Joint Tenancy Severed By Trust

Joint Tenancy Severed By Trust

A  joint tenancy of co owned property was severed by the signing of a trust agreement by one of the co owners held the BC Court of Appeal in  Public Guardian BC v Mee 1972 WWR 424 .

The respondent was the joint tenant with her former husband of real property.

Following divorce proceedings the husband executed a declaration of trust which was not registered at the Land Registry Office but was left with a solicitor.

By the document he constituted himself a trustee of his undivided one-half interest in the property for his infant son “until the sale or other disposition, or until the said William Donald Mee attains the full age of twenty-one (21) years, in trust for the said William Donald Mee to permit the said lands and premises to be used as a residence for himself, his mother and sisters.”

Further provision was made that if the property were sold one-half of the proceeds of sale were to be held in trust for the son, to be used for his education, and given to him on his becoming 21. The husband died some 5 years later and the wife made an application, which was successful, for a declaration that the property vested in her by right of survivorship.

The Public Trustee, on behalf of the infant appealed and the appeal was allowed.

The execution of the trust agreement was not consistent with unity of title and the joint tenancy was therefore severed and became a tenancy in common..

THE  LAW

A declaration of trust had the same binding effect as a transfer to a trustee and could as effectively sever a joint tenancy as a transfer made to a trustee; the trust created by the father in the case at bar was completely constituted and was binding on his heirs, executors, administrators and assigns.

It followed that a severance of the joint tenancy was effected: Milroy v. Lord (1862), 4 De G.F. & J. 264, 45 E.R. 1185; Stonehouse v. Attorney General of British Columbia, 33 W.W.R. 625, 26 D.L.R. (2d) 391, affirmed [1962] S.C.R. 103, 37 W.W.R. 62, 31 D.L.R. (2d) 118 applied.

6       There is no doubt, and it was conceded by the respondent in the Court below as well as in this Court, that a vaid declaration of trust (although not registered in the appropriate Land Registry Office) could effectively sever a joint tenancy to the same extent as a transfer made to a trustee would do. The principle that a declaration of trust has the same binding effect as a transfer to a trustee has been long the law and is set out in the oft-cited case of Milroy v. Lord (1862), 4 De G.F. & J. 264, 45 E.R. 1185, wherein Turner L.J. at p. 1189 said:

… in order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes … but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift.

BC Estate Lawyer-Loan or Gift?

Loan or Gift?

Trevor Todd and Jackson Todd have over 60 years combined experience in handling contested estates, including the thorny issue of whether an advancement of funds is a loan or a gift.

 

In family environments it is often very difficult or near impossible for third parties such as a court to easily determine if that parental advancement of funds used to buy their child’s new family home was a loan or a gift.

From the parent’s viewpoint, it is usually a “gift for so long as the marriage holds together”- but if it fails, we want our money back.

These transactions are invariably not legally or at least properly  documented and are involving greater sums of monies than before and are being made more frequently, especially with the current  high priced homes.

A word of caution to the financing relatives/parents- legally document the advancement of funds as a loan or risk losing it upon a separation/divorce. I recommend that if assisting buying a home, then document the transaction with a mortgage containing a current interest rate.

Accrued interest can always be forgiven .

The Law: Loan or Gift?

In Byrne v. Byrne, 2015 BCSC 318 (B.C. S.C.), the issue was whether bi-weekly payments of $1,000 made by the claimant’s father to a joint account held by the claimant and the respondent and used to pay for household expenses constituted a gift or loan.

THE  COURT:  On the balance of probabilities and in the absence of evidence described in Kuo concerning parental loans, I am satisfied that the claimant’s parents advanced this money without expectation of repayment of principal or interest and that their current desire for repayment was more likely triggered by the separation of the parties.

( NOT LOAN)

49      As a result, I conclude that the money paid by the Byrnes to their son is not a family debt as described in s. 86 of the FLA

Mr. Justice Armstrong began his analysis at paras. 41 and 42:

[41] Payments from a parent to an adult child are generally not presumed to be gifts; they are presumed to form a resulting trust in which the parent keeps an interest in the property. However it is open to a party claiming the transfer is a gift to rebut the presumption of a resulting trust by providing evidence to that effect:Pecore v. Pecore
[42] In Pecore, the Supreme Court of Canada addressed how the presumptions operate in the context of transfers from a parent to an adult child:

(a) the focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer …

(b) When the transferor’s intent is unavailable or unpersuasive, the presumptions of advancement (a gift) and resulting trust are useful guides and will apply …

(c) gifts from parents to independent adult children are not presumed to be gifts; rather the presumption of a resulting trust applies …

(d) there may be circumstances where a transfer between a parent and an adult child was intended to be a gift and it is open to the party claiming that the transfer is a gift to rebut the presumption of resulting trust by bringing evidence to support that claim …

(e) the burden on the party claiming a gift was made is proof on a balance of probabilities …
40      At para. 43, the court noted that in Kuo v. Chu, 2009 BCCA 405 (B.C. C.A.) at para. 9, the Court of Appeal adopted the following factors from Locke v. Locke, 2000 BCSC 1300 (B.C. S.C.), as applicable to the question of whether a loan or a gift was intended:

(a) Whether there were any contemporaneous documents evidencing a loan;

(b) Whether the manner for repayment is specified;

(c) Whether there is security held for the loan;

(d) Whether there are advances to one child and not others, or advances of unequal amounts to various children;

(e) Whether there has been any demand for payment before the separation of the parties;

(f) Whether there has been any partial repayment; and,

(g) Whether there was any expectation, or likelihood, of repayment.
41      The Locke factors are items of circumstantial evidence relevant to the transferor’s actual intention. They are not exhaustive and are to be weighed by the trial judge, along with all of the other evidence, in order to determine the transferor’s actual intention as a matter of fact: Beaverstock at para. 11.
42      Whether the opposing spouse was aware of the transaction is not determinative of the question of whether a loan was made: Byrne at para. 47.
43      In Beaverstock, the Court held that the trial judge had erred in law by failing to begin his analysis with the presumption of resulting trust and in failing to make a finding concerning the appellant’s actual intention when she advanced the funds to her son.
44      In Puri v. Puri, 2011 BCSC 1734 (B.C. S.C.), the wife received funds from her mother for the purchase of the family home. The issue was whether the funds were a loan or a gift. The court applied Beaverstock and held that the onus was on the husband to demonstrate the mother intended a gift: Puri at paras. 95 and 96. In the result, the court accepted the mother’s evidence that when she provided the funds to her daughter, she intended a loan. The mother had borrowed the funds from a line of credit she held with her husband and the daughter had signed a promissory note.
45      More recently in Savost’Yanova v. Chui, 2015 BCSC 516 (B.C. S.C.), where the husband’s father had advanced $60,000 to assist with the purchase of the matrimonial home, Mr. Justice Weatherill held that in determining the intent of the person of who advances money in a family context, the court must weigh all of the evidence to determine whether the presumption of resulting trust has been rebutted: Chui at para. 77.
46      At para. 75, the court adopted the following summary of the applicable legal principles:
[75] The law regarding whether a transfer made by a parent to an adult child is a loan or a gift was summed up by Madam Justice Brown in Hawley v. Paradis, 2008 BCSC 1255 at para. 30, after a review of the applicable authorities:
[30] Based on the case law presented to me, I conclude:

1. that the presumption of advancement no longer applies between adult children and their parents;

2. that as between adult children and their parents, the presumption is a resulting trust when the parents make gratuitous transfers to children;

3. that the court must consider all of the evidence in determining whether the parent intended the transfer as a gift or a loan;

4. that the factors considered in Wiens and Locke will assist the court in determining whether the advance was a loan or a gift.
47      The respondent relies upon a line of authorities that holds that where a parent advances funds to a child for the purchase or maintenance of the family home, there is a rebuttable presumption that the funds are a gift to both the child and his or her spouse: Cabezas v. Maxim, 2014 BCSC 767 (B.C. S.C.) (appeal pending); B. (J.) v. C. (S.), 2015 BCSC 2136 (B.C. S.C.); C. (H.) v. C. (H.P.), 2014 BCSC 1775 (B.C. S.C.); and Madruga v. Madruga, 2015 BCSC 1605 (B.C. S.C.).
48      In Cabezas, the issue was whether funds paid by the respondent’s parents toward the mortgage on the family home were a gift or an inheritance to the respondent, so that any property derived from them might be excluded property under s. 85(1) of the FLA. At para.
49, Chief Justice Hinkson cited Wiens v. Wiens [1991 CarswellBC 511 (B.C. S.C.)] for the principle that:
… where the parents of a married child advance money to facilitate the purchase or the improvement of the matrimonial home, and the spouses later do not agree as to the nature of that advancement, the court must presume that the money advanced is a gift to the child which on a presumption of advancement becomes a gift to the wife.
49      After considering the Locke factors, the court concluded that when the funds were advanced, the respondent’s mother intended them as a gift for the benefit of both the respondent and the claimant: Cabezas at para. 67.
50      At para. 68, Chief Justice Hinkson stated:
[68] Had Mrs. Maxim’s intentions been unclear, I would nonetheless have found that, in keeping with the statement of Harvey J. in Wiens, the funds used to pay off the mortgage on the Madeira Park Property were provided by the respondent’s parents as a gift to avoid the foreclosure of the property, resulting in a presumption of advancement to the claimant. This presumption of advancement is limited in scope, and does not apply to all gifts or inheritances received by a spouse from his or her parents. Generally, such gifts are excluded property under s. 85(1)(b) of the Act, as was the Camaro received by the respondent from his father in this case. However, where a parent chooses to provide funds to a child for the purchase or maintenance of the family residence (to use the language of the Act), those funds are presumed to be a gift to both the child and his or her spouse. Absent evidence rebutting that presumption, the funds and any proceeds derived from them are family property under s. 84 of the Act. None of the evidence presented is capable, in my view, of rebutting that presumption.
51      In cases dealing with issues of excluded property under s. 85 of the FLA, judges of this Court have followed and applied Cabezas in B. (J.) v. C. (S.) at para. 99, C. (H.) v. C. (H.P.) at paras. 69 to 71, and Madruga v. Madruga at paras. 16 to 18.
52      It does not appear that Beaverstock was brought to the attention of the court in Cabezas or the other authorities cited by the respondent.
53      On the case law cited on this application, I conclude that the governing authority is the judgment of the Court of Appeal in Beaverstock. I must determine whether the actual intention of the claimant’s parents was to make a gift or a loan. Because the advance was gratuitous, the respondent bears the onus of demonstrating that the transferors intended a gift, “since equity presumes bargains, not gifts”. In determining the transferors’ intention, the court must take into account the Locke factors, along with all of the other evidence

Consolidation of Court Actions

Consolidation of Court Actions
 It is not uncommon that two estate cases are commenced at the same time that relate to the same estate, and in such situations an order is often made for consolidation of the court actions or alternatively, that they be heard at the same time by the same judge.
THE  LAW
Rule 22-5(8) of the Supreme Court Civil Rules provides:
Consolidation
(8) Proceedings may be consolidated at any time by order of the court or may be ordered to be tried at the same time or on the same day.
In The Owners, Strata Plan BCS 2854 v. Travelers Guarantee, 2013 BCSC 2428, Mr. Justice Steeves discussed the factors to be considered:
[14] It is well established in the authorities that I have a broad discretion under this Rule. As well, a number of previous cases have discussed consolidation applications. In these there appear to be acceptance of the following factors that should be considered:
• Whether there is a common question of law and fact. That is an important factor, but not the only one:
• Avoidance of multiplicity of proceedings.
• Savings of time and expense.
• Inconvenience to parties.
• Whether one action is at a more advanced stage.
• Whether an order results in delay of trial and so prejudice to one party; and
• Avoidance of inconsistent results.
[37] Master Joyce held the issue is not to be determined solely on the basis of the commonality of issues, although that is described as important, and the first factor to be considered, but that after finding commonality the court should look at factors which were enumerated as follows:
(1) Will the order sought create a saving in pretrial procedures, (in particular, pre-trial conferences)?
(2) Will there be a real reduction in the number of trial days taken up by the trials being heard at the same time?
(3) What is the potential for a party to be seriously inconvenienced by being required to attend a trial in which that party may have only a marginal interest?
(4) Will there be a real saving in experts’ time and witness fees?
(5) Is one of the actions at a more advanced stage than the other?
(6) Will the order result a delay of the trial of one of the actions?
(7) If so, does any prejudice which a party may suffer as a result of that delay outweigh the potential benefits which a combined trial might otherwise have?
[16] A broad summary of my role under an application for consolidation is set out at paragraph 39 of Globalnet (citing Master Keighley in Sohal Estate v. Argitos, 2010 BCSC 916, para. 22) and that is: will the order to consolidate make sense in the circumstances?

Fiduciary Duty: Employee For Employer

Fiduciary Employee - Employer

The law of fiduciary duty is very relevant to estate litigation cases but is also prevalent in almost any other claim where equity is involved, including an employee can be found to be a fiduciary for the employer.

M A Concrete Ltd v Truter 2016 BCCA 138 quoted such law in an unrelated fiduciary claim re a failed business purchase and sale.

The facts Truter arose out of a failed attempt to purchase a business and the calculation of damages and costs arising out of it, but did quote some important statements of fiduciary law.

17      Employees cannot profit by taking unauthorized advantage of their employment. The law is clear: Reading v. R., [1951] A.C. 507 (Eng. H.L.). There, at 514, Lord Porter quoted Denning J., who was the trial judge, as follows:

… it is a principle of law that if a servant, in violation of his duty of honesty and good faith, takes advantage of his service to make a profit for himself, in this sense, that the assets of which he has control, or the facilities which he enjoys, or the position which he occupies, are the real cause of his obtaining the money, as distinct from the mere opportunity for getting it, that is to say, if they play the predominant part in his obtaining the money, then he is accountable for it to the master.

18      Lord Porter saw fiduciary duty as an alternative ground for liability (at 516):

As to the assertion that there must be a fiduciary relationship, the existence of such a connexion is, in my opinion, not an additional necessity in order to substantiate the claim; but another ground for succeeding where a claim for money had and received [i.e. bribery] would fail. In any case, I agree with Asquith, L.J. [[1949] 2 K.B. 232, 236], in thinking that the words “fiduciary relationship” in this setting are used in a wide and loose sense and include, inter alia, a case where the servant gains from his employment a position of authority which enables him to obtain the sum which he receives.

Reading is cited with approval in Canadian jurisprudence: see, for example, Frame v. Smith [1987] 2 S.C.R. 99 (S.C.C.), Wilson J. in dissent at 137; Tombill Gold Mines Ltd. v. Hamilton (City) (1954), [1955] 1 D.L.R. 101 (Ont. H.C.), at 133; aff’d [1955] 5 D.L.R. 708 (Ont. C.A.); aff’d [1956] S.C.R. 858, 5 D.L.R. (2d) 561 (S.C.C.); and Calbar Securities Ltd. v. Toole Peet Co. (1983), 29 Alta. L.R. (2d) 236 (Alta. C.A.), at 249.

On this point, the judge reviewed cases such as Canadian Aero Service Ltd. v. O’Malley (1973), [1974] S.C.R. 592 (S.C.C.) and Standard Life Assurance Co. v. Horsburgh 2005 BCCA 108 (B.C. C.A.) , which recognize that even an employee may be a fiduciary where he or she has control or discretionary authority over the employer’s assets. The duty includes, of course, the avoidance of conflicts of interest and the prohibition against taking for one’s self any “maturing” corporate opportunity of the person to whom the duty is owed.

Bearing in mind that once a breach of fiduciary duty is shown, the onus shifts to the defendant to disprove the amount of the loss (see Procon Mining & Tunnelling Ltd. v. McNeil 2010 BCSC 487 (B.C. S.C.) at para. 101), I see no error in the trial judge’s assessment of damages under this head at $32,2

Court Removal of Counsel

Court Removal of Counsel

Court applications are occasionally made to remove the opposing counsel for various reasons ranging from litigation tactics to outright conflict of interest.

The following are two cases where this was argued and both discuss the cautious approach that the courts should take in considering such an application due to the inherent right in our legal system to choose one’s own counsel.

The BC Court of Appeal in  Coutu v Jorgensen, 2004 BCCA 400 at para. 31, stated ” it is a serious matter to seek to deprive a litigant of its chosen counsel in a manner that interferes with the conduct of the action”

This Court has previously taken a cautious approach to ordering the removal of counsel contrary to the wishes of the clients: see Mara (Guardian ad litem of) v. Blake (1996), 134 D.L.R. (4th) 716 (B.C. C.A.) at para. 13; Ribeiro at para. 20, quoting Esson C.J.B.C. (as he then was) in Manville Canada Inc. v. Ladner Downs (1992), 63 B.C.L.R. (2d) 102 (B.C. S.C.), at 117, (affirmed in (1993), 76 B.C.L.R. (2d) 273 (B.C. C.A.)).

This cautious approach acknowledges the right of a litigant to his or her choice of counsel and the prejudice from being forced to change counsel in the course of litigation. Balancing those interests are, of course, the interests of public confidence in the integrity of the legal profession and the administration of justice: see Martin v. Gray at para. 51. This Court has previously taken a cautious approach to ordering the removal of counsel contrary to the wishes of the clients: see Mara (Guardian ad litem of) v. Blake (1996), 134 D.L.R. (4th) 716 (B.C. C.A.) at para. 13; Ribeiro at para. 20, quoting Esson C.J.B.C. (as he then was) in Manville Canada Inc. v. Ladner Downs (1992), 63 B.C.L.R. (2d) 102 (B.C. S.C.), at 117, (affirmed in (1993), 76 B.C.L.R. (2d) 273 (B.C. C.A.)).

This cautious approach acknowledges the right of a litigant to his or her choice of counsel and the prejudice from being forced to change counsel in the course of litigation. Balancing those interests are, of course, the interests of public confidence in the integrity of the legal profession and the administration of justice: see Martin v. Gray at para. 51.

Mayer v Mayer BCSC 615 followed Coutu v Jorgensen involved very long and protracted litigation involving several court decisions and after four years an application was brought to remove the opposing counsel which was dismissed. these reasons dealt with an application for special costs but recapped the background and the law re this area:

[13] In the circumstances before me, to deprive Mhinder Mayer of his chosen counsel, who has represented him now for many years in this complex litigation, would itself threaten the integrity of the justice system, and impair the very important principle of access to justice. I am satisfied on the authorities that a clear and genuine competing threat would be required to justify the order that Bhora Mayer seeks. As was stated in Manville Canada Inc. v Ladner Downs (1992), 63 BCLR (2d) 102 (SC) at 117,

…the imposition of such hardship and injustice can only be justified if it is inflicted to prevent the imposition of a more serious injustice on the party applying. It follows that the injunction should be granted only to relieve the applicant of the risk of “real mischief”, not a mere perception.

I see no such risk of more serious injustice arising in this case, over which I have now presided for some four years.

12      It does not, however, necessarily follow that bringing an unsuccessful application to disqualify counsel is reprehensible and worthy of rebuke. As the cases make clear, the elements that need to be balanced in considering such an application are the integrity of the justice system on the one hand, and the right of a litigant to counsel of its choice on the other: MacDonald Estate v Martin, [1990] 3 SCR 1235.

Long Delayed Court Action Justified

Long Delayed Court Action Justified

An application for dismissal of the court action for want of prosecution was dismissed when the court found that the reasons for the 13 year delay of the court action was justified.

The law relating to dismissal for want of prosecution was recently summarized in Eastman v. Eastman Estate 2016 BC SC 209.

FACTS:

In 2003 a widow commenced court action to vary her late husband’s will on the basis that she was not adequately provided for.

The widow and the three children of the deceased subsequently entered into a temporary standstill agreement and never filed a statement of defense to the court action, and no further steps whatever taken in the proceedings.

The widow continued to live in the matrimonial home for the remaining 13 years until she died at age 90.

After her death her estate  issued a notice of intention to proceed with the court action under the wills variation, and the defendants applied to strike out the claim  for want of prosecution.

The court dismissed the application and found that the widow was justified in allowing the court action to sit idle for 13 years .

THE  LAW

36      However, the wording of Rule 22-7 does not prevent a party in default from bringing an application to dismiss for want of prosecution. The court’s focus is on the length of the delay, the reason for it, and any resulting prejudice. Ultimately, dismissing an action for want of prosecution involves an exercise of discretion to be exercised in the interests of justice. It is not an order that is made lightly.

37      The considerations on an application for dismissal for want of prosecution are well-settled, having been established in a number of cases. They are derived from the reasons for judgment of Lord Justice Salmon in Allen v. Sir Alfred McAlpine & Sons Ltd., [1968] 2 Q.B. 229 (Eng. C.A.), at pp. 268-269. The parties agree that those considerations were summarized in March v. Tam, 2002 BCSC 1125 (B.C. S.C. [In Chambers]):

… The defendants must establish that there has been inordinate delay and that this delay is inexcusable. If those two factors are established a rebuttable presumption of prejudice arises and the onus shifts to the plaintiff to prove on a balance of probabilities that the defendants have not suffered prejudice or that on balance justice demands that the action not be dismissed. [para. 25]

[Emphasis in original]

38      As a result, in this case, I will consider:

(a) the length of the delay and whether it was inordinate;

(b) any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances;

(c) whether the delay has caused serious prejudice to the defendants in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be readied for trial after its reactivation by the plaintiff; and

(d) whether, on balance, justice requires dismissal of the action.

39      In this case, the delay in proceeding with the action has been almost thirteen years which, all parties agree, is inordinate. Such a delay cannot meet the object of the Rules which is to secure the just, speedy and inexpensive determination of every proceeding in its merits (Rule 1-3).

40      I also accept, on the evidence, that the defendants have suffered not just rebuttable prejudice but actual prejudice. Buela is now deceased and no steps were taken by the Executors to secure any evidence from her while she was still competent or before her death. Carole says that while the estate has kept records for estate purposes, they have not secured financial and other documentation pre-dating Donald’s death for litigation purposes. Further, some of Buela’s and Donald’s friends are now deceased.

41      The real argument between these parties is whether the delay was justified.

42      For the reasons which follow, I have concluded that Buela had justification for her delay.

43      First, when the standstill agreement was entered into, it was at the defendants’ request and it was the defendants who were to take the next step. The defendants were seeking an indulgence from Buela. Because of their conflict of interest as Executors, and as personal defendants to the Wills Variation Act claim, they would have been required to renounce their executorship or forego any interest in the residue of the Estate following Buela’s death. As a result of the standstill agreement they were not required to defend the action or to elect.

44      Although the standstill agreement was intended to be temporary, at any time either party could have ended it by delivering notice. Neither did.

45      Second, although Carole, on behalf of the Executors says that she believed that a resolution had been reached with Buela, the Executors never formally sought a release of the CPL or a dismissal of the action. Throughout, they were aware that the CPL remained on title and the action remained extant. No release and dismissal of the action was ever finalized.

46      Third, both Carole and Darlene acknowledge that Buela and Donald’s family valued their ongoing relationship. Darlene says that Buela did not want to upset that relationship by aggressively pursuing her Wills Variation Act claim. I accept that the delay in this case is not through inadvertence or due to negligence on the part of solicitors, however, unlike the situation in Irving v. Irving (1982), 38 B.C.L.R. 318 (B.C. C.A.), where the delay was deliberate in the hope that the law might change in the future, this is not a case in which Buela sought some tactical legal advantage by laying in the weeds. Rather, she sought family peace and, according to Darlene’s affidavit, left the litigation for after her death.

47      All parties benefited from the standstill agreement. Buela maintained family peace and all parties benefitted from the continuation of the relationship they had established during the 18 years Donald and Buela were married. Further, the Executors were not required to elect to remain as Executors or forego any interest they had in the residue of the Estate after Buela’s death. The Estate which was not large, would have been depleted by legal fees to the detriment of all parties.

48      Fourth, while Carole says that the Executors acted on their understanding that there had been agreement, exhausting the estate’s liquid assets to have Buela remain in the Home to the potential detriment of their interest as residual beneficiaries, in my view that issue is best assessed when considering their obligations under the Will in the context of Buela’s claim to a variation of it. It may ultimately be determined that the Executors did no more than was required of them under the Will.

49      Finally, I am satisfied that the steps taken by the Executors in furtherance of what they believed to be was an agreement with Buela, can be taken into account by the court when assessing the merits of Buela’s Wills Variation Act claim. The court will be able to assess whether, in light of all the circumstances and the benefits she received over the years since Donald’s death, Buela is entitled to anything further from the Estate.

Joint Venture Agreement

Joint Venture Agreement

Leontowicz Estate v Bakus 2016 BCSC 601 dealt with the validity of a trust relating to mining stakes where it was argued that the deceased had entered into a Joint Venture Agreement that must be based on whether or not there is a binding contract between the venturers.

The court reviewed the evidence and documents and concluded that the deceased in creating the trust did not intend to create a Joint Venture Agreement and discussed the law relating to same :

76      I reject the defendant’s proposition that the Deceased, Bakus and Dahl intended the Trust Declarations as joint venture agreements. A trust declaration may form part of a joint venture agreement, but it must itself constitute a valid trust and satisfy all the essential elements summarized earlier in these Reasons.
77      The invalid Trust Declarations in this case purported to create bare trusts. They do not declare or contain the terms necessary to constitute an enforceable joint venture. The actions Bakus undertook both with respect to the Deceased’s mineral claims and to his own did not represent performance of the terms of a joint venture agreement. The Trust Declarations did not authorize them and there is no joint venture agreement to be found that does so, either in writing or clearly inferable from the parties’ conduct, or from the surrounding circumstances.
78      The subject matter of the venture remains at best ill-defined and vague. In other words, if there was a form of contract, it would be void for uncertainty of essential terms. There is no expressed right of mutual control or management of the enterprise. There is no provision for a right of accounting or reimbursement for extraordinary contributions made to the venture of the kind Bakus said he had made and for which he should be compensated. The purported assets of the alleged joint venture are at best uncertain.

What is a Joint Venture Agreement?

[31] … Although its existence depends on the facts and circumstances of each particular case, and while no definite rules have been promulgated that apply generally to all situations … the following factors must be present [for a valid joint venture]:
(a) A contribution by the parties of money, property, effort, knowledge, skill or other asset to a common undertaking;
(b) A joint property interest in the subject matter of the venture;
(c) A right of mutual control or management of the enterprise;
(d) Expectation of profit, or the presence of “adventure”, as it is sometimes called;
(e) A right to participate in the profits;
(f) Most usually, limitation of the objective to a single undertaking or ad hoc enterprise.
75      To be valid, the joint venture agreement must have at its foundation a binding contract among the partners or joint venturers which contains all the essential terms of the agreement between the parties: Blue Line Hockey Acquisition Co., Inc. v. Orca Bay Hockey Limited Partnership, 2009 BCCA 34[Blue Line] at para. 10; see also, Palmar Properties Inc. v. JEL Investments Ltd., at paras. 37-41. In Blue Line, the parties’ intention to form a joint venture agreement was found in the express terms of the joint venture agreement and the trust declaration, which the defendants did not dispute were validly executed.

Expert Reports and Opinions

Expert Reports and Opinions

Many estate litigation cases involve the necessity of obtaining an expert opinion in the form of a written  report that summarizes the evidence that  the expert  will  and opinion give at trial. The expert must set out the factual assumptions and documents that were relied upon in forming the written expert report and opinion.

Expert reports are what is known in law as “opinion evidence and may contain hearsay evidence as per the following guidelines”

The Court of Appeal summarized the correct approach for dealing with opinion evidence of this type in Mazur v. Lucas, 2010 BCCA 473 (B.C. C.A.).

When deciding what weight to place on expert evidence, the trier of fact must assess the extent to which the expert relied on hearsay evidence and factual assumptions, and the reliability of those hearsay statements and assumptions. Madam Justice Garson for the Court summarized this as follows:

[40] From these authorities, I would summarize the law on this question as to the admissibility of expert reports containing hearsay evidence as follows:
  • An expert witness may rely on a variety of sources and resources in opining on the question posed to him. These may include his own intellectual resources, observations or tests, as well as his review of other experts’ observations and opinions, research and treatises, information from others — this list is not exhaustive. (See Bryant, The Law of Evidence in Canada, at 834-835)
  • An expert may rely on hearsay. One common example in a personal injury context would be the observations of a radiologist contained in an x-ray report. Another physician may consider it unnecessary to view the actual x-ray himself, preferring to rely on the radiologist’s report.
  • The weight the trier of fact ultimately places on the opinion of the expert may depend on the degree to which the underlying assumptions have been proven by other admissible evidence. The weight of the expert opinion may also depend on the reliability of the hearsay, where that hearsay is not proven by other admissible evidence. Where the hearsay evidence (such as the opinion of other physicians) is an accepted means of decision making within that expert’s expertise, the hearsay may have greater reliability.
  • The correct judicial response to the question of the admissibility of hearsay evidence in an expert opinion is not to withdraw the evidence from the trier of fact unless, of course, there are some other factors at play such that it will be prejudicial to one party, but rather to address the weight of the opinion and the reliability of the hearsay in an appropriate self-instruction or instruction to a jury.

WESA Probate Delivery Rules

WESA Probate Delivery Rules

Re Davies estate 2014 BCSC 1233 deals with the WESA probate rules relating to the 21 day notice and proof of delivery of that notice.

This blog will be of note to anyone applying for a grant of probate or administration as to the requirements to be met before a grant will issue.

[6]             Rule 25-2(1), (2) and (3) and Rule 25-4(2) of the Supreme Court Civil Rules provide as follows:

(1)        Subject to this rule, unless the court otherwise orders, a person intending to apply for an estate grant or for the resealing of a foreign grant in relation to the estate of a deceased must, at least 21 days before submitting for filing the materials required for that application under this Part, deliver the following to the persons referred to in subrule (2):

(a)        a notice that complies with subrule (3);

(b)        whichever of the following, if any, that applies to the intended application:

(i)         if the intended applicant intends to apply for a grant of probate or a grant of administration with will annexed, a copy of the will in relation to which the application is to be made;

(ii)        if the intended applicant intends to apply for the resealing of a foreign grant or for an ancillary grant of probate or an ancillary grant of administration with will annexed, a copy of the foreign grant and, if a copy of the will in relation to which the foreign grant was issued is not attached to the foreign grant, a copy of the will;

(iii)       if the intended applicant intends to apply for an ancillary grant of administration without will annexed, a copy of the foreign grant.

[en. B.C. Reg. 149/2013, s. 8; am. B.C. Reg. 44/2014, Sch. 1, s. 3 (a).]

(2)        The documents referred to in subrule (1) must be delivered to the following persons:

(a)        if the deceased left a will, each of the following who is not a person by whom or on whose behalf the documents referred to in subrule (1) are to be delivered (a person by whom or on whose behalf the documents referred to in subrule (1) are to be delivered is, in this subrule, called an “intended applicant”):

(i) each person

(A)       who is named in the will as executor or alternate executor,

(B)       whose right to make an application for an estate grant in relation to the deceased is prior to or equal to the intended applicant’s right to make that application, and

(C)       who is alive at the time of the deceased’s death;

(ii)        each beneficiary under the will who is not referred to in subparagraph (i) of this paragraph;

(iii)       each person who, under Division 1 of Part 3 of the Wills, Estates and Succession Act, would have been an intestate successor if the deceased did not leave a will and who is not referred to in subparagraph (i) or (ii) of this paragraph;

(b)        if the deceased did not leave a will,

(i)         each person who, under Division 1 of Part 3 of the Wills, Estates and Succession Act, is an intestate successor of the deceased, and

(ii)        each creditor of the deceased whose claim exceeds $10,000 and who is not referred to in subparagraph (i) of this paragraph;

(c)        if the deceased was a Nisga’a citizen, the Nisga’a Lisims government;

(d)        if the deceased was a member of a treaty first nation, the treaty first nation;

(e)        any other person who, by court order under subrule (14) (a), is to receive notice;

(f)         any person not referred to in paragraph (a), (b), (c), (d) or (e) of this subrule who has served a citation on the intended applicant in relation to the deceased.

[en. B.C. Reg. 149/2013, s. 8.]

(3)        A notice under subrule (1) must be in Form P1, must be signed by the intended applicant or the intended applicant’s lawyer and must contain the following:

(a)        the name, last residential address and date of death of the deceased;

(b)        subject to subrule (4), the name and mailing address of the intended applicant and an address for service for the intended applicant, which address for service must be an accessible address that complies with Rule 4-1 (1);

(c)        if the intended applicant is an individual, the city and country in which the intended applicant ordinarily lives;

(d)        the estate grant or resealing for which the intended applicant intends to apply;

(e)        the registry of the court where the submission for estate grant or submission for resealing will be filed;

(f)         the following statements in relation to each person to whom the notice is delivered:

(i)         that the person has a right to oppose,

(A)       in the case of a notice provided in relation to an application for an estate grant, the issuance to the intended applicant of either or both of an authorization to obtain estate information and an estate grant, or

(B)       in the case of a notice provided in relation to an application for a resealing of a foreign grant, either or both of the issuance of an authorization to obtain resealing information and the resealing of the foreign grant;

(ii)        that the person may or may not be entitled to claim against the estate for relief, including a claim under

(A)       the Family Law Act, or

(B)       Division 6 of Part 4 of the Wills, Estates and Succession Act;

(iii)       that, if the person chooses to take a step referred to in subparagraph (i) or (ii) of this paragraph, the person must do so within the time limited by any relevant rule of court or other enactment;

(iv)       that the person may consult with that person’s own lawyer concerning the person’s interest in, or rights against, the estate;

(v)        in the case of an application for a grant of administration, that the person may apply for an order requiring the intended applicant to provide security unless the intended applicant is the Public Guardian and Trustee;

(g)        the following statements:

(i)         that an estate grant may issue or a foreign grant may be resealed, as the case may be, without further notice, on any date that is at least 21 days after the date on which the notice is delivered, or on any earlier date ordered by the court;

(ii)        if an authorization to obtain estate information issues to the intended applicant, the intended applicant may apply for an estate grant without further notice, and if an authorization to obtain resealing information issues to the intended applicant, the intended applicant may apply for the resealing of the foreign grant without further notice;

(iii)       that if an estate grant issues to the intended applicant as a result of the application, the intended applicant must provide, if there is a will, to the beneficiaries or, if there is no will, to intestate successors of the deceased, an accounting as to how the estate was administered and how the estate assets were distributed, and

(iv)       that if a foreign grant is resealed as a result of the application, the intended applicant must provide, if there is a will, to the beneficiaries or, if there is no will, to intestate successors of the deceased, an accounting as to how the estate comprising the assets to which the resealed grant applies was administered and how those assets were distributed.

[en. B.C. Reg. 149/2013, s. 8; am. B.C. Reg. 44/2014, Sch. 1, s. 3 (b).]

25-4(2) The registrar must not issue an authorization to obtain estate information under subrule (1) (a) of this rule or an estate grant under subrule (1) (b) unless the registrar is satisfied that

(a)        notice of the application has been delivered in accordance with Rule 25-2,

(b)        the application materials comply with Rule 25-3,

(c)        without limiting paragraph (b), if the application is for a grant of probate or a grant of administration with will annexed and is supported by an affidavit in Form P3, it was appropriate for that form of affidavit to be filed in support of the application,

(d)        if the application is for an ancillary grant of probate or administration,

(i)         the information in the foreign grant respecting the name of the deceased and the other names by which the deceased was known exactly matches the information in the submission for estate grant respecting those names, and

(ii)        each of the persons to whom the foreign grant was issued is an applicant in the submission for estate grant, and the names of the applicants in the submission for estate grant exactly match the names of the persons to whom the foreign grant was issued,

(e)        if the document to be issued is an authorization to obtain estate information, the only document that remains to be filed is the affidavit of assets and liabilities for estate grant and the applicant requires the authorization to obtain estate information to facilitate the applicant’s ability to determine the assets in the estate and the liabilities applicable to them,

(f)         if the document to be issued is an estate grant, all fees payable in relation to the application, including all probate fees, have been paid,

(g)        there is no notice of dispute in effect in relation to the estate, and

(h)        there is no reason to require a hearing in relation to the application.

[en. B.C. Reg. 149/2013, s. 8.]

[7]             Rule 25-2(1) clearly provides that at least 21 days before submitting materials for filing, the applicant must deliver certain things to certain persons.

[8]             The first thing which must be delivered is a notice which complies with subrule (3). Reference to subrule (3) reveals that such notice must be in Form 1, must be signed by the intended applicant or his or her lawyer, and must contain all of the enumerated information referred to in subrule (3)(a)-(g) inclusive. Form 1 in its entirety is mandatory; the other material to be delivered varies with the type of application and is detailed in subrule (1)(b).

[9]             Rule 25-2(2) details who is to receive the notice detailed in subrule (1) in both will and non-will situations as well as situations in which the deceased was a Nisga’a citizen or a member of a treaty first nation or when a person has served a citation.

[10]         Rule 25-4(2), again in mandatory fashion, states that the registrar must not issue an authorization for information under Rule 25-4(1)(a) or an estate grant under Rule 25-4(1)(b) unless he or she is satisfied, among other things, that notice of the application has been delivered in accordance with Rule 25-2.

[11]         Form P9 is the form which provides the registrar with evidence as to who received notice of the application and of what that notice consisted. Nowhere in the standard Form P9 is there specific reference to when notice was delivered, however, that does not reduce the duty on the registrar to be satisfied that proper 21 day notice has been provided.

[12]         The absence of express evidence of the date of delivery is not fatal in itself. The Form P9 may well be silent in its body as to the date of delivery but may have been sworn 21 or more days before the application was submitted. In such case, as long as the list of enumerated persons correctly identifies the persons entitled to notice, the registrar may properly infer adequate notice and process the application for the estate grant. In situations where that Form P9 is sworn less than 21 days before the filing of the application the inference is not available and sufficient evidence as to the date of delivery must be provided in order that the registrar may be satisfied as to observance of and compliance with Rule 25-2. Where such evidence satisfies the registrar that proper 21 day notice was given before the application was filed, the matter may be processed based on the original application date; where the evidence fails to establish that 21 day notice was given before the application was filed the original application cannot be remediated and must be resubmitted following a proper 21 day notice period, established by proper evidence.

[13]         In this particular file, and as indicated at the outset of these reasons, the application was filed a mere four days after the swearing of the Form P9 and contained no evidence as to the date of delivery. In such circumstances additional evidence must be provided in order to establish the date of delivery and thus the provision of the required 21 day notice. Until such evidence is provided the application for probate cannot be considered further or processed.

Reviewing a Tribunal’s Decision

Reviewing a Tribunal's Decision

Janzen v Society of Notaries 2015 BCSC 2485 dealt with the legal standard of a court in the review of a penalty pronounced by a professional society or tribunal, in this case the Notaries Public.

A notary had been fined $5000 and a one month suspension for his poor conduct in handling an estate as executor and failing to communicate with his society.

He commenced court action to have the finding of fault and penalty reviewed by the Supreme Court.

He appealed and ruling and his appeal was dismissed – the court felt it should intervene as to penalty only if satisfied that the tribunal failed to take a material matter into account or erred in principle.

The court adopted a reasonableness test and the finding of the tribunal that the notary was not professional fell within a reasonable range of outcomes in the circumstances.

Standard of review:

[22] The parties do not agree on the standard of review applicable to decisions of the Board of Directors of the Society. On behalf of the appellant, Mr. Schildt submits that the decision should be reviewed on a correctness standard. He acknowledges that three decisions of this court have held that decisions of the Board in disciplinary matters should be reviewed on a reasonableness standard: Bailey v. Society of Notaries Public, 2004 BCSC 444; Re Farrell, 2003 BCSC 1380; and Evans v. The Society of Notaries Public, 2010 BCSC 1232.

[23] However, Mr. Schildt submits that Bailey and Farrell were decided prior to the decision of the Supreme Court of Canada in Dunsmuir v. New Brunswick, 2008 SCC 9, in which the Court held that there are only two standards of review of decisions of administrative tribunals or statutory bodies; reasonableness and correctness, and that there was no longer a patently unreasonable standard as had been the case when Bailey and Farrell were decided.

[24] As I understand Mr. Schildt’s submission, it is that the earlier decisions must be read in light of the pragmatic and functional approach mandated by the Supreme Court in Dunsmuir, and that the finding in the earlier cases that the applicable standard was reasonableness simpliciter does not preclude a finding that, post‑Dunsmuir, a correctness standard should be applied.

[25] In support of this argument, Mr. Schildt points to the fact that this is a statutory appeal in which the parties are free to submit further evidence, that s. 38 of the Notaries Act permits direct applications to this court to suspend or terminate membership in the Society, and the fact that discipline decisions are not polycentric in nature and, of course, have a significant impact on the person on whom the discipline is imposed.

[26] Notwithstanding Mr. Schildt’s able submissions, I conclude that the appropriate standard of review in this case is reasonableness. While Savage J. in Evans did seem to express some reservations about that standard of review, he did finally conclude that he should follow the earlier decisions of this court that applied a reasonableness standard.

[27] In addition, in Dunsmuir, the Supreme Court made it clear that the imposition of a single reasonableness standard did not pave the way to a more intrusive review by the courts (paragraph 48). Dunsmuir also directs that courts initially ascertain whether the jurisprudence has already satisfactorily established the appropriate level of deference to be given to a tribunal or administrative body decision (paragraph 62).

[28] Given the basis of the Board’s decision in this case, that is that Mr. Janzen’s conduct was a marked departure from normal and expected conduct of a member of the Society, I conclude that deference should be given to the Board’s decision and that it should be reviewed on a reasonableness standard.

[29] In addition, in my view, the principles set out in Re Hansard Spruce Mills, [1953] B.C.J. No. 142, mandate that I should follow previous decisions of this court on questions of law. As three previous decisions of this court have applied a reasonableness standard of review, Re Hansard Spruce Mills directs that I should accept that those decisions are correct and apply the same standard.

Was the decision unreasonable?

[30] I turn now to consider the question of whether the decision was unreasonable.

[31] In Dunsmuir, the Supreme Court held that a decision can be reasonable, even if the tribunal commits an error of law. The applicable principles with respect to reasonableness are set out in paragraphs 47 to 48 of Dunsmuir as follows:

[47] Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.

[48] The move towards a single reasonableness standard does not pave the way for a more intrusive review by courts and does not represent a return to pre-Southam formalism. In this respect, the concept of deference, so central to judicial review in administrative law, has perhaps been insufficiently explored in the case law. What does deference mean in this context?  Deference is both an attitude of the court and a requirement of the law of judicial review. It does not mean that courts are subservient to the determinations of decision makers, or that courts must show blind reverence to their interpretations, or that they may be content to pay lip service to the concept of reasonableness review while in fact imposing their own view. Rather, deference imports respect for the decision-making process of adjudicative bodies with regard to both the facts and the law. The notion of deference “is rooted in part in a respect for governmental decisions to create administrative bodies with delegated powers” (Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554, at p. 596, per L’Heureux-Dubé J., dissenting). We agree with David Dyzenhaus where he states that the concept of “deference as respect” requires of the courts “not submission but a respectful attention to the reasons offered or which could be offered in support of a decision”: “The Politics of Deference: Judicial Review and Democracy”, in M. Taggart, ed., The Province of Administrative Law (1997), 279, at p. 286 (quoted with approval in Baker, at para. 65, per L’Heureux-Dubé J.; Ryan, at para. 49).

[32] In this case, it appears to have been agreed or at least acknowledged that, acting as an executor, per se, is not one of the acts that a notary may perform, that is, is legally entitled to perform, pursuant to s. 18 of the Notaries Act. However, the Board was clearly of the view that there was a sufficient connection between Mr. Janzen’s conduct with respect to the estate and his office of a notary to engage the Society’s Principles for Ethical and Professional Conduct.

[33] Mr. Janzen relies on the decision of our Court of Appeal in Li v. College of Pharmacists of British Columbia, [1994] B.C.J. No. 1830, for the proposition that conduct with respect to matters outside of the scope of professional duties should not form the basis for disciplinary measures against a professional. However, in my view, Li is distinguishable from the facts of this case. In Li, Mr. Li’s alleged misconduct did not demonstrate any lack of professional competence. Mr. Li was found by the chambers judge to simply have been rude. In this case, Mr. Janzen was found by the Board to have demonstrated an inability, or perhaps an unwillingness, to prioritize his affairs to undertake the steps necessary to rectify the matter that gave rise to the public complaints to the Society. The Board concluded that that inability gave rise to a concern with respect to his professional competence.

[34] In addition, I note that Li was a case in which the conduct in question was close to the line and on which the Court of Appeal was divided. At paragraph 19 of the majority reasons, Madam Justice Rowles points out that the respondent’s position, that is Mr. Li’s position, was that there must be a rational connection between the conduct complained of and professional matters. She went on to cite the complaint against Mr. Li, that is:

. . . [he] treated six of his “patients in an extremely rude, condescending and . . . unreasonable manner”.

[35] The majority concluded that such conduct could not give rise to any professional conduct issue.