Fraudulent Executor Ordered to Pay Costs

Kyle estate 2017 BCSC 752 held that an executor who misappropriated trust funds was denied the legal costs of defending the pursuit of those assets and either double costs or special costs were awarded against the executor on the basis of public policy, rather than the costs be borne by the estate.

The executor had been removed by court order, and it was determined that approximately $450,000 had been misappropriated from estate funds by him.

He was not forthright with his mother and siblings regarding what appeared by them to be sums missing from the estate of the deceased, had obtained a grant of probate of the will of the deceased without disclosing the joint account, and had failed to meet the onus of showing that it was the intention of the deceased to make an absolute gift of the monies in the joint account to himself.

The court also found that the former executor undertook almost 2 years of misdirection and deceit to knowingly permit inaccurate information to be conveyed by the estate lawyer and was not honest, complete or neutral in disclosing the benefits he had received from the deceased.

The other beneficiary was awarded full indemnification for his legal costs and expenses as a result of pursuing a claim against the former executor.

In a proceeding involving the misconduct of an executor or trustee, including where the executor has acted dishonestly and in breach of fiduciary obligations, the beneficiary may obtain an award of special costs against the executor personally and, if the executor is a beneficiary under the estate, these costs can come out of the executor share of the estate. Szpradowski v Szpradowski Estate (1992) 44 ETR 89

Szpradowski at para. 227 stated ” there is no reason why the estate of the legatee, should bear the cost of which the executor put the estate “-

Wills Variation-Abandoned Twins Awarded %70 Estate

Jung v Poole estate 2021 BCSC 623 awarded two twins who were abandoned by their father shortly after birth and then again after a contested custody application at age 4, 70% of the residual estate of the deceased, with the two neighbors who had been left the estate receiving 15% each.

After abandoning the children at birth, and subsequently losing a custody trial, despite being awarded generous parenting time, the deceased through bitterness blame the children and in his last will, stated that they were illegitimate, that he wanted no part of his estate to go to them, and he instructed his executors to fight any attempt by them to vary the will.

The court found that the deceased attitude towards the children was misguided, ill-conceived, and a breach of his moral obligation to provide for the twins.

The Law

The validity of the testator’s reasons for disinheriting an adult child is based on fact. The rationality of his or her reasons must consist of a logical connection between the facts and the act of disinheritance . Kelly v baker 1996 BCJ 3050 BCCA.

A testator’s failure to support his or her minor children is a factor that can be considered in determining the existence of a moral claim. Brown v . Ferguson 2010 BC SC 1890 at para 101.

An adult child’s decision to have no contact with the testator can be a rational ground for disinheritance. Enns v Gordon Estate 2018 BC SC 705 at 103 – 106.

However if the lack of a relationship between the testator in his or her child was the testator’s fault, as opposed to mutual estrangement, a moral duty can be found in can intensify if the testator rejects the child’s efforts at reconciliation. Lamperstorfer v Plett 2018 BC SC 89 at para 195.

The moral duty of a testator who has been rejected by member of his or her family is not required to ignore the rejection. The testator must be judicious, he need not be impervious . Hall v . Hall, 2011 BC CA 354 at para 26 – 27.

The moral obligation of a testator to a child begins when the child is born. The law of nature leaves each child utterly dependent upon his or her parents during infancy, and by extension to childhood in later years and a diminishing capacity. Tomlyn v Kennedy 2008 BCSC 331

In the Court of Appeal decision Gray v Nandel 2002 BCCA 94 the court stated at paragraph 17:

” 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 claim to 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 material way; the will was his last opportunity to do right by his son.”

McMain v Lebalc 2013 BCSC 891 also involved a testator who through no fault of his son had little contact and no relationship with his son for the 20 years prior to his death, and to disinherited his son is a result of that estrangement.

The court in McMain stated that in the circumstances of this case,” the plaintiff is a strong moral claim to share of the of the testator’s estate. The plaintiff had come to the conclusion that his father did not love them and wanted nothing to do with them. I do not blame him. The testator did almost nothing to lead them to think otherwise. It was the only rational conclusion for him to have drawn from a lifetime of experience.”

Passive-Aggressive Behavior

Passive-Aggressive Behavior

Passive-aggressive people are frequently seen in estate litigation and family law matters.


People such as parents or partners who display passive-aggressive behavior have a hard time expressing their feelings verbally. This results in the suppression of any negative emotions they may experience. Instead of expressing negative emotions verbally, they project those feelings in their behaviors toward a spouse or child.


What Is Passive Aggression?

Passive aggression is behavior that is indirectly aggressive rather than directly aggressive. Passive-aggressive people regularly exhibit resistance to requests or demands from family and other individuals often by procrastinating, expressing sullenness, or acting stubborn.


Manifestations of Passive-Aggression

Passive-aggressive behavior won’t manifest in a punch to the face, but covert anger can cause you to feel as if you’ve been kicked in the gut. People who exhibit this behavior show their anger by withholding something they know you want, through procrastination, stubbornness, and obstructionism. “Passive-aggressive people act passive, but are covertly aggressive,”

When they reach a point where they no longer want to go along with the status quo that has been set over the years, they will become defiant in their own non-confrontational way. That is when the disconnection and loss of emotional intimacy is most felt by those married to a passive-aggressive spouse or parent.


Emotional Alienation

Passive-aggressive people are pretty good at showing up and meeting needs during good times, but not so much during the bad times.

Their fear of conflict coupled with their fear of forming emotional connections keeps them from being a fully engaged partner. “Passive-aggressive people are generally codependent, and like codependents, suffer from shame and low self-esteem,”

They can form an intimate connection up to a certain point. They can be self-sacrificing within limits. They can make an emotional investment to a degree.

1. During an argument, a passive-aggressive person will claim that the other party is overreacting or too aggressive. In the heat of the moment, it is completely normal, healthy even, to be expressive and show emotions. These are traits that they themselves cannot understand, much less demonstrate. They may not see the exercise as a way to solve a problem—only to deepen one; some may even take it as a personal attack. Their refusal to engage in conflict leaves the other party feeling lonely and responsible for all the marital problems. “They don’t express their anger openly

2. The more expressive and emotional their partner/parent becomes, the calmer and more logical the passive-aggressive person appears to become. This is a mechanism to once again avoid conflict—the “logic” they employ is relative to the situation and does not reflect any mature emotional intelligence. .

3. The passive-aggressive person retreats completely and their partner/child is left to pick up the pieces. Nothing ever gets resolved, and such behavior sends a clear message that they are unwilling to meet halfway in the marriage. This feeling for the spouse or child is comparable to rejection, but the passive-aggressive partner/parent doesn’t see it that way. They still love their partner/parent , but will forget what that means when they begin to feel threatened, thus starting the chain reaction of conflict-avoidance, emotional distance, and long-term relationship woes.

The Pay-Off

There is a twisted logic at play behind someone’s need to remain calm and logical during times of conflict. They fear rejection, and by engaging and sharing their emotions during conflict, they feel this will trigger a rejection by someone they love. The thought of anyone being upset with them is unsettling, and when that person is their betrothed, they see it as emotional destruction.

The more they refuse to engage, the more effort their partner/child puts into their interactions together. In their mind, the more you try, the more you admire and love them, and so they will not see this situation as negative. Unfortunately, this leads to an emotional disconnect that cannot be bridged until their passive-aggressive behavior is addressed and amended.

S. 58 WESA Refused

The curative provisions of section 58 WESA were declined in De Bon estate 2021 BCSC 505 Van where the court refused to vary a January 2012 will that the deceased referred to in six subsequent letters that purported to vary the 2012 will in various degrees.

Many of the subsequent documents referred to as “ instructions to assist and provide guidance to the executor” of the estate, or “ to whom it may concern”, were contradictory with respect to what part of the bequest was going to be distributed to which individual and at what time.

The court was satisfied that the documents were created by the deceased, although not all were signed by him, but were clearly prepared in his handwriting. The deceased also made arrangements for the documents to be delivered to his executor.

Most importantly, the court found that at no time was their language in any of the documents that provided for a revocation of the 2012 will.

The deceased was familiar with the preparation of wills, as he had prepared and had delivered to the wills registry six notices of filing of early earlier versions of a will, all prior to the 2012 will.

The court found on a balance of probabilities that the provisions of the 2012 will remained unaffected by the subsequent letters and notations and none of them purported to be a will dealing with intentions of someone who was well aware of the statutory elements a will must contain
Accordingly, the court found that the notes did not contain the testamentary intentions of the deceased.


In the Estate of Palmer, 2017 BCSC 1430, Justice Kent summarized the analysis required pursuant to s. 58 of WESA as follows;

27.   The recent case of Estate of Young, 2015 BCSC 182, describes the legal framework applicable to s. 58 of WESA and the curing of “deficiencies” related to the making or alteration of a will. The history and intent of the legislation, including the case law in other jurisdictions addressing similar provisions, is set out in paras. 16–33 of that decision and will not be repeated here.

The law is summarized in paras. 34–37 of the decision and can be paraphrased as follows:

• the courts’ curative power with respect to non-compliant testamentary documents is inevitably and intensely fact-sensitive;

• the first threshold issue is whether the document in question is authentic;

• the second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions;

• a testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death. Rather, the document must record a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death;

• the burden of proof that a non-compliant document embodies the deceased’s testamentary intentions is the balance of probabilities;

• factors relevant to establishing the existence of a fixed and final testamentary intention may include the presence of the deceased’s signature, the deceased’s handwriting, witness signatures, revocation of previous wills, funeral arrangements, specific bequests and the title of the document; and

• generally speaking, the further a document departs from the formal validity requirements of the legislation, the harder it may be for the court to find that it embodies the deceased’s testamentary intention.

Cohabitation Agreement Upheld- S. 93 Family Law Act

In Hudema v Moore 2021 BCSC 587 the parties signed a cohabitation  agreement between themselves that while they cohabited, the relationship would NOT be defined as marriage like, the court reviewed S. 93 Family law act and  upheld the agreement.

The male partner had brought an action under section 93 (3) and 93 (5) of the Family Law Act based on unfairness and misrepresentation of the “true” purpose of the agreement.

The court held that the Agreement was not substantively unfair, and there was no basis to set it aside under s. 93(5) of the FLA


S. 93 Family Law Act


(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a)a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
(b)a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
(c)a spouse did not understand the nature or consequences of the agreement;
(d)other circumstances that would, under the common law, cause all or part of a contract to be voidable.

(4)The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is substantially different from the terms set out in the agreement.

(5)Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

(a)the length of time that has passed since the agreement was made;

(b)the intention of the spouses, in making the agreement, to achieve certainty;

(c)the degree to which the spouses relied on the terms of the agreement.


Mr. Hudema voluntarily chose to sign the Agreement and was not coerced into doing so. While there was no certificate of independent advice signed, Mr. Hudema did have an opportunity to consult with a lawyer before signing. His decision to sign the Agreement was an informed one.

The court concluded there was no procedural unfairness in the process by which the Agreement was signed, and no basis to set aside the Agreement, in whole or part, on any of the grounds listed in s. 93(3) of the FLA.


Mr. Hudema alternatively argues that the Agreement should be set aside pursuant to s. 93(5) because it is significantly unfair in its terms. The issue of whether the terms of the Agreement are significantly unfair turns on a consideration of the factors listed in s. 93(5)(a)-(c) of the FLA, including the length of time that has elapsed, the intentions of the spouses in making the agreement, and their reliance on the terms of the Agreement.

This is not a case where circumstances have changed since the making of the Agreement such as to undermine the parties’ intentions in signing it. The parties’ relationship ended just over a year after the signing of the Agreement.

There is no evidence that their financial circumstances substantially changed over the course of that year. Mr. Hudema simply regrets his agreement and wants to be released from it.

Promises and Reliance- Proprietary Estoppel

Khela v Clarke 2021 BCSC 503 examined promises made and reliance thereon which may give rise to a claim for proprietary estoppel which is an equitable doctrine that may form the basis of a cause of action for claimed interests in land, in the absence of an enforceable contractual relationship with the defendant.

Lord Denning M.R.’s judgment in Crabb v. Arun District Council, [1975] 3 All E.R. 865 at 871 (C.A.), as setting out the basis for proprietary estoppel:

The basis of this proprietary estoppel – as indeed of promissory estoppel – is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as “estoppel”. They spoke of it as “raising an equity”. If I may expand that, Lord Cairns said in Hughes v. Metropolitan Railway Co [(1877) 2 App Cas 439 at 448, [1874-1880] All E.R. Rep 187 at 191]: “… it is the first principle upon which all Courts of Equity proceed …” that it will prevent a person from insisting on his strict legal rights – whether arising under a contract, or on his title deeds, or by statute – when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties. What then are the dealings which will preclude him from insisting on his strict legal rights? …


Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights – knowing or intending that the other will act on that belief – and he does so act, that again will raise an equity in favour of the other, and it is for a court of equity to say in what way the equity may be satisfied. The cases show that this equity does not depend on agreement but on words or conduct….

The doctrine of proprietary estoppel was considered by the Supreme Court of Canada in Cowper-Smith v. Morgan, 2017 SCC 61 [Cowper-Smith].

At paras. 15–22 of Cowper-Smith, Chief Justice McLachlin stated the law of proprietary estoppel in Canada as follows:

[15] An equity arises when:

(1) a representation or assurance is made to the claimant, on the basis of which the claimant expects that he will enjoy some right or benefit over property;

(2) the claimant relies on that expectation by doing or refraining from doing something, and his reliance is reasonable in all the circumstances;

and (3) the claimant suffers a detriment as a result of his reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on her word:

The representation or assurance may be express or implied: see Wolff v. Canada (Attorney General), 2017 BCCA 30, 95 B.C.L.R. (5th) 15, at para. 21;

An inchoate equity arises at the time of detrimental reliance on a representation or assurance. It is not necessary to determine, in this case, whether this equity is personal or proprietary in nature.

When the party responsible for the representation or assurance possesses an interest in the property sufficient to fulfill the claimant’s expectation, proprietary estoppel may give effect to the equity by making the representation or assurance binding.

Proprietary estoppel protects the equity, which in turn protects the claimant’s reasonable reliance:

Like other estoppels, proprietary estoppel avoids the unfairness or injustice that would result to one party if the other were permitted to break her word and insist on her strict legal rights

When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.

Where protecting the equity of the case may demand the recognition of “new rights and interests … in or over land” (Crabb v. Arun District Council, [1975] 3 All E.R. 865 (C.A.), at p. 871, per Lord Denning M.R.), proprietary estoppel can do what other estoppels cannot – it can found a cause of action: see MacDougall, at p. 424; McGhee, at pp. 330-33. Where the ingredients for a proprietary estoppel are present, the court must determine whether it is appropriate to satisfy the equity by recognizing the modification or creation of property rights “in situations where there is want of consideration or of writing”: Anger & Honsberger Law of Real Property (3rd ed. (loose-leaf)), by A. W. La Forest, at p. 28-3.

It has commonly been understood in Canada that proprietary estoppel is concerned with interests in land: Delane Industry Co. v. PCI Properties Corp., 2014 BCCA 285, 359 B.C.A.C. 61, at para. 49; f or transfer of rights to land”:

The British Columbia Court of Appeal has acknowledged the question of whether proprietary estoppel “also extends to other proprietary rights”, although this was not at issue in the case before it: Sabey, at para. 32. The English courts have gone much further, allowing proprietary estoppel claims in relation to chattels, insurance policies, intellectual property rights, commercial assets, and other forms of property: see S. Wilken and K. Ghaly, The Law of Waiver, Variation, and Estoppel (3rd ed. 2012), at pp. 263-64; MacDougall, at pp. 452-53; see also Thorner, at paras. 48 and 66, per Lord Walker, and para. 104, per Lord Neuberger.

What Debts Survive Bankruptcy

Re Poonian 2021 BCS555 reviewed the law as to what debts survive an order of bankrupty and thus cannot be avoided.


In Cruise Connections Canada v. Szeto, 2015 BCCA 363 at para 14, our Court of Appeal endorses the description of the purpose and principles of the BIA in general and s 178 in particular as set out by Blair J (then serving ad hoc on the Ontario Court of Appeal; later JA) in Simone v. Daley (1999), 170 DLR (4th) 215 (ONCA):


An important purpose of bankruptcy legislation is to encourage the rehabilitation of an honest but unfortunate debtor, and to permit his or her re-integration into society – subject to reasonable conditions – by obtaining a discharge from the continued burden of crushing financial obligations which cannot be met.

Debts which survive a bankruptcy as a result of the provisions of subsection 178(1), therefore, are exceptions to the overriding principle, and should be addressed accordingly.


An analysis of the provisions of subsection 178(1) shows that the types of debt which survive a bankruptcy may be divided into four overall categories, namely,


(1) those which have been imposed by a court in the form of a fine or some other penalty for an offence against the state (paragraph (a));
(2) those which reflect the legislative policy decision to protect spouses and children requiring support (paragraphs (b) and (c));
(3) those arising out of acts of fraud, dishonesty, or misconduct while acting in a fiduciary capacity (paragraphs (d) and (e)); and finally,
(4) those which, if discharged, would undermine the integrity of the bankruptcy process itself (paragraph (f)).


In Jerrard v. Peacock [(1985), 57 C.B.R. (N.S.) 54 (Alta. Q.B.)], Master Funduk—an experienced official in matters of this nature—subjected section 178 to the following analysis, which in my opinion is an accurate one. At pp. 62–63 he said:

Considering the new start object ingrained in the Act, the logical interpretation of the two subsections in question is that subs. (2) creates the general principle (being a release of all debts) with subs. (1) being an exception to the general principle. [Subsection (1)] establishes exceptions, not the principle, and must be viewed in that light.


It is as if the section literally reads that the order of discharge releases the bankrupt from all claims provable in bankruptcy “except the following” and then lists the seven (now six) categories in subs. (1).
. . .
All of the exceptions in the section are based on what might be classed as an overriding social policy. In other words, they are the kinds of claims which society (through the legislators) considers to be of a quality which outweighs any possible benefit to society in the bankrupt being released of these obligations.
. . .
Paragraphs (d) and (e) are morality concepts which look at conduct. These kinds of conduct are unacceptable to society and a bankrupt will not be rewarded for such conduct by a release of liability.


[ The intention of Parliament in enacting s 178 is to prevent a bankrupt from using the statutorily-bestowed shield of bankruptcy to avoid the payment of debts arising from intentionally bad conduct: Martin v. Martin, 2005 NBCA 32 at para 11; Mutual Transportation Services Inc. v. Saarloos, 2020 NSSC 198 at para 14.


Courts accordingly “take a purposive approach to interpreting s. 178(1)(d) and (e) to ensure that debtors do not benefit from their dishonesty”: HY Louie Co. Limited v. Bowick, 2015 BCCA 256 at para 41.

[ The creditor seeking to have the debt or liability survive the discharge bears the onus of establishing that one of the provisions of s 178(1) apply: Toronto-Dominion Bank v. Merenick, 2007 BCSC 1261 at para 48; Gray (Re), 2014 ONCA 236 at para 24.

Lawyer Negligence

Tellini v Grewal and Bell Alliance 2021 BCS549 discussed the standard of care upon a lawyer who for negligence.

The law is clear with respect to the standard of care required :

A leading case is Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147 at paras. 58 and 59 [Central Trust]:


1. A solicitor is required to bring reasonable care, skill and knowledge to the performance of the professional service which he has undertaken. See Hett v. Pun Pong (1890), 18 S.C.R. 290 at 292 (S.C.C.). The requisite standard of care has been variously referred to as that of the reasonably competent solicitor ( lawyer), the ordinary competent solicitor and the ordinary prudent solicitor.

2. A solicitor is not required to know all the law applicable to the performance of a particular legal service, in the sense that he must carry it around with him as part of his “working knowledge”, without the need of further research, but he must have a sufficient knowledge of the fundamental issues or principles of law applicable to the particular work he has undertaken to enable him to perceive the need to ascertain the law on relevant points.

3. “An attorney is expected to possess knowledge of those plain and elementary principles of law which are commonly known by well informed attorneys, and to discover those additional rules of law which, although not commonly known, may readily be found by standard research techniques.


The law with respect to the standard of care required of lawyers was discussed in in Newton v. Marzban, 2008 BCSC 328 at paras. 605-609 [Newton].

At para. 605 she referred to Millican v. Tiffin Holdings Ltd. (1964), 49 D.L.R. (2d) 216 at 219 (Atla. T.D.), aff’d [1967] S.C.R 183 for this list of a lawyer’s obligations:

(1) To be skilful and careful.
(2) To advise his client on all matters relevant to his retainer, so far as may be reasonably necessary.
(3) To protect the interests of his client.
(4) To carry out his instructions by all proper means.
(5) To consult with his client on all questions of doubt which do not fall within the express or implied discretion left to him.
(6) To keep his client informed to such an extent as may be reasonably necessary, according to the same criteria.

Millican referred at paras. 607 and 608 to the lawyer’s duty to inform a client of all relevant matters, and to warn of risks that accompany a proposed course of action, relying on Girardet v. Crease & Co. (1987), 11 B.C.L.R. (2d) 361 (S.C.)

Fiduciary Obligations of a Power of Attorney

Sarzynick v Skwarchuk 2021 BCSC 443 discussed the fiduciary obligations that an ad hoc fiduciary attorney under a power of attorney would owe in equity that have largely been codified in the Power of Attorney Act, R.S.B.C. 1996, c.370 (“PAA”):

For example, s. 19(1) of the PAA now mandates that an attorney must “act honestly and in good faith” and “exercise the care, diligence and skill of a reasonably prudent person”.

Moreover, s. 19(1)(d) requires that an attorney “keep prescribed records and produce the prescribed records for inspection and copying at the request of the adult.”
An attorney is required to act in the “adult’s best interest’s” when managing and making decisions about the adult’s financial affairs: PAA, s. 19(2).

Finally, pursuant to s. 19(4) of the PAA, an attorney must keep their own property separate from the donor’s property.

In a similar vein, the Power of Attorney Regulation, B.C. Reg. 20/2011 (“Regulation”) imposes further obligations on attorneys.

Section 2(1) mandates that an attorney acting under an enduring power “must make a reasonable effort to determine the adult’s property and liabilities as of the date on which the attorney first exercises authority on the adult’s behalf” and “maintain a list of that property and those liabilities.”


Further record keeping obligations are imposed under s. 2(2) of the Regulation, which provides as follows:

(2) An attorney acting under an enduring power of attorney must keep the following records in relation to the period for which the attorney is acting:
(a) a current list of the adult’s property and liabilities, including an estimate of their value if it is reasonable to do so;
(b) accounts and other records respecting the exercise of the attorney’s authority under the enduring power of attorney;
(c) all invoices, bank statements and other records necessary to create full accounts respecting the receipt or disbursement, on behalf of the adult, of capital or income.
In short, the Regulation imposes fairly robust record keeping obligations on those acting under an enduring power of atto
The standard of care for an attorney, which has now been codified under s. 19(1) of PAA, was well-established in the case law by 2008.
For example, in Andreasen v. Daniels-Ferrie, 2001 BCSC 1503 at para. 27, the requisite standard of care for a fiduciary acting under a power of attorney was described as follows:
even where the attorney acts gratuitously he or she has a duty to account, to exercise reasonable care as would a typically prudent person managing his or her own affairs, and not act contrary to the interests of the donor.

Principles of Contract Interpretation


Principles of Contractual Interpretation


  1. The goal is to ascertain the objective intentions of the parties
  2. A practical, common sense approach is required;
  3. The court is to look to the contract as a whole and give effect to all provisions (i.e., provisions should not be read as standing alone but in light of the contract as a whole);
  4. Words used must be given their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time;
  5. Contextual evidence must not be permitted to overwhelm the wording of the agreement);
  6. Contractual provisions should be interpreted in the context of the objective intention of the parties as evidenced by the contract as a whole;
  7. It should be presumed that the parties meant what they said in the contract; and
  8. The contract’s interpretation should accord with sound commercial principles and good business sense. It is important to consider the purpose and nature of the relationship established by the contract,

(Sattva Capital Corp. v. Creston Moly Corp. 2014 SCC 53).


Courts seek to discover what the parties intended, not what a court thinks reasonable.

In determining the intention of the parties, and where appropriate, the court has the ability to imply terms even if the parties did not put them in writing. A term cannot be implied simply on the ground of fairness. There has to be strong evidence to support the conclusion that the implication of a term is permissible in the circumstances: Fridman, G.H.L., The Law of Contract in Canada, 6th Ed. (Toronto: Thomson Reuters, 2011) at 463–64.


Ultimately, a term can be implied into a contract in one of three general scenarios:

  1. Where custom and usage necessitates the implication of the term;
  2. Where a term is necessary to give business efficacy to a contract by implying terms that the parties would have obviously assumed; and
  3. Where the proposed term is implied by law;

(see M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619 at 634–635 [M.J.B.]; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 at 1009–1010, per McLachlin J., as she then was; Union Road Properties Ltd. v. British Columbia, 2019 BCCA 302 at para. 18).

[        In considering whether certain terms of a settlement contract were implied, the court will look at the settlement discussions and the documentation and correspondence in the context of normal business and common sense: Urban Handyman Inc. v. Should I stay or Should I Go West Productions Inc., 2015 BCSC 1780 at para. 56, quoting Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Gen. Div.).


When considering whether an implied term is necessary, the court must not slip into a determination of the intention of reasonable parties; the term must have “a certain degree of obviousness to it” that the actual parties would have intended at the time of contract formation: M.J.B., at 635; Illidge v. Sona Resources Corporation, 2019 BCCA 89 at para 23, quoting Moulton Contract Ltd. v. British Columbia, 2015 BCCA 89 at paras. 55, 58.