UBC Property Transfer Set Aside For Being a “Fraud On a Power”

Fraud On a Power

It is a fraud on a power contained in a will to use a society created in accordance with the terms of the will to achieve indirectly the transfer of property to a non-object of that power which could not be done directly as was quoted by the BCCA in The Land Conservancy of BC v UBC 2014 BCCA 473.

The headnote is interesting and reads:

The University of British Columbia (UBC) challenged the transfer of a historic property known as the Binning House by the executors and trustees of the estate of the owner of the property.  

The testatrix’s will instructed the trustees to either create a society for the preservation of the property and transfer it to that society or to sell the house and give the net proceeds of the sale to a fellowship fund with UBC.  

The trustees entered into talks with the respondent, a society dedicated to historical preservation, about assuming ownership of the property.  After receiving legal advice that the will did not permit them to transfer the property directly to the respondent, the trustees created a society and transferred the property to it.  

The society immediately transferred the property to the respondent.

 When the respondent encountered financial difficulties and proposed to sell the Binning House, UBC challenged the transfer by the trustees as a fraud on the power granted to them in the will.  

The application judge dismissed the challenge, finding that the will granted the trustees significant discretion to fulfill the testatrix’s hope that the Binning House would be preserved for historical purposes. 

Held: appeal allowed.  Although the trustees acted in good faith, they deliberately exercised their power under the will for the ulterior purpose of benefiting a non-object of the power.  The transfer of the Binning House by the trustees to the new society constituted a fraud on the power given to them, and the transfer is void.

In order to succeed in having the transfer of the Binning House declared void, UBC had the onus of proving that the transfer was a fraud on the power contained in the Will authorizing the Trustees to transfer it.  The phrase “fraud on a power” is a term of art, and it does not connote fraud in the usual sense of dishonesty.  This is explained by Geraint Thomas in Thomas on Powers, 2d ed. (Oxford: Oxford University Press, 2012) at para. 9.03:

The doctrine of fraud on a power is not founded upon a state of conscience imputed to the donee in equity.  Dishonesty of some kind is often present, but it is not essential.  Indeed, the donee’s intention or motive may be perfectly honest.  Thus, the doctrine may apply where the donee honestly believes that, by his exercise of the power, he is disposing of the property in a more beneficial manner, or in a way which is consonant with what he believes would have been the real wish of the donor of the power …

[Footnotes omitted.]

[43]         The parties are agreed, as they were before the chambers judge, that the two basic elements of a fraud on a power are as set out in Thomas on Powers at para. 9.02:

(a)      “a disposition beyond the scope of the power by the donee, whose position is referable to the terms, express or implied, of the instrument creating the power;” and

(b)      “a deliberate breach of the implied obligation not to exercise that power for an ulterior purpose”.

[44]         The first element involves the interpretation of the Will to determine whether the disposition of the Binning House by the Trustees was beyond the scope of the power given to them in the Will.  The second element involves a consideration of the Trustees’ actions.

(a)  Scope of the Power

[45]         The parties are also agreed as to the general principles governing the interpretation of wills.  The basic principle was articulated by the Supreme Court of Canada in National Trust Co. Ltd. v. Fleury, [1965] S.C.R. 817 at 829:

            In the construction of wills, the primary purpose is to determine the intention of the testator and it is only when such intention cannot be arrived at with reasonable certainty by giving the natural and ordinary meaning to the words which he has used that resort is to be had to the rules of construction which have been developed by the Courts in the interpretation of other wills.

[46]         Other relevant principles include the following statements from James MacKenzie, Feeney’s Canadian Law of Wills, loose-leaf, 4th ed. (Markham, Ont.: LexisNexis, 2000):

§10.43       … the most influential rule of construction is that the court may construe the words used by the testator in their ordinary sense.…

* * *

§10.60       The testator’s intention is to be gathered from a consideration of the will as a whole and not solely from the words used, say, in an unclear portion of the will.  The ordinary meaning rule and other rules of construction are entirely subservient to the content of the will.  This idea is often expressed by saying that the testator’s intention is to be ascertained, first of all, from the four corners of the will.

* * *

§10.61       It is reasonable to presume that the testator’s intention was that effect be given to every word of his or her will …

[Footnotes omitted.]

[47]         It is appropriate to consider surrounding facts and circumstances only if the language of the will is ambiguous: Feeney’s Canadian Law of Wills at §10.51.

 

 

Appeal Court Disapproves Using Assessments To Value Property

Assessments To Value PropertyProperty assessments

Dosanjh v Liang  2015 BCCA 18 disapproved of the use of using assessments to value property and prove damages in it’s valuation, and that the better practice is to use appraisers, especially for historical valuations.

Here are excerpts paragraphs 57-70 that discus the issue:

A more serious difficulty with the assessment of damages was the trial judge’s reliance on the assessment to determine the property value.

[58] In deciding to admit the assessment as evidence, the trial judge referred to a number of family law cases in which assessments had been used by the trial court to determine the value of real property. She purported to rely on the opening words of Rule 11-7 of the Supreme Court Civil Rules, B.C. Reg. 168/2009, as providing her discretion to admit the evidence.

[59] There is some difficulty in relying on family law cases for the proposition that assessments should be admissible evidence to determine the value of real property. While the rules of evidence are applicable to family law proceedings, they are often applied in a relaxed manner. I agree with the recent observations of Kent J. in Walker v. Maxwell, 2014 BCSC 2357:

[64] Of course, one of the stark realities of family law litigation is that the parties are often unrepresented by counsel and/or are unable to afford the substantial cost of experts and the procuring of expert evidence.

[65] Evidence in family law cases is subject to the same rules applicable to any other area of civil law. In reality, however, the technical yields to the practical and the strict rules of evidence are often ignored or accorded only slight deference.

[60] While trial courts have, with some frequency, admitted property assessments as evidence of property value in family law cases, they have generally done so either with the agreement of the parties, or, alternatively, where no other evidence of value has been tendered (e.g. Chung v. La, 2011 BCSC 1547). Where proper expert evidence of value has been tendered, the courts have been reluctant to consider property assessments as evidence (see, for example, Hall v. Mougan, 2009 BCSC 645).

[61] In family law cases, a court is often faced with having to assess the value of real property in a situation where neither side is clearly subject to any burden of proof. Rather, the court is simply required to estimate the value of property for the purpose of dividing a family asset. It is not surprising, in such situations, that a court may “grasp at straws” in an attempt to reach a just result. It is simply a matter of doing the best job possible with limited evidence.

[62] It seems to me that different considerations arise in non-family cases, where one party or the other will generally bear the onus of producing evidence of property value.

[63] It is not necessary, in this case, to make any pronouncement as to the scope for admission of property assessments as evidence of property value in family law cases, and I will refrain from doing so. In my view, however, there is, absent agreement, no scope for using assessments in place of expert opinion evidence in cases such as the present one.

[64] The trial judge erred in her reliance on the opening words of Rule 11-7. The relevant provisions of the rule are as follows:

 

11-7 (1) Unless the court otherwise orders, opinion evidence of an expert, other than an expert appointed by the court under Rule 11-5, must not be tendered at trial unless

(a) that evidence is included in a report of that expert that has been prepared and served in accordance with Rule 11-6, and

(b) any supplementary reports required under Rule 11-5 (11) or 11-6 (5) or (6) have been prepared and served in accordance with Rule 11-6 (5) to (7).

…

(6)At trial, the court may allow an expert to provide evidence, on terms and conditions, if any, even though one or more of the requirements of this Part have not been complied with, if

(a) facts have come to the knowledge of one or more of the parties and those facts could not, with due diligence, have been learned in time to be included in a report or supplementary report and served within the time required by this Part,

(b) the non-compliance is unlikely to cause prejudice

(i) by reason of an inability to prepare for cross-examination, or

(ii) by depriving the party against whom the evidence is tendered of a reasonable opportunity to tender evidence in response, or

(c) the interests of justice require it.

 

 

[65] Rules 11-6 sets out special requirements for expert opinion evidence. It is designed to ensure that adequate notice is given of the intention to adduce expert evidence, and to ensure that expert reports are presented in a particular form. Rule 11-7 allows the court to dispense with the requirements of Rule 11-6 in certain limited circumstances (see Perry v. Vargas, 2012 BCSC 1537 and XY, LLC v. Zhu, 2013 BCCA 352).

[66] In those limited circumstances, Rule 11-7 allows a judge to admit opinion evidence at trial where the evidence, though otherwise admissible, fails to meet the requirements of Rule 11-6. Nothing in Rule 11-7 purports to allow a judge to admit into evidence an expert opinion that does not meet the requirements of R. v. Mohan, [1994] 2 S.C.R. 9.

[67] The basic difficulty with the property assessment as evidence of property value is that the court had no basis on which to evaluate its cogency. The court was not able to determine how the assessor went about making the assessment, and had no basis for determining what weight to give it. This was a particular problem in this case, as the court had no basis for determining the effect of the recent use of the property to grow marijuana on the property value.

[68] I acknowledge, again, that these sorts of difficulties have not always been seen as precluding the admission of assessments as evidence of value in family law cases (see, for example, Dykman v. Dykman, 2011 BCSC 883). Whatever discretion a court may have to admit such evidence in a family law case, however, it did not have that discretion in the case before us.

[69] As the trial judge observed, there was some evidence before her to the effect that the market value of the property in September 2011 was substantially higher than the contract price. The evidence of how much higher, however, was minimal. Given that the assessment report was not admissible, the trial judge was faced with a formidable (perhaps impossible) task in trying to determine the quantum of damages.

 

 

Inheritance In Trust Taken By Trustee In Bankruptcy

Bankruptcy

A bankruptcy can over ride an inheritance, even when the inheritance is left in trust as per Bolt Estate 2014 BCSC 2095

 

A trust in a will provided that the un discharged bankrupt heir,  was to receive 1/4 of the capital at 26, the 1/4 at 35, and the balance at age 45 .

 

The bankrupt and the trustee argued over whether the trust fund could be attacked by the trustee in bankruptcy and the court found that it could be.

 

The court held that the inheritance constituted “property” vesting in her estate in bankruptcy within the meaning of Section 2 of the Bankruptcy and Insolvency act, so that the inheritance was avaialbe to her creditors.

The Differences Between Joint Bank Account and Joint Property

There are some particular features of a joint bank account that distinguish it from a joint tenancy in real property and these have been discussed by our Court of Appeal (Bergen v. Bergen, 2013 BCCA 492): ( see my blog on Bergen dated August 26.14

These differences between a joint bank account and a jointly owned real property as discussed in the Bergen case were re-iterated recently by Justice Steeves in Zeligs v Janes 2015 BCSC 7:

[39] The practicalities of a joint bank account … are different from those of a joint tenancy in respect of other forms of property.

Obviously, a depositor’s interest in a bank or investment account is a chose in action: the depositor is a creditor, and the bank or other depository is a debtor that is bound, subject to the terms of the agreement between them, to pay over the balance in the account on demand. In this context, it is difficult to conceptualize the operation of the four unities (of title, interest, time and possession) from which joint tenancy historically arose. (See generally Law Reform Commission of British Columbia, Report on Co-Ownership of Land (1988), at 3.)

Most importantly, where one of the holders of a joint account wishes to discontinue the arrangement and eliminate the right of survivorship, the usual course is to bring the account to an end – if necessary by draining it to a zero balance. (See generally Waters (4th ed.) at 440 [Waters’ Law of Trusts in Canada, 2012]; see also Edwards v. Bradley, supra at 233, quoted above [[1956] O.R. 225 (Ont. C.A.)]; and Pecore at para. 50.)

The remaining account-holder who claims to have had a beneficial interest in the withdrawn funds may pursue an equitable remedy such as constructive trust or tracing (see Waters, 4th ed., at 440), but this may be a complex process.

[181]     As I see it, the dynamic nature of joint accounts with funds being withdrawn and deposited over time does not easily accommodate the application of the unities. The nature of the joint account is that it is to be used for withdrawals and deposits and it cannot be that one of the unities is destroyed by doing so. In short, the withdrawal of funds by one tenant by itself cannot sever a joint account. In contrast, in the case of real property, either tenant can sever the joint tenancy at any time by destroying one of the unities and the value of the resulting equal shares held in of the unities and the value of the resulting equal shares held in common is subject only to market conditions. 

Courts Scrutinize Claims Against Estates

Claims Against Estates To Be ScrutinizedCOurt scrutiny

 

Miller v Miller ( 1987) 14 BCLR (2d) 42 at pa 451, and approved by other cases such as Friak v Pilon 2012 BCSC 528 state that claims against deceased persons must be approached by the courts ” with the most careful scrutiny and indeed at the outset with some suspicion”. This was most recently applied in Wharton v McMinigal Estate 2014 BCCA 434

Miller at page 451 states:

Despite the repeal, it seems reasonable that a court should require a high standard of proof from a person who claims he is owed a sum of money by way of a debt due him from a deceased individual. This is because the deceased cannot, of course, appear in court and present his or her side of the argument.

The only evidence that can be introduced in most instances is the evidence of the survivor. Support for the idea that a court must view this kind of evidence with care comes from a decision of Rae J. in Kong v. Kong, 14 B.C.L.R. 357, [1979] 6 W.W.R. 673, 5 E.T.R. 67 (S.C.). He describes the requirement of adequate proof as a rule of practice which a court should follow as a consequence of the repeal of s. 11 of the Evidence Act. At pp. 361-62 His Lordship said this:

In the absence of the statutory provision, one must at least examine the evidence with the most careful scrutiny and indeed, at the outset, with some suspicion: see Re Garnett: Gandy v. Macaulay (1885), 31 Ch. D. 1 (C.A.). One should also give consideration to whether corroborative evidence of a material nature exists and, if it does not, then whether in the particular circumstances it is necessary in order to render the other evidence believable. Under the rule of practice referred to, it was not in variably necessary to have corroboration of the nature indicated before the evidence could be acted upon: Re Garnett, supra; and Re Hodgson; Beckett v. Ramsale (1885), 31 Ch. D. 177 (C.A.), as cited in Bayley v. Trusts & Guar. Co. Ltd., 66 O.L.R. 254, [1931] 1 D.L.R. 500 at 504, per Middleton J.A.
35      More recent authority argues that the common law rule of practice demanding corroboration was not revived by the repeal of s. 11 of the Evidence Act in 1976: McLeod v. MacLeod; McLeod v. Deighton (1980), 22 B.C.L.R. 51 at 55 (Cowan L.J.S.C.):
In light of the decisions above referred to and the provisions of s. 30 of the Interpretation Act, I hold that the repeal of s. 11 of the Evidence Act did not have the effect of reviving the former common law rule regarding corroboration in cases involving claims by or against a deceased person in respect of matters occurring before the death of the deceased.
37      Therefore, while corroboration is no longer necessary, it still seems to me the evidence of a claimant in these types of situations should be examined with “the most careful scrutiny and indeed at the outset with some suspicion”.

disinherited.com Likes Contingency Fee Cases

 

Contingency feeA contingency fee basis agreement is a fee arrangement between a lawyer and client were typically the lawyer only receives a fee from the successful monies collected from a court action, with the usual motto being” no collection, no fees”.

Such an arrangement is typically satisfactory to the client who bears little risk in the litigation other than losing the case and having to pay the other party’s costs. The client is saved the often inordinate regular buildings that litigation lawyers send on a regular basis that are expected to be paid promptly should work be expected to continue.

In a contingency fee arrangement it can often be many years before the lawyer realizes his or her fee, even after the trial or settlement.

Contingency fees are often referred to as the poor man’s key to the courtroom, and the reality is is that many larger law firms do not allow their lawyers to handle fees on a contingency basis as they are simply risky and thus hard to account for in budgeting.

disinherited.com on the other hand typically ask for those who have been disinherited and more often than not, is prepared to accept a case on the basis of a contingency fee arrangement.

Court disputes on occasion occur over the terms of a contingency fee, particularly where the success has been substantial and thus the fee accordingly may be deemed excessively high.

There has been a great number of cases litigated simply on the terms of the contingency fee itself, with the latest best-known Court of Appeal case in British Columbia being Mide-WIlson v Hungerford Tomyn 2013 BCCA 559, which is required reading for all lawyers performing legal services under contingency fee agreements. The plaintiff was the granddaughter of the deceased, Jack Cewe, who was a very successful gravel operator and road Paver, who died within estate worth perhaps $100 million.

After a long discussion with the client as to the possibility of potential fees being as high as $2 million if the case went to the Supreme Court of Canada, the client and the law firm settled on the basis that the firm’s fees would be 20% of any settlement entered into within the first year of the agreement being signed, and 25% settlement entered into within the second year or third year of any settlement or judgment obtained thereafter.

The law firm claimed a fee of $17 million based on the contingency fee

 

The registrar and a decision found in  2011 BCSC 1440 awarded $9 million to the law firm. Both parties called very senior lawyers to give expert evidence as to their opinion as to the proper quantum of the fee.

The firm appealed to the soup bream court and the Supreme Court judge reduce the fee to $5 million, calling the $9 million award excessive and one that would question the integrity of the profession.

The Court of Appeal reviewed the matter at 2013 BCCA 559 and upheld the award of $5 million

The Court of Appeals summary includes the following passage:

 

“Lawyers are not venture capitalists, and there exists a risk that the amount payable under a contingency fee agreement will be arbitrarily high, particularly where the underlying assets recoverable and therefore the fee payable may fluctuate greatly. In this case to come of the value is not a function of the work done by the firm. If the estate had been worth $200 million the firm would under the agreement be entitled to a fee of 40 million. There was an aspect of arbitrariness to such a result.

 

 

Appeal Test For Reviewing Trials By Affidavit (Summary Trial)

Three JudgesAppeal Test For Reviewing a Summary trial

 

Lorintt v Boda 2014 BCCA 354 deals inter alia with the appeal test, the court uses when reviewing a trial where no oral evidence was give, but instead it was a summary trial based on affidavits.

One of the risks of summary trial is  the Chambers Judge has no or little opportunity to watch people on the witness stand and get a sense of their “true character”, which is often the most important aspect of estate litigation and allegations of undue influence, such as was alleged. Instead, the evidence is all presented in affidavit form. A Judge will usually decline to hear a summary trial where there are issues such as credibility-ie who to believe or disbelieve.

The Facts:

In February 2000 a father transferred his residence from himself to himself and his son in joint tenancy. After the father’s death in 2008, his executor sought a declaration that the son held the property in trust for the father’s estate. The chambers judge dismissed the executor’s claim. He held that the father intended to gift the property to the son. He found that the relationship between the parties was such that the presumption of undue influence did not apply. The executor now appeals. He submits that the chambers judge erred in determining that the presumption of resulting trust had been rebutted and further, and in the alternative, he erred in failing to find the transaction should be set aside because of undue influence.

Held: Appeal dismissed. It was open to the chambers judge on the evidence to find that the father had a donative intent. There was no basis to interfere with the chambers judge’s findings that the relationship between the parties did not give rise to the potential domination of one party by another.

 A. Standard of Review

[72]         The parties are in agreement that the question of the intention of a party who transfers property to another for no consideration is a question of fact reviewable on a palpable and overriding error standard. The parties also agree that findings concerning undue influence are questions of fact and subject to a differential standard of review absent palpable and overriding error.

[73]         In this case there was no oral testimony. All of the evidence was by way of affidavit. The general rule in this Court when dealing with affidavit evidence is where evidence consists entirely of affidavits rather than viva voce evidence, the standard of review is that findings of fact should only be set aside if the finding was clearly wrong or was not reasonably supported by the evidence: Tangerine Financial Products Limited v. Sutherland, 2013 BCCA 283 at para. 46; Icahn Partners LP v. Lions Gate Entertainment Corp., 2011 BCCA 228 at para. 73; Orangeville Raceway Ltd. v. Wood Gundy Inc. (1995), 6 B.C.L.R. (3d) 391 (C.A.).

Removal of a Notice of Intention to Dispute Under WESA

Re Richardson Estate 2014 BCSC 2162 also dealt with the new WESA rules relating to the removal of a Notice of Intention to Dispute ( the former probate caveat), finding that the test is whether it is in the best interests of the estate to do so.

 

In Re Richardson, the Judge found that between the contesting parties, the wife was a common law spouse who would inherit the entire estate, then it was only to follow that the Notice of Intention to Dispute would be removed as the matter in issue had been resoled.

 

Best interests of the estate

[54]         New Supreme Court Rules came into force with WESA. The applicant seeks the removal of the disputant’s notice of dispute pursuant to the new Rule 25-14(1)(h). Rule 25-10(11) sets out the grounds for removal:

Grounds on which notice of dispute may be removed

(11) On an application under subrule (10), the court may, by order in Form P31, remove a notice of dispute if the court determines that the filing is not in the best interests of the estate.

As with WESA itself, counsel advise that there are as yet no cases interpreting these Rules.

[55]         As a first point it is useful to return to the July 21, 2014 notice of dispute. The basis of the dispute is that the disputant “… disputes that [the applicant], who is applying by Letters of Administration and claiming to be the sole beneficiary, is a spouse of the deceased.” As above, I have found that the applicant was the spouse of Mr. Richardson and that his intestate estate must be distributed to her, pursuant to ss. 2(1) and  20 of WESA, respectively. Those findings are, in my view, conclusive as to the dispute in this case and I can find no basis for proceeding further. Put another way, I conclude that it would not be in the best interests of the estate to leave a spent dispute lying over the estate.

[56]         A related matter is I have decided above that there should not be an adjournment of the applicant’s application so that a full or summary trial can take place. The evidence in this case is by affidavit. While there are clear differences between affidavit evidence and viva voce evidence, the former are entirely adequate for the issues in this case.

[57]         I was directed by the disputant to the approach prior to WESA under the then Rule 19(24). Different language was used and the issue was whether to strike a caveat under the then Rule 19(24). It provided that a caveat could be struck if it “discloses no reasonable claim or defence as the case may be”, among other reasons. Before a caveat was struck out it had to be “plain and obvious” that it did not disclose a reasonable claim (or defence). As well, it was to be assumed that the facts plead were true and any doubt was to be resolved in letting the pleading stand (Chang Estate v. Chang, 2010 BCCA 111 at para 39; citing Hunt v. Carey Canada Inc., [1990] 2 SCR 959).

[58]         As can be seen above, the new language in Rule 25-10(11) describes removing a notice of dispute and whether that would be in the “best interests of the estate.” In my view this is broad language and with a substantially different objective than the previous Rule. Instead of a focus on the nature of the pleadings under the previous Rule, the focus now is on the estate and what is in its best interest.

[59]         It is submitted on behalf of the disputant that the test to be applied to this new language is a three stage test: does the disputant have standing to challenge the will or appointment of an administrator without a will; is there a reasonable claim or a legitimate issue to be contested; and is the removal of the notice of dispute consistent with protecting the integrity of the probate and administration process? There is considerable overlap between this approach and the approach under the former Rule 19(24) inasmuch as both focus on the merits of the dispute and the process of probate and administration. Those matters may in some circumstances be relevant to determining the best interests of the estate. However, the best interests of the estate is broader language and capable of including other issues.

[60]         Another aspect of the submission of the disputant is to say that it “will always” be in the best interests of the estate to challenge the appointment of an executor or administrator thus making valid any challenge. As a very general proposition I accept that valid disputes should not be discouraged. However, making it a final legal conclusion as a matter of interpreting WESA and the new Rules would, in my view, make Rule 25-10(11) essentially a dead letter because no notice of dispute could be removed.

[61]         There is a previous case which provides some assistance in the interpretation of the phrase “best interests of the estate” (Re: Estate of Fannie Cleverley, 2000 BCSC 1454 at paras. 24-26). In that case a beneficiarysaid that an executor was not protecting the beneficiaries because he was not pursuing litigation on behalf of the estate. The executor, appearing on his own, said that the litigation in question would involve substantial costs for a nominal value to the estate of not more than $20,000. The executor submitted to the court that it would not be in the best interests of the estate to pursue the litigation. Master Joyce (as he then was) concluded that he was in no better position than the executor with whom he agreed.

[62]         Looked at in this light, the best interests of the estate are an economic issue, one requiring the weighing of the value of a decision or issue in dispute with the overall value of the estate. I conclude that this approach has some merit in interpreting Rule 25-10(11) in this case. I hasten to add that non-economic issues can be important to the best interests of the estate such as, for example, situations involving personal items or even real property that has unique value. Those circumstances are not a concern here.

[63]         In this case the potential estate of Mr. Richardson includes about $105,000 in term deposits and cash. I note that this is an imprecise estimate in as much as it is based on what Mr. Richardson told Ms. Weiser in 2010. I presume that the imprecise estimate of the estate arises from the fact that there is no administrator who has authority to itemize or value the estate.

[64]         In reaching the estimate of $105,000, I have excluded an RRSP and investment account, as described by Ms. Weiser, because the applicant is the named beneficiary. With respect to land, as discussed above, there are State of Title Certificates indicating that Mr. Richardson is the owner of the property at 837 West Bay Road and another property.

[65]         The potential estate of Mr. Richardson includes the $105,000 in cash and term deposits as well as the value of his interest in the properties on Gambier Island. I acknowledge the importance of this estate to the applicant and the disputant but it is also appropriate to point out that it is not a large estate as measured by its value. Nor is it a large amount when compared with the cost of litigation, litigation that has essentially been answered by the finding above that the applicant was the spouse of Mr. Richardson.

[66]         On this basis I conclude that it is in the best interests of the estate to remove the notice of dispute in this case.

Party v Party Court Costs

Rocky partyParty v Party Court Costs

 

Semenoff Estate v Bridgeman 2014 BCSC 1845 involves the Court’s approach to assessing costs against a plaintiff who acted for himself personally in a nine day trial that was dismissed with costs for part of the trial and double costs for a portion thereafter.

The plaintiff’s actions were deemed excessive and wasteful by the Court, who awarded $53,000 in costs, plus taxes and disbursements, all totalling $74,000.:

8      The cause of action alleged that the defendant was negligent in allowing the property owned by Bill to pass to his siblings, thereby depriving the plaintiff of his alleged inheritance. Despite the underlying simplicity of the case, the plaintiff filed four sets of pleadings: the first on October 30, 2007; the second on November 4, 2011; the third on March 23, 2012 and; the last on February 6, 2013. In describing the pleadings, in Semenoff Estate v. Bridgeman, 2013 BCSC 1022 (B.C. S.C.), Mr. Justice McKinnon stated:
 
[25] The plaintiff’s pleadings go on for pages making all sorts of claims, including claims in contract. The trial management judge described them as “prolix”. I agree and go further to label them, for the most part, incomprehensible, vexatious and frivolous.
[26] The plaintiff seems incapable of making simple claims which would be appropriate to his perceived view of the facts. When one wades through the prolix pleadings and considers the evidence proffered, the essence of his complaint is the failure of Mr. Bridgeman to investigate the state of title which, if done, ought to have prompted him to sever the joint tenancy and thereby protect the “estate” of Bill Semenoff. If that had been done, on Bill’s death, his interest would have passed to his estate whose heirs are Robert and his brother Howard.
9      The trial had been scheduled for four days but ended up taking nine days, almost all of which was entirely devoted to the plaintiff’s case. The trial judge characterized the plaintiff as being “preoccupied with conspiracy theories” (Semenoff Estate v. Bridgeman, 2013 BCSC 1022 (B.C. S.C.) at para. 37) and included requests from the plaintiff to “examine all the defendant’s closed files for the past 30 or 40 years to see if he could find
The Court awarded

 

                   THE  LAW of Party v Party Costs

Supreme Court Civil Rule 14-1(2) provides:

Assessment of party and party costs
(2) On an assessment of party and party costs under Appendix B, a registrar must
(a) allow those fees under Appendix B that were proper or reasonably necessary to conduct the proceeding, and
(b) consider Rule 1-3 and any case plan order.
16      In approaching the issue of whether work for which costs are claimed and claimed outlays should be allowed, an objective standard is to be applied. A step or expense was “necessary” if it was indispensable to the conduct of the proceeding (McKenzie v. Darke, 2003 BCSC 138 (B.C. S.C.)) (Registrar); Van Daele v. Van Daele (1983), 56 B.C.L.R. 178 (B.C. C.A.).
17      A step was “proper” if it was not necessary but was nevertheless reasonably taken or incurred for the purpose of the proceeding: McKenzie v. Darke, supra; McKenna v. Anderson, 2005 BCSC 84 (B.C. S.C.) (Registrar).
18      Registrars are to disallow costs proved to have been incurred or increased through extravagance, negligence or mistake, or by reason of the payment of unjustified charges or expenses (Bell v. Fantini (1981), 32 B.C.L.R. 322 (B.C. S.C.)). The defendant alleges the proceeding was unnecessarily and unreasonably lengthened and complicated by the actions of the plaintiff.
19      The defendant relies upon Kemp v. Wittenberg, 2001 BCSC 273 (B.C. S.C.) at para. 9, wherein the court stated:
[9] …. A sense of fairness and understanding granted to unrepresented parties ought never to extend to the degree where courts do not give effect to the existing law, or where the issue of fairness to an unrepresented litigant is permitted to override the rights of a defendant party.
Disbursements
Applicable Principles
77      The applicable legal principles which must be applied with respect to disbursements are summarized in Turner v. Whittaker, 2013 BCSC 712 (B.C. S.C.) at para. 5, wherein Master MacNaughton stated:
[5] Counsel were also able to agree on the following legal principles which are applicable on an assessment of disbursements:
1. Rule 14-1(5) requires an assessing officer to determine which disbursements were necessarily or properly incurred in the conduct of a proceeding and to allow a reasonable amount for those disbursements.
2. The consideration of whether a disbursement was necessarily or properly incurred is case-and circumstance-specific and must take into account proportionality under Rule 1-3. (Fairchild v. British Columbia (Vancouver Coastal Health Authority), 2012 BCSC 1207).
3. The time for assessing whether a disbursement was necessarily or properly incurred is when the disbursement was incurred not with the benefit of hindsight. (Van Daele v. Van Daele, 56 B.C.L.R. 176 (SC) rev’d 56 B.C.L.R. 178 at para. 4 (CA))
4. A necessary disbursement is one which is essential to conduct litigation; a proper one is one which is not necessary but is reasonably incurred for the purposes of the proceeding. (McKenzie v. Darke, 2003 BCSC 138, para. 17-18)
5. The role of an assessing officer is not to second guess a competent counsel doing a competent job solely because other counsel might have handled the matter differently. (McKenzie v. Darke, 2003 BCSC 138, para. 21)

The Standard of Review By Appeal Courts of Lower Court’s Decisions

The BCCA in Re Korol 2014 BCCA 380 recently examined the standard of review of an appellate court of a lower court’s decision in light of the following  SCC case of Penner v Niagara Regional

 

An Appeal Court’s standard of review of discretionary decisions was recently restated by the Supreme Court of Canada in Penner v. Niagara Regional Police Services Board, 2013 SCC 19 (S.C.C.):

[27] A discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustice: Elsom v. Elsom, [1989] 1 S.C.R. 1367, at p. 1375.

 

Reversing a lower court’s discretionary decision is also appropriate where the lower court gives no or insufficient weight to relevant considerations: Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3, at pp. 76-77.

 

However, a discretion exists in superior courts to grant relief from the effect of issue estoppel. ( the finding of facts made by a lower court)

Obviously such discretion should be exercised where the first proceedings were actually unfair, but relief may be granted from issue estoppel in fair proceedings where a clear legislative distinction exists between the purposes of the first and second proceedings.

What is relevant is the parties’ reasonable expectations of the stakes of each proceeding.