Settlement Agreements

Entering into Settlement Agreements

Probably every litigator has had the experience of having entered into a settlement agreement only to have the opposing party attempt to repudiate the settlement agreement resulting in a court application to determine if the agreement is valid and enforceable or if it was successfully repudiated.

Kuo v Kuo 2017 BCCA 245 recently upheld a chambers judge who found a settlement agreement to be valid despite the parties not having agreed to the capital gains tax issue.

The BC Court of Appeal reviewed the case law relating to settlement agreements and the desirability of reaching settlement as opposed to a trial.

The judge reviewed several authorities and foundational principles on repudiation. In doing so, he identified the two-question framework outlined in Fieguth v. Acklands Ltd. (1989), 37 B.C.L.R. (2d) 62 (C.A.):

i) was a contract reached?; and

ii) if so, was it repudiated by one party insisting on terms not agreed to?

Legal Framework

37      There is a strong public interest in favour of resolving lawsuits by agreement. As Abella J. observed in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37at para. 11, “[s]ettlements allow parties to reach a mutually acceptable resolution to their dispute without prolonging the personal and public expense and time involved in litigation”. As a result, the policy of the courts is to promote settlement and to enforce settlement agreements: Catanzaro v. Kellogg’s Canada Inc., 2015 ONCA 779. This judicial policy contributes to the effective administration of justice: Kelvin Energy Ltd. v. Lee, [1992] 3 S.C.R. 235, at 259, citing Sparling v. Southam Inc. (1988), 66 O.R. (2d) 225 (Ont. H.C.).

38      When a dispute arises, the first question is whether the parties have agreed on all essential terms of the purported settlement: Fieguth at 70. The usual principles of contract formation apply. The court must analyse the evidence to determine whether, in all the circumstances, it is clear to the objective, reasonable bystander that the parties intended to contract, and whether the essential terms of that contract can be determined with a reasonable degree of certainty: Lacroix v. Loewen, 2010 BCCA 224at paras. 35-36. If they have, unless otherwise agreed, an obligation to furnish a release is implied: Fieguth at 69-70.

39      After a settlement agreement has been reached, the next stage is its completion: Fieguth at 70. Unless the agreement is terminated, the parties must fulfill their obligations, express and implied. Termination by repudiation occurs when a party evinces an intention not to be bound by the agreement and the innocent party elects to accept the repudiation: Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423 at para. 40. A fundamental breach of a primary obligation may also constitute a repudiation because it deprives the other party of substantially the whole mutually intended benefit of the agreement and thus amounts to a refusal to perform: Mantar at para. 11; Doman Forest Products Ltd. v. GMAC Commercial Credit Corp. – Canada, 2007 BCCA 88at para. 109.

40      An intention not to be bound by an agreement may be evinced by words or conduct: Guarantee Co. at para. 40. Depending on the circumstances, this may include silence in response to a request for performance when and after the request is made. In some circumstances, a repudiation may be ongoing, which, unless the agreement is affirmed, provides the innocent party with a continuing right to accept it. However, regardless of how it manifests, the refusal to perform must be clear and unequivocal to amount to a repudiation: Dosanjh v. Liang, 2015 BCCA 18at paras. 43-44; Doman Forest Products at paras. 108-109.

41      It is rare for subsequent conduct to amount to a repudiation of a settlement agreement: Fieguth at 72. For example, while insisting upon an excessive release may evidence an unwillingness to be bound, the mere proffer of such a release does not necessarily have this effect. On the contrary, as Chief Justice McEachern explained in Fieguth at 70, 72:

. . . [Unless otherwise agreed] either party is entitled to submit whatever releases or other documentation he thinks appropriate. Ordinary business and professional practice cannot be equated to a game of checkers where a player is conclusively presumed to have made his move the moment he removes his hand from the piece. One can tender whatever documents he thinks appropriate without rescinding the settlement agreement. If such documents are accepted and executed and returned then the contract, which has been executory, becomes executed. If the documents are not accepted then there must be further discussion but neither party is released or discharged unless the other party has demonstrated an unwillingness to be bound by the agreement by insisting upon terms or conditions which have not been agreed upon or are not reasonably implied in these circumstances.


It should not be thought that every disagreement over documentation consequent upon a settlement, even if insisted upon, amounts to a repudiation of a settlement. Many such settlements are very complicated, such as structured settlements, and the deal is usually struck before the documentation can be completed. In such cases the settlement will be binding if there is agreement on the essential terms. When disputes arise in this connection the question will seldom be one of repudiation as the test cited above is a strict one . . . It will be rare for conduct subsequent to a settlement agreement to amount to repudiation.

Loan or Gift Within the Family?

s it a Loan or Gift Within the Family?

ABP v KGW 2017 BCSC 977 provides a template of the criteria a court will examine in determining if a gratuitous advance of monies or property within a family from parents to children will be a loan or a gift.

5      The topic of gratuitous transfers between parents and adult children was covered in Pecore v. Pecore, [2007] 1 S.C.R. 795, in which it was held that these come freighted with a rebuttable presumption of resulting trust putting the transferee to the onus of demonstrating that a gift was intended. What matters is the intention of the transferor at the time of handing over the property.

6      A template for evaluating whether the presumption has been rebutted was set up in Locke v. Locke, 2000 BCSC 1300, and applied and approved in Kuo v. Chu, 2009 BCCA 405 at para. 9, where the questions to be considered on the loan/gift issue in a family law context were said to include:

a. whether there were any contemporaneous documents evidencing a loan;

b. whether the manner for repayment is specified;

c. whether there is security held for the loan;

d. whether there are advances to one child and not others, or advances of unequal amounts to various children;

e. whether there has been any demand for payment before the separation of the parties;

f. whether there has been any partial repayment; and

g. whether there was any expectation, or likelihood, of repayment.

Undue Delay: Laches

Undue Delay: Equitable Defence of Laches

Hrenyk v Preiss estate 2017 SKQB 151 contains a through discussion of the equitable defence of laches- the plaintiff’s undue delay in proceeding with a court action to resolution.

26 Laches is discussed in Ahone v. Holloway (1988), 30 B.C.L.R. (2d) 368 (C.A.), at page 378:

… Laches is established when two conditions are fulfilled:

(1) there must be unreasonable delay in the commencement or prosecution of proceedings, and

(2) in all the circumstances the consequences of delay must render the grant of relief unreasonable or unjust.

27 Laches was more recently considered by Gabrielson J. in Turcot v. Slade, 2010 SKQB 367, 364 Sask. R. 36at para. 15:

[15] … The equitable doctrine of laches was discussed by the Supreme Court of Canada in M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, [cites omitted] where the court stated at paras. 97 and 98:

97 The leading authority on laches would appear to be Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221, in which the doctrine is explained as follows, at pp. 239-40:

… the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent of a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

. . .

In turn, this formulation has been applied by this Court; see Canada Trust Co. v. Lloyd, [1968] S.C.R. 300; Blundon v. Storm, [1972] S.C.R. 135.

98 The rule developed in Lindsay is certainly amorphous, perhaps admirably so. However, some structure can be derived from the cases. A good discussion of the rule and of laches in general is found in Meagher, Gummow and Lehane, supra, at pp. 755-65, where the authors distill the doctrine in this manner, at p. 755:

It is a defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either (a) acquiesced in the defendant’s conduct or (b) caused the defendant to alter his position in reasonable reliance on the plaintiff’s acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb …

Thus there are two distinct branches to the laches doctrine, and either will suffice as a defence to a claim in equity. What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches under either of its two branches. Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.

(Emphasis added)

. . .

35      The applicant asserts that the respondent bears the burden of establishing laches, relying on the following comments of Caldwell J.A. in Olney Estate v. Great-West Life Assurance Co., 2014 SKCA 47, 438 Sask. R. 47 (Sask. C.A.):

75 … the doctrine of laches is an equitable defence which must be made out on the evidence by the party who asserts it. If the evidence adduced by the party relying on the doctrine makes out the availability of the defence, the onus shifts and the other party is logically and properly put to the burden of adducing evidence to dispel its application; however, the law does not require a party to make out the party opposite’s defence.

[emphasis in original]

36      I must first determine whether the respondent has established that the applicant acquiesced in the respondent’s position. In Gottselig Estate v. Gottselig Estate, 2014 SKQB 20 (Sask. Q.B.) at paras 51, 54 and 55, (2014), 436 Sask. R. 144 (Sask. Q.B.), Barrington-Foote J. explained the relationship of acquiescence to the doctrine of laches:

51 Laches is an equitable doctrine. In Waters’ Law of Trusts, supra, the principled justification for the doctrine is described as follows: (at p. 1242-43)

No legal system could allow a person who has a legal claim to do nothing over a long period of time to then assert it, and bring his action because it pleases him at that moment to do so. A would-be defendant is reasonably entitled to ask that action shall be brought when the evidence, particularly in his own favor, is still available and at least relatively fresh. Nor is it unreasonable for him to assume, if the would-be plaintiff does nothing for a considerable period of time, that the latter has condoned the wrongdoer’s act or omission, and intends that the wrongdoer may arrange his affairs accordingly. Courts of equity traditionally adopted these views, and applied them in the doctrine of laches. The claimant who delayed bringing his claim for an unreasonable period of time was taken to have acquiesced in the circumstances brought about by the wrongdoing. (footnotes omitted)

. . .

54 Laforest J. [in M. (K.) v. M. (H.), [1992] 3 S.C.R. 6] also explores the concept of acquiescence, which is not only relevant to a consideration of laches, but is a separate equitable doctrine. The following comments in Waters’, supra, are instructive: (at p. 1254)

[The doctrine of laches] is also closely related to the doctrine of acquiescence which in recent years has increasingly become associated with delay in bringing action. Indeed, it is more likely that what the courts are really concerned with is implied acquiescence rather than delay itself. This is particularly true today when limitation statutes expressly apply to so many actions brought in equity…[Acquiescence] is something more than a mere abstaining from legal proceedings; it is an adoption established by some positive evidence of the transaction or dealing which the claimant now disputes. … (footnotes omitted)

55 This statement is consistent with Laforest J.’s explanation of acquiescence, and its relationship to laches, which is as follows:

100 Acquiesence [sic] is a fluid term, susceptible to various meanings depending upon the context in which it is used. Meagher, Gummow and Lehane, supra, at pp. 765-66, identify three different senses, the first being a synonym for estoppel, wherein the plaintiff stands by and watches the deprivation of her rights and yet does nothing. This has been referred to as the primary meaning of acquiescence. Its secondary sense is as an element of laches — after the deprivation of her rights and in the full knowledge of their existence, the plaintiff delays. This leads to an inference that her rights have been waived. This, of course, is the meaning of acquiescence relevant to this appeal. The final usage is a confusing one, as it is sometimes associated with the second branch of the laches rule in the context of an alteration of the defendant’s position in reliance on the plaintiff’s inaction.

101 As the primary and secondary definitions of acquiescence suggest, an important aspect of the concept is the plaintiff’s knowledge of her rights. It is not enough that the plaintiff knows of the facts that support a claim in equity; she must also know that the facts give rise to that claim: Re Howlett, [1949] Ch. 767. However, this Court has held that knowledge of one’s claim is to be measured by an objective standard; see Taylor v. Wallbridge (1879), 2 S.C.R. 616, at p. 670. In other words, the question is whether it is reasonable for a plaintiff to be ignorant of her legal rights given her knowledge of the underlying facts relevant to a possible legal claim.

Occupational Rent – Competing Damages Between Co-Owners

Occupational Rent - Competing Damages Between Co-Owners

Ajayi v Oziegbe  2017 ONSC  2732 discussed the concept of occupational rent where one co owner occupies a jointly owned property to the exclusion of the co owner, and the co owner seeks damages for the use of the property and the occupying party seeks competing damages for the costs of carrying on the property such as maintenance and upkeep.

Occupation Rent and Carrying Costs

101      This brings me to Mr. Ajayi’s claim for occupation rent. The principles relating to occupation rent are set out in Erb v. Erb, 2003 CanLII 2112 (ON SC), where the Court stated at paras. 73 and 74:

In evaluating the claim for occupation rent, the jurisprudence establishes that a court has jurisdiction to grant occupation rent where it would be equitable and reasonable to do so. The court should look to a number of factors, including when the claim was first raised, the duration of the occupancy, as well as other circumstances existing between the parties: McColl v. McColl (1995), 12 R.F.L. (4th) 449; McKinlay v. McKinlay (1996), 22 R.F.L. (4th) 212. I subscribe to the observations of J.W. Quinn J. as set forth in paragraph 57 of Higgins v. Higgins, [2001] O.J. No. 3011. I think the case of Adams v. Adams (2001), 15 R.F.L. (5th) 1, relied upon by the defendant, to have little application to this case in that there the amounts paid by the husband were “prepayments” on the mortgage and were agreed by him to have been paid voluntarily for the family’s benefit. The expenses paid by the plaintiff in this case were not of that type or for that purpose.

I accept the defendant’s submission, supported as it is by remarks in Higgins, supra that as a basic proposition there should be an allowance for occupation rent if there is a claim for expenses during occupancy and prior to sale. The evaluation of those competing interests has to be decided based on all the circumstances in the case.

102      In resisting a claim for occupation rent, Ms. Oziegbe points to the decision of Horkins J. in B(J) v. M.(D.), 2014 ONSC 7410, where she states at para. 152:

The facts of this case do not support the respondent’s claim for occupancy rent. The respondent’s inability to use the matrimonial home arose from his criminal conduct when he assaulted the applicant. The applicant has been solely responsible for all of the household expenses since separation. It is not reasonable or equitable to award occupation rent given these facts. The request is denied.

103      When these decisions are reviewed, it is clear that the Court has the ability to consider the equities of the case in deciding whether to order occupation rent. The conduct of Mr. Ajayi in assaulting Ms. Oziegbe is a factor that supports denying Mr. Ajayi’s claim for occupation rent. However, I am of the view that this factor is outweighed by the factors in favour of granting occupation rent. These factors are:

a) The title to half the property should have been with Mr. Ajayi, and his equity has been tied up in the home, preventing him from investing it elsewhere.

b) Mr. Ajayi is responsible for the carrying costs for the home. As noted by Glithero J. in Erb, supra, where there is a claim for expenses there should be an allowance for occupation rent.

c) The delay in Mr. Ajayi obtaining his equity between September of 2015 and now is as a result of Ms. Oziegbe defending this case, and claiming that there was no resulting trust.

104      The parties have agreed on the amount that should be charged for occupation rent, and I have included that in my calculations in Appendix “1”. When the carrying costs are set off against the occupation rent, then Mr. Ajayi owes Ms. Oziegbe an adjustment of $5,773.44, which will be paid out of the proceeds from the house.

Property Partition and Sale Ordered for Joint Tenants

Property Partition and Sale Ordered for Joint Tenants

Bindley Estate v Quartermaine Holding Ltd. 2017 BCSC 672 ordered partition and sale of a property %50 owned by two parties where one party wished to sell and the other refused. They we unable to agree on a price for the respondent to buy out the petitioner’s interest. The petitioner estate wished to sell in order to wind up the estate of a deceased owner in a residential apartment .

The Court ordered a sale of the property pursuant to section 6 of the Partition of Property act.

Sections 2 and  6 of the act states: 

2 (1)  All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.

6  In a proceeding for partition where, if this Act had not been passed, an order for partition might have been made, and if the party or parties interested, individually or collectively, to the extent of 1/2 or upwards in the property involved request the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property, the court must, unless it sees good reason to the contrary, order a sale of the property and may give directions.

[27]        In McRae v. Seymour Village Management Inc., 2014 BCSC 714, a case involving a condominium development near Seymour Mountain in North Vancouver where 105 owners wanted to sell and 9 did not, Justice Fenlon stated at para. 20:

… [T]he Court, in exercising its discretion, is concerned with doing justice and must ultimately weigh the significance of the respondents’ reasons for objecting to the sale against the petitioners’ interest and reasons for wanting the [sale]. …

[28]        In the end, and as all the cases seem to agree, it is a matter of discretion under s. 6. In the exercise of the court’s discretion, the court must act judicially and fairly. One consideration will be whether an overriding fairness and similar result can be obtained by some other reasonable process: Richardson. v. McGuinness (13 December 1996), Vancouver Registry, C965381, (B.C.S.C.) at para. 34.

[38]        The court has a broad discretion to fashion a remedy that brings the parties’ dispute to an end in the fairest and most appropriate possible way. The respondent asks that if an order for sale is to be made, that I consider postponing it to allow for some tax planning and possible refinancing. The petitioner says that, given that this petition was filed some six months ago, the respondent has had sufficient time already.

[39]        I have considered the various options that may help a party solve this impasse. I find that the most appropriate remedy is to make the following orders:

a)     On or before June 9, 2017, and absent an agreement to the contrary, or absent any further court order, the parties will jointly appoint and engage an independent real estate broker (the “Broker”) to offer the Property for sale and obtain the highest price and most favourable terms (collectively called the “Sale Terms”) available on the open market. If the parties are unable to agree on the Broker to be engaged, the parties are at liberty to apply for an order in respect thereof.

b)     The respondent is at liberty to apply for an extension for the listing of the Property for sale past the June 9, 2017 deadline should the respondent consider it has appropriate grounds for an extension.

c)     Each of the parties may submit an offer to purchase the Property if either so wishes, provided that neither of them will act or omit to act in any way that affects the integrity of the sales process and the Broker’s mandate as set out in this order.

d)     Except as provided in subpara. (e) below, and subject to a right of first refusal, the Property will be sold pursuant to the sale terms, and upon completion of the sale, the net sale proceeds will be distributed equally between the parties.

e)     Instead of a sale of the Property, upon a determination of the sale terms, each of the parties may offer to purchase from the other that other’s 50 percent interest in the Property for an amount equal to the net amount that the vendor will receive if the Property is sold pursuant to the sale terms.

f)      If necessary, each party has liberty to apply to the court for directions with respect to the marketing of the Property or as to the conduct of sale on three days’ notice to the other if such directions are necessary.

g)     All necessary accounts, directions and inquiries may be taken, including a determination of net income owing to the parties, from the operation of Property, up to the date the sale of the Property completes.

h)     The parties have liberty to apply for the appointment of a trustee to conduct the sale of the Property and to distribute the net sale proceeds as the court directs.

Understanding the Value of Life Estates

Life estates or life interests means that someone gets the use of a piece of property or some monies and investment or something along those lines for their lifetime and then after they pass away, the interest, whatever it was, goes to what is known as the remainder then.

Many issues can arise in the course of a life estate because many years, of course, are involved in the use of it and this video and paper deal with many of those types of issues. A life estate can be created by many different ways such as a will or a trust or a court order or a transfer or an intestacy. As it pertains, it lasts for a lifetime and then ceases to exist. The value of this can be a substantial sum of money. If it’s for example a house, it would be the value of the use of that property such as rent for the whole lifetime of the person or it may not be substantial enough at all depending on the circumstances.

2 Ways the Revocation of Wills Can Happen in Vancouver

A revocation of a will in British Columbia can happen in two different ways. For example, the test dater can rip it up with the intention of revoking it. He can burn it, destroy it, and any other matter of destruction of the will with the intention of revoking it, or it can happen by operation of law. For example, when a married couple divorced, the gift to the husband is revoked. The rest of the will is valid.

Revocation is a very important topic in the estate litigation issue as you can well imagine. It is important to safeguard that original will because if the original will cannot be produced, there is a presumption in law that the testator intended to revoke it provided that the will was in his or her possession at the time it went missing. This can have disastrous effects to some of the main beneficiaries. So, anything you need to know about revocation of wills, please feel free to contact us.

How the Award of Court Costs are Made in British Columbia

This video is about court costs. Typically and historically, court costs often came out of the estate. The unsuccessful party did not have to pay the winning party and that was the way it was for many, many years. Approximately 20 years ago in British Columbia, the courts began to be more discriminated on how the award of court costs was made.

There are typically a few different scenarios that can have different implication for costs. If for example, the reason of the court application is the testator’s own fault, for example, the will is ambiguous, then the court will typically award court costs out of the estate. If on the other hand, the parties are having a legal dispute over the validity of a will or such things, the court has a discretion to award cost and might very well award court costs to the winning party against the losing party, that is, the losing party would have to pay a contribution towards the legal fees of the winning party.

Typically an executor is entitled to be reimbursed for his or her legal fees if incurred properly. There’s a great number of different scenarios of cost in this video. The one I caution litigants about is the award of special costs. If for example a litigant claims undue influence against another party and fails to prove it at court, the trial judge may very well award special costs against the losing party which means that the losing party has to pay 100 percent of the winning party’s legal fees. That can be a very significant sum of money.

Mr. Attorney – Don’t Change the Wills Variation Act

The Wills Variation Act was written in approximately 2007 after the government of British Columbia the year prior announced that they intended to make slipping changes to wills and succession legislation in British Columbia. The overriding change was to change the Wills Variation Act provision so that adult independent children could no longer contest the will in British Columbia if they were inadequately provided for. The overriding reasoning for this change was that it would now bring British Columbia into more accord with the law of the rest of Canada.

My wife Judith Milliken and I led the fight against these proposed changes. I travel to various bar meetings. We wrote letters, and Judith in particular wrote this article and mailed it to the attorney general and republished it. It is a compelling story as to why the Wills Variation Act should not have been changed and I’m pleased to say that at the end of the day, we won. The government of British Columbia backed down and are not changing that provision of the Wills Variation Act.

Using DNA in Vancouver Estate Litigation for Proof of Paternity

DNA in British Columbia estate litigation is widely used and it is readily accepted by the courts as proof of paternity in particular. The first time I used DNA was in approximately 1991 when somebody committed suicide off a ferry. Their body was never found. A child from the Northwest Territories of Canada came forward and said that he was her father. She had no proof whatsoever of this. She had a photograph of him in which he looked somewhat like him but other than that, the marriage certificate and birth registration made no mention of this child.

We obtained DNA from the deceased siblings across the country and it concluded that 99.99 percent that she was his child. He died without a will. She inherited his entire estate. It is common to use DNA in estate litigation as many, many people find out late in life that who they thought was the father was in fact not their father. I recently had this happen of the 55 year-old man who found out that his father was not in fact his father and another man who had lived with the family was. It was quite a shock, needless to say. Court orders can be obtained to force people to grant DNA. It is a discretionary remedy but such an order can be obtained if it is necessary. I’ve done so in several occasions.