Laxton v. Coglon,


2008 BCSC 772

Date: 20080617
Docket: S045940
Registry: Vancouver


Chandra Laxton



Richard Luke Coglon, 629256 B.C. Ltd.,
656643 B.C. Ltd., Osoyoos Resort Development Corp.,
Deltec Worldwide Limited and Benures Investment Ltd.


Before: The Honourable Mr. Justice Kelleher

Reasons for Judgment

Counsel for the Plaintiff:

J.R. Shewfelt

Counsel for Richard Luke Coglon:

G.A. Lang
B.J. Ingram


Date and Place of Hearing:

April 16, 2008


Vancouver, B.C.

[1]                This is an application by Richard Coglon, a former defendant in these proceedings.  Mr. Coglon seeks an order re-opening the trial in this matter and seeks permission to present further evidence.

[2]                The plaintiff’s claims against all defendants except Deltec Worldwide Limited (“Deltec”) were dismissed pursuant to a consent order dated October 22, 2007.

[3]                On June 14, 2007, the court struck out Deltec’s statement of defence and granted judgment to the plaintiff, with damages to be assessed.  The trial for the assessment of damages took place before me on December 7, 2007.  I published reasons for judgment on January 14, 2008 (see Laxton v. Coglon, 2008 BCSC 42).  I assessed damages of $2,561,409.

[4]                The last two paragraphs of the judgment, as it was originally published, read as follows:

[33]      I am satisfied that the defendant has not yet made full disclosure to this court.  I am prepared to infer that he has control or possession of undisclosed assets at least equal in value to the assets which have recently been disclosed.


[34]      There will be judgment for the plaintiff in the amount of $2,561,409.00.

[5]                Paragraph 33 is in error.  I was referring to Mr. Coglon, who was no longer a defendant.  Paragraph 34, in light of the wording of paragraph 33, is ambiguous.

[6]                On April 16, 2008, at the end of the hearing of this matter, I advised counsel for Mr. Coglon and counsel for the plaintiff that I intended to publish a clarification or correction of those paragraphs.  They did not object.  On April 18, I sent out a correction of paragraphs 33 and 34.  Paragraph 33 now reads:

[33]      I am satisfied that Mr. Coglon has not yet made full disclosure to this court.  I am prepared to infer that he has control or possession of undisclosed assets at least equal in value to the assets which have recently been disclosed.

[7]                This change is necessary because Mr. Coglon is not “a defendant” and certainly not “the defendant”.

[8]                Paragraph 34 now reads:

[34]      There will be judgment against the defendant Deltec Worldwide Limited in the amount of $2,561,409.00.

This change was made because a casual reader might assume, in part due to the error in paragraph 33, that the judgment was against Mr. Coglon.  It is not.  He is not a party to these proceedings, as a result of the consent order.

[9]                The judgment against Deltec is described more fully in the reasons published on January 14, 2008.  In short, it is based on the conclusion that Deltec was party to a concealment by Mr. Coglon of family assets.  I adopted the approach taken by Mr. Justice Fraser in Cunha v. Cunha (1994), 99 B.C.L.R. (2d) 93 (B.C.S.C.).  I decided it was appropriate to infer that the value of undisclosed assets is at least equal to the value of the disclosed asset.  The plaintiff was therefore entitled to the entire value of the asset.

[10]            The judgment relies on facts set out in a notice to admit dated October 5, 2007 and the second amended statement of claim.  These facts are deemed to be admitted because Deltec did not respond to the notice to admit and its statement of defence was struck.  In the course of the judgment findings of fact are made in respect of Mr. Coglon.  Mr. Coglon had denied the claims made against him through a statement of defence.

[11]            Mr. Coglon now applies to re-open the trial conducted on December 7, 2007.  Mr. Coglon asks for leave to submit evidence and introduce additional materials into the trial record.

[12]            No order has yet been entered, pending the resolution of these issues.


[13]            Although the plaintiff’s action against Mr. Coglon was dismissed by consent on October 22, 2007, Mr. Coglon argues that he has standing to appear before this court and make arguments regarding certain findings of fact that were made.

[14]            Mr. Coglon argues that he has standing because he remains a party to this action.  He says that upon filing an appearance he became a party of record and thus is entitled to certain rights.  For example, he would have the right to appear before the court to make arguments on issues such as costs or to ask the court to correct a clerical error by way of Rule 14(24) of the Supreme Court Rules, B.C. Reg. 221/90.  Similarly, he says that he has standing to appear before the court in these proceedings.

[15]            Mr. Coglon also argues that the Supreme Court has an inherent jurisdiction to ensure fairness in judicial proceedings, including the duty to prevent abuse of process.  He seeks standing on this basis, as well, arguing that some of the critical findings made in the reasons for judgment could bring the administration of justice into disrepute.

[16]            Mr. Coglon also says that his counsel, as an officer of the court, has standing to address the court in situations where there are circumstances casting a shadow on the integrity of the administration of justice.

[17]            Finally, Mr. Coglon argues that he has standing in equity to address the findings of fact made against him.

[18]            The plaintiff argues that Mr. Coglon has no standing to make arguments before this court because he has no interest in the order that was granted.  The order is against the defendant Deltec and is not binding as against Mr. Coglon.  An individual has no right to ask that changes be made to reasons for judgment pronounced in relation to an order which does not affect them.

[19]            In Union Pacific Capital v. Piché, 2005 BCSC 1018, 48 B.C.L.R. (4th) 136, Groberman J. (as he then was) considered whether a solicitor who was referred to negatively in reasons for judgment had standing to apply to have these comments excised from the judgment.  Groberman J. stated that one must show restraint when criticizing a person who is not before the court.  He went on to say, however, that criticism cannot always be avoided.  He said at paras. 7 and 8:

[7]        Civil trials are not general public inquiries designed to uncover facts, but rather focussed investigations designed to resolve private disputes.  It is appropriate that the process in a civil trial be controlled by the parties.  Their rights to present the evidence and arguments as they see fit ought not to be interfered with lightly.  This is particularly so in light of the trend toward longer and costlier litigation; the court should be wary of any developments that have the potential to make litigation more complex and costlier.

[8]        It is not always possible for the court to avoid findings that might affect the reputations of non-parties.  In some circumstances, it may be appropriate to afford non-parties limited status to make argument and even to present evidence as interveners.  Even this degree of participation by non-parties may prove problematic, however.  For the most part, the reputations of non-parties must be protected by judicial restraint rather than by affording them rights to control the process.

[20]            I conclude that Mr. Coglon does not have standing to raise arguments in relation to the findings of fact made in the judgment of January 14, 2008.  I agree with Groberman J.’s comments.  While it is desirable to avoid findings that are critical of non-parties, it is not always possible.  Here, the findings were dictated by the failure of Deltec to respond to the notice to admit.

[21]            Mr. Coglon is no longer a party to these proceedings.  I agree that the court has an inherent jurisdiction to ensure fairness and to prevent an abuse of process.  Here, however, there is no reason to engage this jurisdiction.  However, in the event that I am wrong, I will consider each of the arguments raised by Mr. Coglon.


[22]            Mr. Coglon argues that he was entitled to but had no notice of the trial to assess damages against Deltec that was held on December 7, 2007.  Again, although the claims against him were dismissed, Mr. Coglon says that he did not cease to be a party of record and as such should have received notice.

[23]            Counsel for the plaintiff acknowledges that there is little authority considering whether a party to a dismissal order is entitled to notice.  However, the plaintiff points to several compelling policy reasons which militate against affording rights to a party against whom a claim has been dismissed.

[24]            First, the plaintiff says that if a party against whom an action has been dismissed continues to be entitled to the rights of a party of record, then, correspondingly, such a party must also comply with all the obligations attaching to a party of record.  A party of record is subjected to ongoing document discovery by way of Rule 26(13) and must answer interrogatories pursuant to Rule 29(1).  To ensure that a party against whom an action has been dismissed continues to abide by these obligations would be extremely inefficient.

[25]            In addition, the plaintiff says that if a party against whom an action has been dismissed is entitled to notice under Rule 39(21), then that party is also entitled to all other kinds of notices or rights of delivery provided for in the Supreme Court Rules, supra.  This could include such things as delivery of amended pleadings, notice of interrogatories served upon another party, notice of discontinuance against another defendant, notice of pretrial disposition, and notice of interlocutory motions, to name a few.  Again, such an exercise would be extremely inefficient and inconvenient.

[26]            I agree with the plaintiff that to impose a right of notice upon a defendant who has had a claim dismissed is onerous and impractical.  Such a finding does not accord with the spirit and intent of the Supreme Court Rules, supra.  Moreover, in this case, Mr. Coglon had actual but not formal notice of the trial.

[27]            Accordingly, I find that that Mr. Coglon is not entitled to re-open the trial on the basis that he did not have notice of the trial.

Res Judicata

[28]            Mr. Coglon argues that the findings of fact made in the reasons for judgment are precluded due to the application of the doctrine of res judicata.  Mr. Coglon says that the dismissal order resolved all issues as between the plaintiff and himself.  The trial held on December 7, 2007 functioned to raise those same issues in a different context.  Any adverse comment made about Mr. Coglon in the reasons for judgment functioned to effectively pass judgment on those issues a second time.

[29]            The plaintiff argues that the doctrine of res judicata does not apply in this context.  The reasons for judgment issued on January 14, 2008 are not binding on Mr. Coglon and served to resolve an issue as between only Deltec and the plaintiff.  This issue was not settled in the dismissal order.

[30]            The doctrine of res judicata is a principle which ensures that a judgment of a court is final and determinative.  A matter thus cannot be re-tried in a subsequent suit between the same parties.  There are two forms of res judicata: issue estoppel and cause of action estoppel.  They are defined in Donald J. Lange, The Doctrine of Res Judicata in Canada, 2nd ed. (Markham, Ontario: LexisNexis Canada, 2004) at 1 as follows:

When res judicata applies, a litigant is “estopped” by the previous proceeding.  In their simplest definitions, issue estoppel means that a litigant is estopped because the issue has clearly been decided in the previous proceeding, and cause of action estoppel means that a litigant is estopped because the cause has passed into a matter adjudged in the previous proceeding.

In this case, the defendant relies on the doctrine of issue estoppel.

[31]            In Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248, 47 D.L.R. (3d) 544, the Supreme Court of Canada stated that the following requirements must be met before issue estoppel can be invoked: (1) the same question must have been decided in a previous proceeding (2) the judicial decision said to create the decision must have been final and (3) the parties to the judicial decision must be the same persons as the parties to the proceedings in which estoppel is raised.

[32]            With regards to the first requirement identified in Angle, supra, the question raised in the first proceeding must have been fundamental to the decision.  Issue estoppel will not arise where the question was merely collateral or incidental to the question adjudicated in the first proceeding.

[33]            It is settled law that a consent judgment is a judgment of the court.  Where a consent order is intended to be final, it will operate as such for the purpose of issue estoppel (The Doctrine of Res Judicata in Canada, supra at 223).

[34]            In this case, however, issue estoppel cannot apply because the parties to the dismissal order differ from the parties to these proceedings.  Deltec is not a party to the consent dismissal order of October 22, 2007.  Similarly, Mr. Coglon is not a party to the trial order of January 14, 2008.  That order is not binding on Mr. Coglon.

[35]            In addition, the consent dismissal order does not preclude findings of fact which, although they are adverse to Mr. Coglon, are necessary for the assessment of damages against Deltec.  Res judicata functions, on a policy level, to ensure that the authority of a court is not undermined as issues are re-litigated.  This is not a concern here.

Collateral Attack

[36]            The defendant argues that the trial functioned as a collateral attack on the dismissal order, and that this is impermissible.

[37]            A collateral attack is defined by the Supreme Court of Canada in R. v. Wilson, [1983] 2 S.C.R. 594 at 599-600, 4 D.L.R. (4th) 577:

It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. It is also well settled in the authorities that such an order may not be attacked collaterally -- and a collateral attack may be described as an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment. Where appeals have been exhausted and other means of direct attack upon a judgment or order, such as proceedings by prerogative writs or proceedings for judicial review, have been unavailing, the only recourse open to one who seeks to set aside a court order is an action for review in the High Court where grounds for such a proceeding exist. Without attempting a complete list, such grounds would include fraud or the discovery of new evidence.

[38]            In Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77 the Supreme Court of Canada stressed that prohibited collateral attacks are abuses of process. 

[39]            This trial was not a collateral attack.  Although the claims against Mr. Coglon were dismissed, the plaintiff was entitled to proceed against another defendant.

Findings of Fact Made Against Mr. Coglon

[40]            Mr. Coglon argues that the adverse findings of fact made about him in the reasons for judgment could bring the administration of justice into disrepute.  He was not before the court and was not given the opportunity to defend himself in these proceedings.  Several of the findings of fact made are strongly worded.

[41]            The plaintiff states that a court is legally permitted to make findings of fact about an individual who is not before the court, if it is necessary to do so (see Storey v. Canada Post, 2006 BCCA 372, 55 B.C.L. R. (4th) 131).  The plaintiff further says that Mr. Coglon and Deltec were co-conspirators and joint tortfeasors.  It is not possible to assess damages against Deltec without referring to the actions of Mr. Coglon.

[42]            As stated in Piché, supra, Groberman J. cautioned that a finding of fact against a non-party is a serious matter.  There is a risk that adverse findings of fact could damage that individual’s reputation.  Compounding this, an individual who is not a party to the litigation will not have the opportunity to address allegations made against them.

[43]            In this case, the findings of fact were based on unanswered notices to admit and previous findings made by this court.  Facts set out in the unanswered notice to admit are deemed to be admitted.  Here, Deltec did not respond to the notice to admit.  As such, even if Mr. Coglon had appeared at trial, he would have been unable to contradict the facts as set out in the notice to admit.

[44]            The findings flowed from the unanswered notice to admit.  The findings of fact which named Mr. Coglon were unavoidable due to the nature of the cause of action pleaded against Deltec.

Lack of Full and Fair Disclosure

[45]            The defendant argues that counsel for the plaintiff failed to fully disclose all material facts at trial.  Specifically, the defendant alleges that counsel failed to inform the court that Mr. Coglon had no notice of the Deltec trial date, called Mr. Louis Dion as a witness but failed to disclose that Mr. Justice Bauman had found the evidence given by this witness suspect, failed to disclose that the Court of Appeal had affirmed Mr. Justice Bauman’s decision, and failed to disclose the transcript of Mr. Dion’s cross-examination.  The defendant says that the standard of good faith and disclosure approaches that of ex-parte applications.

[46]            The plaintiff argues that this is not an ex parte application.  The plaintiff says that none of the arguments relied upon by the defendant establishes that Mr. Dion was an untruthful witness, and the comments made by Mr. Justice Bauman need to be understood in context.

[47]            I am not persuaded that there was a lack of full and fair disclosure.  This does not constitute a ground upon which to re-open the case.


[48]            I deny Mr. Coglon's application to re-open the case.

[49]            In the course of examining this matter, I have reconsidered whether it is appropriate to apply the principle in Cunha v. Cunha, supra, in the unusual circumstances of this case.

[50]            I accept that Cunha v. Cunha is a correct statement of the law.  The principle is that the non-disclosing spouse bears the onus of establishing that there has been complete disclosure. 

[51]            Here, however, the plaintiff has entered into a consent order dismissing her claim against Mr. Coglon.  He is, for the reasons explained above, no longer a party.  As a non-party, he is unable to rebut any presumption.

[52]            This precise issue was not raised in the plaintiff’s argument at the trial or by the court in the course of oral argument.  I am therefore providing the plaintiff’s counsel with the opportunity to address the matter by written submission.  This should be received by the court by July 4, 2008.

"The Honourable Mr. Justice Kelleher"