Executive Summary: Key Legal and Evidentiary Issues

• The appellant’s attempt to adduce fresh evidence failed for not meeting the Palmer test criteria, particularly regarding due diligence and material impact.

• The court rejected the appellant’s application to add BC Ferries as a respondent, finding BC Ferries lacked a direct interest in the outcome and the application misused Rule 18(2).

• Allegations of fraud, misrepresentation, and document spoliation by the respondent were dismissed due to insufficient evidentiary support and procedural misuse.

• The Registrar's Report, finding no overpayments or monies owed under the sublease, was confirmed after a full evidentiary and legal review by the trial judge.

• The appellant and its director were declared vexatious litigants due to repetitive, meritless filings and abusive conduct toward the court and opposing parties.

• Procedural fairness was upheld by the court despite the appellant’s claims, with the record showing full opportunities for submissions and judicial consideration.

Background of the dispute

This case concerns a protracted dispute between Delane Industry Co. Ltd. (“Delane”) and Tsawwassen Quay Market Corporation (“Tsawwassen”) relating to a commercial sublease dating back to 2005/06. Under the lease, Delane was responsible for paying a proportionate share of common area expenses at a retail market located within the BC Ferry Terminal in Tsawwassen. Their relationship eventually deteriorated, leading to the non-renewal of the lease and subsequent litigation. Over more than a decade, the parties have been involved in numerous legal proceedings at both the trial and appellate levels.

Registrar's findings and trial court confirmation

In February 2024, a Registrar issued a report concluding that no funds were owed between the parties for common area expenses. The Registrar’s assessment, which included evidence such as an affidavit from Tsawwassen’s CFO, found that charges were correctly calculated and there was no evidence supporting Delane’s theory that some expenses belonged to BC Ferries. The Supreme Court of British Columbia confirmed this Report in August 2024, rejecting Delane’s challenge and an application for further document production.

Appeal and related applications

Delane appealed the Supreme Court's confirmation and brought two additional applications: one to adduce fresh evidence and another seeking to add BC Ferries as a party to the appeal.

The fresh evidence application involved two affidavits purportedly showing falsehoods and procedural abuses by Tsawwassen. However, the Court of Appeal found the new evidence failed the Palmer criteria—most of the materials were either previously available or irrelevant to decisive issues in the appeal.

The attempt to include BC Ferries as a respondent under Rule 18(2) of the Court of Appeal Rules was rejected on multiple grounds. The Court found that BC Ferries had no legal interest in the dispute, had never contracted with Delane, and the application was primarily a pretext for discovery purposes rather than a legitimate addition of a necessary party.

Findings on procedural fairness and abuse of process

Throughout the appellate judgment, the Court emphasized that Delane had been afforded ample opportunity to present its case at every stage. The claim of procedural unfairness—primarily that Mr. Karry Au Yeung, Delane’s director, was denied a fair chance to speak—was found to be unsubstantiated.

In a broader assessment of Delane’s litigation conduct, the Court upheld the trial judge’s declaration of both Delane and Mr. Au Yeung as vexatious litigants. Their pattern of repetitive, abusive, and unfounded legal filings, as well as hostile accusations against judges and counsel, was found to justify the restriction of future filings without court leave.

Final disposition

The British Columbia Court of Appeal dismissed all aspects of Delane’s case: the appeal itself, the motion to admit fresh evidence, and the application for review of Justice Iyer’s procedural ruling. The Court reiterated that the underlying issues had been definitively resolved and that continued attempts to reopen them constituted an abuse of process.