Category: Probate Litigation

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.

Factors In Assessing a Witness’ Testimony

The validity of a witness’ testimony depends on whether their evidence is consistent with the probabilities affecting the case as a whole and shown to be in existence at that time: Faryna v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.) at 357.

In Bradshaw v. Stenner, 2010 BCSC 1398, aff’d 2012 BCCA 296, Justice Dillon adopted a three-step approach in which the court first considers the testimony of a witness on a “stand alone” basis followed by an analysis of whether the story is inherently believable.

If the testimony survives the first part of the test, the second step is to evaluate the testimony based upon its consistency with other witnesses and with documentary evidence.
Lastly, the court determines “which version of events is the most consistent with the ‘preponderance of probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions’”: at para. 187.

At para. 186 of Bradshaw the court set out a non-exhaustive list of the factors to be considered in assessing a witness’ evidence:

1. the capacity and opportunity of the witness to observe the events at issue;
2. his or her ability to remember those events;
3. the ability of the witness to resist being influenced by his or her interest in recalling those events;
4. the internal and external consistency of the witness’ evidence;
5. whether the witness’ evidence harmonizes with or is contradicted by other evidence, particularly independent or undisputed evidence;
6. whether his or her evidence seems unreasonable, improbable or unlikely, bearing in mind the probabilities affecting the case; and
7. the witness’ demeanor, meaning the way he or she presents while testifying.

The testimony of non-party disinterested witnesses may provide a “reliable yardstick for comparison”: Bradshaw at para. 187

S. 151 WESA – Leave of the Court Required to Bring Action Against Estate

Under WESA leave of the court is required to commence legal proceedings in the name of a specified person and on behalf of the estate of the deceased person and the requirements are set out in S 151 WESA.

Section 151 of WESA states:

Who may sue with leave of court

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

(1) Despite section 136 [effect of representation grant], a specified person may, with leave of the court, commence proceedings in the name of the specified person and on behalf of the estate of the deceased person
(a) to recover property or to enforce a right, duty or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or
(b) to obtain damages for breach of a right, duty or obligation owed to the deceased person.
(1.1) A specified person may apply for leave of the court under subsection (1) in the proceedings described in that subsection.
(2) Despite section 136, a specified person may, with leave of the court, defend in the name of the specified person and on behalf of the estate of a deceased person, a proceeding brought against the deceased person or the personal representative.
(2.1) A specified person may apply for leave of the court under subsection (2) in the proceeding described in that subsection.
(3) The court may grant leave under this section if
(a) the court determines the specified person seeking leave
(i) has made reasonable efforts to cause the personal representative to commence or defend the proceeding,
(ii) has given notice of the application for leave to
(A) the personal representative,
(B) any other specified persons, and
(C) any additional person the court directs that notice is to be given, and
(iii) is acting in good faith, and
(b) it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.
(4) On application by a specified person or a personal representative, the court may authorize a person to control the conduct of a proceeding under this section or may give other directions for the conduct of the proceeding.

For leave to be granted under s. 151 of WESA the applicants must meet the requirements summarized in Hoggan v. Silvey, 2022 BCCA 176:

In summary, the factors that are relevant in an application pursuant to s. 151 may vary depending on the nature of the application.

The statutory factors will always apply,

-so the petitioner must have standing as a specified person,
-must have made reasonable efforts to cause the personal representative to commence or defend the action,
-must have given the necessary notice, and must be acting in good faith.
-There must be an arguable case, as a meritless case would be neither necessary nor expedient to protect the interests of the estate or the specified person.

However, it will not always be necessary to consider whether the potential relief outweighs the inconvenience to the estate and whether the litigation is in the best interests of the estate.

Rather, as mentioned, s. 151(3)(b) is to be read disjunctively, such that there are four possible ways the standard may be met:

it may be necessary to protect the interests of the estate;

it may be expedient to protect the interests of the estate;

it may be necessary to protect the interests of a specified person;

or it may be expedient to protect the interests of a specified person.

Surreptitious Recordings Are Admissible

In C.C. v. S.P.R., 2022 BCSC 1057 [C.C.], the court considered the admissibility of surreptitious recordings. During the trial, the respondent who had made the recordings sought to adduce them, along with transcripts, into evidence. The court . noted (at para. 4) that while the practice of secretly recording a party for use in a family law proceeding should be discouraged, “there are circumstances where the probative value of admitting surreptitiously made recording outweighs the prejudicial effect of its admission”.

Note that it is a criminal offence to secretly record a conversation that is between third parties that you are not privy to the conversation , it is not illegal to record a conversations that you are a party to.

In C.C., at paras. 31-32, Gibb-Carsley J. set out the test applicable in British Columbia for determining the admissibility of surreptitious recordings:
[31] In British Columbia, the court has developed a four-part test to determine the admissibility of surreptitious recordings.

This test as set out by Justice Skolrood in Finch v. Finch, 2014 BCSC 653 at para. 62 [Finch] can be summarized as follows:

i. the recordings must be relevant;
ii. the participants must be accurately identified;
iii. the recordings must be trustworthy; and
iv. the court must be satisfied that the probative value of the recordings outweighs its prejudicial effects.

The court considered the leading cases in this province regarding the use of surreptitious recordings including A.D.B. v. E.B., [1997] B.C.J. No. 227, 1997 CarswellBC 104 (S.C.), Sweeten v. Sweeten, [1996] B.C.J. No. 3138, 1996 CanLII 2972 (S.C.) [Sweeten], and Mathews v. Mathews, 2007 BCSC 1825 [Mathews], and accepted that as a starting point there is a limited discretion for the court to exclude the evidence simply on a policy basis.

Admission of Extrinsic Evidence in Wills Interpretation Post WESA

Zalechuk Estate 2023 BCSC 523 discussed the modern approach to wills interpretation post WESA.

The Court’s power to rectify a will is found in s. 59 of the WESA:

59 (1) On application for rectification of a will, the court, sitting as a court of construction or as a court of probate, may order that the will be rectified if the court determines that the will fails to carry out the will-maker’s intentions because of

(a) an error arising from an accidental slip or omission,
(b) a misunderstanding of the will-maker’s instructions, or
(c) a failure to carry out the will-maker’s instructions.
(2) Extrinsic evidence, including evidence of the will-maker’s intent, is admissible to prove the existence of a circumstance described in subsection (1).
(3) An application for rectification of a will must be made no later than 180 days from the date the representation grant is issued unless the court grants leave to make an application after that date.

(4) If the court grants leave to make an application for rectification of a will after 180 days from the date the representation grant is issued, a personal representative who distributes any part of the estate to which entitlement is subsequently affected by rectification is not liable if, in reasonable reliance on the will, the distribution is made
(a) after 180 days from the date the representation grant is issued, and
(b) before the notice of the application for rectification is delivered to the personal representative.
(5) Subsection (4) does not affect the right of any person to recover from a beneficiary any part of the estate distributed in the circumstances described in that subsection.

In Thiemer Estate, 2012 BCSC 629 which also predated the coming into force of the WESA, Justice Dardi summarized some useful principles of construction. She said that the objective of the court is to ascertain the intention of the testator as expressed in his or her will when it is read as a whole in light of any properly admissible extrinsic evidence. The testator’s intention is to be gathered from the will as a whole and not solely from the provisions in dispute (para. 45 citing Perrin v. Morgan, [1943] A.C. 399 at 406 (H.L.) and (H.L.); Re: Burke (1960), 20 D.L.R. (2d) 396 at 398-399 (Ont. C.A.).

The court is to ascertain the express intention of the testator which is the meaning of the written word as opposed to what the testator may have meant to do when he or she made a will (Thiemer at para. 46 citing Perrin at 406).
Earlier lines of authority endorsed an objective approach to will interpretation but modern jurisprudence recognizes a strict literal approach can defeat the intention of the testator (Thiemer at para. 47, citing “The Law Reform Commission of British Columbia”, Report on Interpretations of Wills, LRC 58 at 6).
[68] At para. 48 Justice Dardi said:

[48] In keeping with contemporary judicial thinking, the courts of this province have favoured the subjective approach to interpreting wills, wherein the objective is to ascertain the actual meaning the testator ascribed to the words he or she used in the will. In determining the testator’s intention the courts have endorsed the analytical approach commonly described as the “armchair rule”. The rule requires that the court put itself in the position of the testator at the point in time when he or she made the will, and from that vantage point construe the language in the will in light of the surrounding facts and circumstances known to the testator.
In Jamt Estate, 2021 BCSC 788, ss. 58 and 59 of the WESA is discussed by Justice Coval. He says that s. 58 is remedial in nature covering a broad discretion in prescribed circumstances to order a writing or marking on a will be fully effective. Section 59, like s. 58 is remedial in nature conferring a broad discretion to rectify a will that fails to carry out the makers intentions in prescribed circumstances. Prior to the enactment of the WESA there was no such statutory authority in British Columbia to rectify wills and common law rectification had very narrow boundaries.

Since there were no judicial considerations of s. 59(1)(a) Justice Coval took guidance from the United Kingdom decision in Re Segelman [1996] Ch. 171 at p. 180 which considered similar but not identical sections of the Administration of Justice Act 1982. He raised three questions:

1) what were the testator’s intentions with regard to the issue for which rectification is sought?
2) does the Will as written fail to carry out those intentions?
3) is that failure a consequence of one of the reasons specified in ss. 59(1)(a)-(c).

Justice Coval concluded that the extrinsic evidence strongly supported granting the rectification sought under s. 59(1). He concluded that Mr. Jamt intended to leave his estate to the petitioner. The accidental slip had been the use of the wrong middle name for the petitioner.

Section 59(2) of the WESA admits extrinsic evidence to prove the circumstances described in s. 59(1) if the court is of the view that the will fails to carry out the will-maker’s intentions because of an error arising from an accidental slip or omission or a misunderstanding or failure to carry out the will-maker’s instructions. Since the Will was prepared by the deceased, I will only consider whether there has been an accidental slip or omission.

In Simpson, the Court of Appeal applied s. 59 to rectify a will in a case where they found a denial of rectification in those particular circumstances would deprive the respondents of the gift the deceased intended them to have, and provide the appellant with a windfall the deceased never intended her to have. An accidental omission arose from the deceased’s failure to realize that his intended gift of the shares would never get to the respondents due to the operation of the survivor clause of the shareholders agreement.

The trial judge allowed the extrinsic evidence of the drafting solicitor’s notes to determine what the testator’s intentions were.
The majority of the Court of Appeal allowed the rectification.

Court Delay & Dismissal Want of Prosecution

Many court actions, including estate litigation are commenced and then just ” sit there” often for years such that inordinate delay can occur.

After certain criteria are met, typically the defendant will apply to the court for dismissal of the plaintiff’s court action for want of prosecution.

In Drennan v. Smith, 2022 BCCA 86 the Court of Appeal summarized principles to be considered on an application for dismissal for want of prosecution at para. 16 as follows:

Relevant factors for consideration are summarized in Wiegert v. Rogers, 2019 BCCA 334:

On an application to dismiss for want of prosecution, it must be shown that

1)there has been inordinate delay,

2)that the inordinate delay is inexcusable,

3) and that the delay has caused, or is likely to cause, serious prejudice to the defendant.

4) In addition, the final and decisive question, which encompasses the other three, is whether, on balance, justice requires a dismissal of the action: Azeri v. Esmati-Seifabad, 2009 BCCA 133 at para. 9; 0690860 Manitoba Ltd. v. Country West Construction Ltd., 2009 BCCA 535 at paras. 27-28.

Inordinate delay is defined in Drennan at para. 16 (citing para. 32 of Wiegert v. Rogers, 2019 BCCA 334 [Wiegert]) as follows:

…Inordinate delay is delay that is immoderate, uncontrolled, excessive and out of proportion to the matters in question: Azeri at para. 8; Sahyoun v. Ho, 2015 BCSC 392 at para. 17. As Justice Saunders explained in Sun Wave Forest Products Ltd. v. Xu, 2018 BCCA 63 at para. 25, the concept is relative: some cases are naturally susceptible of fast carriage or call for more expeditious prosecution than others. Although there is no universal rule as to when time starts to run, the date of commencement of the action is typically identified as the point from which delay is measured. The delay should be analysed holistically, not in a piece-meal fashion, and the extent to which it may be excusable is highly fact-dependent: Ed Bulley Ventures Ltd. v. The Pantry Hospitality Corporation, 2014 BCCA 52 at para. 38; 0690860 at para. 29.

The plaintiff’s diligence and dispatch in advancing the action is relevant to whether a delay is inordinate. Plaintiffs have a particular onus to move expeditiously when a case involves serious allegations that go to a defendant’s character and credit, see Extra Gift Exchange Inc. v. Accurate Effective Bailiffs Ltd., 2015 BCSC 915 [Extra Gift Exchange Inc.].
In considering the issue of whether there has been inordinate and inexcusable delay, the court is entitled to consider the conduct of the defence contributing to that delay, see Tundra Helicopters Ltd. v. Allison Gas Turbine, 2002 BCCA 145 at para. 21 [Tundra].

The burden is on the applicant to establish that there has been inordinate and inexcusable delay. Once the applicant has established inordinate and inexcusable delay, a rebuttable presumption of prejudice arises:

Once a defendant establishes that delay is inordinate and inexcusable, a rebuttable presumption of prejudice arises: Busse v. Chertkow, 1999 BCCA 313 at para. 18. The concern is with the prejudice that a defendant will suffer in mounting and presenting a defence if the matter goes to trial: 0690860 at para. 27. Relevant matters could include failing memories, unavailable witnesses and the loss or destruction of physical evidence.
…
Drennan at para. 16 (citing para. 33 of Wiegert).

The final and overriding question is whether the interests of justice require dismissal of the action, see Drennan para. 16 (citing para. 33 of Wiegert):

…As to the final consideration — whether, on balance, justice requires dismissal of the action — again, the determination is highly fact-dependent. Relevant matters could include the length of and reasons for the delay, the stage of the litigation, the context in which the delay occurred and the role of counsel in causing the delay (although negligence on the part of a plaintiff’s lawyer may not always amount to an excuse): International Capital Corporation v. Robinson Twigg & Ketilson, 2010 SKCA 48 at para. 45; 0690860 at para. 29.

Four questions are to be addressed in an application to dismiss for want of prosecution:

1. Has there been inordinate delay on the part of the plaintiff in pursuing its claim?
2. Has the delay been inexcusable?
3. Has the delay caused serious prejudice, or is it likely to cause serious prejudice to the defendants?
4. Does the balance of justice require an order dismissing the plaintiff’s claim?
Extra Gift Exchange Inc., at para. 41.

The Admissibility of Hearsay Statements of a Deceased

It is a fact that estate litigation is rife with hearsay evidence, often “from” the deceased and if certain criteria are met, such evidence is admissible.

In Peterson v. Welwood, 2018 BCSC 1379 at paras. 69-8o the court considered the admissibility of statements of the deceased:

In Gutierrez v. Gutierrez, 2015 BCSC 185 at para. 34 the court summarized the factors that can be considered when assessing the threshold reliability of a hearsay statement:

1) the presence or absence of a motive to lie

2) independent corroborative evidence that “goes to the trustworthiness of the statement” (Blackman at para. 55; Khelawon at para. 67; R. v. Couture, 2007 SCC 28 (S.C.C.) at para. 83);

3) timing of the statement relevant to the event, contemporaneity (Khelawon at para. 67);

4) the declarant’s mental capacity at the time of making the statement (Khelawon at para. 107);

5) solemnity of the occasion and whether the declarant’s statement was made “in circumstances that could arguably be akin to the taking of an oath where the importance of telling the truth and the consequences of making a false statement were properly emphasized” (Couture at para. 89; Khelawon at para. 86).

It is important to recognize that, as a preliminary threshold issue, the court must first find on a balance of probabilities that the statement was in fact made by a deceased declarant before it goes on to determine the treatment and weight of such evidence: Creutz v. Estate of Kristian Winther, 2007 BCSC 1463 at para. 99.

This assessment turns on the credibility of the witnesses who relate to the court the hearsay statements attributed to the deceased declarant: Halfpenny v. Holien (1997), 37 B.C.L.R. (3d) 186 (S.C.).

Settlement Agreements to Be Upheld

The bar to set aside a settlement agreement is a high one.

There is a great public interest in holding people to their bargains.

BC courts have repeatedly cited the principles set out by the British Columbia Court of Appeal in Robertson v. Walwyn Stodgell Cochran Murray Ltd. 24 BCLR (2d) 385 (BCCA), 1988 CarswellBC 120 at para 9, cited in Lessing Brandon & Company LLP v. Dyck and others, 2019 BCSC 2331 at para 43:

“The fact that the settlement agreement may not have been a desirable one from [one parties point of view], or the fact that they may have received poor advice from their lawyer, or the fact that they later changed their minds, cannot provide grounds for setting aside the settlement agreement, or for a refusal to enforce it […]

Sojka v Sojka 2018 BCSC 562 reviews the law with respect to enforcement of a settlement reached at a mediation where both parties were represented by counsel, and one party attempted to renege on the agreement by utilizing what the court regarded as “settler’s remorse.”

The plaintiff brought on a court application to enforce the minutes of settlement that were signed by the parties and their counsel, and relied upon S 8(3) of the Law and Equity act and the inherent jurisdiction of the court to enforce the terms of settlement, which the court in fact did.

The defendants in their attempt to renege on the settlement argued that they were mistaken as to certain evaluations of property at the mediation, which the court found was not in fact the case, finding that the minutes of settlement and release constituted a clear agreement between the parties.

The court followed the decision of Roumanis v Hill 2013 BCSC 1047 as to when the enforceability of a settlement agreement ought to be decided on a summary procedure.
The court stated:

The question of the proper procedure to adjudicate the enforceability of the settlement was addressed in Mackenzie v Mackenzie (1975) BCJ 1114 were the court reviewed the authorities and concluded that the court ought to enforce settlement upon application in the action of justice could be done by proceeding summarily.

The court found that there is a sound policy for the courts to enforce the terms of a valid settlement agreement as stated by the BC Court of Appeal in Robertson v Walwyn et al (1988) 24 BCLR )2d) 385 (BCCA):

“Justice affects both parties and requires a balancing of their interests. The fact that the settlement agreement may not have been a desirable one from the point of view of the Robertsons, or the fact that they may have received for advice from their lawyer, or the fact that the later change their minds, cannot provide grounds for setting aside the settlement agreement, or refusal to enforce it. And it would do scant justice to the interests of the defendants in this case to recognize the validity of the settlement agreement, and that it will ultimately prevail, but to refuse to enforce it at this time and in these proceedings.”

Hawitt v Campbell 1983 Carswell BC 199 (BCCA) set out that a court could refuse to exercise its discretion to perfect a settlement where:

1. There was a limitation on the instructions of the solicitor known to the opposite party;
2. There was a misapprehension by the solicitor making the settlement of the instructions of the client or the facts of the type that would result in an justice or make it unreasonable or unfair to enforce the settlement;
3. There was fraud or collusion;
4. There was an issue to be tried as to whether there was such a limitation, misapprehension, fraud or collusion in relation to the settlement.

The Importance of Pleadings

Pleadings are important. They delineate the issues between the parties and inform the opposing party of the nature of the case they have to meet. Pleadings prevent surprises at trial and limit the issues to be tried.

Parties must plead the legal basis for seeking relief.

Rule 3-1 of the Supreme Court Civil Rules [Rules] addresses what is properly contained in an originating pleading:

Contents of notice of civil claim

(2) A notice of civil claim must do the following:

(a) set out a concise statement of the material facts giving rise to the claim;

(b) set out the relief sought by the plaintiff against each named defendant;

(e) if the plaintiff sues or a defendant is sued in a representative capacity, show in what capacity the plaintiff sues or the defendant is being sued;

(f) provide the date collection information required in the appendix to the form;

(g) otherwise comply with Rule 3-7.

Rule 3-7(18) addresses particulars:

If the party pleading relies on misrepresentation, fraud, breach of trust, wilful default or undue influence, or if particulars may be necessary, full particulars, with dates and items if applicable, must be stated in the pleading.

Rule 3-7(12) addresses pleadings subsequent to a notice of civil claim:

In a pleading subsequent to a notice of civil claim, a party must plead specifically any matter of fact or point of law that

(a) the party alleges makes a claim or defence of the opposite party not maintainable;
(b) if not specifically pleaded, might take the other party by surprise, or
(c) raises issues of fact not arising out of the preceding pleading.

Rule 6-1(8) provides that amendments to pleadings may be granted at trial. Unless otherwise ordered by the court, “if an amendment is granted during a trial or hearing, an order need not be taken out and the amended pleading need not be filed or served.”

There are numerous cases which discuss the purpose and importance of the Rules with respect to pleadings.

In Sahyoun v. Ho, 2013 BCSC 1143, Justice Voith, as he then was, discussed the function of pleadings generally:

[16] The new Rules alter the structure in which pleadings are to be prepared. The core object of a notice of civil claim, however, remains the same. That object is concisely captured in Frederick M. Irvine, ed., McLachlin and Taylor, British Columbia Practice, 3rd ed.; vol. 1 (Markham, Ont.: LexisNexis Canada Inc., 2006 at 3-4 – 3-4.1:

If a statement of claim (or, under the current Rules, a notice of civil claim) is to serve the ultimate function of pleadings, namely, the clear definition of the issues of fact and law to be determined by the court, the material facts of each cause of action relied upon should be stated with certainty and precision, and in their naturel order, so as to disclose the three elements essential to every cause of action, namely, the plaintiff’s right or title; the defendant’s wrongful act violating that right or title; and the consequent damage, whether nominal or substantial. The material facts should be stated succinctly and the particulars should follow and should be identified as such…

[17] These requirements serve two foundational purposes: efficiency and fairness. These purposes align with Rule 1-3 which confirms that “the object of [the] Supreme Court rules is to secure the just, speedy and inexpensive determination of every proceeding on its merits.”

[18] I emphasize efficiency because a proper notice of civil claim enables a defendant to identify the claim he or she must address and meet. The response filed by a defendant, together with the notice of civil claim and further particulars, if any, will confine the ambit of examinations for discovery and of the issues addressed at the trial itself. Proper pleadings limit the prospect of delay or adjournments. They allow parties to focus their resources on those matters that are of import and to ignore those that are not. They facilitate effective case management and the role of the trier of fact.

[19] A proper notice of civil claim also advances the fairness of pre-trial processes and of the trial. Defendants should not be required to divine the claim(s) being made against them. They should not have to guess what it is they are alleged to have done.
…

There are cases which specifically discuss the importance of pleading fraud and misrepresentation. Some disallow claims under those headings where they were not pleaded in accordance with Rule 3-7(18): Karimi v. Gu, 2016 BCSC 1060, at paras. 183-187.

In Grewal v. Sandhu, 2012 BCCA 26, at para. 19, the Court of Appeal held that “[a]n allegation of fraud must be scrupulously pleaded and fully particularized.” In Grewal, the Court held that the plaintiff could not seek to establish a case of fraud against the defendant that depended entirely on the defendant’s husband’s knowledge since there was no pleaded allegation that the husband was a participant in a fraud.
In Terrim Properties Ltd. v. Sorprop Holdings Ltd., 2012 BCSC 985, the plaintiff framed its argument in negligence but had not pleaded it. Justice Melnick held that the negligence claim could not be maintained since the plaintiff had not pleaded negligence. Justice Melnick said the following:

[17] …It is trite law (as well as R. 3-1(2)(c)) that one must plead the legal basis for seeking relief. Neither counsel for the defendants came to court prepared to deal with a claim for negligence. They anticipated, properly, that they were here to meet a claim in nuisance.
[…]
[19] Given the above, it is not necessary for me to come to any conclusions respecting the capacity of Terrim to maintain all of the claims it advances…

Applying a different approach in Berthin v. Berthin, 2018 BCCA 57, the Court of Appeal left open the principle that a pleading need not explicitly say “equitable fraud”:

[22] With great respect, I am of the view that the judge erred in dismissing the fraud claim on the basis that it disclosed no reasonable cause of action. The judge fell into error because he assessed the pleading against the requisite elements of the tort of civil fraud, rather than equitable fraud relied on by Mr. Berthin. The error occurred no doubt in part because the notice of civil claim unhelpfully failed to use the phrase “equitable fraud”. However, counsel for Mr. Berthin made submissions at the hearing based on equitable fraud and in my view the facts and averments pleaded are capable of supporting that cause of action.

In Anenda Systems Inc. v. AL13 Systems Inc., 2020 BCSC 2077 [Anenda], Justice Lyster considered circumstances where, contrary to Rule 3-7(18), the defendant had not provided full particulars of the fraud in which it alleged the plaintiff had engaged. Justice Lyster found that the defendant should have pleaded equitable fraud and granted leave to file a notice of civil claim rather than further amend its counterclaim.

In Whiten v. Pilot Insurance Co., 2002 SCC 18, the defendant argued that the statement of claim did not plead the factual basis for an independent actionable wrong. The statement of claim did include a claim for punitive and exemplary damages. Justice Binnie, at paras. 89 to 90, stated “if the respondent was in any doubt about the facts giving rise to the claim, it ought to have applied for particulars and, in my opinion, it would have been entitled to them.” Justice Binnie noted there was no surprise except as to the quantum of punitive damages. He further noted that the plaintiff had pleaded a breach of the duty to deal fairly and in good faith in handling the plaintiff’s claim.
In Cook v. Neufeld, 2022 BCSC 6:

The general rule is that amendments to pleadings should be permitted as necessary to allow the real issues between the parties to be determined. Although more stringent considerations apply when amendments are sought at the end of trial, provided the proposed amendments would not cause injustice, unfairness or prejudice to the non-amending party, the amendments are generally allowed so that the real issues between the parties can be adjudicated upon: Argo Ventures Inc. v. Choi, 2019 BCSC 86 at paras. 6, 8 and 9; Lam v. Chiu, 2012 BCSC 677 at para. 10.