IN THE SUPREME COURT OF BRITISH COLUMBIA  
Citation:  
Tai An Holding Company Ltd. v. Boyal,  
2022 BCSC 821  
Date: 20220517  
Docket: S1711855  
Registry: Vancouver  
Between:  
And:  
Tai An Holding Company Ltd.  
Plaintiff  
(Defendant by Counterclaim)  
Hardev Boyal and Bhupinder Mandair  
Defendants  
(Plaintiff by Counterclaim)  
And:  
Ke Xiang Zhou, Wei Kang and Harpreet Purba  
Defendants by Counterclaim  
Before: The Honourable Mr. Justice Riley  
Reasons for Judgment  
Counsel for the Plaintiff and Defendants by  
Counterclaim:  
T.D. Boyd  
R.S. Deol  
Counsel for the Defendants:  
Place and Dates of Hearing:  
New Westminster, B.C.  
June 3, 2021  
November 12, 2021  
December 2, 2021  
Place and Date of Judgment:  
Vancouver, B.C.  
May 17, 2022  
Tai An Holding Company Ltd. v. Boyal  
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Introduction  
[1]  
This is a ruling on a summary trial application brought by the plaintiff Tai An  
Holding Company Ltd. (“Tai An”) in an action for breach of contract against the  
defendants Hardev Boyal and Bupinder Mandair. The plaintiff entered into a contract  
to purchase the Sheraton Four Points Hotel in Surrey, British Columbia from the  
defendants. The contract included a schedule for certain property improvements to  
be completed by each party along a particular timeline. The hotel sale completed,  
but the plaintiff says the defendants failed to perform much of the work assigned to  
them under the property improvement schedule. The plaintiff later completed the  
disputed improvements itself, and now seeks damages for breach of contract.  
[2]  
In addition to their primary argument that the case is not suitable for summary  
trial for various reasons, the defendants dispute the plaintiff’s breach of contract  
claim on a number of grounds. First, they say the plaintiff breached the contract and  
is thus disentitled to sue on it. Second, the defendants say that on a proper  
interpretation of the contract, their responsibility was limited to supplying materials  
for the improvements rather than completing the work, and in any event was capped  
by the amount specified in the property improvements holdback clause. Third, the  
defendants say that many if not all of the specific costs incurred by the plaintiff  
cannot be linked to items that were the responsibility of the defendants under the  
property improvement schedule.  
Facts  
[3]  
The property at the heart of the dispute between the parties is the Sheraton  
Four Points Hotel on 158 Street in Surrey, British Columbia. Prior to the sale, the  
defendants Mr. Boyal and Mr. Mandair owned all of the shares of the company that  
held the title to the hotel property, the Guildford Hotel Ltd. The hotel sale was  
effected by way of a share transfer arrangement, in which the defendants sold all of  
the shares in Guildford Hotel Ltd. to the plaintiff for $12,450,000.  
[4]  
In contemplation of selling the property, the defendants had liaised with the  
franchisor of the hotel, Sheraton. In order to obtain approval for the sale, the  
Tai An Holding Company Ltd. v. Boyal  
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defendants committed to a Property Improvement Plan (PIP) following a site visit  
by Sheraton representatives on 22 September 2015. The original PIP, developed by  
Sheraton in consultation with the defendants, did not allocate responsibility for any of  
the improvements as between the then-owners, the defendants Mr. Boyal and  
Mr. Mandair, and the prospective purchaser, the plaintiff Tai An.  
[5]  
The negotiations between the defendants and the plaintiff with regard to the  
purchase of the hotel included discussions about who would bear responsibility for  
the PIP works. Ultimately, the parties agreed upon an arrangement in which  
responsibility for the PIP works was divided between them, with a timetable for  
completion of the works. All of this was written into a schedule (“PIP Schedule”)  
attached to the share transfer agreement.  
[6]  
The share transfer agreement, dated 5 January 2016, was signed by  
Mr. Zhou on behalf of the plaintiff Tai An, and by the defendants Mr. Boyal and  
Mr. Mandair personally. The agreement’s key components can be summarized as  
follows:  
(a)  
Clause 3.1 provided that the plaintiff was to pay the purchase price of  
$12,450,000 to the defendants on the closing date, which was 6 January  
2016. (By subsequent agreement in writing, the parties later changed the  
closing date to 8 March 2016). The total purchase price was subject to an  
inventory adjustment as provided for in Clause 3.5, and certain holdbacks to  
be held in trust as set out in Clause 11.4.  
(b)  
The inventory adjustment was dealt with in Clause 3.5, under which  
the defendants were to arrange for hotel staff to take an inventory of the  
current supplies on hand, including alcohol and food supplies in the guest  
rooms, restaurants, and bars. This inventory was to be reflected in a closing  
statement, which would then be used to adjust the purchase price to account  
for inventory on hand on the closing date.  
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(c) Clause 6.1 provided that on or before the closing date, the defendants  
were required to deliver to the plaintiff all books, records, and accounts in its  
possession.  
(d)  
Clause 6.5 stated that the parties were responsible for the PIP work  
required by the franchisor as set out in Schedule 7 to the share transfer  
agreement. This clause in the agreement included an express provision that if  
the plaintiff had to pay more than $20,000 USD for new light fixtures on the  
second and third floor, the additional cost would be deducted from the PIP  
Funds holdback, defined later in the agreement.  
(e)  
Schedule 7, the terms of which are at the heart of the current legal  
dispute between the parties, consisted of a table that included the following  
columns:  
Work # [Untitled,  
but clearly  
intended to  
provide  
Responsible Time Line Total  
Party for Holdback if any  
completing by the  
Exemption Result  
the  
Purchaser  
description  
of work]  
unfinished  
Items  
$100,000  
What followed after the table headings were sections dealing with different  
categories of rooms or areas of the hotel. For example, the first section of the  
table dealt with “Standard Guestrooms” on the first and second floor. The  
second section dealt with “Standard Guestrooms” on the third floor. The third  
section dealt with “Guest Bathrooms”. The fourth section dealt with “Guest  
Suites” on the first and second floors; this section simply stated, “Renovate  
suites following scope previously defined for guestrooms, with the addition of  
the items listed below”, but no additional items were listed. The fifth section  
dealt with “Guest Suites” on the third floor, and repeated the catch-all  
language set out in the preceding sentence.  
(f)  
The holdbacks were dealt with in Clause 11.4. There are two holdback  
terms that are relevant to the current action, as follows:  
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(i) Clauses 11.4(b) through (d) provided for a $200,000 “due  
diligence holdback”, to be taken from the purchase price and held in  
trust by the plaintiff’s solicitors, for satisfaction of any outstanding third  
party claims for matters such as unpaid taxes or employee  
remittances.  
(ii)  
Clause 11.4(f) provided that $100,000 of the purchase price  
would be held in trust by the solicitor of the defendants to satisfy “any  
PIP works that the [defendants] are responsible to complete” (“PIP  
Funds holdback”). Upon receipt of invoices for completed work, the  
solicitors were authorized to release funds equal to the invoiced  
amounts to the defendants. The final $10,000 of the PIP Funds  
holdback would only be released when the franchisor confirmed that  
the PIP works for which the defendants were responsible had been  
completed.  
(g)  
Under Clauses 11.3 and 11.6, each party agreed to indemnify the  
other for “any loss, damage, liability, cost and expense arising directly or  
indirectly out of any breach of representation, warranty, covenant, or  
agreement” of the indemnifying party.  
(h)  
Under Clause 11.10, each party was obliged, before and after the  
closing date, to “execute and deliver such further documents and instruments  
and do such acts and things” as may be “reasonably required by another  
party to carry out the intent and meaning” of the share transfer agreement.  
(i)  
Clause 11.12 provided that the share transfer agreement was to  
represent the entire agreement between the parties pertaining to the subject  
matter, and was to supersede all prior agreements, understandings,  
representations, negotiations and discussions between the parties.  
[7]  
The defendant Mr. Mandair gave affidavit evidence describing some of the  
negotiations preceding the signing of the share transfer agreement. There is a  
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dispute between the parties as to the relevance and permitted uses of this evidence.  
The plaintiff appears to concede admissibility, but maintains that this evidence can  
only be considered as part of the factual matrix for interpretation of the terms of the  
written contract. The defendants say Mr. Mandair’s affidavit is a permissible source  
of evidence in resolving the ambiguity in the terms of the contract itself. I will return  
to this issue in my legal analysis below. Putting the evidentiary dispute aside for the  
moment, the relevant parts of Mr. Mandair’s affidavit can be summarized as follows.  
[8]  
Mr. Mandair avers that in the course of the negotiations, he and the other  
defendant Mr. Boyal were represented by Mr. Bal, and the plaintiff Tai An was  
represented by two real estate agents, Mr. Kaintura and Mr. Purba. Thus, much of  
what Mr. Mandair says in his affidavit about the actual negotiations between the  
parties is second hand information, although Mr. Mandair is able to give direct  
evidence about his instructions to Mr. Bal as the agent of the defendants.  
[9]  
Mr. Mandair avers that Mr. Bal informed the plaintiff’s representative of the  
obligation to complete the PIP works in order to retain the Sheraton franchise, and  
that in response to this, the plaintiff’s representatives prepared a spreadsheet  
summarizing the PIP work to be done, the party who would be responsible for  
particular aspects of the work, the timetable for completion of the work, and the  
amount that would be held back “to secure performance of the works” to be  
competed by the defendants.  
[10] Mr. Mandair avers that in the negotiations with regard to the PIP works, he  
was “not prepared to accept responsibility” for improvements with an “unascertained”  
cost. As a result, the parties “estimated the cost of the works to be undertaken by  
[the defendants] and decided that $100,000 represented a fair amount to fully secure  
the defendants’ obligations for the conduct of the PIP [works]”. Mr. Mandair says this  
was the reasoning behind the drafting of Clause 11.4(f) of the share transfer  
agreement, providing for a PIP Funds holdback of $100,000.  
[11] Mr. Mandair goes on to describe his understanding of how the PIP works  
would be done under the terms of the share transfer agreement. Among other  
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things, Mr. Mandair avers that since the defendants and the plaintiff were  
responsible for completing various aspects of the PIP works at more or less the  
same time, the defendants would be responsible for ordering the material (and, upon  
providing invoices, would be entitled to release of the holdback funds), and the  
plaintiff would then be responsible for “installing and placing those materials”.  
[12] Much of the plaintiff’s evidence came from Ms. Zhang, who assumed the role  
of assistant general manager of Guildford Hotel Ltd. on 8 March 2016, on or about  
the date that Tai An took over operations of the hotel. Ms. Zhang avers in her  
affidavit that when the plaintiff took over the hotel, she determined that many of the  
PIP works for which the defendants were responsible either “had not been  
addressed”, or the work was “not sufficient”. In or around March 2016, Ms. Zhang  
created a “checklist” documenting the “state of the rooms” when the plaintiff took  
possession, and the remaining PIP works which had to be completed “in order to  
meet Sheraton brand requirements”.  
[13] Between 20 September 2016 and 4 October 2016, the solicitors for the  
parties corresponded with regard to the status of the due diligence holdback. The  
plaintiff’s solicitor initially refused to release the due diligence holdback funds on the  
basis that the defendants had not completed their portion of the PIP work. The  
solicitor for the defendants replied that the plaintiff was “mixing the issues”, and that  
the PIP works were secured by a separate PIP holdback of $100,000. The plaintiff’s  
solicitor replied that all but the final $10,000 of the PIP holdback funds had already  
been released. The defendants then threatened legal action to obtain release of the  
due diligence holdback. All of this led up to a written agreement dated 19 October  
2016, signed by both solicitors, in which the plaintiff agreed to release the balance of  
the due diligence holdback funds, subject to certain conditions, including an  
acknowledgment by the defendants that within 14 days of the release of the net  
funds, the defendants would “commence work” on the PIP on the terms set out in  
the share transfer agreement.  
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[14] It appears that no further PIP works were undertaken throughout the balance  
of 2016. The plaintiff later tasked Ms. Zhang with overseeing the completion of the  
PIP works. Ms. Zhang assumed responsibility for “engaging all of the suppliers and  
contractors who performed the works”. The work itself was conducted in two phases.  
The first was from February 2017 to June 2017, and the second was from October  
2017 to May 2018.  
[15] Ms. Zhang avers that the total cost of the PIP works she oversaw was  
$747,762.04. On Ms. Zhang’s interpretation of the PIP Schedule, some of the works  
were the responsibility of the defendants, and others were the responsibility of the  
plaintiff. In her affidavits, Ms. Zhang has broken down the PIP costs into a number of  
categories, specifically: (i) wallpaper, (ii) furniture, (iii) casegoods, (iv) patio, (v)  
architecture and permit, (vi) construction and project management fees, (vii) waste  
disposal, and (viii) door replacement.  
[16] In its summary trial application, the plaintiff takes the position that the PIP  
works that were the responsibility of the defendants cost a total of $549,671.84. The  
plaintiff seeks damages for breach of contract in that amount. The plaintiff also  
seeks legal costs of the action as damages arising from the breach of contract by  
the defendants.  
[17] For their part, the defendants take issue with the plaintiff’s overall position as  
to the scope of each party’s obligations under the PIP Schedule and the share  
transfer agreement. The defendants also take issue with the figures in Ms. Zhang’s  
evidence, and her allocation or apportionment of certain costs to the defendants.  
[18] The defendants further contend that the plaintiff has breached its obligation  
under Clause 3.5 of the share transfer agreement to adjust the sale price to account  
for $21,479.94 in inventory at the time that the hotel changed hands. The defendants  
say that the plaintiff’s breach of this term effectively disentitles the plaintiff from suing  
for breach of contract. The defendants have also, presumably as an alternative  
position, filed a counterclaim against the plaintiff, its representatives Mr. Kang and  
Ms. Zhou, and its real estate agent Mr. Purba, for damages in breach of contract.  
Tai An Holding Company Ltd. v. Boyal  
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Legal Analysis  
(1) Suitability for Summary Trial  
[19] Under Rule 9-7 of the Supreme Court Civil Rules, B.C. Reg. 168/2009  
[Rules], a party can obtain judgment by way of a summary trial on an issue or  
generally, unless it is not possible for the court to find the facts necessary to decide  
the issues, or it would be unjust to decide the matter on a summary application.  
[20] In Gichuru v. Pallai, 2013 BCCA 60 at paras. 3031 [Gichuru], the Court  
referred to a number of factors to be considered in determining whether a matter is  
suitable for a summary trial, namely: (a) the amount involved, (b) the complexity of  
the matter, (c) the cost of a conventional trial in relation to the amounts involved, (d)  
the course of the proceedings, (e) the timing of the summary trial application, (f)  
whether credibility is a critical factor in determining the dispute, (g) whether a  
summary trial would itself create unnecessary complexity, and (h) whether the  
application would involve litigating in slices.  
[21] Where a party brings an application for summary trial, the opposing party  
cannot frustrate the process by failing to take necessary steps in responding to the  
application. The opposing party cannot “simply insist on a full trial in hopes that with  
the benefit of viva voce evidence, ‘something might turn up’”: Gichuru at para. 32,  
citing Everest Canadian Properties Ltd. v. Mallmann, 2008 BCCA 275 at para. 34.  
[22] The plaintiff says this is a relatively straightforward breach of contract claim,  
with few disputed facts. The plaintiff says it is a relatively easy exercise to identify  
the uncompleted work assigned to the defendants in the PIP Schedule, and then  
consult the evidence of the plaintiff’s representative – who oversaw the construction  
to determine the costs incurred by the plaintiff to compete the work.  
[23] The defendants say this case is not suitable for summary trial, arguing that  
the Court is unable to find the facts necessary to decide the issues, and that it would  
be unjust to decide the matter having regard to various case-specific factors  
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including the amount of money at stake, the complexity of the case, and the  
importance of witness credibility given the conflicts in the evidence.  
[24] I do not agree with the defendants that the Court is unable to find the facts  
necessary to decide the issues. Based on my review of the record, I do not see any  
significant issues of credibility or head-on conflicts in the evidence. The principal  
witnesses for each party had no direct interactions with each other, and the Court is  
not being invited to prefer the evidence of one witness over the evidence of another  
based on credibility considerations.  
[25] The defendants point out that the PIP works were undertaken at Ms. Zhang’s  
direction, under the supervision of one contractor, altogether with no effort to  
distinguish between work that was the responsibility of the plaintiff and work that was  
the responsibility of the defendants. I accept that this poses challenges in  
ascertaining the cost of PIP works attributable to each of the parties. However, there  
is no reason to believe that it would be manifestly easier to resolve issues of this sort  
on the basis of viva voce evidence in a full trial.  
[26] The most reliable records pertaining to the nature and costs of the PIP works  
are the spreadsheets and underlying records contemporaneously created or collated  
by Ms. Zhang while the work was being done. Ms. Zhang has appended the  
spreadsheets, contractor invoices, and subcontractor invoices to her affidavits, and  
the defendants were able to cross-examine her on the affidavits and the underlying  
records.  
[27] There is no reason to believe that viva voce evidence from the contractor or  
subcontractors retained to do the work would be any more reliable or accurate in  
ascertaining the cost of work attributable to each of the parties under the PIP  
Schedule. There is no evidence that the contractors were asked to segregate the  
work attributable to each of the parties. They were tasked with performing the work  
itself, not with delineating how much of it was attributable to the contractual  
responsibilities of each of the parties.  
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[28] As for whether it would be unjust to the decide the matter by way of a  
summary trial, there are factors going both ways. On balance, I do not consider it  
unjust to decide the case by summary trial, for the reasons that follow.  
[29] On the one hand, I agree with the defendants that the amount in issue is  
substantial, and that a seven-day trial would not be out of proportion to the plaintiff’s  
claim for damages in excess of $500,000. On the other hand, I also agree with the  
plaintiff that this is not a complex case, and that a consideration of the history of the  
litigation and the timing of the application weighs in favour of deciding the matter in a  
summary trial.  
[30] The timing of the application does not present any injustice to the defendants.  
Document production is complete. The defendants have completed an examination  
for discovery of the plaintiff’s representative Mr. Kang, and have cross-examined the  
plaintiff’s key witness, Ms. Zhang, on all of her affidavits with the exception of her  
reply affidavit.  
[31] Finally, I am satisfied that deciding the issues raised in the plaintiff’s summary  
trial application and the defendants’ cross-application will effectively resolve the  
entire case. Accordingly, deciding the matter by way of a summary trial will not result  
in litigation in slices, nor will it unduly add to the complexity of the proceedings.  
(2) Plaintiff’s Breach of the Agreement and its Implications  
[32] The defendants say that the plaintiff breached its obligations under the share  
transfer agreement by failing to comply with the inventory adjustment clause. Under  
Clause 3.5 of the agreement, the plaintiff was obliged to make a retroactive  
adjustment of the sale price to account for the inventory on site when the hotel  
changed hands. The defendants say there was $21,479.94 of inventory on hand, for  
which the plaintiff failed to make any adjustment or otherwise compensate the  
defendants. The defendants further argue that breach of this obligation disentitles  
the plaintiff to sue on the contract.  
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[33] I agree with counsel for the defendants that the plaintiff breached its  
obligation under the inventory adjustment clause. The plaintiff was obliged to make a  
retroactive adjustment to the sale price to account for inventory on hand. The  
evidence establishes that an inventory was taken, and a record of it was created and  
signed by representatives of both parties on or about the closing date. There is no  
evidence that the plaintiff ever made an inventory adjustment or compensated the  
defendants for inventory on hand. The plaintiff concedes this point, and agrees that  
the defendants are entitled to credit for the inventory on hand by way of damages in  
their counterclaim.  
[34] The more controversial question is whether the defendants are right in  
asserting that, as a consequence of the breach, the plaintiff is somehow disentitled  
to sue for relief in connection with alleged breaches of the contract by the  
defendants. In support of this position, counsel for the defendants relies on excerpts  
from G.H.L. Fridman, The Law of Contract in Canada, 4th ed. (Toronto: Carswell,  
1999), and 6th ed. (Toronto: Carswell, 2011), along with two cases, Jedfro  
Investments (U.S.A.) Ltd. v. Jacyk Estate (2006), 80 O.R. (3d) 533 (C.A.) [Jedfro]  
and Production Equipment Ltd. v. Langille (1981), 47 N.S.R. (2d) 181 (C.A.)  
[Production Equipment].  
[35] The first passage from Fridman discusses the duty of strict performance. At  
547 (4th ed.), the learned author states, [the] duty to perform must be carried out  
precisely and exactly. Anything less than such performance is a breach of contract  
and may preclude the party in default from enforcing the provisions of the contract  
that are to his benefit, for example, the payment of the price agreed upon for goods  
or services” (emphasis added). I point out that the underlined phrase is an  
acknowledgement that breach of a contractual obligation may or may not preclude  
the defaulting party from enforcing the contract against the other party. The question  
becomes one of determining whether the nature of the breach is such as to deny the  
defaulting party the right to pursue any benefit or relief under the contract.  
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[36] The second passage from Fridman cited by the defendants addresses what is  
referred to as the doctrine of “dependency of performance”. At 566 (4th ed.), the  
author states, “non-performance in accordance with the terms of the contract,  
besides being a breach of contract itself [] precludes the party guilty of such non-  
performance from enforcing the contract against the other party”. However, the  
author goes on at 567 to point out that “dependency of performance” is by no means  
a simple concept, because it “raises the whole question of what has been called  
substantialperformance, and the problem of entire and divisible, or non-entire  
contracts”. In Herron v. Hunting Chase Inc., 2003 ABCA 219 at para. 14, the Court  
explained that “the principle of dependency applies when the obligation of each party  
constitutes the entire contract, such that no consideration is paid unless every  
aspect of the contract is perfectly performed”. In any event, when one reads this  
particular passage of Fridman’s work in context, it is clear that the non-performance  
described therein must relate to a fundamental aspect of the contract. In other  
words, this passage from Fridman’s text relates to forms of non-performance that  
amount to fundamental or repudiatory breaches.  
[37] That brings me to the case law cited by the defendants.  
[38] In Jedfro, the plaintiff failed to make payments owed to a lender under the  
terms of a joint venture agreement, and later sued the other parties for breaching the  
agreement. The trial judge dismissed the claim. In the passage relied upon by the  
defendants in the case at bar, the Court of Appeal endorsed the trial judge’s  
reasoning, stating at para. 11 that, “[w]here parties act in a way that shows they do  
not intend to comply with or be bound by the terms of their written agreement, one  
party cannot later come to court and ask to have the agreement enforced for its  
benefit.” The defendants say the same reasoning applies in the present case to  
preclude the plaintiff from pursuing any remedies or relief under the share transfer  
agreement.  
[39] Counsel for the defendants did not refer to the further appeal in Jedfro, in  
which the Supreme Court of Canada upheld the result, but fundamentally disagreed  
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with the reasoning of the courts below: see Jedfro Investments (U.S.A.) Ltd. v.  
Jacyk, 2007 SCC 55. At para. 14, Chief Justice McLachlin catalogued “[t]he ways in  
which a contract can be discharged”, namely by “performance”, “agreement”,  
“frustration”, or “repudiatory or fundamental breach”. On the facts in Jedfro, the  
Court was not satisfied that the contract was discharged on any of these bases.  
While the trial judge held that the plaintiff’s failure to pay its share of the debt under  
the joint venture agreement reflected a lack of regard for the terms of the agreement,  
this did not necessarily evince an intention not to be bound by the contract so as to  
engage the doctrine of repudiation. At para. 21, the Chief Justice reasoned that  
while “ignoring the terms of an agreement” may qualify as a breach, it was not clear  
whether the plaintiff’s conduct went beyond “[o]rdinary, non-repudiatory breach”,  
explaining that “[m]ore is required to establish repudiation”. The Court found it  
unnecessary to determine whether the plaintiff’s refusal to pay its share of the debt  
could be objectively regarded as a repudiatory breach, because even if it did, the  
opposing party did not elect to treat it as such. The Court went on to decide that  
even though the joint venture was never discharged, the plaintiff’s claim failed  
because its initial investment was forfeited through a foreclosure.  
[40] In the end, what I take from Jedfro is that not every breach of a contractual  
obligation constitutes a “fundamental or repudiatory breach” sufficient to lead to a  
“discharge” of the contract. Some breaches will constitute “ordinary, non-repudiatory  
breaches”. As McLachlin C.J. stated at para. 20, “[a] contract may be said to be  
repudiated when one party acts in a way that evinces an intent to no longer be  
bound by the contract”, at which point “[t]he other party may then, at its option, elect  
to terminate the contract”.  
[41] The second case cited by the defendants, Production Equipment, clearly  
involves a discussion of the consequences of a repudiatory breach. This case lends  
no real support to the position of the defendants that any and all breaches of a  
party’s contractual obligations effectively bar the breaching party from pursuing  
remedies or relief under the contract.  
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[42] There is other case law discussing the difference between an “ordinary, non-  
repudiatory breach” and a “fundamental or repudiatory breach”. A “simple breach” is  
no basis to rescind a contract. When faced with a material breach of this nature, the  
innocent party may sue for damages as described in Nikolaev v. Fakhredinov, 2015  
ONSC 6267 at para. 41, but the breach would not necessarily bring the contact to an  
end. To qualify as a fundamental or repudiatory breach, the breaching party’s  
conduct must be “tantamount to the frustration of the contract either as a result of  
the unequivocal refusal of one party to perform his contractual obligation or as a  
result of conduct which has destroyed the commercial purpose of the contract,  
thereby entitling the innocent party to be relieved from future performance”: Poole v.  
Tomenson Saunders Whitehead Ltd., [1987] 6 W.W.R. 273 (B.C.C.A.) at p. 282. The  
question is whether the breach “strikes at the heart of the agreement in a manner  
that evinces an intention not to be bound by the contract any longer”: Pavlis v. HSBC  
Bank Canada, 2009 BCSC 498 at para. 50.  
[43] Applying that reasoning in the case at bar, I am not satisfied that the plaintiff’s  
breach of the inventory adjustment clause was conduct that evidenced “an intent to  
no longer be bound by the contract” so as to engage the doctrine of repudiation. The  
plaintiff had paid $12,450,000 to the defendants in exchange for all of the shares in  
the hotel company. Thereafter, the plaintiff (through its solicitor) urged the  
defendants to complete their portion of the PIP works, and eventually agreed to the  
release of certain holdback funds on the understanding that the defendants would  
honor their obligation to complete the work. In all of these circumstances, I would not  
regard the plaintiff’s failure to make an inventory adjustment of $21,480 as an  
intention to no longer be bound by the contract.  
[44] Moreover, there is no evidence that the defendants ever treated the plaintiff’s  
conduct as a repudiatory breach, and elected to terminate. Well after the date when  
the inventory adjustment was due, the defendants (through their solicitor) continued  
to engage in correspondence for the release of the holdback funds. The bulk of the  
holdback funds were ultimately released to the defendants, on the condition that  
they would complete their share of the PIP works. There is no evidence that, at any  
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point in this process, the defendants ever raised the plaintiff’s failure to comply with  
the inventory adjustment clause, much less sought to characterize it as a  
fundamental or repudiatory breach supporting an election by the defendants to  
terminate the agreement.  
(3) Whether the Defendants Breached the Agreement  
[45] The plaintiff says the share transfer agreement clearly obliged the defendants  
to complete their share of the PIP works, as set out in the PIP Schedule. Plaintiff’s  
counsel points to Clause 6.5 of the agreement, which provides that the parties “are  
responsible for the Property Improvement Plan (the “PIP”) work required by the  
Licensor as per the attached Schedule 7”. Plaintiff’s counsel also cites Clause 11.3  
of the agreement, under which the defendants covenanted and agreed to indemnify  
the plaintiff from “any loss, damage, liability, cost and expense” suffered by the  
plaintiff “directly or indirectly” as a result of “any breach of representation, warranty,  
covenant or agreement” made by the defendants under the share transfer  
agreement. Finally, plaintiff’s counsel refers to the description of the work as set out  
in the PIP Schedule, attached as Schedule 7 to the share transfer agreement.  
[46] The defendants raise two points of contractual interpretation as regards the  
scope of their obligations in respect of the PIP works. First, the defendants say their  
responsibility for the PIP works is capped by the PIP holdback amount of $100,000  
that is provided for in Clause 11.4(f) of the agreement. Second, the defendants say  
the agreement did not require them to actually complete any of the PIP works; it only  
required them to provide the materials or inputs for the particular items assigned to  
them under the PIP Schedule.  
[47] Before dealing with the merits of these arguments, it is necessary to address  
the admissibility and permitted uses of Mr. Mandair’s affidavit evidence with respect  
to the negotiation of the share transfer agreement. The plaintiff does not appear to  
object to the admissibility of Mr. Mandair’s affidavit, but argues that it can only be  
received as evidence with respect to the “surrounding circumstances” as discussed  
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in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras. 5658  
[Sattva].  
[48] In Sattva, Mr. Justice Rothstein explained at para. 57 that when interpreting a  
contract, it is permissible to consider evidence about the “surrounding  
circumstances” in order to “deepen a decision-maker’s understanding of the mutual  
and objective intentions of the parties as expressed in the words of the contract”.  
However, the interpretation of a particular contractual provision must always be  
“grounded in the text and read in light of the entire contract”. Thus, evidence as to  
the surrounding circumstances may assist in understanding the meaning of the text  
in the contract, but cannot be allowed to “overwhelm the words of [the] agreement”:  
Sattva at para. 57.  
[49] As to the nature and form of such evidence, Rothstein J. explained at  
para. 58 of Sattva that this will “vary from case to case”. Subject to the principles  
discussed in the preceding paragraph, and to the strictures of the parole evidence  
rule, evidence as to the surrounding circumstances may include “absolutely anything  
which would have affected the way in which the language of the document would  
have been understood by a reasonable man”: Sattva at para. 58.  
[50] Thus, interpretation of the terms of a contract is no longer limited to the “four  
cornersof the written contract. The interpretation should be “informed by the  
surrounding factual matrix”, based on the principles described in the jurisprudence:  
Can-West Development Ltd. v. Parmar, 2019 BCSC 1573 [Can-West Development]  
at paras. 2223. On a proper application of those principles, evidence with respect  
to negotiations should only be considered for the limited purpose of showing that  
the parties were in negotiations and the reasons for those negotiations”: Can-West  
Development at para. 23, applying McMillan v. Altastream Power Systems Inc., 2018  
BCSC 1298 at para. 62.  
[51] The case law both before and after Sattva suggests that evidence as to the  
surrounding circumstances may also be relied upon to assist in resolving genuine  
ambiguity in the words of the contract: Khela v. Clarke, 2021 BCSC 503 at para. 84,  
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aff’d 2022 BCCA 71, citing Water Street Pictures Ltd. v. Forefront Releasing Inc.,  
2006 BCCA 459 [Water Street Pictures] at paras. 2327. Of course, it is not the role  
of the court to “search for ambiguity”: Water Street Pictures at para. 25. Genuine  
ambiguity only arises where the operative words in the text of the agreement, read  
contextually, are objectively capable of bearing two or more equally plausible  
interpretations: Water Street Pictures at para. 26. Where such genuine ambiguity is  
present, the surrounding circumstances may shed light on which of the competing  
interpretations best accords with the mutual intention of the parties, interpreted  
objectively: Water Street Pictures at paras. 2327.  
[52] Applying those principles to the case before me, I accept that the averments  
in Mr. Mandair’s affidavit with respect to the circumstances surrounding the  
negotiation of the share transfer agreement are admissible. Mr. Mandair’s affidavit  
describes some of the considerations that factored into the PIP obligations and PIP  
holdback provisions in the agreement. Of course, under the parole evidence rule,  
Mr. Mandair’s affidavit evidence is not admissible to “add to, subtract from, vary, or  
contradict” the terms of the share transfer agreement. Nor can Mr. Mandair’s  
evidence be allowed to “overwhelm the words” in the written agreement.  
[53] I should add that Mr. Mandair’s subjective beliefs as to the intent and  
meaning of the PIP obligations and PIP holdback provisions has virtually no value in  
the interpretive exercise, because evidence about surrounding circumstances is only  
relevant to show how the language in the agreement “would have been understood  
by a reasonable [person]”: Sattva at para. 58. In other words, the analysis is an  
objective one. The point of the exercise is not to ascertain Mr. Mandair’s subjective  
belief as to the intent of the contractual terms, but rather, to determine the objective  
meaning of the written text, as informed by the surrounding circumstances.  
[54] Finally, I find that with one exception discussed in para. 88 below, the  
operative words of the share transfer agreement, interpreted contextually in light of  
the entire text of the agreement and the surrounding circumstances in which it was  
entered into, do not suffer from any ambiguity. Subject to the one exception just  
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noted, I have no difficulty ascertaining the common intent and objective meaning of  
the terms in the agreement, based on the analysis set out below.  
[55] I start the interpretive exercise by considering the overall objective or purpose  
of the relevant provisions in the share transfer agreement. When read within the  
context of the agreement as a whole, the objective of the PIP provisions (Clause 6.5  
and the PIP Schedule) was to create a process for ensuring that the improvements  
mandated by the franchisor would not unduly impair the ability of the defendants to  
sell the hotel to the plaintiff. The parties basically divided up responsibility for the PIP  
works, as a means of sharing the associated cost and risk, while allowing for the  
sale of the hotel to proceed. The PIP holdback provision (Clause 11.4(f))  
represented a further allocation of the associated cost and risk. Its objective was to  
provide the plaintiff with some assurance that the defendants would fulfill their  
obligation to complete the PIP works, even after the plaintiff had paid the defendants  
$12,400,000 for the transfer of all of the shares in the hotel company. The  
defendants agreed that the plaintiff could hold back $100,000 as security for the  
improvement work for which the defendants had assumed responsibility. The  
reference in the PIP holdback clause to the release of funds to the defendants upon  
delivery of PIP work invoices was a countervailing measure to ensure that where the  
defendants spent money on PIP works, they would receive a release of holdback  
funds equal to the amounts expended.  
[56] With those overall purposes in mind, I turn to a consideration of the  
interpretive arguments raised by the parties.  
[57] I will deal firstly with the proper interpretation of Clause 11.4(f), the PIP  
holdback clause. The defendants argue that Clause 11.4(f) has the effect of capping  
financial responsibility or liability for the parts of the work allocated to them under the  
PIP Schedule. I cannot agree that this is an objectively reasonable interpretation of  
the PIP holdback clause, read together with the other provisions in the agreement.  
[58] Clause 6.5 expressly states that the parties are responsible for the PIP works  
as provided for in the PIP Schedule, and the PIP Schedule then allocates various  
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aspects of the work to each of the parties. There is nothing in the text of either  
Clause 6.5 or the PIP Schedule that expressly limits the responsibility of the  
defendants to complete their portion of the PIP works to the amount of the holdback  
in Clause 11.4(f).  
[59] Clause 11.4(f) states that a total of $100,000 would be held back “to satisfy  
any PIP works the [defendants] are responsible to complete”. There is nothing in the  
text of this clause expressly providing that the holdback amount constituted a  
financial limit or cap on the responsibility of the defendants for the PIP works.  
Similarly, there is nothing in the text of Clause 11.4(f) stating that the release of  
holdback funds somehow extinguished the defendants’ responsibility to complete the  
PIP works as provided for in Clause 6.5. The last sentence in Clause 11.4(f)  
provides that the final $10,000 of the holdback funds would only be released upon  
the franchisor’s confirmation that the PIP works for which the defendants were  
responsible had been completed. This makes it crystal clear that the $100,000  
holdback was never intended to represent a cap on the financial responsibility of the  
defendants to complete their portion of the PIP works. Indeed, the defendants might  
have had to spend tens or hundreds of thousands of dollars more than had already  
been invoiced in order to secure the release of the final $10,000 in PIP holdback  
funds.  
[60] I have considered Mr. Mandair’s evidence on this point. His subjective belief  
that the responsibility of the defendants to perform the PIP works was somehow  
limited or capped by the amount in the PIP holdback clause is simply not consistent  
with the objective meaning of the text in the share transfer agreement, interpreted  
contextually. The evidence as to Mr. Mandair’s belief has virtually no weight under  
the principles of contract interpretation discussed above. Evidence of this sort could  
never be used to vary the written terms, nor can it be allowed to overwhelm the text  
of the written agreement. A reasonable person would never have interpreted the  
terms of the PIP holdback provision as a financial cap on the defendants’  
responsibility to complete its share of the PIP works.  
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[61] I turn next to interpretation of the PIP Schedule. The defendants argue that  
they were only required to supply materials for the particular items of work assigned  
to them under the PIP Schedule. Once again, I cannot agree that this is an  
objectively reasonable interpretation of the words in the share transfer agreement,  
interpreted in light of the entire factual matrix of the contract.  
[62] Clause 6.5 states that the parties “are responsible for the Property  
Improvement Plan (the “PIP”) work required by the Licensor as per the attached  
Schedule 7”. The agreement uses the term “work”, not “materials”, “supplies”,  
“inputs”, or any like phrase. Moreover, the language in Schedule 7, referred to  
throughout these reasons as the PIP Schedule, describes the respective obligations  
of the parties to perform various works, not merely to provide materials or supplies.  
The PIP Schedule uses terms like “repaint” (not merely “supply paint”), and “replace”  
wall coverings, “caulked and sealed at connecting edges” (not merely “supply  
wallpaper”). A reasonable person would clearly have understood these terms to  
contemplate that each party was responsible for completing the particular works  
assigned to that party under the PIP Schedule, not merely to supply the materials or  
inputs required to do the work.  
[63] The defendants say the language in Schedule 7 of the share transfer  
agreement is a mere reproduction of the PIP Schedule prepared by the franchisor,  
and as such it is not a reliable reflection of the true intentions of the parties. The  
defendants also point out that there is no provision in the share transfer agreement  
for them to access the hotel after the change in possession. They also say it is  
unrealistic to expect that the plaintiff and the defendants would both be working on  
their respective property improvements at the same time. Finally, the defendants  
point to the second last sentence in Clause 11.4(f), which states that that portions of  
the PIP holdback funds were to be released to the defendants upon providing  
invoices for their share of the PIP works. All of this is said to indicate that the parties  
never intended to allocate responsibility for completing the PIP works, but only to  
allocate responsibility for providing the necessary materials or supplies.  
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[64] I do not find these arguments convincing, either individually or cumulatively,  
for the reasons that follow.  
[65] The fact that the parties used the PIP documents prepared by the franchisor  
as a starting point for the negotiations does not alter the significance of the agreed  
upon text in Schedule 7 to the share transfer agreement. In negotiating the  
agreement, the parties clearly allocated responsibility for various items to either the  
plaintiff or the defendants. Thus, whatever the origin of the PIP Schedule, its terms  
were clearly negotiated between the parties and appended to the share transfer  
agreement for the specific purpose of allocating responsibility for the PIP works as  
provided for in Clause 6.5.  
[66] The fact that the share transfer agreement was silent on the issue of access  
to the hotel does not negate the clear intent and meaning of the PIP provisions  
themselves. Under Clause 11.10, each party was obliged, before and after the  
closing date, to “do such acts and things” as may be “reasonably required by  
another party to carry out the intent and meaning” of the share transfer agreement.  
This would include allowing access to the hotel to complete the PIP works.  
[67] With regard to the part of Clause 11.4(f) requiring the release of PIP holdback  
funds to the defendants upon provision of receipts, the text of that clause states that  
the holdback funds are to be held “to satisfy any PIP works that the [defendants]  
were responsible to complete”, and the defendants would be entitled to release of  
the funds “[u]pon providing invoices for work completed(emphasis added). The text  
does not support the interpretation advanced by the defendants. Indeed, the text is  
entirely consistent with the plain meaning of the language used in Clause 6.5, and  
Schedule 7 (the PIP Schedule), both of which are drafted in terms that require each  
party to actually complete the work allocated to that party under the PIP Schedule,  
as opposed to merely providing supplies or inputs.  
[68] With regard to Mr. Mandair’s evidence, his subjective belief that the  
defendants were only responsible for supplying PIP materials as opposed to actually  
completing their share of the PIP works is not consistent with the objective meaning  
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Page 23  
of the text in the agreement, interpreted contextually. A reasonable person reading  
the text of the agreement, and aware of the entire factual matrix, would clearly have  
understood that the mutual intent was to allocate to each party the responsibility for  
actually completing the PIP works allocated to that party under the PIP Schedule.  
(4) Responsibility for Particular Aspects of the PIP Work  
[69] On the basis of Ms. Zhang’s affidavit evidence, I am satisfied that the  
defendants breached the terms of the share transfer agreement by failing to  
complete the portions of the PIP works assigned to them under the PIP Schedule.  
Under Clause 11.3 of the agreement, the defendants are required to indemnify the  
plaintiff for “cost and expense” arising “directly or indirectly” from any such breach.  
[70] The next issue to be addressed is the quantum of damages to which the  
plaintiff is entitled in connection with the failure of the defendants to complete their  
share of the PIP works. The plaintiff claims to have spent a total of $549,671.84 on  
PIP works that were the responsibility of the defendants under the PIP Schedule. In  
written submissions, the plaintiff grouped the expenditures under a number of  
headings, as discussed below.  
[71] Before addressing the specific categories of work, it is necessary to briefly  
explain the hotel’s layout and room composition. At all material times, the hotel had  
55 standard guest rooms and 22 guest suites for a grand total of 77 rooms, spread  
over three floors. The main floor had 17 standard rooms and four suites, and the  
second and third floor each had 19 standard rooms and nine suites.  
(a) Wallpaper  
[72] Sections 1.1(8) and 1.1(9) of the PIP Schedule required the defendants to  
“[r]eplace wall covering with new vinyl wall covering”, and “[p]rovide new accent vinyl  
wall covering… at headboard wall”, with all of the coverings to be “caulked and  
sealed at connecting edges”, for all “standard guestrooms” on the first and second  
floor. Sections 1.4 and 1.5 of the PIP Schedule required the defendants to renovate  
“guest suites” on all three floors, with the same scope of work as outlined above.  
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[73] Ms. Zhang avers in her affidavit that she engaged two companies to provide  
wallpaper, at a total cost of $54,298.88, and that the general contractor charged the  
plaintiff a total of $75,807 for removal and disposal of the old wallpaper and  
installation of the new wallpaper. (This latter figure was corrected or updated in  
closing argument to $82,800 based on the supporting documents in the record).  
Accordingly, the plaintiff claims a total of $137,098.88 for costs incurred to replace  
the wallpaper as provided for under the PIP Schedule.  
[74] The defendants say they were not responsible for any wallpaper work in  
relation to the “guest suites”, because the relevant portion of the PIP Schedule,  
ss. 1.4 and 1.5, states “n/a” – which I take to be shorthand for “not applicable” –  
under the columns for responsible party, timeline, holdback, exemption, and results.  
However, the entry in the first column of the table under both ss. 1.4 and 1.5 states,  
“[r]enovate suites following scope previously defined for guestrooms, with the  
addition of the items listed below”. There are no additional items listed. The clear  
intent of this catch-all phrase was that, in respect of the “guest suites” on the first  
and second floor (s. 1.4) and the third floor (s. 1.5), each party would be responsible  
for the same scope of work for items described in earlier sections of the PIP  
Schedule applicable to “guestrooms”. On this basis, I reject the argument that the  
defendants were not responsible for any PIP work in relation to the “guest suites”.  
[75] The defendants also rely on the affidavit evidence of Mr. Mandair, who avers  
that the plaintiff’s claim does not account for wallpaper the defendants purchased  
and left at the hotel when they gave up possession to the plaintiff. However,  
Ms. Zhang counters this point in her reply affidavit, in which she explains that the  
wallpaper materials referred to by Mr. Mandair were for replacement of wallpapering  
on the third floor, and that all of the wallpaper costs the plaintiff incurred related to  
rooms on the first and second floors.  
[76] The defendants also complain that the plaintiff failed to obtain competitive  
quotes for the wallpaper. This point is also addressed in Ms. Zhang’s reply affidavit,  
explaining that her general practice was to use the supplier specified in the earlier  
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Page 25  
design plans, which the defendants had commissioned while they owned the hotel.  
In relation to the wallpaper, Ms. Zhang actually contacted a separate supplier, but  
that supplier was not responsive. On the basis of all this evidence, I am satisfied that  
the costs incurred by the plaintiff to perform the wallpaper work attributable to the  
defendants under the PIP Schedule were reasonable and necessary. I find the  
defendants liable to pay damages for the full amount, $137,098.88.  
(b) Furniture and Casegoods  
[77] Sections 1.1(11), (12), (13), and 1.2(4) of the PIP Schedule required the  
defendants to replace various items of furniture in the “guest rooms” on the first and  
second floor. Section 1.1(10) required the defendants to replace “casegoods” in the  
“guest rooms” on the first and second floor. And ss. 1.4 and 1.5 of the PIP Schedule  
required the same scope of renovation with respect to the “guest suites” on the  
second and third floors.  
[78] Based on the information in the checklist she created when the plaintiff took  
over operation of the hotel, Ms. Zhang avers in her affidavit that the defendants had  
not replaced “most of the furniture” as required under the sections of the PIP  
Schedule cited in the preceding paragraph. Similarly, Ms. Zhang says the  
defendants had not replaced cabinetry, i.e. casegoods, “in certain rooms”.  
Ms. Zhang goes on to state that the plaintiff spent a total of $40,980.69 on  
replacement furniture, and $2,167.20 on replacement casegoods. Finally, Ms. Zhang  
asserts that the general contractor charged the plaintiff a total of $33,075 for  
furniture removal and replacement. Accordingly, the plaintiff claims a total of  
$76,222.89 for the replacement of furniture and casegoods that were supposed to  
be the responsibility of the defendants under the PIP Schedule.  
[79] The defendants contend that they had no responsibility to provide furniture for  
the “guest suites”. That position is based on an interpretation of the PIP Schedule  
which I have already considered and rejected in para. 74 above.  
[80] The defendants also contend that the plaintiff has failed to take into account  
replacement furniture that had already been ordered by the defendants, as reflected  
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in the “time line” column in ss. 1.1(10) to (13) of the PIP Schedule. The defendants  
also rely on the affidavit of Mr. Mandair, attaching copies of invoices for furniture  
purchased by the defendants, and a copy of the hotel inventory showing that these  
materials were actually on hand at the hotel when the plaintiff took possession.  
[81] On my reading of the PIP Schedule, the defendants were responsible for  
providing replacement furniture and casegoods for 36 standard guest rooms and 22  
guest suites, for a total of 58 rooms. Considering the records cited by the  
defendants, I cannot agree with Ms. Zhang’s assertion that the defendants had not  
replaced “most of the furniture” in the 58 rooms for which they were responsible  
under the PIP Schedule. It is possible if not likely that Ms. Zhang based her  
assessment that the defendants had failed to replace “most of” the furniture and  
casegoods in the rooms on her room checklist. But Ms. Zhang’s checklist may not  
have accounted for the inventory of new furniture that was on hand, some of which  
was still in the basement when the property changed hands.  
[82] However, it is also clear to me that the number of units of particular items of  
furniture and casegoods that the defendants had already ordered and paid for as set  
out in the preceding paragraph does not equal the number of units of furniture and  
casegoods required to replace everything in the 58 rooms for which the defendants  
were responsible under the PIP Schedule. On the whole of the evidence, I am  
satisfied that the defendants had not ordered enough furniture and casegoods.  
[83] Comparing the number of units of furniture and casegoods previously ordered  
by the defendants with the number of units that the plaintiff subsequently purchased,  
in many cases the numbers added together are equal to or very close to the total  
number of units of furniture and casegoods required to refit the 58 hotel rooms that  
were the responsibility of the defendants under the PIP Schedule. This  
demonstrates that the plaintiff only purchased additional units of furniture and  
casegoods necessary to complete the refitting of the 58 rooms in question. Although  
the numbers do not add up exactly, they are close enough to convince me that the  
work undertaken and paid for by the plaintiff did not fail to account for the furniture  
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and casegoods that the defendants had ordered and left on site before the hotel  
changed hands.  
[84] This conclusion is reinforced by the reply affidavit of Ms. Zhang, who asserts  
that the plaintiff “used all the goods left behind by the [defendants]”, that the furniture  
and casegoods on hand were “not sufficient for all the rooms”, and that the evidence  
relied upon by the plaintiff relates to the furniture and casegoods “required to  
complete the PIP works for the remaining rooms”. I interpret Ms. Zhang’s use of the  
phrase “remaining rooms” to refer to unfinished rooms that were the responsibility of  
the defendants. I accept Ms. Zhang’s evidence on this point and I find it to be  
consistent with the invoices and other records relied upon by both parties.  
[85] Descending further into the details, the defendants take issue with the cost of  
two particular categories of furniture and casegoods, namely TV motion mounts and  
lighting.  
[86] With regard to TV motion mounts, the defendants say these were not part of  
the PIP works required by the defendants. Counsel points to s. 1.1(10) of the PIP  
Schedule, which states that the defendants are responsible for replacing casegoods  
with new “contract quality” materials or items, including “TV wall unit[s]”. Amongst  
the items ordered, paid for, and left on hand by the defendants when the hotel  
changed hands were a total of 59 “LCD TV wall units”. This is one more than the  
total number of hotel rooms for which the defendants were responsible. The plaintiff  
later purchased a total of 53 “full motion mounts”, described in Ms. Zhang’s affidavit  
as “TV motion mounts”, at a total cost of $5,039.89. I am not satisfied that this is a  
cost arising out of the PIP works for which the defendants were responsible under  
the PIP Schedule. It was a superadded expense incurred by the plaintiff.  
Accordingly, I would deduct this amount from the plaintiff’s claim for replacement  
furniture and casegoods.  
[87] With regard to lighting, the plaintiff’s claim for replacement furniture and  
casegoods includes a total of some $10,000 for standing lamps and floor lamps. The  
defendants say these items are not properly characterized as either furniture or  
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casegoods. They point out that under ss. 1.1(3) and (4) of the PIP Schedule, the  
plaintiff was responsible for lighting of various kinds. Section 1.1(3) refers to  
“architectural light fixtures”, and s. 1.1(4) refers to “decorative light fixtures”.  
[88] I find that there is genuine ambiguity in the contract on this particular point.  
On the one hand, I would not consider plug-in lamps to fit within the commonly  
understood meaning of the terms “fixture” or “lighting fixture”, which would generally  
only apply to lighting that is affixed to the structure: Merriam-Webster Dictionary  
(online: https://www.meriam-webster.com) [Merriam-Webster], “fixture”. Thus, one  
cannot say that replacement lamps were clearly the responsibility of the plaintiff. On  
the other hand, I would not consider lamps to fall within the meaning of the term  
“casegoods”, which is generally understood to refer to furniture that provides interior  
storage space, such as bureaus or bookcases: Merriam-Webster, “casegoods”.  
Thus, it is not entirely clear from the text of the contract that replacement lamps were  
the responsibility of the defendants.  
[89] The case law instructs that where there is genuine ambiguity in the terms of  
the contract, the court can have regard to evidence of the surrounding  
circumstances to assist in interpretation. The PIP Schedule indicates that as of the  
date of the written agreement, certain “casegoods” had already been ordered. The  
defendant has presented, as evidence of what was ordered, invoices for the  
purchase of items including headboards, nightstands, coffee tables, and access  
pillows. The defendants later obtained the release of PIP holdback funds based  
upon these invoices. Some of the items listed do not fit easily into the common  
meaning of the term “casegoods”, that is, furnishings with interior storage space.  
Despite this, both parties appeared to accept that these items fell within the scope of  
the PIP works. This evidence assists me in determining that the parties had a mutual  
understanding and agreement that the term “casegoods” was not limited to furniture  
providing “interior storage”.  
[90] I conclude that the desk lamps and standing lamps fell within the scope of the  
PIP improvements under the responsibility of the defendants as provided for in  
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s. 1.1(10) of the PIP Schedule. The plaintiff is entitled to damages for the cost of  
these items.  
[91] In the result, apart from the claim for TV “motion mounts” falling outside the  
scope of the PIP works, I am satisfied that the balance of the plaintiff’s claim for  
furniture, casegoods, and associated contracting fees relates to items that were the  
responsibility of the defendants under the PIP Schedule. I therefore find that the  
defendants are liable to pay damages in the amount of $71,183 under this heading.  
(c) Patio Furniture  
[92] Section 1.9(3) of the PIP Schedule required the defendants to provide new  
tables and chairs for the exterior patio. Ms. Zhang deposes that the defendants did  
not do so, as a result of which the plaintiff purchased these items at a cost of  
$9,947.43.  
[93] The defendants point out that the PIP Schedule indicates the patio furniture  
had been “ordered” at the time that the written agreement was executed. However,  
there are no invoices or other evidence showing that the defendants paid for any  
particular items of patio furniture, nor is there any evidence that new patio furniture  
was on hand as part of the hotel inventory when the plaintiff took possession.  
[94] Even taking into account the indication in the PIP Schedule that the patio  
furniture had been ordered, I am satisfied on the affidavit evidence of Ms. Zhang that  
these items were not on hand when the hotel changed hands, such that the plaintiff  
found it necessary to purchase replacement patio furniture in order to complete the  
PIP works to the satisfaction of the franchisor.  
[95] The defendants also point out that the plaintiff’s claim for the cost of patio  
furniture includes $976.64 for planters that fall outside the scope of the PIP  
Schedule. Ms. Zhang accepts this point in her reply affidavit, and plaintiff’s counsel  
concedes in his written submission that this amount should be deducted from the  
total. In the result, I find that the defendants are liable to pay damages in the amount  
of $8,970.79 under this heading.  
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(d) Building Permit and Architectural Fees  
[96] In her affidavit, Ms. Zhang avers that in order to undertake the PIP works, she  
had to obtain a municipal building permit at a cost of $5,143.68. Mr. Mandair  
responds in his affidavit by pointing out that none of the work assigned to the  
defendants under the PIP Schedule consisting of providing wall coverings,  
painting, and replacing furniture and casegoods would have required a building  
permit. Mr. Mandair explains that none of this work would require any alteration of  
the buildings gas lines, electrical system, or water fixtures. In her reply affidavit,  
Ms. Zhang said she was not able to comment on what aspects of the PIP works did  
or did not require a building permit. She was advised by the supervising  
professional, Mr. Kutev, that a building permit was required for the PIP works as “as  
a whole”, and she is unable to comment on which particular aspects of the work did  
or did not require a building permit.  
[97] After considering all of this evidence, I find that the plaintiff has failed to prove  
that any portion of the cost of the building permit was attributable to PIP works for  
which the defendants were responsible under the PIP Schedule. There is no  
evidence before me as to what kinds of work would or would not require a building  
permit. Having regard to the nature of the work assigned to the defendants under the  
PIP Schedule, which is largely decorative or cosmetic, Mr. Mandair’s explanation  
makes sense to me. By comparison, at least some of the PIP works assigned to the  
plaintiff would appear to involve changes to the building’s lighting fixtures, plumbing  
fixtures, heating and cooling systems. On this record, I find it more likely than not  
that the building permit was only required in order to perform aspects of work for  
which the plaintiff was responsible under the PIP Schedule. Thus, the plaintiff has  
failed to prove this aspect of its claim.  
[98] With regard to the architectural fees, the plaintiff does not take the position  
that the architectural designs and the like were necessary in order to undertake the  
specific works attributable to the defendants under the PIP Schedule. Rather, the  
plaintiff says it was obliged by the franchisor to retain an architect to oversee the PIP  
works as a whole, and the defendants refused to provide or agree to the release of  
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the architectural plans previously prepared by the supervising architect, Mr. Kutev.  
As a result of all this, the plaintiff was forced to “re-engage” Mr. Kutev, at a total cost  
of $15,541.84.  
[99] The plaintiff says that the refusal of the defendants to agree to the release of  
the architectural plans was a breach of their obligations under both Clause 6.1 and  
Clause 11.10 of the agreement. The former clause required the defendants to  
provide the plaintiff with all records, documents, files and other data relating to the  
business of the company, and the latter clause required the defendants to do such  
acts as may reasonably be required to carry out the intent and meaning of the  
agreement.  
[100] In support of its position, the plaintiff cites an email dated 25 July 2016 from  
Ms. Zhang’s co-worker, copied to Ms. Zhang, to the defendant Mr. Boyal, seeking  
assistance in obtaining consent for the release of design documents from the  
previous owner of the hotel and their consultant Mr. Kutev. Mr. Boyal responded on  
the same day, stating in his reply email, “I would be happy to accommodate [the  
plaintiff] once we have received the holdback monies which are overdue to us”. After  
the defendants refused to provide assistance in obtaining the design documents, the  
plaintiff “re-engaged” Mr. Kutev, who then prepared design plans without the benefit  
of any “paperwork” from the “previous owner”.  
[101] The defendants contend that the plaintiff’s position is based on a  
“misunderstanding” that the defendants refused to provide the relevant documents.  
The defendants say the design documents were actually the property of the previous  
hotel owner, Fortis Hotels. This is reflected in the original email dated 25 July 2016  
from the franchisor to Ms. Zhang and others, stating that the franchisor’s legal team  
“has advised that all design documents completed by the previous owner (Fortis  
Hotels) and their consultants (Jordan Kutuv [sic] Architect Inc.) are their property  
only”. The defendants rely on the reference in this email to the previous owner as  
“Fortis Hotel” to say that the plaintiff directed its request to the wrong party.  
[102] I do not find the position of the defendants persuasive, for three reasons.  
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[103] First, the plaintiff’s request for documents was clearly time-sensitive, given  
that both the plaintiff and the defendants had committed to complete the PIP works  
by a certain timeline that had already passed. The defendants, who would  
reasonably have expected that the plaintiff would be accountable to the franchisor  
for the incomplete status of the PIP works, were obliged to provide all relevant  
documents per Clause 6.1 of the agreement, and obliged to do such acts as may  
reasonably be required to carry out the intent and meaning of the agreement per  
Clause 11.10. Despite all of this, Mr. Boyal declined to “accommodate” the request,  
citing the ongoing dispute over the status of the holdback funds.  
[104] Second, based on the reasoning in paras. 32 to 42 above, I would not  
interpret the disagreement about the release of the holdback funds, which was the  
subject of ongoing discussion between the parties’ solicitors, as a fundamental or  
repudiatory breach by the plaintiff. Accordingly, Mr. Boyal was not justified in  
declining to “accommodate” the plaintiff’s request for documents relating to the PIP  
works on the basis of the ongoing dispute about the status of the holdback funds.  
[105] Third, the plaintiff made a rather straightforward request to the defendant  
Mr. Boyal, one of the two prior owners of the hotel, to facilitate access to  
architectural documents related to the PIP works. Mr. Boyal did not respond by  
indicating that the request was directed to the wrong party. Rather, he responded by  
saying that he would be “happy to accommodate” the plaintiff once the holdback  
funds were released. Accordingly, I do not accept the position of the defendants that  
they did not breach their obligations under the share transfer agreement because  
the plaintiff directed its request to the wrong party. Mr. Mandair avers that he and  
Mr. Boyal had been the owners of the hotel since 2008 or 2009, and in  
contemplation of selling it to the plaintiff, they arranged for the PIP report “at their  
own cost” following a site visit by representatives of the franchisor on 22 September  
2015. In these circumstances, I infer that the defendants would have been able to  
assist in obtaining the architectural designs that went into the preparation of the PIP.  
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[106] The defendants were obliged under Clause 11.10 to undertake such acts as  
were reasonably required to carry out the intent and meaning of the agreement. The  
defendants breached this obligation by refusing to “accommodate” the plaintiff’s  
request for access to documents necessary to carry out the PIP works. As a  
consequence of the defendants’ breach, the plaintiff had to incur $15,541.84 in  
architectural fees. The defendants are liable to pay damages in that amount.  
(e) Doors and Door Frames  
[107] Section 1.1(5) of the PIP Schedule required the defendant to “[r]epaint all  
painted items and surfaces with new color to match [the] new design scheme” for all  
standard guest rooms on the first and second floors. Section 1.2(2) required the  
defendants to “[r]epaint entry doors where paint is peeling” for guest rooms on the  
third floor. Sections 1.4 and 1.5 required the defendants to renovate the guest suites  
on all three floors, with the same scope of work as outlined above.  
[108] Ms. Zhang deposes that the defendants failed to adequately repaint the  
doors and door frames, as a result of which the plaintiff was required to pay for this  
work itself. Attached to Ms. Zhang’s affidavit are three separate invoices for door  
and frame painting, totalling $10,321.50. Of this amount, $1,558 relates to the  
painting of “utility” doors, or doors of other descriptions which appear to be outside  
the scope of the defendants’ responsibility. Removing that amount would reduce the  
net amount of the defendants’ responsibility for repainting work to $8,763.40.  
[109] For their part, the defendants claim that some repainting of doors was done  
before the plaintiff took possession of the hotel. Even allowing for this, I accept the  
evidence of Ms. Zhang that the door and frame painting as described in her affidavit  
was necessary to bring the hotel into compliance with the finishing standards  
contemplated in the PIP Schedule. I find that the plaintiff is entitled to recover  
$8,763.50 for the cost of repainting doors and door frames within the scope of the  
defendants’ responsibility under the PIP Schedule.  
[110] The much more contentious issue under this heading relates to the plaintiff’s  
claim for $248,296.10 for the complete replacement of guest room doors. In her  
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affidavit, Ms. Zhang avers that in early 2017, a representative of the franchisor  
inspected the hotel for compliance with the franchise standards. Ms. Zhang avers  
that the unnamed representative “said that it would not be acceptable to the  
franchisor for us to repaint the doors”, because this would “require the doors to be  
removed and sanded down”, which would, among other things, “remove much of the  
detailing on the doors”. Accordingly, “the franchisor required the doors to be  
removed and replaced with doors that met their standard”.  
[111] There are two concerns with Ms. Zhang’s evidence about the replacement  
doors. First, it is hearsay. The plaintiff has not identified any applicable exception to  
the hearsay rule, or any other rationale on which to admit this evidence for the truth  
of its contents. Second, even if the plaintiff had presented some admissible evidence  
to establish that repainting the doors would not meet the franchisor’s standards, this  
was not the responsibility of the defendants. The defendants were required to  
“repaint” surfaces, and touch up door frames as set out in the PIP Schedule. Even if  
there were admissible evidence that the franchisor later insisted on better quality  
finishing, this was not part of the agreement that the parties had committed to when  
they signed the share purchase agreement.  
[112] I have another concern about the plaintiff’s claim for the cost of replacement  
doors. Section 1.1(2) of the PIP Schedule required the plaintiff to “[r]eplace entry  
door lockset with new electronic RFID grade 1 mortise lock hardware” for the guest  
rooms on the first and second floor. Based on similar language in ss. 1.2(3), 1.4, and  
1.5 of the PIP Schedule, the plaintiff was required to replace the locks on the entry  
doors in all of the other guest rooms and guest suites. In this regard, there are  
references to the terms “doors and locks” and “doors & hardware” in the invoice and  
deposit documents put forward by Ms. Zhang to support the plaintiff’s claim for  
replacement doors.  
[113] This evidence causes me to question whether it was truly necessary to  
replace the doors in order to address the quality of the repainting, or whether,  
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alternatively the decision to replace the doors was driven by the plaintiff’s obligation  
to replace the “locks” or “hardware”.  
[114] Moreover, the subcontractor invoice does not distinguish between the cost of  
the doors and the cost of the locks. Thus, even if the evidence established that it  
was necessary for the plaintiff to replace the doors as a consequence of the  
defendant’s failure to repaint (and I find that it did not), the plaintiff has failed to  
prove what portion of the $248,296.60 is attributable to the doors, and what portion  
is attributable to the replacement of locks. I would not expect the cost of “electronic  
RFID” locks to be minimal. I have no evidence either way, but it could well be the  
lion’s share of the total amount invoiced by the subcontractor.  
[115] For all of these reasons, I find that the plaintiff has failed to prove that the  
$248,296.60 incurred to replace the hotel room doors (and locks) is attributable to  
any breach of the defendants’ obligations under the PIP Schedule.  
(f) Asphalt Repair  
[116] Section 1.13(3) of the PIP Schedule required the defendants to “repair cracks  
and reseal asphalt paving” for the “site”. Ms. Zhang deposes that the defendants did  
not do this work, and the plaintiff paid $10,080 to have the work completed. The  
defendants argue that they were only required to repair “cracks” in the asphalt, not  
“replace the entire parking lot”. However, the invoice presented by the plaintiff does  
not indicate that the plaintiff paid to “replace the entire parking lot”. According to the  
invoice, the work consisted of applying two layers of commercial grade sealant at a  
cost of $7,200 plus GST, and a further $2,200 plus GST for painting lines and  
repairing a concrete curb. The resealing work was clearly within the responsibility of  
the defendants under the PIP Schedule. The curb repair was not. I conclude that the  
plaintiff is entitled to damages in the amount of $7,560 under this heading.  
(g) Project Management Fees and Disposal Fees  
[117] The general contractor for the PIP works charged the plaintiff for particular  
aspects of the works, which are dealt with under some of the headings above,  
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Page 36  
specifically wallpaper, and replacement of furniture and casegoods. However, the  
general contractor also charged the plaintiff contingency fees and monthly  
management fees. The contingency fees, calculated at a rate of $300 per renovated  
hotel room, totalled $23,100. The monthly management fees, at a rate of $5,777 per  
month for seven months, totalled $40,425. Thus, the plaintiff paid its general  
contractor a total of $63,525 in overhead charges.  
[118] The plaintiff seeks to recover a portion of this from the defendants on the  
basis that much of the contractor’s time and effort was taken up by work allocated to  
the defendants under the PIP Schedule. In her affidavit, Ms. Zhang states that,  
based on her work in overseeing the PIP works, approximately 50% of the general  
contractor’s time and effort was attributable to the work allocated to the defendants  
under the PIP schedule. Thus, the plaintiff says it is entitled to recover 50% of the  
overhead charges from the defendant. The plaintiff relies on Clause 11.1 of the  
agreement, in which the defendants agreed to indemnify the plaintiff for any loss,  
liability, cost or expense, incurred directly or indirectly as a result of a breach by the  
defendants.  
[119] The defendants take issue with Ms. Zhang’s assertion that 50% of the  
subcontractor’s overhead charges are attributable to work for which they were  
responsible. They cite, among other things, the cross-examination of Ms. Zhang, in  
which she stated that her attribution of 50% of the overhead costs to the defendants  
was a “rough estimate”. Based upon the figures in her spreadsheet, Ms. Zhang  
calculated the portion attributable to the defendants to be “about 30 to 50 percent”,  
but went on to explain that based on her personal observations, the contractor spent  
“significantly” more time on the defendants’ part of the PIP works. The defendants  
also point out that they were only responsible for some portions of the work in some  
of the hotel rooms that the contractor renovated. Finally, the defendants rely on  
Mr. Mandair’s affidavit evidence that, based his experience as a construction  
manager and developer, no more than 10% of the subcontractor expenses are  
attributable to the defendants.  
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[120] I do not consider the conflict in the affidavit evidence of Ms. Zhang and  
Mr. Mandair to raise any real issue of credibility. These are not two witnesses giving  
different factual accounts of the same event. Rather, both witnesses endeavoured to  
provide an estimate of the overhead attributable to the defendants’ portion of the  
work, based on their familiarity with the hotel, and their knowledge of the PIP works.  
The assessment of this evidence turns on admissibility and reliability, not witness  
credibility.  
[121] Even if the evidence of both witnesses is admissible as something other than  
unqualified opinion evidence, I would not attach much weight to either Ms. Zhang’s  
estimate or Mr. Mandair’s estimate.  
[122] Although Ms. Zhang was in a position to make personal observations of the  
contractor’s work, her estimate is based on little more than a general assertion that  
the contractor spent a disproportionate amount of time on jobs that fell within the  
responsibility of the defendants. Her evidence was also significantly weakened in  
cross-examination, specifically her concession that when she tried to calculate the  
overhead using the data from her own records, the defendants’ portion came out to  
“about 30 to 50 percent”.  
[123] Mr. Mandair appears to have based his 10% estimate on a general  
knowledge of the hotel, along with his stated experience in development and  
construction. He had no direct involvement with the contractor, and was not in a  
position to observe the work. I also find it likely that Mr. Mandair’s assertion that no  
more than 10% of overhead is attributable to the defendants is based on a narrow  
and self-serving interpretation of the scope of the defendants’ responsibilities under  
the PIP Schedule.  
[124] I would characterize Ms. Zhang’s spreadsheet as a contemporaneous record  
of the contractor fees over the course of the project. This spreadsheet indicates that  
the total of all direct costs charged by the subcontractor for the PIP works was  
$352,447. Of this, some $108,882 of direct costs related to work that had been  
assigned to the defendants under the PIP Schedule. Thus, the work attributable to  
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the defendants accounted for 30.9% of the direct costs charged by the  
subcontractor. I consider that figure to be an objectively reasonable representation  
of the proportion of all the subcontractor fees attributable to the defendants. On that  
basis, I conclude that of the $63,525 in overhead charges, $19,629 is attributable to  
work that was the responsibility of the defendants. The plaintiff is entitled to  
compensation in that amount.  
[125] The plaintiff also incurred some $12,756.64 in disposal fees, above and  
beyond the disposal fees included within the general contractor’s fees. Applying the  
same analysis, I find that $3,942 is attributable to the disposal of materials related to  
the defendants’ share of the PIP works. The plaintiff is entitled to compensation in  
that amount.  
(h) Legal Expenses as Damages  
[126] The plaintiff also seeks recovery of the entirety of its legal expenses as  
contractual damages pursuant to the indemnity provision of the share transfer  
agreement. To be clear, this is not merely a plea for costs of the litigation under the  
Rules, but rather a claim for full recovery of all legal expenses incurred by the  
plaintiff as damage for breach of the contract, pursuant to the indemnity clause in the  
share transfer agreement.  
[127] The case law recognizes that parties may agree in a contract “that one party  
will reimburse the other for actual legal fees and other expenses incurred in certain  
circumstances”, in which case “entitlement to recovery of legal fees and expenses is  
derived from the terms of the contract, not from the statutory costs regime”: Tanious  
v. The Empire Life Insurance Company, 2019 BCCA 329 at para. 52, citing  
Canadian Petcetera Limited Partnership v. 2876 R Holdings Ltd., 2010 BCCA 469 at  
para. 42.  
[128] A contractual right to full indemnification of legal expenses must be “clearly  
and unequivocally expressed” in the text of the contract, although no “magical  
incantation” is required: Bakshi v. Shan, 2013 BCSC 969 [Bakshi] at para. 44. The  
court must ascertain “the reasonable intention of the parties” based on the “language  
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used” in the contract: Eisler Estate v. GWR Resources Inc., 2020 BCSC 562 at  
para. 32 [Eisler Estate], aff’d 2021 BCCA 247.  
[129] It is also important to bear in mind that legal expenses paid to a lawyer are  
unlike other expenses, in that they are subject to a statutory right of review under the  
Legal Profession Act, S.B.C. 1998, c. 9, as explained in Travelers Guarantee  
Company of Canada v. Ryan, 2012 BCSC 43 at paras. 819. For this reason, where  
a claim for contractual indemnification of legal fees is successful, the proper  
approach is to make an order awarding legal fees as damages, with the quantum to  
be assessed by the Registrar under Rule 18-1: Shang v. Dhuu, 2021 BCSC 68  
[Shang] at para. 20; Eisler Estate at para. 33.  
[130] In the present matter, there is a live issue of contract interpretation as to  
whether the indemnification clause clearly and unequivocallyextends to legal  
expenses, including legal costs incurred to enforce the share transfer agreement.  
Neither party has provided any case law on that issue. There is also the added  
wrinkle that the share transfer agreement contains a reciprocal indemnification  
clause in favour of the defendants, who have brought a successful counterclaim.  
The defendants seek costs but have not advanced a claim for recovery of legal fees  
as contractual damages.  
[131] In all of these circumstances, I have decided to adjourn the plaintiff’s  
contractual claim for indemnification of legal expenses, to be considered at the same  
time as any arguments for costs under the Rules. Many comparable cases have  
dealt with such claims in a similar way, including Bakshi, Eisler Estate, and Shang.  
(5) Sum Total of Damages Payable to the Plaintiff  
[132] In summary, I conclude that the defendants are liable to pay the plaintiff  
damages for breach of contract as follows: (i) $137,098.88 for wallpaper  
replacement costs; (ii) $15,541.84 for architectural fees; (iii) $8,763.40 for the cost of  
repainting of doors and door frames; (iv) $7,560 for the cost of asphalt maintenance;  
(v) $19,629 for contractor overhead costs; and (vi) $3,942 in material disposal costs,  
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Page 40  
for a total of $192,535.12, plus from 27 February 2018, which was the date when the  
plaintiff made its final payment to the general contractor.  
[133] With regard to the final $10,000 of PIP holdback funds, if those funds have  
not already been released, they should be released to the defendants upon payment  
of the net amount of the judgment. If the funds have not previously been released to  
the defendants and are no longer available for release to them for some reason,  
then $10,000 should be deducted from the amount of the plaintiff’s judgment.  
(6) Counterclaim  
[134] As noted above, the defendants have filed a counterclaim for damages in  
connection with the plaintiff’s failure to adjust the contract purchase price to account  
for $21,479.94 in inventory materials at the hotel when it changed hands. The  
counterclaim is not merely against the plaintiff, but also the personal representatives,  
Ms. Zhou and Mr. Kang, and Mr. Purba, who allegedly made personal guarantees to  
pay the inventory amount, at the hotel, on the occasion when the inventory was  
counted.  
[135] The plaintiff admits to breaching the obligation to make an inventory  
adjustment under Clause 3.1, and concedes that the counterclaim should be  
allowed. The plaintiff says the amount should be set off against the damages  
payable by the defendants.  
[136] Mr. Zhou and Mr. Kang filed responses to the counterclaim denying liability,  
but neither of them filed responses to the defendants’ summary trial application.  
Mr. Purba never filed a response to the counterclaim, and is therefore in default  
under the Rules.  
[137] Given the plaintiff’s concession that the counterclaim against it should  
succeed, and given the further reality that damages payable to the defendants in the  
counterclaim will be set off against the damages payable to the plaintiff for its  
originating claim, I would adjourn the counterclaims against the other parties. It  
seems to me that those claims are practically moot, even if not technically so. If the  
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Page 41  
defendants take issue with this and wish to seek further relief in that regard, they  
may raise the matter in conjunction with their submissions on costs.  
[138] In the result, I would allow the counterclaim against the plaintiff and award  
damages of $21,479.94 plus interest from 8 March 2016 (the final closing date for  
the agreement), to be set off against the award of damages payable by the  
defendants in the main action. I would adjourn generally the counterclaim against  
the personal defendants by counterclaim, giving the defendants leave to revisit the  
matter in conjunction with their submissions on costs.  
Costs and Legal Fees  
[139] If the parties are unable to agree on: (i) the disposition of the plaintiff’s  
contractual claim for legal fees, and (ii) costs of the action, they may file written  
submissions, unless either party takes the view that a further oral hearing is required  
on these issues. If the parties are content to proceed by written submissions, then:  
(a) within three weeks of the date of this judgment, the plaintiff shall file and serve a  
written submission no more than eight pages in length, together with any supporting  
materials; (b) within two weeks of receiving the plaintiff’s submission, the defendants  
shall file and serve a written submission no more than eight pages in length, along  
with any supporting materials; and (c) within one week of receiving the defendants’  
submissions, the plaintiff may file and serve a written reply submission no more than  
three pages in length, plus any supporting (reply) materials.  
Riley J.”  



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