Executive Summary: Key Legal and Evidentiary Issues

• Canstar Restorations sought payment of over $1 million for emergency restoration services performed on MBW's fire-damaged hotel property under a Work Authorization contract.

• MBW received full insurance proceeds from Gore Mutual Insurance for Canstar's invoices but refused to remit payment to Canstar, constituting a breach of the Work Authorization.

• The court found the matter suitable for summary trial, rejecting MBW's objections that its counterclaim was inextricably interwoven with Canstar's contractual claim.

• MBW's expert evidence (Ron Scott's Declaration) was deemed inadmissible for failing to comply with evidentiary rules, lacking impartiality, and relying on unsupported assertions.

• Contractual interpretation confirmed that Canstar was entitled to take direction from the insurance adjuster and be compensated for all work performed, including work commenced before the Work Authorization was formally signed.

• MBW never exercised its contractual right to cancel the Work Authorization with 24-hour written notice, only raising complaints after receiving insurance funds.

The fire and the parties involved

On December 31, 2020, a significant fire broke out at a commercial property located at 21735 Lougheed Highway, Maple Ridge, British Columbia, owned by MBW Canada Holding Inc. ("MBW"). The property housed a hotel and a restaurant. The fire caused substantial fire, smoke, and water damage to the building, with the roof severely damaged and firefighting efforts resulting in water damage throughout the majority of the structure. MBW was insured with Gore Mutual Insurance Company ("Gore Insurance"), which appointed a number of consultants, including insurance adjuster Darren Berg from Charles Taylor Adjusters and Mike Kirkwood from MBC Engineering Group Inc. to oversee the claim. Canstar Restorations Limited Partnership ("Canstar"), a restoration company whose majority of work is related to property damage covered by insurance, was appointed by the adjuster to deal with the emergency portion of the claim related to the fire at the hotel.

The Work Authorization and scope of services

Canstar commenced emergency work on the property on January 3, 2021, given the urgency of the situation. On January 7, 2021, MBW's owner, Mr. Lizhi Luo, signed a one-page standard form agreement known as the Work Authorization, which governed the relationship between the parties. The Work Authorization checked the box for "Emergency/Environmental Services" and contained key terms and conditions: Canstar would perform work "as soon as reasonably practicable and shall do so in a good and workmanlike manner in accordance with industry standards and as may be directed by the Adjuster/Insurer"; Canstar would be compensated based on its standard labour and material charges including applicable contractor's fees plus GST/HST; any cheques issued by the insurer for the work would be endorsed by MBW to Canstar; and MBW was obligated to pay Canstar within 30 days of the date of an invoice, failing which interest would accrue at a rate of 24% per annum. A handwritten clause was added at MBW's request permitting MBW to cancel the Work Authorization at any time with 24-hour written notice.

The restoration work and invoicing

Canstar performed extensive emergency restoration work on the property, including shoring the damaged roof, removing damaged roof and mechanical equipment, removing damaged framing to the second floor, removing debris throughout the hotel, lead abatement in tiling located in some of the bathrooms, drywall and interior finish removal to prevent mould growth from standing water between two and three feet in certain basement areas, removing contents from the hotel for off-site drying, erecting a roof tent for weather protection during the emergency phase, deploying dehumidifiers and large commercial grade fans in less severely impacted areas, sealing the electrical room to protect it from damage, diverting water ingress to prevent water from migrating to the restaurant, and erecting fencing around the property for security. Canstar issued two invoices: the first for $750,128.53 on February 26, 2021, and the second for $246,069.10 on April 30, 2021. After an independent audit by MBC Engineering, the invoices were adjusted and reissued at $754,833.82 on August 6, 2021 and $234,260.09 on August 26, 2021. The auditing engineer, Mr. Kirkwood, considered, based on the detailed audit he had conducted, that Canstar's work on the property was well done and the costs incurred were reasonable. The adjuster, Mr. Berg, approved MBC Engineering's payment recommendations, finding that the work performed by Canstar was reasonable and what he expected to be completed given the size of the loss. Gore Insurance sent cheques totalling $989,093.91 to MBW's bank, the Bank of Montreal, specifically designated for Canstar's emergency invoices.

MBW's refusal to pay and its defences

Despite receiving the insurance proceeds earmarked for Canstar's work, MBW refused to pay. MBW raised several arguments: it argued that Canstar exceeded the scope of the contract since they were authorized to conduct emergency and environmental services but performed reconstruction work, that Canstar demolished more of the building than what was required for restoration work, that Mr. Luo was pressured into signing the Work Authorization, that work performed before the Work Authorization was signed should not be covered, and that Canstar's work was "illegal" for allegedly being done without required permits, breaching local bylaws, breaching the B.C. Building Code, and breaching Workers Compensation regulations. MBW also filed a counterclaim alleging negligence and brought a related action against Gore Insurance and others. MBW relied on a "Declaration" from Ron Scott, who stated he was a certified fire investigator, to challenge the quality of Canstar's work.

Procedural history and suitability for summary trial

The litigation had a protracted procedural history. Canstar filed its notice of civil claim on September 23, 2021, and expressed its intention to proceed by summary trial since July 2023. The hearing was adjourned multiple times due to MBW's repeated changes of counsel (its fourth lawyer withdrew on January 2, 2025), adjournment requests, disqualification applications found to be without merit by Justice Underhill on November 19, 2025, and an unsuccessful urgent leave application to the Court of Appeal dismissed by Registrar Outerbridge on December 8, 2025. MBW had been self-represented since January 2, 2025. The court found the matter suitable for summary trial under Rule 9-7 of the Supreme Court Civil Rules, holding that the contractual claim was not inextricably interwoven with MBW's counterclaim, the facts were largely undisputed, and MBW had failed to diligently pursue the pre-trial procedures it claimed were necessary.

The court's analysis and contract interpretation

The court applied the principles from Sattva Capital Corp. v. Creston Moly Corp. to interpret the Work Authorization, considering both the text and surrounding circumstances. The court accepted Canstar's interpretation: the contract entitled Canstar to take direction from the adjuster, the work performed fell within the scope of the agreement, and Canstar was to be compensated for that work. The court rejected MBW's argument that Canstar required MBW's approval for each step taken to restore the property, finding that the adjuster acted as an agent for the insured and that an agency arrangement was clearly provided for in the Work Authorization. Work performed before the formal signing was also covered, as MBW knew that Canstar was working on the property and implicitly, if not explicitly, consented to it. The court found no evidence supporting MBW's claims of illegality or that the scope of Canstar's demolition went beyond what was needed, and noted that Mr. Scott's Declaration was clearly not admissible as his qualifications were not set out, the Declaration did not conform with Rule 11-2, and there was no indication as to what information he relied on in coming to his conclusions. Notably, MBW never exercised its contractual cancellation right, and only after the funds were advanced to MBW did MBW complain about Canstar's work.

The ruling and outcome

The Honourable Justice J. Walker of the Supreme Court of British Columbia granted judgment in favour of Canstar on March 19, 2026, finding that MBW breached the Work Authorization by failing to pay Canstar's invoices for the work performed despite receiving corresponding insurance proceeds. Judgment was entered against MBW in the total amount of $1,038,549.15, comprising $754,833.82 based on the invoice dated August 6, 2021 and GST of $37,741.69, and $234,260.09 based on the invoice dated August 26, 2021 and GST of $11,713.00. Additionally, the court ordered contractual interest at 24% per annum beginning 30 days after September 21, 2021 for the first invoice and 30 days after September 23, 2021 for the second invoice. The Security of $1,008,490.09, plus any accrued interest, held in court pursuant to the consent order dated July 7, 2025, was ordered paid out to Canstar by way of cheque payable to its counsel "DLA Piper (Canada) LLP "In Trust". Canstar, as the successful party, was also entitled to costs of the action.