Author: Trevor Todd

Mortgage Obtained By Fraud Not Valid

Le v Chan ( Trustee) 2023 BCSC 1654 confirmed the law that a mortgage obtained by fraud, such a forgery is invalid.

A mortgage obtained by fraudulent means does not constitute a valid or enforceable charge on title to land in British Columbia: Credit Foncier Franco-Canadien v. Bennett (1963), 43 W.W.R. 545, 1963 CanLII 839 (BCCA) and Reliable Mortgages Investment Corp. v. Chan, 2011 BCSC 1080 at para. 39. Further, a mortgage granted by a party who lacks the valid authority to grant the said mortgage is invalid which accords with the legal principle of nemo dat quod non habet – one cannot give what one does not have: Reliable at para. 31; see also Land Title Act, RSBC 1996, c 250, ss. 25.1, 26(1), 26(2).

[34] Courts have held that when a mortgage application is found to be a forgery, the mortgage registered against title is a nullity, and will be unenforceable and the court will direct the registrar to discharge the mortgage: Homewood Mortgage Investments Ltd. v. Lee, 2008 BCSC 512.

[35] Put simply, a mortgage acquired fraudulently or for which the supposed mortgagor lacked the authority to grant is invalid and unenforceable. However, to rebut the deemed presumption that the registration evinces an interest, the party alleging the fraud must adduce evidence to establish the fraud. Accordingly, in the case at bar, Ms. Chan bears the evidentiary burden to provide “clear and cogent” evidence to establish, on a balance of probabilities, that the Mortgage was obtained by fraud and registered on title fraudulently through forged documents. As Madam Justice Wedge helpfully explained in Lloyd Investments Ltd. v. Wang, 2023 BCSC 303:

[22] As the plaintiff in this action, Lloyds bears the legal onus to prove its case against Ms. Wang. However, the evidentiary onus is on Ms. Wang to prove that the Lloyd Mortgage was entered into fraudulently through a forged power of attorney. The onus of proof with respect to the allegation of fraud advanced by Ms. Wang is on a balance of probabilities. Some authorities suggest that this onus can be met only with clear and cogent evidence. In the case of Bank of Montreal v. Chan, 2004 BCSC 841 [Chan], this Court held as follows at paras. 23-24:

It is common ground that the validity of the mortgage rises or falls with the validity of the powers of attorney.

The Chan respondents bear the onus of proving the powers of attorney to be forgeries. Although the standard of proof is on a balance of probabilities, the onus will not be met except with clear and cogent evidence: Continental Insurance Co. v. Dalton Cartage Ltd., 1982 CanLII 13 (SCC), [1982] 1 S.C.R. 164, 131 D.L.R (3d) 559 (S.C.C.) at 169-170.

[23] The “clear and cogent evidence” standard is not, however, a departure from proof on a balance of probabilities. In Wanson (Bristol) Development Ltd. v. Sahba, 2018 BCCA 260, the Court, after reviewing the case law on the issue, said at paras. 28-29: “What these cases stress that the party with the burden of proving a fact in issue must prove it on a balance of probabilities and on no higher standard, even if the fact involves criminal or other moral blameworthy conduct.”

[24] Most recently, in British Columbia (Director of Civil Forfeiture) v. Angel Acres Recreation and Festival Property Ltd., [2023 BCCA 70], the Court reminded us at paras. 162 to 164 of the decision of the Supreme Court of Canada in F.H. v. McDougal, 2008 SCC 53. In that decision the Court “put to rest any debate that a heightened standard of proof applies in civil cases involving criminal or morally blameworthy conduct”. The level of scrutiny applied by the finder of fact “does not change with the seriousness of the case”. However, the quality of the evidence required to meet the balance of probabilities standard “will depend upon the nature of the claim and of the evidence” adduced.

Executor Removed For Conflict of Interest

Re Thomspon estate 2023 BCSC 1591 is an excellent review of the law relating to the removal and substitution of an executor.

The executor was removed for a ” disabling” conflict of interest as she had previously sued the estate and could be liable for costs.

Removal of Executor

[38] There are three sources of authority that the Court can draw on to remove an executor or trustee and appoint a replacement: the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 [WESA], the Trustee Act, R.S.B.C. 1996, c. 464, and the Court’s inherent authority: Morelli v. Morelli, 2014 BCSC 106 at para. 29.

[39] Section 158 of WESA governs an application to remove or pass over a personal representation and replace them. The relevant portions of s. 158 include:

(3) Subject to the terms of a will, if any, and to subsection (3.1), the court, by order, may remove or pass over a person otherwise entitled to be or to become a personal representative if the court considers that the personal representative or person entitled to become the personal representative should not continue in office or be granted probate or administration, including, without limitation, if the personal representative or person entitled to become the personal representative, as the case may be, …
(f) is
(i) unable to make the decisions necessary to discharge the office of personal representative,
(ii) not responsive, or
(iii) otherwise unwilling or unable to or unreasonably refuses to carry out the duties of a personal representative,
to an extent that the conduct of the personal representative hampers the efficient administration of the estate, or …

[40] Section 159 of WESA provides the Court with the statutory authority to appoint an executor in circumstances where the Court has discharged or removed an executor.

[41] Sections 30 and 31 of the Trustee Act, provides the statutory authority for the Court to remove an individual as trustee of an estate and appoint a replacement. In the application of both WESA and the Trustee Act, the same considerations apply, as provided below.

[42] The Court’s discretion to remove an executor should be guided by the principles listed in Parker v. Thompson (Trustee), 2014 BCSC 1916 at para. 37. The will-maker has the right to choose their executor, and as such their decision is entitled to deference and will only be interfered with if there is clear and cogent evidence to do so. The executor’s acts or omissions must be of such a nature as to endanger the administration of the estate.

[43] The Court’s main consideration is the welfare of the beneficiaries: Parker at para. 37; Burke v. Burke, 2019 BCSC 383 at para. 29. It is not the interests of a particular beneficiary that are to be considered, but rather the benefit of the beneficiaries collectively: Conroy v. Stokes, [1952] 4 D.L.R. 124 at p. 128, 1952 CanLII 227 (B.C.C.A.).
[44] The analysis is contextual and each case will turn on its facts: Burke at para. 43.

[45] In Conroy, the Court of Appeal described the four categories of misconduct by an executor that can warrant their removal:

a) Endangerment of trust property;
b) Want of honesty;
c) Want of proper capacity to execute duties; and
d) Want of reasonable fidelity.

[46] The existence of friction between the executor and one or more beneficiaries is generally, in and of itself, not sufficient to warrant the removal of the executor: Letterstedt v. Broers, (1884), 9 App. Cas. 371 at 389 (South Africa P.C.). However, animosity between those parties, or co-executors, can be relevant to whether it hampers the proper administration of the estate: Dunsdon v. Dunsdon, 2012 BCSC 1274 at para. 202; Levi-Bandel v. McKeen, 2011 BCSC 247 at paras. 21–25. In such circumstances, a finding of wrongdoing is not necessary: Dunsdon at para. 202; Weisstock v. Weisstock, 2019 BCSC 517 at para 44.

[47] In Radford v. Radford Estate (2008), 43 E.T.R. (3d) 74, 2008 CanLII 45548 (O.N.S.C.), Justice Quinn comments that removal is not intended to punish past conduct:
Removal not intended to punish past misconduct

[106] “The authorities are, I believe, consistent in placing the emphasis on the future administration of the estate, and the risks to which it will be exposed if the trustee remains in office. The question is whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries. The sanction of removal is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 28.

[107] But, “past misconduct that is likely to continue will often be sufficient to justify removal …”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 29.
[Emphasis added.]

Conflict of Interest

[48] An executor’s conflict of interest may warrant removal. In Hall v. Hall (1983), 45 B.C.L.R. 154, 1983 CanLII 396 (S.C.), Justice Proudfoot held that conflict of interest and a conflict of duty demonstrate want of fidelity: see also Pangalia Estate, 2021 BCSC 1070 at para. 22. Further, in Morelli at para. 30, Justice Harvey held that the “welfare of the beneficiaries of an estate may be endangered if there is a conflict of interest”. However, not all perceived or actual conflicts of interest will give rise to the removal of an executor: Burke at para. 43.

[49] In Ching Estate (Re), 2016 BCSC 1111, an executor was passed over due to perceived unequal treatment and conflict of interest, with Justice Affleck holding that the “perception of a disabling conflict of interest is overwhelming”: at para. 20. The Court held that a “perceived” conflict of interest may lead to removal:

[22] The authorities indicate that even a “perceived” conflict of interest between an executor’s personal interests and her obligation to administer the trusts in the will in the interests of the beneficiaries may cause this court to intervene to appoint a new executor or an administrator to avoid even the appearance of conflict.

[50] These cases demonstrate that in situations where the trustee is in a conflict of interest, actual or perceived, if it is to the detriment of the beneficiaries, the executor must be removed.

Section 151 of WESA

[51] Section 151 of WESA gives a beneficiary, wills variation claimant, or intestate successor the right to seek leave to commence proceedings on behalf of the estate, often in circumstances where the personal representative is in a conflict of interest with respect to a potential claim and therefore unlikely to commence proceedings to pursue the estate’s interests: Soo Estate, 2023 BCSC 762 at para. 25.

[52] In Soo Estate at para. 26, Justice Francis concluded that s. 151 of WESA did not remove the requirement that executors be free from conflicts of interest with respect to the estate they seek to administer and an executor is a fiduciary, and like any fiduciary, must be in a position where they can protect the best interests of the beneficiaries without the interference of their own personal interests.

Assessing Special Costs in Estate Litigation

Re Derco Estate 2023 BCSC 1622 involved the assessment of special costs for a two day passing of accounts hearing

The following is an excerpt of the principles of law used by the court in the assessment of the parties special costs:

[14] Part 25 of the Supreme Court Civil Rules, B.C. Reg. 168/2009 [SCCR], governs estate proceedings. Rule 25-13(1) provides that a personal representative may apply for an order for the passing of the personal representative’s accounts, which Miles did in November 2021. Rule 25-13(7) expressly provides that unless the court on an application otherwise orders, if costs are payable under an application for the passing of accounts, those costs must be assessed as special costs and that Rules 14-1(3) and (5) of the SCCR apply.

[15] Rule 14-1(3) stipulates that on an assessment of special costs, a registrar must allow those fees that were “proper or reasonably necessary to conduct the proceeding”, which requires the registrar to consider all of the circumstances of the case, including the following factors listed in R. 14-1(3)(b)(i) through (viii):

(i) the complexity of the proceeding and the difficulty or the novelty of the issues involved;

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

(iii) the amount involved in the proceeding;

(iv) the time reasonably spent in conducting the proceeding;

(v) the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the proceeding;

(vi) the importance of the proceeding to the party whose bill is being assessed, and the result obtained;

(vii) the benefit to the party whose bill is being assessed of the services rendered by the lawyer;

(viii) Rule 1-3 and any case plan order.

[16] Rule 1-3 establishes that the object of the SCCR is to secure the just, speedy and inexpensive determination of every proceeding on its merits, which includes, so far as is practicable, conducting the proceeding in ways that are proportionate to the amount involved, the importance of the issues in dispute, and the complexity of the proceeding.

[17] In Gichuru v. Smith, 2014 BCCA 414 [Gichuru], at para. 155, the Court of Appeal noted that when assessing special costs, the assessor “must only allow those fees that are objectively reasonable in the circumstances …. the purpose of a special costs award is to provide an indemnity to the successful party, not a windfall.” In order to determine if a legal fee is reasonably objective, “it is often necessary to know the particulars of what the lawyer did to accrue it … the fact that a lawyer has billed a certain sum does not necessarily make the fee reasonable” (Gichuru, paras. 104-105). An assessment of special costs must be guided by some evidence to permit an objective assessment of a reasonable fee: Gichuru, para. 156.

[18] The assessment of special costs is objective, as opposed to the subjective review of a lawyer’s bill conducted under the Legal Profession Act, S.B.C. 1998, c. 9. In Bradshaw Construction Ltd. v. Bank of Nova Scotia, 1991 CanLII 4019 (BC SC), 54 B.C.L.R. (2d) 309 [Bradshaw], [aff’d 1992 CanLII 4038 (BC CA)], Justice Bouck noted at p. 319 that special costs “are not necessarily the fees that the successful solicitor would recover from his or her client … [but] are the fees that a reasonable client would pay a reasonably competent solicitor for performing the work described in the bill.”

[19] Rule 14-1(5) provides that a registrar must determine which disbursements have been necessarily or properly incurred in the conduct of the proceeding, and must allow a reasonable amount for those disbursements. The authorities establish that whether a disbursement was necessarily or properly incurred is case and circumstance specific and must include consideration of proportionality under R. 1-3 (see, for example, Brown v. Goodacre, 2019 BCSC 1008, para. 30, citing Turner v. Whittaker, 2013 BCSC 712 at para. 5). These authorities also confirm that the time for assessing whether a disbursement was necessarily or properly incurred is when the disbursement was incurred, without the benefit of hindsight.

[20] The law is clear that special costs may be awarded to a self-represented litigant; however, there is a lack of clarity in the authorities regarding how special costs for self-represented litigants should be calculated: Neural Capital GP, LLC v. 1156062 B.C. Ltd., 2022 BCSC 1800 [Neural Capital], at para. 75; see also K.L.M. v. L.K.M., 2023 BCSC 1414, at para. 41. The authorities regarding the calculation of a self-represented litigant’s special costs are discussed further in the assessment of the special costs Miles claims.

[21] Rule 25-13(7) expressly provides that if costs are payable under an application for the passing of accounts, those costs must be assessed as special costs, unless the court otherwise orders. This rule codifies the general principle that in estate litigation, courts award special costs to executors payable out of the estate, recognizing that executors are entitled to be indemnified for the costs that they properly and reasonably incur while acting within the ambit of their fiduciary duties (see, for example, Mawdsley v. Meshen, 2011 BCSC 923, at para. 39).

[22] In recent jurisprudence, the Court of Appeal has concluded that there is no general rule that a party is entitled to special costs of an assessment of those costs, unless the judge orders special costs are awarded “of a proceeding”, which encompasses the assessment: 567 Hornby Apartment Ltd. v. Le Soleil Restaurant Inc., 2020 BCCA 69 [Le Soleil], paras. 137-141.

Judicial Discretion and Appeals From It

Kish v Sobchak 2016 BCCA 65 deals with the court’s exercise of judicial discretion and when it is appropriate for an appellate court to interfere in the trial judge’s exercise of discretion. The appeal court is mandated not to simply insert the exercise of their discreation in the place of that exercised by the trial judge.

The case was a will variation claim and the appeal court interfered with the discretion of the trial judge and reduced the trial award in half.

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

According to my definition, an issue falls within a judge’s discretion if, being governed by no rule of law, its resolution depends on the individual judge’s assessment (within such boundaries as have been laid down) of what it is fair and just to do in the particular case. He has no discretion in making his findings of fact. He has no discretion in his rulings on the law. But when, having made any necessary finding of fact and necessary ruling of law, he has to choose between different courses of action, orders, penalties or remedies he then exercises a discretion. It is only when he reaches the stage of asking himself what is the fair and just thing to do or order in the instant case that embarks on the exercise of a discretion.

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

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

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

The standard of review applicable in Canada to the exercise of judicial discretion is found in Friends of the Oldman River Society v. Canada (Minister of Transport) [1992] 1 S.C.R. 3. There La Forest J. wrote for the majority:

Stone J.A. cited Polylok Corp. v. Montreal Fast Print (1975) Ltd., [1984] 1 F.C. 713 (C.A.), which in turn approved of the following statement of Viscount Simon L.C. in Charles Osenton & Co. v. Johnston, [1942] A.C. 130, at p. 138:

The law as to the reversal by a court of appeal of an order made by the judge below in the exercise of his discretion is well-established, and any difficulty that arises is due only to the application of well-settled principles in an individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion, had it attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight, or no sufficient weight, has been given to relevant considerations such as those urged before us by the appellant, then the reversal of the order on appeal may be justified.

That was essentially the standard adopted by this Court in Harelkin v. University of Regina, [1979] 2 S.C.R. 561, where Beetz J. said, at p. 588:

Second, in declining to evaluate, difficult as it may have been, whether or not the failure to render natural justice could be cured in the appeal, the learned trial judge refused to take into consideration a major element for the determination of the case, thereby failing to exercise his discretion on relevant grounds and giving no choice to the Court of Appeal but to intervene. [At 76-7; emphasis by underlining added.]

This standard was affirmed and supplemented more recently in Penner v. Niagara (Regional Police Services Board) 2013 SCC 19, where the Court stated:

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 injustic

When The Lawyer Is Also a Witness

Re Zenrosso Estate 2023 BCSC dealt with an issue where a conflict of interest arose with respect to a lawyer representing the sole beneficiary personally and also in the capacity of the executor at a passing of accounts where the lawyer would also be a witness. The issue was the division of fees between acting in the role of executor and being the residual beneficiary

The court held that the lawyer was in a conflict of interest and was removed as acting for the executor at the passing of the accounts.

The Code of Professional Conduct for Lawyers In British Columbia [Code] states:

2.1-3(k) A lawyer who appears as an advocate should not submit the lawyer’s own affidavit to or testify before a court or tribunal except as to purely formal or uncontroverted matters, such as the attestation or custody of a document, unless it is necessary in the interests of justice. If the lawyer is a necessary witness with respect to other matters, the conduct of the case should be entrusted to other counsel

5.2-1 A lawyer who appears as advocate must not testify or submit his or her own affidavit evidence before the tribunal unless

(a) permitted to do so by law, the tribunal, the rules of court or the rules of procedure of the tribunal;

(b) the matter is purely formal or uncontroverted; or

A lawyer should not express personal opinions or beliefs or assert a fact that is properly subject to legal proof, cross-examination or challenge. The lawyer should not, in effect, appear as an unsworn witness or put the lawyer’s own credibility in issue. The lawyer who is a necessary witness should testify and entrust the conduct of the case to another lawyer. …

The Code is not binding on a court, but it may be persuasive as an important statement of public policy: MacDonald Estate v. Martin, 1990 S.C.R. 1235, [1991] 1 W.W.R. 705 at paras. 16 and 18.

This Court has the inherent jurisdiction to remove from the record lawyers who are in a conflict of interest: MacDonald Estate at p. 713.

Some salient factors to be considered in deciding whether to remove a lawyer of record were set out in Essa (Township) v. Guergis, [1993] O.J. No. 2581 at para. 48.

These include:

(a) The stage of the proceedings;

(b) The likelihood that the witness will be called;

(d) The significance of the evidence to be led;

(e) The impact of removing counsel on the party’s right to be represented by counsel of choice;

(f) Whether trial is by judge or jury;

(g) The likelihood of a real conflict arising or that the evidence will be “tainted”;

(h) Who will call the witness; and

(i) The connection or relationship between counsel, the prospective witness and the parties involved in the litigation.

In Elkay Management Inc. v. Law Studio Professional Corporation, 2021 ONSC 3181 at para. 18, the Ontario Superior Court of Justice provided additional principles to consider on a motion to remove a lawyer of record who may be a witness at trial, in particular (internal citations omitted):

…

(v) The court’s concern of a lawyer appearing as a witness is that (i) there may be a conflict of interest between the lawyer and client and (ii) the administration of justice can be impaired by a conflict between the lawyer’s obligations of objectivity and detachment which are owed to the court and the lawyer’s obligation to his or her client to present evidence in as favourable a light as possible. …

(xi) If there is some doubt or “merely a potential” that a lawyer will be called as a witness at trial, the courts should be more generous in allowing the lawyer to remain on the record and deferring the matter until after discoveries or leaving the matter to the trial judge…

(xii) “In view of the expense of litigation and the enormous waste of time and money and the substantial delay which can result from an order removing solicitors, courts should only do so in clear cases”…

(xiv) Certainty that a lawyer will be called as a witness is not required. Rather, the court must consider the likelihood of the lawyer being called as a witness…

At para. 15 of Webb v. Attewell (October 4, 1994) Vancouver A013381/CA13480 (B.C.C.A.), cited in Fraresso v. Wanczyk, 1995 CanLII 1127 (B.C.S.C.) at para. 7:

The law does not forbid a barrister appearing for his client because he has given, or may have to give, evidence. The rule of professional practice is that he or she ought not to do so when doing so may put the court in an invidious position. The court is in an invidious position when counsel gives evidence on a contested issue. When counsel does that, he or she is also in the embarrassing position of inviting the court to accept counsel’s evidence rather than that of another witness.

Executors Should Not Purchase Estate Assets

Re Dewberry estate 2023 BCSC 325 reviewed the law that executors should not self deal with estate assets.

An executor or administrator owes a fiduciary’s duty of loyalty to the beneficiaries, and the well-settled general rule is that a trustee cannot purchase trust property. This rule against self dealing reflects the duty of loyalty: a use of the fiduciary power to dispose of trust property to the trustee is an obvious conflict of interest. See National Trust Co. Ltd. v. Osadchuk, [1943] S.C.R. 89 at 91-92; Re Nathanson (1971), 18 D.L.R. (3d) 495 at 502 (N.S.S.C.(T.D.)); Waters’ Law of Trusts in Canada, 5th ed., at p. 1018.

The general rule may give way if all beneficiaries are of full capacity and they give fully informed consent to the proposed self-dealing: Waters’ Law of Trusts, at p. 1020. Court approval is another available form of authorization. Ms. Dewberry is an in-person litigant, and her notice of application does not specify the authority on which the Court may act. I am satisfied, however, that the Court has the jurisdiction to grant approval to self-deal in appropriate circumstances– either on the basis of an application for advice and directions under s. 86 of the Trustee Act (see Waters’ Law of Trusts, at p. 1020), or on the basis of the Court’s inherent power to authorize a trustee to sell trust property (see Re Nathanson, at 501).

The burden on a trustee seeking permission to sell trust property to herself is substantial. She must establish that a sale is necessary and that “no other purchaser has been forthcoming or seems likely to come forward within a reasonable time, and that his or her own offer in the circumstances is a favourable one”: Waters’ Law of Trusts, at p. 1020.

In Re Mitchell (1970), 12 D.L.R. (3d) 68 (N.S.S.C.(A.D.)), Cooper J.A. reviewed the leading cases that show the limited circumstances in which the general rule will be relaxed, and held at p. 79 that “[a]pproval by the Court of a sale of trust property to a trustee will only be given where it is clearly to the advantage of the beneficiaries.”

In that case, because there was another person by the name of Matheson prepared to purchase at the same price as the trustee, the Court overturned the approval granted to the trustee by the judge below: “The only way in which she could buy would be by Mr. Matheson dropping out of the picture and by her establishing that no other purchaser could be found at a price equal to that offered by her” (p. 81).

When Do Spouses Separate?

Dixson v Moss 2023 BCSC 1248 discussed the law relating to a contested claim as to when the spousal parties separated.

The date of spousal separation can be very important in some estate litigation claims.

The question when the parties separated is a question of mixed fact and law that requires the application of the legal test for same.

In S. (H.S.) v. D. (S.H.), 2016 BCSC 1300. While that was a decision under the former FRA, the court referred and relied upon decisions under the FLA in considering the principles that apply to the determination of whether parties have separated:

[42] … The Court’s task is to assess objectively, on the totality of the evidence, whether one spouse held a settled intention to separate and communicated that intention through his or her conduct to the other spouse. An express statement is only one of the factors for consideration in what is necessarily a contextual analysis.

[43] The Ontario Court of Appeal in Re Sanderson and Russell (1979), 1979 CanLII 2048 (ON CA), 24 O.R. (2d) 429 (C.A.), held, in the context of a common law relationship, that a relationship has come to an end “when either party regards it as being at an end, and by his or her conduct, has demonstrated in a convincing manner that this particular state of mind is a settled one”: at 432. This statement was cited with approval by the Supreme Court of Canada in Hodge v. Canada (Minister of Human Resources Development), 2004 SCC 65 at para. 42.

[44] In Gosbjorn v. Hadley, 2008 BCSC 219, Madam Justice Gray adopted the analysis articulated in Hodge:

[142] Using the analysis suggested in Hodge, parties cease to live and cohabit in a marriage-like relationship when either party regards the relationship to be at an end, and by his or her conduct, demonstrates in a convincing manner that this particular state of mind is a settled one. [Emphasis added.]

[45] In Nearing at para. 54, Madam Justice Fleming recognized that there must be a unilateral intention, as well as “action consistent with that intention”. At para. 56, she observes that “a clear statement by one of the parties of his or her desire to terminate the relationship” is one of a range of factors a court will consider in determining whether there has been a separation. In my view, the Court did not endorse the notion that such a statement is necessary.

[46] The Court in Weber v. Leclerc, 2015 BCCA 492, recently considered the definition of “spouse” under the Family Law Act. The Court reviewed the appellate authorities that have evaluated the characteristics of a “marriage-like” relationship and observed that the jurisprudence has evolved in accordance with the changing societal norms surrounding marriage. The Court must apply a holistic approach, having regard to all aspects of the relationship. While the Court must consider the evidence expressly describing the parties’ intentions, the Court must test that evidence by considering whether the objective evidence of the parties’ lifestyle and interactions is consonant with those intentions: at para. 23.

[143] The determination of a date of separation can be a somewhat arbitrary exercise. The dissolution of a long-term relationship is often a long and convoluted process. The Court must attempt to locate the point at which at least one of the parties regarded the relationship as at an end, and by their conduct demonstrated in a convincing manner that that state of mind was a settled one.

[144] In making this determination, s. 3(4)(b) of the FLA provides:

(b) the court may consider, as evidence of separation,
(i) communication, by one spouse to the other spouse, of an intention to separate permanently, and
(ii) an action, taken by a spouse, that demonstrates the spouse’s intention to separate permanently.

Presumption of Revocation of Lost Will Rebutted

In Re Galloway Estate 2023 BCSC 1204 the presumption of revocation of a lost will was rebutted and a copy of the deceased’s will was admitted to probate.

Because the safe keeping of the last will was the fault of the testator, each of the parties were awarded special costs.

The presumption of revocation was summarized in Morton v. Christian, 2014 BCSC 1303

[50] The defendants rely on a presumption of revocation, which was succinctly described by A.F. Wilson J. in Haider v. Kalugin, 2008 BCSC 930 at para. 9:
If a Will last known to be in custody of testator is not found at his death, the presumption is that the testator destroyed it with the intention of revoking it (“animo revocandi”). However, that presumption may be rebutted by evidence, written or oral, of the facts. The strength of the presumption will depend on the character of the custody which the testator had over the Will: Sugden v. Lord St. Leonards (1876), 1 P.D. 154 (English C.A.).

[51] In Haider there was no direct evidence that the testator ever had the original will in his possession, and the court refused to draw that inference. The presumption was held not to apply.

[52] The presumption of revocation is based in part on a logical inference that a person of ordinary prudence would keep safe an original document as important as a will, and that failure to find such an important document after a person’s death is presumptive evidence that it was intentionally destroyed by that prudent person. It goes to both the physical act of destruction and the intention to destroy …

In Haider v Kalugin 2008 BCSC 930 the Court identified the following as factors that might be considered in determining whether the presumption is overcome such that a copy should be admitted into probate:

• whether the terms of the will are reasonable;
• whether the deceased continued to have good relationships with the beneficiaries under the will up to the date of death;
• whether personal effects of the deceased were destroyed prior to the search for the will being carried out;
• the nature and character of the deceased in terms of taking care of their personal effects;
• whether there were any dispositions of property that support or contradict the terms of the will;
• statements made by the testator confirming or contradicting the terms of distribution set out in the will;
• whether the deceased was of the character to store valuable papers and whether the deceased had a safe place to store papers;
• whether there is evidence that the deceased understood the consequences of not having a will, and the effect of an intestacy; and
• whether the deceased made statements indicating the deceased had a will.
While the listed considerations may be helpful, all of the relevant facts in a case must be considered. The list is non-exhaustive.

The court in Galloway found that it did not make sense for the testator to intentionally destroy the will as on an intestacy a person he was known to despise would have inherited.

Petitions and Triable Issues

Some types of claims must be brought by petition- proving a will in solemn form and partition and sale are two examples.

Generally speaking if the petition was opposed it would be necessary to apply to court to convert the petition into an action, provide for examinations for discovery and set the matter for trial.

That general rule changed in 2022 by the Court of appeal as stated in Ross Estate (Re), 2023 BCSC 467 paragraphs 53 through to 56:

[53] Until the decision of the Court of Appeal in Cepuran v. Carlton, 2022 BCCA 76, a petition was required be converted into an action and sent to the trial list if there was a “bona fide triable issue” – that is, there were disputes of fact or law – unless the party requesting the trial was “bound to lose” … Put another way, before proceeding by petition, the judge hearing the matter had to be satisfied that there is “no dispute as to the facts or law which raises a reasonable doubt or which suggests that there is a defence that deserves to be tried” … The test is the same as the one that is applied on an application for summary judgment.

[54] That is still the definition of a triable issue, but in Cepuran a five-justice division of the Court reconsidered the requirement in Saputo that a petition has to go to the trial list whenever that definition is met. Instead, the Court concluded that:

158 It should be kept in mind that the starting point for those matters that are properly brought by way of petition is that the Rules contemplate that a summary procedure will be appropriate… This is different than the starting point for an action. There should be good reason for dispensing with a petition’s summary procedure in favour of an action. The mere fact that there is a triable issue is no longer a good reason.

The modern approach to civil procedure… is to allow parties and the trial courts to tailor the pre-trial and trial procedures to a given case, in the interests of proportionality and access to justice, while preserving the court’s ability to fairly determine a case on the merits. …R. 16-1(18) and R. 22-1(4) work to reflect this modern approach within a petition proceeding.

[A] judge hearing a petition proceeding that raises triable issues is not required to refer the matter to trial. The judge has discretion to do so or to use hybrid procedures within the petition proceeding itself to assist in determining the issues, pursuant to R. 16-1(18) and R. 22-1(4). For example, the judge may decide that some limited discovery of documents or cross-examination on affidavits will provide an opportunity to investigate or challenge the triable issue sufficiently to allow it to be fairly determined by the court within the petition proceeding, without the need to convert the proceeding to an action and refer it to trial.

At a minimum, when considering whether to order the use of hybrid procedures within the petition proceeding itself, or to refer the matter to trial, the court will need to be mindful of the object of the Rules set out in R. 1-3: to secure the just, speedy and inexpensive determination of every proceeding on its merits, and so far as can be achieved, in ways that are proportionate to the amount involved, the importance of the issues, and the complexity of the proceeding.

At para. 165 the Court “commended” a list of factors that may be relevant when deciding to convert a petition proceeding to an action [those being take from] Terasen Gas Inc. v. Surrey (City), 2009 BCSC 627, at para. 39. This list was in turn drawn from Haagsman v. British Columbia (Minister of Forest) … [and] Those factors are:

(a) the undesirability of multiple proceedings;
(b) the desirability of avoiding unnecessary costs and delay;
(c) whether the particular issues involved require an assessment of the credibility of witnesses; and
(d) the need for the Court to have a full grasp of all the evidence; and
(e) whether it is in the interests of justice that there be pleadings and discovery in the usual way to resolve the dispute.

The Court added at para. 166 that “[t]he factors that may be relevant will evolve with time and the circumstances of a particular case.”

Extrinsic Evidence Admissible To Determine Intention in S. 58 WESA

In Re Hadley Estate 2017 BCCA 311the Court of Appeal underscored the importance of evidence, including extrinsic evidence to determine testamentary intention in S.58 WESA applications to remedy a defective “will”.

40. Sitting as a court of probate, the court’s task on a s. 58 inquiry is to determine, on a balance of probabilities, whether a non-compliant document embodies the deceased’s testamentary intentions at whatever time is material.

The task is inherently challenging because the person best able to speak to these intentions — the deceased — is not available to testify. In addition, by their nature, the sorts of documents being assessed will likely not have been created with legal assistance.

Given this context and subject to the ordinary rules of evidence, the court will benefit from learning as much as possible about all that could illuminate the deceased’s state of mind, understanding and intention regarding the document.

Accordingly, extrinsic evidence of testamentary intent is admissible on the inquiry: Langseth Estate v. Gardiner (1990), 75 D.L.R. (4th) 25 at 33 (Man. C.A.); Yaremkewich Estate (Re) at para. 32; George. As is apparent from the case authorities, this may well include extrinsic evidence of events that occurred before, when and after the document was created: see, for example, Bennett; George; Estate of Young; Re MacLennan Estate (1986), 22 E.T.R. 22 at 33 (Ont. Surr. Ct.); Caule v. Brophy (1993), 50 E.T.R. 122 at paras. 37-44 (Nfld. S.C.).