Stay of Proceedings

Stay of Proceedings

Gerritse v Hospital For Sick Children 2017 ONSC 1859 dealt with an application for a stay of proceedings in one court case until the paternity issue in another case was firstly decided.

The Court refused the application and cited the law as previously set out in Leung Estate v Leung 2004 CarswellOnt 1366.

[20] The law is well-settled as to what is required for a stay to be granted in this type of situation. Special circumstances are required. This must be viewed as one of the clearest of cases.

Two conditions must be met, both of which the moving parties have responsibility to demonstrate on a balance of probabilities:

(i) that continuance of the Application would work an injustice because it would be oppressive or vexatious or would amount to an abuse of process, and

(ii) the stay would not cause an injustice to the Applicants. Leung Estate v. Leung, 2004 CarswellOnt 1366 (S.C.J.), at paragraph 28, citing the decision of Justice Blair, as His Honour then was, in Canadian Express Ltd. v. Blair (1992), 11 O.R. (3d) 221 (Gen. Div.). 

Leung Estate v Leung stated:

28      In Canadian Express Ltd. v. Blair (1992), 11 O.R. (3d) 221 (Ont. Gen. Div.), Mr. Justice Blair set out the general principles that have been followed by the Court in this regard. Firstly, a stay should only be ordered when special circumstances are shown to exist. It will only be ordered in the clearest of cases. In quoting from McNair J. in Varnam v. Canada (Minister of National Health & Welfare) (1987), 12 F.T.R. 34 (Fed. T.D.), at p. 36 of that decision, Mr. Justice Blair quotes the following:

In order to justify a stay of proceedings two conditions must be met, one positive and the other negative: (1) the defendant must satisfy the court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in some other way; and (b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant. Expense and inconvenience to a party or the prospect of the proceedings being abortive in the event of a successful appeal are not sufficient special circumstances in themselves for the granting of a stay.

Change of Venue of Trial

Change of Venue of Trial

Harder v Harder estate 2017 BCSC 425 discussed the law relating to changing the venue of trial or interlocutory proceedings from where the action was originally commenced to another city.

The defendants in Harder sought an order transferring the proceedings  from Victoria to the Vancouver registry for all purposes. As an alternative, the defendants ask that the proceeding remain in the Victoria registry but that all interlocutory applications and the eventual trial take place in Vancouver.

The plaintiffs live in Alberta, and the defendant Frances lives in Delta, B.C. According to the sworn evidence, any potential lay witnesses to the proceeding live in either Alberta or the Lower Mainland. The lawyers and financial advisors involved in the critical events described in the NOCC do business in the Lower Mainland. Some of the Vancouver-based lay witnesses are quadriplegic, with those individuals’ travel to Victoria, at least according to the defendant Frances, being a particularly arduous task. The two pieces of real property that the defendant Frances owned in joint tenancy with the deceased are both in the Lower Mainland.

The defendant Frances suffers from bi-polar disorder. She deposes that travelling to Victoria and being put in “new situations” will be psychologically challenging. She also describes the importance of her dog in managing the bi-polar disorder and her inability to bring the dog with her to Victoria for any trial 

THE LAW

18      As for the transfer of this proceeding, the defendants rely on McPhatter v. Thorimbert, [1966] B.C.J. No. 12 (S.C.), for the proposition that a change of venue may be ordered based on either the interests of justice or the preponderance of convenience.1 The plaintiffs have the right to control the course of the litigation, including the place of trial, with the defendant Frances having the burden of proving that serious prejudice will arise to her if the venue is not changed or the very great or overwhelming preponderance of convenience ousts the plaintiffs’ rights: Robertson v. Zimmer, 2001 BCSC 1067at paras. 3 and 4

Robertson v Zimmer stated:

“The law referable to the issues raised is not in dispute. The test to be applied was set out in McPhatter v. Thorimbert (1966), 56 W.W.R. 497 (1966), 56 W.W.R. 497 (B.C. S.C.), a decision of Kirke Smith, L.J.S.C., (as he then was), at page 497:

It is established by a line of decisions binding on me that the only two grounds for ordering a change of venue on the application of a defendant are those based upon: (a) The interests of justice; or (b) The preponderance of convenience.

It is to be noted that the conjunctive word in that passage is “or” and not “and”. At page 498, Smith, J. referred to Armstrong v. Revelstoke (City), [1927] 2 W.W.R. 245, 38 B.C.R. 253 (B.C. C.A.), Macdonald, C.J.A., at p. 246:

There is a preponderance of convenience in favour of a change of venue, but nothing short of a great or considerable preponderance of convenience and expense would justify the taking from the respondent the right which the law has given him to select his own place of trial. 

4      On the same page, Smith, J. referred to Charman v. British Columbia (Attorney General) (1956), 3 D.L.R. (2d) 269 (B.C. S.C.), at 271, where Whittaker, J. (later J.A.) cites with approval the following language of Boyd, C. in McDonald v. Dawson (1904), 8 O.L.R. 72 (Ont. H.C.):

The plaintiff, as dominus litis, has the right to control the course of litigation. He has the absolute right, unless in cases covered by the Rule, to choose the place of trial, subject to its being changed by the defendant for sufficient cause. The burden is on the defendant to make it appear that serious prejudice is likely to arise to him if it is not changed. Usually the question turns on the balance of convenience, based on number of witnesses, distance from the place of trial, and expenses of attendance. It then becomes a question of degree of less or more, and the test is variously expressed as to whether there is a great, or very great, or overwhelming preponderance of convenience shewn by the defendant which ousts the right of the plaintiff.

It is to be noted that the above passage, which comments on the burden on the defendant states “that serious prejudice is likely to arise to him if it is not changed”, (the emphasis is mine).”

19      While the evidence presented here is not as complete as that described in Robertson, I find that the defendants have proven that the great preponderance of convenience justifies an order that the trial in this proceeding be held in the Vancouver registry. The parties and all of the identified witnesses either reside in the Lower Mainland and/or can more easilty and less expensively travel to Vancouver rather than to Victoria to attend a trial. The plaintiffs’ bald assertion that Victoria is more convenient for both themselves and their witnesses is simply not supported by any evidence.

20      However, the defendants have not demonstrated that either the interests of justice or the great preponderance of convenience favour the transfer of the proceeding to the Vancouver registry for all purposes. Subject to an agreement or order otherwise, examinations for discovery will be held nearest to where the examinee resides: SCCR 7-2 (11). Interlocutory applications do not require a party’s attendance, unless cross-examination on a party’s affidavit is ordered; the court can always give directions in that situation to address any specific inconvenience. In any event, if successful at trial, the defendants will likely be compensated for their counsel’s travel costs to attend these types of applications.

Conflict of Law: “Ordinarily Resident”

Conflict of Law: "Ordinarily Resident"

Cresswell v Cresswell Estate 2017 BCSC 178 dealt with a conflict of law situation and held that the jurisdiction of the BC court should be denied for a wills variation action and held that it should properly be filed under Alberta court jurisdiction as the deceased was found to be “ordinarily resident ” there.

The plaintiff was the surviving spouse who after marrying the deceased in Alberta in 1994 lived together there until buying a house in BC in 2014 that was registered in joint tenancy and which went to the surviving plaintiff after her death.

The deceased returned to Alberta in 2015 for cancer treatments and to live with family and remained there until her death in late 2016.

Her will provided that it would be interpreted as per the laws of Alberta.

Her will left everything to her three children who were all Alberta residents.

The court interpreted the Court Jurisdiction and Proceedings Transfer act and held that the deceased had a settled intention to ordinarily reside in Alberta when she moved there in November 2015, and that at the time of her death she had no real or substantial connection to BC.

The Court determined that Alberta was the proper jurisdiction for the case having regard to the interests of the parties and the ends justice, and declined to exercise BC jurisdiction in favour of Alberta.

Section 10(b) of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003 c. 28 states as follows:

10  Without limiting the right of the plaintiff to prove other circumstances that constitute a real and substantial connection between British Columbia and the facts on which a proceeding is based, a real and substantial connection between British Columbia and those facts is presumed to exist if the proceeding

…

(b)  concerns the administration of the estate of a deceased person in relation to

(i)  immovable property in British Columbia of the deceased person, or

(ii)  movable property anywhere of the deceased person if at the time of death he or she was ordinarily resident in British Columbia

Section 11(1) states:

11  (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding.

(2)  A court, in deciding the question of whether it or a court outside British Columbia is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including

(a)  the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum,

(b)  the law to be applied to issues in the proceeding,

(c)  the desirability of avoiding multiplicity of legal proceedings,

(d)  the desirability of avoiding conflicting decisions in different courts,

(e)  the enforcement of an eventual judgment, and

(f)  the fair and efficient working of the Canadian legal system as a whole.

The term “ordinarily resident” has been interpreted by the Court in Blazek v. Blazek, 2009 BCSC 1693, at paras. 31-35:

[31]      Section 3 of the Act provides that the court has territorial competence in a proceeding if the person is “ordinarily resident in British Columbia at the time of the commencement of the proceedings.” Although the evidence is somewhat conflicting, it appears that at the time this action was commenced in 2007, the defendant split his time between the Czech Republic and Kelowna, British Columbia. There is a dispute between the parties regarding whether the amount of time the defendant spent in British Columbia was more or less than 150 days.

[32]      The meaning of “ordinarily resident” has been considered by the courts on many occasions. The authority often referred to is Thomson v. Minister of National Revenue, [1946] S.C.R. 209, [1946] C.T.C. 51, where Mr. Justice Estey stated:

A reference to the dictionary and judicial comments upon the meaning of these terms indicates that one is “ordinarily resident” in the place where in the settled routine of his life he regularly, normally or customarily lives. One “sojourns” at a place where he unusually, casually or intermittently visits or stays. In the former the element of permanence; in the latter that of the temporary predominates. The difference cannot be stated in precise and definite terms, but each case must be determined after all of the relevant factors are taken into consideration, but the foregoing indicates in a general way the essential difference. It is not the length of the visit or stay that determines the question. …

…

It is well established that a person may have more than one residence…

[33]      I am satisfied that the defendant resided in both places in 2007. I agree with the plaintiff’s position that “ordinarily resident” should be given a broad and liberal interpretation, in accordance with the provisions of the Act regarding corporations ordinarily resident in the province; “ordinarily resident” does not require a counting of days in which a party may spend in this jurisdiction. One can be ordinarily resident in more than one jurisdiction.

[34]      I am satisfied that the defendant was ordinarily resident in British Columbia. He was served with the writ of summons and statement of claim in this action at the Kelowna address and he was a director and officer of a company which listed the Kelowna address as the defendant’s address at the time the action was commenced. Further, the defendant files his income tax in Canada and receives a pension in Canada.

[35]      On this test, the court has territorial competence to hear the matter.

[27]         I am satisfied that the deceased had a settled intention to ordinarily reside in Alberta when she moved there on November 14, 2015 and took up residence at her sister’s home. It is clear from the evidence that she intended to remain in Alberta to be around her family and although some of her comments that were transcribed by the plaintiff are inconsistent where she said, on November 19, 2015:  “[t]hat’s sad hopefully I will be back there in a few months”, referring to Westbank, and on January 14, 2016: “One last thing I love you please remember that”. Those comments must be taken in context to her impending death. It is clear that she was applying for Alberta medical coverage, she changed her mailing address on her Edmonton Royal Bank chequing account to that of her sister, she had a will drawn up in Edmonton to be governed by the laws in Alberta, and it is clear from the telephone messages that she wished to sell the home in Westbank. Her contacting a lawyer and attempting to commence divorce proceedings shows her intention to separate from the plaintiff as was the January 9, 2016 text:  “You said you were here for me and you are a liar. I want you out.”

[28]         I am satisfied, based on all the evidence, that at the time of her death, the deceased was ordinarily resident in Alberta.

[29]         I am also satisfied that at the time of her death she did not have any real and substantial connections to British Columbia (s. 10 of the Court Jurisdiction and Proceedings Transfer Act).

[30]         The defendants also say that this court should decline to exercise its territorial competence in accordance with s. 11 of the Court Jurisdiction and Proceedings Transfer Act.

[31]         Section 11(1) states:

11  (1) After considering the interests of the parties to a proceeding and the ends of justice, a court may decline to exercise its territorial competence in the proceeding on the ground that a court of another state is a more appropriate forum in which to hear the proceeding.

(2)  A court, in deciding the question of whether it or a court outside British Columbia is the more appropriate forum in which to hear a proceeding, must consider the circumstances relevant to the proceeding, including

(a)  the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum,

(b)  the law to be applied to issues in the proceeding,

(c)  the desirability of avoiding multiplicity of legal proceedings,

(d)  the desirability of avoiding conflicting decisions in different courts,

(e)  the enforcement of an eventual judgment, and

(f)  the fair and efficient working of the Canadian legal system as a whole.

[32]         Here, I am satisfied that the evidence is overwhelming, that all of the defendants and all the evidence concerning the execution of the will, and deceased’s assets, are in Alberta, as are the witnesses. I am satisfied after considering the interests of the parties to this proceeding and the ends of justice that this court should decline to exercise its territorial competence as Alberta is the more appropriate forum in which to hear these proceedings.

Will In “Contemplation of Marriage” Not Revoked

Will In "Contemplation of Marriage" Not Revoked

Pace Estate 2016 BCSC 2306 held that a 2001 will left to “my common law spouse  of four years ” was not revoked by their subsequent marriage under what was then S 15 Wills Act that provided that marriage revoked a will. The parties married over a year  after the execution of the will.

The will did not expressly state that the will was being signed in ” contemplation ” of their marriage.

The parties signed mirror wills at the time leaving the residue of each of their estates to the other.

The parties separated a few years later and divorced in 2009. The effect of S. 16 of the Wills act invalidated the appointment of that spouse as executrix and as the recipient of the residue of his estate when he subsequently died in 2015. In fact he had been living with another spouse for about 2 years prior to his death and there was a dispute as to whether she was his spouse.

Since the introduction of WESA on March 31, 2014 marriage no longer does revoke a previous will.

It is not clear why the first spouse sought an order that the 2002 will had not been revoked by their subsequent marriage, but in any event the court held that it had not been revoked.

Extrinsic evidence was allowed and indicated to the court that the deceased clearly intended his will to be made in contemplation of his marriage even though it did not expressly state so.

The court followed the reasoning of the Court of Appeal in MacLean estate v Christianson 2010 BCCA 374 at paras 30-31 where the court held that it had the right to ascertain all the facts that were known to the testator at the time the will was signed so as to determine the intention.

They had arranged their affairs so that they were the named beneficiaries of each others pensions and insurance.

The court further held that the will could not have been rectified under the provisions of  59 WESA  as his death occurred after the coming into force of WESA  and new statutes are presumed to not have retrospective application where such statutes affect the substantive  rights of others R. Dineley ( 2012) SCJ #58.

The court declared to have held other wise would have frustrated the clear intent of the parties and have run afoul of the presumption against an interpretation that resulted in an intestacy.

The court held that under S 18 of the Wills act the will had been “revived” by showing a contrary intention  that the will had not been revoked by the  subsequent marriage.

Statute Barred Debt to Estate Deducted From Beneficiary

Statute Barred Debt to Estate Deducted From Beneficiary

Re Johnston Estate 2017 BCSC 272 upheld the rule in Cherry v. Boultbee  which provides that where a legatee of a share of the residue is a debtor of the estate, he or she is not entitled to receive his or her legacy without bringing his or her debt into account, even though the debt owed by the beneficiary in that case was 43 years old and was statute barred.

The rule derives from the case of Cherry v. Boultbee (1839), 4 My. & Cr. 442. It is an equitable principle designed to ensure fairness.

The purpose of the rule was to prevent a beneficiary who owed money to an estate from receiving more than his or her fair share of the estate.

In the case of Re: Akerman, Akerman v. Akerman, [1891] 3 Ch. 212, Kekewich J. stated:

A person who owes an estate money, that is to say, who is bound to increase the general mass of the estate by contribution of his own, cannot claim an aliquot share given to him out of that mass without first making the contribution which completes it. Nothing is in truth retained by the representative of the estate; nothing is in strict language set off; but the contributor is paid by holding in his own hand a part of the mass, which, if the mass were completed, he would receive back.

29      The rule has been held to apply even where the debt is statute-barred: see Re: Akerman.

30      The applicant submits that the rule continues to apply in Canada and relies on the decision of the Supreme Court of Canada in Canada Trust Company v. Lloyd et al, [1968] S.C.R. 300.

In that case, the Supreme Court applied the rule in Cherry v. Boultbee in finding that the contribution of three directors who had improperly withdrawn funds from the company some 43 years earlier, had to be taken into account in the distribution of the residue by the receiver. The court noted that the situation was analogous to that of a “legatee who must bring into account even a statute barred debt before he can claim a legacy left to him in the testator’s will”.

31      The applicant also relies on a more recent decision of the Ontario Court of Appeal, Olympia & York Developments Ltd. v. Royal Trust Co. (1993), 103 D.L.R. (4th) 129, where the court confirmed that the rule in Cherry v. Boultbee has been accepted in Canadian decisions and, where appropriate, applied.

The rule in Cherry v. Boultbee does not confer on the estate any right to recoup the amount owing but rather operates to ensure fairness in the distribution of an estate, recognizing that the relationship between a testator and his or her beneficiaries is typically not at arm’s length. The fundamental purpose of the rule is to ensure that beneficiaries are treated fairly and it embodies the principal that he who seeks equity must do equity. As the court noted in Re: Akerman, nothing is being retained by the representative and nothing is being set off but rather, the contributor is paid by what he is holding in his own hand.

The court in Re: Goy & Co Ltd., [1900] 2 Ch. 149, also noted that the claimant has in his own hands that which is applicable to the payment and should pay himself out of that. The question of whether the testator or the estate can recover the debt or whether the debt is statute barred is therefore largely irrelevant to the application of the rule. In my view, the change in approach to limitation provisions by the Supreme Court of Canada in Tolofson does not affect the application of the rule in Cherry v. Boultbee.

37      The decision of the Yukon Territory Court of Appeal in Leeper Estate makes it clear that the rule in Cherry v. Boultbee continues to apply in Canada.

39      The Estate of William Leonide Johnston is, however, entitled to retain and deduct from the share of the estate otherwise payable to the respondent an amount on account of the debt owed to the Estate of William Johnston by the respondent that was outstanding and owing on his death.

The Duty of Care Owed By a Will Drafter

The Duty of Care Owed By a Will Drafter

In Korpiel v Sanguinetti (1999) B.C.J. 1048 the court concluded that a will drafter, usually a solicitor or notary, owes no duty of care to beneficiaries beyond the competent and timely fulfillment of the testator’s testamentary instructions.

In the Sanguinetti case, the court considered whether a will drafter owed a duty to beneficiaries who had been named in a client’s former will.  The plaintiffs were relatives of an elderly testator who had instructed his lawyer to prepare a will bequeathing his home to the plaintiffs.  Some years later, the testator changed his mind and instructed the lawyer to draft a new will, leaving the plaintiffs only a small bequest.

The plaintiffs challenged the later will and brought a court action against the lawyer who drafted it for a breach of fiduciary duty owed to them.  Their claim was dismissed.

The court held that if a will drafter were to conduct him- or herself as proposed by the plaintiffs—that is, to refuse to follow the client’s instructions in preference to the interests the potential beneficiaries—it would be impossible for the will drafter to avoid a conflict of duty and interest.  If the will drafter were to be held to advocate for inclusion of persons or terms of disposition that were contrary to the specific instructions of the client, it would clearly result in a conflict with the will drafter’s primary duty to his or her client.  The court found such a situation would be untenable.

Thus a will drafter cannot owe an independent fiduciary duty to the beneficiary of a will, for if the testator’s instructions were to conflict with the beneficiaries’ interests, the will drafter would be unable to avoid conflicting duties to both parties.

In Smolinski v. Mitchell [1995] 10 W.W.R. 68 (BCSC), Sigurdson J. considered the question of the duty of a solicitor to his client, in contrast to the duty to others who may be deprived of an inheritance by reason of a solicitor’s failure to properly carry out his client’s instructions.  His Lordship quoted from the English decision of Ross v. Caunters [1979] 3 All E.R. 580, [1980] Ch. D. 297 at 322:

“The argument seems to me to confuse duties which differ in their nature. In broad terms, a solicitor’s duty to his client is to do for him all that he properly can, with, of course, proper care and attention.  Subject to giving due weight to the adverb “properly,” that duty is a paramount duty.  The solicitor owes no such duty to those who are not his clients.  He is no guardian of their interests.  What he does for his client may be hostile and injurious to their interests; and sometimes the greater the injuries the better he will have served his client.  The duty owed by a solicitor to a third party is entirely different.  There is no trace of a wide and general duty to do all that properly can be done for him.  Instead, in a case such as the present, there is merely a duty, owed to him as well as the client, to use proper care in carrying out the client’s instructions for conferring the benefit on the third party.”

The Alberta Court of Appeal in Graham v. Bonnycastle, 2004 ABCA 270 (leave to appeal to the S.C.C. refused, [2004] S.C.C.A. No. 489) came to a similar conclusion after an extensive review of the law.

In the Graham case the children of the testator had been equal beneficiaries under a 1984 will.  In 1994, after having been diagnosed with Alzheimer’s disease, the testator executed a new will, leaving a small bequest to each of his children and grandchildren and the residue to his new wife.  After the testator’s death the children commenced litigation challenging both the validity of the marriage and the 1994 will on the basis of lack of mental capacity, which any beneficiary is entitled to do.

Both of those actions were discontinued and a settlement agreement was entered into by the parties.  The children subsequently commenced an action against the solicitor who prepared the 1994 will claiming damages for the difference between the bequest they would have received under the original will and the benefits they received pursuant to the settlement agreement.

The Court of Appeal upheld the decision of the trial judge and dismissed the children’s claims on the grounds that the solicitor owed no duty of care to the children who claimed as beneficiaries under the original will, and that the original will had been revoked by both the subsequent will and the subsequent marriage of the testator.  (Note:  In British Columbia, prior to the enactment of the Wills, Estates and Succession Act on March 31, 2014, a subsequent marriage revoked an existing will but that is no longer the case.)

The court made it clear, however, that by extension of the principles set out in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] 2 All E.R. 575, a leading House of Lords decision, a will drafter may be liable to an intended beneficiary who, as a result of the will drafter’s negligence, does not receive a benefit which the testator intended to grant.

Thus the general rule that a will drafter owes a duty of care only to his or her client and not to any third party, has been modified to include a duty to an intended beneficiary under a will who does not, as result of the will drafter’s negligence, receive a benefit which the testator intended to grant.  This has been labelled the “third-party beneficiary rule”.

The leading case is the House of Lords decision in White v. Jones [1995] 1 All E.R. 691 at 698-99 in which the court found a testator’s solicitor liable to an intended beneficiary for negligently failing to have the testator’s new will prepared and executed before the testator died.

Thus the only duty of care owed to an identified third-party beneficiary is where the will drafter owes a duty to the third-party beneficiary as well as the client, to use proper care and diligence in carrying out the client’s instructions for conferring the benefit on the third party.

In the Graham case the Alberta Court of Appeal held that the will drafter’s primary duty was to carry out the intentions of the testator, after being satisfied that the testator had testamentary capacity and recording his or her observations in that regard, so that the testator’s will would subsequently be admitted to probate.

The will drafter’s duty to ensure testamentary capacity coincides with the duty to ensure that the will accurately reflects the testator’s wishes.  A will drafter could never owe an intended beneficiary a duty of care that is inconsistent with his or her duty to the client. (Hall v. Bennett Estate (2003), 227 D.L.R. (4th) 263 (ONCA).

The imposition of a duty to beneficiaries under a previous will would create inevitable conflicts of interest for a will drafter that would be contrary to public policy.  A will-drafting solicitor or notary cannot have a duty to follow the instructions of his or her client to prepare a new will and, at the same time, have a duty to beneficiaries under previous wills whose interests are likely to be affected by the new will.

The BC Court of Appeal decision of Johnston v. Johnston Estate 2017 BCCA 59 followed the reasoning of both the Graham and Sanguinetti decisions in disallowing the claims of children who inherited under their father’s 2007 will that was modified against their interests by a 2012 will and a codicil thereto.

The testator’s children had been heirs under the 2007 will but were disinherited under the subsequent will, in which the testator left his entire estate to his new wife.

At trial the court struck out that portion of the plaintiff’s claim that alleged that the drafting lawyer owed the children a duty of care as beneficiaries under the 2007 will to, in effect, not carry out their father’s instructions to prepare a new will in terms inconsistent with the provisions of the 2007 will, finding that such claim was doomed to fail.  The Court of Appeal upheld that decision.

Therefore, the only duty a will drafter has to beneficiaries is to carry out the instructions of the will maker in a competent and timely manner.

Non Binding (Precatory) Words In Will Not a Trust

Non Binding (Precatory) Words In Will Not a Trust

Non Binding (Precatory)  words in a will were found not to create a trust that was legally binding on the trustee, but instead that the words were non binding ( precatory) and thus only morally binding an thus an outright bequest.

Killam v Killam 2017 BCSC 175  contains an exhaustive review of the rules of construction in deciding whether the following provision of a will creates a trust that is legally binding to use for the bequest for the health, support and maintenance” of the beneficiary, or whether the words “ it is my desire but I do not direct “are merely morally binding ( precatory) and not legally binding:

The provision in dispute is worded differently than those concerning the other relatives. It reads:

Provided HUMPHREY HUBBARD KILLAM should survive me, then in such event I give and bequeath ONE (1) SHARE to EUGENE HUMPHREY KILLAM, provided, should he predecease me, then to LAWRENCE HEBB KILLAM. It is my desire, however, I do not direct, that said share shall be used for the health, support and maintenance of HUMPHREY HUBBARD KILLAM, for as long as he should live or as long as said funds are available for such purpose.

After an exhaustive review of the rules of construction of the court concluded that the words do not form a trust for the beneficiary and instead is an outright bequest.

Precatory Language

63      Professor Waters, in his authoritative work, Waters’ Law of Trusts in Canada, 4th ed. (Toronto, Ont.: Carswell, 2012), provides an interesting historical context to what some have referred to as “precatory trusts”. He notes, first of all, that the prime question of whether a trust has been created is still one of construction (at 145):

The question which gives rise to most litigation is whether a testator intends to create a trust, or merely impose some kind of moral obligation upon the legatee when he bequeaths personalty or devises land in confidence that the legatee will use the property in certain ways. He may speak, for instance, of his “expectation”, “fervent wish”, “desire”, “firm belief” or “purpose” that this will be done. Such words may give rise to what has been called “a precatory trust”, though, as Rigby L.J. pointed out in the English Court of Appeal, and his words have been echoed in Canada, this title is awkward and incorrect; “a misleading nickname”. If language, once construed, is held to intend a trust, then whether the language is precatory or otherwise, the trust which is thereby set up is the same as any other express trust, and no different rules apply.

64      There was a profound shift in the judicial approach to these sorts of cases starting in the nineteenth century, caused by an English statutory change (at 145 – 147):

Prior to the latter half of the nineteenth century the courts bent over backwards to find that testamentary language of a precatory kind revealed the intention to transfer on trust. By imposing a binding obligation upon the recipient of the property, the wishes of the testator were held to be safeguarded, concerning those who were to benefit from his property. Moreover, before 1830, the executor in English law took the residue of the estate beneficially, if it were not otherwise disposed of; and where it was incumbent upon the executor to respect only the wishes, hopes, desires, and belief of the testator that others would be benefited, the temptation of the executor to ignore those moral obligations was considerable. Then, in 1830, that right of the executor was statutorily taken away, and thereafter, the pace picking up after 1870, the courts became gradually less inclined to discover trust intention in mere precatory words. It is generally agreed that the climate of judicial attitude changed noticeably with the case of Lambe v. Eames and Canadian courts have joined in this new attitude. In 1889, in Bank of Montreal v. Bower, Chancellor Boyd of the Ontario High Court Chancery Division stated:

It would be an otiose undertaking to go through all the cases, for they are numerous, and cannot be reconciled. But since Lambe v. Eames . . . . there has been a new departure in favour of confining language supposed to create a trust for the children [of the testator and the widow] within much narrower limits, than in some of the earlier cases. If the entire interest in the subject of the gift is given with superadded words expressing the nature of the gift, or the confident expectation that the subject will be applied for the benefit of particular persons, but without . . . terms cutting down the interest before given, it will not now be held . . . that a trust has been thereby created.

And in Johnson v. Farney, Meredith C.J.O. adopted the view of Cozens-Hardy M.R. in the leading English case of Re Atkinson that every care has to be taken not to make mandatory words from those which are the mere indication of a wish or request, and that to construe the true intention of the testator, the courts must examine the trust instrument as a whole and not be mesmerised by particular words. Earlier, in Renehan v. Malone, this same view had been expressed by Barker J. On many occasions, Trench v. Hamilton has been approved in Canadian courts. In that case, Lindley L.J. pointed out that the meaning which a court derives must prevail even if judges in the past have drawn different conclusions from more or less similar language.

65      Professor Waters concludes as follows (at 147):

Whether a trust has been created is simply a matter of construction; this principle has not changed. What has changed is the tendency found in the earlier cases to discover imperative meaning in various word formulae, like “wish and direction” or “trusting that” and expressions of that nature.

BC Wills Variation: Severance of Court Actions

Severance of Court Actions Upheld On Appeal

The Court of Appeal in Johnston v Johnston Estate 2017 BCCA 59 upheld the trial decision found at 2016 BCSC 1388 where an action seeking that a will was invalid, or alternatively if it was valid it should be varied under the wills variation provisions , should be severed into two court actions, with the validity of the will to be determined firstly.

The Appeal Court expanded upon the reasons of the trial judge in  ordering a severance of the two claims as follows:

A discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustice: Elsom v. Elsom, [1989] 1 S.C.R. 1367, at p. 1375. Reversing a lower court’s discretionary decision is also appropriate where the lower court gives no or insufficient weight to relevant considerations: Friends of the Oldman River Society v. Canada . . . [At para. 27.]

(See also: Rise & Shine Grocery & Gas Ltd. v. Novak, 2016 BCCA 483 at paras. 36 — 37.)

43      The standard of review for discretionary decisions is one of deference.

44      As noted by the PGT, in addition to the court’s jurisdiction under Rule 22-5, it may temporarily stay a proceeding pursuant to its inherent jurisdiction or under s. 8(2) of the Law and Equity Act, R.S.B.C. 1996, c. 253, or both: Zurich Indemnity Co. of Canada v. Western Delta Lands Inc. (1997), 38 B.C.L.R. (3d) 273, 95 B.C.A.C. 165 at para. 14 (C.A.), leave to appeal to S.C.C. refused [1997] S.C.C.A. No. 469. In exercising its discretion to grant or deny a stay, the court must weigh the potential benefits and prejudice at play and fairly balance the parties’ competing interests.

45      The court’s jurisdiction under Rule 22-5, s. 8(2) of the Law and Equity Act, and its inherent jurisdiction are exceptions to the principle stated in s. 10 of the Law and Equity Act as to the general avoidance of multiplicity of legal proceedings “as far as possible”.

46      I would endorse the judge’s non-exclusive summary of the key considerations relevant to an application to sever and the general principles governing severance:

[68] The key factors engaged in a general sense on an application to sever were canvassed in Schaper v. Sears Canada, 2000 BCSC 1575[Schaper] at para. 19:

1. . . . the party making the request must show that hearing the claims together would unduly complicate, delay the hearing, or otherwise be inconvenient. If a party applying does not meet this threshold, the court need not go further in any analysis and the application should be dismissed.

2. Have the actions of any party in the proceeding been unreasonable and have they contributed to the complication, the delay, or the inconvenience alleged by the party applying? If this found [sic], that would strengthen the argument to sever.

3. Are the issues between the plaintiff and defendant and the issues between the defendant and the third party sufficiently distinct so as to allow them to be tried separately? If so, that strengthens the argument to sever off third party proceeding.

4. Is the relief claimed by, or the potential obligation of, any party best determined by hearing the evidence of all parties at one hearing? If so, that weakens an application to sever.

5. Does the prejudice to the party applying, prejudice based on undue complication, delay or inconvenience, outweigh any benefit of matters being heard together, or outweigh any considerations related to the overall objective of the rules to ensure a just, speedy and inexpensive determination of every proceeding on its merits, including the avoidance of a multiplicity of proceedings for the benefits of litigants and having concern to congestion in the courts generally?

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

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

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

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

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

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

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

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

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

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

47      The judge also identified specific principles relevant to the nature of the case before her. In particular, she recognized limitations on the powers of a committee and on the nature of claims that can properly be included in a counterclaim to a proof of will in solemn form proceeding. Citing Re: Langford and The Patients Property Act, 2000 BCSC 721, she said:

[77] There is no question but that as the executor named in the Impugned Wills, the PGT is entitled to bring the Proof of Will Action. On the surface, s. 24 of the PPA suggests that in its capacity as committee of Norman’s estate, the PGT would have the authority to defend against the other claims. However, in Re: Langford and The Patients Property Act, 2000 BCSC 721 [Re: Langford], the Court reasoned that the legislature could not have intended to invest a committee with all of the powers of an executor or administrator such as obtaining title to the deceased’s assets or winding up and distributing the estate of the deceased patient. It held that because s. 24 expressly contemplates that probate or administration will be taken out after a patient’s death, it is intended to be operative only in the intervening period. In the result, Re: Langford held that s. 24 simply authorizes a committee of a deceased patient to maintain the status quo of the deceased patient’s estate during the hiatus period pending the issuance of letters probate or administration.

And as to Clark v. Nash, [1986] B.C.J. No. 1655, 39 A.C.W.S. (2d) 375 (S.C.), aff’d [1987] B.C.J. No. 304, 3 A.C.W.S. (3d) 412 (C.A.), the judge reasoned:

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

[84] Since its pronouncement, Clark has stood for the general proposition that it is improper to include a wills variation claim in an action for proof of will in solemn form on the footing that a valid will is a condition precedent to a variation proceeding. Although I believe that, on occasion, this Court has heard such claims together (presumably without being taken to Clark), Clark nonetheless strengthens the application to sever, at least vis-a-vis David’s claim to have the Impugned Wills varied.

Amending Court Pleadings

Amending Court Pleadings

Russell Estate v Larson 2017 BCSC 113 contains a good summary of the law relating to amending court pleadings.

Pleadings are very important in litigation so as to give a concise definition of the issues to be tried and to allow the opposing party to have fair notice of the case against them to be met.

29      The applicants referred to the decision of British Columbia (Director of Civil Forfeiture) v. Violette, 2015 BCSC 1372in support of the application. In that case, the court considered the principles to be considered on an application to amend pleadings and noted:

[39] In Mayer v. Mayer, 2012 BCCA 77 at para. 215, the Court of Appeal affirmed that the fundamental purpose of pleadings is to define the issues to be tried with clarity and precision, to give the opposing parties fair notice of the case to be met, and to enable all parties to take effective steps for pre-trial preparation.

[40] Applications for leave to amend pleadings are considered on the same basis as applications to strike pleadings with the question being whether it is plain and obvious that the proposed amendments are bound to fail. In assessing that question, it is not determinative that the law has not yet recognized a particular claim. In its analysis, the court must be generous and err on the side of permitting an arguable claim to proceed to trial. See: McMillan v. McMillan, 2014 BCSC 546 at paras. 13-14, and cases cited therein.

[41] In Peterson v. 446690 B.C. Ltd., 2014 BCSC 1531 at para.37, this Court summarized the general principles arising on an application to amend pleadings as follows:

[37] Finally, the general principles arising on an application to amend pleading can be summarized as follows:

(a) Amendment to pleadings ought to be allowed unless pleadings fail to disclose a cause of action or defence: McNaughton v. Baker, [1988] 24 B.C.L.R. (2nd) 17 [(C.A.)].

(b) Amendments are usually permitted to determine the issues between the parties and ought to be allowed unless it would cause prejudice to party’s ability to defend an action: Levi v. Petaquilla Minerals Ltd., 2012 BCSC 776).

(c) The party resisting an amendment must prove prejudice to preclude an amendment, and mere, potential prejudice is insufficient to preclude an amendment: Jones v. Lululemon Athletica Inc., 2008 BCSC 719.

(d) Costs are the general means of protecting against prejudice unless it would be a wholly inadequate remedy.

(e) Courts should only disallow an amendment as a last resort: Jones, McNaughton, Innoventure S& K Holdings Ltd. et al. v. Innoventure (Tri-Cities) Holdings Ltd. et al., 2006 BCSC 1567.

30      Here, in my view, the question turns on prejudice. The position of the plaintiff that the new pleadings will raise matters going back 30 years raises no new prejudice. The entire action stems from matters going back 30 years.

31      The other prejudice argued is the potential expiry of the limitation period, the proximity of the trial date and the potential that the trial date will be lost and the fact that document discovery and examinations for discovery have been conducted on the basis of the amended counterclaim.

BC Wills Variation: Executor Added After Expiration of Limitation Date

Executor Added After Expiration of Wills Variation Limitation
 Under the provisions of section 60 WESA, an action under the wills variation provisions must be commenced within 180 days of the grant of probate or the action is statute barred.
In the 1987 decision Cowan v Cowan 17 BCLR ( 2d) 114, the plaintiff commenced an action (by an endorsed writ that existed then but no longer exists), under what was then known as the Wills Variation act, naming the defendant as a beneficiary but failing to name the executor as required by the rules of court.
The court ordered that the executor may be named as a party, despite the fact that the expiration of the limitation period under the wills variation act had expired, holding that the defect amounted only to an irregularity and not a nullity.
The court added the executor as a proper party to the action pursuant to what was then Rule 15(5) (A) (11) and section 4( (1) (A) of the Limitation act, which required that the new party be connected with the subject matter of the original action.
The court found that there was no prejudice to the executor, since he had in fact been served with the cause of action in his capacity as a beneficiary within the 180 day limitation, and the plaintiff had attempted to add the executor as a party in a timely fashion.
The court held that rule 8 (14) meant that all beneficiaries as well as the executor must be named as parties to the proceeding, and where such an individual as an executor is a party to an action in a representative capacity, that capacity should appear in the style of cause. If it is not, then the writ is a regular Raj Kour v Chan (1958) 27 WWR 191 AT 192.

The plaintiff must show that:

1) the person ought to of the named as a party, or b) the parties participation in the proceeding is necessary to ensure that all matters in the proceeding may be effectually adjudicated upon (Ent.. Realty v  Barnes Lake Cattle  Co. (1979) 13 BCLR 293 ( CA).
The court provided the following reasons for concluding that in these particular circumstances that the executor could be added as a party, despite the fact the   180 day limitation period ( then 6 months)  had expired:

20 (a) by R. 8(14) he must be a party;

21 (b) the Wills Variation Act claim was begun within the six-month period;

22 (c) the executor, while not named, was in fact served with the writ;

23 (d) it is clear from the endorsement that the claim is under the Wills Variation Act — not a personal claim against Mr. Cowan;

24 (e) there can be no prejudice to the defendant/beneficiary or executor in this case. There can be no more difficulty with old witnesses and poor memories than if the executor were named in the original writ;

25 (f) the purpose of limitation period under the Wills Variation Act is to enable the executor to distribute funds without fear of a claim being advanced after six months. In this case the beneficiary/executor was served with the writ within six months and there has been no prejudice in that regard;

26 (g) the position of executor, in a Wills Variation Act claim, is one of neutrality. He is to assist the court: Re McCarthy, [1919] N.Z.L.R. 807 (S.C.); Cookv. Webb, [1918] N.Z.L.R. 664. Thus his addition is not prejudicial;

27 (h) refusing to add the executor would not be in accordance with R. 2(1), which states that failure to comply with the rules (R. 8(14)) should be treated as an irregularity not a nullity.