Wills Variation ( S 60 WESA) Is Discretionary

Kish v Sobchak 2016 BCC65 discussed how the claim of wills variation is discretionary top the trial judge and how the appeal court should deal with such.

The entire jurisdiction of the trial judge under this statute is discretionary in character. The relief which may be granted under it is completely dependent on his opinion, first, as to whether adequate provision for proper maintenance and support has been provided for the spouse and children under the will, and second, if adequate provision is not thought to be made, as to what provision should be made.

 

. This being so, that Court has the power and the duty to review the circumstances and reach its own conclusion as to the discretion properly to be exercised.

 

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.

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 injustice: Elsom v. Elsom, [1989] 1 S.C.R. 1367, at p. 1375. Reversing a lower court’s discretionary decision is also appropriate where the lower court gives no or insufficient weight to relevant considerations: Friends of the Oldman River Society v. Canada 

        Well before Tataryn was decided (but after Swain v. Dennison), summary trial procedures had of course been introduced in British Columbia and elsewhere. It was clear, certainly in this province, that summary trials were not limited strictly to cases in which there were no conflicts in the evidence. In Orangeville Raceway Ltd. v. Wood Gundy Inc. [1995] 6 B.C.L.R (3d) 391 (C.A.), which was not a WVA case, this court discussed the standard of review on appeals from summary trial judgments. At para. 44, the Court considered whether it was entitled to set aside the judgment below and substitute its own views for those reached by the chambers judge “simply because he did not have the advantage of observing the witnesses as their testimony was tested by cross-examination”. Mr. Justice Goldie for the Court answered this question in the negative, adopting the comments of Mr. Justice Taylor in an earlier case as follows:

So far as findings of fact are concerned, the onus on the appellant in an appeal against a summary disposition of issues made without oral testimony under R. 18A, cannot be merely to persuade the appeal court to a different view of the evidence. The appellant must show that the chambers judge reached a conclusion which cannot reasonably be supported. That is a heavier burden than merely to establish that the appeal court would have made different findings, or have drawn different inferences. [At para. 45; emphasis added.]

 

It has been said that an appellate court is in as good a position to draw inferences from proven facts as the trial judge. But this states only half the equation. The appellate court may be in as good a position but the burden is still on the appellant to demonstrate error, that is to say, that the position reached below after a summary trial cannot reasonably be supported.

 

 

Wills Variation ( S.60 WESA) Is Discretionary

The BC Court of Appeal in Kish v Sobchak 2016 BCC65 discussed that the relief sought in wills variation claims is discretionary to the trial judge and how the appeal court should  handle discretionary remedies on appeal.

The entire jurisdiction of the trial judge under the statute is discretionary in character. The relief which may be granted under it is completely dependent on his opinion, first, as to whether adequate provision for proper maintenance and support has been provided for the spouse and children under the will, and second, if adequate provision is not thought to be made, as to what provision should be made.

This being so, that Court has the power and the duty to review the circumstances and reach its own conclusion as to the discretion properly to be exercised.

The line between the exercise of judicial discretion and the finding of facts is not easy to enunciate.

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 or she has no discretion in making his findings of fact. There is  no discretion in the 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.

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. T

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 injustice: Elsom v. Elsom, [1989] 1 S.C.R. 1367, at p. 1375. Reversing a lower court’s discretionary decision is also appropriate where the lower court gives no or insufficient weight to relevant considerations: Friends of the Oldman River Society v. Canada … [At para. 27.]

Summary Trial Determinations

Well before Tataryn was decided (but after Swain v. Dennison), summary trial procedures had of course been introduced in British Columbia and elsewhere. It was clear, certainly in this province, that summary trials were not limited strictly to cases in which there were no conflicts in the evidence. In Orangeville Raceway Ltd. v. Wood Gundy Inc. [1995] 6 B.C.L.R (3d) 391 (C.A.), which was not a WVA case, this court discussed the standard of review on appeals from summary trial judgments. At para. 44, the Court considered whether it was entitled to set aside the judgment below and substitute its own views for those reached by the chambers judge “simply because he did not have the advantage of observing the witnesses as their testimony was tested by cross-examination”. Mr. Justice Goldie for the Court answered this question in the negative, adopting the comments of Mr. Justice Taylor in an earlier case as follows:

So far as findings of fact are concerned, the onus on the appellant in an appeal against a summary disposition of issues made without oral testimony under R. 18A, cannot be merely to persuade the appeal court to a different view of the evidence. The appellant must show that the chambers judge reached a conclusion which cannot reasonably be supported. That is a heavier burden than merely to establish that the appeal court would have made different findings, or have drawn different inferences.

It has been said that an appellate court is in as good a position to draw inferences from proven facts as the trial judge. But this states only half the equation. The appellate court may be in as good a position but the burden is still on the appellant to demonstrate error, that is to say, that the position reached below after a summary trial cannot reasonably be supported.

S. 151 WESA- Leave To Bring Action On Behalf of Estate

Mischke v. Mischke Estate 2021 BCSC 1404 dealt with a S. 151 WESA application for leave by a beneficiary of their mother’s estate to commence an action on behalf of the estate against the executor and another sibling for alleged breach of trust for missing funds while the executor and the sibling handled a power of attorney for the deceased.

The Court refused the application on the basis that no arguable case had been presneted and reviewed the criteria for a S. 151 application.

The Law- S. 151 WESA

A beneficiary under a will who is of the view that litigation should be brought on behalf of an estate in a situation where the executor is unwilling to do so may seek leave of the court to commence proceedings under s. 151 of the WESA.

The relevant portions of this provision read as follows:

151 (0.1) In this section, “specified person” means a beneficiary, an intestate successor or a person who may commence a proceeding claiming the benefit of Division 6 [Variation of Wills] of Part 4 [Wills].

151 (1) Despite section 136 [effect of representation grant], a specified person may, with leave of the court, commence proceedings in the name of the specified person and on behalf of the estate of the deceased person

(a) to recover property or to enforce a right, duty, or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or
(b) to obtain damages for breach of a right, duty or obligation owed to the deceased person.

151(3) The court may grant leave under this section if

(a) the court determines the specified person seeking leave
(i) has made reasonable efforts to cause the personal representative to commence or defend the proceeding,
(ii) has given notice of the application for leave to
(A) the personal representative,
(B) any other specified persons, and
(C) any additional person the court directs that notice is to be given, and
(iii) is acting in good faith, and

(b) it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.

 

In Malecek v. Leiren, 2021 BCSC 1052 at para. 40, Mr. Justice Giaschi conveniently set out the five conditions that must be satisfied by an applicant in order to obtain leave to bring a s. 151 WESA beneficiary action:

  1. the applicant must be a “specified person” within the meaning of the section;
  2. reasonable efforts must have been made to have the executor commence the proceedings;
  3. notice must have been given to the required persons;
  4. the applicant must be acting in good faith; and,
  5. the court must be satisfied it is necessary or expedient for the proceedings to be brought.

Efforts to Have the Executor Bring the Proposed Proceeding

In situations where proposed beneficiary proceedings are to be brought against executors, it is not self-evident what would constitute “reasonable efforts” to cause executors to start such actions against themselves. This issue was canvassed at some length in Fry v. Fry, 2018 BCSC 1018 at paras. 49 to 58. The s. 151 WESA applicant in that case had essentially argued that when an executor is intended to be a defendant in the proposed proceeding and is therefore in an inherent conflict of interest, it would be nonsensical to require the applicant to first try to persuade the executor to commence such litigation. However, based on the wording of s. 151 and case law that has interpreted a similar provision in corporate legislation, Mr. Justice Milman concluded that the applicant must still give the executor reasonable notice of the request together with details of the nature of the claim that the applicant wishes the executor to pursue. At para. 57, he wrote:

In summary, I conclude that in a case such as this where the personal representative is an intended defendant, the applicant must, before commencing an action in the name or on behalf of the estate or seeking leave to do so:

(a) inform the personal representative of the specific allegations being made; and
(b) request that the personal representative take, or allow others to take, specific remedial action to address them.

While the precise form that such a notice and request for action requires will vary and is dependent upon the context, failure to make a reasonable effort to meet this requirement will be fatal to the application (Fry v. Fry, 2018 BCSC 1018, at para. 58).

The Applicant’s Good Faith

The s. 151 WESA applicant has the burden to demonstrate that the proposed proceeding is being brought in good faith. Evidence of the applicant’s motivation must be presented, as good faith cannot be presumed. Once again, Fry v. Fry, 2018 BCSC 1018, is instructive:

The requirement in s. 151(3)(a)(ii) that the applicant be acting in good faith was explained by Pearlman J. in the context of an application for leave to commence a derivative action in Luft v. Ball, 2013 BCSC 574, as follows at para. 46:

The applicant bears the onus of establishing that it is acting in good faith in bringing derivative proceedings. Good faith is not presumed; the applicant must adduce evidence to establish good faith: Creative Realty Corp. v. 333 Terminal Holdings Ltd., 2011 BCSC 638 at para. 19. The test of good faith is whether the action is brought primarily for the purpose of pursuing the claim on the company’s behalf. The factors to be considered include the applicant’s belief in the merits of the proposed claim, existing disputes between the parties, and alleged ulterior motives: Bennett v. Rudek, 2008 BCSC 1278 at para. 46. As Adair J. observed in Lost Lake Properties Ltd. [Lost Lake Properties Ltd. v. Sunshine Ridge Properties Ltd., 2009 BCSC 938] at para. 56, ultimately good faith is a question of fact to be determined on all of the evidence and the particular circumstances of the case.

The fact that the applicant may be motivated by self-interest will not disqualify that person from obtaining leave under s. 151 of the WESA. To the contrary, in light of the wording of s. 151(3)(b), good faith can be shown with evidence that the applicant is genuinely pursuing the proposed litigation for the benefit of the estate or out of the person’s own self-interest (Jiang v. Piccolo, 2020 BCSC 1584 at para. 69).

As with the “reasonable efforts to have the executor act” criterion, however, should the applicant fail to establish that the proposed proceeding is bona fide, leave to commence it will not be granted regardless of whether it may otherwise be meritorious.

Necessity or Expediency of the Proposed Proceeding

Section 151(3)(b) of the WESA provides that leave to bring a beneficiary proceeding can only be granted if it appears to the Court that it is “necessary or expedient for the protection of the estate or the interests of a specified person…”. Guidance on how to apply this provision was set out by Madam Justice Gray in Bunn v. Bunn Estate, 2016 BCSC 2146 at paras. 50-51:

A proceeding may be “necessary” under s. 151 of WESA if the personal representative is unwilling or unable to proceed. It may be “expedient” if it is in the best interests of the estate.

In this case, the applicant is a beneficiary of the Estate and seeks the order under s. 151 of WESA on the basis that the claim, if successful, will increase the value of the Estate. In such a case, in my view, to satisfy the court that it should exercise its discretion to grant leave to commence litigation on behalf of the estate, the applicant must show not only that there is an arguable case, but also that the potential relief in the action is sufficient to justify the inconvenience to the estate of being involved in the action, and that proceeding is overall in the best interests of the estate. In my view, that must involve a consideration of the costs of proceeding, including the potential of a costs award against the estate if it fails. Further, in my view, in determining whether the proposed lawsuit appears to be in the best interests of the estate, the court can consider the strength of the proposed claim based on a limited weighing of the evidence.

In other words, when considering whether leave should be granted on a s. 151 WESA application, it is permissible and expected for the Court to assess the evidentiary material tendered by the parties by performing a “limited weighing” of this evidence.

However, the Court cannot decide the merits of the case or deal with issues of credibility (Hoggan v. Silvey, 2021 BCSC 971, at para. 24). The assessment relates in particular to three interrelated questions: (1) is there an arguable case; (2) does the potential relief/recovery justify the time and expense of the proposed action; and (3) is the proceeding in the overall best interest of the estate (Malecek v. Leiren, 2021 BCSC 1052 at para. 44).

Offers to Settle and Double Costs

Yeomans v Buttar 2021 BCSC 1394 awarded double costs where the plaintiff’s offer to settle was not beaten by the defence.

The costs of an action in this court are generally awarded to the successful party, although the court has the discretion to order otherwise: Rule 14-1(9). However, rule 9-1 permits the court to make alternative costs awards when a party has made a formal offer to settle. Sub-rules (4),(5),(6) provide:

Offer may be considered in relation to costs

(4) The court may consider an offer to settle when exercising the court’s discretion in relation to costs.

Cost options

(5) In a proceeding in which an offer to settle has been made, the court may do one or more of the following:

(a) deprive a party of any or all of the costs, including any or all of the disbursements, to which the party would otherwise be entitled in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(b) award double costs of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle;
(c) award to a party, in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle, costs to which the party would have been entitled had the offer not been made;
(d) if the offer was made by a defendant and the judgment awarded to the plaintiff was no greater than the amount of the offer to settle, award to the defendant the defendant’s costs in respect of all or some of the steps taken in the proceeding after the date of delivery or service of the offer to settle.

Considerations of court in making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;
(b) the relationship between the terms of settlement offered and the final judgment of the court;
(c) the relative financial circumstances of the parties;
(d) any other factor the court considers appropriate.

In Bains v. Antle, 2019 BCCA 383, the Court set out various principles regarding any award of double costs including:

• trial judges have a broad discretion regarding costs under rule 9-1, including the discretion to award costs as if the settlement offer had not been made;
• while the judicial discretion is broad, it must nonetheless be exercised judicially and in a principled manner;
• in assessing the various cost options specified in rule 9-1(5), the court may consider the factors set out in rule 9-1(6), although these factors are not mandatory considerations;
• in considering whether the offer to settle was one that ought reasonably to have been accepted, the court does not engage in a hindsight analysis but rather assesses only the circumstances in existence at the time of the offer and not the award made at trial;
• the question is not whether the offer itself was reasonable, but whether it was unreasonable to refuse it;
• in answering this question, the court may consider the recipient’s subjective reasons for rejecting the offer, but must also decide whether those reasons are objectively reasonable;
• in assessing the reasonableness of refusing an offer, the court will consider factors such as the timing of the offer, whether it had some relationship to the claim, whether it could be easily evaluated, and whether some rationale for the offer was provided;
• the relationship of the offer to the claim is relevant because it speaks to whether a party should be penalized for proceeding to trial in hopes of achieving a more favourable outcome than what was offered;
• it is not unreasonable for a party to refuse an offer even if it is just a fraction of the amount sought, provided that party had reasonable confidence their position would prevail; and,
• if a party’s claim lacks objective evidence and is largely dependent upon the court’s assessment of the party’s credibility, there will usually be more risk in proceeding to trial such that the refusal of a reasonable offer may be considered unreasonable.
(paras. 32-37)

In C.P. v. RBC Life Insurance Company, 2015 BCCA 30, the Court of Appeal stated at paragraph 97:

Whether an offer to settle is one that ought reasonably to have been accepted, is assessed not by reference to the award that was ultimately made, but under the circumstances existing when an offer was open for acceptance… The court is entitled to take into account the reasons why a party declined to accept an offer to settle. The court must consider whether those reasons are objectively reasonable.

Partnership Severed Joint Tenancy

In Garland v Newhouse 2021 BCSC1291 a partnership between non-spouses of a jointly owned property was held to sever the joint tenancy when one of the partners died.

The parties had no personal relationship and equally contributed to the purchase of the investment property, equally shared expenses associated with the property and equally shared in profits derived. Their objective was to earn profit over time. They opened the joint bank account to manage the financial aspects of the business. The accounting records describe the arrangement as a partnership and individuals as partners, and the court found that there was in fact a partnership and that it was inconsistent with a joint tenancy with right of survivorship.

 

The court stated that it might have been a different result if the partners were spouses.

What Is a Partnership

Partnership is defined in s. 2 of the Partnership Act as “the relation that subsists between persons carrying on business in common with a view of profit”. The conditions for the formation of a partnership are set out by the Court of Appeal in Grewal v. Grewal, 2016 BCCA 237:

[107] …A partnership must have a contractual foundation, demonstrated by an offer and acceptance regarding all essential terms, certainty of terms, consideration, and an intention to create legal relations. The contract may, however, be oral or written, and may be established by express declaration or be implied through conduct: Porter v. Armstrong, [1926] S.C.R. 328 at 329; Prince Albert Co-operative Association v. Rybka, 2010 SKCA 144 at paras. 23-24. Whether a partnership exists must be determined pragmatically and objectively, in the context of all of the surrounding circumstances: Backman v. Canada, 2001 SCC 10 at paras. 25-26. As stated by the Court in Backman:

25. … In other words, to ascertain the existence of a partnership the courts must inquire into whether the objective, documentary evidence and the surrounding facts, including what the parties actually did, are consistent with a subjective intention to carry on business in common with a view to profit.

A partnership may be distinguished from certain other relationships, including co-ownership of land when the parties have no intention of creating a partnership. Section 4(a) of the Partnership Act expressly provides that the co-ownership of land does not of itself create a partnership as to any property that is so held, whether or not the co-owners share profit from use of the property. Whether or not the position of co-owners becomes that of partners depends on their intention, as disclosed by all of the facts of the case. It is necessary to determine whether the parties had a common intention to carry on business in a partnership, or whether they intended to maintain their separate interests in the property as co-owners: A.E. LePage Ltd. v. Kamex Developments Ltd. et al (1977), 16 O.R. (2d) 193 (C.A.) at 195.

The co-ownership of land by spouses presents a distinct category of cases. Courts are less ready to infer a partnership from the conduct of the parties where the parties are spouses. This is because such conduct may be equally consistent with conduct arising out of the community of interest created by the marriage: Diflorio v. Canada, 2014 TCC 67 at paras. 33–40, rev’d only on costs 2015 FCA 11; Bains v. Canada, 2005 FCA 378.

 

Joint Tenancy Severed

In its ordinary operation, the principal characteristic of joint tenancy is the right of survivorship. When a joint tenant dies, their interest is extinguished, and the surviving joint tenant takes full ownership of the property: McKendry v. McKendry, 2017 BCCA 48 at para. 28.

[ However, where the property in issue is partnership property, there is a presumption that there is no right survivorship as between partners, at least as concerns their beneficial interest in partnership assets: R.C. I’Anson Banks, Lindley & Banks on Partnership, 20th ed. (London: Sweet & Maxwell, 2017) at 19-13 [Lindley & Banks]. Absent compelling evidence of a contrary agreement, a surviving partner holds legal title to property held in joint tenancy on trust for the surviving partner and the estate of the deceased partner: Agro Estate v. CIBC Trust Corp. (1999), 26 E.T.R. (2d) 314 at para. 44 [Agro]. This presumption is reflected in the rules governing partnership property under the Partnership Act. Section 23 provides, in relevant terms, as follows:

23 (1) Subject to subsection (2), all partnership property must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.
(2) The legal estate or interest in land that belongs to the partnership devolves according to its nature and tenure and the general rules of law applicable to it, but in trust so far as necessary, for the persons beneficially interested in the land under this section.

When partnership property is held in joint tenancy, the effect of s. 23(2) is that the legal estate transfers to the surviving partner, but the property must be held in trust for the benefit of the deceased partner and the surviving partner. Both are “beneficially interested in the land”: Agro at para. 38. The devolution of legal estate on the death of a partner is explained in Lindley & Banks at 18-66.
Devolution of the legal estate in land will in all cases be governed by the normal law affecting real property; thus, on the death of a partner, any land vested in him and his co-partners will devolve on the latter in their capacity as surviving trustees of a trust of land. Those partners will accordingly be entitled to charge or sell the land for the purpose of paying partnership debts or otherwise winding up its affairs. As regards the beneficial entitlement of the deceased partner in respect of land (if any), the surviving partners on whom the legal estate devolves are naturally bound to account to his estate therefor.

The death of a partner in a two-person partnership dissolves the partnership: Partnership Act, s. 36(1)(a). On dissolution, every partner is entitled, pursuant to s. 42, to a proportionate share of the partnership assets after the payment of debts. Section 25 of the Partnership Act provides that where land becomes partnership property, it is to be treated as between the partners, including the representative of a deceased partner and their heirs and executors, as personal or movable and not real or heritable estate.

Underlying these provisions is the equitable principle of partnership law that all property, whether real or personal, is subject to sale on the dissolution of the partnership, with each partner, or representative of a deceased partner, having a right to insist on a sale. A partner’s share in a partnership consists of their proportion of the partnership assets after they have been turned into money and applied in liquidation of partnership debts. As between the partners, land owned by a partnership is deemed to have already converted into personal estate and it devolves as such: E.R. Hardy Ivamy and D.R. Jones, Underhill’s Principles of the Law of Partnership, 12th ed. (London: Butterworth’s, 1986) at 34; Lindley & Banks at 19-14.

A right of survivorship is inconsistent with the ordinary rules that govern the treatment of partnership assets on the dissolution of a partnership. This is not to say that the right of survivorship can never apply to partnership property. However, there must be evidence of a contrary agreement between the parties that is sufficiently clear and compelling to overcome the presumption that beneficial interest in partnership property does not transfer through the right of survivorship.

Dismissal of a Court Action For Delay

Dismissal of a court action for inordinate delay ( want of prosecution) requires four criteria:

1) Has there been an inordinate delay;
2) Is the inordinate delay inexcusable;
3) Has the delay caused or is likely to cause serious prejudice to the defendant; and
4) On balance does justice require a dismissal of the action?

Rule 22-7(7) provides that the court may order that a proceeding be dismissed if it appears that there is want of prosecution in the proceeding.

The BC Court of Appeal in Wiegert v. Rogers, 2019 BCCA 334 set out the relevant considerations in respect of applications for want of prosecution as follows:

1. On an application to dismiss for want of prosecution, it must be shown that there has been inordinate delay, that the inordinate delay is inexcusable, and that the delay has caused, or is likely to cause, serious prejudice to the defendant. In addition, the final and decisive question, which encompasses the other three, is whether, on balance, justice requires a dismissal of the action: Azeri v. Esmati Seifabad, 2009 BCCA 133 at para. 9; 0690860 Manitoba Ltd. v. Country West Construction Ltd., 2009 BCCA 535 at paras. 27–28.

Inordinate delay is delay that is immoderate, uncontrolled, excessive and out of proportion to the matters in question: Azeri at para. 8; Sahyoun v. Ho, 2015 BCSC 392 at para. 17.

2. In Sun Wave Forest Products Ltd. v. Xu, 2018 BCCA 63 at para. 25, the concept is relative: some cases are naturally susceptible of fast carriage or call for more expeditious prosecution than others. Although there is no universal rule as to when time starts to run, the date of commencement of the action is typically identified as the point from which delay is measured. The delay should be analysed holistically, not in a piece-meal fashion, and the extent to which it may be excusable is highly fact-dependent: Ed Bulley Ventures Ltd. v. The Pantry Hospitality Corporation, 2014 BCCA 52 at para. 38; 0690860 at para. 29.

3. Once a defendant establishes that delay is inordinate and inexcusable, a rebuttable presumption of prejudice arises: Busse v. Chertkow, 1999 BCCA 313 at para. 18.

The concern is with the prejudice that a defendant will suffer in mounting and presenting a defence if the matter goes to trial: 0690860 at para. 27.

Relevant matters could include failing memories, unavailable witnesses and the loss or destruction of physical evidence.

4. whether, on balance, justice requires dismissal of the action — again, the determination is highly fact-dependent.

Relevant matters could include the length of and reasons for the delay, the stage of the litigation, the context in which the delay occurred and the role of counsel in causing the delay (although negligence on the part of a plaintiff’s lawyer may not always amount to an excuse): International Capital Corporation v. Robinson Twigg & Ketilson, 2010 SKCA 48 at para. 45; 0690860 at para. 29.

Redacting Relevant Documents

Redacting relevant documents is often attempted by litigants who wish to edit out irrelevant or embarrassing portions of a document disclosed or demanded in the litigation process.

The issue was discussed in Minchin v Movsessian 2021 BCS 1303 which quoted North American Trust Co. v. Mercer International Inc. (1999), 71 B.C.L.R. (3d) 72, that discouraged the practice of litigants “editing out substantial parts of a document production believed to be irrelevant”.

Rule 7-1(1)(a)(i) requires parties to list and produce:

…all documents that are or have been in their possession or control that could, if available be used by any party of record at trial to prove or disprove a material fact

Under the rules of court, a litigant cannot avoid producing a document in its entirety simply because some parts of it may not be relevant. The whole of a document is producible if a part of it relates to a matter in question.

Since North American Trust Co. was decided, Rule 7-1(1) narrowed the scope of relevance for initial lists of documents. However, Rule 7-1(1) did not authorize litigants to edit documents on the basis of relevance alone. Generally speaking, the whole of a document must still be produced if a part of it may be used to prove or disprove a material fact: Este v. Blackburn, 2016 BCCA 496 at para 19.

In Araya v. Nevsum Resources, 2019 BCSC 1912, the court rejected an attempt to redact Facebook posts for irrelevant content, holding that the plaintiffs’ approach of treating each post as a separate document for the purposes of production and redaction is clearly not efficient, will increase cost, and cause delay.

The practice of redacting relevant records by removing information that counsel believes cannot be used to prove or disprove a material fact is not consistent with the rules, and should be discouraged by the court.

Irrelevant information may be removed but counsel must follow the guidelines lad down by the court for doing so.

In North American Trust Co., the court allowed that an otherwise relevant document may be redacted where:

a) the redacted material is irrelevant; and,
b) there is a good reason why it should not be disclosed

A listing party may redact information with a note to that effect in its list of documents, and then, on an application by the requesting party for production of the complete document, seek a ruling of the court under Rule 7-1(14)(a) upholding the redaction: Este, at para 20; McCaw’s Drilling & Blasting Ltd. v. Greenfield Construction Ltd., 2019 BCSC 2244, at para. 23.

When a redaction is disputed by the receiving party, the onus is on the party seeking to limit the disclosure to adduce evidence that satisfies the court that the material is likely irrelevant and a good reason favouring redaction: Este, at para. 21.

Where a Halliday order is appropriate, a litigant may redact irrelevant or privileged information from otherwise relevant documents. The weighing of probative value and prejudicial effect is an evidentiary consideration that goes to the admissibility of documents at trial, not document production.

In exceptional cases, the court may make an order under Rule 7-1(14)(a) excusing a party from full compliance with the document disclosure rules. But privacy alone is not an exceptional circumstance relieving litigants of their obligation to list and produce all relevant documents.

Rectification of a Contractual Mistake

The general principles and the operation of rectification were explained in Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56 :

If by mistake a legal instrument does not accord with the true agreement it was intended to record — because a term has been omitted, an unwanted term included, or a term incorrectly expresses the parties’ agreement — a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties’ true agreement.

Alternatively put, rectification allows a court to achieve correspondence between the parties’ agreement and the substance of a legal instrument intended to record that agreement, when there is a discrepancy between the two. Its purpose is to give effect to the parties’ true intentions, rather than to an erroneous transcription of those true intentions

Because rectification allows courts to rewrite what the parties had originally intended to be the final expression of their agreement, it is “a potent remedy” be used “with great caution”, since a “relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine the confidence of the commercial world in written contracts”:

Rectification is limited solely to cases where a written instrument has incorrectly recorded the parties’ antecedent agreement . It is not concerned with mistakes merely in the making of that antecedent agreement: E. Peel, The Law of Contract (14th ed. 2015), at para. 8-059; Mackenzie v. Coulson (1869), L.R. 8 Eq. 368, at p. 375 (“Courts of Equity do not rectify contracts; they may and do rectify instruments”).

In short, rectification is unavailable where the basis for seeking it is that one or both of the parties wish to amend not the instrument recording their agreement, but the agreement itself.
The court’s task in a rectification case is . . . to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party or the other”.

Two types of error may support a grant of rectification:

1) The first arises when both parties subscribe to an instrument under a common mistake that it accurately records the terms of their antecedent agreement. In such a case, an order for rectification is predicated upon the applicant showing that the parties had reached a prior agreement whose terms are definite and ascertainable;

2) that the agreement was still effective when the instrument was executed; that the instrument fails to record accurately that prior agreement; and that, if rectified as proposed, the instrument would carry out the agreement: …

Rectification is limited solely to cases where a written instrument has incorrectly recorded the parties’ antecedent agreement”

The test for rectification requires courts to assess the true intention of the parties:

In order for rectification to be available, it is necessary to identify a “true agreement” which precedes (and is not accurately recorded by) the written instrument. Such an agreement may itself be contained in a written instrument; but it may be oral, and need not itself have contractual force.

Funerals and Control of Human Remains

Court disputes over control of a deceased’s human remains on occasion occur, particularly over the form if any of a funeral’s religious service.

This occurred in Kartsonas v Kartsonas 2010 BCCA 336 where the children of the deceased were granted sole control of their father’s remains in the Supreme Court and the executor/niece unsuccessfully appealed to the Court of Appeal.
The children of the deceased had a falling out with their father prior to his death and he changed his will to appoint his niece as his executor.

The children were unable to agree with the executor as to whether the deceased should be buried in accordance with the Greek Orthodox religion.

The niece argued that the testator had been estranged from his children and that he was an atheist and would not have wanted a religious funeral.

The Law

The Judge considered the evidence before him and concluded in exercising his discretion that the wishes of the family members who wanted a religious service should be favoured.

The appeal court held that the judge gave proper consideration to the relevant considerations.

Section 5(1) of the Cremation, Interment and Funeral Services Act, S.B.C. 2004, c. 35, sets out the order of priority of persons to control the disposition of the remains of a deceased person.

1) The first priority is given to the personal representative named in the will of the deceased.

2) The next following priorities are given to the spouse of the deceased and the adult children of the deceased.

Section 5(4) of the Act authorizes an application to be made by a person claiming that he or she should be given the sole right to control the disposition of the remains of a deceased person, and s. 5(6) provides that if such an applicant is successful, he or she is deemed to be at the top of the order of priority.

Section 5(5) of the Act provides direction to the court in hearing an application under s 5(4). It reads as follows:

(5)When hearing an application under subsection (4), the Supreme Court must have regard to the rights of all persons having an interest and, without limitation, give consideration to

(a)the feelings of those related to, or associated with, the deceased, giving particular regard to the spouse of the deceased,
(b)the rules, practice and beliefs respecting disposition of human remains and cremated remains followed or held by people of the religious faith of the deceased,
(c)any reasonable directions given by the deceased respecting the disposition of his or her human remains or cremated remains, and
(d)whether the dispute that is the subject of the application involves family hostility or a capricious change of mind respecting the disposition of the human remains or cremated remains.

Clause (c) of s. 5(5) provides that reasonable directions given by the deceased person are to be taken into account on an application under s. 5(4).

The appeal court noted that the deceased’s wishes are not determinative and are only one factor to be taken into account by the court.

The court noted that the deceased may in his or her will make a binding wish as to the disposition of the deceased’s remains in a proper will, but in the present circumstances the deceased did not express a preference in his will and his representation agreement as to his preference if any for a religious service.

Adverse Inferences- Under Utilized?

Govorcin Fisheries v Medanic Fisheries 2021 BCSC 1092 reviewed the principles relating to adverse inferences for failure to call certain witnesses or evidence without valid explanation.

It is a principle that dates back to the late 1700’s and is perhaps under utilized in estate litigation.

The matter of adverse inferences was discussed in some detail in the decision of the Court of Appeal in Rohl v. British Columbia (Superintendent of Motor Vehicles), 2018 BCCA 316, at paras. 1-4:

M.K. Fuerst in The Law of Evidence in Canada (4th ed., 2009):

In civil cases, an unfavourable inference can be drawn when, in the absence of an explanation, a party litigant does not testify, or fails to provide affidavit evidence on an application, or fails to call a witness who would have knowledge of the facts and would be assumed to be willing to assist that party. In the same vein, an adverse inference may be drawn against a party who does not call a material witness over whom he or she has exclusive control and does not explain it away. Such failure amounts to an implied admission that the evidence of the absent witness would be contrary to the parties’ case, or at least would not support it.
. . .
An adverse inference may be drawn when, without explanation, a party does not give evidence or fails to call a witness who in the circumstances would be expected to favour the party and the witness would have knowledge of the facts in dispute. In such circumstances, the failure to call the witness or give testimony is seen as akin to an admission that the evidence would have been contrary to the party’s case, or at least would not support it. [At § 13.2131.]

According to the jurisprudence, an adverse inference or missing witness instruction is not “appropriate” where:

• counsel have offered an explanation for the failure to call the witness; such as a good faith belief in the unreliability of the witness; or, that the decision was a tactical one;
• the party has no special access to the witness;
• the evidence would be “unimportant to the case, cumulative, or inferior to the evidence already available on the relevant point”;
• where there is no evidence as to why the witness was not called.

Courts have held that an instruction is “appropriate” where:

• a party advises a jury or judge that the witness will be called;
• a party has greater access to the witness than the other and the witness would corroborate the party’s case in a significant respect; or, “where the accused in his own testimony first raises the corroborative significance of the witness to his defence”. [At § 33.10.30.]

These apply with varying degrees of strictness in civil actions.

In Jolivet, Binnie J. emphasized that one must be “precise” about the exact nature of the adverse inference sought to be drawn, endorsing the suggestion made in the Lederman text that in Canada, the inference is generally that the evidence of the absent witness would not support or, more significantly, that it would be contrary to the evidence of the party involved. In the criminal law context, therefore, courts must be particularly careful to ensure that an accused’s right to remain silent is not breached by the drawing of an adverse inference and that the onus of proof is not mistakenly shifted to the accused.

A considerable number of cases now reinforce the view that there is no such thing as a “mandatory adverse inference” to be drawn where a party fails to call a witness. Rather, the question of whether to make such an inference seems to depend upon the specific circumstances, in particular whether:

• There is a legitimate explanation for the failure to call the witness;
• The witness is within the “exclusive control” of the party, and is not “equally available to both parties”; and
• The witness has material evidence to provide; and
• The witness is the only person or the best person who can provide the evidence.

Essentially, the decision to draw an adverse inference is discretionary and premised on the likelihood that the witness would have given harmful testimony to the party who failed to call him or her.

See also Davison v. Nova Scotia Government Employees Union 2005 NSCA 51 at para. 74; O’Connell (Litigation Guardian of) v. Yung 2012 BCCA 57 at para. 75, citing Rimmer (Guardian ad litem of) v. Langley (Township) 2007 BCCA 350 at para. 30; R. v. Degraw 2018 ONCA 51 at para. 35; Parris v. Laidley 2012 ONCA 755 at para. 2; Gough v. C.R. Frankenham Backhow Services Ltd. 2008 NSCA 38 at para. 48; McWilliams, supra, at § 33.10.30.