Category: Probate Litigation

Court Invokes Parens Patriae in Patients Property Application

Re Binder (Patients Property Act) 2022 BCSC 990 utilized the parens patriae jurisdiction of the Supreme Court to overcome a problem in the Patients Property Act with respect to the admissibility of foreign doctors medical evidence as the act doesn’t permit it.

The court invoked its inherent jurisdiction under parens patriae ( “parent of the country”) and admitted medical evidence of the patient from a foreign doctor.

In Parker v. Barbeau, [1998] B.C.J. No. 841 (B.C.S.C.), Justice Shaw cited Re Eve (1986), 1986 CanLII 36 (S.C.C.) at p. 28 for a description of the source and meaning of the Court’s parens patriae jurisdiction.

In essence it is founded on necessity, specifically, the need to protect those who cannot protect themselves and the jurisdiction may be exercised in many situations.

In Johnston v. Johnson, 2003 BCSC 110 at para. 20, Justice Goepel noted, citing L(M) v. D(F),1999 CanLII 6429 (BCSC) at 142, that the threshold required before the court can consider using its parens patriae jurisdiction as a basis to appoint a committee is the need for a lacuna in the legislative framework for the protection of such persons.

The court was satisfied that there was a gap in the legislative framework of the PPA for protecting an individual such as Johann. There is no mechanism for recognizing the order of the Swiss authority and given Johann’s circumstances, specifically his ill health and his inability to attend examination by doctors in British Columbia, he cannot avail himself of the procedure provided by the PPA.

Appointing an Administrator of a Will

Berlinguette Estate 2022 BCSC 1098 discussed the criteria for appointing an administrator of a will and Sections 130 and 132 WESA.

Sections 130 and 132 of WESA address the appointment of an administrator for a person who dies without a will:

130 If a person dies without a will, the court may grant administration of the deceased person’s estate to one or more of the following persons in the following order of priority:

(a) the spouse of the deceased person or a person nominated by the spouse;
(b) a child of the deceased person having the consent of a majority of the children of the deceased person;
(c) a person nominated by a child of the deceased person if that person has the consent of a majority of the deceased person’s children;
(d) a child of the deceased person not having the consent of a majority of the deceased person’s children;
…
132 (1) Despite sections 130 and 131, the court may appoint as administrator of an estate any person the court considers appropriate if, because of special circumstances, the court considers it appropriate to do so.

(2) The appointment of an administrator under subsection (1) may be
(a) conditional or unconditional, and
(b) made for general, special or limited purposes.

In order for the court to appoint an administrator under WESA, that person must be independent and indifferent to the outcome of the estate’s distribution.

The Court of Appeal in Ruffolo v. Juba-Ruffolo, 2005 BCCA 26, determined that one of the relevant considerations for appointing an administrator was whether the potential appointee could act with detachment and even-handedness:

[15] In this case, there is a need for detachment and even-handedness to ensure that the estate is administered for the benefit of each of the beneficiaries under the statute, that is, the appellant widow and the child. With the respondent’s acknowledged animosity toward the appellant, it is not possible to conclude that the detachment required to properly administer the estate would be present.

In Raye v. Phillip Estate, 2021 BCSC 387 at para. 27, Justice Norell considered the factors a court must consider in exercising its discretion to appoint an administrator, including neutrality and a lack of actual or perceived conflict of interest:

[27] In exercising its discretion to appoint an administrator, the court must consider the best interests of the estate and all persons interested in the estate. The court should appoint an administrator who is likely best able to convert the estate to the advantage of those who are interested in it: Flores v. Mendez, 2014 BCSC 951 at paras. 35-41. The support of the majority of beneficiaries is a significant factor in determining an appropriate administrator: Godby Estate (Re), 2015 BCSC 1809 at para. 47. An administrator must act with “detachment and even handedness” and without animosity: Ruffolo v. Juba-Ruffolo, 2005 BCCA 26 at para. 15. An administrator should play a neutral role and not pick sides between beneficiaries and should be indifferent as to how the estate is to be divided: Kolic Estate (Re), 2016 BCSC 1312 at paras. 25-26. An actual or perceived conflict of interest may cause a court to appoint a new executor or administrator: Ching Estate (Re), 2016 BCSC 1111 at para. 22.

In El-Adams Estate (Re), 2022 BCSC 75, Justice Forth considered whether the mother of a deceased daughter should be appointed the interim administrator of her daughter’s estate. The mother was engaged in a legal proceeding with a person with whom her daughter had been in a relationship. That individual claimed that he should be declared the daughter’s husband, thus entitling him to inherit her estate. The mother of the deceased opposed the application for such a declaration and sought to be appointed the estate administrator.
Justice Forth acknowledged that the deceased’s mother was a person of integrity, but held that it was inappropriate to appoint her as the administrator because she was in litigation regarding the estate with the individual seeking a declaration that he was deceased’s husband. In setting out why the court must avoid appointing the mother, Forth J. commented on the importance of the administrator being neutral and indifferent to the outcome:
[39] I turn now to whether the petitioner is the appropriate person to be appointed. I have no hesitation in accepting that the petitioner is a person of integrity that has strived to do her best to care for Jenna. As a mother, she has the tragic burden of coping with the loss of her daughter. However, in my view, appointing her as an interim administrator will likely result in more strife between the respondent and Jenna’s family. It is unfortunate that issues of distrust have already arisen. An administrator must act with “detachment and even-handedness” and without animosity: Ruffolo v. Juba-Ruffolo, 2005 BCCA 26 at para. 15.

[40] Until the issue of the respondent’s status is determined, there are steps that the interim administrator may have to take to deal with the two outstanding lawsuits. The two actions are: the respondent’s action that he has continued against Adams Glass; and the action that Kayla has against Adams Glass and Jenna. In my view, it is inappropriate for the petitioner, as the mother of Kayla, to be providing instructions on behalf of the defendants in this lawsuit, where her daughter is the plaintiff. I anticipate that the petitioner may well be a witness in that action, in that it involves Kayla’s allegations of undue influence against her sister, Jenna, respecting their father, Mr. Adams.
…
[42] As matters currently stand, both the petitioner and respondent are in a potential conflict since one or the other will be inheriting the Estate. An administrator should play a neutral role. An administrator should not pick sides between beneficiaries, and should be indifferent as to how the estate is to be divided: Raye at para. 27. Neither of these parties is indifferent.

Executor and Proving the Will in Solemn Form

When the validity of a will is in question, the propoundor of the will (usually the executor) is often forced to prove the validity of the will in solemn form, by commencing a court action and having a judge determine the wills validity, as opposed to a non contentious probate where the will is approved by a court registrar in common form.

In Romans estate v. Tassone 2009 BCCA 421, the appeal court discussed the difference between proving a will in common form, and proving a will in solemn form as follows:

Often proof of a will in common form is all that is required for the administration of an estate where there is a will. Proof in common form, however, does not conclusively determine the will to be the valid last will of a person.

Proof of the will in solemn form provides some protection for the will, in that it will not later be set aside, unless obtained by fraud or a later will is found: Tristam & Cootes Probate Practice (27th Edition, 1989, p. 572. As noted by the authors of the British Columbia Probate & Estate Administration Manual, 2nd Edition, 2008 Update, at p. 18-17, “[t]he safeguarding effect of a grant in solemn form is an application of the principle of res judicata to what is a judgment in rem”.

17 Halsbury’s Laws (4th) para. 866 says:

If there is any doubt as to the validity of a will or any apprehension that there may be opposition to it, it is open to the executor, or if there is no executor the person entitled to administration with the will annexed, to prove it in solemn form.

In Trites v. Johnson, [1945] B.C.J. No. 76, [1945] 3 W.W.R. 100 (B.C.S.C.) Macfarlane J., as he then was observed that “In a case of this kind where the validity of a will has once been called in question I think it is the duty of the executors to prove the will in solemn form of law….”

Proof in solemn form was required even where the party originally requesting such had withdrawn their objection.

If the will is proven in solemn form, or per testes, it must be proven in open court, upon notice to all interested persons, and will not be admitted to probate unless the court is satisfied of the due execution of the will, the testator’s knowledge and approval of its contents, his capacity and non-revocation: Osterhoff on Wills and Succession, 6th Edition, 2007, Thomson, Carswell, p. 44.

Administrator of Estate Can Commence Family Law Action

Weaver Estate v Weaver 2022 BCCA 79 clarified the law in British Columbia that an administrator of an estate of a separated and deceased spouse may commence a claim for the division of family property and family debt after the spouse’s death.

The property interest underlying the cause of action crystallized on the separation of the spouses and did not abate on death.

The Family Law Act (FLA):

The Family Law Act governs the division of family property and family debt in British Columbia.

Section 81 stipulates that on separation each spouse is entitled to an undivided half interest as a tenant in common in all family property and is equally responsible for family debt.

Family property includes all non-excluded real and personal property that is owned by at least one spouse on the date of separation ( SS 84(1) ,85)

A former spouse includes an individual who meets the criteria of the definition of a spouse in section3(1) FLA who is separated before the legislation came into effect. ( Newton v Crouch 2016 BCCA 115 at para. 35,56,69.

The fact that separation occurred before enactment does not preclude those individuals from commencing a claim for the division of family property and family debt, subject to the time limits established by section 198 that states a spouse must initiate their court action no later than two years after the granting of a divorce or the date on which the marriage was declared a nullity.

Rule 8-2 , provides that in defined circumstances, the family law case may continue notwithstanding the death of a spouse.
Rule 20-6(1) provides that a family law case may be started by a litigation representative in defined circumstances which includes a person who has died before starting a family law case in relation to that cause of action.
Section 150 WESA also provides that a cause of action or proceeding is not annulled by reason only of the death of a person who had the cause of action or a person who is or may be named as a party of the proceeding.
It further provides that the personal representative of the deceased person may commence or continue a proceeding, the deceased person could have commenced a continued with the same rights and remedies to which the deceased person would have been entitled, if living.

Section 150 WESA has exceptions for libel, slander, and certain actions under the privacy act, as well as denying the representative of an estate the right to include recovery for damages for nonpecuniary loss or loss of future income following death. This is subject to the Family Compensation act and certain provisions of the Worker’s Compensation act).

At common law, the general rule was that causes of action predicated on property interest survived the death of the plaintiff.

Public Court Access and Court Documents

The courts have long held a policy of open courts including access to court documents.

In Sherman Estate v. Donovan, 2021 SCC 25, the Supreme Court of Canada considered access to certain court records of a probate file.

[19] In Sherman Estate, the Court stated:

[1] This Court has been resolute in recognizing that the open court principle is protected by the constitutionally entrenched right of freedom of expression and, as such, it represents a central feature of a liberal democracy. As a general rule, the public can attend hearings and consult court files and the press — the eyes and ears of the public — is left free to inquire and comment on the workings of the courts, all of which helps make the justice system fair and accountable.

[2] Accordingly, there is a strong presumption in favour of open courts. It is understood that this allows for public scrutiny which can be the source of inconvenience and even embarrassment to those who feel that their engagement in the justice system brings intrusion into their private lives. But this discomfort is not, as a general matter, enough to overturn the strong presumption that the public can attend hearings and that court files can be consulted and reported upon by the free press.
…
[37] Court proceedings are presumptively open to the public ([Attorney General of Nova Scotia v. MacIntyre, [1982] 1 S.C.R. 175] at p. 189; A.B. v. Bragg Communications Inc., 2012 SCC 46, [2012] 2 S.C.R. 567, at para. 11).

[38] The test for discretionary limits on presumptive court openness has been expressed as a two step inquiry involving the necessity and proportionality of the proposed order (Sierra Club [v. Canada (Minister of Finance, 2002 SCC 41] at para. 53). Upon examination, however, this test rests upon three core prerequisites that a person seeking such a limit must show. Recasting the test around these three prerequisites, without altering its essence, helps to clarify the burden on an applicant seeking an exception to the open court principle.

In order to succeed, the person asking a court to exercise discretion in a way that limits the open court presumption must establish that:

(1) court openness poses a serious risk to an important public interest;

(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and,

(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

Only where all three of these prerequisites have been met can a discretionary limit on openness — for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order — properly be ordered.

This test applies to all discretionary limits on court openness, subject only to valid legislative enactments (Toronto Star Newspapers Ltd. v. Ontario, 2005 SCC 41, [2005] 2 S.C.R. 188, at paras. 7 and 22).

Reopening a Trial

Shen v Chan BCSC 2514 is an example where a plaintiff lost at trial and attempted to reargue and reopen the case before the same judge rather than appealing the decision.

The application was dismissed and the court referred to the main principles set out below.

In Mayer v. Mayer Estate, 2020 BCCA 282, our Court of Appeal stated:

I would summarize the main principles applicable to such an application in the following way:

it is generally speaking in the interests of justice to consider that a trial is complete when each side has closed their case and the judge has delivered his or her judgment;
a judge’s … discretion to reopen a trial should be exercised with restraint;
a party may not use the rule to re-argue, re-cast, or re-state his or her case, rather the rule is available to remedy what might otherwise be a substantial injustice;
it is not intended that a party should be able to lead substantial new evidence, nor does the rule generally permit the leading of new expert evidence;
the reasons that the evidence was not led or submissions not made in the first place may be relevant to the exercise of the judge’s discretion, particularly where the failure to do so in the first place was a considered or pragmatic decision; and
the discretion should only be exercised if the reception of the new evidence would probably change the result of the trial.

I would add to this list that a judge may reasonably exercise such discretion where a relatively discreet error in math or some mechanical consideration of the evidence is clearly in error.

Finally, the overarching consideration is whether it is in the interests of justice that the court reopen the case. (See also Brown v. Douglas, 2011 BCCA 521, 314 B.C.A.C. 143.)

Admissibility of Medical Records

Many types of estate litigation cases such as testamentary capacity, undue influence, committee applications and others rely on medical evidence, which is typically initially obtained from medical records that are subsequently admitted into evidence at trial provided they meet the legal requirements set out below.

Re Gibb Estate 2021 BCSC 2461 quoted Re Singh Estate 2019 BCSC 272, which reviewed the law relating to the admissibility of medical records as an exception to the rule against hearsay pursuant to the standard business records exception.

The court summarize the applicable law:

[48] While clinical records are hearsay, they are admissible under the business records exception both at common law and under s. 42 of the Evidence Act. The requirements for the admission of medical records as business records are set out in Aresv Venner 1970 SCR 608

The Supreme Court of Canada held at 626:

Hospital records, including nurses’ notes, made contemporaneously by someone having a personal knowledge of the matters then being recorded and under a duty to make the entry or record should be received in evidence as prima facie proof of the facts stated therein.

[49] Justice Burnyeat in McTavish summarized the principles from Ares at 311-12:

1. The notes taken must be made contemporaneously.

2. The notes must be made by someone having a personal knowledge of the matters being recorded.

3. The notes must be made by someone who has a duty himself or herself to record the notes or to communicate the notes to someone else to record as part of the usual and ordinary course of their business.

4.The matters which are being recorded must be of the kind that would ordinarily be recorded in the usual and ordinary course of that business.

5. A statement in the records of the fact that a certain diagnosis was made will be admissible.

6. Recorded observations, diagnosis and opinions will be admissible providing they are recorded in accordance with points 1 through 4.

7. The fact that the referring doctor relied upon another doctor’s opinion to assist in coming to his or her own diagnosis and opinion is only evidence of that fact so that the other opinion does not become evidence unless it is otherwise admissible. Accordingly, it is only evidence of the fact that the referring doctor wished or required that opinion to be received before forming his or her own opinion.

8. Statements made by parties or by experts which are recorded in the usual and ordinary course of business but which lie outside the exception to the hearsay rule are hearsay and will not be admitted into evidence unless they can be brought within Section 14 of the Evidence Act which allows for the admissibility of such statements if it can be shown that they are proof of a prior inconsistent statement.

[50] The issue of third party statements was addressed in Cambie Surgeries. Justice Steeves provides:

…any statement by the patient or any third party that is not within the observation of the doctor or person who has a duty to record such observations in the ordinary course of business is not admissible for any purpose and will be ignored by the trier of fact…
…

S. 43 WESA: Gifts to Will Witnesses or Their Spouses

Prior to the introduction of WESA on March 31, 2014 the law was clear that the court had no discretion to allow for gifts to a will witnesses or to his or her spouse. Estate of Jason M. Bird 2002 BCSC 1584.

The purpose of that rule was to prevent fraud and undue influence, but its rigid application often defeated the genuine intention of the testator.
As a result of s. 43 WESA, gifts made in such circumstances where a beneficiary or his or her spouse witnesses the will is still presumptively void, but the courts now have the discretion to declare them valid.

The factual circumstances of where s.43 will usually apply is the home made will, and not that prepared by a solicitor.

This is largely due to the effects of s. 58 WESA which empowers the court to order that a document or other record is fully effective as the will of a deceased person if the court is satisfied that the document represents the testamentary intentions of that deceased person.

After verifying the authenticity of the testamentary document, the courts will the focus in on what was the intention of the testator in exercising its discretion pursuant to s. 43 (4) WESA.

At this time there have been three cases decided by the court relating to s.43 WESA, and the court has allowed the validity of each bequest under s. 43 in each case after closely examining the facts and probable intention of the deceased.

1. Bach Estate (Re), 2017 BCSC 548

The testator was predeceased by his wife and was survived by one natural child and two stepchildren. in September 2014, the testator’s sister (the “applicant”) and her husband accompanied the testator to a notary public’s office for the purpose of creating a new will, in which he named the applicant as the sole beneficiary of his estate.
The notary public advised the testator to come back the next day to execute this new will. After that appointment, the testator had to be hospitalized the same day.

That same evening the testator signed a document in which he left his entire estate to the applicant. A physician and the applicant’s husband witnessed the document. The next day the testator passed away.

The applicant brought an application for an order that the document be declared a valid will pursuant to s. 37(1) and s. 58 WESA and that the gift under the will be declared valid pursuant to s. 43 (4) and the application was allowed.

The testator had informed his friend that he wanted to leave his estate to his sister and he had an appointment with a notary public for this purpose. Additionally, the physician who witnessed the document stated that the contents of the document were read aloud to him, that the testator agreed with the contents, and that he understood the document was intended to indicate his wishes for the estate.

Based upon all of the evidence the Court was satisfied that the document executed on September 9, 2014 amounted to a will and represented the testator’s testamentary intent. The gift was not void.

The document was handwritten and read:

SEPT. 9, 2014

I TERRENCE ARTHUR BACH

LEAVE ALL MY ASSETS

In full to my sister

Sharon Rose Thibodeau

“T. Bach”

Witness: “E. Willms”

SEPT 9/14

Witness: “R. Thibodeau”

September 9, 2014

The court’s analysis relied heavily on the s. 58 WESA case law that focused on the intention of the testator .

The court specifically relied upon Yaremkewich Estate (Re), 2015 BCSC 1124, that considered s. 58 and the concept of testamentary intent when considering curing deficiencies in a purported will, stating:

[35] In George the court confirmed that testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death. The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death. A deliberate or fixed and final intention is not the equivalent of an irrevocable intention, given that a will, by its nature, is revocable until the death of its maker. Rather, the intention must be fixed and final at the material time, which will vary depending on the circumstances.

The court allowed extrinsic evidence to be admitted on the question of testamentary intent under s. 43(5) and stated that the court is not limited to the evidence that the inspection of a document provides.

2. Wolk v Wolk 2021 BCSC 1881 reviewed the law of will witnesses or their spouses receiving a gift to them under and the effect of s. 43 (4) of WESA .

The deceased left the following document:
“I leave to my parents, Michael Dawson Wolk and/or Lynda Ruth Wolk should they survive me all monies and properties of my estate with the proviso that they in turn provide a portion of the estate to my daughters, Jessica Berens and [E.H.] either in trust or in a protected format such that they will in turn receive a stipend when they reach the age of twenty-five (25) should they also survive me. This includes the repayment of monies to my parents for loans and assistance given me over the years including the overseeing of my daughter [E.H.].

My parents can decide if the money goes to education payments, RRSPs’, or a similar portfolio to protect my daughters for later in life.
This is as given by me on this 9th day of September 2016.”
The beneficiaries of the “ will” witnessed the document.

Under s. 40 of WESA, the fact that a signing witness is given a gift under the will does not affect the capacity to serve as a witness:

Will Witnesses

s. 40 …

(2) A person may witness a will even though he or she may receive a gift under it, but the gift may be void under s. 43

However a gift to a signatory witness is automatically void by statute, but the court may declare such a gift valid on application under s.43(4) WESA.

Section 43 of WESA includes the following:

(1) Unless a court otherwise declares under subsection (4), a gift in a will is void if it is to

(a) a witness to the will-maker’s signature or to the spouse of that witness,
. . .
(3) If a gift is void under subsection (1), the remainder of the will is not affected.

(4) On application, the court may declare that a gift to a person referred to in subsection (1) is not void and is to take effect, if the court is satisfied that the will-maker intended to make the gift to the person even though the person or his or her spouse was a witness to the will.

(5) Extrinsic evidence is admissible for the purposes of establishing the will-maker’s intention under subsection (4).

The court followed the Re Bach estate decision finding that s. 43(4) is centrally concerned with testamentary intent.

The court was further concerned that absent a declaration of the will’s validity under s. 43(4), there would be a partial intestacy under s. 25 of WESA which would not have been the intended result of the deceased.
The Court found that the deceased wanted the witnesses to receive the bequests as a gift and allowed such under Rule 43(4) WESA.

3. Re Le Gallais Estate 2017 BCSC 1699 dealt with the charging clause in a will that provided that if the lawyer who prepared and witnessed the will should act as the executrix and attend to the legal work of the estate, then she would be entitled to a fee for the usual and proper charge for such legal work.

A legal issue arose as to whether the charging clause in favour of the lawyer was valid due to the fact that the lawyer witnessed the will.

The drafting lawyer M. Isherwood had known the deceased professionally for over 40 years.

The charging clause stated:

“If the said Constance Dora Isherwood should act as Executrix of this my will and should also attend to the legal work of my estate, she shall be entitled to the usual and proper charge for such legal work.”

The court found that the deceased was an experienced business woman who would have known that legal work was required to finalize her estate after her passing.

The court invoked S. 43 ( 4) WESA that a gift to the lawyer was intended and that under the circumstances, the charging clause was not void by reason of her having witnessed the will and would take effect.

Conclusion

The courts have focused on the intention of the deceased when determining relief under s. 43 WESA when a bequest has been made to a witness of the will, or to his or her spouse.

Prior to the introduction of WESA there were strict execution requirements under the previous Wills Act that when not followed undoubtedly resulted in outcomes that were contrary to the intention of the deceased. While well intended these execution rules were strict and the court lacked discretion to in effect do justice.

To date the cases reported under s. 43 (4) have followed the rationale of the several cases reported under as the curative provisions s. 58 WESA and focused on the fixed and final intention of the deceased when signing a purported testamentary document him. Where the court is satisfied as to its validity, it will order curative provisions under both sections of WESA.

Determining the intention of the deceased when examining a document appearing to be a will together with extrinsic evidence from witnesses can be a daunting fact driven exercise for the trier of fact, but is a fact of estate litigation as seemingly more and more people attempt to save money and do their own will.

Limitation of Actions- New Rules

The Supreme Court of Canada in Grant Thornton LLP v New Brunswick 2021 SCC 31 provided new guidelines for when a plaintiff discovers or should have discovered that a claim has arisen, thus starting the limitation clock.

The SCC upheld the trial judge who dismissed a substantial claim for an auditor’s negligence on the basis that the Province had actual or constructive knowledge of the material facts when if received the draft auditor’s report in 2011.

In June 2014 the Province commenced an action for negligence seeking damages but the court held it was filed out of time as per the Limitation of Actions Act( LAA). The draft report was sufficient to draw a plausible inference that the auditor had been negligent.

Since the province did not bring its claim until June 23, 2014, more than the limitation period for negligence of two years , its claim was therefore statute-barred.

THE LAW

The standard to be applied in determining whether a plaintiff has the requisite degree of knowledge to discover a claim under s. 5(2) of the LAA, thereby triggering the two-year limitation period in s. 5(1)(a), is whether the plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn.

This was sufficient to draw a plausible inference that the auditor had been negligent. Since the province did not bring its claim until June 23, 2014, more than two years later, its claim is therefore statute-barred.

In order to properly set the standard, two distinct inquiries are required.

1) The first inquiry asks whether, in determining if a statutory limitation period has been triggered, the plaintiff’s state of knowledge is to be assessed in the same manner as the common law rule of discoverability. Under that rule, a cause of action arises for purposes of a limitation period when the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence.

The common law rule of discoverability does not apply to every statutory limitation period. Rather, it is an interpretive tool for construing limitations statutes and, as such, it can be ousted by clear legislative language. Assessing whether a legislature has codified, limited or ousted the common law rule is a matter of statutory interpretation. Section 5(1)(a) and (2) of the LAA does not contain any language ousting or limiting the common law rule; rather, it codifies it. This interpretation is supported by the words of s. 5, read in their entire context and in their grammatical and ordinary sense harmoniously with the LAA’s scheme and object, and the intention of the legislature.

Accordingly, as established by the rule of discoverability and the LAA, the limitation period is triggered when the plaintiff discovers or ought to have discovered, through the exercise of reasonable diligence, the material facts on which the claim is based.

2. The second inquiry relates to the particular degree of knowledge required to discover a claim.

A claim is discovered when a plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn. This approach remains faithful to the common law rule of discoverability, which recognizes that it is unfair to deprive a plaintiff from bringing a claim before it can reasonably be expected to know the claim exists. It also accords with s. 5 of the LAA, promotes consistency and ensures that the degree of knowledge needed to discover a claim is more than mere suspicion or speculation. At the same time, it ensures the standard does not rise so high as to require certainty of liability or perfect knowledge. A plausible inference of liability is enough; it strikes the equitable balance of interests that the common law rule of discoverability seeks to achieve.

The material facts that must be actually or constructively known are generally set out in the limitation statute. In the LAA, they are listed in s. 5(2)(a) to (c).

A claim is discovered when the plaintiff has actual or constructive knowledge that: (a) the injury, loss or damage occurred; (b) the injury loss or damage was caused by or contributed to by an act or omission; and (c) the act or omission was that of the defendant. This list is cumulative. In assessing the plaintiff’s state of knowledge, both direct and circumstantial evidence can be used. A plaintiff will have constructive knowledge when the evidence shows that the plaintiff ought to have discovered the material facts by exercising reasonable diligence. Finally, the governing standard requires the plaintiff to be able to draw a plausible inference of liability on the part of the defendant from the material facts that are actually or constructively known. This means that in a negligence claim, a plaintiff does not need knowledge that the defendant owed it a duty of care or that the defendant’s act or omission breached the applicable standard of care. All that is required is actual or constructive knowledge of the material facts from which a plausible inference can be made that the defendant acted negligently.

In the instant case, the province had actual or constructive knowledge of the material facts — namely, that a loss occurred and that the loss was caused or contributed to by an act or omission of the auditor — when it received the draft report from the other firm on February 4, 2011.

Dismissal of a Court Action For Delay

Dismissal of a court action for inordinate delay ( want of prosecution) requires four criteria:

1) Has there been an inordinate delay;
2) Is the inordinate delay inexcusable;
3) Has the delay caused or is likely to cause serious prejudice to the defendant; and
4) On balance does justice require a dismissal of the action?

Rule 22-7(7) provides that the court may order that a proceeding be dismissed if it appears that there is want of prosecution in the proceeding.

The BC Court of Appeal in Wiegert v. Rogers, 2019 BCCA 334 set out the relevant considerations in respect of applications for want of prosecution as follows:

1. On an application to dismiss for want of prosecution, it must be shown that there has been inordinate delay, that the inordinate delay is inexcusable, and that the delay has caused, or is likely to cause, serious prejudice to the defendant. In addition, the final and decisive question, which encompasses the other three, is whether, on balance, justice requires a dismissal of the action: Azeri v. Esmati Seifabad, 2009 BCCA 133 at para. 9; 0690860 Manitoba Ltd. v. Country West Construction Ltd., 2009 BCCA 535 at paras. 27–28.

Inordinate delay is delay that is immoderate, uncontrolled, excessive and out of proportion to the matters in question: Azeri at para. 8; Sahyoun v. Ho, 2015 BCSC 392 at para. 17.

2. In Sun Wave Forest Products Ltd. v. Xu, 2018 BCCA 63 at para. 25, the concept is relative: some cases are naturally susceptible of fast carriage or call for more expeditious prosecution than others. Although there is no universal rule as to when time starts to run, the date of commencement of the action is typically identified as the point from which delay is measured. The delay should be analysed holistically, not in a piece-meal fashion, and the extent to which it may be excusable is highly fact-dependent: Ed Bulley Ventures Ltd. v. The Pantry Hospitality Corporation, 2014 BCCA 52 at para. 38; 0690860 at para. 29.

3. Once a defendant establishes that delay is inordinate and inexcusable, a rebuttable presumption of prejudice arises: Busse v. Chertkow, 1999 BCCA 313 at para. 18.

The concern is with the prejudice that a defendant will suffer in mounting and presenting a defence if the matter goes to trial: 0690860 at para. 27.

Relevant matters could include failing memories, unavailable witnesses and the loss or destruction of physical evidence.

4. whether, on balance, justice requires dismissal of the action — again, the determination is highly fact-dependent.

Relevant matters could include the length of and reasons for the delay, the stage of the litigation, the context in which the delay occurred and the role of counsel in causing the delay (although negligence on the part of a plaintiff’s lawyer may not always amount to an excuse): International Capital Corporation v. Robinson Twigg & Ketilson, 2010 SKCA 48 at para. 45; 0690860 at para. 29.