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Hidden Assets: Abuse of Process

Hidden Assets- Abuse of Process - Disinherited

The Court of Appeal in Estate v Esteghmat-Ardakani 2018 BCCA 290 upheld the dismissal of a claim on the basis of abuse of process as the appellant hid assets and in one court action disavowed beneficial owner of the assets and in another court action claimed beneficial ownership of the same assets.

In a divorce action the appellant asserted that she held millions of dollars of property in trust for her mother.

After settlement of the divorce action, the appellant then commenced a court action against her sibling and another, asserting she was the beneficial owner of property that she had previously asserted in another court action that she held in trust for her mother.

The court found that in the context of the allegation of inconsistent pleadings, the financial statement filed in the divorce action was tantamount to a pleading, and the appellants deliberate inconsistent pleadings were an abuse of process, causing dismissal of her claim.

In the trial judge’s reasons for judgment 2017 BCSC 878, the court stated that in the divorce action the appellant:

1) Did not disclose key facts as required by law and oath;
2) deceived the opposing counsel and the court;
3) perpetrated a fraud designed to cheat, using the court and its processes;
4) used false documents and false discovery evidence to mislead her own counsel and the opposing counsel;
5) attended the divorce hearing and remain silent while knowing of her sworn false filed form financial statement, and the false and concocted story she gave during her examination for discovery.

The trial judge found that the appellants action was an abuse of process because she was attempting to pursue inconsistent rights by claiming in the divorce action that she did not have a beneficial interest in certain property and then, in the action against her mother and siblings, claiming she did have that interest.

The court stated at paragraph 33:

“A litigant cannot use the court’s process to state one set of rights in a proceeding, and then a subsequent proceeding assert rights inconsistent with the rates for stated. Otherwise, uncertainty would result in many paths of mischief would be introduced into our law for the avaricious, the malicious, and the vexatious. The litigant must elect at the outset, which set of rights the litigant wishes the court to recognize.

The court further stated that her actions to continue would bring the administration of justice into disrepute, citing Regina v . Grant 2009 SCC 32 at paragraph 68 for the principle that the reputation of the justice system, including that of the courts, must be understood in the long sense of maintaining the integrity of and public confidence in the justice system.

The trial judge referred to an off cited passage from Cunha v Cunha (1994) 98 BC LR93 at paragraph 9 that nondisclosure of assets is the cancer matrimonial property litigation, and the judge of kind that not permitting the appellants claim to continue would impress upon family law litigants the need to be true thoughts with respect to disclosure of their assets.

I would applying that the same principle would apply in estate litigation.

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