Legal Fees Agreements

Legal Fees Agreements

The test as to whether a legal fees agreement was “fair and reasonable” was recently reviewed in Hammerberg Lawyers LLP v Ikeda 2016 BCSC 621.

The agreement in question was a contingency fee agreement. The lawyers worked on a difficult case for a long time but found that the client would not co operate and eventually obtained an order removing the firm as the lawyers for the -plaintiff. The plaintiff then settled her case directly with the insurance company and the lawyers sued the plaintiff for their fees and won.

The court found that it was a difficult case, the client could not have afforded to prosecute it without a contingency fee and that the settlement was a result of the work performed by the law firm.

In reviewing the law on fee agreements the court stated :

[86]         Registrar Nielsen has summarized the framework for this type of analysis in Spraggs & Company v. Carnaby, 2015 BCSC 1504:

[25]      Section 65 of the Legal Profession Act allows a lawyer or a law firm to enter into an agreement with any other person, requiring the payment for services provided or to be provided.

[26]      Section 68 of the Legal Profession Act allows a person who has entered into an agreement with a lawyer to have the agreement examined and cancelled if the agreement was unfair or unreasonable at the time it was entered into. However, section 68(3) of the Legal Profession Act provides a strict limitation period for such a review which has not been met in this case. The client’s failure to properly challenge the agreement within the time provided by the Legal Profession Act is sufficient to dispose of this issue.

…

[28]      The test for determining whether an agreement is fair and reasonable was established in Commonwealth Investors Syndicate Ltd. v. Laxton, 50 BCLR (2d) 186 (BCCA), leave to appeal refused [1990] S.C.C.A. No. 479 QL. The Court stated at pages 198 and 199:

In our opinion s. 99 contemplates a two-step enquiry.

The first step investigates the mode of obtaining the contract and whether the client understood and appreciated its contents. The enquiry would include whether, at the time the contract was entered into, there was any lack of capacity on the part of the client, whether there was any undue influence exercised or unfair advantage taken by the solicitor, whether any mistake was made, or whether any other flaw arose in the formation of the contract which would indicate that the client did not understand and appreciate its content. The onus would be upon the solicitor to satisfy the foregoing requirements of the enquiry. Should any of those be found, the contract would not be “fair” in the sense of the statute and Re Stuart. The court would declare the contract cancelled, or would modify it, or the bill could be remitted for taxation.

The second enquiry, assuming the contract is found to be fair” involves an investigation of the “reasonableness” of the contract. On this investigation, extending from the time of the making of the contract until its termination or its completion, all of the ordinary factors which are involved in the determination of the amount a lawyer may charge a client are to be considered, and each factor may be the subject of professional evidence to assist the judge in determining the reasonableness of the fee in the particular circumstances.

[29]      This approach continues to be endorsed by the court. See Mide-Wilson v. Hungerford Tomyn Lawrenson & Nichols, 2013 BCCA 559, at paragraphs 22 and 23.

…

[35]      Having found the agreement to be fair and reasonable is not the end of the matter. It remains to be determined whether the agreement results in a “fair fee” (see Mide-Wilson, supra, at paragraphs 69 to 73, 76 to 77, and 100.

[36]      Section 71(5) of the Legal Profession Act provides that the discretion of the Registrar is not limited to the terms of an agreement between the lawyer and the client. Therefore, the bill is to be reviewed keeping in mind the principles of review which are summarized in s. 71 of the Legal Profession Act which provides:

71(1) This section applies to a review or examination under section 68 (7), 70, 77 (3), 78 (2) or 79 (3).

(2) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services:

(a) those reasonably necessary and proper to conduct the proceeding or business to which they relate;

(b) those authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate.

(3) Subject to subsections (4) and (5), the registrar may allow fees, charges and disbursements for the following services, even if unnecessary for the proper conduct of the proceeding or business to which they relate:

(a) those reasonably intended by the lawyer to advance the interests of the client at the time the services were provided;

(b) those requested by the client after being informed by the lawyer that they were unnecessary and not likely to advance the interests of the client.

(4) At a review of a lawyer’s bill, the registrar must consider all of the circumstances, including

(a) the complexity, difficulty or novelty of the issues involved,

(b) the skill, specialized knowledge and responsibility required of the lawyer,

(c) the lawyer’s character and standing in the profession,

(d) the amount involved,

(e) the time reasonably spent,

(f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time spent by the lawyer, whether the rate was reasonable,

(g) the importance of the matter to the client whose bill is being reviewed, and

(h) the result obtained.

(5) The discretion of the registrar under subsection (4) is not limited by the terms of an agreement between the lawyer and the lawyer’s client.

Joint Tenancy Severed By Conduct

Joint Tenancy Severed By Conduct

Lescano v Unlu 2016 BCSC 1535 is a case exemplifying how conduct of joint tenants that is inconsistent with joint tenancy can have the legal effect of severing the joint tenancy into a tenancy in common.

The court found that if the joint tenants ever were a couple that it long ago ended and that at least one of the parties, if not both, did not understand the legal effect of a joint tenancy and did not want it from the outset. A hand written will prepared by one of the joint owners indicated that she wished her share of the property to go to her three children equally in the event of her death.

Was the joint tenancy severed?

[6]             There is no dispute that any discussion of severance of a joint tenancy must begin with the decision of Vice-Chancellor Wood in Williams v. Hensman (1861), 70 E.R. 862, at p. 867.  Vice-Chancellor Wood set out the three ways in which a joint tenancy may be severed.

These ways − often referred to subsequently as “Rules” − were summarized by Chief Justice Winkler, for the Ontario Court of Appeal, in the last sentence of para. 34 of Hansen Estate v. Hansen, 2012 ONCA 112, as follows:

Rule 1:  unilaterally acting on one’s own share, such as selling or encumbering it.

Rule 2:  a mutual agreement between the co-owners to sever the joint tenancy, and,

Rule 3:  any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.

[7]             In Hansen Estate, the Ontario Court of Appeal expressly declined to follow or adopt what may be described as an added pre-requisite enunciated by Justice Southin, writing on behalf of the British Columbia Court of Appeal in Tompkins Estate v. Tompkins, [1993] B.C.J. No. 445 (C.A.).  In Tompkins Estate, Justice Southin stated that Vice-Chancellor Wood’s “Rules” were a species of estoppel.  At para. 17 of her Reasons she wrote:

In my opinion, the Vice-Chancellor was postulating a species of estoppel which might be put thus:  if joint tenants conduct themselves in their legal dealings with one another on a footing consonant only with their interests being several and not joint, one of them may not later resile and assert the interest was joint if a right of survivorship in him would be unjust to his fellow co-tenants who have themselves proceeded on the footing the interests were several.

[8]             Based on this conclusion, Justice Southin stated that the party seeking to assert severance must show that it relied on the acts of a co-tenant, to its detriment.

[9]             In Hansen Estate, Chief Justice Winkler provided cogent and compelling reasons for rejection of these added elements.  In paras. 47 and 49 through 51, Chief Justice Winkler explained the basis of his rejection of Justice Southin’s requirements for proof of reliance and detriment.

[10]         Having carefully considered both the decision in Hansen Estate and the cases cited to me that have applied it; and the decision in Tompkins Estate and the cases cited to me that have applied it: I prefer the reasoning in Hansen Estate.  I am satisfied, however, that even if I am bound to follow Tompkins Estate, the plaintiffs in the case at bar have established that a severance of the joint tenancy between Delma B and Mr. Unlu occurred before Delma B’s death in 2015.

[11]         As discussed in Hansen Estate, and in Tompkins Estate, the primary characteristic distinguishing joint tenancy from tenancy in common is the right of survivorship − that is, that upon the death of one joint tenant, his or her interest passes by operation of law to the other joint tenant or tenants.

 I am satisfied that the facts referred to in the Statement of Agreed Facts, supplemented by the facts set out in these Reasons, establish a course of dealing indicating that Mr. Unlu and Delma B considered themselves to have become tenants in common.

[52]         I have already referred to Mr. Unlu’s testimony indicating that he never wanted joint tenancy and from the outset did not understand or agree that on his death the entire property (the 99% interest he and Delma B held) would become the property of Delma B.  The handwritten “will” prepared by Delma B in December 2000 indicates that she also did not intend that her interest in the property pass to Mr. Unlu by right of survivorship.  She intended her “share” of the property to go to her three children in the event of her death.

[53]         If there was a spousal relationship between Mr. Unlu and Delma B, it ended soon after the purchase of the Richmond home.  Thereafter, the two lived separate and apart in the same home and conducted separate lives.  They did not maintain joint bank accounts or intermingle their finances in any way.  The parties did not maintain any other joint assets.  Delma B moved out of the home temporarily in 2004 and later Mr. Unlu permanently vacated the premises, leaving Delma B in sole possession.

[54]         In 2004, Mr. Unlu attempted to make a will leaving his share of the property to his daughter.  Mr. Unlu’s lawyer, Mr. Ash, wrote to Delma B and asserted on behalf of Mr. Ash that the joint tenancy had been severed at the time the parties separated.  Delma B did not, so far as the evidence indicates, dispute that assertion.  I am of the view that Delma B, who apparently had no legal representation at that time, relied on the representation made by Mr. Ash on behalf of Mr. Unlu, to her detriment.  After December 2005, she paid all of the expenses associated with the home, including the entirety of the mortgage and taxes, without demanding a contribution from Mr. Unlu.  Even after the fire occurred and she could no longer reside in the property, Delma B continued to bear all of the costs of preserving the property.  I conclude she would not have done so had she believed that in the event of her death, the entire benefit of payments made solely by her would go to Mr. Unlu.

[55]         I conclude that the joint tenancy between Mr. Unlu and Delma B was severed prior to the death of Delma B and that at the time of her death, the parties were tenants in common.

Adding Defendants

Adding Defendants

Stewart v. Stewart  2016 BCSC 1576 was a contested application for adding defendants to a court action commenced by one of four children to wind up a trust.

The application to add the remaining three children as defendants was opposed on the basis that the trustee could and would represent the interests of the other three children.

The court allowed the three defendants to be added as parties as there was a different legal position being put forward between the -plaintiff as a beneficiary and the applicants to be added as defendants as beneficiaries.

A: RULE 6-2(7)(b)

[34]         This subrule provides two alternate tests:

  • whether the person ought to have been joined as a party, or
  • whether that person’s participation in the proceeding is necessary to ensure that all matters in the proceeding may be effectually adjudicated on.

[35]         The Applicants, relying on Kitimat (District) v. Alcan Inc., 2006 BCCA 562 at para. 28, submit that if either of the circumstances referred to in paragraph 34 above arise, then the person should be added as a party.

[36]         They argue it is necessary to join the Applicants as defendants since their direct interests might be affected by the granting of the relief sought in the NOCC.

[37]         Kitimat was considered and applied in Delta Sunshine Taxi (1972) Ltd. v. Vancouver (City), 2014 BCSC 2100 at para 14:

[14]      “Ought” is a broader concept than “necessary” and includes situations in which joining the person may be more than mere convenience but less than necessity (Kitimat at para. 29). Necessary parties are those whose direct interests might be affected by the relief sought (Canadian Labour Congress v. Bhindi (1985), 1985 CanLII 384 (BC CA), 61 B.C.L.R. 85 at 94 (C.A.) (Canadian Labour Congress), Kitimat at paras. 30-32). In Kitimat, the petitioners sought to quash a decision of the province that authorized Alcan Inc. (“Alcan”) to sell hydro power that it produced for use outside of Kitimat’s aluminum industry, without adding Alcan as a party. The Court found that Alcan ought to have been joined and that Alcan was a necessary party because a binding order would limit the instruments held by Alcan, without its participation. In other words, the effect of the petition could be to limit the ability of Alcan to sell the hydro power it produced, so affecting the value of the power and the financial interests of Alcan

[38]         Their arguments include:

  • as in Kitimat, the relief sought by the plaintiff in these proceedings will affect the Applicants’ rights and interests under the Trusts. If the plaintiff is successful, there will be a direct financial impact on the Applicants in that among other relief, the plaintiff seeks orders that QPPC and its subsidiaries, ABC and its subsidiaries, the Stewart Trust, and the Martin Trusts be liquidated, dissolved or wound up and the Trustees of the Stewart Trust and Martin Trusts distribute one-quarter of the assets held by the Trusts to each of the plaintiff, and the Applicants, adjusted for any unequal distributions;
  • accordingly, if the plaintiff’s claims were successful, the operations of QPPC, ABC, and their subsidiaries would be terminated prematurely. The Stewart Trust and the Martin Trusts would also be terminated, the Trust assets distributed, and the Applicants’ rights and interests as beneficiaries under those Trusts would be eliminated;
  • the Stewart Trust and the Martin Trusts are a major source of income for the Applicants. The plaintiff has stated that the Applicants and the plaintiff have received over $34 million in equal shares from the Stewart Trust alone since its settlement. The relief sought by the plaintiff in these proceedings would terminate this ongoing income source;
  • it is no answer for the plaintiff  to say that the interests of the Applicants are not directly affected because they would be entitled to a distribution of an approximately equal share of the trust property should the relief be granted. The plaintiff has pled that the purpose of the Trusts was to allow the Deceased’s assets to grow in a consolidated and diversified manner for the benefit of the Deceased’s children and their issue.
  • this is not one of those situations where the beneficiaries’ input is necessary or helpful;
  • to the extent that any of the interests of the beneficiaries of the family trusts are affected by the claims brought in the within proceeding, their interests ought to and can be protected by the defendant trustees of the family trusts. The Applicants have not asserted any argument or defence that would be available to them as trust beneficiaries that is not available to be advanced, or has not been advanced, by the defendant Trustees of the family trusts.

[41]         I have concluded that the application should be granted. While I accept that the Applicants do not currently have a position adverse in interest to the trustees, that is not, in my view, the proper test to be applied.

Leave to Appeal

Leave to Appeal

The legal test for leave to appeal was restated in Ho Estate v. Ho 2016 BCCA 253 , upheld at 2016 BCCA 378, where the decision of one appeal judge was upheld by a panel when he refused leave to appeal on the basis that there was no reasonable chance of success.

16      Orders of a judge of the Supreme Court may be appealed as of right unless they qualify as limited appeal orders. The definition of a limited appeal order is set out in R. 2.1 of the Court of Appeal Rules. This definition includes “an order granting or refusing relief for which provision is made under … Part 7” of the SCCR, other than R. 7-7(6). Maisonville J.’s order is clearly an order made under Part 7 of the SCCR and qualifies as a limited appeal order; therefore, leave to appeal is required.

17      The test for leave to appeal was set out by Madam Justice Saunders in Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326 (B.C. C.A. [In Chambers]) at para. 10:

[10] The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include:

(1) whether the point on appeal is of significance to the practice;

(2) whether the point raised is of significance to the action itself;

(3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and

(4) whether the appeal will unduly hinder the progress of the action.

18      The party who is seeking leave to appeal bears the onus of establishing that these four conditions have been met: B.C.T.F. v. British Columbia (Attorney General), (1986), 4 B.C.L.R. (2d) 8 (B.C. C.A. [In Chambers]) at 11.

19      The merits threshold on an application for leave to appeal is relatively low: Bartram (Guardian ad litem of) v. Glaxosmithkline Inc., 2011 BCCA 539 (B.C. C.A. [In Chambers]) at para. 16 (Prowse J.A. in Chambers). However, an appeal that is vexatious, frivolous, or has no reasonable chance of success will not meet this threshold: Gichuru v. Law Society (British Columbia), 2012 BCCA 159 (B.C. C.A. [In Chambers]) at para. 22 (Bennett J.A. in Chambers), aff’d 2012 BCCA 171 (B.C. C.A.).

20      The overarching concern on an application for leave is the interests of justice: Hanlon v. Nanaimo (Regional District), 2007 BCCA 538 (B.C. C.A. [In Chambers]) at para. 2 (Saunders J.A. in Chambers). Even if the applicant has satisfied the four conditions from Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp. [1988 CarswellBC 615 (B.C. C.A.)], leave may be denied if granting leave is not in the interests of justice: Movassaghi v. Aghtai, 2010 BCCA 175 (B.C. C.A. [In Chambers]) at para. 27 (D. Smith J.A. in Chambers).

 

Entered Court Orders

Entered Court Orders

The Court does not have jurisdiction  to re open entered court orders but may vary the order where has been a change of circumstance.

The court refused to re open or vary an entered court order in Sugrim v Sugrim 2016 BCSC 1644 when after entering a desk order under the Family Relations act under S 57,  (which has the effect of crystalizing matrimonial assets and severing jointly owned titles), the husband became incapacitated and was awarded $1.8 million in damages for the injury.

With the consent of the committee adult child of the patient, the wife’s application to set aside the entered court order was dismissed on the basis that inter alia there was a risk that the wife and her children were acting out of self interest and not in the best interest of the patient.

The Sugren case stated:

 [22]         The PGTBC submits and I agree that the court does not have jurisdiction to reopen and set aside an entered order. The court may, however, entertain a variation of an order on the basis of a change of circumstance.

[23]         I raised a question as to the validity of a consent to a s. 57 declaration. However, having reviewed the circumstances of this case and the authorities, I conclude that the declaration was valid.

[24]         This was not a situation where one party at a judicial case conference requested a s. 57 declaration and the other party opposed it, as was the case in Harrison v. Harrison, 2007 BCCA 120. InHarrison, Finch C.J. found the death of Mr. Harrison was a material new circumstance giving rise to a reconsideration of the previous order to avoid a miscarriage of justice. In that case, the order was not entered, so the court was not functus officio and there was evidence of a possible miscarriage of justice which does not exist in the present case.

[25]         The only issue before me is whether or not a committee has the authority to consent to an application to set aside the s. 57 declaration based on a material change in circumstance.

[26]         The claimant submits that s. 15 of the PPA provides that a committee of the patient has all the rights, privileges and powers with regard to the estate of the patient as the patient would have if of age of majority and of sound and disposing mind. Those rights include the ability to commence defend or otherwise conduct legal proceedings.

[27]         The PGTBC submits that the committee’s power is qualified in that she may only act in the best interests of the respondent.

[28]         In Beadle v. Beadle, 1984 CanLII 806 (BC CA), the PGTBC continued divorce proceedings and set an application for an undefended divorce down for hearing on behalf of an incapacitated claimant, citing Re Swartz, [1947] 2 W.W.R. 979 at 980 (B.C.C.A.) where the court agreed that a committee has the power to bring a divorce action on behalf of the patient and there was nothing in the PPA which limited that power. In Beadle, at para. 8, MacFarlane J.A. held that:

… [the] appointment [of a committee] contemplates … the full management of the affairs of the patient who is incapable of doing so herself. That includes, in my opinion, the management or conduct of any litigation which the patient has undertaken, or which might need to be undertaken in the best interests of the patient. To hold otherwise would put a severe limitation upon the proper management of a patient’s affairs while she is incompetent.

[29]         In Beadle, the court made a distinction between dealing with property matters and dealing with questions of status. In response to this concern, the court said that there are controls in place to ensure that a committee exercises caution in bringing proceedings which involve the status of the patient. Those controls lie in the discretion of the PGTBC under the PPA and under the Supreme Court Civil Rules where the court has the discretion to deny an appointment of a committee as the guardian ad litem of the patient in a proceeding.

[30]         A litigation guardian must declare that he or she does not have any interest in the proceeding that is adverse in interest to the patient (Rule 20-2 of the Supreme Court Civil Rules).

[31]         Protection of the interests of the incompetent party is the primary consideration of the court.

[32]         In a concurring judgment, Lambert J.A. added (at para. 26):

… that where any proceedings are instituted by a committee in which matters of status and morals are involved, there is an obligation on the committee to bring before the court evidence that will satisfy the court that the proceedings are in the best interests of the person who is being represented by the committee.

[33]         In this case, the claimant says there has been a material change in circumstance which should give rise to a variation of the s. 57 declaration because the claimant asserts there is no longer a marital rift that will lead to a final divorce order.

[34]         The claimant asserts that there is a reasonable prospect of reconciliation as one party wishes to reconcile and the other party consents by way of his committee. This submission focuses on the status of the parties and not on what is in the patient’s best interests.  The respondent’s wish prior to his incapacity was to separate from the claimant.  It is unclear to me how the committee could come to the conclusion that he would now want to reconcile. It is open to the committee to satisfy the court that this change in status would be in the respondent’s best interests even though he cannot consent.

[35]         In Anderson v. Anderson Estates, [1990] O.J. No. 1123 (H. Ct. J.), the court considered whether an attorney appointed by power of attorney had the authority to exercise the patient’s right to elect or consent to receive an equalization payment in lieu of entitlement under the deceased spouse’s will. The court concluded that the fact the patient was incapacitated from personally making the election should not diminish her right. The Powers of Attorney Act, R.S.O. 1980, c. 386, s. 5 contemplated an attorney continuing to manage the affairs of the donor after the donor was deemed incompetent.

[36]         In Anderson, at para. 13, the court said:

… the right to elect is a very personal decision that should only be exercised by the surviving spouse and not left to a stranger to the marriage, lest the stranger interfere with the testator’s intentions without knowing whether or not the surviving spouse has made the choice to disregard his or her spouse’s last wishes. …, this concern can somewhat be alleviated by the fact that an attorney under power of attorney will always have a fiduciary duty to act in the best interest of the donor. It may also be possible for the donor to set out in the power of attorney his or her wishes with respect to such an election.

[37]         In the case before me, the claimant also asserts that it is in the respondent’s best interests to “have a home to return to should he ever be able to leave the care of the facility in which he currently resides.”

[38]         This assertion begs the question of whether the respondent is welcome in the home if the claimant is not successful with this application.

DECISION

[39]         The respondent’s incapacity is a material change in circumstance which may give rise to grounds to vary the declaration.

[40]         I agree with the PGTBC’s submission that the entered order cannot be reopened or re-heard and the only way a court can reconsider the order is on a variation application.

[41]         A variation application brought by the committee of the respondent will only be successful if the committee can satisfy the court that it is in the patient’s best interests to vary the order.

[42]         Having considered the reasons for the application, I conclude that while a variation of the s. 57 declaration may well be in the best interests of the claimant and her children, there is no evidence that satisfies me that a variation of the s. 57 declaration is in the best interests of the respondent. There is a risk that the claimant and her children are acting out of self-interest. We will never know what the respondent would want at this time, and his interests must be protected.

[43]         As far as I know, the respondent is being well cared for in a long-term care facility receiving 24-hour a day nursing care. His family visit him on a regular basis, and ensure that the care is adequate. He has sufficient funds in trust to finance his care. The PGTBC monitors the spending of those funds to make sure they are used in only his best interests and not in the interest of anyone else. Upon his death, those funds will be left to the beneficiaries of his estate. There is nothing in the material that leads me to believe the current situation is not in the best interests of the respondent. Accordingly, I dismiss the application.

 

Civil Conspiracy

Civil Conspiracy

Klaus v. Hamilton, 2015 BCSC 2386 involved a claimant who sued alleging he was a spouse of the deceased, for a variance of her will and for damages for civil conspiracy for alleging he was not a spouse.

The tort of civil conspiracy has two branches (Cement LaFarge v, B.C. Lightweight Aggregate, [1983] 1 S.C.R. 452] at 471-472):

  1. whether the means used by the defendants are lawful or unlawful, the predominant purpose of the defendants’ conduct is to cause injury to the plaintiff; or
  2. where the conduct of the defendants is unlawful, the conduct is directed towards the plaintiff (alone or together with others), and the defendants should know in the circumstances that injury to the plaintiff is likely to and does result[.]

[31]         Mr. Klaus asserts that the defendants conspired to harm him personally, emotionally and financially.

[32]         There is limited evidence to support a claim of conspiracy. At most, there is some evidence that Ms. Hamilton prepared the notices ending tenancy and requests that Mr. Klaus leave the New Westminster apartment by March 31, 2009. There is also some evidence that Ms. Hamilton asked the staff of the Fleetwood Manor to prevent Mr. Klaus from seeing Ethel Colley. The three defendants attended at the apartment building to provide the notices to Mr. Klaus.

[33]         I cannot conclude that any of these constitutes a conspiracy as that is contemplated by the law.

Mandatory Injunctions: Harm Must Probably Occur

Mandatory Injunctions: Harm Must Probably Occur

McLean v. Law Society of British Columbia 2016 BCCA 368 reviewed the law on injunctions and held that the court should only grant a mandatory injunctions when the harm complained of would probably occur.

 
[17]        Both declarations and injunctions, speaking as they do to actions in the always unknowable future, are uncommon relief. The principles in equity are clear that a permanent injunction will not be ordered in the absence of a determination that the enjoined conduct is likely to occur. In Aquila Networks Canada (B.C.) Ltd. v. Borgnetta, 2004 BCCA 188 (CanLII) at para. 13, this court said:

In order to obtain an injunction Aquila must establish the likelihood that the apprehended behaviour will occur: Operation Dismantle Inc. v. Canada, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441 at 458. …

[18]        This same approach applies in respect to declarations concerning future conduct. In Operation Dismantle Inc. v. Canada, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441 at 457-458 Justice Dickson, for the majority, discussed the sparing approach that courts must take on applications for prospective declaratory and injunctive relief:

… the preventative function of the declaratory judgment must be based on more than mere hypothetical consequences; there must be a cognizable threat to a legal interest before the courts will entertain the use of its process as a preventive measure. As this Court stated in Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, a declaration could issue to affect future rights, but not where the dispute in issue was merely speculative. In Solosky, supra, one of the questions was whether an order by a director of a prison to censor correspondence between the appellant inmate and his solicitor could be declared unlawful. The dispute had already arisen as a result of the existence of the censorship order and the declaration sought was a direct and present challenge to this order. This Court found that the fact that the relief sought would relate to letters not yet written, and thereby affect future rights, was not in itself a bar to the granting of a declaration. The Court made it clear, however, at p. 832:

… that a declaration will not normally be granted when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise. [Emphasis added by Dickson J.]
A similar concern with the problems inherent in basing relief on the prediction of future events is found in the principles relating to injunctive relief. Professor Sharpe, Injunctions and Specific Performance (1983), clearly articulates the difficulties in issuing an injunction where the alleged harm is prospective, at pp. 30-31:

All injunctions are future looking in the sense that they are intended to prevent or avoid harm rather than compensate for an injury already suffered. …

Where the harm to the plaintiff has yet to occur the problems of prediction are encountered. Here, the plaintiff sues quia timet – because he fears – and the judgment as to the propriety of injunctive relief must be made without the advantage of actual evidence as to the nature of harm inflicted on the plaintiff. The court is asked to predict that harm will occur in the future and that the harm is of a type that ought to be prevented by injunction.

The general principle with respect to such injunctions appears to be that “there must be a high degree of probability that the harm will in fact occur”: (Sharpe, supra, at p. 31). In Redland Bricks Ltd. v. Morris, [1970] A.C. 652, at p. 665, per Lord Upjohn, the House of Lords laid down four general propositions concerning the circumstances in which mandatory injunctive relief could be granted on the basis of prospective harm. The first of these stated [at p. 665]:

1. A mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future…. It is a jurisdiction to be exercised sparingly and with caution but in the proper case unhesitatingly.

It is clearly illustrated by the rules governing declaratory and injunctive relief that the courts will not take remedial action where the occurrence of future harm is not probable. This unwillingness to act in the absence of probably future harm demonstrates the courts’ reluctance to grant relief where it cannot be shown that the impugned action will cause a violation of rights.

Court Discretion In Wills Variation Claims

Court Discretion In Wills Variation Claims

In wills variation cases now brought under S. 60 WESA , the judge has “entire discretion” in deciding pro or against a claimant on its findings of fact.

In Swain v Dennison 1967 SCR 7 the Supreme Court of Canada held that the jurisdiction of the court in such claims is statutory, not founded in equity and the entire jurisdiction of the court is discretionary.

Within reason the court can make findings of fact in its discretion which makes it very difficult to appeal since the appeal court would have to substitute its own findings of fact in place of the trial judge unless the appeal court finds that the trial judge did not give sufficient weight to relevant factors.

The BC Appeal court in Kish v Sobchak and Doyle 2016 BCCA 65 stated the following about the courts proper use of discretion:

33.   The line between the exercise of judicial discretion and the finding of facts is not easy to enunciate. For purposes of this case, I respectfully adopt Lord Bingham’s description of judicial discretion given in The Business of Judging: Selected Essays and Speeches(2000):

According to my definition, an issue falls within a judge’s discretion if, being governed by no rule of law, its resolution depends on the individual judge’s assessment (within such boundaries as have been laid down) of what it is fair and just to do in the particular case.

He has no discretion in making his findings of fact. He has no discretion in his rulings on the law. But when, having made any necessary finding of fact and necessary ruling of law, he has to choose between different courses of action, orders, penalties or remedies he then exercises a discretion. It is only when he reaches the stage of asking himself what is the fair and just thing to do or order in the instant case that embarks on the exercise of a discretion.

I believe this definition to be broadly consistent with the usage adopted in statutes. [At 36; emphasis added.]

Lord Bingham also explains that fact-finding is not “discretionary”, although some judges have described it as such. In his words:

… it is one thing to say that the responsibility of finding the facts is entrusted to a particular person or body, be he judge, arbitrator, official or public authority, and that such finding is to be treated as conclusive or virtually so. But it is quite another to describe that function as discretionary. It is, I suggest, nothing of the kind. In finding the facts the judge’s job is to consider all the conflicting evidence this way and that and decide as best he can where the truth lies. It is very much the task performed, for instance, by the historian or the journalist as part of his stock in trade. The judges of course are constricted by formalities and rules of evidence which do not afflict them. On the other hand, he has powers of compelling testimony which they would envy. It is none the less essentially the same function. Yet to say of a historian or journalist that he exercised a discretion in reaching conclusions of fact would, I suggest, be regarded as a libellous. The judge must exercise judgment, not discretion, in finding the facts, and it is usually the most difficult and often most exacting task which the civil trial judge has to undertake. [At 37; emphasis added.]

Gift or Loan?

Gift or Loan?

It is often difficult for the court to determine if advancements of funds from one party to another done orally and without witnesses is a gift or loan.

Rosas v. Toca 2016 BCSC 1754 dealt with such a situation. The plaintiff won over $4 million in a lottery and advanced over $600,000 to the defendant to buy a house.

The plaintiff demanded repayment and the defendant asserted the funds were a gift. Alternatively the defendant asserted the claim was statute barred as out of time and succeeded on this point.

The court did however find that the funds were intended as a gift and not a loan largely relying on the corroboration of the bank manager who handled the bank draft.

It was not necessary to resort to the law of resulting trusts as the court determined that the intention of the plaintiff was to make a loan and not a gift.

The Court stated:

As set out in the case of Clifford v. Flores 2004 BCSC 358, the Court must decide whose version of events is most reliable in order to decide the issues.  Mr. Justice Cohen noted at paragraph 39 in that case:
[39]      The credibility of the witnesses must be tested against those facts that are not seriously in dispute, and the preponderance of the evidence and the probabilities surrounding the events.

[40]      Although this task is primarily one of fact finding, some legal principles submitted by defence counsel are of assistance:

a)         First, the plaintiff carries both the legal and evidentiary burden of proving on a balance of probabilities, that the alleged oral contract was made.
b)         Second, the basic contractual principles of offer and acceptance, and certainty of terms are applicable.  These principles are summarized in Friedman, The Law of Contract in Canada (4th ed.). at pp. 16-17, and 20, as follows:
Constantly reiterated in the judgments is the idea that the test of agreement for legal purposes is whether parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. The law is concerned not with the party’s intentions but with their manifested intentions. It is not what an individual party believed or understood was the meaning of what the other parties said or did that is the criterion of agreement; it is whether a reasonable man in the situation of that party would have believed and understood that the other party was consenting to the identical terms.
…
Sometimes it is a simple matter to decide what the parties have manifested to each other, and consequently, whether they have agreed, and if so, upon what. This is especially true where a document containing their agreement has been prepared and signed by the parties. If the plain wording of the document reveals a clear and unambiguous intent, it is not necessary to go further.
…
It is different, however, where the language is not unambiguous but vague and uncertain. In the absence of the requisite certainty and clarity the courts will not declare that a contract exists.

Wills Variation:Court Rewrites Will

Court Rewrites Man's Will to Include Daughters

court rewrites man's willCourt Rewrites Man’s Will to Include Daughters (Globe and Mail Article)

Son was named as sole beneficiary until judge intervened Where there’s a will, there’s a way to have it overturned.

A B.C. Supreme Court Judge has ordered a man to a split his late father’s estate, despite the fact the patriarch chose to leave his four daughters out of his will.

One of the women said she’s gratified by the court’s decision while her brother is “devastated.”

Such cases are becoming more and more common in B.C., which legal experts say is the most “plaintiff friendly” province in Canada for spouses and children who have been disinherited.

In his ruling, Mr. Justice Randall Wong said the father, William Werbenuk, was “a racist whose will and personality dominated his family.” He said Mr. Werbenuk “resorted to and engaged in harsh and brutal corporal and other punishments.” Mr. Werbenuk, who died in March of 2008 at age 86, also demeaned his daughters and made them wash his feet, said Judge Wong.

Mr. Werbenuk named his son, Randall, the sole beneficiary and executor of his will. His estate was valued at approximately $434,000, although the judge noted that did not include farmland in Saskatchewan or a valuable violin collection. He said the exact value of the remaining assets is still uncertain.

Judge Wong said under the province’s Wills Variation Act, Mr. Werbenuk did not take “contemporary moral standards” into account when he excluded his daughters. The judge said the women attempted to have relationships with their father, despite his harsh treatment, but it was clear he favoured his son.

Patricia Skwarok, one of the Mr. Werbenuk’s daughters, said she is pleased with Monday’s ruling. “It was fair, just and equitable to the family who was in crisis,” she said in an interview.

Ms. Skwarok, a 53-year-old nurse who resides in Penticton, said she wasn’t surprised the judge essentially rewrote her father’s will.

She said wills that allow a parent to leave everything to one person at the expense of others should remain a thing of the past.

“In the 1700s and 1800s that was social standard. It is not [in 2010].”

Charles Albas, lawyer for Ms. Skwarok’s brother, said his client was devastated by the decision.

He says, “I feel like I’ve been kicked in the head’ It’s sad.”

Mr. Albas said he will recommend his client have independent counsel look at the ruling with fresh eyes, but an appeal is unlikely.

“It’s very hard to appeal a case like this because it is based on facts.

“The trier of facts is Justice Wong and, basically, he heard all of the evidence and decided this was a case where a major variation was called for.”

Rick Covell, who represented Ms. Skwarok and two of her sisters, said such court rulings are more common than the public might think. He said there’s been a “steady stream” of Wills Variation Act cases in recent years.

“It’s not that rare because people will occasionally in their will let their prejudices and biases get away with them,” he said.

Keith Sabey, counsel for the fourth woman, said B.C. legislation is the most plaintiff friendly in the country when it comes to such cases.

“The spouses and the children have the law favour then the most in B.C. if they’re trying to challenge the wills, and probably by quite a bit,” he said.

“The B.C. legislation has a broader base for people who would have standing to bring this kind of claim. In other provinces, my client, who’s an independent adult child who has no financial need … would not have been able to bring this application.”

Trevor Todd, a Vancouver lawyer who has handled several cases involving disinherited children, said such rulings always bring a great deal of media attention.

“If you sit down at a dinner party… you’ll get half the people saying he should be able to leave it to who he wants to, and you’ll get the other half saying, ‘That isn’t right.'”

– The Globe and Mail