Category: Probate Litigation

Vancouver Estate Lawyer – Interim Distributions From the Executor

Trevor Todd and Jackson Todd have handled contested estates including obtaining interim distributions of estate for over sixty comb9ined years.

INTERIM DISTRIBUTIONS IN ESTATES

The court retains a general jurisdiction over the actions of executors/trustees and will normally require that a trustee discharge his or her duties with good faith, and with the standard of care of a reasonable and prudent person of business.

However, where a trustee is granted powers which are to be exercised at his or her sole discretion, the court traditionally would not interfere, unless the trustee had not turned his or her mind to the exercise of the discretion, or they had acted unfairly or in bad faith.

The case of Re: Blow Press Ltd. v U.S.W.A. (1977) O.R. (2d) 516 held that the court had jurisdiction to intervene in the exercise of a discretion by trustees in three situations:

1) a mala fide exercise of such a discretion;
2) a failure to exercise such a discretion; or
3) a deadlock between trustees as to the exercise of such a discretion

It is not uncommon for a will or a trust to be drafted with adjectives giving trustees “absolute,” “uncontrolled,” or “full discretion” to trustees, to use their authority. The courts traditionally have not interfered unless they found mala fides with respect to its exercise of such discretion.

In recent years, however, there are now a number of estate decisions in British Columbia that have allowed for interim distributions in certain circumstances, when the trustee is refusing to distribute under their discretion.

WESA

While WESA does not specifically allow for interim distributions of intestate estates, beneficiaries are no longer required to wait one year from the intestate person’s death to distribute the surplus of the personal estate, as was previously required by section 74 of the Estate Administration Act.

The executor can now distribute all forms of assets after 210 days have passed since the issuance of the representation grant, provided that no proceedings have been commenced, which might affect the distribution of the estate.

A new provision, section 155 (2) WESA prohibits a personal representative from distributing the estate after the 210 day waiting period without a court order if:

1) proceedings of been commenced as to whether a person is a beneficiary or intestate heir;
2) a variation claim has been brought; or
3) other proceedings have been brought, which may affect the distribution him.

INTERIM ESTATE DITRIBUTIONS GRANTED

Trustees generally have the right to exercise their discretion to refuse to make any interim distribution to the beneficiaries until their accounts are approved by the court, by way of a passing of accounts.

In Reznik v Matty 2013 BCSC 1346, an application was brought by three of four residual beneficiaries for an order directing distribution of $15,000 to each of them from the $50,000 held back in the estate. The executor of the estate was the fourth beneficiary, and it had been 13 years since the deceased will maker had passed away. The court held that the power given to the executor under the will to retain a portion of the estate did not displace the duty to distribute the assets.

In assuming general jurisdiction, Reznik was followed in 80 Wellesley St. East Ltd. v. Fundy Bay Builders Ltd., [1972] 2 O.R. 280 (C.A.), which stated at paragraph 282:
“As a superior Court of general jurisdiction, the Supreme Court of Ontario has all of the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the Court’s jurisdiction is unlimited and unrestricted in substantive law in civil matters.”
The court reasoned that there was significant delay, and that the estate was of significant value and liquidity that the executors assent to the distribution was compelled, and thus the executor was ordered to pay $10,000 to each of the residual beneficiaries.
In Davis v Burns Estate 2016 BCSC 1982, the court held at paragraph 31 that the following criteria govern whether an interim distribution should be made:
a) the amount of the benefits sought to be distributed as compared to the value of the estate;
b) the claim of the beneficiaries on the testator;
c) the need of the beneficiaries for money; and
d) the consent of the residuary beneficiaries to the proposed distribution

In Davis v Burns, the applicant was 76 years of age and had been the deceased will maker’s common-law spouse for five years and had been friends with he and his wife for many years prior. The former spouse was bequeathed 20% of the assets of the estate (approximately $500,000).
The applicant had no funds and a negative monthly cash inflow. The court found that the other parties to the court action would not be prejudiced by an interim distribution to him, and so the court ordered an advance of $250,000, given his advanced age, and the will’s specific direction that he should “have fun” with the monies after her death.
Nykoryak v Anderson 2017 BCSC 1800 was a wills variation action that followed the criteria set out in Davis v Burns and ordered an interim distribution to each of the personal defendants from the estate funds in the amount of $50,000 each.
Each of the applications provided evidence of their financial need and hardship and the court found that the plaintiff’s security was still more than adequately protected from any award at trial.

In Re Zanrosso Estate 2021 BCSC 2928, the court commented that the new provisions of WESA did not directly address the possibility of court intervention, should an executor/trustee refuse or neglect to distribute the estate.

Counsel in this decision agreed that the court had general jurisdiction to order an interim distribution of estate assets and relied on Reznik v Natty as the authority.
The court found that it had authority to order a personal representative to make an interim distribution of an estate, further to its general jurisdiction and stating that such authority is discretionary and must be exercised in order to do justice between the parties.

The court referred to the criteria set out by the Court of Appeal in Hecht v Hecht 1991 BJ 3475, but stated that it was not an exhaustive list of potential considerations:
The court found that the factors to be considered by the court when deciding whether to exercise its discretion to grant leave to the executors include:

(a) the amount of the benefits sought to be distributed as compared to the value of the estate;
(b) the claim of the beneficiaries on the testator;
(c) the need of beneficiaries for money; and
(d) the consent of the residuary beneficiary to the proposes distribution.”

The court stated that since the legislator had not seen fit to expressly provide for interim distributions from an estate over the objection of the personal representative, that an order should only be made in exceptional circumstances, and with the burden on the applicant to justify the issuance of such an order.

In the case of Re Antonias Estate 2021 BCSC 2388, the court ordered an interim distribution where the applicants were the sole beneficiaries of the residue of the estate, sharing equally and were siblings ranging in age from 76 to 89 years of age, some of them with health issues, and some with concerns that they would pass away before the estate was distributed.
The executor did provide an offer to make an interim distribution, the same that was sought in the court order, but did so on the basis that a release would be signed and returned. The beneficiaries did not comply with the request to sign the release.

The applicants relied on the decision of Reznik v Matty and the quote of Austin v Beddoe (1893) that if an executor has assented to an interim distribution and the assets available to the estate after an interim distribution are sufficient to cover all outstanding liabilities, and had basically made that acknowledgement, it is appropriate to have assets released.
The court ordered the beneficiaries to indemnify the executor from any loss arising from the interim distribution in the event that there was an estate shortfall in assets verus liabilities.

The court ordered an interim distribution of $528,000 and noted that the estate holdback would be approximately $447,000 over and above executor’s fees of % 3.5.

CONCLUSION

Since approximately 2015, the British Columbia courts have been more willing to override the typical absolute discretion of a trustee as to whether or not to make an interim distribution. Historically, the courts would only interfere where there was mala fides on the part of the trustee before they would order a distribution of estate assets.
As the recent cases indicate, if there is evidence of an appropriate set of facts that “justice is done” by ordering an interim distribution, then the courts will seriously consider doing so.

Such evidence should consist of matters such as: inordinate delay, financial need, the advanced age of beneficiaries, holdback protection for the remaining beneficiaries’ interests, sufficient funds to pay future debts, with an indemnity from the beneficiaries in the event of a shortfall.
If such evidence is accepted by the court, then recent cases in British Columbia indicate that the court will give serious consideration to ordering an interim distribution of estate assets, if necessary over the objection of the executor/trustee.

As the court in the Zanrosso decision stated regarding the criteria set out by the Court of appeal in the 1991 Hecht decision – “this is not an exhaustive list.” This statement appears to indicate a greater willingness of the BC courts to order interim distributions of estate assets in appropriate circumstances.

Previous Wills Ordered Produced

In DeContiis v DeContiis Estate 2023 BCSC 2163 , a wealthy father of seven boys did six wills between 1997 and 2009 which the plaintiff sought to be produced in order to determine the deceased true intentions re his estate planning.

The deceased left a last will, January 2016, which disinherited one son entirely.

In 2019. The deceased established an alter ego trust in which he put substantial assets.

The plaintiff sought and was granted production of the previous six wills of the deceased in order to determine the deceased true intentions re his estate planning

The plaintiff argues that s. 62 of Wills and Estate Succession Act, S.B.C. 2009, c. 13 supports production of the prior wills. Section 62 states:
Evidence

62 (1) In a proceeding under section 60, the court may accept the evidence it considers proper respecting the will-maker’s reasons, so far as may be determined,
(a)for making the gifts made in the will, or

(b)for not making adequate provision for the will-maker’s spouse or children,

including any written statement signed by the will-maker.

(2) In estimating the weight to be given to a statement referred to in subsection (1), the court must have regard to all the circumstances from which an inference may reasonably be drawn about the accuracy or otherwise of the statement.

[The amended notice of civil claim at para. 53 of Part 3, Legal Basis, asserts that “prior wills, executed before 2016 and without the undue influence of the Younger Brothers, included the Plaintiff as a beneficiary”.

Based on these paragraphs of the amended notice of civil claim alone, the defendants ought to have listed the prior wills in their initial list of documents because they are material.

The prior wills are squarely at issue because the court considers prior wills where a will or other estate planning documents are challenged.

The prior wills are relevant to the claim of undue influence because they will disclose how the deceased treated the plaintiff in the prior wills which would be an indication of Innocenzo’s attitudes toward Ivano over time.

In Jung v. Poole Estate, 2021 BCSC 623, the trial judge analyzed the deceased’s attitudes towards his disinherited children by, in part, examining the terms of the prior wills (paras.

51 to 52) and Geluch v. Geluch Estate, 2019 BCSC 2203, in which the trial judge considered prior wills as evidence of the deceased’s prior wishes that were inconsistent with the impugned final will (para. 117).

Rule 7-1(11) requires listing and production of documents that “relate to any or all matters in question in the action”. The test for such disclosure is whether the documents “may enable a party, directly or indirectly, to advance their own case or damage that of their adversary, including documents that may fairly lead to a train of inquiry having either consequence”: Richter v. Richter Estate, 2023 BCSC 105 at paras. 57 and 58.

In Westman v. Westman, 2000 BCSC 236, the trial judge referred to the history of the deceased’s prior wills as indicative of an “inter-family phenomenon” (at para. 34) that was relevant to an assessment of whether the will made adequate provision for the deceased’s spouse. In the present case, the analogy to “inter-family phenomenon” is the changing attitudes Innocenzo had to each of his sons. The prior wills are relevant to this issue.

in Kobzos v. Kobsoz Estate, 2019 BCSC 2254, the documents relating to the deceased’s estate planning were relevant for production.

Examinations For Discovery and Their Limits

Brown v Fisher 2023 BCSC 2070 dealt with an application in a motor vehicle accident case to compel a party to answer various questions at an examination for discovery. The court refused the application on the basis that the proposed questions were too remote and invasive.

The application is governed by R. 7-2(18)(a) and (25), which read as follows:

(18) Unless the court otherwise orders, a person being examined for discovery
(a) must answer any question within his or her knowledge or means of knowledge regarding any matter, not privileged, relating to a matter in question in the action,
…
(25) If a person under examination objects to answering a question put to him or her, the question and the objection must be taken down by the official reporter and the court may:

(a) decide the validity of the objection, and

(b) order the person to submit to further examination and set a maximum duration for that further examination.

In general, the pleadings define the scope of discovery: Cominco v. Westinghouse Canada Ltd. (1979), 11 B.C.L.R. 142, at paras. 8 and 9

A broad or wide scope is to be given on examinations for discovery, given that they are in the nature of a cross examination, such that parties ought not interfere with the examination except where it is clearly necessary to resolve ambiguity or prevent an injustice.

Such a “hands off” approach accords with the principle of proportionality: Kendall v. Sun Life Assurance Co. of Canada, 2010 BCSC 1556 (“Kendall”), at para. 10 – 12 and para. 18, and Nwachukwu v. Ferreira, 2011 BCSC 1755, at para. 33.

The newly imposed time limit on discovery makes it all the more important that the courts enforce the principle that counsel for the examined party must not unduly interfere or intervene during the examination for discovery. The time limit imposes a self-policing incentive on the examining counsel to be focused and to not waste time on questions that will not advance the purpose of investigating the case or obtaining admissions for use at trial.

In this respect, the scope is broader than that of document discovery: More Marine Ltd. v. Shearwater Marine Ltd., 2011 BCSC 166, at paras. 6 to 9.
However, there are limits to the discovery rights. In this respect, a party is not expected to, as has often been said, “throw open their file cabinets” to allow unlimited inquiries into their private affairs, including their medical history

The defendant relies on the following decisions:

a) Hickey v. Roman Catholic Archdiocese of Vancouver, 2015 BCSC 2314, where the court found that questions regarding a motor vehicle accident 10 years prior to the subject accident, and whether any compensation was received, was not objectionable; and

b) Andrist v. Bryant, 2023 BCSC 490 at para. 35, where the court agreed that a blanket objection to questions abut the plaintiff’s medical history beyond two years prior to the subject accident was unreasonable. However, I note that the court specifically referenced the plaintiff’s medical history, which included evidence of back and neck issues prior to the subject accident, and a traumatic brain injury in both 2001 and 2018 (the subject accident was in December 2018).

The plaintiff relies on the following statements made in Marchant-Larson v. Bahrami, 2017 BCSC 2337, in support of a general two-year rule:

(7) The defendants bring no specific evidence in support of their application that more than two years of records are required. They simply point to the pre-existing conditions, the evidence that these pre-existing conditions are of some considerable length and history prior to the accident, and certainly well prior to two years before the accident. There is no evidence from any expert that more than two years of disclosure are required in order to properly analyse her propensity for having the problems she is currently experiencing or to establish the baseline for an analysis of her present condition.

(8) There is nothing before me that takes this outside of the sort of general concept that two years prior to a motor vehicle accident is a sufficient investigation, barring other evidence, to allow the defendants to properly investigate the facts surrounding pre-existing conditions.

Judicial Discretion and Appeals From It

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

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

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

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

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

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

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

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

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

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

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

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

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

A discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustic

BC Lawyer-Disinherited. When Do Spouses Separate?

Trevor Todd and Jackson Todd have been doing contested estate disputes for over sixty combined years, including acting for separeted spouses.

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

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

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

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

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

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

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

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

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

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

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

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

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

Severance of a Trial

In civil suits severance refers to the division of a trial into two or more parts. Plaintiffs in civil suits base their cases on a cause of action—facts that give the plaintiff the right to sue. For reasons of judicial economy, the court may order the lawsuit divided into two or more independent causes of action.

For example the case law indicates that a wills variation action should be severed from an action that also includes a claim that the will is invalid. The courts have stated that the validity of the will should firstly be determined before the wills variation claim is heard and have ordered severance in such situations.

Whether or not to sever part of a trial is within the discretion of this Court and the scope of the Court’s discretion must be interpreted in light of the overall object embodied in Rule 1-3 to “secure the just, speedy and inexpensive determination of every proceeding on its merits”: Kitsul v. Slater Vecchio LLP, 2015 BCSC 1394 at paras. 22–23.

The principles relevant to the exercise of discretion under Rule 12-5(67) were summarized in British Columbia (Minister of Forests) v. Okanagan Indian Band, 2007 BCSC 1014 at para. 69 (citing Nguyen v. Bains, 2001 BCSC 1130 at para. 11), aff’d 2008 BCCA 107:

…
a. A judge’s discretion to sever an issue is probably not restricted to extraordinary or exceptional cases. However, it should not be exercised in favour of severance unless there is a real likelihood of a significant saving in time and expense.
b. Severance may be appropriate if the issue to be tried first could be determinative in that its resolution could put an end to the action for one or more parties.
c. Severance is most appropriate when the trial is by judge alone.
d. Severance should generally not be ordered when the issue to be tried is interwoven with other issues in the trial. This concern may be addressed by having the same judge hear both parts of the trial and ordering that the evidence in the first part applies to the second part.
e. A party’s financial circumstances are one factor to consider in the exercise of the discretion.
f. Any pre-trial severance ruling will be subject to the ultimate discretion of the trial judge.

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.

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.

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

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.

Applications for Extension of Time to Appeal

In accordance with R. 6(2) of the Court of Appeal Rules, B.C. Reg. 120/2022, is required to file and serve a notice of appeal not more than 30 days after the order was pronounced.

Section 32 of the Court of Appeal Act, S.B.C., 2021, c. 6, provides that a justice may extend a time limit in the Act or Rules, including for filing and serving a notice of appeal.

The burden is on the applicant to establish that the criteria for granting such an extension are met: Rapton v. British Columbia (Motor Vehicles), 2011 BCCA 71 at para. 19.

In considering an application to extend time to file and serve an appeal, certain factors are described in Davies v. C.I.B.C. (1987), 15 B.C.L.R. (2d) 256 at 259–260 (C.A.):

a. Was there a bona fide intention to appeal?
b. When were the respondents informed of the intention?
c. Would the respondents be unduly prejudiced by an extension of time?
d. Is there merit in the appeal?
e. Is it in the interest of justice that an extension be granted?

The interests of justice is “an overriding question and embraces the first four questions”: Davies at 260–261.

But it is “not all that comprises the fifth factor.” The interests of justice include a myriad of factors, such as the interests of the parties and compliance with the Rules of Court: Clock Holdings Ltd. v. Braich, 2009 BCCA 437 at paras. 23–24.

Notices to Admit

One of the most powerful yet under utilized litigation tool is the Notice to Admit.

Civil Rule 7-7(14) reads in part:

(1) In an action in which a response to civil claim has been filed, a party of record may, by service of a notice to admit in Form 26, request any party of record to admit, for the purposes of the action only, the truth of a fact or the authenticity of a document specified in the notice.

The Civil Rule 7-7(2) speaks to the effect of a notice to admit and provides that:

(2) Unless the court otherwise orders, the truth of a fact or the authenticity of a document specified in a notice to admit is deemed to be admitted, for the purposes of the action only, unless, within 14 days after service of the notice to admit, the party receiving the notice to admit serves on the party serving the notice to admit a written statement that

(a) specifically denies the truth of the fact or the authenticity of the document,

(b) sets out in detail the reasons why the party cannot make the admission, or

(c) states that the refusal to admit the truth of the fact or the authenticity of the document is made on the grounds of privilege or irrelevancy or that the request is otherwise improper, and sets out in detail the reasons for the refusal.

Civil Rule 7-7(4) provides that the court may order a party who unreasonably refuses to admit a fact, pay the costs associated with the proof of those facts which the party unreasonably refused to admit. If a responding party unreasonably denies or refuses to admit the truth of a fact or the authenticity of a document specified in a notice to admit, the court may order the party to pay the costs of proving the truth of the fact or the authenticity of the document and may award as a penalty additional costs, or deprive a party of costs, as the court considers appropriate.

In the present case, at paras. 4-29 of the notice to admit, the defendants have provided a boilerplate refusal which reads; “Refuse to make admission. The circumstances surrounding the dealing of the parties are outlined in the pleadings filed by the defendants. This is a triable issue and cannot be dealt with by way of admissions.”

In Ceperkovic v. MacDonald, 2016 BCSC 939, Madam Justice Dillon discusses the purpose of a notice to admit at para. 30, where she says: I

The purposes of the notice to admit are multiple. The primary purpose is to “save both the Court and litigants the time and expense involved in proving the authenticity of documents or in proving facts” (Clarke v. Minister of National Revenue (2000), 189 F.T.R. 76 at para. 43, [2000] F.C.J. No. 475). The rule is intended to eliminate issues altogether from a case or to facilitate proof of issues that cannot be eliminated (Garry D. Watson & Derek McKay, eds., Holmested and Watson: Ontario Civil Procedure (Toronto: Carswell, 1993) (looseleaf updated 2014, release 1) vol. 5 at 51§7 (Holmested and Watson)). Thus, the notice to admit can isolate important factors from a strategic and cost efficient perspective [citation]. It enables the parties to “prepare for an efficient trial focused on what is disputed” (Orlan Karigan & Associate Ltd. v. Hoffman (2000), 2000 CanLII 22725 (ON SC), 52 O.R. (3d) 235 at para. 21 (Sup. Ct. J.)). The notice to admit obviates the necessity and expense of calling evidence at trial (Canada Southern Petroleum v. Amoco Canada Petroleum (1994), 1994 CanLII 9096 (AB KB), 168 A.R. 126 at para. 16 (Q.B.)). Ultimately, it is a means to foster the timely adjudication of a claim on its merits (Furgiuele v. Don Casselman Global Enterprises, 2013 ONSC 7032 at para. 44 (Furgiuele)).

The decision canvasses the factors enumerated in Civil Rule 7‑7(2) and discusses some of the valid refusals for admitting a fact; namely, that the requested fact is privileged, that the party simply does not have the information necessary to answer it, or that the requested admission is somehow improper, or a veiled attempt to obtain particulars or ensure compliance with discovery obligations. The court also states, at para. 35, that the notice might be overly repetitious, overly broad, in the nature of argument, or vague.

At para. 38, she summarizes that:

[38] …the failure to admit the truth of a fact may be unreasonable within the meaning of [the rule] if:

(a) the truth of the fact is subsequently proved;

(b) the fact was relevant to a material issue …;

(d) the notice to admit was not otherwise improper;

(e) the notice to admit was reasonably capable of evaluation within the time required for response; and

(f) the refusing party had no reasonable grounds for believing that it would prevail on the matter.

Admissibility of Expert Opinion Evidence

The law governing admissibility of expert opinion evidence stems from the Supreme Court of Canada’s decision in R. v. Mohan, [1994] 2 S.C.R. 9, 1994 CanLII 80, subsequently clarified in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23 [White Burgess]. The party seeking to admit the evidence must satisfy each element in a two-stage inquiry:

a)At the threshold stage, the party seeking to admit the evidence must demonstrate that the evidence satisfies the Mohan That is, the evidence must be relevant, necessary, absent of an applicable exclusionary rule, and that the expert providing that evidence is properly qualified: White Burgessat para. 23.
b)At the second stage, the trial judge, exercising the gatekeeping role, must decide whether the benefits of admitting the evidence outweigh its potential risks: White Burgessat para. 24.

The element of a “properly qualified expert” under Mohan requires that the expert has acquired special or peculiar knowledge through study or experience in respect of the matters the expert undertakes to testify: McEwan v. Canadian Hockey League, 2022 BCSC 1104 at para. 186. The court must be satisfied that the person under consideration has expertise with respect to the opinions to be advanced, which is something distinct from just familiarity or involvement: Hughes v. Haberlin, 49 B.C.L.R. (3d) 366, 1997 CanLII 2186 at paras. 14 and 21 (S.C.).

In addition, as noted in R. v. Abbey, 2017 ONCA 640 at para. 48, a properly qualified expert includes the requirement that the expert be willing and able to fulfil the expert’s duty to the court to provide evidence that is:

a)impartial,
b)independent, and
c)

Expert witnesses must be impartial in the sense that their evidence must reflect an objective assessment of the questions presented to them. They must be independent in the sense that their evidence must be the product of their independent judgment, uninfluenced by the party who retained them or the outcome of the litigation. An expert’s lack of impartiality and/or independence is relevant not just to the weight to be given to the evidence under the second stage of the test, but also to its admissibility under the first stage of the test, to be addressed under the “qualified expert” element of the Mohan framework: McEwan at paras. 182–183.

Survey evidence may be admissible, assuming the survey responses are elicited by a relevant question, where the survey is both reliable, “in the sense that if the survey were repeated it would likely produce the same results”, and valid, “in the sense that the right questions have been put to the right pool of survey respondents in the right way, in the right circumstances to provide the information sought”: Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 at para. 94. Like all expert evidence, survey evidence must be prepared by a properly qualified expert: Tokai of Canada Ltd. v. Kingsford Product Company, LLC, 2021 FC 782 at para. 25.

Evidence tendered on an application for certification must meet the usual criteria for admissibility: Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2008 BCSC 1263 at para. 25; McEwan at paras. 29–32. The court exercises an important gatekeeping function in a proposed class proceeding and must not “shirk” its responsibility to consider the admissibility of evidence: McEwan at para. 31, citing Carter v. Ford Motor Company of Canada, 2021 ONSC 4137 at para. 9.

Testimonial Competence

Karrington v Morrisonn 2023 BCSC 570 dealt with the thorny issue of testimonial competence.

The court appointed a litigation guardian for the personal defendant and then ordered that an examination for discovery of the said demented persona take place as the threshold for testimonial competence is not high.

Under Rule 9-2(8) of the SCFR, a mentally incompetent person can only be examined with leave from the court. Rule 7-2(9) of the Civil Rules is identically worded. The court should grant leave only if the party seeking examination can establish that the proposed examinee can give sufficiently reliable evidence: DeMerchant v. Chow, 2010 BCSC 1447 [DeMerchant] at para. 44.

In considering whether the proposed examinee is able to give sufficiently reliable evidence, the elements of testimonial competence may provide useful guidance, namely, the proposed examinee’s capacity to observe, recollect and communicate. If the person satisfies the low threshold of testimonial competence, the court should grant leave for them to be examined, provided the person would not suffer psychological damage in the process.

The onus for showing that a mentally incompetent person should be examined rests on the party seeking examination: Penn v. Secord, [1980] 1 W.W.R. 464, 1979 CanLII 693 (B.C.S.C) at para. 7.

In DeMerchant, the Court frames the inquiry in terms of the reliability of the proposed examinee’s testimony: at paras. 44-47. If the court is satisfied that the person’s evidence would be unreliable, and that examining them would be futile, then leave should not be granted: at para. 44. Ultimately, in that case, the Court declines to grant leave to examine the proposed examinee due to medical evidence indicating that they have a tendency to fill in memory gaps by confabulating.

Courts outside of British Columbia have also considered whether a person under a disability should be examined for discovery. For example, in Abrahamson v. Buckland, [1990] 5 W.W.R. 193, 1990 CanLII 7809 (S.K.C.A.) [Abrahamson], at paras. 32–33, the Saskatchewan Court of Appeal set out a useful framework that has been cited by courts in Saskatchewan, Ontario and Alberta, including the Alberta Court of Appeal in Bilawchuk v. Wawryko, 2002 ABCA 178 at para. 67.

The relevant portions of the framework described in Abrahamson are as follows:

In deciding whether to grant leave, the court should consider whether the person’s evidence would be sufficiently reliable and whether examining them would be futile: DeMerchant at para. 35. In this regard, the court may consider whether the person is “legally fit and qualified to give evidence” (Abrahamson at para. 29) and whether they possess the capacity to observe, recollect and communicate evidence: Marquard at para. 12. If the proposed examinee can give sufficiently reliable evidence, and there is no concern that they would suffer psychological damage in the process, the court should grant leave for them to be examined.

The threshold for testimonial competence is not high. If the person is shown to have basic abilities to observe, recollect and communicate, along with an understanding of the nature of an oath, their evidence should be admitted: Marquard at para. 14.

The authorities indicate that a deficit in a person’s ability to observe, recollect or communicate is not necessarily a disqualifier to testimonial competence. That is because, after it has been determined that their evidence should be admissible, any deficiencies in their ability ought to go to weight: Marquard at para. 14.