Third Session, 42nd Parliament

(2022) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, March 29, 2022

Afternoon Sitting

Issue No. 175

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Motions Without Notice

Permission for Indigenous leaders to address the House

Hon. M. Farnworth

Orders of the Day

Committee of the Whole House

Bill 9 — Attorney General Statutes Amendment Act, 2022 (continued)

Hon. D. Eby

M. de Jong

Report and Third Reading of Bills

Bill 9 — Attorney General Statutes Amendment Act, 2022

Committee of the Whole House

Bill 11 — Commercial Liens Act

Hon. S. Robinson

P. Milobar

Reporting of Bills

Bill 11 — Commercial Liens Act

Second Reading of Bills

Bill 14 — Wildlife Amendment Act, 2022 (continued)

J. Rustad

A. Olsen

B. Bailey

T. Shypitka

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Mental Health and Addictions (continued)

Hon. S. Malcolmson

P. Milobar

T. Halford

Estimates: Ministry of Agriculture and Food

Hon. L. Popham

I. Paton

A. Olsen

S. Furstenau

J. Sturdy

TUESDAY, MARCH 29, 2022

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Hon. M. Farnworth: I seek leave to move a motion.

Leave granted.

Motions Without Notice

PERMISSION FOR INDIGENOUS LEADERS

TO ADDRESS THE

HOUSE

Hon. M. Farnworth: I move a motion that has been shared with both opposition parties.

By leave, I move:

[That Cheryl Casimer, Chief Jerry Jack, and Grand Chief Stewart

Phillip be permitted to address the House on March 30, 2022.]

Motion approved.

Orders of the Day

Hon. M. Farnworth: In this chamber, I call Committee on Bill 9, Attorney General Statutes

Amendment Act.

[1:35 p.m.]

In

Section A, Committee of Supply, I call continued debate on the

estimates of the Ministry of Mental Health and Addictions. Following their

conclusion, we will go to the Ministry of Agriculture, Food and Fisheries

estimates.

Committee of the Whole House

BILL 9 — ATTORNEY GENERAL STATUTES

AMENDMENT ACT, 2022

(continued)

The House in Committee of the Whole (Section

B) on Bill 9;

J. Tegart in the chair.

The committee met at 1:37 p.m.

On clause 2 (continued) .

Hon. D. Eby: I’m joined here by Darin Thompson, legal counsel, Ministry of

Attorney General and Housing.

M. de Jong: When we left off, the Attorney was making the point that the

limitation period that will ultimately be prescribed here relates to a

new provision that is created later in this bill, an amendment to

subsection 133(1) of the existing act, the Civil Resolution Tribunal

Act.

Further, I think he wanted to emphasize that the circumstances in

which the finding of responsibility for an accident is relevant — it’s

certainly relevant to this

section — is limited. He did that almost in

the reverse by saying it’s not relevant in the case of transitional

cases that still rely upon tort law.

He made the point, I believe, that it’s not necessarily relevant,

under the newer regime — where benefits might be reduced based on

responsibility — but that this finding of responsibility that’s

contemplated has relevance in circumstances where there are no damages

that have been suffered but where future premiums and, possibly, future

employment could be impacted. The example he used was a commercial truck

driver.

[1:40 p.m.]

All helpful, of course. I’m going to ask a question that draws, I

guess, necessarily on a

section that we come to later in this bill,

section 14, which creates the new subsection to sub 133(1)(d), which

speaks to “the determination by the Insurance Corporation…or a

prescribed insurer of the extent to which the initiating party is

responsible for the accident.”

We have the Attorney’s explanation for the limited circumstances

in which that determination of responsibility is relevant. My question

is: where do we look? It doesn’t appear to be in

section 14. Where do we

look for the statutory confirmation of what the Attorney has said about

the limited application of this finding of responsibility?

Hon. D. Eby: The relevant clause is clause 14 of this bill, which would, if

passed, adds a new subsection (

d) to the existing subsection 133(1). Sub

133(1) talks about claims within the jurisdiction of the civil

resolution tribunal for accident claims, and (

a) and (

c) talk about

determination of fault and the relation of fault to benefits paid or

payable, or liability and damages.

There is this third category where there are no benefits paid or

payable and there is no liability or damages, but there are future

impacts that don’t fit into those categories, namely impacts on premiums

and impacts on, potentially, future employment, which is why subsection

(

d) is necessitated and why clause 14 would add that new jurisdiction to

the civil resolution tribunal.

M. de Jong: Can the…? What might be helpful is for the Attorney to offer the

committee a practical example of the circumstances in which this would

be relevant. When I had the briefing with the officials, they kindly

alerted me to circumstances in which there were no damages and — I’m

relying now on my notes from the briefing — circumstances where the

tribunal had to dismiss a claim for lack of jurisdiction on questions

related to this.

Maybe the easiest way to get to the heart of this is for the

Attorney, with the assistance of his officials, to just lay out an

example of the problem that arose and how this will fix that

problem.

[1:45 p.m.]

Hon. D. Eby: The issue is that somebody who receives one of these notices that

they’re at fault in a collision goes to the CRT, because that’s an

avenue to go to resolve these disputes with ICBC. They try to file their

claim and say: “I want this determination to be reversed, because I

wasn’t at fault.” The CRT says: “Okay, what liability is occasioned by

your being found at fault?” That’s subsection 133(a).

Pardon me. Subsection (a). “What benefits are you being denied

because you were found to be at fault?” They say: “No benefits. It’s

just that down the road, I might face increased premiums, or down the

road, I might have difficulty getting employment.” “Okay. What liability

are you facing? What additional expenses and damages are you going to

have to pay out because you were found at fault?” “Well, none. There are

none here. I was found at fault, and I’m worried about these future

consequences.”

When the CRT goes through their relevant jurisdiction, within

section 133(1)(

a) and (c), this person doesn’t qualify for either of

those areas of responsibility, so they have to say: “I’m sorry. We don’t

have the jurisdiction to issue what you’re asking for, which is a bare

declaration that you were not at fault, in the absence of any liability

or damages.” If they get through to a hearing, the tribunal finds that

there is no jurisdiction, or they may not even get through to a hearing

at all.

The remedy here is to create a new subsection, subsection (d), to

say that in fact, even in these situations where there are no damages,

no liability, no disentitlement to benefits or purported entitlement to

benefits…. Even in the absence of those things, the CRT can still make a

determination related to fault or not being at fault in a collision, and

to clarify that for the CRT.

M. de Jong: Right. That is helpful. So the position the tribunal seems to have

taken on the strength of its

interpretation of the existing legislation

is that it didn’t have the jurisdiction to make that finding,

notwithstanding, I guess, the virtual certainty that a finding of

responsibility ultimately impacts the premiums, at a minimum, that

people would pay down the road. The government and the Attorney have

brought legislation before the House in this committee.

Was that a frequent phenomenon? It wouldn’t be hard to convince me

that it was insofar as the ramifications of losing a safe driver’s

discount can be fairly significant. So was it a frequent phenomenon? And

does the Attorney have any information he can share with the committee

indicating what volume of additional work this is likely to create for

the tribunal?

[1:50 p.m.]

Hon. D. Eby: The civil resolution tribunal has done two samples of cases. They

don’t track their statistics to this level of nuance about the reasons

why a matter might be dismissed or so on. Instead, they’ve pulled sample

cases to try to determine the frequency.

In the first sample, there were 180 decisions pulled in June of

2020 to examine and try to identify fault-only disputes which had gone

to adjudication. They found the following examples.

Two cases where the civil resolution tribunal found in favour of

the applicant — in other words, reversing the ICBC fault decision — but

ultimately dismissed the claim for lack of proven damages. They said:

“You’re right, but we can’t make that determination because of

jurisdiction.” Then 19 cases where the applicant was not successful on

liability. In other words, they upheld the ICBC fault decision. But in

any event, the CRT still noted that, even had they been successful, the

CRT couldn’t have gone ahead and granted the relief that was

sought.

In the second set, there were 20 cases pulled in October 2021.

They found five cases where the CRT found in favour of the applicant for

liability but dismissed the claim because there were no proven damages,

two where the CRT refused to resolve the dispute on the basis of lack of

jurisdiction and other cases where the applicant was not successful on

liability but the CRT still noted it would have had to dismiss in any

event.

The CRT advises that this is likely a growing potential issue,

given the fact that people are increasingly aware of the role of the CRT

and their ability to resolve claims related to ICBC. Staff advised that

in the interim, people have been going to Provincial Court to resolve

these matters. The advice we have received from the CRT is that there

may be a one-time capital cost to update the so-called Solutions

Explorer software that people go through at the beginning to find their

way through the process, but they should be able to handle this with

existing staff.

M. de Jong: The Attorney will indulge me as I try to walk through, then, how

this is intended to look when the amendment has passed and the new

system is in place.

I’m driving along the freeway in the morning. Traffic backs up,

I’m not paying attention, and I rear-end the vehicle in front of me.

Hard to imagine damage now that doesn’t cost $3,000 or $4,000 at a

minimum, unless it’s my car, which is 35 years old. I’ve caused damage

to another vehicle, and somewhere along the line, my insurer ICBC sends

me a letter and says: “We have determined you to be responsible for this

accident.”

[1:55 p.m.]

I want to challenge that because I want to allege some other

contributing factor. I’m not going to get hung up on this, because I

understand why the rationale for the change. But why doesn’t sub

133(1)(c), as it presently exists, bestow jurisdiction in a case where,

as the

section says that, in respect of an accident — and, in that case,

in sub (c) — loss or damage is less than or equal to the tribunal

amount?

On the reading of it, it would seem to me that if there is an

accident and there is damage that falls within the jurisdiction of the

tribunal, it would have the authority to render a decision.

Hon. D. Eby: I’m advised that 133(1)(c)’s term “accident” is, in fact, a

defined term which limits the types of accidents for which jurisdiction

is granted to accidents that include some form of bodily injury. Outside

of that definition, then…. If there is not bodily injury, then there’s

not jurisdiction.

Beyond that, the structure of (

c) is really intended for the

previous tort-related claims. It’s what it was designed for. It was not

intended for the no-fault or enhanced benefit system that we have now.

So for a couple of reasons, it’s an awkward fit and has resulted in this

jurisdictional gap.

M. de Jong: All right. Candidly, I’m not sure I entirely understood the

answer. That undoubtedly is my problem, not the Attorney’s.

The new sub (

d) incorporates the term “accident” and would seem to

draw on the same definition. I take it that it’s the Attorney’s view

that the wording prior to the word “accident” in the newly proposed sub

(

d) is sufficient to cure that problem, but it is the same term and

presumably subject to the same definition.

Hon. D. Eby: It was one of those moments in a chess game where you think that

you’re checkmated, but then suddenly you see a way through. The member

points out….

[2:00 p.m.]

Obviously, the word “accident” appears in both, so if “accident”

limited jurisdiction in (c), surely it would in (

d) as well. Staff have

kindly pointed out to me…. In

section 12 of the bill, the definition of

“accident” for sub-subsection 133(1)(

d) of the act has its own

definition, which is different than the word “accident” in subsection

(c).

Clause 12 of this act anticipated the member’s question and

responds to it by saying as follows, “in respect of a determination of

responsibility referred to in

section 133 (1) (

d) of this Act, has the

same meaning as in

section 1.1 of the Insurance (Vehicle) Act,” which,

itself, does not refer to bodily injury.

M. de Jong: To the Attorney, I fear I would pursue further questioning at my

peril. Maybe I’ll just ask the Attorney to…. And I don’t say that in

jest. I get the connection and the tortuous ways, sometimes, that

legislation has to deal with these matters.

Let’s go back to the example that I gave, which may be the best

way to clarify what is being created here. I rear-end someone. There is

damage that falls to the other vehicle. No personal injury damages. I

get my letter from my insurer, ICBC, who says: “We have found you to be

responsible for this accident.” I take issue with that.

I now have, when this is done, the ability within what will be a

prescribed period of time, which the Attorney has indicated will likely

be something in the neighbourhood of 60 days, to signal my dispute of

that finding of responsibility and to bring that matter before the civil

resolution tribunal to be adjudicated.

Is that the scenario that’s being created here?

Hon. D. Eby: Yes, all of these technical

definitions and so on will be

invisible to the user. They’ll just receive notice that they were found

responsible.

Likely, ICBC will say: “If you want to challenge this, this is the

avenue.” When they go to the civil resolution tribunal, they’ll go

through the Solutions Explorer process that will advise them about how

to complete the forms in which category they’re making a claim under. It

will be updated to include this, so they won’t have to know what the

definition of “accident” is in subsection (

d) or anything like that. But

as the member described, that is how the process would go.

M. de Jong: Just to close the loop on this. In circumstances where the damage

caused exceeds the jurisdictional authority of the tribunal, I still get

a letter that says ICBC is assigning responsibility to me for the

accident. What do I, as the insured, do in those circumstances? What are

the options available to me in those circumstances for disputing the

finding of responsibility by my insurer?

Hon. D. Eby: There is not actually a monetary limit of a claim that could be

heard by the tribunal in relation to fault or not fault. That

determination itself, fault or not fault, doesn’t have a monetary limit

assigned to it. The CRT can hear any fault or no-fault dispute,

regardless of the value of the damages or benefits that may be

associated with it. The caps would come in, in relation to those

benefits and damages if there were a dispute about that, not the fault

or no-fault piece.

[2:05 p.m.]

M. de Jong: Sorry, I’m not meaning to be meddlesome or mischievous. When the

Attorney General used the term “fault,” was he using that in place of

the term “responsible”?

Hon. D. Eby: Yes. I should be more precise in my terminology. Responsibility

for the collision.

M. de Jong: Does it follow, then, in the case of, let’s call it, a more

significant accident, where the damage amounts are greater…? By virtue

of these amendments, does the tribunal then become the starting point in

virtually any case where an insured person has received notice from

their insurer, from ICBC, that they are being held responsible or having

responsibility assigned to them? Is the effect of this that in virtually

every case, that becomes the starting point for disputing that

determination by the insurer?

Hon. D. Eby: We just had to work it through. In all but the most exceptional

cases, they will be starting through the CRT. I just want to confirm for

the member that the amendments today relate only to those matters where

there are no damages or liability except for those future consequences

we talked about that haven’t yet been realized but are reasonably

anticipated. Other than that, the system remains the same. So, as I say,

for all but the most exceptional, they would be going through the CRT

front door.

M. de Jong: Okay. Well, that’s a helpful reminder in terms of the distinction

between the more serious-type accident and what the amendment is

intended to address.

All right. We’ll head on to the next section, then.

Clause 2 approved.

On clause 3.

[2:10 p.m.]

M. de Jong: We discussed this a little bit, that the nature of the bill is…. A

lot of this is so interrelated that we’re having to draw from various

sections.

Amendments to existing 16.4, the elimination of division 5 and the

repeal of subsection (c.1). Maybe I’ll just ask the minister to confirm

this: that the amendments included in clause 3 of this bill, combined

with the amendments included in clause 6 of this bill, are what will

eliminate the ability of a person disputing a finding by the tribunal to

have that matter retried at the provincial small claims court, the

impact of that and the effect of that being that the person disputing

that will then be obliged to refer the matter for judicial review to the

B.C. Supreme Court.

These are the two sections, clause 3 and clause 6 combined, that

seem to make that change.

Hon. D. Eby: These are two of the sections, but there are more to come yet in

the bill.

M. de Jong: All right. Well, we had a conversation…. The Attorney has

explained to the committee his rationale for why he believes that’s an

appropriate change to make. I’ve responded and made some submissions to

the committee about why I think it may not be an appropriate change. I

don’t intend to repeat those submissions, and I don’t think I’ve changed

the Attorney’s mind, so it might be appropriate to simply record that

difference of opinion about the nature of the change being made both in

this clause and clause 6.

Hon. D. Eby: I regret I wasn’t able to persuade the member, but yes, if he

wishes to indicate the difference in our opinions, this clause and

clause 6 would be the key provisions.

Clause 3 approved on division.

On clause 4.

M. de Jong: Just with respect to the amendment, the repeal of sub 48(5) of the

existing legislation. Am I correct that that, too, is required with

respect to the impediment, the filing of a notice of an objection had on

the actual enforcement of a tribunal finding? Is that the rationale

behind the amendment in clause 4?

[2:15 p.m.]

Hon. D. Eby: If you maybe imagine the scenario where I’ve knocked down the

member’s fence. He’s sued me in the CRT process. He’s received a

judgment from the CRT that, in fact, I was negligent, and I owe him the

money to fix the fence. Under this old provision, he would have been

waiting 28 days to see whether I went down to B.C. Provincial Court to

file a notice of objection.

We are in the process of, I hope, getting rid of that process, so

we don’t need this

section here. The tribunal will be able to give an

order that has immediate effect, if they wish, in relation to a claim

like that because of the removal of subsection 5 and the notice of

objection process.

Clauses 4 and 5 approved.

Clause 6 approved on division.

Clauses 7 and 8 approved.

On clause 9.

M. de Jong: Just give me a second, please. So these are amendments to the

existing

section 93 and, particularly, the regulation-making power

included in the legislation.

There are existing reg-making powers that, as we might expect, are

fairly broad. I wanted to just ask for the Attorney’s rationale and

explanation for, in general terms, why the specific regulation-making

powers were required for these limitation periods. There are other

limitation periods associated with the operation of the tribunal in the

act. What is it about these limitation periods that he and the drafters

felt required them to be enunciated specifically in the

legislation?

[2:20 p.m.]

Hon. D. Eby:

Section 93(2)(b.1) is really the mirror of

section 13.5 that we

covered earlier that a limitation period may be prescribed. So it’s a

drafting preference to have a matching reg-making power that clearly

corresponds. The member will see there are two parts to it to set a

limitation period, which we talked about, that will likely be in the

neighbourhood of 60 days.

Then there is a second piece, which is the event that causes the

limitation period to start running. Because ICBC’s processes may change

over time in terms of how they provide notice and a desire to ensure

that there is not some new process that has to be established to give

notice separately to instead fit it into the existing process so that it

runs smoothly for the insured, this regulation-making power is set out

so that the event can be consistent with the method by which the person

would have received notice under the existing system.

Section 93(2)(e.1) talks about the matters to be proven and the

onus of proof. The reason for this is that this could easily evolve into

a sort of trial-type structure, a civil trial, where the determination

is essentially a negligence standard or something like that, when, in

fact, the matters have been dealt with through the courts on more like a

contractual dispute with the insurer kind of basis.

What the B.C. Court of Appeal has set out as the test is whether

the insurer acted properly or reasonably in assigning responsibility,

and there is some other judicial commentary on it. We want to make sure

that the CRT knows that that is the intent here, that this is the

framing of the dispute rather than establishing a new negligence-based

tort process in the CRT.

Then finally, subsection 93(2)(e.2). This is around identifying

additional insurers against whom an initiating party may bring a

dispute. It relates to the potential of needing to provide some

clarification around optional insurers or potentially even

out-of-province insurers, just depending on how this evolves as we move

forward.

They are very distinct, and potentially covered in some other

regulation-making powers, but from a drafting perspective, we wanted to

have absolute clarity for these areas so that we had the flexibility to

be able to ensure the CRT was adjudicating these matters consistent with

existing case law and also incorporate it into existing processes so

that there isn’t duplication or extra steps for an insured.

[2:25 p.m.]

M. de Jong: To the Attorney General, helpful. I would say of the three — we’re

on clause 9 — subclauses, (b.1), (e.1), (e.2), that (b.1) and (e.2) are

pretty clear and deal with specific matters. The Attorney took a

specific amount of time to refer to (e.1). Again, I don’t know that he

would agree, and I’m certain he’s not going to want to tamper with the

drafting, but it strikes me as very, very broad.

The Attorney has sort of indicated why that may be so, but the

subsections above it and below it both deal with something specific, the

need for regulations around timelines and, as he mentioned, a triggering

event for a limitation period, and then, in (e.2), prescribing specific

entities. But the part that I’d highlighted in (e.1) is that phrase

“including respecting any matters required to be proven and the onus of

proof with respect to any matters required to be proven” — and, I guess,

the phrase “respecting claims referred to in

section 133 (1)

(a).”

It almost looks like this is going to be the rules of court power.

Has something arisen that has created, in the Attorney’s mind and the

government’s mind, the need to create that kind of authority? How does

he contemplate that being used? Are there going to be something akin to

the tribunal’s rules that will arise out of this? I think there are

procedural rules now, but it’s a very broad power, and that’s the best

analogy I can come up. It looks like a rules-of-court type of power that

is being created here.

I’d be interested to know the rationale for the need and for

proceeding on that basis.

Hon. D. Eby: Staff have kindly shared with me an example of what the regulation

might look like, which may address the member’s question.

It’s not intended to be a regulation that creates a whole series

of procedural rules, like the rules of court. Instead, it’s meant to

clarify the test, from an array of tests that could potentially be used

by the tribunal in assigning responsibility, to avoid unintended

consequences. One of which is to my concern, proportionality.

That this is a dispute which while significant for the insured —

potentially, a couple hundred dollars, even a month in addition to their

insurance, because they were at fault in a collision…. That’s a big deal

for a driver, but the court process that matches that or the

determination process that finds whether or not the person is

responsible should be proportionate to that $2,400 claim.

To ensure that proportionality, the goal here is to set out what

the test should be so that there aren’t extensive arguments about what

is even the test, what is the burden of proof, and so on.

[2:30 p.m.]

A draft regulation might look something like this, with two

subsections.

Subsection (1): In a claim referred to in subsection 133(1)(d),

the onus is on the initiating party to prove that the insurer did not

act properly or responsibly in administratively assigning responsibility

to the initiating party.

Subsection (2): If the initiating party is successful in proving

the matter described in subsection (1), then the onus is on the

initiating party to prove that the assignment of responsibility by the

insurer should have been different.

That is an articulation of the test used in the Court of

Appeal.

M. de Jong: It sounds like the thinking around what the regulation might look

like pursuant to (e.1) has developed somewhat. Does the Attorney foresee

that regulation being posted relatively shortly after the legislation is

passed and proclaimed?

Hon. D. Eby: What I read to the member is more of a policy kind of draft of

what the regulation might look like. That would need to go through

legislative drafting processes and then through the cabinet process

before finalization. So there are a number of factors that could lead to

changes in the timing.

I can say this, though. There is an interest on the part of

government to get this in place as soon as we can, and the CRT will have

to adjust their systems to be able to accept these claims. The reason

why we would like it to happen as quickly as we can is that these claims

are out there now. People have these concerns now. They would like to

bring this forward to the CRT, if they can, and we want them to be able

to do that as quickly as possible.

M. de Jong: In the example the Attorney gave…. Can he just help me with this?

In that example, what part of it represents “a matter required to be

proven”?

Hon. D. Eby: Essentially, what is required to be proved is whether the insurer

did not act properly or reasonably in administratively assigning

responsibility to the initiating party. That is the matter to be proved,

which is essentially the legal test.

Staff acknowledge that that that was part of the drafting

engagement about how best to articulate that this regulation would set

out that legal test that has to be proved, and that is the matter

intended to be communicated here.

M. de Jong: I think the last kick at this. Any concern on the part of the

Attorney…? As a learned counsel, all of these things make sense. But any

concern that in an exercise which, by definition, is going to involve an

unrepresented layperson, and in the case of the insured, most likely

someone with legal training, that the development of these sets of rules

that lawyers, admittedly, quite like, and I suppose parliamentarians

might quite like…?

The more traditional and, perhaps, less complicated notions of

reasonableness will give way to these far more specific tests, which — I

grant the Attorney — lawyers like. But any concern at all that as we

layer on some of these additional requirements, the position of the

unrepresented participant, vis-à-vis the lawyer who will undoubtedly be

arriving on behalf of the insurance company, is going to make this a

fairly difficult and intimidating process?

[2:35 p.m.]

Hon. D. Eby: In the vast majority of situations, as I understand it, it would

be an ICBC adjuster. But I take the member’s point that the adjuster

would be familiar with the relevant provisions, maybe has done a dozen

of these in a month, and the lay litigant has not ever done this before.

So there is an imbalance that comes from that.

That is attempted to be rectified through the civil resolution

tribunal structure, everything from the process that the person goes

through to articulate their claim, the negotiation process that’s built

into it and then the more civil law–type structure of a decision-maker

that’s actively involved in drawing out evidence and information from

the parties.

The whole structure of the civil resolution tribunal is to level

that playing field. That’s why we think that this is a good fit for the

CRT, for them to adjudicate these claims, versus some other court

process, and it’s certainly easier for a self-represented litigant than

the B.C. Supreme Court would be, for example.

The bottom line here is that this is being situated in the context

of a tribunal that is designed for self-represented litigants, to

minimize those power imbalances as much as possible and get to a fair

outcome.

Clause 9 approved.

On clause 10.

M. de Jong: Can 93(2)(c)…? It can be repealed. Is that because the

jurisdiction of the provincial small claims court has been removed? Is

that sort of the rationale there?

Hon. D. Eby: This was a regulation-making power that cabinet could have used —

didn’t use but could have used — to say that if you’re going to file a

motion of objection, you have to pay a certain proportion of the

judgment against you as a deposit into court.

Because the notice of objection will no longer exist if this

statute passes in its entirety in this House, then there’s no need for

this regulation-making power to prescribe how much deposit should be

made on the filing of a notice of objection.

Clauses 10 to 14 inclusive approved.

On clause 15.

M. de Jong: I don’t know if the Attorney…. I’ve got a few questions about

these sections. I don’t know if that entails a switch in staff, although

staff would thoroughly enjoy this conversation and would undoubtedly

want to remain as spectators.

The Chair: We’ll take a two-minute recess while staff changes.

The committee recessed from 2:38 p.m. to 2:40 p.m.

[J. Tegart in the chair.]

The Chair: We’re considering Bill 9, clause 15.

M. de Jong: I’ll use sections 15 and 16 as the point for asking my questions

insofar as the concept, as it applies to the notaries society, is the

same. At least, I think it is. The Attorney can confirm that.

I wonder if he…. He briefly touched on, in his second reading

remarks, as I think a few of us did, the challenge associated with

maximizing the return on trust funds that then benefits the foundations

that are referred to in the legislation — the Law Foundation, in

particular — and all of the good work that they and the Notary

Foundation do.

Maybe the Attorney, though, could take a moment to just explain

the conundrum that has presented itself and, I suppose, become more

acute in the age of very low interest rates, although I suspect it was

also an issue back when interest rates weren’t as low as they are today.

Let’s just quickly start there and make sure we all understand what the

problem is that is trying to be addressed here.

The Chair: Could I just remind members that if you have a conversation,

please take it outside the chamber. Thank you.

Hon. D. Eby: Members of this House will likely know that lawyers and notaries

have trust accounts. They receive retainers. A notary might receive the

proceeds of a mortgage for a property sale.

They are not permitted to keep the interest from these trust

accounts. They have to remit it over to these foundations or, in certain

situations, back to the client, where there’s a segregated trust

account. In those situations where the money is remitted to these

foundations, the foundations use that money for good works, free legal

aid services, legal aid clinics, legal information, publications, these

kinds of things.

The opportunity here is one that was realized in Ontario. Their

provincial Legislature passed similar provisions which allow the Law

Foundation and the Notary Foundation to enter into

negotiations….

They’re already in negotiations with banks and trust companies to

talk about what interest rates will be paid on lawyers’ trust accounts.

This provides them with the ability to, essentially, have a list of

endorsed banks and credit unions that are approved for lawyers’ trust

accounts. That gives them the ability to negotiate fair fees and

interest rates on these accounts.

I also understand that Nova Scotia has done similar authority. It

has worked out positively for all involved in that the interest rates

are fair. The fees are fair.

The mischief that is sought to be addressed is…. I do understand

that in the past some financial institutions have paid uncompetitive

interest rates on trust accounts or have charged significant fees or

charges to the Law Foundation. Because of the disconnect between the

lawyer and who sees the impact of those low interest rates and high fees

— namely, the foundations…. That disconnect has meant a lack of

accountability. This really brings some of that accountability back and

gives the Law Foundation and the Notary Foundation the ability to get

fair interest rates and fees.

[2:45 p.m.]

M. de Jong: Just to be clear, when the Attorney said user fees to the Law

Foundation, my recollection and understanding is…. The trust accounts

upon which those user fees are charged are in the name of the lawyer or

the law firm. So what happens is that when those exorbitant or excessive

user fees are charged against that account, the impact is less money

flows to the foundation. It’s not as if the foundation is being charged

those fees, but it is having an impact on the funds that flow to the

foundation.

The only thing that I wanted to be on guard about and have a

conversation with the Attorney about on this matter relates to some

concern that might arise about whether or not existing relationships

between lawyers and notaries and financial institutions might be

impacted.

In asking the question, I will invite the Attorney to make the

point to the committee about what happens, now, under the Legal

Profession Act, where the saving institutions are prescribed today as

being qualified to host a lawyer’s or notary’s trust account. The

exercise of prescribing where an account can be set up exists today, as

I understand it. If the Attorney can offer some indication of how that

happens….

My understanding is that if the technical requirements are met, a

lawyer can establish a trust account virtually anywhere. I can’t

remember if the regulation includes a list of savings institutions or if

it’s merely descriptive of what the savings institution must have or how

they qualify. So that’s the first thing.

What’s now being added is a second layer that says: “In addition

to those technical requirements and representing a prescribed savings

institution, they must now pay interest at a certain level.” But let’s

start with the first part, and maybe have the Attorney confirm what the

present state of affairs is.

[2:50 p.m.]

Hon. D. Eby: The relevant Law Society rule is rule 3-56. The requirements to

become a designated savings institution are that you must have an office

in British Columbia accepting demand deposits, and you must be insured

by either (

a) the Canada Deposit Insurance Corp. or (

b) the Credit Union

Deposit Insurance Corp. of British Columbia. Those are the existing

requirements.

The new requirement that this bill proposes to add is that it also

must be an institution that is paying interest and charging fees at a

level approved by the board of the Law Foundation. That would be an

additional requirement, and it’s important to note, in terms of

implementation, that the Law Foundation is prepared, on this coming into

force, to deem all current arrangements approved with banks and credit

unions so that there will be no impact on lawyers and notaries in the

short to medium term as they then work through the process of

negotiating these rates with the relevant banks.

The member also asked about whether fees are charged to the

lawyers or to the Law Foundation. I’m advised that the current structure

of things is that the Law Foundation goes out to the different banks and

credit unions and negotiates interest rate and service charges that are

actually paid — the service charges — by the Law Foundation of B.C. So

often it’ll be a charge of a certain number of thousands of dollars a

month that are paid by the Law Foundation of B.C. to the institutions

for the service charges on the trust accounts.

M. de Jong: To a lawyer or a law firm who might be concerned — and I think my

greater concern here might be for lawyers and law firms located outside

of major metropolitan areas, although, I suppose, the issue could arise

there as well — who might say, “Okay. Well, this is all well and good,

but I have had a 30-year relationship with my small credit union or my

savings institution here in my town,” the Attorney is offering assurance

that says that relationship will continue.

Under the Legal Profession Act, presumably, that trust account

exists at a savings institution that has been in compliance with the Law

Society rules that have been created under

section 33(1) of the act. As

long as that is the case, that relationship may continue.

The added assurance that the Attorney has offered to the committee

is the foundation’s apparent decision to honour existing

relationships.

[2:55 p.m.]

I’m not sure of the relevance of that statement by the Law

Foundation, because, as the Attorney has pointed out, the only new

requirement will be that that savings institute is prepared to pay

interest at the rate prescribed by the foundation and not charge fees in

excess of those agreed to in an agreement with the

foundation.

If I’ve got all of that correct, then that would seem to be the

assurance that law firms, practitioners and sole practitioners, in

particular, might be looking to secure out of this discussion

today.

Hon. D. Eby: Under the current process, the foundations do take into account

the size and location of financial institutions when seeking to

negotiate rates and changes. We understand that they’re going to

continue to do so.

Obviously, there’s online banking, and there are lots of ways for

lawyers to do this work. But it is something that is taken into

consideration in the existing negotiations that are already taking place

with the Law Foundation and the Notary Foundation.

I do think it is important, though, to note that we are proposing

to give the ability to these foundations to not approve a particular

financial institution. If that were the case, a lawyer or a notary would

need to move their trust account elsewhere or potentially face

disciplinary action by their regulator. Now, they could do all of their

other banking with this institution still, but the trust account would

potentially need to move.

It’s important to be clear about that, but at the same time, in

practice in Ontario and Nova Scotia, my understanding is that if not

exceedingly rare, then perhaps it has not actually come up that a bank

was not approved.

It’s gone more to the nature of the negotiations than whether or

not a bank or a credit union is approved.

M. de Jong: I’m just going to take a couple more minutes on this. The Attorney

said something, and again, I don’t wish to be overly specific. But he

talked about the foundation approving savings institutions.

My understanding is that that’s actually not technically correct.

They don’t approve the savings institution. They are empowered in this

legislation to set the amounts — the interest rates and the fee amounts.

So the approval of the savings institution remains with the Law Society,

with the benchers. But what the foundation is being authorized to do is

set an interest rate.

The Attorney said something I thought interesting that I hope

he’ll expand upon.

[3:00 p.m.]

When you read the act, or when you read the amendments, it

suggests that there will be an interest rate, but the scenario that the

Attorney has pointed out suggests that there will perhaps be a whole

variety of interest rates. They might be different, or they likely will

be different, for different savings institutions. I think people will be

interested to hear a little bit more about what that may look like,

practically.

Hon. D. Eby: The member’s understanding of my remarks is correct. There are

likely to be — certainly, in practice, it has been the case in Ontario —

multiple interest rates, depending on the size of the institution,

location of the institution and also the balance between the interest

rate and the fees. So some might offer more interest but charge more

fees. Some might have a lower interest rate with fewer fees. They are

negotiated institution by institution.

[S. Chandra Herbert in the chair.]

M. de Jong: To come back to my original point in my last submission, if the

Attorney could maybe clarify. The benchers approve savings institutions.

The foundation has the authority to determine what the interest rates

and charges are for those trust accounts.

When he has done that, can he indicate to the committee then what

we should anticipate seeing at some point from the foundations — the two

foundations, in fact? Will they take the list, in the Law Society’s

case, from the benchers? “Here are all of the approved savings

institutions in which you may have a trust account, Madam or Mr. Lawyer.

But if you do, here are the interest rates that those accounts must

have, and here are the amounts that can be charged.”

Is that chart going to be produced in that way so that everyone

knows what the rules of the game are?

Hon. D. Eby: Based on the experience in other provinces, the expectation is

that the communications would be the reverse of what the member has

suggested — that the assumption of lawyers and notaries, generally,

would be that their institution is in compliance unless they receive

notice from the relevant foundation or regulatory body that a bank or

credit union is not paying interest at the level that is

required.

The expectation is that the Law Foundation, the Notary Foundation

would work with the regulators to communicate in the unlikely event that

there is an institution that is not willing to meet that

standard.

M. de Jong: In a moment, I’m going to come to one last question or

two.

The last time I had a look at this in detail, actually, was a few

years back. It had to do with the Real Estate Foundation. I expect in

terms of the trust accounts, the variation or the variety of interest

rates being paid…. Can the Attorney indicate, with the assistance of his

staff, based on the experience in other provinces, the degree to

which…?

[3:05 p.m.]

There was a surprising degree of variation in the rates paid by

savings institutions in the case of the Real Estate Foundation. The

Attorney has already mentioned that a smaller credit union is in a

different position than a big-five bank. Are these rates and the

negotiations…? It’s a negotiation that, ultimately, the foundation says:

“Here’s what it’s going to be.” The strength of the bargaining position

is going to change pretty significantly between the institutions and the

foundation.

Does he anticipate that there will be a continuation of that

variation? There’s going to be a floor below which no one can, if they

want to be in this business…. But does he anticipate there being

accommodation? And is that reflected in the Ontario example?

Hon. D. Eby: Because it’s institution-by-institution, there may still be

variation, based on the structures that work best for them. Some might

have a higher interest rate with higher fees, and some might have a

lower interest rate with lower fees. Some, because they’re a small

credit union or a remote community, may have a lower overall return back

to the foundations. So the member can and should expect some level of

variation between institutions.

We unfortunately don’t have detailed information about what that

spread is in places like Ontario. But even if we did, we understand that

that might be sort of the art of the negotiation, as well, that they

engage in with these institutions, and it might be sensitive information

from that perspective. So that’s our best information we can provide on

that.

I have been negligent in not introducing, after our shift change

here…. I’m joined by Andrea Buzbuzian, from JSB legal counsel, and Katie

Armitage is assisting me here, as well, legal counsel. I was joined

earlier by Nina Bindra, who was assisting with the CRT, related to

ICBC.

Also, while I’m doing some minor housekeeping here, a correction

from an earlier question that I answered on clause 10. I advised the

member that LGIC had not made a regulation under the amount for deposit

on a notice of objection to Provincial Court. In fact, that was not

correct. LGIC has made a regulation under that section.

It was in the tribunal small claims regulation,

section 4. It said

the maximum amount for deposit on a notice of objection is equal to the

amount awarded by the tribunal. If the tribunal awarded $2,300, the

maximum deposit on notice of objection could only be $2,300. It also

allows an additional $1,000 as security for costs. I want to clarify the

record on that.

M. de Jong: I am always cautious about presumptions, so I’ll ask the attorney

to confirm…. When the linkage between approved and prescribed savings

institutions and the interest and fees they’re entitled and obliged to

charge has been settled, I presume that will be publicly available. Not

that many people will be interested, but presumably, some in the legal

and notarial community would be interested, and the foundation, of

course, will know it because it set the amounts.

Will the list be publicly available? Will people know what their

bank or credit union or savings institution is paying in terms of

interest?

[3:10 p.m.]

Hon. D. Eby: It is not expected that that information would be made public. The

relevant regulators do have notice of who banks where. They’re going to

be able to notify members that the institution they’re banking with does

not meet the minimum standards. That’s the extent to which we’re aware:

that there would be a sort of public reporting obligation. It would

essentially be on the part of the regulator, notifying the relevant

notary or lawyer about the fact that the bank or credit union wasn’t

qualified.

M. de Jong: Okay, I think I heard the Attorney say that he did not anticipate

the information would be publicly available. I’m curious. If I’m a

practitioner — if I’m a notary or a lawyer — and I take some interest in

the fact that funds in my trust account pay interest to the Law

Foundation, which supports a lot of worthy endeavours, wouldn’t I want

to know?

Wouldn’t I want to know that if I set up my accounts at this

savings institution, it will generate X amount of benefit for the Law

Foundation, versus if I it set up at Y savings institution, which will

generate considerably less or considerably more? I have to say that I’m

a bit surprised by the answer.

Hon. D. Eby: While they don’t publish the rates, I’m advised that currently,

the Law Foundation of British Columbia publishes a list of banks and

credit unions that pay favourable rates in their annual report as a

special thank-you to those institutions. But that, I understand, is the

extent of that kind of public reporting.

I don’t understand that there’s any bar to a lawyer inquiring of

their financial institution and learning what the interest rate is that

is paid on their trust account. They could do so. But they wouldn’t be

able to compare that to a list, like a mortgage rate list, of what

various institutions are offering.

There is a practice resource available to lawyers, a letter of

instruction to a bank or a credit union when setting up a trust account.

That letter, once this legislation passes, would be modified to instruct

the bank to calculate the interest on the trust account “at the rate and

in the manner agreed upon between your institution and the Law

Foundation of British Columbia, and to remit such interest directly to

the Law Foundation according to the terms of that agreement.”

It does note, “In the event that there is no agreement in place,

please contact the executive director of the Law Foundation,” for a

credit union — maybe a small credit union that wasn’t aware that this

was a thing.

[3:15 p.m.]

A practice letter shows the break between the lawyer’s activities

and the interest and the proceeds of the trust account that are remitted

to, and the business of, the Law Foundation. Lawyers are asked by the

Law Society to instruct their banks and credit unions

accordingly.

M. de Jong: Okay. Well, I disagree. We have decided….

I think in the second reading remarks, there was support for

what’s being attempted here. I think there’s still support for what’s

being attempted here. In granting this unique authority to the

foundation…. And it is a unique authority. It’s one that benefits the

foundation greatly, potentially greatly. I’ll ask a question about that

in a moment.

Is it…? I’m trying to understand the hesitation on the part of the

Attorney and the government and the officials advising him to, once the

decisions have been made by the foundation, making that publicly

available. Not that the public is going to rush out, but people in the

business of the law or the notaries might be interested to know. I mean,

it’s not something that impacts them directly, but it does impact their

ability to use the funds that flow through their offices to generate

public good, and it might influence them to know that if they go to

another savings institution, their trust funds will generate an

additional amount.

Is this an argument around, sort of, proprietary interest? I’m not

sure I understand the argument for not disclosing the decisions that are

ultimately made by the foundation. The foundation is being given

statutory authority to say to an institution: “You must pay X amount of

interest.” Now, we’ve talked about a negotiation, but it’s a negotiation

that ends with a legal authority being bestowed upon the foundation to

say: “You will pay X amount of interest, or you will not be entitled to

have trust accounts.” I don’t understand why that, in principle,

wouldn’t be public information.

I’ll let the Attorney maybe try to persuade me about why keeping

that information from the public and wider distribution is

appropriate.

[3:20 p.m.]

Hon. D. Eby: We don’t understand that there’s any bar on the Law Foundation or

Notary Foundation publishing the rates. One assumes that if they thought

there was some advantage to doing that, in the sense that there would be

philanthropic lawyers and notaries moving their accounts, they would do

so.

In fact, the Law Foundation of B.C. does publish a preferred

institution list. I’m certainly happy to raise the member’s suggestion

with them. The member is right that there’s no requirement here that

they in fact publish them. I mean, this wasn’t an issue front and

centre, but this was understood to be negotiation, akin to contract

negotiations, between the foundation and the credit unions and banks,

and that there was a certain sort of business relationship between them

that was being negotiated.

Again, just for clarity, we can’t see anything, except for maybe

an agreement reached with the bank or credit union, that would prevent

them from publishing this information, if they chose to.

M. de Jong: Well, maybe we can take a moment or two to use the committee’s

time to send a message to the foundation around the advisability of

that, and I have a couple of propositions to make to the Attorney

General for his agreement or disagreement. If it were the government

that were prescribing fees and interest rates — and it’s not — that must

be paid, that information would be public.

I’ll put that as the question. I presume the Attorney would agree

with that.

Hon. D. Eby: We do have rules around interest rates, for example, in relation

to payday lenders, and the federal government has rules around criminal

rates of interest. Within those prescribed limits, which are public, in

regulation and law, there could be a wide range of negotiations between

the parties engaging in that practice. We set the parameters for that

publicly, and then the rates that are negotiated are negotiated between

parties freely.

This is setting out the basis on which the negotiations can take

place and shifting some, frankly, of the power in the negotiation to the

foundations. But we’re not prescribing interest rates here, nor are we

obligating the banks to pay an interest rate or a credit union to pay an

interest rate. They just as easily could say: “We don’t wish to pay that

interest rate on this trust account. Thank you for your offer. Have a

wonderful day.” So it’s not a legal requirement that they pay

that.

M. de Jong: No, but the trade-off for not paying it is you don’t have a trust

account. I mean, that’s the flip side of it.

I have to say of all the things we went through, I was not

anticipating to get hung up on this particular aspect of the

bill.

Would the Attorney be worried at all about allegations, down the

road, of preferential treatment?

[3:25 p.m.]

I mean, I can see allegations arising that savings institution X,

for whatever reason, was able to cut a better deal or got a more

sympathetic hearing from the foundation. And by the way, that’s the

unique part of this. The government isn’t prescribing it. It isn’t

prescribing the rates and the fees. If it were, it would be public.

That’s the essence of what the government does through OICs.

What the government is saying to a foundation is: “You can do so,

and you will have that authority.” We’ve talked about negotiations. But

at the end of the day, the foundation is going to set the rates, and

apparently, be able to do so differentiating between savings

institutions.

The possibility, given the amounts of money involved, that someone

is going to come along later and say: “Well, hold on. Savings

institution X has, we think, managed to secure a very, very favourable

arrangement with the foundation, and we don’t know what it is.” Now, I’m

not suggesting that that would, in fact, be the case. But I can

certainly see allegations being made, if the information isn’t simply

made available.

The Attorney has helped me a little bit by saying that there’s

nothing to preclude that from happening. I think I’m going to ask him

for a slightly more forceful statement that says to the foundation:

“Actually, as you come to these agreements, it’s our expectation — as a

committee, as a Legislature, as an executive branch — that just as it

would have to be public if the government were doing it, we’re asking

you to do it in our place. We think that information should be publicly

available.”

Hon. D. Eby: I think it’s important to keep in mind the interest of the

foundations here. The interest of the foundations is to maximize their

revenue for their good legal works. There is no benefit that comes to

them by cutting a deal with a particular bank or credit union that’s

dramatically lower than other institutions. The interest in that

scenario would be to say: “Please don’t….” More than please: “You may

not deal with this institution.”

That scenario where someone is getting a really good deal is a

complicated one that would be against the very interests of the

foundations themselves. I’m not sure that publishing the rates wouldn’t

lead to exactly the situation that the member describes. Publish all of

the rates. Here’s the list of rates. You know, “Oh, we at RBC noticed

that the Quesnel credit union is only paying 2 percent on this, so we’re

not going to pay more than 3 percent, even though we have 20 percent of

the lawyers’ trust accounts. They’re in a smaller community, and we

don’t deliver the same services in that community.” The challenge of

that kind of a process is not addressed by publication or not

publication.

The aim of this bill is really to bring back together the

interests of the client of the bank — in this case, the foundations —

and the bank.

If you were looking for a mortgage, you would be shopping around.

Very few people pay the published mortgage rates. You might get a

slightly better rate because they want your business on some other

piece. You might pay slightly more because your credit rating is

riskier. You’ll go around, and you’ll shop around, because it’s in your

interest to find the best rate for you.

[3:30 p.m.]

The problem that we’ve faced with these foundations is that their

interests are separated from the lawyer’s interests and the lawyer is

the one who is opening the account. So the lawyer opens the account, and

the bank or the credit union can say: “If you locate your trust account

with us, we’ll give you this array of benefits for your personal and

business interests. Then leave it to us what we pay and charge on the

trust account.”

There’s a separation in interest between the interests of the

foundations — that there be a high rate of interest and low fees on the

trust account — and of the person who is actually opening the account.

Now, I think most lawyers would be sensitive to that and would try to

get a good return on the trust account as a matter of principle, but

there’s nothing to ensure that. This is simply aiming to bring those two

things together. The party that benefits is able to negotiate and unify

those interests.

I accept the member’s discomfort, as he articulated, that these

aren’t published. I’m not sure I share it. But my interest is that these

foundations are able to negotiate the best rate and lowest fees possible

to maximize their good works in British Columbia. If they feel that that

is facilitated by publishing, they should publish. If they feel that

that is inhibited by publishing, then they should not

publish.

The interest that government has is that they be able to negotiate

effectively and find a good rate of return on these things. The scenario

that the member paints of a favourable deal for one institution is one

that would put that at odds with the very structure and interests of the

foundations themselves.

M. de Jong: What I tried to address is the difference between what may be the

reality and what may become a perception when information isn’t readily

available. I’ll say it again. I and the opposition agree with the

objective to maximize the benefits available to the foundation from the

vast amounts of money — we’re talking about billions and billions of

dollars over the course of the year — that are held in trust.

I agree entirely with the description the Attorney has offered of

the disconnect between the interests of the foundation and the interests

of the practitioner, who is not receiving any direct benefit from

interest generated by the trust account. That often translates into a

level of disinterest or, in the scenario that the Attorney has pointed

out, even negotiating away some of that benefit to the foundation to

benefit other aspects of the business that might be undertaken. I get

all that.

I’ll take one more kick at this. Simply, as the Attorney fairly

pointed out a few moments ago, what may flow from this legislation is

that there is a lawyer, a notary, a law firm or a notary firm out there

that, sometime down the road in the next number of months, may get a

letter that says: “The savings institution with which you have chosen to

set up your trust account is not in compliance with the requirements, as

determined by the foundation, as it relates to interest paid and fees

chargeable. Therefore, they are no longer qualified to hold your trust

account. So pick another institution.”

Well, that law firm, that lawyer, that notary, that notarial firm

is going to say: “Well, all right, where should I go? I’ve got to move

my business.” If they don’t have access to that information, in the

absence of that information being available, I guess the foundation or

the Attorney would say: “Well, you just go pick another one off an

approved list, and see what you come up with.” I don’t think that’s

appropriate.

We’re taking this step to empower the foundation to set these

prescribed amounts. It strikes me that the flip side of that coin is

that, in providing them with that power and that authority, they’ve got

to share how they exercise it, the nature of those agreements and the

amounts they set.

[3:35 p.m.]

I’m not sure what else I can do to try and make my point, but the

example I’ve just shared sounds like a pretty realistic one to me.

Someone is going to get a letter saying: “You can’t have your trust

accounts over here any more.” They’re going to go: “Okay. Well, where

should we go? Who’s paying what interest?” Unless that material is

available somewhere, they’re not going to know.

That’s my pitch to the Attorney and, through him, to the

foundation, which is acquiring a significant authority that is going to

alter the negotiating dynamic. It’s ultimately no longer a negotiation,

per se, because they have the power.

There we go. That’s my kick at the can on the advantages, the

advisability and, in this case, I would say, the requirement — I would

use that term — of at least obliging the foundation to make the

information available to those for whom it is of interest.

Hon. D. Eby: The member has moved me with his final argument of this scenario,

where someone gets the notice, and they’re like: “Well, where am I going

to go?”

I will absolutely go on the record and encourage the foundations,

when they have preferred providers that offer greater benefits to them,

that they provide those recommendations to lawyers and notaries and that

they provide that information freely. I understand the Law Foundation of

British Columbia does that, to an extent, with their preferred provider

list. It seems like a way that guidance could be offered to the

profession to locate at institutions that pay favourable rates. They

could be rewarded for offering those favourable rates. That would be a

positive thing to do so.

I’ll join the member in recommending that. I won’t go so far…. I

think we part ways around obliging it. The interest of the government,

as I’ve articulated, is to maximize the revenues of these foundations

through a fair negotiation that allows access to trust account services

for lawyers and notaries and, at the same time, pays a fair return. To

the extent that publication facilitates that or not publishing

facilitates that, leave that to the relevant foundations to determine

that on a case-by-case basis.

M. de Jong: Two last things on these clauses 15 through 19.

When the Law Foundation and the Notary Foundation came to the

ministry and to the government, I suspect that they — as a different

foundation did a few years ago with me — said: “We think we’re leaving X

amount of money on the table.” Now, it would have been an estimate. It

would have been a range. They would have told officials within the

ministry: “Because of the fact that lower-than-reasonable interest rates

are being paid” — in an age of low interest rates, by the way; in some

cases, some institutions aren’t paying any interest rates — “we think

we’re losing X amount of money.”

I’d be curious to know, at this stage…. We’re taking the step,

presumably in part…. Well, not in part. We’re taking the step to

maximize the return to the foundation on these deposited trust amounts.

Can the Attorney share with the committee what the estimates are that

this will generate in terms of additional revenues to the

foundations?

[3:40 p.m.]

Hon. D. Eby: The Law Foundation provided us with an example, in correspondence

that they sent to us. In this scenario, they looked at one of their

major financial institutions where their trust accounts were and

calculated that if there were a 50 basis point cut in the interest rate

paid on trust accounts there, that would result in a loss of between

$600,000 and $750,000 in annual revenue. If it was a 35 basis point cut,

it would be a $420,000 impact in revenues. These major institutions,

even on a relatively small shift in interest rates, have a very

significant impact.

I’m afraid I don’t have the exact number that the member is

looking for. But even if you looked at the big five and a 35 percent

basis point cut — five times $420,000 — you’re talking over $2 million

of Law Foundation programming affected by a relatively small interest

rate cut. Or a corollary 35 basis point increase — $2 million more

funding for justice programs in the province. That provides some idea of

the potential scale of the negotiations and the value of them involved

here.

M. de Jong: Okay, that’s helpful. I mean, presumably, we’re doing this to

effect an increase. I’ll qualify that. If the Bank of Canada rate drops,

then that is something outside of the control of this chamber and the

foundation. But in the short term, that doesn’t seem to be the trend

line.

I presume, the foundation, in making its pitch for this

legislation, said to the government, said to the ministry and the

Attorney: “Look, we think there are a number of institutions who are

paying below what is reasonable in terms of interest on trust accounts.

We’re looking for you to give us some leverage, some authority, to

convince them to pay what is reasonable or get out of the business and

have moneys transferred to institutions.”

I am certain they would have said that in today’s world that would

translate into some additional amounts of revenue. It is an estimate,

and it is a range. The Attorney has signalled what 35 basis points

means, but it would be….

We know what the foundation got this year. When this is up and

running, it would be nice to be able to look back and for the foundation

to be able to say: “As a result of this initiative, we think somewhere

between X and Y millions of dollars were generated in additional funds,

and we’ve sent that money to Legal Aid. We sent it to the library, and

we sent it to all those worthwhile agencies that are now benefitting as

a result.”

[3:45 p.m.]

Hon. D. Eby: Certainly, in a rising interest rate environment, our hope would

obviously be that this might allow trust account revenue to match that

increase we see. But, just as much, this is to try to avoid reductions

in revenue for these foundations. The annual interest revenue for the

Law Foundation fluctuates quite wildly depending on interest rates and

also economic activity in lawyers’ trust accounts.

We see things like, in the early 2000s, revenue being in the range

of between $7 million and $17 million, but when you get to 2007, revenue

was $51 million. Then when you get to 2013, it was $18 million. Then you

get to 2018, and it’s $52 million. So it really has very remarkable

peaks and valleys, and one of those valleys lasted for a long time —

between 2009 and 2016 — where they saw record lows in terms of the

revenue from lawyers’ trust accounts.

The hope is that this is going to stabilize some of the revenues

as much as potentially increase them but also to guard against

unexpected cuts to interest rates.

M. de Jong: I should have asked this earlier. Can the Attorney advise…? In the

agreements that are negotiated and the final decisions that are made….

And this may be drawing, again, on the Ontario example. Rather than

setting, in the case of interest rates, specific amounts, has the

practice been to tie it to a Bank of Canada rate and create a range?

Otherwise, at a time when interest rates seem to be changing, there is

going to be a lot of movement, and these things are going to be out of

date pretty quickly.

Hon. D. Eby: Yes. We’re advised by the Law Foundation that under their current

structure, they typically negotiate a rate, which is prime less a

specific percentage. So it fluctuates with the prime rate.

M. de Jong: Thanks. Last couple of questions, I think, and I’ll tie them into

these sections.

I mentioned earlier that I became aware of the general issue when

another agency not, admittedly, addressed in this legislation, the Real

Estate Foundation, came forward. Of course, the Real Estate Foundation

does a lot of similarly good work in a slightly different area than the

Law Foundation and Notary Foundation. It’s not included, although the

circumstances are different. Is there a particular reason?

The Real Estate Foundation has been seeking this kind of change

now for, I would say, four or five years. The work that was begun

earlier wasn’t completed. They will be looking at this and, I think,

saying: “Well, what about us?” Was there a particular reason that the

Real Estate Foundation, which obviously sees a significant amount of

money flow through its trust accounts…? Was there a particular reason

that it wasn’t included in this series of amendments?

Hon. D. Eby: The Ministry of Finance has responsibility for the Real Estate

Foundation. The member is right. The Real Estate Foundation does not

currently have this authority. The Ministry of Finance is aware of

similar concerns that are related to the Real Estate Foundation and may,

in fact, consider similar amendments.

M. de Jong: Two questions. It sounds to me as if the Attorney General would be

supportive of seeing the Real Estate Foundation and real estate trust

accounts dealt with in a similar manner. If that’s the case, hearing him

say that is a good thing.

[3:50 p.m.]

He may wish to defer my other question. I was advised…. It was

suggested to me that perhaps one of the reasons the Real Estate

Foundation wasn’t included relates to some plans that the government may

have to alter its composition, even the creation of a Crown corporation.

I’m not sure the Attorney has any information he can offer in that

respect, or if he does, whether he wants to, but I will at least pose

the question.

Hon. D. Eby: I don’t have any information about this. Certainly, for the Law

Foundation and the Notary Foundation, I think this is good policy. I

don’t know about the structure of the Real Estate Foundation and the

wishes of its governors sufficiently to say whether this would be an

appropriate solution for them. But I would certainly recommend that they

study it and determine whether it is, in fact, a good

structure.

In regard to the member’s suggestions, I’m not familiar with that

matter, so I would suggest that he refer those questions to the Minister

of Finance, who is responsible for legislation related to the Real

Estate Foundation and realtors.

M. de Jong: What’s the best estimate from the Attorney about when we would see

the new regime fully in place and operational? And by that, I mean the

foundation having set the rates and concluded the agreements. What’s the

objective by which time both the Law Foundation and the Notary

Foundation will have concluded this work? It’s obviously in their

interest to move as quickly as possible, but what are the government’s

expectations in that regard?

Hon. D. Eby: The Law Foundation has advised us, and in fact they’ve issued a

press release to this effect, that they will be honouring the existing

arrangements between financial institutions and the Law Foundation. As

those agreements come up for renewal, that would be the point at which

negotiations will take place under this new system. So they’re staggered

between institutions so it won’t all be at once. The existing agreements

will carry forward until such time as they expire as they’re

written.

M. de Jong: Sorry. Those are agreements between the foundation and the lending

institution? Because the accounts are the accounts, and they probably

continue in perpetuity as long as the practitioner and the firm are

going. Is it the Attorney’s advice to the committee that the agreement

presently in place between the foundation and these savings institutions

have finite time periods? Secondly, it’s my understanding that not all

of the savings institutions have agreements, which is part of the

problem.

[3:55 p.m.]

Hon. D. Eby: Staff advise me that there may be agreements that don’t have a

term. So I may have inadvertently not accurately represented what might

happen in some cases. But the Law Foundation or Notary Foundation may,

in fact, proactively approach an organization.

What I would like to confirm is that the wording from the press

release from the Law Foundation is that if these amendments are enacted,

lawyers will not need to take any action in response to the legislative

change. The board of the Law Foundation will be adopting measures that

ensure that existing arrangements between financial institutions and the

Law Foundation are deemed approved when the change comes into

force.

Clauses 15 to 21 inclusive approved.

Title approved.

Hon. D. Eby: With appreciation to my critic for a thorough debate on both

bills, I move the committee rise and report the bills complete without

amendment.

Motion approved.

The committee rose at 3:58 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

BILL 9 — ATTORNEY GENERAL STATUTES

AMENDMENT ACT,

Bill 9, Attorney General Statutes Amendment Act, 2022, reported

complete without amendment, read a third time and passed.

Hon. D. Eby: I call Committee of the Whole on Bill 11, Commercial Liens

Act.

[4:00 p.m.]

Committee of the Whole House

BILL 11 — COMMERCIAL LIENS ACT

The House in Committee of the Whole (Section

B) on Bill 11;

J. Tegart in the chair.

The committee met at 4:01 p.m.

The Chair: We are addressing Bill 11, Commercial Liens Act.

On clause 1.

Hon. S. Robinson: I just would like to introduce to the House my two staff people

who are here to guide us through this bill. We have Renée Mounteney, the

assistant deputy minister, policy and legislation division. She’s on my

right. On my left, we have Cynthia Callahan-Maureen, director of

pensions and personal property security, financial and corporate sector

policy branch, policy and legislation division.

P. Milobar: I just have a few front-end questions that maybe would be easier

to deal with during clause 1. Then we’ll have a few in various other

sections. It’s a fairly lengthy bill and fairly technical, so hopefully,

we can plow through this.

I guess I’m just trying to get a sense from the minister. This is

a very technical bill. It’s very heavy with detail. I’m just trying to

get a sense. That’s not always been the case. This one does not seem to

leave much up to regulation in terms of that detail. Other bills

definitely do rely on regulation and not detail. I’m just wondering the

thought process behind this bill in particular. Why not just make it

enabling legislation, with detail to come with regulation

later?

Hon. S. Robinson: This commercial legislation, of course, needs to be enduring

legislation. When there’s enabling legislation, it’s typically because

you want to have some flexibility or recognize that there are different

regions around the province that might need a little bit more

flexibility. But this is a bit different in terms of its

context.

It’s a uniform piece of legislation that is recommended by the law

conference of Canada that we adopt the model act, which is already

enacted in Saskatchewan. Other provinces, we expect, will be coming on

board so that the law is consistent right across Canada. So in order to

make changes, it’s going to take significant work, of course, with our

provincial partners. That’s why it’s built into the legislation

directly.

[4:05 p.m.]

P. Milobar: Thanks for that. I do recognize that Saskatchewan already has this

and that the hope and intent is to have other provinces and, in fact, a

national framework that’s cohesive.

Does the minister have any idea where the other provinces are at

in terms of their timelines for looking at implementation, especially

Alberta, I guess, and, potentially, the Yukon as well? Obviously, those

would be the most interactive with us in terms of repairs and things of

that nature, especially when you think of the Peace region or the

Kootenays, in terms of back and forth and seeking services on either

side of the border either for industry or other types of repairs and

things that would be covered off in this act.

Do we have any sense of when Alberta or the Yukon would be joining

this?

Hon. S. Robinson: I got a little bit of a history lesson to try to understand the

context.

The member asked a question about other provinces and where

they’re at. So 2002 is when Saskatchewan brought this in. We’ve been at

this since 2014, the initial proposal to modernize this legislation.

We’ve reached out right across the nation to let everybody know what

we’re doing. At this point, we haven’t heard back from anyone that is

actively pursuing this at this time.

P. Milobar: Thanks for that.

Is there any process that B.C. is intending to try to initiate

once this has been passed and gone through to try to actually engage, at

a higher level or at an awareness level, within the Alberta government

or the Yukon government to make sure that those neighbouring

jurisdictions are aware and see the value in trying to expedite them

coming in sync? Alberta, especially, would be bordered, then, by two

provinces on either side that would have this in place.

Hon. S. Robinson: I can assure the member that staff meet annually with their

counterparts and will be sure to let them know. If the member would

like, I’d be happy to inform my political counterpart in Alberta that

we’ve worked through this legislation. We’d certainly encourage them to

take a look so that we can have some consistency, particularly for those

who live along the border towns, the border communities.

P. Milobar: I’m just wondering if the minister or her staff has done any

review or looking into any potential impacts that this may have with

agreements like, say, a TILMA, in terms of that cross-border trade? Has

this has been looked through with that lens? Or if there’s no difference

in terms of our ability to set our own rules within our own province and

not…. Then I’ll likely come back to this when we get to cross-border and

out-of-province clauses in the bill.

[4:10 p.m.]

Hon. S. Robinson: There are no trade issues with this legislation.

P. Milobar: Just one or two other general questions on the front end

here.

The minister had mentioned how this is to align with Saskatchewan

— the hope is to align nationally — but also referenced that there would

be, obviously…. The reason for not leaving it all to regulation was

partly that, partly to make sure there was a cohesive set of rules

across the province regardless of region.

I did somewhat joke about the Tugboat Worker Lien Act within this

and the modernization of that. Obviously, that does revolve mainly

around coastal areas of the province. As much as I can vaguely remember

a tugboat on Shuswap Lake towing around logbooms, I can’t imagine

Saskatchewan has a massive amount of tugboats, or other provinces, but

they may have. To that end…. I don’t take issue, obviously, that that’s

in this bill for B.C.

Are there any particular clauses or sections in this bill that

would be separate and apart from what would be a national standard? In

other words, has B.C. done some additions or some changes to what

Saskatchewan has? If so, what would those B.C.-specific sections and

clauses be? I can just quickly highlight them and then have some

follow-up questions in those areas when we get to it.

Hon. S. Robinson: When we get to

section 3, the member will see — or clause 3, as we

call them now — there is no application of the commercial liens act. We

have the Forestry Service Providers Protection Act, which is unique to

British Columbia.

[4:15 p.m.]

P. Milobar: Thank you for that.

I do want to assure the minister. These are strictly

educational-type questions today. I recognize that we’re not going to be

trying…. I’ll let the minister know I’m not trying to amend or anything.

It does get to be a very confusing part for a lot of people watching,

and I think the clarity for the public will be well served, as well,

moving forward, as to why some things are or aren’t in this

bill.

With that as a background, I did have questions already on 3. I’ll

save those for then.

There’s also the Builders Lien Act. I recognize that this does not

cover that, but we have heard issues from builders and suppliers, both —

and homeowners, everyone — around concerns, from time to

time.

That wasn’t part of this. I’m just wondering if we could have an

explanation on why it wasn’t part of it. What is the plan to try to

modernize the Builders Lien Act and the timeline for that, moving

forward?

Hon. S. Robinson: I thank the member for the question.

A builders lien is a lien on land. It secures a claim for payment

for work on a construction project or repairs or renovations made to an

existing structure by workers, contractors, subcontractors, engineers,

architects. It also secures a claim for payment for materials supplied

to a construction project. When a builders lien is registered in the

land title office, it becomes a charge against the title to the land or

the property involved.

The Builders Lien Act is with the Ministry of Attorney General.

It’s not under the Ministry of Finance.

Clauses 1 and 2 approved.

On clause 3.

P. Milobar: A similar question to the builders lien. I’m just wondering why….

I’m assuming it’s probably because it’s under a different ministry. If

we get clarification on why the Forestry Service Providers Protection

Act would not be included in this today, that would be great.

Hon. S. Robinson: Based on consultation with the Ministry of Forests, Lands, Natural

Resource Operations and Rural Development, contractors that are entitled

to a lien under the Forestry Service Providers Protection Act should not

be entitled to a lien under this act for the same services.

The Forestry Service Providers Protection Act, which was enacted

in 2013, is designed to address payment problems in the contracted

forestry sector, which operates under licences issued under the Forest

Act. It also creates a forestry service providers compensation fund to

reimburse forestry service providers if a licensed forest product owner

becomes insolvent.

Of course, this sits with the Ministry of Forests, Lands, Natural

Resource Operations and Rural Development.

Clauses 3 and 4 approved.

On clause 5.

P. Milobar: Further clarification on when the lien attaches to the goods on

commencement of the services, which is what clause 5 is. Is that

essentially saying…? I take my car into a repair shop, leave it there.

The clock is already ticking. There may be paperwork that needs to be

done to commence a lien on the car, to remove it back out.

I’m not articulating this very well, admittedly, to the minister.

I think I’m answering my own question, actually, as I stand up to speak.

So you know what? I’m going to say 5 is all good.

Clauses 5 and 6 approved.

On clause 7.

P. Milobar: I’m just wondering. It looks like this does not prevent the

dispute on the amounts owed as well.

What is the process there, if there is not only the lien being

filed but a disagreement on the amounts that are owed? How is that to be

enforced?

[4:20 p.m.]

Hon. S. Robinson: Well, certainly I would, and we all should, encourage people to

work it out. I think that that’s ideal. But if they can’t and we get to

section 44, the member will see that this

section allows someone to go

to court to challenge the amount they think that they are being charged

too much.

Clause 7 approved.

On clause 8.

P. Milobar: This clause is all about transferability, so I’m just seeking

clarification. I think it’s to be the case, but again, more for

certainty and clarity for others who may be watching or reading

transcripts later to get a better understanding. If I’m the lien holder,

this clause says that if I have moneys owed….

The member for Peace River South — I have a lien on his car. But

the member from the Kootenays I owe money to. This gives me the ability

to transfer that lien over to a different person. That may settle one of

my debts, but that would still leave that debt owed to whoever the lien

gets transferred around to. Is that how I’m interpreting this

clause?

Hon. S. Robinson: We were discussing the use of language and how policy gets

written, and how it gets understood is sometimes not always that easy in

terms of the language that gets used. If I understand the member

correctly, it’s about whether or not a friend can pay your debt for you

and then just transfer where the debt goes. It is certainly possible to

do that here.

Clause 8 approved.

On clause 9.

P. Milobar: Again, just getting clarification on this clause. The lien holder

could…. Am I reading it correctly, or am I reading it in the reverse?

The lien holder could still grant even more credit to the person the

lien is against if they choose. Or are they capped out, and until the

lien is gone, they can’t do anything more?

[4:25 p.m.]

Hon. S. Robinson: This clause is a clarification. If the lien holder wants to

provide grant credit, they’re free to do so.

Clauses 9 to 17 inclusive approved.

On clause 18.

P. Milobar: Again, a very lengthy clause here. Some of them are quite lengthy.

This is around the transfer of owner’s interest in goods with prior

consent.

The designated period “begins on the day that is 15 days after the

date the owner transfers all or part of the owner’s interest in the

goods….” Could the minister just, I guess, give some broader detail or

background into the purpose of this clause in terms of the designated

periods and the importance of those?

Hon. S. Robinson: The significance of this particular clause is that the lien holder

has a 15-day grace period after the transfer to amend the registration

to preserve priority against a perfected security interest or an

interest resulting from seizure under judgment enforcement or an

interest resulting from bankruptcy.

Clauses 18 and 19 approved.

On clause 20.

P. Milobar: I’m just wondering if the minister or her staff could provide kind

of a real-world example of what a typical prioritization of the liens

would be in terms of the typical type of debt that would be already

amassed on a piece of equipment or something that would be subject to a

lien from a repairman or woman. How would that actually look with the

pecking order of who would be in what position if a lien gets

registered?

[4:30 p.m.]

Hon. S. Robinson: If you register…. Let’s say that you’ve done repairs on some

equipment for a company, and you’ve registered the lien with the

personal property registry, and the company on whose equipment you have

been working on gets a loan from the bank and uses the equipment to

secure the loan.

Because you’ve registered the lien, it actually gets…. Because it

came first….. It actually protects against the bank taking the equipment

because you have that lien registered.

P. Milobar: What is the case, then, if the reverse happens? Most people before

seeking repairs on equipment would already have a loan on the equipment.

So the bank would have a loan in place. The repair person would then be

trying to file a lien against the repairs. Who would be in first

position in that case? I’m assuming the bank. But could we

have…?

That’s kind of the prioritization in various scenarios that I’m

just trying to figure out, so the average person knows what to expect.

Obviously, big equipment, logging equipment and things like that, it’s

likely going to have debt against it from various lending

sources.

Hon. S. Robinson: I appreciate the member is looking for real-life examples. If he

looks at subclause 20(2), the repair actually improves the value of the

equipment. The bank, of course, would benefit from that, and the lien

holds, because it’s increased the value of the goods that the lien is

against. If that makes sense.

P. Milobar: I’ll just cover that off in 22. I have other questions there as

well. So that’s fine.

Clauses 20 and 21 approved.

On clause 22.

P. Milobar: We just heard an answer that related to 22. So the minister is

saying that the lien…. I guess I’m just trying to get a better sense of

the prioritization and the concept here around: the repair adds valued

to the vehicle or the piece of equipment that’s been repaired. So that

lien would be the first priority over a bank, even though it would be

filed second, after a bank.

Again, this would come into play more often than not, because

almost everybody’s personal car, if it’s financed, would have some sort

of paper against it, things of that nature. So this has the potential to

be a fairly significantly used section, in terms of prioritization of

who gets the lien when.

I’m just trying to understand that concept, though, of how, if a

bank was assumed to be the main lender against a vehicle, they would

then suddenly be put in second position simply because of a repair being

done versus the repair person. That’s typically the order of structuring

who gets paid out.

It’s my understanding that it’s usually the person that’s there

first gets covered off the best, and everyone else get what’s remaining.

This sounds like this is doing the reverse. Can I get a bit more

explanation on that, to start with?

[4:35 p.m.]

Hon. S. Robinson: I realize that the member perhaps didn’t hear when I said it was

subsection 20(2), which is what I was referring to. I hope that this

will clarify for him.

If someone has a lien on equipment, like in the example that we

used, and the equipment gets sold, the lien holder is entitled to the

value of the repairs that are on that equipment because now what you’ve

done is you’ve taken out the increased value and it’s gone to the person

that has increased the value.

Then the remainder of whatever the value is left over would go,

for example, to the bank, because that’s what their entitlement is,

given that the lien holder increased the value of the equipment through

their repairs.

P. Milobar: Okay. That assumes there’s still enough value there to cover that.

Then again, I’m just trying to think of this through…. This would relate

more to a home, obviously, but when you’re talking larger equipment,

there are, a lot of times, secondary insurance policies that banks would

require, as well, for write-offs and things of that nature.

If there was a loan on a larger piece of equipment…. I’m thinking

like a logging truck. We won’t use logging. We’ll use some other large

piece of equipment for the purpose of this. There’s a bank loan on it.

There’s an insurance policy that also secures the bank that

way.

Both of those, the payout by the insurance company to the bank and

all of that…. That would all be secondary to the repair person being

paid out first, for their repair works, and then the residual value

taking care of, or not taking care of, the remaining balance that’s

owed.

[4:40 p.m.]

Hon. S. Robinson: In the example that we’ve been working through here on the floor

of the House, it really is the lien holder…. As long as they’ve

registered it and they are entitled to the increased value of whatever

they’ve added, the piece of equipment or whatever other work that

they’ve done….

Insurance is not part of this legislation, and every insurance

policy will read differently. So it’s actually a separate piece. This is

really around if you’ve registered the lien and you’ve done work on

this, you get that value back. You’re the first in line, and then others

come afterwards.

P. Milobar: I’m just wondering if the minister could give a little more

explanation to 22. Again, as I read it, this looks like if somebody else

is just coming in and purchasing things in good faith and one of the

other parties within the lien situation that might be unfolding isn’t

disclosing, the good-faith consumer purchaser is sheltered and not

looking at things being suddenly slapped with a lien and taken away —

that they’ve now been left with after purchasing — and it’s still

between the original two parties.

If we could just get a little more detail and explanation into

clause 22, that would be great.

Hon. S. Robinson: To explain

section 22 a little bit more simply. Goods that are

bought or leased in a customary business transaction are no longer

subject to a lien. Even if the buyer or lessee knows that there is a

lien on the goods, consumer goods with a purchase price of more than

$1,500 are not subject to a lien if they are bought or leased by a

person who is not aware of the lien. That’s what this

section

does.

Clauses 22 and 23 approved.

On clause 24.

P. Milobar: I’m just wondering. I don’t believe I saw “reasonable care” within

the

definitions. This is all about the care of goods in the lien

holder’s possession. We’re dealing with a lot of equipment and things of

that nature, obviously, with these types of liens — repair work and all

that. How one person feels is reasonable to store something is not

necessarily another’s.

What type of background…? What has been the experience with

Saskatchewan, then? This is obviously in sync, it sounds like, with what

Saskatchewan has been doing. Have there been disputes around the care of

goods? Obviously, if someone has got an outstanding debt and they’re

starting to feel a little desperation creep in and trying to figure out

ways out of the debt, claims that misstorage or misuse of the handling

of their property is why they’re not paying can start to rear

up.

What has been the experience, do we know? And how solid is the

wording within this clause in terms of withholding or withstanding any

challenges over the years that Saskatchewan has had this in

force?

Hon. S. Robinson: This

section is consistent with the Uniform Liens Act that was

enacted by Saskatchewan. They’ve had this legislation for 20 years. We

haven’t received any sort of feedback around disputes around this

section, and it really is up to the courts to determine what is a

reasonable duty of care as it’s listed out here in this piece of

legislation.

[4:45 p.m.]

P. Milobar: If I’m hearing the minister correctly, it’s essentially putting

the onus on the person who the lien is against in the first place to

say: “You should have paid your debt.” You’re kind of left to the mercy

of how the person with your goods is handling things.

If it looks like there are any extra reasonable expenses, costs of

insurance and things like that, those are also on the shoulders or can

be added to the overall lien value to make sure that things are secured

properly, insured properly, stored properly. Any of those additional

costs, as long as they’re deemed to be reasonable, would be passed on

from the lien holder to the person who is indebted in the first place to

the lien holder.

Hon. S. Robinson: Unless there’s an agreement otherwise, the lien holder is entitled

to recover reasonable expenses, including insurance, taxes and other

charges incurred to obtain, keep possession of and preserve those

goods.

P. Milobar: This also, of course, deals with the Livestock Lien Act. So there

are provisions in this

section around what happens if an animal is born

while being subject to the lien. This covers off that as

well.

I’m just trying to think of when that situation would come in. But

I guess this is a provision that would pertain to you if you were

leasing a field out for grazing or something of that nature, and someone

did not pay their fees to you for the use. You’re hanging on to their

livestock until they pay, and they start to have lamb season or calving

season or whichever season it is.

Would that be covered off in this, that that person could still

hang on that livestock reasonably, including the offspring, until such

time as they can make arrangements?

Hon. S. Robinson: The member, I think, captures it, particularly with livestock. And

24(2)(

c) certainly notes that calves, for example, would be a credit to

the amount owing. But if there were expenses incurred in order to

maintain the livestock, then that, of course, would go on the flip side

of the ledger. So all of these expenses and credits need to be tracked

until it can be resolved.

Clause 24 approved.

On clause 25.

P. Milobar: This seems to be more of an area, now, that we get into the

requirements for duty for the lien holder to provide information as

requested. I just want to clarify.

Anybody that feels they have an interest in what may be having a

lien put against it has the ability, essentially, with this to request

information from the lien holder. The lien holder would have ten days to

reply with that information in terms of either values or moneys owed,

work that was done resulting in the moneys owed, equipment or parts that

were secured which resulted in the money owed. Is that a fair

summarization of 25?

Hon. S. Robinson: There are a number of persons and their representatives that may

use a lien holder’s registered contact information to demand more

information. Those who have interest are typically the owner or other

person with an interest in the goods, such as a lessee, a person who

requested the services for the goods and a creditor or sheriff to assess

the extent to which goods subject to a lien may be useful in any

enforcement of a debt, such as a judgment enforcement

proceeding.

Clause 25 approved.

On clause 26.

[4:50 p.m.]

P. Milobar: A lien holder in 25 must reply or comply with a demand for

information within ten days after the lien holder receives the demand. I

should have maybe asked this in 25, so we can just lump it in with 26.

I’m assuming that’s ten business days, not ten calendar days, but we can

get clarification on that. Again, not a huge sticking point, just more

so that people understand what the rules of the game are.

The lien holder doesn’t…. Clause 26 deals with what happens when

the lien holder doesn’t comply with the demand for information within

that ten days. It appears that the only remedy for somebody seeking that

information is to try to take the lien holder to court to get an order

to make sure that that information gets forwarded.

Just to be clear, there’s nothing in this that says that by

ignoring that, the person who is seeking the information…. Let’s say it

was the person the lien was against. They don’t start to see a reduction

in the lien amount or anything of that nature, the charge against their

property, for failure to comply with the demand. It’s strictly that the

remedy is to go to court and try to get the demand actioned through that

process.

Hon. S. Robinson: The member is correct. You do have to go to court in order to get

the information, and we’re talking about ten business days.

P. Milobar: In terms of the need to have to go to court to deal with this,

does the minister or her staff have any sense of what, within B.C., the

current timelines for filing something like this would take? Is it

strictly to show up to the courthouse and file at the court? Or is it

actually a more onerous process that’s envisioned with this

clause?

Hon. S. Robinson: That’s outside the scope of the act. The act just provides a

remedy for when it’s impossible or you’re not able to get the

information that you need. There is a remedy, which is to go to court,

and the courts will determine the speed at which it moves.

P. Milobar: Well, recognizing that our court systems are not 100 percent

aligned, province to province, but similar, does the minister have any

idea what the process in Saskatchewan currently is, in terms of

provisions to seek court rulings around the demand for information or

things of that nature?

[4:55 p.m.]

Hon. S. Robinson: This is consistent with the Uniform Liens Act that was enacted by

Saskatchewan. At this point, we haven’t heard anything that suggests

that this has been problematic.

P. Milobar: Sorry, maybe I wasn’t clear. I just wasn’t sure if the minister or

her staff knew what the process in Saskatchewan is to trigger the

petitioning of the court to get that demand for information processed.

Is it just the equivalent of filing a small claims application, or is it

that you’re going and waiting for a court time to actually make a

presentation to a judge? Do they have any idea what the overall

rigmarole is?

Hon. S. Robinson: It’s Supreme Court, which is Queen’s Bench in Saskatchewan. It’s

the same process.

Clauses 26 to 28 inclusive approved.

On clause 29.

P. Milobar: Again, more for clarification. This is fairly straightforward, but

it appears that by this clause the lien holder can demand a payment, set

out in a

schedule of the Personal Property Security Act, to reply for a

demand for information. But once every six months, the owner can make a

demand and receive that information for free.

I just want clarity. If there’s an individual that owes money that

the lien is registered against, but there’s also a bank that has a loan

and may require verification, do both parties get to have a demand every

six months for free? Or is it strictly the actual owner of the equipment

on title versus the others? In

section 25, the people that can demand

the information are “a creditor, a sheriff or an authorized

representative” — things of that nature.

I’m trying to get a sense of: could there be multiple people all

asking for a demand free of charge? Or is it just one person that gets…?

Or one request? One requester gets it every six months, and everyone

else could be subject to a demand for payment by the lien

holder?

Hon. S. Robinson: It’s just the owner.

Clauses 29 to 32 inclusive approved.

On clause 33.

P. Milobar: This relates back to 32, with seizures by the bailiff. This

enables them to seize without removing from the premises.

Again, could we get a better understanding of the rights of the

bailiff, then, to come back and forth, if they’re not actually

physically removing that — in terms of the person who the lien is

against, this is obviously their premises — and the ability of the

bailiff to not remove it but still be in charge of the goods.

Hon. S. Robinson: If I understand the member’s question, he’s looking for an example

of what a seizure of goods by bailiff without removal from premises

might look like. What came up for me was a herd of cattle, for example.

The bailiff may not come and have the ability to physically move them to

a different site.

[5:00 p.m.]

P. Milobar: Well, it’s like the minister read my mind on where I was going to

go next in terms of goods actually qualifying as livestock as well,

because obviously, this act covers off a pretty wide range of, manner

of, asset.

I guess, on the livestock piece again, I’m just trying to get a

better sense of the bailiff’s right to come and go. People working the

land, people with livestock, get pretty sensitive about access points,

the tracking in and out of weeds and things of that nature. This still,

though, would give the bailiff that ability to come and go in terms of

trying to figure out arrangements for something like a herd of

livestock. To be able to properly action the orders that the bailiff is

dealing with, the landowner would need to capitulate with those visits

by the bailiff to make sure that they happen.

[S. Chandra Herbert in the chair.]

Hon. S. Robinson: I think I have some answer for the member about his specific

question, but I think it’ll become clearer with the next

section.

This is about seizure of goods by a bailiff without removal from

premises. We’re talking about, for example, cattle. The options here

reflect the manner in which a sheriff may seize goods under a writ of

execution without removal. It’s a feature of the common law of judgment

enforcement. In common law, a sheriff may seize without taking physical

possession, by placing some tangible evidence of the seizure at the

place of seizure, like a notice of seizure. It would be posted, for

example, on fences and such.

The lien holder can sell the goods from this location, leaving to

the buyer the arrangements for their removal should this be required.

When we get to the next section, I believe there’s the opportunity to

assign a bailee. I’m happy to answer the member’s question when we get

to that

section and can explain how the bailee would work in this

instance of the cattle that we are talking about.

Clause 33 approved.

On clause 34.

P. Milobar: Well, I wasn’t going to ask questions on 34, but now I’m just

intrigued about how a bailee would work with the cattle. So if the

minister could provide the example she was referencing, that would be

great.

Hon. S. Robinson: The bailiff can designate a bailee. I am now going to use that

word as part of Scrabble. It’s a real word, so it’s really nice to

see.

They require a signed undertaking to hold the goods in the

bailee’s possession as the bailiff’s bailee and deliver the goods to the

bailiff in accordance with the bailiff’s demands, such as the timing,

method and location of delivery. So if a bailiff doesn’t know, for

example, how to care for these animals, the bailee can be assigned to do

that on behalf of the bailiff.

Clauses 34 to 36 inclusive approved.

On clause 37.

P. Milobar: I’ll acknowledge in advance that there may be an answer to this in

either previous clauses or future clauses, but it all will tie together.

This is about the disposition of goods by the lien holder.

I’m a lien holder. The amount of the lien is not paid. In 30 days,

I have a default judgment, and 30 days later I can then start to

liquidate what the lien is against, to try to have myself paid. That’s

how I’m reading this. Is that correct, that essentially the core of this

clause is that that’s the trigger that would enable you to start to sell

off any livestock or equipment or anything like that that the lien may

be against? You file, and you get a default judgment, and then 30 days

later, you can start to sell.

[5:05 p.m.]

Hon. S. Robinson: What this clause says is if 30 days have passed after the date of

default and the amount secured by a lien has not been paid, the lien

holder may initiate the process to dispose of the goods by sale or lease

under sections 37 and 38. This disposition process parallels the

disposition process in

part 5 of the PPSA.

P. Milobar: Previously, when I asked about the ten days, calendar or working,

not a huge difference. I mean, it’s two weeks or ten actual days on a

calendar. But when we start getting into 30 days, that’s either six

weeks or 30 actual calendar days. Is this 30 Monday-to-Friday days, or

is this a calendar month, basically?

Hon. S. Robinson: The 30 days refer to what the

Interpretation Act has. It’s

consistent with the

Interpretation Act, and that dictates the actual

number of days.

P. Milobar: Now for the question that may be in one of the various other

sections. I’m assuming it is, but I haven’t found it yet. I probably

glanced over it.

This gives the lien holder rights and the ability to trigger

sales, and understandably so, or there’s not much point in having a

lien. Where is the trigger, I guess, for the person who the lien is

against to ensure that that lien is now removed? Obviously, they

wouldn’t still own the equipment anyways. In this day and age of credit

score tracking and things of that nature, I would think liens would

start to pop up. It could affect their ability to borrow on future

equipment or things of that nature.

Where is their remedy in this to ensure that that lien is removed

and no longer tagged with their name?

Hon. S. Robinson: If we go back to clause 17(1), it says: “The lien holder

identified in a registered financing statement must discharge the

registration not later than one month after the date the amount secured

by the lien is paid, unless before the expiry of that one-month period

the registration lapses.”

Clauses 37 to 43 inclusive approved.

On clause 44.

P. Milobar: Again, this is more for information and just trying to get a

better sense of the order of magnitude.

Does the minister have any insight or knowledge…? Obviously, going

to a Supreme Court starts to get to be fairly significant in cost and

everything else. One would assume that if you have a lien against you,

you’re not going to be spending a lot of money to take something to a

Supreme Court. Principle can be a funny thing sometimes. It can get very

expensive for some people where they’re refusing to pay a repair bill

for a principle more so than they don’t have the funds to do

it.

Is there any threshold that needs to be met in terms of value to

start trying to initiate Supreme Court rulings on liens? Or is it

strictly up to the courts to decide whether or not they want to

entertain what could be, potentially, very small dollar figures? In

other words, is there a small claims option versus Supreme Court option

through this bill?

[5:10 p.m.]

Hon. S. Robinson: There is no threshold, and there is no small claims court. This is

the only remedy.

Clause 44 approved.

On clause 45.

Hon. S. Robinson: I move the amendments to sections 45 and 46 that are in possession

of the Clerk.

[ CLAUSE 45 (2), by deleting the text shown as struck out

and adding the underlined text as shown:

(2) In a petition proceeding under

section

section 44 , the petitioner

(

a) may make a payment into court of the amount claimed, in

writing by the lien holder, for the services provided by the lien

holder, and

(

b) must include the payment when filing the

petition.]

[ CLAUSE 45 (4), by deleting the text shown as struck out

and adding the underlined text as shown:

(4) A notice of the payment served in accordance with

subsection (2) subsection (3) must include

the following information, in accordance with the regulations, if

any:

(

a) the amount of the payment;

(

b) the form of the payment into court;

(

c) any other prescribed information.]

[ CLAUSE 45 (6), by deleting the text shown as struck out

and adding the underlined text as shown:

(6) The charge is discharged if a the lien

holder does not file, by one of the following dates, an application for

an order for the payment out of court of the payment secured by the

charge:

(

a) the date that is 60 days after the date the lien holder was

served in accordance with subsection (3);

(

b) if applicable, the date set by the court under

section 47

(2) (b) (i) [supervisory jurisdiction of

court] .]

The Chair: We’ll just take a short recess to ensure that the amendments

can get out to everyone appropriate. The House will take a short

recess.

The committee recessed from 5:11 p.m. to 5:13 p.m.

[S. Chandra Herbert in the chair.]

The Chair: We are on the proposed amendments to clause 45. I ask the

minister to move the amendment.

On the amendments.

Hon. S. Robinson: I move the amendments to

section 45 of the bill.

Perhaps I can explain, as well, for the House. The amendments to

section 45 of the bill make non-substantive corrections to references to

other provisions of the bill as well as a grammatical

correction.

The amendment to 45(2) corrects a reference to

section 45, that a

petition proceeding may be initiated under

section 44.

The amendment to

section 45(4) corrects a reference to subsection

(2), that a notice of payment into court must be served in accordance

with subsection (3).

The amendment to

section 45(6) makes a grammatical correction to

the lien holder to signify this is the same lien holder referred to

earlier in this section. The amendment to

section 45(6)(

b) corrects the

reference to

section 47(2)(b). The court’s authority to set a different

filing date in relation to this provision is under

47(2)(b)(i).

The Chair: All right. I’m not seeing any questions on clause 45(2). I

will ask that we hold a vote on that first one, and we’ll go through

them in order.

Amendments approved.

Clause 45 as amended approved.

On clause 46.

[5:15 p.m.]

Hon. S. Robinson: I move the amendment to clause 46 that is in the possession of the

Clerk.

[ CLAUSE 46 (6), by deleting the text shown as struck out

and adding the underlined text as shown:

(6) The charge is discharged if a the lien

holder does not file, by one of the following dates, an application for

an order for the payment out of court of the payment secured by the

charge:

(

a) the date that is 60 days after the date the lien holder was

served in accordance with subsection (2) subsection

(3) ;

(

b) if applicable, the date set by the court under

section 47 (2) (c)

section 47 (2) (b)

(ii) .]

On the amendment.

The Chair: Seeing no questions, shall clause 46(6)….

Minister would you like to speak to it, please? Sorry.

Apologies.

Hon. S. Robinson: I’d like to speak to it just so that all members understand what

this amendment is.

The amendment to

section 46 of the bill makes, again,

non-substantive corrections to references to other provisions of the

bill. The amendment to

section 46(6) makes a grammatical correction to

the lien holder to signify that this is the same lien holder referred to

earlier in the section.

The amendment to

section 46(6)(

a) corrects the reference to

subsection (2), that a notice of payment into court must be served in

accordance with subsection (3).

The amendment to

section 46(6)(

b) corrects the reference to

section 47(2)(c). The court’s authority to set a different filing date

in relation to this provision is under 47(2)(b)(ii).

Amendment approved.

Clause 46 as amended approved.

Clauses 47 to 51 inclusive approved.

On clause 52.

P. Milobar: Both on 52 and 53, just looking for more clarification or

understanding and detail around how this works with the interprovincial

trade and filing of liens in terms of work being done on one side of the

border or not.

If work is done…. I’m thinking more of equipment or vehicles and

things of that nature in terms of cross-border. You break down in one

province. You go home. You decide you’re not doing anything with your

car. That’s fine. You don’t come back to pick it up. The lien holder in

B.C. would have the full rights.

Does the reverse hold true? I’m assuming that if they’re in

Alberta and you ditch your car there, you’re subject to the Alberta laws

and not the other way around. So this is strictly for the benefit of

British Columbian people doing work within British Columbia.

Hon. S. Robinson: The member is correct. It’s based on where the goods

are.

Clause 52 approved.

On clause 53.

P. Milobar: Just to clarify, then. The liens registered outside of B.C. now,

with this clause…. As I read through it, a person under the law of

another province holds a lien on goods or services, holds a lien on the

goods within the meaning of this act. But again, that’s…. The person

from outside of another province holds a lien, files a lien in B.C. for

work done in B.C., even though they may reside in a different

province?

In other words, they have to file within British Columbia. They’re

not filing in Alberta. Is that correct? Am I mixing this up? It seems

that we’re highlighting what happens with cross-border, but it’s all

about the protection of what actually happens within British Columbia

versus outside of B.C.

[5:20 p.m.]

Hon. S. Robinson: Saskatchewan already has this legislation, and we are creating

parallel legislation. If a person has a lien on goods for services under

the law of, let’s say, Saskatchewan, which has parallel requirements to

those in

section 4 for creation of a lien under this act, the lien must

be registered in the other province for the person to hold the lien

under this act so that we’re consistent. I think that’s the whole

intent. It’s that across the nation, we can support this kind of

legislation and be consistent.

Clauses 53 to 86 inclusive approved.

On clause 87.

P. Milobar: I didn’t want the minister to think she was totally

done.

Obviously, this is commencement. The act comes into force by

regulation of the Lieutenant-Governor-in-Council. Does the minister have

any idea when that is anticipated, when the minister thinks the OIC will

come through? Should people start to be preparing for this change in the

next week, 15 minutes after we’re done? When should they expect that

this would actually be taken into force and effect?

Hon. S. Robinson: I want to take the opportunity to thank the member for his

thoughtful questions and helping to understand what I think is a pretty

thick read. I thought he asked some really excellent

questions.

The act will be brought into force by regulation at a date that

is, in fact, yet to be determined. We do need time to develop

regulations under the act in consultation with the court services branch

as well as the judiciary. In addition, changes to the personal property

registry and amendments to the personal property security regulation are

needed to enable commercial liens to be registered in the registry. So

there’s still some work that needs to be done.

As well, B.C. registries and online services is being consulted on

the timing of the registry changes, and we don’t expect commencement in

this calendar year.

P. Milobar: Just to that, as much as all of us find plowing through this type

of legislation so enthralling and interesting, it’s important,

nonetheless. I make light of it, but if your livelihood depends on this

or pro