Removing and Replacing Executors and Trustees

This video is on removing executors and trustees. Personally, I think being an executor is like being a fire hydrant on a street of dogs. You can never, ever get enough appreciation. Unfortunately, it seems to attract a lot of heat. Now there are good executors and there are bad executors. But the fact that you don’t like the executor or you can’t get along with the executor really is not going to be sufficient to remove that executor.

At common law, it has historically been very difficult to remove an executor. But more recently, the courts I think have adopted a more flexible approach. Therefore, you can remove an executor for such reasons as dishonesty or total impasse where nothing is happening whatsoever and things along that line. It’s very difficult. It’s something you’re going to have to consult an expert on and ultimately, it has to be resolved in favour of getting the estate distributed to the proper heirs.

Forfeiture Clauses in Wills

A forfeiture clause is typically a clause that the testator puts in the will to try and make it much more difficult, if not impossible, for someone to contest the will. Typically, it would be a clause that it says, “If my wife ever remarries, then she’s not to inherit,” or something along those lines. Suffice to say, for the purposes of this video, if a clause purports to prevent someone contesting the will on the basis of the Wills Variation Act, that is, the will did not provide adequately for either a child or a spouse of the deceased, then that forfeiture clause will be of no forcing effect.

On the other hand, a properly drawn forfeiture clause other than the Wills Variation Act, can be effective in preventing certain types of court actions but it’s a very difficult area for a lay person to understand. Please feel free to contact disinherited.com if you see such a clause in a will.

The Pitfalls of Joint Tenancy

This video is about joint tenancy. Many years ago, financial advisors in particular, started to advise people to put their assets in joint tenancy with others, in particular, their spouses or children in order to avoid probate fees. It was a minimal type of estate planning.

Unfortunately, all of those joint accounts have now ended up in litigation in the sense that in many occasions, the deceased did not make it clear if he or she intended to gift the monies to the other joint tenant or if the other joint tenant simply held the assets in trust.

I’ll give you an example. Many parents trust that their children will do the right thing amongst themselves. So the parent might put a condominium or a house in joint tenancy with one child knowing that that child, will upon the parent’s death, do the right thing and share it equally with the other children. In fact, this often doesn’t happen. The deceased child feels entitled and takes it as a gift. The other children end up in years of litigation arguing that mom intended it as a trust. It is essential that the intention be noted or there is a presumption that, or there is a transfer of an asset of significant value for no value per one dollar another consideration, it is a presumption of a trust.

Costs: The Standard of Review

Costs: The Standard of Review

The BC Court of Appeal in Giles v Westminster Savings Credit Union 2010 BCCA 282 reviewed the standard of awarding costs and the various purposes for an award of costs.

The case was recently followed in Kyle Estate v Kyle 2017 BCSC 752 which stated inter alia  that the discretion to order the payment of double costs must be exercised in a just, principled and consistent way: Giles v. Westminster Savings Credit Union (2010, 5 B.C.L.R. (5th) 252 at para. 88 and such an order is permissive, not mandatory: Buttar v. Di SpiritoI, 2009 BCSC 72 at para.

Standard Review of Costs

72      Before considering the various challenges to the trial judge’s costs orders, I note that such orders are discretionary and appellate review is limited in scope. As Arbour J. stated in Hamilton v. Open Window Bakery Ltd. (2003), 2004 SCC 9, [2004] 1 S.C.R. 303 (S.C.C.), “[a] court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong”: para. 27. More recently, in Victoria (City) v. Adams, 2009 BCCA 563, 313 D.L.R. (4th) 29 (B.C. C.A.), this Court said:

[180] The general rule with respect to costs is that they follow the event and are assessed on a party and party basis unless the court otherwise orders: Rules 57(9) and 57(1) of the Rules of Court. Courts retain the discretion to depart from the general rule where the circumstances justify a different approach: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 at para. 22. It is a broad discretion, and this Court will only interfere “if there is misdirection or the decision is so clearly wrong as to amount to an injustice”: Agar v. Morgan, 2005 BCCA 579 at para. 26.

Misdirection may include making an error as to the facts, taking into consideration irrelevant factors, or failing to take into account relevant factors, all of which would amount to an error in principle: Sutherland v. Canada (Attorney General), 2008 BCCA 27, 77 B.C.L.R. (4th) 142 (B.C. C.A.) at para. 24.

73      However, the discretion with respect to costs is not wholly unencumbered. As Mr. Justice Seaton stated in Royal Trust Corp. of Canada v. Clarke (1989), 35 B.C.L.R. (2d) 82 (B.C. C.A.) at 88:

Costs are in the discretion of the court, but it does not follow that the judge is to do whatever pleases him at the moment. Rules and decisions offer guidance that should ensure that different judges in similar cases make similar decisions.

74      The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

• “Deterring frivolous actions or defences”: Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 37 B.C.L.R. (2d) 2 (B.C. C.A.), leave ref’d, [1988] 1 S.C.R. ix;

• “To encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”: Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 (B.C. C.A.) at para. 28;

• “Encouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases: Bedwell v. McGill, 2008 BCCA 526, 86 B.C.L.R. (4th) 343 (B.C. C.A.) at para. 33;

• “To have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”: Catalyst Paper Corp. v. Companhia de Navegação Norsul, 2009 BCCA 16, 88 B.C.L.R. (4th) 17 (B.C. C.A.) at para. 16.

75      Lastly, it must be also remembered that “the person who seeks to displace the usual rule [as to costs] has the burden of persuading the judge that the rule should be displaced”: Grassi v. WIC Radio Ltd. 2001 BCCA 376, 89 B.C.L.R. (3d) 198 (B.C. C.A.) at para. 24.

 

The Rising Trend of Self Represented Litigants

Self Represented Litigants

The Ontario Court of Appeal in Moore v Apollo & Beauty Care 2017 ONCA 383 discussed the increasing trend of self  represented litigants appearing before the courts.

Self represented litigants present a problem for both the Court and any opposing counsel due to their general unfamiliarity with the procedures of court.

The Court stated:

[41]            The new reality of civil litigation in public courts is the significant number of parties who are not represented by a lawyer, but present their own cases. Presiding over a trial where a party is not represented by a lawyer poses distinct challenges for a trial judge, and also brings with it distinct responsibilities.

[42]            Both the challenges and responsibilities are succinctly described in the Statement of Principles on Self represented Litigants and Accused Persons (the “Statement”) issued by the Canadian Judicial Council in September 2006. The Supreme Court of Canada endorsed the Statement in Pintea v. Johns, 2017 SCC 23.

[43]            The main challenge faced by a trial judge when a party is not represented by a lawyer lies in the difficulty of managing an adversarial proceeding when one party lacks formal training in the law and its procedures. As described by the Statement, at p. 3:

Self represented persons are generally uninformed about their rights and about the consequences of choosing the options available to them; they may find court procedures complex, confusing and intimidating; and they may not have the knowledge or skills to participate actively and effectively in their own litigation.

[44]            While self represented persons vary in their degree of education and sophistication, I think it safe to say that most find court procedures “complex, confusing and intimidating.” That state of affairs gives rise to the responsibility of judges to meet the need of self-represented persons for “simplicity” and to provide “non-prejudicial and engaged case and courtroom management” to protect the equal rights of self-represented persons to be heard: Statement, pp. 4 and 6.

[45]            The Statement, at p. 7, offers specific advice to judges about how to meet their responsibilities to self-represented persons in the courtroom environment:

Judges have a responsibility to inquire whether self represented persons are aware of their procedural options, and to direct them to available information if they are not. Depending on the circumstances and nature of the case, judges may explain the relevant law in the case and its implications, before the self-represented person makes critical choices.

In appropriate circumstances, judges should consider providing self-represented persons with information to assist them in understanding and asserting their rights, or to raise arguments before the court.

Judges should ensure that procedural and evidentiary rules are not used to unjustly hinder the legal interests of self-represented persons. 

 

 

 

 

Court Directions

Court Directions

Biely Estate v CNIB 2017 BCSC 788 involved an application for Court directions to be followed with respect to three competing wills of a deceased.

The application was brought pursuant to Supreme Court Civil Rule 25-14(8)(a) and sought directions that the litigation only deal with the proof in solemn form of Geraldine Biely’s will dated September 25, 2014  and not the counterclaim dealing with two previous wills of the deceased.

Supreme Court Civil Rule 25-14(8)(a) provides as follows:

(8) Without limiting any other power of the court under this or any other Part of these Supreme Court Civil Rules, the court may, on its own motion or application, give directions concerning the procedure to be followed in any matter under this Part and, without limiting this, may give directions respecting any of the following:

(a) the issues to be decided;

(16) The directions sought by the plaintiffs are, essentially, an application to have the subject matter of the counterclaim of the Litzky Defendants dealt with separately from the plaintiffs’ proof of will in solemn form proceeding with respect to the 2014 Will. Pursuant to Rule 3-4, a counterclaim is to be heard at the same time as the main action, unless the court orders to the contrary (Pacheco v. Degife, 2014 BCSC 1570, at para. 200). Under Rule 3-4(7.1) the court may order that the counterclaim be struck out or tried separately or may make any other order it considers will further the object of the Supreme Court Civil Rules.

The Court ordered that the counter claim be severed and that the trial proceed firstly on the proff of solemn form action only.

[69] Guidelines that focused attention more keenly on the efficacy of the trial process were helpfully laid out in O’Mara v. Son, Kim et al., 2007 BCSC 871[O’Mara] at para. 23:

1. whether the order sought will create a saving in pre-trial procedures;

2. whether there will be a real reduction in the number of trial days taken up by the trial being heard at the same trial;

3. whether a party may be seriously inconvenienced by being required to attend a trial in which the party may have a marginal interest;

4. whether there will be a real saving in expert’s time and witness fees;

5. whether one of the actions is at a more advanced stage than the other;

6. whether the order sought will result in delay of the trial of any one of the actions and, if so, whether any prejudice which a party might suffer as a result of that delay outweighs the potential benefits which a consolidated trial might otherwise have;

7. the possibility of inconsistent findings and common issues resulting from separate trials.

[70] Severance may well be appropriate where the determination of one issue will render another one moot: Lawrence v. ICBC, 2001 BCSC 1530[Lawrence].

[71] The judicial discretion to sever trials or hearings is to be exercised sparingly: Morrison-Knudsen Co. v. British Columbia Hydro & Power Authority, 1972 CarswellBC 62, 24 D.L.R. (3d) 579 (S.C.); Lawrence at para. 43. The test for severance is not applied in a vacuum; it is to be considered against the backdrop of the nature of the particular case at hand: Wirtz v. Constantini, 137 D.L.R. (3d) 393, 1982 CarswellBC 588 (S.C.). Because the determination involves an individualized assessment of the unique case before the Court, there is no closed list of uniformly applied considerations that inform the exercise of the Court’s discretion.

22      The court went on to provide the following comments about Clark v. Nash, [1986] B.C.J. No. 1655 (S.C.) aff’d [1987] B.C.J. No. 304 (C.A.) [Clark]:

[83] . . . there is case authority that has placed some limitation on the nature of claims that can properly be included in a counterclaim to a proof of will in solemn form proceeding. In Clark v. Nash, [1986] B.C.J. No. 1655 (S.C.) aff’d [1987] B.C.J. No. 304 (C.A.) [Clark], the Court held that the procedure and hearing involved in a proof of will in solemn form proceeding should be limited to the aspects of the will execution, testamentary capacity, want of knowledge and fraud. The Court reasoned that a counterclaim to vary a will that is alleged to be invalid is therefore premature, and hearing it at the same time or before the action involving the proof of the challenged will is neither just nor convenient.

Offers to Settle Double Costs

Offers to settle double costs

Sim v Sim estate 2017 BCSC 345 discussed offers to settle and rejected an award for double costs finding that the offer was one that ought not to have reasonably been accepted as it required the plaintiff to give up the claim entirely while providing no rationale.

[1]             The plaintiffs were unsuccessful in seeking a variation of the will of the late Alexander William Sim, pursuant to s. 2 of the Wills Variation Act, R.S.B.C. 1979, c. 435. Costs were awarded to the defendants. The defendants now seek double costs under Rule 9-1(5) of the Supreme Court Civil Rules.

Settlement Offers

[4]             By letter dated August 11, 2015,  the plaintiffs offered to settle all claims if the defendants: paid them $250,000; made a life insurance policy, under which the plaintiffs were beneficiaries, irrevocable; agreed to continue to pay the premiums on the policy and paid the plaintiffs’ costs and disbursements at Scale B. The plaintiffs’ offer was open for 30 days.

[5]             On August 13, 2015, the defendants rejected the plaintiffs’ offer and countered with an offer that Mrs. Sim would agree to make the life insurance policy irrevocable, the plaintiffs would agree to make the future premium payments and each party would bear their own costs. The defendants’ offer remained open until it was revoked on December 11, 2015 which was after the trial had commenced but before it finished.

[6]             Based on Mrs. Sim’s life expectancy the cost to the plaintiffs of agreeing to pay the future life insurance premiums would have been $20,857. The plaintiffs did not respond to that offer by the defendants.

[7]             At the Trial Management Conference on September 9, 2015, the presiding judge recommended that the parties try to settle the case. By email on September 10, 2015 the defendants’ counsel suggested to plaintiffs’ counsel that if he responded to his clients’ offer they may reach a settlement. On September 14, 2015 the defendants’ counsel emailed plaintiffs’ counsel and said he looked forward to a response to his offer on August 13, 2015 and a possible settlement without trial.

[8]             On the same day, plaintiffs’ counsel, in effect, rejected the defendants’ offer of August 13th and the case proceeded to trial.

Analysis

[10]         In Hartshorne v. Hartshorne, 2011 BCCA 29, our Court of Appeal offered some guidance when a trial court is asked to award double costs.

[11]         At para. 25 the Court of Appeal states:

[25] An award of double costs is a punitive measure against a litigant for that party’s failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted. Litigants are to be reminded that costs rules are in place “to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer. (Authorities are cited)

[12]         The Court goes on to state, at para. 27:

[27] The first factor – whether the offer to settle was one that ought reasonably to have been accepted – is not determined by reference to the award that was ultimately made. Rather, in considering that factor, the court must determine whether, at the time that offer was open for acceptance, it would have been reasonable for it to have been accepted…the reasonableness is to be assessed by considering such factors as the timing of the offer, whether it had some relationship to the claim (as opposed to simply being a “nuisance offer”), whether it could be easily evaluated, and whether some rationale for the offer was provided.

[13]         I do not agree with the plaintiffs that the results of the trial were mixed. All of the plaintiffs’ claims were dismissed with costs.

[14]         The order that Mrs. Sim continue to pay the premiums on the life insurance policy and make the policy irrevocable simply confirmed what she had agreed to do in her testimony. As defendants’ counsel said, the court put her position “in stone”.

[15]         However, I do not consider the defendants’ offer to have been one that ought reasonably to have been accepted by the plaintiffs. In assessing reasonableness, I cannot consider the ultimate decision in the case. At the time of the defendants’ offer they were essentially asking the plaintiffs to give up their claim entirely and, in addition, pay the future premiums for the life insurance policy. Accepting the offer would have required the plaintiffs to completely accept the defendants’ position. Furthermore, no rationale was provided by the defendants to the plaintiffs for the terms of the offer.

[16]         In the end result the defendants’ application for double costs is dismissed and they remain entitled to costs at Scale B.

Trustee For Child Under Will Has Priority

Trustee For Child Under Will Has Priority

Leniuk Estate 2016 BCSC 159 held that a trustee for a child appointed under a will has priority over a guardian appointed under the Family Law act to hold funds in trust for a child’s behalf.

An application to have a guardian appointed trustee who was different from the will appointed trustee Part  8 of the Family Lawact  was dismissed.

The Public Guardians position that the will appointed trustee is paramount and that Part 8 of the Family Law act was upheld by the court.

The will authorized the appointed trustee to make any payments for the beneficiary under 19 to the guardian of such person.

The Court stated inter alia:

Directions of the Court are sought because it is submitted that the executors and trustees are persons “having a duty to deliver property to a child” as defined in s. 175 Infants Act either because there is an existing duty to deliver the property to a child or because they would be under a duty to deliver property to a child if the child were an adult. (ss. 175 (a)(b)).

[12]         That however is not determinative given Part 8 of the FLA does not, in my view, apply in this situation. I say this for a number of reasons.

[13]         Section 176 provides that a guardian, simply because they are a guardian, is not a trustee of a child’s property. As a result someone else can be trustee of the child’s property. Hence, a trust instrument, such as a will, that states a guardian is to receive a child’s property and is empowered to grant a discharge is not contrary to the section. Indeed s. 176 by its very wording recognizes this as it provides “by reason only of being a guardian”. (Emphasis added)

[14]         In my opinion the FLA provisions were not intended to, nor do they, override trust instruments. For public policy reasons, the Legislature saw fit to provide that the FLA address the situation where there is property to which a child is entitled but the child only has a guardian and there is no existing trustee. In circumstances where the property exceeds the prescribed amount in the small property exception the child’s guardian is not deemed to be the child’s trustee simply because they are a guardian. An application to the Court is required in order to determine who the appropriate trustee should be. Section 179 provides the factors the Court should consider when appointing a child’s trustee. Similar to other provisions in the FLA, the best interests of the child are paramount. An example of a situation when this might occur would be if a child received property from a relative who died intestate.

[15]         Given the significant repercussions if the FLA provisions were intended to override existing trusts, in my opinion the legislature would have addressed that explicitly. Since the FLA provisions when dealing with “small property” were clearly addressing issues of proportionality I cannot accept that it was intended that existing trusts would have to apply to appoint a guardian a trustee in order to deliver property to a child. The potential number of applications would undoubtedly be significant and the cost substantial. In addition it would result in an inappropriate layering of trustee on top of trustee. Finally, it would be contrary to the express terms of the trust representing the wishes, in this case, of the testator.

[17]         Part 8 also recognizes in s. 175 that a trust instrument includes a will and that trustees are authorized under such an instrument to receive or hold property in trust for a child. In other words, such a trustee is included in the definition of trustee just as is a trustee appointed under the FLA.

[18]         In addition Part 8 acknowledges a trust instrument’s priority over the provisions of the FLA. For example, s. 178(6) of the FLAdealing with the delivery of small property provides:
178      …

(6)        Nothing in this section
(a)        affects the duty of a trustee to deal with trust property in accordance with the terms of the trust, …
…

[19]         Section 179, the appointment of a trustee by the Supreme Court provision, also contains an exception in s. 179(1)(b) which provides:

179     (1)        Subject to subsection (2), the Supreme Court on application may appoint one or more persons as trustees over
…
(b)        all property to which the child is entitled at the time the order is made and to which the child becomes entitled while the order is in effect, except property

(i)         identified in the order, or

(ii)        over which a trustee already has authority. (Emphasis added)

[20]         Finally, s. 179(4) states:
179      …

(4)        Except as provided for in an order made under this section, The Trustee Act applies to the trustee and the trust.

[21]         To assert that children’s property advanced to a guardian by anyone is caught by these sections extends the FLA provisions beyond their purpose and the problem they were intended to address. The purpose of these sections is to ensure that there is a trustee to protect the interests of the child, whether that is the guardian as trustee or another person does not matter. The point is to have someone responsible for the infant’s funds and to address the fact, that often for various practical reasons, it is desirable for the guardians to have the funds. Where there is no trustee and where the property exceeds a certain value, the guardian can be appointed as trustee.

[22]         This is not a situation where there is uncertainty over who is the infant’s trustee. It is the trust instrument (the Will) that establishes the trust and names the trustees. It is the terms of that instrument that govern the trust. As long as the trustees comply with the terms of the trust they are protected. In accepting a receipt from the guardian they would be acting in accordance with the terms of the will and the trust and as a result that would be a valid discharge.

[23]         The trustees are in this instance attempting to delegate their duties as trustees to a third party. In effect they are seeking an order that amounts to a variation of the Will.

[24]         As a result, where the trust instrument addresses the issue of advancing funds, whether income or capital, to a guardian and addresses the obtaining of a valid receipt there is no need for a court application.

Special Costs Not to Include Pre Litigation Conduct

Special Costs Not to Include Pre Litigation Conduct

The BC Appeal court in Smithies Holdings Inc. v. RCV Holdings Ltd., 2017 BCCA  extensively reviewed the law relating to an award of special costs and held that reprehensible pre litigation conduct should not be included when a judge exercises his or her discretion  as to award or not award special costs.

The court stated that oppressive or reprehensible conduct by a party in pre litigation might instead be awarded punitive damages, but any costs award for such behaviour should be limited to during the course of the litigation and not before.

Special costs are typically awarded when there has been some form of reprehensible conduct on the part of one of the parties: Young v. Young [1993] 4 SCR 3 at 134–138. Special costs are not compensatory; they are punitive: Grewal v. Sandhu, 2012 BCCA 26 at para. 106. They are awarded when a court seeks to disassociate itself from some misconduct: Fullerton v. Matsqui (District) (1992), 74 B.C.L.R. (2d) 311 (C.A.) at para. 23. There are circumstances where special costs may be ordered where there has been no wrongdoing: Gichuru v. Smith, 2014 BCCA 414 at para. 90. These reasons are not concerned with such types of cases.

[57]         The leading authority on special costs is this Court’s decision in Garcia v. Crestbrook Forest Industries Ltd. (1994), 9 B.C.L.R. (3d) 242 (C.A.). There, Mr. Justice Lambert, writing for the Court, set out that the threshold for special cost awards is “reprehensible conduct”. He noted the continuum of circumstances in which special costs could be awarded, ranging from “milder forms of misconduct deserving of reproof or rebuke” to “scandalous or outrageous conduct”:

[17]      Having regard to the terminology adopted by Madam Justice McLachlin in Young v. Young, to the terminology adopted by Mr. Justice Cumming in Fullerton v. Matsqui,  and to the application of the standard of “reprehensible conduct” by Chief Justice Esson in Leung v. Leungin awarding special costs in circumstances where he had explicitly found that the conduct in question was neither scandalous nor outrageous, but could only be categorized as one of the “milder forms of misconduct” which could simply be said to be “deserving of reproof or rebuke”, it is my opinion that the single standard for the awarding of special costs is that the conduct in question properly be categorized as “reprehensible”. As Chief Justice Esson said in Leung v. Leung, the word reprehensible is a word of wide meaning. It encompasses scandalous or outrageous conduct but it also encompasses milder forms of misconduct deserving of reproof or rebuke. Accordingly, the standard represented by the word reprehensible, taken in that sense, must represent a general and all encompassing expression of the applicable standard for the award of special costs.

[100]    At the outset, it is important to emphasize that in exercising the power to fix costs a judge cannot act arbitrarily or capriciously. He or she must act in a manner consistent with the Rules and the principles that have long governed such awards. In Stiles v. B.C. (W.C.B) (1989), 38 B.C.L.R. (2d) 307 (C.A.) at 310, Lambert J.A. articulated the limits on a judge’s power to award costs:
…Generally, the decisions on costs, including both whether to award costs, and, if awarded, how to calculate them, are decisions governed by a wide measure of discretion. See Oasis Hotel Ltd. v. Zurich Insurance Co. (1981), 28 B.C.L.R. 230, [1981] 5 W.W.R. 24, 21 C.P.C. 260, [1982] I.L.R. 1-1459, 124 D.L.R. (3d) 455 (C.A.). The discretion must be exercised judicially, i.e. not arbitrarily or capriciously. And, as I have said, it must be exercised consistently with the Rules of Court. But it would be a sorry result if like cases were not decided in like ways with respect to costs. So, by judicial comity, principles have developed which guide the exercise of the discretion of a judge with respect to costs. Those principles should be consistently applied; if a judge declines to apply them, without a reason for doing so, he may be considered to have acted arbitrarily or capriciously and not judicially.
[Emphasis added in [131]     As has been set out in many authorities reviewed here, pre-litigation conduct that gives rise to a cause of action will already be the subject of a damage award flowing from the objectionable conduct. Where a party’s misconduct is so malicious, oppressive and high-handed that it offends the court’s sense of decency, an award of punitive damages may also follow. Whiten provides a principled structured framework for such awards.

[132]     Special costs are an inherently unsatisfactory mechanism to punish pre-litigation conduct. Special costs are intended to punish reprehensible conduct which as per Garcia includes scandalous or outrageous conduct as well as milder forms of misconduct deserving of reproof or rebuke. The case law has considered a range of pre-litigation conduct, including breach of contract, negligence, breach of fiduciary duty, fraud, misappropriation, deceit, sexual assault, failure to follow a constitutionally mandated process and murder. All such conduct could be said to be deserving of rebuke.

[133]     Attempting to draw the line on a principled basis as to what pre-litigation conduct should be sanctioned by special costs and which should not is, as amply demonstrated by the case law, a near impossible task. It is also an unnecessary task as the law already provides appropriate relief and remedies for such conduct. In my respectful opinion, special costs should only be awarded to punish reprehensible conduct in the litigation.

[134]     In the result, I am of the view that a bright line can and should be drawn so that judges will be able to exercise their discretion in like cases in a like manner. Special costs should be reserved to punish and deter reprehensible conduct in the course of litigation. Pre-litigation conduct should not be considered in determining whether such an award is appropriate. There are other suitable mechanisms to censure pre-litigation conduct.

APPLICATION OF THE BRIGHT LINE RULE

[135]     It is clear from the trial judge’s reasons that special costs were awarded in this case because of the pre-litigation conduct. That conduct was the central issue in the trial. It is the basis of RCV’s claim for loss of opportunity. I note in his costs reasons the trial judge stated that RCV did not claim punitive damages and in the circumstances of this case, it could not have done so. While it is true that RCV did not seek punitive damages, I am not aware of any reason why it could not have done so.

[136]     For the reasons I have set out, pre-litigation conduct should not have been considered in determining the cost award. I thus find the trial judge erred in principle. In the result, I would allow the appeal and set aside the award of special costs. RCV is entitled to the costs of the trial on a party and party basis. The Appellants are entitled to the costs of the appeal.

Wills Variation: 84 Year Old Second Spouse With Dementia

Wills Variation: 84 Year Old Second Spouse With Dementia

Philp v.  Philp Estate 2017 BCSC 625 in a wills variation claim awarded an 84 year old second spouse with dementia $300,ooo from an estate of $660,000 after a 35 year marriage.

The widower was a retired doctor who had contributed substantial sums of his money to his spouses horses breeding hobby farm throughout their marriage. He had approximately $600,000 of his own assets at the time of his wife’s death.

The plaintiff was severely demented and was living in a care facility at a cost of $7000 per month.

His wife had left him a life estate in her hobby farm that she had been given after her divorce from her first husband.

The court held that the wife had satisfied her legal obligation to her husband as per the leading case of Tataryn v Tataryn 1994 SCR 807, but she had failed to satisfy her moral obligation to provide for his maintenance and awarded him $300,000.

His claim was opposed by her 5 children from a first marriage.

The Moral Obligation

[56]        Summarizing the decision in Tataryn, Ballance J. made the following comments in Dunsdon v. Dunsdon, 2012 BCSC 1274 (CanLII) at para. 133:

[133]   All legal and moral claims should be satisfied where the magnitude of the estate permits. In cases where complete satisfaction of all claims is not possible, the competing claims are to be prioritized. Claims that would have been recognized as legal obligations during a testator’s lifetime should generally take precedence over moral claims:  Tataryn, at 823. The court must also weigh the competing moral claims and rank them according to their strength. While claims of independent adult children may be more tenuous than those of a spouse or dependent child, where the size of the estate permits, some provision should be made for them unless the circumstances negate such an obligation:  Tataryn, at 822 – 823.

[57]        In balancing the conflicting claims, the Court in Tataryn noted one should take into account the important changes consequent upon the death of the will-maker. As there is no longer a need to provide for the will-maker, the reasonable expectations may differ following a death than in a separation:  at 823.

[58]        The relevant time for determining whether the will-maker has made adequate provision for a spouse or child is at the date of his or her death — 2013 in this case.

[59]        The court may consider the circumstances of the plaintiff, including any reasonably foreseeable changes in the circumstances, as at the date of death, when determining whether adequate provision has been made.

[90]        Turning to the issue of her moral obligations, I note the comment in Bridger v. Bridger Estate, 2006 BCCA 230 (CanLII) at para. 20:

[20] … Tataryn recognizes that there is no clear legal standard to judge moral claims and the test is more nebulous where the surviving spouse is not strictly speaking a dependent spouse and the children are all financially independent adults. …

[91]        As set out in Eckford v. Vanderwood, 2014 BCCA 261 (CanLII) at para. 56, Dr. Philp’s deteriorating health, i.e. dementia, is not relevant to whether Mrs. Philp made adequate provision for him in her will; rather, only those circumstances existing or reasonably foreseeable at the time of the death of the will-maker are relevant. Evidence of cognitive decline “in or about the fall of 2014” was noticed by Ms. Isaak in her affidavit. This, however, was over a year after Mrs. Philp’s death, and therefore I find his condition was not reasonably foreseeable.

[92]        Kish noted at para. 60, the “claims of adult children do not and should not overshadow a testator’s moral duty to a spouse”, especially where the relationship is long. I agree with Saugestad at para. 123, that it is particularly difficult to assess cases where the deceased and surviving spouse have independent adult children from their first marriages.

[93]        Kish also noted at para. 61, however, that as set out in Tataryn, “testator autonomy is one of the two interests ‘protected’ by the WVA.” In this case the defendants argue that testator autonomy reflects Mrs. Philp’s clear attachment to the farm and her wish that it should devolve to her children.