at p. 210:

…I would only add that this
conclusion is strongly supported by the consideration that there is nothing in
the letters to indicate that the insurer had any reservations about settlement.
Thus, there was nothing which might indicate to the recipient of the letters
anything other than that the insurer would settle. If the adjuster had any
doubts about settlement he would surely have said that liability was not
admitted and that he would enter settlement discussions without prejudice. If
the adjuster wanted only to avoid litigation and secure peace, one would expect
to find some indications of this position in the letters.

[57]       
In Unger v. Fortin (1997), 33 B.C.L.R. (3d) 97, disclaimer language
similar to that at issue here was found to be sufficient to oust the conclusion
that the correspondence should be construed as an admission of liability.  The
Township distinguishes this case on the basis that the disclaimer in that case
appeared within the body of the email and appeared to have been typed by the
adjuster.  Here, the disclaimer appears, in different font, at the foot of the
email after the adjuster’s name and address.  The Township submits that this
language is mere automatic “boilerplate” that appears at the foot of all ICBC
correspondence, of whatever kind, and as such loses its meaning.

[58]       
On this point the Township cites South Coast British Columbia Transportation
Authority v. First West Leasing Ltd. (19 August 2013), Vancouver Registry No. 12-42253
(B.C.P.C) [First West Leasing].  The issue in that case was whether an
email from ICBC that contained both an apparent admission of liability and
a disclaimer had the effect of confirming the cause of action.  The email in
question indicated in the “re” line that the claimant was “zero percent
liable”, an assessment that was repeated in the body of the email.  The learned
judge said at para. 20:

In my view, given that that
without-prejudice line appears in most of … ICBC’s correspondence in this
instance with the claimant company, I hearken back to the decision in Podovinikoff
that something more would have to have been required in order for the recipient
of the email correspondence to think that liability remained outstanding. 
Given the clear, simple, and brief reference in that letter, ICBC would have
been required to do something other than just conclude with their regular
boilerplate language, that appears on this and other emails, to take away from
the fact that a reasonable person would have come to a ready conclusion that
liability was admitted.

[59]       
Here, the defendant objects to the Township’s use of the term
“boilerplate” in this case, noting that there are only three emails in evidence
and thus there is insufficient information on which such a characterization can
be made.  On the substantive point, the defendant submits that First West
Leasing is distinguishable because there the disclaimer was directly
contradicted by both the “re” line and the content of the email itself.

[60]       
I accept these submissions.  The cases in this area are fact-specific. 
The approach mandated by Podovinikoff requires that the communication as
a whole be considered. First West Leasing is merely an application of
that approach.

[61]       
While the location and font of the disclaimer in the present case does leave
the impression that it is automatically generated, I do not see that this means
the language must necessarily be ignored.  It depends on the situation.  If the
disclaimer directly contradicts the substance of the email and has been used in
a multitude of communications between these parties regardless of their
purpose, then the overall impression left on a reasonable person may well be
that the disclaimer language is to be ignored in favour of the substantive
message, as it was in First West Leasing.

[62]       
In the case at bar I do not have any evidence showing a use of the
disclaimer in communications between these parties that is so automatic, and
perhaps inappropriate in some instances, that I should conclude it is
meaningless language.  I do consider it fair to conclude that the tag-end
location of the disclaimer and its differing font might well cause a reasonable
person to give less weight to it in considering the email as a whole.

[63]       
I have already concluded that the substance of the email would not
convey to an objective, reasonable person that that the defendant was going to
settle the claim or that some liability was being admitted.  If I am wrong in
that conclusion and the email does constitute an acknowledgement, it is an
acknowledgement that is very weak.  When the email as a whole is considered, including
the disclaimer, I conclude that a reasonable person would find that it was not
an acknowledgement of any liability.

IV.          
Conclusion

[64]       
Given my findings concerning the emails of March 18, 2003 and September
30, 2013, I conclude that there is nothing in the admissible evidence before me
that amounts to a confirmation of the cause of action for the purposes of
s. 5 of the Limitation Act.  Since the Township filed its claim
after the expiry of the applicable two-year limitation period, its action is
statute-barred.

[65]       
The defendant’s application is allowed and the action is dismissed with
costs.

“Blok
J.”