Quantifying Special Costs and Contingency Fees

Quantifying Special Costs and Contingency Fees

Norris v Burgess 2016 BCSC 1451 stated the law for quantifying special costs and then applied that amount towards the plaintiff’s contingency fees.

Norris was an ICBC case where the judge in a Jury trial found fault on the insurer for the late production of a video and photos and awarded special costs in the same amount as the plaintiff’s entire %30 contingency fee , amounting to $155,340 plus out of pocket expenses for the court action ( disbursements).

The same reasoning should apply to estate litigation cases where the opposing party is awarded special costs against them in the same amount as the plaintiff’s legal fees work out to be on a contingency fee basis between the client and the lawyer.

[79]         Rule 14-1(3) of the Rules of Court refers to “special costs” as “those fees that were proper or reasonably necessary to conduct the proceeding”. In its entirety, R. 14-1(3) reads:

(3) On an assessment of special costs, a registrar must

(a)   allow those fees that were proper or reasonably necessary to conduct the proceeding, and

(b)   consider all of the circumstances, including the following:

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

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

(iii)            the amount involved in the proceeding;

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

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

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

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

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

[80]         In Gichuru, our Court of Appeal summarizes the general principles related to the assessment of costs by a judge:

[154]    We would briefly summarize the principles as discussed above. The decision to fix the quantum of costs under R. 14-1(15) is a matter of judicial discretion that should be sparingly exercised. The court officer best placed to conduct an assessment is usually the registrar, whose knowledge and experience in assessing legal bills is extensive and seldom matched by that of a trial judge. An exception may arise in cases when the judge is intimately familiar with the litigation or the time and cost of a registrar’s hearing cannot be justified or where the parties consent. The fact that a judge has heard the trial does not necessarily lead to the conclusion that the best use of judicial resources is for the judge to assess costs. A concern that a party who might have to pay costs will prolong the costs assessment by requiring a microscopic review of the services provided by counsel must be balanced against the right of that party to challenge the reasonableness of the proposed costs.

[155]    When assessing special costs, summarily or otherwise, a judge must only allow those fees that are objectively reasonable in the circumstances. This is because the purpose of a special costs award is to provide an indemnity to the successful party, not a windfall. While a judge need not follow the exact same procedure as a registrar, the ultimate award of special costs must be consistent with what the registrar would award in similar circumstances. Thus, a judge must conduct an inquiry into whether the fees claimed by the successful litigant were proper and reasonably necessary for the conduct of the proceeding as set out in R. 14-1(3)(a), taking into account all of the relevant circumstances of the case and with particular attention to the non-exhaustive list of factors in R. 14-1(3)(b).

[156]    A special costs assessment, whether before a judge or a registrar, cannot proceed in absence of evidence of the amount of legal fees incurred. Usually this will be provided in the same form as a bill between a solicitor and client under the Legal Profession Act. This is necessary to allow a court to inquire as to the objective reasonableness of the fees claimed by a litigant, as the fact that a solicitor has billed a certain sum does not necessarily make the fee reasonable. Where production of a bill of special costs would lead to a loss of solicitor-client privilege, the party seeking special costs must either waive privilege or can elect to preserve privilege by having its costs assessed after all appeals are exhausted.

Special Costs and Contingency Fees

[1]             The plaintiff was successful at trial with the jury awarding her $462,374 in damages resulting from a June 2, 2010 motor vehicle accident. The Insurance Corporation of British Columbia (“ICBC”) had conduct of the defence.

[2]             The defendants elected a jury trial. The plaintiff applied unsuccessfully to strike the jury: Norris v. Burgess (14 October 2015), Vancouver M123216 (B.C.S.C.)

[3]             On October 23, 2015, the defendants made an offer to settle for $678,500 which complied with R. 9-1 of the Supreme Court Civil Rules, [Rules of Court]. The plaintiff did not accept the offer.

[4]             The defendant admitted liability just before the commencement of the scheduled 20-day trial, which began on November 16, 2015.

[5]             The defendants now seek to be awarded costs at Scale B, Appendix B of the Rules of Court, from the date of the offer until the start of trial, and special costs for the trial as a result of the late disclosure of various photographs and copies of some hunting licences. In the alternative, for the trial, the defence seeks costs at Scale C, Appendix B of the Rules of Court. In either case, the plaintiff would have her costs prior to the date of the offer at Scale B.

[6]             The plaintiff states that the Court should not consider the defendants’ offer in exercising its discretion in relation to costs.

[7]             The plaintiff seeks special costs for the entire proceeding, equalling plaintiff’s counsel’s contingency fee. In the alternative, the plaintiff seeks costs at Scale B until the start of the trial and at Scale C for the trial.

[8]             The plaintiff’s basis for seeking special costs is the timing of ICBC’s disclosure of surveillance video for 2015 (“2015 Video”). By an October 20, 2015 Court Order, the defendants were required to list any surveillance video on or before October 23, 2015 (approximately three weeks before the scheduled trial). The 2015 Video was not disclosed until after the third week of trial.

[9]             Prior to the October 20, 2015 Court Order, surveillance videos for 2013 and 2014 had been disclosed.

[10]         For the reasons that follow, the plaintiff is awarded the special costs she seeks as a result of ICBC’s late disclosure of the 2015 Video.

 

Settlement Offers and Court Costs

Settlement Offers and Court Costs

Norris v Burgess 2016 BCSC 1451 deals with settlement offers and court costs, that is how courts adjust cost upwards or downwards either in favour of one party or against the other party depending on the parties conduct and the terms of any formal offers to settle made in accordance with the rules.

Costs are increasingly being awarded against unsuccessful estate litigants on a personal basis and the amount of them has escalated over the years almost like property prices in the lower mainland.

In writing for our Court of Appeal in C.P. v. RBC Life Insurance Company, 2015 BCCA 30, leave to appeal ref’d [2015] S.C.C.A. No. 136, Justice Goepel, in considering a trial award of double costs, sets forth generally the purpose of the costs rules related to settlement offers:

[94]      The underlying purpose of the offer to settle rule was set out in Hartshorne:

[25] An award of double costs is a punitive measure against a litigant for that party’s failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted. Litigants are to be reminded that costs rules are in place “to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer” (A.E. v. D.W.J., 2009 BCSC 505, 91 B.C.L.R. (4th) 372 at para. 61, citing MacKenzie v. Brooks, 1999 BCCA 623, Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 (C.A.), Radke v. Parry, 2008 BCSC 1397). In this regard, Mr. Justice Frankel’s comments in Giles are apposite:

[74] The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

  • “[D]eterring frivolous actions or defences”: Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 37 B.C.L.R. (2d) 2 at 25 (C.A.), leave ref’d, [1988] 1 S.C.R. ix;
  • “[T]o encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”: Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 at para. 28 (C.A.);
  • “[E]ncouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases: Bedwell v. McGill, 2008 BCCA 526, 86 B.C.L.R. (4th) 343 at para. 33;
  • “[T]o have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”: Catalyst Paper Corporation v. Companhia de Navegaçao Norsul, 2009 BCCA 16, 88 B.C.L.R. (4th) 17 at para. 16.

[95]      A plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs. To do otherwise would undermine the importance of certainty and consequences in applying the Rule: Wafler v. Trinh, 2014 BCCA 95 at para. 81. The importance of those principles was emphasized by this Court in A.E. Appeal at para. 41:

[41] This conclusion is consistent with the importance the Legislature has placed on the role of settlement offers in encouraging the determination of disputes in a cost-efficient and expeditious manner. It has placed a premium on certainty of result as a key factor which parties consider in determining whether to make or accept an offer to settle. If the parties know in advance the consequences of their decision to make or accept an offer, whether by way of reward or punishment, they are in a better position to make a reasoned decision. If they think they may be excused from the otherwise punitive effect of a costs rule in relation to an offer to settle, they will be more inclined to take their chances in refusing to accept an offer. If they know they will have to live with the consequences set forth in the Rule, they are more likely to avoid the risk.

[40]         With respect to the first factor in R. 9-1(6), whether the offer ought reasonably to have been accepted, Goepel J.A. in C.P. states:

[97]      Whether an offer to settle is one that ought reasonably 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: Bailey v. Jane, 2008 BCSC 1372 at para. 24 and Hartshorne at para. 27. This factor is considered from the perspective of the person receiving the offer. It has both a subjective and objective component. 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.

[41]         I emphasize that R. 9-6(1)(a) uses the word, ought. “Ought” is defined in The Oxford English Dictionary, 2d ed. as follows:

b. In present sense: = Am (is, are) bound or under obligation: you ought to do it = it is your duty to do it; it ought to be done = it is right that it should be done, it is a duty (or some one’s duty) to do it. (The most frequent use throughout. Formerly expressed by the pres. t., OWE v. 5.)

[42]         The use of the word “ought” in R. 9-6(1)(a) evinces a legislative intent that the court may consider whether the offer was one that the offeree should have accepted. Where the offeror is the plaintiff, this wording encourages an offer that falls at the low end of the range of potential trial awards the plaintiff is anticipating. Where the offeror is the defendant, it encourages an offer that falls at the high end of the range of potential trial awards the defendant is anticipating. In short, the word “ought” brings the respective positions of the parties closer, with the object of reaching an agreement and conserving judicial and other resources.

Removal of Executor

Removal of Executor
 Re Kolic Estate 2016 BCSC 1312 contains an excellent summary on the criteria for the removal of executor.
 
In Kolic the court ordered the removal of executor for basically choosing sides in the litigation concerning the very will that she was to remain impartial over pending the litigation.
22      The authority to remove Mary and substitute another individual as executor to Violet’s Will is found under s. 31 of the Trustee Act, R.S.B.C. 1996, c. 464, and the inherent jurisdiction of the court. Given that a Master does have any inherent jurisdiction to exercise, the basis for Joseph’s remedy must be s. 31. That provision reads as follows:
31 If it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court, it is lawful for the court to make an order appointing a new trustee or trustees, whether there is an existing trustee or not at the time of making the order, and either in substitution for or in addition to any existing trustees.
23      In Miles v. Vince, 2014 BCCA 289 (B.C. C.A.), the court adopted the following guidelines when considering an executor’s removal and substitution:
84 What circumstances justify the removal of a trustee? In Letterstedt v. Broers (1884), 9 App. Cas. 371 (J.C.P.C.), the court established guidelines justifying the removal of a trustee (at 385-389):
1. If the Court is satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.
2. The acts or omissions must be such as to endanger the trust property or to show a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity.
3. In exercising the delicate jurisdiction of removing trustees, the Court’s main guide must be the welfare of the beneficiaries. It is not possible to lay down any more definite rule in a matter that is so “essentially dependent on details often of great nicety.” The Court must proceed to look carefully into the circumstances of the case.
4. Where a trustee is asked to resign, and if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign.
5. The lack of jurisprudence in respect of the removal of a trustee reflects that a trustee when asked to do so, will resign.
6. If, without any reasonable ground, the trustee refuses to do so the court might think it proper to remove him.
7. Friction or hostility between trustees and the beneficiary is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is not to be disregarded.
24      The first question to be answered is whether Mary is properly fulfilling her role as executor. In my view, she is not.
25      The primary duty of an executor is to preserve the estate assets, pay the debts and distribute the balance to the beneficiaries entitled under the Will, or in accordance with any order made varying the terms of the Will. The executor should not pick sides between beneficiaries, and should be indifferent as to how the estate is to be divided: Quirico v. Pepper Estate, 1999 CarswellBC 2177 (B.C. S.C.).

Executor Can Be Liable For Unaccounted Expenses

Executor Can Be Liable For Unaccounted Expenses

Jackson v King 2003 BCSC 328 is a good decision on a passing of accounts and held inter alia that an executor is entitled to be indemnified expect for unaccounted or excessive expenses for which the executor can be held personally liable.

The Court held:

12      As Executors, the Respondents are entitled to be indemnified out of the Estate for all proper expenses incurred in relation to the Estate and this right of indemnity is a first charge upon the capital and the income of the Estate: Halsbury’s Laws of England, vol.17, 4th ed. (London: Butterworths, 1976) at 612, paragraph. 1190. The Respondents are also entitled to be indemnified for all costs including legal costs which are reasonably incurred: Goodman Estate v. Geffen (1991), 81 D.L.R. (4th) 211 (S.C.C.). As well, the Respondents are entitled to full indemnity for all costs and expenses properly incurred in the due administration of the Estate: Thompson v. Lamport, [1945] S.C.R. 343 (S.C.C.).

14      In these regards, the following passages from D.W.M. Waters, Law of Trusts in Canada 2nd ed.(The Carswell Company Limited: Toronto, 1984) are instructive:

A trustee is essentially one who is managing the affairs of others. He may have a personal beneficial interest, indeed, he may for all apparent purposes be the only beneficiary, but as a trustee he still remains subject to the obligation to account for his administration to those who may have an interest in the trust fund, whether as beneficiary or creditor. This obligation has been called the duty to disclose.(at p. 871) (footnotes and citations omitted)

The trustee is expected to have his accounts ready within a reasonable period of time from receiving the request. If the trust has been in existence for some time, the affairs or investments of the trust are complex, and the records are to be found in a series of books and documents, the court would take an appropriate view of what is reasonable. These are the kind of factors which are relevant. It may also make a difference as to what is reasonable whether the person making the request is interested in the accounts at large, or the particular accounts which concern his own interest. Nor will the courts permit the requesting person to use the courts as a means of gaining rapid access to the trust accounts. In Re Smith, McRuer C.J.H.C. followed Maclennan J.A.’s word in Sandford v. Porter that the law only asks of the trustee what is reasonable. This means that no beneficiary or creditor can bring a vexatious motion for the purpose of harassing a trustee. (at p. 872)(footnotes and citations omitted)

Creditors will normally have the right to demand an account as a consequence of statute, but the question arises as to what persons with an interest in the trust can claim an accounting. An “interest” is in fact broadly construed. Persons with vested or contingent interests are entitled to seek an inspection or request the court for an accounting, and next-of-kin and personal representatives of such interested persons are recognized. As far as asking the court for an accounting is concerned, none of these persons has an absolute right. As we have seen, harassing the trustee is vexatious litigation, and whether the court will order an accounting depends entirely upon the court’s discretion and the circumstances of the case. (at p. 873) (footnotes and citations omitted)

Severance of Court Actions

Severance of Court Actions

Severance of Court actions joined together may occur in civil litigation.

The Public Guardian and Trustee for BC v Johnston 2016 BCSC 1388 has an excellent review of the law as to when the courts will order that court actions be severed from the other and heard separately.

This decision was upheld by the BCCA in 2017 BCCA 59.

In that action there were claims that the will was invalid and alternatively in the same action , that if the will was valid, that it should then be varied as per wills variation provisions.

The application was to sever the two claims from the other and the court ordered that the trial firstly be held on  whether the will is valid, and then after that trial, if necessary, the wills variation claim would be tried.

[67]        Rules 22-5(6) and (7) state:

Separation

(6)        If a joinder of several claims or parties in a proceeding may unduly complicate or delay the trial or hearing of the proceeding or is otherwise inconvenient, the court may order separate trials or hearings or make any other order it considers will further the object of these Supreme Court Civil Rules.

Separating counterclaim or third party claims

(7)        If a counterclaim or a third party proceeding ought to be disposed of by a separate proceeding, the court may so order.

[68]        The key factors engaged in a general sense on an application to sever were canvassed in Schaper v. Sears Canada, 2000 BCSC 1575 (CanLII) [Schaper] at para. 19:

  1. …the party making the request must show that hearing the claims together would unduly complicate, delay the hearing, or otherwise be inconvenient. If a party applying does not meet this threshold, the court need not go further in any analysis and the application should be dismissed.
  2. Have the actions of any party in the proceeding been unreasonable and have they contributed to the complication, the delay, or the inconvenience alleged by the party applying? If this found, that would strengthen the argument to sever.
  3. Are the issues between the plaintiff and defendant and the issues between the defendant and the third party sufficiently distinct so as to allow them to be tried separately? If so, that strengthens the argument to sever off third party proceeding.
  4. Is the relief claimed by, or the potential obligation of, any party best determined by hearing the evidence of all parties at one hearing? If so, that weakens an application to sever.
  5. Does the prejudice to the party applying, prejudice based on undue complication, delay or inconvenience, outweigh any benefit of matters being heard together, or outweigh any considerations related to the overall objective of the rules to ensure a just, speedy and inexpensive determination of every proceeding on its merits, including the avoidance of a multiplicity of proceedings for the benefits of litigants and having concern to congestion in the courts generally?

[69]        Guidelines that focused attention more keenly on the efficacy of the trial process were helpfully laid out in O’Mara v. Son, Kim et al., 2007 BCSC 871 (CanLII) [O’Mara] at para. 23:

  1. whether the order sought will create a saving in pre-trial procedures;
  2. whether there will be a real reduction in the number of trial days taken up by the trial being heard at the same trial;
  3. whether a party may be seriously inconvenienced by being required to attend a trial in which the party may have a marginal interest;
  4. whether there will be a real saving in expert’s time and witness fees;
  5. whether one of the actions is at a more advanced stage than the other;
  6. whether the order sought will result in delay of the trial of any one of the actions and, if so, whether any prejudice which a party might suffer as a result of that delay outweighs the potential benefits which a consolidated trial might otherwise have;
  7. the possibility of inconsistent findings and common issues resulting from separate trials.

[70]        Severance may well be appropriate where the determination of one issue will render another one moot: Lawrence v. ICBC, 2001 BCSC 1530 (CanLII) [Lawrence].

[71]        The judicial discretion to sever trials or hearings is to be exercised sparingly: Morrison‑Knudsen Co. v. British Columbia Hydro & Power Authority, 1972 Carswell B.C. 62, 24 D.L.R. (3d) 579 (S.C.); Lawrence at para. 43. The test for severance is not applied in a vacuum; it is to be considered against the backdrop of the nature of the particular case at hand: Wirtz v. Constantini, 1982 CanLII 282 (BC SC), 137 D.L.R. (3d) 393, 1982 CarswellBC 588 (S.C.).  Because the determination involves an individualized assessment of the unique case before the Court, there is no closed list of uniformly applied considerations that inform the exercise of the Court’s discretion.

Court Pleadings

Court Pleadings

Court pleadings must briefly limit the issues of fact and law with certain clarity so as to give the opposing party sufficient notice of the case to be met at trial.

The law relating to pleadings was reviewed in the Public Guardian and Trustee BC v Johnston 2016 BCSC 1388 in an application to strike out the combined pleadings of the plaintiff who had claimed in the same court action that  the will was invalid, and alternatively if it was invalid, then the two claims should be heard separately.

The court ordered that the validity of the will be determined before the wills variation action.

[39]        The applicants rely on Rule 9–5(1) of the SCCR. It provides that, at any stage of the proceeding, the Court may order that the whole or any part of the pleading or other document be struck or amended on the ground that:

a)            it discloses no reasonable claim or defence, as the case may be;

b)            it is unnecessary, scandalous, frivolous or vexatious;

c)            it may prejudice, embarrass or delay the fair trial of the proceeding; or

d)            it is otherwise an abuse of the process of the court.

[40]        Where one or more of the grounds enumerated in Rule 9-5(1) are made out, the Court may pronounce judgment or order that the proceeding be stayed or dismissed, and that the costs of the application be paid as special costs.

[41]        The raison d’être of Rule 9-5(1) is as a mechanism to enforce the rules of pleadings: Doyle Construction Co. v. Carling O’Keefe Breweries of Canada Ltd., 1988 CanLII 2843 (BC CA), [1988] B.C.J. No. 831, 27 B.C.L.R (2d) 81 (C.A.) [Doyle].

[42]        The paramount function of pleadings is to define the issues of fact and law with clarity and precision, in order to give the opposing party fair notice of the case to be met at trial.  Equally important is that by defining the essential contours of the case, pleadings facilitate useful pretrial case management, establish the parameters of pretrial discovery and disclosure, and determine the necessity and scope of expert opinions: Keene v. British Columbia (Ministry of Children and Family Development) & Others, 2003 BCSC 1544 (CanLII); Sahyoun v. Ho, 2013 BCSC 1143 (CanLII) [Sahyoun].

[43]        Pleadings are not a vehicle to outline a detailed narrative of the facts and events that may have bearing upon the case.  Evidence is not to be included: Sahyoun at para. 29; Rule 3-7(1).  Rather, pleadings must be summary in nature, setting out a concise and orderly statement of the material facts that give rise to the claim (or counterclaim), establish a defence, or relate to matters raised by the claim: Doerksen v. First Open Heart Society of British Columbia, 2010 BCSC 1291 (CanLII).

[44]        Material facts are the facts that are essential to formulate each cause of action or defence; no averment crucial to success should be omitted: Pyke v. Price Waterhouse Ltd. , 40 C.P.C. (3d) 7, 1995 CarswellBC 907 (S.C.); Delaney & Friends Cartoon Productions Ltd. v. Radical Entertainment Inc. et al, 2005 BCSC 371 (CanLII); Skybridge Investments Ltd. v. Metro Motors Ltd., 2006 BCCA 500 (CanLII); Young v. Borzoni et al, 2007 BCCA 16 (CanLII) at para. 20.

[45]        It is the expectation that material facts will be stated succinctly and with precision, and also be organized in a way that informs the Court of the issues of fact and law it is being called upon to decide: Homalko Indian Band v. British Columbia, [1998] B.C.J. No. 2703, 25 C.P.C. (4th) 107 (S.C.); Glenayre Manufacturing v. Pilot Pacific Properties, et al, 2003 BCSC 303 (CanLII).

[46]         Particulars and material facts are different in their character and purpose.  Broadly speaking, particulars are intended to limit the generality of the pleadings and the issues to be tried; enable the other side to properly prepare for trial; tie the hands of the party supplying the particulars; and inform the opposing party what the pleader intends to prove, as distinct from the mode in which the case is to be proved: Cansulex Ltd. v. Perry, 1982 CarswellBC 836 (C.A.).  They should follow the material facts and be identified as such.  Although particulars must supply sufficient detail of the case to be met, they are not to include the evidence that is  anticipated will be adduced at trial to prove the pleaded facts.  

[47]        The distinctions between evidence and material facts, and between evidence and particulars can be difficult to draw in practice.  Despite the challenges, the integrity of those lines must be maintained as stringently as is reasonably possible.

[48]        Where a party pleads a legal conclusion such as, for example, the existence of a duty of care or of a fiduciary duty, sufficient material facts must be pleaded to support that conclusion: Ferstay v. Dywidag Systems International, 2008 BCSC 793 (CanLII); Rule 3‑7(9).

[49]        Where, as in the case at hand, there are allegations of fraud, breach of trust, undue influence and misrepresentation, inclusion of full particulars, including the dates and items as they are known at the time of the pleading, are mandatory: Rule 3‑7(18).

[50]        Rule 9‑5(2) confirms that no evidence is admissible on an application brought to strike a pleading on the ground that it does not disclose a reasonable claim or defence.  The facts are to be taken as pleaded.  Evidence is admissible, however, in relation to the other grounds.

[51]        In Citizens for Foreign Aid Reform Inc. v. Canadian Jewish Congress, 1999 CanLII 5860 (BC SC), 36 C.P.C. (4th) 266, 1999 CarswellBC 2111 (S.C.), Romilly J. provided an overview of the key principles that inform the analysis of whether a pleading ought to be struck under the predecessor to sub-rules 9-5(1)(b) and (c) at para. 47:

[47]      Irrelevancy and embarrassment are both established when pleadings are so confusing that it is difficult to understand what is being pleaded: Gittings v. Caneco Audio-Publishers Inc. (1987), 1987 CanLII 2561 (BC SC), 17 B.C.L.R. (2d) 38 (B.C.S.C.). An “embarrassing” and “scandalous” pleading is one that is so irrelevant that it will involve the parties in useless expense and will prejudice the trial of the action by involving them in a dispute apart from the issues: Keddie v. Dumas Hotels Ltd. (1985), 1985 CanLII 417 (BC CA), 62 B.C.L.R. 145 at 147 (B.C.C.A.).  An allegation which is scandalous will not be struck if it is relevant to the proceedings.  It will only be struck if irrelevant as well as scandalous: College of Dental Surgeons of B.C. v. Cleland, (1968), 66 W.W.R. 499 (B.C.C.A.).  A pleading is “unnecessary” or “vexatious” if it does not go to establishing the plaintiff’s cause of action or does not advance any claim known in law: Strauts v. Harrigan, [1992] B.C.J. No. 86 (Q.L.) (B.C.S.C.).  A pleading that is superfluous will not be struck out if it is not necessarily unnecessary or otherwise objectionable: Lutz v. Canadian Puget Sound Lumber and Timber Co. (1920), 28 B.C.R 39 (C.A.).  A pleading is “frivolous” if it is obviously unsustainable, not in the sense that it lacks an evidentiary basis, but because of the doctrine of estoppel: Chrisgian v. B.C. Rail Ltd. et al. (6 July 1992), Prince George Registry 20714 (B.C.S.C.).

[52]        A pleading may be embarrassing or scandalous within the contemplation of the Rule where it: does not state the real issues in an intelligible form; is overly prolix; includes irrelevant facts; is calculated to confuse the opposing party and make it difficult, and perhaps impossible, to answer; or contains arguments or evidence: Kuhn v. American Credit Indemnity Co., [1992] B.C.J. No. 953 (S.C.); McNutt v. A.G. Canada et al., 2004 BCSC 1113 (CanLII) at para. 41; B.C./Yukon Association of Drug War Survivors v. Abbotsford (City), 2014 BCSC 1817 (CanLII) at paras. 93-94; Spillane v. United Parcel Service Canada Ltd. et al, 2006 BCSC 687 (CanLII) at para. 22; Budgell v. British Columbia, 2007 BCSC 991 (CanLII) at para. 20.

[53]        That being said, so long as the pleadings do not confuse the opposing party or make it difficult for that party to understand the case that must be met, sheer verbosity does not ordinarily provide sufficient justification for striking a claim: Doyle at para. 4; 347202 B.C. Ltd. v. Canadian Imperial Bank of Commerce, [1995] B.C.J. No. 449 (S.C.); Stanley v. KCL West Holdings Inc. et al, 2004 BCSC 1555 (CanLII).

[54]        A crucial consideration in determining whether to strike a pleading under Rule 9‑5(1)(a) is whether it can be preserved by amendment: International Taoist Church Canada v. Ching Chung Taoist Association of Hong Kong Limited, 2011 BCCA 149 (CanLII).  The prospect of rectifying deficient pleadings by way of amendment is also a factor in considering whether the pleading ought to be struck on the other grounds: Ahmed v. Assu, 2014 BCSC 1768 (CanLII); Willow v. Chong, 2013 BCSC 1083 (CanLII) at para. 23.

Standing In Public Interest Concerns

Standing In Public Interest Concerns

The issue of public interest concerns standing, being the capacity through proper connection  to bring a court action, was canvassed in Trial Lawyers of BC v BC Attorney general 2016 BCSC 1391 by Hinkson CJBC:

[8] The defendants assert that the plaintiff  ( Trial Lawyers)  lacks standing to bring its challenge either as a private interest litigant or on public interest grounds. The plaintiff does not assert a private interest standing, instead asserting that I should exercise my discretion to grant it public interest standing.
[9] Ordinarily, a plaintiff with private interest standing is given preference over a plaintiff who asserts public interest standing. However, in some circumstances, it may be appropriate for the Court to grant public interest standing to a plaintiff so that an issue can be adjudicated upon.

In Canada (Attorney General) v. Downtown Eastside Sex Workers United Against Violence Society, 2012 SCC 45 at para. 37 [DTESW], Mr. Justice Cromwell, for the Court, set out the following three factors for courts to consider in determining whether to grant public interest standing to a party:

a) Whether a serious justiciable issue has been raised;

b) Whether the party has a real stake or genuine interest in that issue;

c) Whether the proposed suit is a reasonable and effective way to bring the issue before the courts.
[10] In Vilardell v. Dunham, 2012 BCSC 748 [Vilardell], Mr. Justice McEwan struck down the hearing fees charged by the Province of British Columbia (the “Province in Supreme Court civil trials as unconstitutional in that they “materially hindered” access to the courts. The Province appealed, and in reasons indexed at 2013 BCCA65 the British Columbia Court of Appeal allowed the appeal in part, and set aside the decision of McEwan J. as it related to persons other than Ms. Vilardell.

[15] Ehrcke J. concluded that the plaintiff’s claim should not be struck out under Rule 19(24)(a) simply on the basis that it was unlikely to succeed. He ruled, however, that the plaintiff organization should not be granted either public or private interest standing to pursue their challenge.
His decision was reversed by the British Columbia Court of Appeal, who granted public interest standing to both the society whose objects included improving conditions for female sex workers in the Downtown Eastside of Vancouver and to one of the former sex workers. The judgment of the British Columbia Court of Appeal is indexed at 2010 BCCA 439.

Summary Trial In Court’s Discretion

Summary Trial In Court's Discretion

Whether or not a case is suitable or not to be decided by way of a summary trial is a matter of the court’s discretion depending on an a number of factors.

Cotter v Point Grey Golf and Country Club 2016 BCSC 10 summarized the law:

[82]        The suitability of matters for a summary trial has now been considered by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 (CanLII).  In that case, the Court was considering Rule 20.04 of the Ontario Rules of Civil Procedure.

[83]        Our Rule 9-7 sets out as follows:

(15)      On the hearing of a summary trial application, the court may

(a) grant judgment in favour of any party, either on an issue or generally, unless

(i)   the court is unable, on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues of fact or law, or

(ii)  the court is of the opinion that it would be unjust to decide the issues on the application,

(b) impose terms respecting enforcement of the judgment, including a stay of execution, and

(c) award costs.

Additionally the Rule provides:

(11)      On an application heard before or at the same time as the hearing of a summary trial application, the court may

(a) adjourn the summary trial application, or

(b) dismiss the summary trial application on the ground that

(i)   the issues raised by the summary trial application are not suitable for disposition under this rule, or

(ii)  the summary trial application will not assist the efficient resolution of the proceeding.

[84]        The Court in Hryniak was concerned with whether it would be appropriate for the judge to proceed on summary judgment and examined the part of the rule that discusses whether there is a “genuine issue requiring a trial”.  The Court also examined when it was in the “interests of justice” for the fact-finding powers on such applications, new to the Ontario Rules of Civil Procedure, to be used in a summary judgment motion.  Lastly, the Court considered the power to call oral evidence and the process to be followed on such a motion.  Importantly, the Rule in Ontario differs from the Rule in British Columbia, permitting greater discretion in British Columbia to proceed or not by way of summary trial.  There are also less tools available to a BC court considering a 9-7 summary trial application as opposed to the Ontario version, which is set out in Rule 20.04

[87]        At para. 58 in Hryniak, the Court held:

[58]      This inquiry into the interest of justice is, by its nature, comparative. Proportionality is assessed in relation to the full trial.  It may require the motion judge to assess the relative efficiencies of proceeding by way of summary judgment, as opposed to trial.  This would involve a comparison of, among other things, the cost and speed of both procedures.  (Although summary judgment may be expensive and time consuming, as in this case, a trial may be even more expensive and slower.)  It may also involve a comparison of the evidence that will be available at trial and on the motion as well as the opportunity to fairly evaluate it.  (Even if the evidence available on the motion is limited, there may be no reason to think better evidence would be available at trial.)

[88]        In connection with the interests of justice inquiry, the Court held that if it was possible for the judge to fairly and justly adjudicate the claim through a summary judgment, it would be against the interests of justice not to do so.

[89]        Hryniak has been considered in British Columbia.  In Crest Realty Westside Ltd. v. W & W Parker Enterprises Ltd., 2015 BCCA 447 (CanLII), the Court of Appeal noted that the decision to proceed by way of summary trial is a matter of discretion, and the Court of Appeal will not interfere unless the discretion was not exercised judicially or exercised on a wrong principal.

[90]        In McLellan v. Shirley, 2015 BCSC 1930 (CanLII), Justice Brown stated that:

[42]      If no genuine issue requires a trial, the court must grant summary trial.

[91]        In Barkwill v. Pachomchuck, 2011 BCCA 207 (CanLII), our Court of Appeal stated:

[14]      The suitability of an action for disposition by way of summary trial depends on whether the evidence is sufficient for the chambers judge to find the facts necessary to give judgment, Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), 1989 CanLII 229 (BC CA), 36 B.C.L.R. (2d) 202 (C.A.) at 214-16.

[92]        In N.J. v. Aitken Estate, 2014 BCSC 419 (CanLII), Justice Ehrcke held:

[33]      In my view, Hyrniak v. Mauldin does not change the law regarding summary trials in British Columbia, and does not render the jurisprudence from our Court of Appeal obsolete.

[93]        In the well-known oft cited decision of Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), 1989 CanLII 229 (BC CA), 36 B.C.L.R. (2d) 202 (C.A.), Chief Justice McEachern, considering the former Rule for summary trial 18A, held that a number of factors were to be considered in determining the appropriateness of a matter for summary disposition:

[47]      In fact R. 18A substitutes other safeguards which are sufficient to ensure the proper attainment of justice. First, 14 days notice of the application must be given (R. 18A (1.1)); secondly, the chambers judge cannot give judgment unless he can find the facts necessary to decide issues of fact or law (R. 18A(3)(a)); and thirdly, the chambers judge, even if he can decide the necessary factual and legal issues, may nevertheless decline to give judgment if he thinks it would be unjust to do so. The procedure prescribed by R. 18A may not furnish perfect justice in every case, but that elusive and unattainable goal cannot always be assured even after a conventional trial and I believe the safeguards furnished by the Rule and the common sense of the chambers judge are sufficient for the attainment of justice in any case likely to be found suitable for this procedure. Chambers judges should be careful but not timid in using R. 18A for the purpose for which it was intended.

[48]      In deciding whether it will be unjust to give judgment the chambers judge is entitled to consider, inter alia, the amount involved, the complexity of the matter, its urgency, any prejudice likely to arise by reason of delay, the cost of taking the case forward to a conventional trial in relation to the amount involved, the course of the proceedings and any other matters which arise for consideration on this important question.

[94]        Accordingly, the decision to proceed with a summary trial is a matter for the court’s discretion.  Both cost and complexity are included as factors to be considered.  Credibility also remains an important issue for the court to determine.  Nonetheless, if the court is able to find the necessary facts to justly resolve the matter, the court should proceed to judgment

Proprietary Estoppel

Promissory Estoppel Revisited

NOTE:   This Court of Appeal Decision was over turned by the Supreme Court of Canada 2017 SCC 61 and the claim was allowed

 

See blog entry dated  February 2,2018

 

The BC Appeal Court in Cowper-Smith v Morgan 2016 BCCA 200 allowed an appeal in part to over turn the successful  the claim brought for proprietary estoppel at trial by finding that the claim should not be allowed where a non owner of property gave assurances and a reliance thereon with respect to her future intentions based on the assumption she would inherit from her mother the owner., when she might not.  Since the sister  had no enforceable equitable or legal right to the property at the critical time being when the representation was made, the brother should not have relied upon it.

The deceased mother transferred her house into joint tenancy with her daughter in 2001. In 2002 the mother made a will leaving her estate equally to her three children. The mother’s investment accounts were over several years transferred into joint names with the daughter.

A declaration of trust for the house and bank assets was signed in 2001.

The defendant sister told her siblings that the house was put into her name only so she could assist in their mother’s affairs and would all eventually go to her mother’s estate.

The defendant daughter promised to sell one of her brothers her anticipated 1/3 share in the house to lure him back to Canada to take care of his mother.

The trial and appeal courts over turned the transfers and distributed her estate equally as per her will on the basis of undue influence  but the appeal over turned the portion of the judgement that allowed the brother to succeed on the basis that he relied upon the promise made by his sister, he took care of his mother for years, but the sister reneged on her promise to transfer to him her 1/3 of the house as she did not own it when she promised it.

The Appeal Court stated in part:

Commerce International Bank Ltd., [1982] Q.B. 84 (Eng. C.A.) at 122:

When the parties to a transaction proceed on the basis of an underlying assumption (either of fact or of law, and 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.

70      While the principles of fairness and flexibility have informed the modern approach to the application of proprietary estoppel, as adopted by this Court in its jurisprudence (see Idle-O Apartments Inc. v. Charlyn Investments Ltd., 2014 BCCA 451 (B.C. C.A.) at para. 49; Sabey v. von Hopffgarten Estate, 2014 BCCA 360 (B.C. C.A.); Scholz v. Scholz, 2013 BCCA 309 (B.C. C.A.) at para. 31; Sykes v. Rosebery Parklands Development Society, 2011 BCCA 15 (B.C. C.A.) at paras. 44-46; Erickson v. Jones, 2008 BCCA 379 (B.C. C.A.) at paras. 52-57; Trethewey-Edge Dyking (District) v. Coniagas Ranches Ltd. [2003 CarswellBC 657 (B.C. C.A.)] at paras. 64-73; Zelmer v. Victor Projects Ltd. (1997), 34 B.C.L.R. (3d) 125 (B.C. C.A.) at paras. 36-37), there remains a necessary balancing between an overly broad application of the doctrine under the general guise of “unfairness” and an overly narrow application of the doctrine that places excessive weight on the technical requirements of the doctrine. See Lord Scott’s observations in Cobbe v. Yeoman’s Row Management Ltd., [2008] UKHL 55 (U.K. H.L.) in contrast to Lord Neuberger’s comments in Thorner v. Major, [2009] UKHL 18 (U.K. H.L.).

71      These underlying rationales and explanations for the evolution of the doctrine have led to its modern iteration as enunciated by Madam Justice Bennett in Sabey and affirmed by Madam Justice Newbury in Idle-O Apartments Inc. at para. 49:

[49] From the foregoing I infer that although proprietary estoppel is, like most equitable remedies, flexible and aimed at doing justice, and although the basic elements of the doctrine are not to be technically confined, those elements must still be made out and an equity established. I reproduce again the encapsulation of the doctrine provided recently in Sabey:

Is an equity established? An equity will be established where:

There was an assurance or representation, attributable to the owner, that the claimant has or will have some right to the property, and

The claimant relied on this assurance to his or her detriment so that it would be unconscionable for the owner to go back on that assurance.

If an equity is established, the court must determine the extent of the equity and the remedy appropriate to satisfy the equity.

72      As was noted by Bennett J.A. in Sabey, the bulk of the analysis occurs at the first stage, where “findings with regard to assurances, reliance and detriment are made” and where the court must determine whether it would be unconscionable for the person “to fail to make good on a promise to create a legal right in favour of someone else” (at para. 27).

73      Thus, the elements of the modern doctrine of proprietary estoppel require:

(i) an assurance or representation by the defendant that leads the claimant to form a mistaken assumption or misapprehension that he or she has an interest in the property at issue;

(ii) a causative connection between the assurance or representation and the claimant’s reliance on the assumption such that the claimant changes his or her course of conduct; (

iii) a detriment suffered by the claimant that flows from his or her reliance on the assumption, which causes the unfairness and underpins the proprietary estoppel; and

(iv) a sufficient property right held by the defendant that could be transferred to satisfy the right claimed by the claimant.

 

The Majority of the Court held:

98      There is no doubt that the applicable standard of review in this case is that described by Newbury J.A. in Idle-O Apartments Inc. as follows (at para. 72):

[72] At the outset, I note that the granting of a remedy for proprietary estoppel is a discretionary matter that attracts a high degree of appellate [deference]. The classic statement of the applicable standard of review may be found in Friends of the Old Man River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3, where the Court quoted with approval the following passage from Charles Osenton & Co. v. Johnston, [1942] A.C. 130 (H.L.):

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…(See also Wenngatz v. 371431 Alberta Ltd., 2013 BCCA 225 at para. 9; Stone v. Ellerman, 2009 BCCA 294 at para. 94; and Harper v. Canada (Attorney General), 2000 SCC 57at para. 26.)

99      In considering whether there has been a wrongful exercise of discretion, I begin by noting that in Uglow v. Uglow, [2004] EWCA Civ 987 (Eng. & Wales C.A. (Civil)) at para. 9, the Court of Appeal described the following general principle:

The overriding concern of equity to prevent unconscionable conduct permeates all the different elements of the doctrine of proprietary estoppel; assurance, reliance, detriment and satisfaction are all intertwined.

100      In my view, the assurance given by Gloria to Max in this case was so based on uncertainty as to undermine any claim based on proprietary estoppel and that uncertainty goes to the root of reliance. The uncertainty arises from the fact that both at the time the assurance was given by Gloria and at the time Max acted upon the assurance, the Property was owned by Elizabeth; that is, Gloria had no beneficial interest in the Property and was uncertain what interest she would eventually inherit, if any. In the circumstances, Max cannot have been reasonably certain Gloria could do what she represented she would do. His hope and belief, initiated and encouraged by her, that he would likely be given the opportunity to buy whatever interest Gloria might inherit does not give rise to an interest in his mother’s estate. With respect, I do not agree with Smith J.A.’s view that Gloria’s “clear entitlement to a one-third interest in the Property at the time of the judge’s order” is relevant to whether an estoppel arose when Max acted upon the assurance given to him.

101      In relation to reliance as an essential element of a claim founded upon proprietary estoppel, Snell’s Equity, 31st ed (London: Sweet and Maxwell, 2005) says, at §10-18:

A must have acted in the belief either that he or she already owned a sufficient interest in O’s property to justify the expenditure or that he or she would obtain such an interest although it is not necessary for A to establish that he or she had an expectation in relation to a specific or clearly identified piece of property. But if A has no such belief, and improves land in which he knows he has no interest or merely the interest of the tenant, or licensee or as an occupier who incurs expenditure in the hope of obtaining planning permission and then entering into a contract to buy the land, he or she has no equity in respect of his expenditure. It is not sufficient that A believes he will obtain an interest over O’s property if he is also aware that O may change his mind.

[Emphasis added.]

102      Snell’s Equity proposes that in order to establish the estoppel it is necessary for A to show that O “created or encouraged the belief or expectation on the part of A that O would not withdraw from the agreement in principle”. That is a description of a present and ongoing obligation.

103      The circumstances in the case at bar resemble those in the many reported inheritance cases, including In re Basham and Thorner v. Major, with an important exception: the assurance here did not come from the beneficial owner of the property interest. In my view, the interest found by the judge to have been wrongly obtained through undue influence in respect of the land transfer and Declaration of Trust cannot be regarded as sufficient interest to permit Gloria to make representations or give assurances that might give rise to a proprietary estoppel. The assurance Gloria gave to Max had nothing to do with an interest in the Property created by the transfer or Declaration of Trust (both of which she thought, at the time, to be intended to simply facilitate the handling of the estate). The interest she promised to Max was the right to buy her expected inheritance. She did not yet own that inheritance and might never have come into it.

104      Walker L.J., in the passage from Thorner cited by Smith J.A., was of the view that in order to constitute proprietary estoppel, “the assurances given to the claimant (expressly or impliedly, or, in standing-by cases, tacitly) should relate to identified property owned (or, perhaps, about to be owned) by the defendant” (emphasis added).

105      Walker L.J. does not expand upon his view that an estoppel may arise from assurances made by one who is about to be the owner of the property. Neither the source nor the extent of that qualification to simple ownership is described, other than by a reference later in the paragraph to Crabb v. Arun District Council, in which there is no discussion of property about to be owned by the Council that made the representation in that case. In fact, in Crabb there are repeated references to the legal rights of the person making the representation. Denning M.R. states: “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” (emphasis added). Scarman L.J., citing Willmott, notes: “the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right” (emphasis added). In short, there is nothing expressly stated in Crabb that contemplates an estoppel arising with respect to property that is other than legally owned by the person making the representation.

106      Even assuming there to be some basis for the view that proprietary estoppel might arise as a result of an assurance given by one about to be the owner of property, I would not expand that class of persons so far as to include a potential beneficiary who gives an assurance to another, years before the death of a testator, with respect to what she will do with an inheritance that she merely anticipates receiving, if the person receiving the assurance acts as requested in the meantime. Not only is there uncertainty, in such a case, with respect to the promisor’s ability to deliver a proprietary interest to the promisee at the time the assurance is given, the uncertainty is not resolved when the promisee acts in reliance upon the promise.

107      Leaving aside, for the moment, the question whether Gloria was in a position to exert undue influence upon her mother, there was uncertainty with respect to the property interest Max was being promised. First, there was uncertainty whether Gloria would inherit anything from her mother. She might have predeceased her mother. Her mother might have changed her will and left Gloria more or less than a one-third interest in the property. Her mother might have sold the house and moved into accommodation more suited to her declining health. Simply by liquidating her property Elizabeth Cowper-Smith would have precluded Max from asserting a right to buy anything from Gloria. Certainly it is not suggested that Elizabeth was in any way restricted in her dealings with the property simply because her daughter made assurances to Max about what she would do on Elizabeth’s death.

108      Without exerting undue influence upon her mother, Gloria was not in a position to determine what property interest Max would receive in exchange for his move to Victoria. The fulfilment of Gloria’s promise was entirely conditional on her mother’s actions, which were outside her control.

109      Further, an obligation on Gloria’s part cannot have arisen before she inherited an interest in the Property. In this case, unlike the inheritance cases, no obligation arose simply as a result of the reliance upon the assurance. Where the assurance comes from the testator, the estoppel arises because there has been such reliance, making it inequitable to permit the testator to resile from the promise. A remedy is available before the testator’s death. As noted by Mummery L.J. in Uglow, proprietary estoppel may be relied upon to prevent a testator from making a will giving specific property to one person, if by his conduct he has previously created the expectation in a different person that he will inherit it:

The testator’s assurance that he will leave specific property to a person by will may thus become irrevocable as a result of the other’s detrimental reliance on the assurance, even though the testator’s power of testamentary disposition to which the assurance is linked is inherently revocable.

110      As Professor MacDougall observes in Estoppel at §6.38, there is a temporal element to proprietary estoppel. The demands of equity and how they are properly satisfied may change over time; but the equity arises when there is reliance. That is the foundation for what he describes at §6.73 as a “more orthodox approach” to the question we face than that which is taken by Smith J.A.:

… [P]roprietary estoppel will not apply where the owner in fact has no existing rights with respect to the property in question when the equity would otherwise arise — i.e., at the time of the detrimental reliance.

111      Uncertainty with respect to the promisor’s ability to fulfill the promise is closely related to the concept of reliance. Key to the acquisition of a proprietary interest by estoppel is the principle that it is unconscionable to permit a person to fail to keep a promise made and reasonably relied upon by the promisee. How can there be reasonable reliance upon a promise to convey an interest in property made by one who does not have such an interest or whose interest is uncertain?

112      Like my colleague, I recognize the evolution of the law of proprietary estoppel has been marked by tensions between, on the one hand, broad principles of flexibility and fairness, and on the other hand, narrow technical requirements. While the jurisprudence tells us that proprietary estoppel is no longer a “Procrustean bed constructed from some unalterable criteria” (see Idle-O Apartments Inc. at para. 23), the Court in Crabb nonetheless insisted the exercise of equitable jurisdiction be rooted in identifiable principles. To that end, the Court adopted the words of Harman L.J. in Bridge v. Campbell Discount Co., [1961] 1 Q.B. 445 (Eng. C.A.) at 459:

Equitable principles are … perhaps rather too often bandied about in common law courts as though the Chancellor still had only the length of his own foot to measure when coming to a conclusion. Since the time of Lord Eldon the system of equity for good or evil has been a very precise one, and equitable jurisdiction is exercised on well-known principles.

113      I do not read this Court’s judgment in Idle-O Apartments Inc. as suggesting that uncertainty that undermines reliance on a representation may be disregarded. To the contrary, when the Court considered whether an equity was established (at para. 23) it required the claimant to establish he believed in the existence of “a right created or encouraged by the words or the actions of the other party such that it would be unfair, unjust or unconscionable to allow the representor to set up its undoubted rights against the claimant”. At para. 57, the Court referred with approval to the trial judge’s recognition that detrimental reliance on the part of the claimant “underpins the claim and establishes the unfairness or unjustness that ought to be addressed by equity. Without such, … the doctrine may become ‘somewhat pointless’ and a ‘circumlocution for doing justice’.”

114      Newbury J.A., after describing the evolving conception of the scope of proprietary estoppel, noted:

[48] This court has adopted the “broader” approach to proprietary estoppel: see Zelmer at para. 49, Erickson at paras. 55-7, and most recently in Sabey at paras. 28-9. This approach is consistent with the judgment of Lord Denning in the seminal English case of Crabb v. Arun District Council, [1976] 1 Ch. D. 179 at 187-9; Oliver J. in Taylor Fashions; Buckley L.J. in Shaw v. Applegate, [1978] 1 All E.R. 123 at 130-1; and various other English authorities. On the other hand, English and Australian courts (and to some extent Canadian courts) have in recent years been at pains to emphasize that proprietary estoppel does not arise simply out of conduct that a court finds to be unconscionable. As observed by Lord Scott in Yeoman’s Row Management Ltd v. Cobbe, [2008] UKHL 55:

… unconscionability of conduct may well lead to a remedy but, in my opinion, proprietary estoppel cannot be the route to it unless the ingredients for a proprietary estoppel are present. These ingredients should include, in principle, a proprietary claim made by a claimant and an answer to that claim based on some fact, or some point of mixed fact and law, that the person against whom the claim is made can be estopped from asserting. To treat a “proprietary estoppel equity” as requiring neither a proprietary claim by the claimant nor an estoppel against the defendant but simply unconscionable behaviour is, in my respectful opinion, a recipe for confusion. [At para. 16.]

[Emphasis added.]

115      Professor MacDougall, at §6.34, echoes Lord Scott’s concerns, suggesting the doctrine of proprietary estoppel “should not be seen as a generalized remedial doctrine for unfairness.” Unfairness, in MacDougall’s view, is merely a general description of what the doctrine seeks to combat. Unfairness is not, in itself, an “overarching principle” that allows proprietary estoppel to be applied even in the absence of the typical requirements.

116      The Court in Idle-O Apartments Inc. further noted that the test for establishing a proprietary estoppel had recently been collapsed, in Sabey, into two components (see para. 30):

There was an assurance or representation, attributable to the owner, that the claimant has or will have some right to the property, and

The claimant relied on this assurance to his or her detriment so that it would be unconscionable for the owner to go back on that assurance.

[Emphasis added.]

117      While the criteria that define the limits of proprietary estoppel are not unalterable, I see no reason in principle why the cause of action should be expanded to permit a person to acquire an interest in property by reliance upon an assurance by a non-owner that falls short of a contractual obligation. Such an expansion would be problematic, untying entirely from its ties to property the only estoppel that can be used as a sword. I would not so extend the cause of action.

118      In my view, the fact Gloria used undue influence to obtain de facto control over the Property and Investments does not affect that conclusion. Max did not, in fact, rely upon that undue influence as assurance that Gloria would deliver on her promise. Even if he had known of the influence exerted by Gloria, equity should not come to the assistance of one who says he arranged his affairs in reliance upon a promise made by a person exerting improper control over a testator with respect to what she would do with the inheritance assured by the exercise of that control. In fairness to him it should be said that Max is not advancing that argument. Even so, the logic of that argument lies at the root of the proposition that undue influence distinguishes this case from others where a non-owner makes assurances about what rights an owner will exercise over property.

Conclusion

119      In the result, I would allow the appeal on this aspect of the order only and set aside the Order made in Max’s favour. In all other respects, I agree with my colleague’s reasons and conclusions.

Saunders J.A.:

I AGREE:

Appeal allowed in part.

Witness Credibility

Witness Credibility

Witness credibility is essential to winning at trial as if a Judge does not believe your client or the witnesses then you will most certainly lose the case.

I have joked for years that the competing stories in estate dispute cases are so diverse that I caution clients that they might well  initially believe they are in the wrong court room.

Mac v Mak 3026 BCSC 1140 stated:

In the often-cited Faryna v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.), the validity of the evidence depends on whether the evidence is consistent with the probabilities affecting the case as a whole: Faryna at 357.  The factors were also considered by Justice Dillon in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186:

[186]    Credibility involves an assessment of the trustworthiness of a witness’ testimony based upon the veracity or sincerity of a witness and the accuracy of the evidence that the witness provides (Raymond v. Bosanquet (Township) (1919), 59 S.C.R. 452, 50 D.L.R. 560 (S.C.C.)). The art of assessment involves examination of various factors such as the ability and opportunity to observe events, the firmness of his memory, the ability to resist the influence of interest to modify his recollection, whether the witness’ evidence harmonizes with independent evidence that has been accepted, whether the witness changes his testimony during direct and cross-examination, whether the witness’ testimony seems unreasonable, impossible, or unlikely, whether a witness has a motive to lie, and the demeanour of a witness generally (Wallace v. Davis (1926), 31 O.W.N. 202 (Ont.H.C.); Farnya v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.) [Farnya]; R. v. S.(R.D.), [1997] 3 S.C.R. 484 at para. 128 (S.C.C.)). Ultimately, the validity of the evidence depends on whether the evidence is consistent with the probabilities affecting the case as a whole and shown to be in existence at the time (Farnya at para. 356).