Loan or Gift From Mom/ Dad To Newly Weds

I previously wrote on the “bank of mom and dad” and how they had an almost %100 failed collection rate when the wedding “gift” suddenly turns into a loan after the  marriage fails.

 

Whether the advancement of funds from one party to another is a loan or a gift is a common theme in estate litigation and more so when it involves families and money.

 

The courts have more frequently than not found that the out of luck parents intended a gift when the monies were advanced and not a loan.

 

Typically since it is family, the details are not documented and signed . The parents attitude is often that it is a gift so long s the marriage holds and if not, we want our money back.

 

In Zucker v Zucker 2022 BCSC 2025 the parents did the usual thing of advancing monies to a child and his spouse for them to buy a home. There was a mortgage and a signed promissory note.

The child of the parents agreed with them at trial that the monies were advanced as a loan but the spouse argued that it was a gift.

Based on some unique evidence the court held that the parents intended a loan.

 

At para. 43, the court noted that in Kuo v. Chu, 2009 BCCA 405 (B.C. C.A.) at para. 9, the Court of Appeal adopted the following factors from Locke v. Locke, 2000 BCSC 1300 (B.C. S.C.), as applicable to the question of whether a loan or a gift was intended:

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

(b) Whether the manner for repayment is specified;

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

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

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

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

(g) Whether there was any expectation, or likelihood, of repayment.
The court firstly attempted to determine the actual intention of the transferors on the balance of probabilities.
The court starts with the presumption of a resulting trust, and weighs the evidence in an attempt to ascertain the transferors actual intention .
The presumption of resulting trust only applies where there is insufficient evidence to rebut it on a balance of probabilities ( Pecore v Pecore 2007 SCC 44.
Since the inquiry focuses on the intention of the transferors the state of knowledge of the opposing spouse about the transaction is not determinative ( Tobias v Tobias 2016 BCSC 125 at 42)
The court seized on the unusual fact that the defendants at one point transferred the title to one of the parents finding that such an act was persuasive reliable circumstantial evidence that the plaintiffs did not intend the monies to be a gift.
The defendants also partially repaid the monies and a partial repayment can be evidence that a loan was intended.  Kuo v Cho 2009 BCCA 405 at para.9
The court found that the defendants were liable to the plaintiffs on the basis of a resulting trust.

Court Inherent Jurisdiction to Prevent Miscarriage of Justice

In Zant v Zant 2022 BCSC 2023 the Court exercised it’s inherent jurisdiction to prevent an abuse of court and miscarriage of justice.

During temporary covid court rules, an imposter posed as a wife and signed and spoke to a consent order over telephone that settled the wife’s interests for very little.

Evidence came forward one year later that the “wife’ was an imposter”, the real wife brought court proceedings to set aside the consent court order, and the court did so

INHERENT JURISDICTION

The court has inherent jurisdiction to set aside a consent order where there are grounds that would invalidate a contract.

The British Columbia Court of Appeal in Racz v. Mission (District), [1988] B.C.J. No. 19 (C.A.) endorsed the law relating to setting aside a consent order summarized by Fraser and Horn, Conduct of Civil Litigation in British Columbia, Vol. 2 as follows:

[8] The law relating to the setting aside of a consent order is summarized by the editors of Fraser and Horn, Conduct of Civil Litigation in British Columbia, vol. 2 at p. 1064 (January 1985):

27.11 Order Obtained by Consent.

An order entered by consent is in effect an agreement of compromise and such an order may be set aside on any ground which would invalidate a contract. In all other respects the judgment has full force and validity. A separate action must be brought to set aside a final order. Where the order is interlocutory however, a motion may be made to set it aside.
Grounds upon which a consent order may be set aside include lack of authority of counsel, common mistake, fraud, collusion, duress and illegality.

Nichol v. Nichol, 2015 BCCA 278 summarized the inherent jurisdiction of the court in more general terms at para. 28:

[28] Further, the Supreme Court has inherent jurisdiction to prevent miscarriages of justice. As this Court stated in R & J Siever Holdings Ltd. v. Moldenhauer, 2008 BCCA 59, at para. 14:

[14] … In addition to the powers conferred by the Rules of Court, the Supreme Court of British Columbia, as a superior court of record, has inherent jurisdiction to regulate its practice and procedures so as to prevent abuses of process and miscarriages of justice: see I.H. Jacob, “The Inherent Jurisdiction of the Court” (1970) 23 Current Leg. Prob 23 at 23-25. As the author said, at 25,

The inherent jurisdiction of the court may be exercised in any given case, notwithstanding that there are Rules of Court governing the circumstances of such case. The powers conferred by the Rules of Court are, generally speaking, additional to, and not in substitution of, powers arising out of the inherent jurisdiction of the court. The two heads of powers are generally cumulative, and not mutually exclusive, so that in any given case, the court is able to proceed under either or both heads of jurisdiction.

The Annulment Order was also set aside on the basis that it constitutes an abuse of process. There should be no question that it is an abuse of process for a party to secure an order of the court with the assistance of an imposter.
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Wills Variation and Estranged Children

J.R.v J.D.M. 2016 BCSC 2265 discusses in great detail the law and related facts of the case in a wills variance case brought by the  estranged child of the deceased.

 

The Facts:

No explanation was left by the deceased for the disinheritance other than the notaries notes that he had not seen his daughter for over ten years.

The daughter’s evidence that she had been sexually and emotionally abused by her father, together with his lack of financial contribution to her education and general welfare was accepted by the court.

As is often the case in estrangement cases that I have dealt with, the child left home at an early age ( 15) .

When this occurs it is  my experience that  it is done for valid reasons.

Any attempt by her in subsequent years to make amends with her father was rejected by him. The court accepted her evidence that there had been nothing positive or healthy in her relationship with her father and that she reasonably believed that her father had no genuine interest in making amends are pursuing any reconciliation.

Generally speaking in my experience, when children leave home at an early age and deliberately have little or no contact with either or both parents, there is usually a valid reason that amounts to the  fault on behalf of the parents to have caused the estrangement.

The court somewhat recognize such behavior and are receptive to the notion that the failure of a parent to financially contribute to a child support during his or her minority is a factor in assessing his or her moral claim for a variation of a parents will when the child has been disinherited.

The court found that any telephone calls between the daughter and the father were distressing and demeaning to the daughter. She was not invited to his second wedding but did attend his funeral.

The court found as a fact that it was the father’s mistreatment of his daughter and his voluntary abdication of his parental obligations that cause the fracture of the father daughter relationship.

As such, the onus for repairing the relationship and seeking any form of reconciliation with his daughter rested squarely with the father and his moral duty to her was enhanced as a result of his blameworthy conduct.

THE  LAW

[98]        When faced with a long period of estrangement as in this case, the court will  inquire into the role played by the testator. If the estrangement is largely the fault of the testator, it will likely not negate a testator’s moral duty to an adult child. McBride, at para. 132; Gray v. Nantel, 2002 BCCA 94 at paras. 17-21. The Court’s summary at para. 132 of McBride is of particular relevance to this case:

“In the early development of the caselaw, a long period of separation, abandonment or estrangement between a child and testator was frequently, though not invariably, taken to militate against finding a moral duty to an adult child. The modern judicial trend indicates that the court will enquire into the role played by the testator in the estrangement or relationship breakdown, and where it is seen to be largely the fault of or at the insistence of a testator, it will likely not negate a testator’s moral duty, and may even enhance it. The weight of the authorities also indicates that the court may discern a moral duty as a means of rectifying the testator’s childhood neglect of the children: Gray v. Gray Estate, 2002 BCCA 94, 98 B.C.L.R. (3d) 389,”

Doucette v. Clarke, 2007 BCSC 1021, 35 E.T.R. (3d) 98 [Doucette]; Tomlyn v.Kennedy, 2008 BCSC 331, 38 E.T.R. (3d) 289; Wilson v. Watson, 2006 BCSC 53, 21 E.T.R. (3d) 285; P.S.G. v G.G. Estate, 2005 BCSC 1855; Ryan.

[123]     The comments of Donald J.A. in Gray in addressing the moral claim of an adult child in a WVA claim are apposite in this case:

“I cannot accept that a child so neglected for his first 18 years and then treated shabbily during a brief reconciliation can be said to forfeit the moral claims to a share in his father’s estate by abandoning any further effort to establish a relationship. The fault in this sad story lies with the father and, in my opinion, the onus to seek further reconciliation was on his shoulders. The testator gave the appellant virtually nothing in an emotional or material way; the will was his last opportunity to do right by his son.”

Settlement Agreements to Be Upheld

The bar to set aside a settlement agreement is a high one.

There is a great public interest in holding people to their bargains.

BC courts have repeatedly cited the principles set out by the British Columbia Court of Appeal in Robertson v. Walwyn Stodgell Cochran Murray Ltd. 24 BCLR (2d) 385 (BCCA), 1988 CarswellBC 120 at para 9, cited in Lessing Brandon & Company LLP v. Dyck and others, 2019 BCSC 2331 at para 43:

“The fact that the settlement agreement may not have been a desirable one from [one parties point of view], or the fact that they may have received poor advice from their lawyer, or the fact that they later changed their minds, cannot provide grounds for setting aside the settlement agreement, or for a refusal to enforce it […]

Sojka v Sojka 2018 BCSC 562 reviews the law with respect to enforcement of a settlement reached at a mediation where both parties were represented by counsel, and one party attempted to renege on the agreement by utilizing what the court regarded as “settler’s remorse.”

The plaintiff brought on a court application to enforce the minutes of settlement that were signed by the parties and their counsel, and relied upon S 8(3) of the Law and Equity act and the inherent jurisdiction of the court to enforce the terms of settlement, which the court in fact did.

The defendants in their attempt to renege on the settlement argued that they were mistaken as to certain evaluations of property at the mediation, which the court found was not in fact the case, finding that the minutes of settlement and release constituted a clear agreement between the parties.

The court followed the decision of Roumanis v Hill 2013 BCSC 1047 as to when the enforceability of a settlement agreement ought to be decided on a summary procedure.
The court stated:

The question of the proper procedure to adjudicate the enforceability of the settlement was addressed in Mackenzie v Mackenzie (1975) BCJ 1114 were the court reviewed the authorities and concluded that the court ought to enforce settlement upon application in the action of justice could be done by proceeding summarily.

The court found that there is a sound policy for the courts to enforce the terms of a valid settlement agreement as stated by the BC Court of Appeal in Robertson v Walwyn et al (1988) 24 BCLR )2d) 385 (BCCA):

“Justice affects both parties and requires a balancing of their interests. The fact that the settlement agreement may not have been a desirable one from the point of view of the Robertsons, or the fact that they may have received for advice from their lawyer, or the fact that the later change their minds, cannot provide grounds for setting aside the settlement agreement, or refusal to enforce it. And it would do scant justice to the interests of the defendants in this case to recognize the validity of the settlement agreement, and that it will ultimately prevail, but to refuse to enforce it at this time and in these proceedings.”

Hawitt v Campbell 1983 Carswell BC 199 (BCCA) set out that a court could refuse to exercise its discretion to perfect a settlement where:

1. There was a limitation on the instructions of the solicitor known to the opposite party;
2. There was a misapprehension by the solicitor making the settlement of the instructions of the client or the facts of the type that would result in an justice or make it unreasonable or unfair to enforce the settlement;
3. There was fraud or collusion;
4. There was an issue to be tried as to whether there was such a limitation, misapprehension, fraud or collusion in relation to the settlement.

Guarantee Claims

What Is a Guarantee?

A useful definition of a guarantee is found in Western Dominion Inv. Co. v. MacMillan, [1925] 2 D.L.R. 442 (Man K.B.).

Reduced to its simplest terms a guaranty is a promise of one man to pay the debt of another if that other defaults. In every case of guaranty there are at least two obligations, a primary and a secondary. The secondary—the guaranty–is based upon the primary, and is enforceable only if the primary defaults. It is so completely dependent upon the unchanged continuance of that primary, that if any, even the slightest, unauthorized changes are made in the primary, as e.g., by extension of time for payment, or by reducing the chances of enforcing payment, as, e.g., by releasing any part of the securities,–the secondary thereby falls to the ground. In other words, the secondary is not only collateral to, but is exactly co-extensive with, the primary, as the primary existed when the secondary came into existence. Lastly, if the secondary obligor pays the debts he is entitled, as of right, to step into the creditor’s shoes.

Guarantee Must Be In Writing

Section 59 of Law and Equity Act, R.S.B.C. 1996, c. 253 requires that both a contract respecting the disposition of land and a guarantee be evidenced in writing:

(3) A contract respecting land or a disposition of land is not enforceable unless

(a) there is, in a writing signed by the party to be charged or by that party’s agent, both an indication that it has been made and a reasonable indication of the subject matter,
(b) the party to be charged has done an act, or acquiesced in an act of the party alleging the contract or disposition, that indicates that a contract or disposition not inconsistent with that alleged has been made, or
(c) the person alleging the contract or disposition has, in reasonable reliance on it, so changed the person’s position that an inequitable result, having regard to both parties’ interests, can be avoided only by enforcing the contract or disposition.

(6) A guarantee or indemnity is not enforceable unless

(a) it is evidenced by writing signed by, or by the agent of, the guarantor or indemnitor, or
(b) the alleged guarantor or indemnitor has done an act indicating that a guarantee or indemnity consistent with that alleged has been made.

Social Media Can Be Compelled- Beware

I am sure that many trial lawyers have experience in obtaining damaging photos or information against the “opposition” from social media .

People are amazingly loose lipped and brazen about their personal lives and activities and haphazardly post ” online” seemingly oblivious to the risk of possible  future implications.

The trend of the ” selfie society” seems to be increasing if anything with people proudly posting online what was once secretive information , photos or videos.

 

For example a few years ago I was involved in an estate litigation file where we searched the opposing party on social media found that the opposing party was a hooker and ran a brothel along with her husband.

In the following cases the court ordered the plaintiff to disclose photographs and video recordings of travels, participation in social events and performance of physical activities:

Tupper v. Holding, 2003 BCSC 153;

– the vacation photographs show the plaintiff “enjoying life” and may “assist the defendant in its defence that her ability to enjoy life is not what it was before the accidents”.

Mikulik v. Huang and Cheung, 2008 BCSC 967;

– photographs taken of the plaintiff on vacation at a time when he was allegedly disabled from “carrying out normal work duties” were deemed to have a “significant likelihood of probative value”. The court ordered that facial features of others appearing in the photographs could be deleted before production.

Tayelor v. Truong, (November 10, 2009 Vancouver Registry No. M031966);

– the plaintiff claimed to be “mostly housebound” with “a marked decrease in her overall activities”. Photographs and videos of vacations to various destinations and participation in a bachelorette party, bridal shower and wedding were ordered produced.

Hawboldt v. Ovens, 2010 BCSC 1061;

– “photographs which disclose a level of physical activity at a time when the plaintiff claims to be unable to work or perform certain physical tasks might well be relevant”.

An order for production of photographs of the plaintiff’s wedding and honeymoon was declined in Watt v. Meier, 2005 BCSC 1834as not relevant

.
In Gasior v. Bayes, 2005 BCSC 1828, the court declined to order production of photographs finding that:
… The production of photographs taken on a personal basis is … far more invasive than probative …

A party’s obligation to disclose social media content has been addressed in a number of decisions under the Supreme Court Civil Rules, including Fric v. Gershman, 2012 BCSC 614; Cui v. Metcalfe, 2015 BCSC 1195; and Dosanjh v. Leblanc, 2011 BCSC 1660.

Generally speaking, the considerations for the court on this type of application include the probative value of the information sought, privacy concerns, potential prejudice to the plaintiff and proportionality: Cui at para. 9.

Travis v Bittner 2022 BCSC 839 summarized:

1. Pleadings continue to govern the determination of issues of relevance in relation to the scope of examination for discovery under the SCCR and will usually also govern issues concerning the initial disclosure obligations of a party under Rule7 1 if those obligations are challenged under Rule 7 1(10);
2. The removal of the Peruvian Guano 11QVD55 train of inquiry test of relevance will generally require a defendant to provide some evidence to support an application for additional documents whether demand is made under Rule 7 1(11) or Rule 7 1(18);
3. Privacy rights should not be abridged without cogent reasons to do so;
4. An automobile accident does not amount to an implied waiver of privacy rights;
5. The scope of document discovery and oral discovery is now not the same. However, the scope of examination for discovery under the present Rules remains unchanged and is very broad; see also Kendall v. Sun Life Assurance Company of Canada, 2010 BCSC 1556, and More Marine Ltd. v. Shearwater Marine Ltd., 2011 BCSC 166.

The Law of Set -Off

Blacks Law dictionary defines set-off as a counterclaim demand which a defendant holds against the plaintiff, arising out of the transaction extrinsic of the plaintiff’s cause of action. The defendant seeks to cancel the amount due from him or to recover a mountain in excess of the plaintiff’s claim against him.

Coba Industries Ltd. v. Millie’s Holdings (Canada) Ltd., 1985 CanLII 144 correctly summarizes the applicable principles for a valid claim of set-off:

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 plaintiff’s 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.
5. Unliquidated claims are on the same footing as liquidated claims.
[citations omitted]

Similarly the Court of appeal in Wilson v. Fotsch, 2010 BCCA 22 described law of 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 plaintiff’s 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.

The Difference Between a Mirror Will and a Mutual Will

In my experience, there is a lot of confusion amongst the public as to the difference between a mutual will and a mirror will, with the latter often being mistaken for the former.

Mutual wills are actually very rare – I have seen two in almost 50  years of practice and they were both identified as a mutual will and both testator signed the same document wherein they contracted with the other that the survivor would not be able to vary the bequests in the future.

A mirror will typically contains gifts by each to the other of their respective estates, with the same contingent gifts over of the residue of the estate of the survivor of them. Typically, this is a husband and a wife, leaving everything to each other, and in the event that the other fails to survive for a certain period of time, such as 30 days, then to alternate beneficiaries who are usually their children.

A mutual will is much more than a mirror will, it is an agreement that the wills not be changed and is a constraint of testamentary freedom. It contains a contract between the parties to the mutual will that the will not be changed after the death of one of the parties.

The testamentary intentions of will makers expressed in their mirror wills is not enough to establish that they had agreed that the survivor would not be able to vary the bequests in the future.

A true mutual will therefore is a binding contract between typically spouses not to revoke or change or replace their wills. It is an agreement between the parties to dispose of their estate in a particular way that equity and forces through the mechanism of a constructive trust after the first of the spouses of died, if the survivor does not abide by their agreement. Oosteroff On Wills 8th Ed at pp127-28.

The most fundamental prerequisite for an application of the doctrine of mutual wills is that there be an agreement (contract) between the individuals who made the wills.

The mutual wills agreement must satisfy:

1) the requirements for a binding contract and not be just some loose understanding or sense of moral obligation;
2) it must be proven by clear and satisfactory evidence;
3) it must include an agreement not to revoke the wills. Edell v Sitzer (2001) 55 O.R. 198 at para.73

In Bellinger v Nuytenn Estate 2002 BCSC 571 .the court held that honor is not a sufficient foundation on its own, and that a mutual will agreement will not be found to exist for the evidence is more consistent with some loose understanding or moral obligation rather than a binding, enforceable agreement.

The agreement may be proven either from the words of the will itself or from extrinsic evidence. The extrinsic evidence does not necessarily have to come from documents and it may be hearsay testimony from interested parties, but the courts have held that mere assertions from which inferences should be drawn are not acceptable as reliable evidence, to prove the existence of a mutual will agreement. Trotman v Thompson 2006 OJ No. 681

The burden of proof rests with the party that alleges the existence of a mutual will agreement, and that onus is heavy in that there must be clear evidence of the mutual will agreement. Cassin v Cassin (2007) 30 ETR 289 at para. 37

The Importance of Pleadings

Pleadings are important. They delineate the issues between the parties and inform the opposing party of the nature of the case they have to meet. Pleadings prevent surprises at trial and limit the issues to be tried.

 

Parties must plead the legal basis for seeking relief.

Rule 3-1 of the Supreme Court Civil Rules [Rules] addresses what is properly contained in an originating pleading:

Contents of notice of civil claim

(2) A notice of civil claim must do the following:

(a) set out a concise statement of the material facts giving rise to the claim;

(b) set out the relief sought by the plaintiff against each named defendant;

(c) set out a concise summary of the legal basis for the relief sought;
(d) set out the proposed place of trial;

(e) if the plaintiff sues or a defendant is sued in a representative capacity, show in what capacity the plaintiff sues or the defendant is being sued;

(f) provide the date collection information required in the appendix to the form;

(g) otherwise comply with Rule 3-7.

Rule 3-7(18) addresses particulars:

If the party pleading relies on misrepresentation, fraud, breach of trust, wilful default or undue influence, or if particulars may be necessary, full particulars, with dates and items if applicable, must be stated in the pleading.

Rule 3-7(12) addresses pleadings subsequent to a notice of civil claim:

In a pleading subsequent to a notice of civil claim, a party must plead specifically any matter of fact or point of law that

(a) the party alleges makes a claim or defence of the opposite party not maintainable;
(b) if not specifically pleaded, might take the other party by surprise, or
(c) raises issues of fact not arising out of the preceding pleading.

Rule 6-1(8) provides that amendments to pleadings may be granted at trial. Unless otherwise ordered by the court, “if an amendment is granted during a trial or hearing, an order need not be taken out and the amended pleading need not be filed or served.”

There are numerous cases which discuss the purpose and importance of the Rules with respect to pleadings.

In Sahyoun v. Ho, 2013 BCSC 1143, Justice Voith, as he then was, discussed the function of pleadings generally:

[16] The new Rules alter the structure in which pleadings are to be prepared. The core object of a notice of civil claim, however, remains the same. That object is concisely captured in Frederick M. Irvine, ed., McLachlin and Taylor, British Columbia Practice, 3rd ed.; vol. 1 (Markham, Ont.: LexisNexis Canada Inc., 2006 at 3-4 – 3-4.1:

If a statement of claim (or, under the current Rules, a notice of civil claim) is to serve the ultimate function of pleadings, namely, the clear definition of the issues of fact and law to be determined by the court, the material facts of each cause of action relied upon should be stated with certainty and precision, and in their naturel order, so as to disclose the three elements essential to every cause of action, namely, the plaintiff’s right or title; the defendant’s wrongful act violating that right or title; and the consequent damage, whether nominal or substantial. The material facts should be stated succinctly and the particulars should follow and should be identified as such…

[17] These requirements serve two foundational purposes: efficiency and fairness. These purposes align with Rule 1-3 which confirms that “the object of [the] Supreme Court rules is to secure the just, speedy and inexpensive determination of every proceeding on its merits.”

[18] I emphasize efficiency because a proper notice of civil claim enables a defendant to identify the claim he or she must address and meet. The response filed by a defendant, together with the notice of civil claim and further particulars, if any, will confine the ambit of examinations for discovery and of the issues addressed at the trial itself. Proper pleadings limit the prospect of delay or adjournments. They allow parties to focus their resources on those matters that are of import and to ignore those that are not. They facilitate effective case management and the role of the trier of fact.

[19] A proper notice of civil claim also advances the fairness of pre-trial processes and of the trial. Defendants should not be required to divine the claim(s) being made against them. They should not have to guess what it is they are alleged to have done.

There are cases which specifically discuss the importance of pleading fraud and misrepresentation. Some disallow claims under those headings where they were not pleaded in accordance with Rule 3-7(18): Karimi v. Gu, 2016 BCSC 1060, at paras. 183-187.

In Grewal v. Sandhu, 2012 BCCA 26, at para. 19, the Court of Appeal held that “[a]n allegation of fraud must be scrupulously pleaded and fully particularized.” In Grewal, the Court held that the plaintiff could not seek to establish a case of fraud against the defendant that depended entirely on the defendant’s husband’s knowledge since there was no pleaded allegation that the husband was a participant in a fraud.
In Terrim Properties Ltd. v. Sorprop Holdings Ltd., 2012 BCSC 985, the plaintiff framed its argument in negligence but had not pleaded it. Justice Melnick held that the negligence claim could not be maintained since the plaintiff had not pleaded negligence. Justice Melnick said the following:

[17] …It is trite law (as well as R. 3-1(2)(c)) that one must plead the legal basis for seeking relief. Neither counsel for the defendants came to court prepared to deal with a claim for negligence. They anticipated, properly, that they were here to meet a claim in nuisance.
[…]
[19] Given the above, it is not necessary for me to come to any conclusions respecting the capacity of Terrim to maintain all of the claims it advances…

Applying a different approach in Berthin v. Berthin, 2018 BCCA 57, the Court of Appeal left open the principle that a pleading need not explicitly say “equitable fraud”:

[22] With great respect, I am of the view that the judge erred in dismissing the fraud claim on the basis that it disclosed no reasonable cause of action. The judge fell into error because he assessed the pleading against the requisite elements of the tort of civil fraud, rather than equitable fraud relied on by Mr. Berthin. The error occurred no doubt in part because the notice of civil claim unhelpfully failed to use the phrase “equitable fraud”. However, counsel for Mr. Berthin made submissions at the hearing based on equitable fraud and in my view the facts and averments pleaded are capable of supporting that cause of action.

In Anenda Systems Inc. v. AL13 Systems Inc., 2020 BCSC 2077 [Anenda], Justice Lyster considered circumstances where, contrary to Rule 3-7(18), the defendant had not provided full particulars of the fraud in which it alleged the plaintiff had engaged. Justice Lyster found that the defendant should have pleaded equitable fraud and granted leave to file a notice of civil claim rather than further amend its counterclaim.

In Whiten v. Pilot Insurance Co., 2002 SCC 18, the defendant argued that the statement of claim did not plead the factual basis for an independent actionable wrong. The statement of claim did include a claim for punitive and exemplary damages. Justice Binnie, at paras. 89 to 90, stated “if the respondent was in any doubt about the facts giving rise to the claim, it ought to have applied for particulars and, in my opinion, it would have been entitled to them.” Justice Binnie noted there was no surprise except as to the quantum of punitive damages. He further noted that the plaintiff had pleaded a breach of the duty to deal fairly and in good faith in handling the plaintiff’s claim.
In Cook v. Neufeld, 2022 BCSC 6:

The general rule is that amendments to pleadings should be permitted as necessary to allow the real issues between the parties to be determined. Although more stringent considerations apply when amendments are sought at the end of trial, provided the proposed amendments would not cause injustice, unfairness or prejudice to the non-amending party, the amendments are generally allowed so that the real issues between the parties can be adjudicated upon: Argo Ventures Inc. v. Choi, 2019 BCSC 86 at paras. 6, 8 and 9; Lam v. Chiu, 2012 BCSC 677 at para. 10.

Breach of Confidentiality Agreements

A breach of a confidentiality agreement may occasionally arise in estate litigation, particularly on behalf of the executor.

In order to found an action for breach of a confidentiality clause, the information in question must have the necessary quality of confidence.

A list of the factors to be considered confidential quality  is found in Foreman v. Chambers et al, 2006 BCSC 1244 at para. 61, citing Pharand Ski Corp. v. Alberta (1991), 80 Alta. L.R. (2d) 216 (Q.B.):

a) the extent to which the information is known outside the owner’s business;
b) the extent to which it is known by employees and other involved in the owner’s business;
c) the extent of measures taken by the owner to guard the secrecy of the information;
d) the value of the information to the owner and his competitors;
e) the amount of money or effort expended by the owner in developing the information; and
f) the ease or difficulty with which the information could be properly acquired or duplicated by others by their independent endeavours.

The mere assembly of publicly available facts by itself does not render the information confidential. Rather, the information must be difficult to assemble, assembled in an innovative manner or analysed in an innovative manner: Foreman at para. 65.