Tag: Trial Procedures

Statute of Limitations

Neudorf Estate v Sellmeyer 2012 SKQB 463 is a sensible decision from the Saskatchewan Queen’s bench interpreting a common situation in will construction disputes, namely the clause that if any of the testatrix’s children owed the deceased money at the time of the deceased’s death, then the amount of the debt would be deducted from the bequest so as to ensure an equal distribution among the children. The common situation however is that often the monies were advanced many years prior, so that by the time of the deceased’s passing, the executor is unable to enforce the debt as it is beyond the statute of limitations. The executor found records of monies owed to the testatrix by some of her children and proposed deducting the monies from their share accordingly. The beneficiaries however objected on the basis that the debts were statute barred and the executor brought an application for directions. The parties did not dispute that the amounts determined by the executor to have been owing to the estate were all statute barred, however in light of the specific construction of the will, the executor sought directions from the court. No evidence existed that the testatrix intended the debts to survive the limitation. So that on a plain reading of the phrase “owe me money” was interpreted to refer to debt. Whether or not the debt existed was a matter of law to be applied to the individual facts. Accordingly, by the time of her death the testatrix could not have sued her children to collect on those debts, as the limitation period for debts was a substantive and not procedural. Consequently at the time of the testatrix’s death, none of her children owed her any monies, and the testatrix’s estate was to be distributed equally among her children.

Indeed, the Supreme Court of Canada’s earliest express recognition of the shift appeared in a case addressing the predecessor of the current Saskatchewan statute, that predecessor bearing wording similar to that in the current statute: Tolofson v. Jensen, [1994] 3 S.C.R. 1022, [1994] S.C.J. No. 110 (S.C.C.).

15 In Tolofson Justice La Forest examined the historical reasons for holding that a statutory limitation provision is procedural and he rejected those reasons, concluding that the Saskatchewan limitation provision under consideration was substantive. Tolofson was a conflict of laws case, but there is no reason for thinking that Justice La Forest’s analysis would differ in any other context. No reason is apparent for limitation periods being substantive in a conflict of laws context but being procedural in other contexts. To the contrary, Justice La Forest’s analysis was not tied to the conflict of laws context. Rather, it was concerned with the logic and practicality of statutory limitation provisions generally being substantive rather than procedural.

16 Indeed, at paragraph 85 Justice La Forest adopted the “substantive” view in broad terms, then remarked on its particular – but not exclusive – application in the conflict of laws context:

… So far as the technical distinction between right and remedy, Canadian courts have been chipping away at it for some time on the basis of relevant policy considerations. I think this Court should continue the trend. It seems to be particularly appropriate to do so in the conflict of laws field ….
[Emphasis added]

17 Since Tolofson the Supreme Court has repeated its view that limitation provisions are substantive, as represented by its remarks in Markevich v. Canada, 2003 SCC 9, [2003] 1 S.C.R. 94 (S.C.C.), at paragraph 41, and in Castillo v. Castillo, 2005 SCC 83, [2005] 3 S.C.R. 870 (S.C.C.), at paragraph 7.

18 For these reasons I adopt Justice Clark’s analysis and conclusions of law as set out in Moody. The expiration of the limitation period served not only to bar a court action but also to extinguish the debt to which the limitation period applied. This result is not affected by the rule in Cherry v. Boultbee (1939), 4 My. & C. 442 (Eng. Ch. Div.) (prohibiting a beneficiary who owes money to an estate from participating in the estate unless the beneficiary pays the debt), a rule whose application has been superseded by the development of the law relating to statutory limitation provisions.

19 The result in this case is that, at the time of Ms. Neudorf’s death, none of her children owed money to her. Therefore, I direct the executor to distribute the estate on the basis that none of the beneficiaries owed Ms. Neudorf money at the time of her death.

Vexatious litigation generally involves legal proceedings brought solely to harass or oppress the opposing party.

Vexatious litigation may range from a first-time, frivolous lawsuit to repetitive, meritless applications brought within an otherwise proper lawsuit. In a nutshell, vexatious litigation involves an abuse or misuse of the legal system for the litigant’s own ends.

In the case of O’Neill v. Deacons, 2007 ABQB 754, a dispute over a dog, vexatious litigants were described as follows.

[25] What the various common law and statutory criteria suggest is that vexatious litigants are those who persistently exploit and abuse the processes of the court in order to achieve some improper purpose or obtain some advantage. Vexatious litigants tend to be self represented, and quite often the motivation appears to be to punish or wear the other side down through the expense of responding to persistent, fruitless applications. This is why the failure to pay costs for such applications is a significant element in determining whether a litigant is vexatious.

Vexatious litigants may be broadly categorized into two groups:
• those with mental health concerns who launch multiple legal actions against diverse targets, and
• those, unsuccessful in a lawsuit, who become aggrieved and refuse to accept defeat. They hopelessly persist attempting to re-litigate their case.

Vexatious litigants abuse the court process, often with a complete disregard for court orders, while paradoxically seeking their own court orders. One sometimes wonders if they are operating under a delusional belief that eventually they will find a judge who will completely understand them and make things ”right.”
As vexatious litigants are usually self-represented, they are initially given a certain amount of leeway. Only with time does the litigant’s obsession become clear. Ultimately that persistence becomes evidence of the party’s unreasonableness.
We learned first-hand about vexatious litigants in 1982 after winning a successful civil claim. Thereafter, the defendant appealed—alleging the trial judge had been bribed. The defendant went on to sue several parties including the Attorney General and many downtown Vancouver law firms. Ultimately, the court granted an order prohibiting him from commencing any further court proceedings except with leave of the court.
Such orders have been made against litigants ranging from the Church of Scientology, to incarcerated malcontents, to defendants in foreclosure proceedings. In appropriate circumstances, our courts are indeed willing to intervene to prevent abuse of the court process.
The Law
Superior courts, such as the BC Supreme Court and Court of Appeal, have an inherent jurisdiction to control their own process. Supplementary to this, many jurisdictions have enacted legislation to allow the courts to control vexatious litigants.
In British Columbia, Section 18 of the Supreme Court Act permits the court to order that a legal proceeding must not be instituted by a named litigant except with leave of the court. Such an order may be made where a court is satisfied that the person has habitually, persistently, and without reasonable grounds instituted vexatious legal proceedings against the same or different persons.
As to the criteria for determining whether legal proceedings are vexatious, the oft cited case, Re. Lang Michener v. Fabian (1987) 59 O.R. (2d) 353, (H. C. J.) has been applied in many BC decisions. In paragraph [19] of that decision, the court enunciated the following principles.
a. The bringing of one or more actions to determine an issue that has already been determined by a court of competent jurisdiction constitutes a vexatious proceeding.

b. Where it is obvious that an action cannot succeed or if the action would lead to no possible good or if no reasonable person can reasonably expect to obtain relief, the action is vexatious.

c. Vexatious actions include those brought for an improper purpose, including the harassment and oppression of other parties by multifarious proceedings brought for purposes other than the assertion of legitimate rights.

d. It is a general characteristic of vexatious proceedings that grounds and issues raised tend to be rolled forward into subsequent actions and repeated and supplemented, often with actions brought against the lawyers who have acted for or against the litigant in earlier proceedings.

e. In determining whether proceedings are vexatious, the court must look at the whole history of the matter and not just at whether there was originally a good cause of action.

f. The failure of the person instituting the proceedings to pay the costs of unsuccessful proceedings is one factor to be considered in determining whether proceedings are vexatious.

g. The respondent’s conduct in persistently taking unsuccessful appeals from judicial decisions can be considered vexatious conduct of legal proceedings.

In British Columbia (Public Guardian and Trustee) v. Brown, 2002 BCSC 1152, Mr. Justice Halfyard set out two distinct elements that must be established for a section 18 application to succeed.

1. The proceedings themselves must be “vexatious.” In other words, the proceedings must be annoying, irritating, distressing, or harassing and must be taken without reasonable grounds.
2. There must be intent. That intent is judged objectively and requires proof of a knowing and deliberate repetition or continuation of the vexatious conduct. It is not necessary to prove that the vexatious litigant actually knows that his or her conduct is vexatious but rather that a reasonable person in those same circumstances would believe the conduct to be vexatious.
Re. Kaiser (2008) 41 CBR (5th) 200 (BCSC), concluded that section 18 orders apply only to future applications and not retroactively to outstanding applications.
This statutory provision, however, is supplementary to similar powers residing in the court’s inherent jurisdiction. In Household Trust Company v. Golden Horse Farms Inc. (1992) BCJ 652, the Court or Appeal held that under this inherent jurisdiction, the court could bar prosecution of proceedings already commenced and also make orders against those defending actions—in this case, defendants in a mortgage action. The court upheld a direction that none of the litigants would be permitted a court audience, except through counsel i.e. they could not personally make submissions to the court—only their lawyer could do so.
Conclusion
The ability to curb abusive litigation must be balanced against a citizen’s right to legitimate access to the courts.
Section 18 of the Supreme Court Act, together with the court’s inherent jurisdiction, provides our courts with valuable tools to prevent the misuse of legal process.
As Justice Southin aptly stated in Household Trust Company v. Golden Horse Farms Inc. (1992) BCJ 652 at page12:
In my opinion, the Supreme Court of British Columbia has an inherent jurisdiction and a corresponding duty to exercise that jurisdiction to protect a petitioner or plaintiff who seeks relief in that Court from proceedings by a defendant who is vexatiously abusing the process of the court. That it is a jurisdiction to be exercised with great caution, I have no doubt. But not to exercise it where there is no other way to bring reason into proceedings is, in effect, to deprive the plaintiff or petitioner of justice according to law. The court if it fails to act becomes but a paper tiger. (Emphasis added)

Nevertheless, judges are typically very hesitant to forbid a party from instituting legal proceedings except with leave of the court. The courts will afford a litigant great leeway to ensure he or she receives a proper hearing. The case must be very clear for such an order to be made.

Judge’s Assessment of Witness Credibility

Any trial lawyer will attest that one can have the best court case in the world, but if the trier of fact does not believe your witnesses, then it is a foregone conclusion that the trial will be lost. I am taking a quotation of law from the decision Frame v Rai 2012 BCSC 1876, where there was much conflicting evidence concerning the ownership of a property purchased and utilized by various members of the nuclear family.

The leading case in British Columbias is Faryna v. Chorny, [1951] 2 D.L.R. 354 (B.C.C.A) for its guidance as to credibility assessment. In this case, O’Halloran J.A. provided the following remarks:

[10] …On reflection it becomes almost axiomatic that the appearance of telling the truth is but one of the elements that enter into the credibility of the evidence of a witness. Opportunities for knowledge, powers of observation, judgment and memory, ability to describe clearly what he has seen and heard, as well as other factors, combine to produce what is called credibility, and cf. Raymond v. Bosanquet at p. 566, 59 S.C.R. 452 at p. 460, 17 O.W.N. 295. A witness by his manner may create a very unfavourable impression of his truthfulness upon the trial Judge, and yet the surrounding circumstances in the case may point decisively to the conclusion that he is actually telling the truth. I am not referring to the comparatively infrequent cases in which a witness is caught in a clumsy lie.

[11] The credibility of interested witness, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. Only thus can a Court satisfactorily appraise the testimony of quick-minded, experienced and confident witnesses, and of those shrewd persons adept in the half-lie and of long and successful experience in combining skilful exaggeration with partial suppression of the truth.

[24] More recently, in Re: Novac Estate, 2008 NSSC 283 the Nova Scotia Supreme Court, at para 36, expanded upon the above principle by summarizing the tools for assessing credibility as including a consideration of the following:

a) The ability to consider inconsistencies and weaknesses in the witness’s evidence, which includes internal inconsistencies, prior inconsistent statements, inconsistencies between the witness’ testimony and the testimony of other witnesses.

b) The ability to review independent evidence that confirms or contradicts the witness’ testimony.

c) The ability to assess whether the witness’ testimony is plausible or, as stated by the British Columbia Court of Appeal in Faryna v. Chorny, [1951] B.C.J. No. 152, 1951 CarswellBC 133, it is “in harmony with the preponderance of probabilities which a practical [and] informed person would readily recognize as reasonable in that place and in those conditions”, but in doing so I am required not to rely on false or frail assumptions about human behavior.

d) It is possible to rely upon the demeanor of the witness, including their sincerity and use of language, but it should be done with caution (R. v. Mah, [2002] N.S.J. No. 349, 2002 NSCA 99, paras. 70-75).

e) Special consideration must be given to the testimony of witnesses who are parties to proceedings; it is important to consider the motive that witnesses may have to fabricate evidence. R. v. J.H., [2005] O.J. No. 39 (Ont. C.A.), paras. 51-56).

[25] Justice Warner then continued at para. 37:

[37] There is no principle of law that requires a trier of fact to believe or disbelieve a witness’s testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness’s evidence, and may attach different weight to different parts of a witness’s evidence. (See R. v. D.R. [1996] 2 S.C.R. 291 at para. 93 and R. v. J.H., supra).

Consolidated Actions For Trial

Suzuki v. DeValone, 2013 BCSC 632 was an appeal from a Masters decision who declined to order two separate actions to be consolidated for trial.

The BCSC, Justice Bowden agreed and dismissed the appeal

[21] In my view, the learned master found correctly that the issues in the two actions are completely different. Furthermore, the parties are not the same. In my view, the learned master correctly applied the decision in Peel. It was not said in Peel, as submitted to the master by the appellant, that if one matter disposes of the other, then they should be consolidated.

27] While that disposes of the grounds of appeal I will add that, although they were not referred to by her, in my view the decision of the learned master is in accordance with the principles enunciated by Master Kirkpatrick, as she then was, in Merritt v. Imasco Enterprises Inc. (1992), 2 C.P.C. (3d) 275 [Merritt].
[28]
At paras. 18 and 19 of Merritt, Master Kirkpatrick stated:
None of the submissions of counsel address the real issue to be determined. That is, are the issues raised by the pleadings sufficiently similar to warrant the order sought and will the order make sense in the circumstances? An application to have actions tried at the same time thus requires an examination of circumstances which may be of a more general nature than is made under R. 27 or 19.
I accept that the foundation of an application under R. 5(8) is indeed disclosed by the pleadings. The examination of the pleadings will answer the first question to be addressed: do common claims, disputes and relationships exist between the parties? But the next question which one must ask is: are they “so interwoven as to make separate trials at different times before different judges undesirable and fraught with problems and economic expense”? Webster v. Webster (1979), 12 B.C.L.R. 172 (C.A.). That second question cannot, in my respectful view, be determined solely by reference to the pleadings. Reference must also be made to matters disclosed outside the pleadings:
(1) Will the order sought create a saving in pre-trial 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?; and
(4) Will there be a real saving in experts’ time and witness fees?

Mutual mistake may void a contract.

The law of mutual mistake is set out in Bell v. Lever Bros., [ 1932] A.C. 161, and Dyson v. Moser, 2003 BCSC 1720.

A contract will be void from the start for mistake if a mistake by both parties to the contract renders the subject matter of the contract fundamentally different from that which both parties believed to exist at the time they entered into the contract, so long as the party seeking to set it aside was not at fault for the mistake

The executors bought court action re a complicated buy- sell agreement.

The court dismissed most of the action on the basis that both parties to the purported contract were mistaken about a fundamental term, the pice, and thus the contract void as there was no consensus ad item between the two parties

The failure to agree on the terms on which the purchase price would be paid, an essential term, means that there was no enforceable contract.

As a result, the parties did not reach a binding agreement on the terms for RR to buy BK’s shares in Kraft through the exchange of letters dated March 8,2007 and April 18,2007.
If so, was there a mutual mistake about something fundamental to that contract?

Credibility-Every trial lawyer can tell you how he or she had a great case, except the #%~|\#* Judge did not believe a word your client said!

It often comes down to who a Judge believes and accepts as a credible witness, as opposed to the opposite. I have seen cases where a judge did not believe the witnesses on either side.

The issue of conflicting evidence given by witnesses for each side is one that requires a trial by a judge with or without a jury, as it is near impossible to judge credibility from reading affidavits- the judge needs to observe and listen carefully to not only what the witness says, but how they appear doing it as well.

The law of credibility can be summarized as follows:

Credibility

In such cases where the parties assert inconsistent versions of the events at issue, it is useful to consider a number of factors including the attitude and demeanour of the witness whose testimony is at issue, the extent to which his or her evidence agrees with that of third parties who have no stake in the outcome of the lawsuit, or of other objective evidence, the likelihood or objective probability that the evidence being advanced is accurate or inaccurate, the interest of the witness has in the outcome of the case, and the ability of the witness to perceive, remember and articulate what he or she is testifying about.

] In Faryna v. Chorny [1952] 2 D.LR. 354 at 357, 4 W.W.R. (N.S.) 171 (B.C.C.A.), O’Halloran J.A. made the following observation:

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.

The Court of Appeal reviewed the law of set-off in Wilson v. Fotsch, 2010 BCCA 226. It described equitable set-off as being available provided that there is a relationship between the cross-obligations such that it would be unfair or inequitable to permit one to proceed without taking the opposing claim into account. The requirements for a claim of equitable set-off are as follows:

1. The party relying on a set-off must show some equitable ground for being protected against his adversary’s demands;
2. The equitable ground must go to the very root of the plaintiffs claim before a set-off will be allowed;
3. A cross-claim must be so clearly connected with the demand of the plaintiff that it would be manifestly unjust to allow the plaintiff to enforce payment without taking into consideration the cross-claim;
4. The plaintiff’s claim and the cross-claim need not arise out of the same contract; and
5. Unliquidated claims are on the same footing as liquidated claims.

[261] The textbook by S.M. Waddams, The Law of Damages, looseleaf (Toronto: Canada Law Book, 1991 at para 1.1770, says the following with respect to tortfeasors who use the proceeds of a conversion to pay down the plaintiff’s debts:
The preferable view, therefore, seems to be not to reduce recovery, on account of repayment of the debt, in any case in which the defendant could not, in an independent action, obtain restitution for the benefit conferred upon the plaintiff by repayment of the debt.

[262] Mr. Justice Stinson of the Ontario Superior Court of Justice commented on the court’s unwillingness to allow recovery of benefits conferred by “officiousness” in J. B.C. Consulting Inc. v. Gray (2000), 47 O.R. (3d) 212 at para. 19, as follows:
[19] Historically, juridical justification for retention of the benefit has been described as existing where a plaintiff acted officiously, or where the defendant has been the unwilling or unwitting recipient of benefits conferred by the plaintiff, that is, where the defendant’s affairs have been interfered with via the plaintiffs payment without the defendant’s awareness or despite the defendant’s objections. The courts have allowed recovery where

the plaintiff has conferred the benefit on the defendant as the result of a legal or practical compulsion, in the absence of officiousness.
[263] Stinson J. allowed the set-off in JBC Consulting. Although there was no compulsion on the plaintiff to confer the benefit, the defendant knew of the benefit he would receive before it was given. Although the defendant did not acquiesce, neither did he object.
[264] Stinson J. also adopted the following passage from J.D. McCamus and P.D. Maddaugh, The Law of Restitution in Canada (Aurora: Canada Law Book, 1990) at 739-740, as an accurate statement of the modern approach to restitution:

In sum, the few unfortunate constraints that have developed in connection with the principle enunciated by Cockburn C.J. in Moule v. Garrett must perforce lose much of their relevance in light of the modern theory of the law of restitution based upon the doctrine of preventing an unjust enrichment. Thus, it should not matter that one party has discharged another’s liability in circumstances of practical, as opposed to strictly legal. compulsion. Nor should it be of concern if the liability of each of the parties should arise from different sources. Indeed, in cases of practical compulsion or economic duress, it is meaningless to speak of any liability whatsoever on the part of the plaintiff to have satisfied the obligation owed by the defendant. Discharge of another’s liability ~ although conferred in an indirect fashion ~ is, after all, simply one form of enrichment. So long as that benefit is bestowed by a plaintiff in circumstances such that the defendant cannot, in all good conscience, retain it, restitutionary relief ought to be awarded…