Dismissal of Court Claim For “Want of Prosecution”

Delay

McBeth-Kearns v Marples 2012 BCSC 714  is an estate litigation case that like so many, can often end up sitting on the lawyer’s desk or filing cabinet for  years.

Charles Dickens wrote about the inordinate delay in estate litigation back in his day in his lengthy novel Bleak House involving a 50 year estate lawsuit.

I recall that the first time I made an application on behalf of the defendant to have the plaintiffs claim dismissed for want of prosecution, that file that had been left undisturbed for four years, yet as a result of my application to dismiss, suddenly flourished into a 9 day trial, all of which my client ultimately blamed me

Sometimes there is merit in the adage “let sleeping dogs lie”.

In the McBeth-Kearns case the plaintiff had commenced a court action in 2005 claiming an interest in certain land.

Seven years later she consented to the removal of a certificate of pending litigation that she had filed, in order to permit the sale of the land, with the proceeds to be held in an interest-bearing lawyers account.

The defendant brought on an application in April of 2012 to have the plaintiffs claim dismissed for want of prosecution, given that she had taken no steps in the court action for more than three years.

The court found that the delay had been inordinate and  inexcusable, but did not dismiss the claim on the basis that justice would not require such a dismissal without a trial on the merits.

In support of that decision  Justice Joyce found that there would be no substantial prejudice to the defendants in having a trial, and finding that the plaintiff did have an arguable claim, that at best could succeed for no more than half of the funds.

Accordingly the judge ordered half of the funds held in trust to be released to the defendant, and ordered that the plaintiff set the matter down for trial.

Justice Joyce, as he usually does, gave an extensive review of the law, in this case  relating to an application to dismiss the plaintiffs claim for want of prosecution.

That excerpt of law is as follows:

 

DISMISSAL FOR WANT OF PROSECUTION The Legal Test

[29]    The starting point for a discussion of the law that applies on an application to dismiss an action for want of prosecution is Irving v. Irving (1982), 38 B.C.L.R. 318 (C.A.) [Irving], where Seaton J.A. referred to the judgments of the English Court of Appeal in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229 (C.A.). At para. 8, he referred to the following statement of Salmon L.J.:

In order for such an application to succeed, the defendant must show:

  1. that there has been inordinate delay. It would be highly undesirable and indeed impossible to attempt to lay down a tariff – so many years or more on one side of the line and a lesser period on the other. What is or is not inordinate delay must depend upon the facts of each particular case. These vary infinitely from case to case, but inordinate delay should not be too difficult to recognize when it occurs.
  2. that this inordinate delay is inexcusable. As a rule, until a credible excuse is made out, the natural inference would be that it is inexcusable.
  3. that the defendants are likely to be seriously prejudiced by the delay. This may be prejudice at the trial of the issue between themselves and the plaintiff, or between each other, or between themselves and the third parties. In addition to any inference that may properly be drawn from the delay itself, prejudice can sometimes be directly proved. As a rule, the longer the delay, the greater the likelihood of serious prejudice at the trial.

If the defendant establishes the three factors to which I have referred, the court, in exercising its discretion, must take into consideration the position of the plaintiff himself and strike a balance. If he is personally to blame for the delay, no difficulty arises. There can be no injustice in his bearing the consequences of his own fault.

In the end, the court must decide whether or not on balance justice demands that the action should be dismissed.

[30]    Further at para. 8, Seaton J.A. also referred to the following statement of Diplock L.J.:

It is thus inherent in an adversary system which relies exclusively upon the parties to an action to take whatever procedural steps appear to them to be expedient to advance their own case, that the defendant, instead of spurring the plaintiff to proceed to trial, can with propriety wait until he can successfully apply to the court to dismiss the plaintiffs action for want of prosecution on the ground that so long a time has elapsed since the events alleged to constitute the cause of action that there is a substantial risk that a fair trial of the issues will not be possible.

 

It is then a Draconian order and will not be lightly made. It should not in any event be exercised without giving the plaintiff an opportunity to remedy his default, unless the court is satisfied either that the default has been intentional and contumelious, or that the inexcusable delay for which the plaintiff or his lawyers have been responsible has been such as to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible at the earliest date at which, as a result of the delay, the action would come to trial if it were allowed to continue.

[31]    In Busse v. Chertkow, 1999 BCCA 313 [Busse], Goldie J.A. considered the question of who bears the onus with regard to the issue of prejudice if the defendant demonstrates inordinate, inexcusable delay. At para. 18, he said:

18       In my view, it is open to this Court to adopt the principle that once a defendant has established the delay complained of has been inordinate and is inexcusable a rebuttable presumption of prejudice arises. To continue imposing the evidentiary burden of proving prejudice after establishing inordinate and inexcusable delay is contrary to the object expressed in sub-rule (5) of Rule 1 of the Rules of Court.

[32]    In Tundra Helicopters Ltd. v. Allison Gas Turbine, 2002 BCCA 145 [Tundra Helicopters], Esson J.A., at paras. 35-36, made this comment with regard to the “rebuttable presumption of prejudice” referred to in Busse:

35         I also regard it as error in principle to dispose of the issue of prejudice by asking
whether the plaintiffs had rebutted* the presumption of prejudice that arises in the
circumstances’ and by going on to answer that question in the negative. The
“presumption of prejudice” is not a presumption of law. It can be termed a presumption
of fact but only in the sense, as it is put in Sopinka and Lederman “The Law of Evidence
in Civil Cases”, 1974 at p. 378:

The term “presumption of fact” is used in many instances in which it is desired merely to shift the secondary burden to a particular party. When used in this sense, it means that the facts are such that a certain inference should, but need not, be logically drawn.

36         It is in that sense that the word “presumption” is employed in Busse v. Robinson
Morelli Chertkow, supra. In considering whether the presumption of prejudice has any
application in a particular case, the question properly to be asked, as stated by Goldie
J.A. in para. 27 of Busse, is:

… has the plaintiff established on a balance of probabilities that the defendant has not suffered prejudice or that other circumstances would make it unjust to terminate the action?

In considering that question it may be misleading to approach it by asking whether the plaintiff offered evidence on the point. In most cases, it will only be the defendant who is in a position to offer evidence as to the existence of specific prejudice – as two of the defendants attempted to do in this case. The plaintiff often will be able only to point to the overall circumstances, including the absence of any evidence from the defendant of specific prejudice, as establishing on the balance of probabilities that serious prejudice has not been suffered.

[33]    In a relatively recent decision, PMC Builders & Developers Ltd. v. Country West

Construction Ltd., 2009 BCCA 535 at paras. 27-28, after reviewing Tundra Helicopters, Irving and Busse, Low J.A. summarized the test as follows:

27        These cases suggest to me that a chambers judge charged with the hearing of
an application for dismissal of an action for want of prosecution is bound to consider the
following:

  1. the length of the delay and whether it was inordinate;
    1. any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances;
    2. whether the delay has caused serious prejudice to the defendant in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be readied for trial after its reactivation by the plaintiff; and
  2. whether, on balance, justice requires dismissal of the action.

28        I consider the fourth question to encompass the other three and to be the most
important and decisive question.

The Missing Hell’s Angel and the Presumption of Death

Missing Hells Angel

The Presumption of Death  and Missing Hells Angel

Re Burgess, 2004 BCSC 62,  in estate circles known  as the “Hell’s Angels case”, is good illustration of the practical considerations often applied by the court in presumption of death applications.

On or about January 7, 2002, Burgess, an actor and stuntman in the movie industry, disappeared . He had membership in the local Chapter of Hell’s Angels Motorcycle Club. On the date of his disappearance, he was planning to attend the regular meeting of the Hell’s Angels local scheduled for the following day.

Four days later, an RCMP constable phoned Burgess’ wife.  He told her that, based on confidential information he had received, in his opinion her husband had been killed by the Hell’s Angels. That same day, a member of the Hell’s Angels club arrived at the Burgess home and requested that his wife turn over his “colours”. Evidence was presented that it was the custom of the club to retrieve club colours when a member died, accidentally or otherwise.

The surviving wife and mother of Burgess’ two children successfully applied under the Survivorship and Presumption of Death Act for a declaration that Burgess was presumed to be dead.

The court found that on the balance of probabilities Burgess had died by misadventure.

Ms. Carmichael has outlined the law for me which is nicely summarized in the contrasting decisions of the Saskatchewan Court of Appeal in Re: Noga et al and Prudential Insurance Co. of America et al (1971), 20 D.L.R. (3d) 331 and the British Columbia Court of Appeal in Re: Martin, Martin v. Prudential Insurance Company of America et al, [1954] 1 D.L..R. 762.

In the Saskatchewan case, Mr. Noga was a widower who owned his own home and had no financial or other problems and enjoyed an amicable relationship with his daughters.  The Court found a complete absence of evidence that he had any compelling motive to disappear, and the presumption to be drawn was that Mr. Noga was dead.

Re Burgess stated :

 

[31]        In contrast, Mr. Martin had domestic as well as financial difficulties and had been drinking heavily for some 18 months.  He disappeared on a night ferry crossing to Victoria.  He had been seen intoxicated during the voyage.  He was last seen at 3:30 a.m. and described as “very despondent”.  His disappearance was reported when the ferry docked at 7:30 a.m.  Prior to that time he had given his suit coat to a companion, placed his return tickets in his companion’s purse and removed his identification from his suit coat.

 

[32]        Culliton, C.J.S. in Noga at p.334 said:

[If at the end of the day] “the scales are left in equilibrium”, as between the presumption of continuing life and the presumption of death, the applicants have not discharged the onus resting upon them.  If the conflicting inferences are of equal degrees of probability, then a choice between them is one of conjecture; there must be evidence when on balance and comparing the probabilities from which it can be said that one probability is more reasonable than the other.

 

[33]        In Noga the Court found the presumption to be drawn was that Mr. Noga was dead.  In contrast in Martin the Court found the scales were left in equilibrium.

 

[34]        The Supreme Court of Canada has widened the scope for the acceptance of hearsay evidence in the “hearsay trilogy of R. v. Khan, [1990] 2 S.C.R. 531, R. v. Smith, [1992] 2 S.C.R. 915 and R. v. B. (K.G.), [1993] 1 S.C.R. 740.  The circumstances are such that I consider the police information to be reasonably trustworthy, the police officers would be disinterested, and the statements would not be made with thought of litigation in mind.  The sources are possessed of a peculiar or special means of knowledge.  And there is some consistency in the reported statements of both the police and the members of the motorcycle gang. The underpinnings of the admission of the comments of the police and the Hells Angels Club member are an necessity, which is plainly the case here, and reliability, which I find may reasonably be inferred.

[35]        The evidence satisfies me that no person has seen Rick Burgess since January 7, 2002.  The last recorded activity appears to have been at midday, that day, on his telephone.  While the evidence of events after Mr. Burgess’ disappearance are by their nature hearsay, they are in the circumstances the best evidence available and can only lead to the conclusion, that the “dark side” of Mr. Burgess’ life caught up with him and the only reasonable inference is that his life has been ended by “person unknown”..

[36]        I am satisfied on the balance of probabilities that Mr. Burgess died by misadventure.

Public Guardian and Trustee Can Be Sued For Mismanagement

Public Guardian and Trustee Can Be Sued For Mismanagement

It is clear that the Public Trustee can be held liable for damages arising out of its negligent management of the patients estate.

This was initially confirmed by the British Columbia Court of Appeal in Wood v.  British Columbia (Public Trustee) (1986), 70 B.C.L.R. 373 ( C.A.)

In Leigh as Litigation Guardian for Beeger v Wynford Realty and the Public Guardian and Trustee of British Columbia 2012 BCSC 583, an action was brought by way of a litigation Guardian on behalf of an elderly widow, for alleged mismanagement of her affairs while she was incapable and under their management from 2002 until 2007.

The statement of claim alleged that the PGT managed the affairs of Mrs. Beeger as her trustee and in that capacity managed and sold a three storey rooming house at 568 Powell Street in Vancouver.

Wynford is said to have acted as the PGT’s agent in respect of the management of the property.

It is alleged that in breach of the fiduciary duties owed to Mrs. Beeger, and breach of the standard of care owed to a person incapable of managing her affairs, the PGT or Wynford:

(a)            did not maintain the property, resulting in a high vacancy rate and loss of income;

(b)            did not attend to its cleanliness resulting in high vacancy and diminution in the value of the property;

(c)            lost rent cheques;

(d)            kept poor accounts;

(e)            did not prevent damage to the property;

(f)              did not manage the property well;

(g)            borrowed money to conduct repairs that were ineffectually done.

The plaintiff alleged that losses had been suffered as a result of those errors or omissions, including a constant loss of income from 2002 to 2007; deterioration in the physical condition of the property resulting in diminishment in its value; and a sale of the property at a price lower than its market value, and, therefore, loss of income and loss of capital from which income could be earned.

The plaintiff brought an application to amend her pleadings and the court refused to allow an amendment whereby the plaintiffs sought to advance a claim for damages for the family or beneficiaries of the plaintiff, that they have suffered as a result of the mismanagement of the estate.

The court held that such a claim is incapable in law of being advanced by the plaintiff.

The court had no problem with the claim that the Public Guardian breached the standard of care by failing to act in the best interest of the plaintiff herself, but

would allow not the plaintiff  to make such a claim on behalf of her family or beneficiaries.

Credibility Revisited

Believable LiesThis blog revisits the law relating to credibility.

On November 4.11 disinherited.com blogged ” The Importance of  Credibility“.That is an understatement  and then some.The following observations of O’Hallaran J.A. in Faryna v. Chorny (1951), [1952] 2 D.L.R. 354 (B.C. C.A.) 354 at pp. 356-357 are often cited when the issue of credibility is before the Court:On reflection it becomes almost axiomatic that the appearance of telling the truth is but one of the elements that enter into the credibility of the evidence of a witness.

Opportunities for knowledge, powers of observation, judgment and memory, ability to describe clearly what he has seen and heard, as well as other factors, combine to produce what is called credibility…

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth.

The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions.

In short, the real test of the trust of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. “

 

If your witnesses have no credibility, your case has no credibility, and the best counsel in the world will not win the case.

 

Is it believable?

Mediation Works In Estate Litigation

Mediation

disinherited.com concluded another successful mediation this week.

While discussing the overall process of mediation with the mediator, we realized that 19/20 of our last mediations together have resolve successfully.

That 95% success factor in mediation is in itself astounding as it is the approximate general average of overall success in the mediation process.

To disinherited.com it is even more astounding, given the propensity for a huge amount of emotion between estate litigants fighting   over a loved one’s estate.

That scenario is juxtaposed to businessman seriously trying to resolve a business dispute that usually contains little personal animosity.

Mediation works and should be encouraged in the litigation process.

Mediation as used in law is a form of alternate dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects.

Typically a third-party, usually a highly skilled mediator who is often a senior lawyer, but not necessarily, assists the parties to negotiate a settlement.

Mediation has been used for many years in a variety of domains, particularly commercial, community and diplomatic contexts, while in more recent years it has become more generally accepted in legal disputes, particularly those involving business and family matters.

It is a very interesting process to participate in, and the 90+%  success factor speaks for itself.

In most situations it is far preferable to a judge making a decision in which one party generally loses and another party wins.

In a successful mediation it is a win-win situation for everyone.

If the mediation process fails and no agreeemnt is reached, there is still a trial as a last resort.

Mediation broadly refers to any instance in which a third-party helps others reach agreement.

It has a structure, a timetable, a dynamic all of its own, and it is strictly confidential.

The mediator is 100% neutral and simply facilitates rather than directs the process.

For most civil disputes in British Columbia one-party can compel the other to attend and mediation.

While it is true that one cannot compel the other to negotiate in good faith at the mediation, it is the experience of disinherited.com that the mediation  time is never wasted and is nearly always fruitful.

Mediators use various techniques to open, improve, and achieve dialogue between the disputants , with the sole purpose of helping the parties reach an agreement .

The negotiators that disinherited.com use for estate litigation are very senior lawyers that are highly skilled in the mediation process and restrict their legal  practice to same.

The advantages of mediation over litigation are as follows:

1. It is usually far cheaper for the litigant;

2. The process is usually much faster than waiting for examinations for discovery and trial;

3.  The process is confidential, courts are public

4. Parties have far more control to negotiate an agreement that best suits everyone,as opposed to having a judge impose a settlement;

5. There is generally more compliance with the agreement because the parties have negotiated in good faith-the agreement also has the force of law;

6. Mutuality- the dynamics of mediation generally involve hearing the other parties side and assuming this to move their positions towards a more amenable position that can result in a mutual settlement;

7. The skills of the mediator are often not realized at the time but they often are the neutral arbitrator who can guide party to accept a broader variety of solutions

8. The entire structure and dynamics of mediation are designed to restrict pressure, aggression intimidation and instead to promote communication and understanding through cloning speaking and listening skills.

 

It is the position of disinherited.com that generally speaking all litigants should firstly proceed through the mediation process before being allowed to proceed to a trial.

Trials are very expensive and are a burden on the taxpayer at the end of the day.

Parties should be encouraged to try and resolve their own disputes through mediation before being allowed to utilize the court system for trial.

Court Orders Production of Public Guardian Investigation File

disinherited.com does not usually report on court decisions from other jurisdictions, but the re Landry Estate case from Ontario ( 2011 CarswellOnt 8830) is one that I believe that would also be followed in British Columbia, if such a decision in fact does not already exist.

The facts are reasonably straightforward – the court application dealt with the scope of the production of documentsin the  discovery stage of the litigation process.

Prior to the death of the deceased, the office of the Public Guardian and Trustee commenced investigation into his financial affairs and management of his estate.

That investigation terminated on the death of the deceased on July 5, 2010.

The daughter of the deceased sought to challenge her father’s testamentary capacity and ability to execute a new will and power of attorney, as well as the respondents management of her father’s property under the power of attorney.

The daughter brought a motion for the production of the documents in possession of the Public Guardian, and that order was granted by the court.

The court reasoned that all disclosure in question was extremely important to the litigation, and the investigation of the Public Guardian was extremely relevant to the issues raised in the litigation.

The issues that were something about which the respondent also had intimate knowledge, and something about which the daughter of the deceased had no knowledge.

Therefore it would be unfair to the daughter to have her proceed to trial without complete and unfettered disclosure.

Additionally,  the documents were not available from any other source.

disinherited.com applauds such decisions that grant complete and unfettered disclosure of the financial affairs of a deceased person when legitimately challenged in court proceedings such as this case.

It is often the case in estate litigation that one party has knowledge of matters such as lack of capacity to the exclusion of others, and that any records of that knowledge should be produced in the litigation process.

Court Refuses Special Costs But Awards Increased Costs On Scale C

Court Refuses Special Costs But Awards Increased Costs On Scale C

In our previous blog we discussed the award of special costs made against an estate  administrator who breached his duties.

In  Antrobus v Antrobus  2012 BCSC 613, the Court declined an award of special costs but instead ordered costs to be increased under Tariff C of  The Rules of Court, rather than at the usual Tariff B.

The Court found that the behavior of the defendants, while unusual, was not reprehensible so as to warrant the punishment of special costs.

The terms “scandalous, outrageous or reprehensible” and “deserving of reproof or rebuke” are used to describe the conduct of a party that warrants special costs:  Camaso v. Egan, 2011 BCSC 954 at para. 6.

As stated in other cases, a special costs award goes beyond indemnity and enters the realm of punishment:  380876 British Columbia Ltd. v. Ron Perrick Law Corp., 2009 BCSC 1209 at para. 14, relying on Fullerton v. Matsqui (District) (1992), 74 B.C.L.R. (2d) 305 (C.A.) where evidence presented by one party was calculated to mislead the judge and jury.

Scale C costs are appropriate for matters of more than ordinary difficulty.

In Mort v. Board of School Trustees of School Board No. 63 (Saanich), 2001 BCSC 1473 at para. 6, the criteria to be considered were said to be:

(a)      the length of the trial;

(b)      the complexity of the issues involved;

(c)      the number and complexity of pretrial applications;

(d)      whether the action was hard-fought, with little or nothing conceded along the way;

(e)      the number and length of the examinations for discovery;

(f)       the number and complexity of experts’ reports; and

(g)      the extent of the effort required in the collection and proof of facts.

The Court found that due to the complexity of the issues, the novelty of the action, and the matter was bitterly fought, made it appropriate to increase the scale of costs to Scale C

Court Orders DNA Samples From Non Party to Court Action

 

DNA 2The Manitoba court decision of Nandwani v Nandwani 2011 CarswellMan 501, caught the attention of disinherited.com out here in BC.

The case had to do with an application for Court ordered DNA samples.

The deceased immigrated to Canada when his purported son was five months old.

The mother and the son did not follow the deceased to Canada.

The mother instead married the deceased’s brother who raised the son as his own.

Accordingly under a partial or full intestacy, if the son was the child of the deceased, then he would inherit before the deceased’s siblings who claimed to be his

next of kin, and thus the heirs on an intestacy.

The siblings brought a court application requesting the son and brother to provide saliva samples for DNA testing to determine whether the son was in fact a child

of the brother.

The court ordered the son and brother to provide DNA samples for paternity testing, as there was prima facie  merit to using DNA testing to determine the issue.

The court found jurisdiction to order the brother, as a non-party to the court action, to provide DNA samples under the inherent jurisdiction of the court. The court

determined that no harm would flow to the brother if he were ordered to provide the samples, and he was not very far removed from the dispute.

 

disinherited.com fully approves of the reasoning of this decision and the preciseness of DNA testing to determ paternity, amongst otherwise very unreliable and

often murky evidence.

Court Outlines Rules For Production of Documents Held By Third Parties

Rules For Production of Documents

The decision Nikolic v. Olson 2011 BCSC 125 is a veritable chestnut of law relating to the principles of court ordered production of documents held by third parties, whether within or outside, the Province of British Columbia.

The application for records was opposed on inter alia the grounds that the order of the court would not be binding on parties outside of the jurisdiction of the court, namely BC.

Disinherited apologizes for quoting so much of the text of the jdugement, but there is simply so much in the judgment relating to the review of the cases in this area,  that I have only editied out portions and left other large portions in the quotes.

 

 

“It is fundamentally important in civil litigation that litigants are provided with all relevant documents pertaining to the issues confronting them. Discovery (a term encompassing document production, interrogatories, examinations for discovery and medical examinations) encompasses the entire legal process through which each litigant to the action or proceeding is able to learn about the opposing case (claim or defence). The objectives are to promote settlement and, where settlement cannot be reached, to narrow the issues in dispute before trial. In short, this process gives the parties an opportunity to ascertain the facts. That opportunity is only meaningful where the litigants disclose evidence which they each will rely upon or which may assist opposing parties at trial, in the manner and to the extent required by law.

[19]         The purpose underlying the rules of document production was articulated by L. Smith J. in Homalco Indian Band v. British Columbia (1998), 56 B.C.L.R. (3d) 114, [1998] B.C.J. No. 2102 (QL) (S.C.), at para. 17 of B.C.L.R.:

What is the underlying purpose of Rule 26? An examination of its terms and of the authorities considering it leads to the conclusion that its purpose is to promote the resolution of disputes on their merits by forcing disclosure in advance of all documents upon which a party plans to rely at trial and, in addition, all documents which may assist the other party at trial (subject to privilege). In this manner, Rule 26 avoids surprise and prevents the destruction, suppression or fabrication of evidence. The end is trial on the basis of full information; the means is disclosure of documents.

[20]         Although considered under the Saskatchewan Rules, I find the view of Walker J. in Zerr v. Rahn (1987), 63 Sask.R. 74, [1987] S.J. No. 682 (QL) (Q.B.), at p. 4 of QL, that disclosure ought to be obtained in the most expedient way (both in terms of time and costs) as is appropriate in the circumstances, to be sound:

The modern tendency is toward full and complete disclosure and flexibility in the manner of obtaining it. In keeping with the principle of broad discovery and in all common sense, it is appropriate to order the plaintiff to make a request to all physicians, physiotherapists and chiropractors [the third party record-holders] for the various documents referred to by the defendants as requested. It is within the power of the plaintiffs to cause the professionals and the hospital to produce the documents. The plaintiff must make her best efforts. Until the medical people and the hospital refuse the plaintiff’s request, the documents are in the plaintiff’s power. Another approach, not requested in this application, is that the plaintiff be ordered to request these same medical people, with respect to the same documents, to permit the defendants to inspect and copy them and to communicate their response to the defendant.

[21]         Moreover, at least one policy concern arising from the application before me comes to mind. The dismissal of applications such as the one at bar may allow a litigant to shirk legal obligations by hiding otherwise compellable records in the hands of third parties residing outside British Columbia. This general concern was evident in Sunnar v. U-Haul Co. (Canada), [1998] B.C.J. No. 1850 (QL), 24 C.P.C. (4th) 179 (S.C. Chambers) [Sunnar cited to QL], where the sought-after documents (namely, accident claims records) could not be obtained because they were held outside the province by the corporate defendant’s insurer and adjuster. The danger, as Allan J. recognized, was that the legal structure of a corporate entity may effectively thwart the mandatory production of relevant records (see, for example, paras. 12, 14 and 18). She ordered, presumably under R. 26(1.1) and R. 26(10), the defendant U-Haul to produce the documents which were sought on the basis that it had access and thus the power to produce them (at para. 20). The situation in Sunnar causes me to believe that dismissing applications for an order compelling authorization of foreign third party production could potentially lead to unjust results and even possibly to a perversion of the Rules of Court.

C.       Overview of Relevant Court Rules

[22]         I mentioned earlier that this Court’s jurisdiction to make an order requiring a litigant to authorize third party production is founded upon the Rules of Court. An overview of the Rules is accordingly warranted. While the present case is decided under the former Rules, equivalent provisions in the Supreme Court Civil Rules, B.C. Reg. 168/2009 [the “current Rules”], which may offer further context and future guidance, are provided.

[23]         I begin by highlighting that the object of the Rules of Court is “to secure the just, speedy and inexpensive determination of every proceeding on its merits”: R. 1(5) of the former Rules; R. 1-3(1) of the current Rules. R. 1-3(2) of the current Rules adds the principle of proportionality: proceedings ought to be conducted in ways that are proportionate to “the amount involved”, “importance of the issues in dispute” and “complexity of the proceeding”.

[24]         Rule 26 of the former Rules and R. 7-1 of the current Rules grant the court broad jurisdiction over the discovery of documents; specifically, the court has the power to order production in any manner it deems just or appropriate. Rule 26(10) of the former Rules stipulates that “The court may order the production of a document for inspection and copying by any party or by the court at a time and place and in the manner it thinks just”; and, R. 7-1(17) of the current Rules stipulates that “The court may order the production of a document for inspection and copying by any party or by the court at a time and place and in the manner it considers appropriate” [emphasis added].

[25]         More generally, R. 1(12) of the former Rules provides that “When making an order under these rules the court may impose terms and conditions and give directions as it thinks just”; and, R. 13-1(19) of the current Rules provides that “When making an order under these Supreme Court Civil Rules, the court may impose terms and conditions and give directions it considers will further the object of these Supreme Court Civil Rules” [emphasis added]. These two general powers may be exercised over any orders made under the Rules of Court, including those pertaining to document discovery.

[26]         Rule 26(1) of the former Rules and R. 7-1(1) of the current Rules deal with litigant-versus-litigant documents. Rule 26(1) of the former Rules specifies that a party is required, on demand, to deliver a list of documents that “are or have been in the party’s possession or control relating to every matter in question in the action”. Under this former Rule, the test for relevance on an application for discovery of documents is broad. Rule 7-1(1) of the current Rules does away with the need for a demand, making instead the preparing and serving of a list of documents mandatory barring the parties’ agreement or court order to the contrary and limits the scope of discovery to documents that “are or have been in the party’s possession or control and that could, if available, be used … to prove or disprove a material fact”.

[27]         The obligation to disclose only refers to documents in a litigant’s possession or control. In order to be in possession of a document, a litigant must have a proprietary interest in it; mere custody is not sufficient: Manson v. Manson, [1997] B.C.J. No. 203 (QL), at para. 11. Control, on the other hand, means an enforceable right to obtain the documents from the person who has actual possession of them: Lacker v. Lacker (1982), 42 B.C.L.R. 188, [1982] B.C.J. No. 1514 (QL) (S.C.), at p. 193 of B.C.L.R.

[28]         Rule 26(1.1) of the former Rules empowers the court to order a litigant to deliver “a list of the documents that relate to a matter in question in the action and that, although not in the possession or control of the party against whom the order is made, are within that party’s power”. The word “power” is interpreted to be broader than control: Sunnar at para. 21. “Power” means the litigant has access to the documents: Net1 Products (Canada) Ltd. v. Mansvelt and Belamant et al., 2001 BCSC 906, [2001] B.C.J. No. 1282 (QL) (Chambers), at para. 14 of BCSC. Thus, this rule broadens the basis upon which documents held by non-parties could be obtained from litigants themselves. Put another way, R. 26(1.1) compels disclosure of documents that are in the hands of third parties but to which the litigant (to whom the request is being made) has a right to access. R. 26(1.1) only requires a litigant to list documents that are in his or her power. The Rules do not expressly provide for the inspection and/or copying of documents that are within a litigant’s “power”.

[29]         Under the former Rules, R. 26(7) governs the inspection of the listed documents and R. 26(9) provides that copies of documents which a litigant is entitled to inspect may be requested. Both rules refer only to documents in a party’s possession or control – the word “power” is not used. Therefore, it seems on the face of these two rules that a litigant is not required to produce documents within his or her power. This interpretation, if adopted, would render R. 26(1.1) meaningless.

[30]         In any case, R. 26(10) allows the court to “order the production of a document for inspection and copying”. That document, I note, may be one over which the litigant has only “power”. In interpreting R. 26(10) in this manner, I am guided and persuaded by the opinion of Hood J. in Lewis at para. 88 where he concluded that the drafters intended documents in a litigant’s power to be treated and produced under R. 26 in the same manner as documents in a litigant’s possession or control and that the former Rules do not make much sense if that is not the case.

[31]         Moreover, I note that R. 26(8) requires a litigant, on notice, to produce a document referred to in his or her pleadings or affidavits; and, it is possible that that document may also be one over which he or she has only “power”.

[32]         The current Rules seem to do away with what might be seen as the legislative anomaly of the former Rules. They unify the obligations to list, inspect and copy documents in one’s possession, control and power. Rule 7-1(11) provides that a party who believes the served list of documents should include additional documents that “are within the listing party’s possession, power or control” may, on written demand, require that listing party to serve an amended list and make the newly listed documents available for inspection and copying. If a litigant fails to comply with a R. 7-1(11) demand, R. 7-1(14)(b) empowers the court, on an application for compliance made under R. 7-1(13), to order a litigant to amend and serve a list of additional documents in that litigant’s “possession, power or control relating to any or all matters in issue in the action” and make the newly listed documents available for inspection and copying.

[33]         Further, under the current Rules, R. 7-1(15) enables a party to inspect any listed documents, and R. 7-1(16) enables a litigant to obtain copies of documents to which he or she is entitled to inspect, that is, all listed documents. Thus, if a demand under R. 7-1(11) has been made, then those listed documents (or those documents to which a litigant is entitled to inspect and/or copy) would include documents in a party’s “possession, power or control”.

[34]         Rule 26(11) of the former Rules and R. 7-1(18) of the current Rules deal with direct third party production. If a listed record is in the possession or control of a third party residing within the court’s jurisdiction, that third party may be ordered to produce it directly to the requesting litigant. I note that the word “power” is not included, probably because its inclusion would unduly broaden the scope of direct third party production. It is a pre-condition of the application of R. 26(11) that the documents sought are not in the possession, control or power of a litigant: Lewis at para. 31. I conclude this interpretation is implicit given the nature and object of the rules. Implying such a pre-condition would enhance efficiency by ensuring that production is sought first through the litigants.

[35]         The purpose of R. 26(11) is “to provide a litigant with the means of ascertaining whether documents in the possession [or control] of a non-party … relate to an issue in the action, or contain information which may relate to an issue in the action”: Dufault v Stevens (1978), 6 B.C.L.R. 199, [1978] B.C.J. No. 1219 (QL) (C.A.) [Dufault cited to B.C.L.R.], at p. 205. However, where a third party resides outside this Court’s jurisdiction (that is, outside British Columbia), the requesting litigant does not have the right to apply under R. 26(11) for direct third party production: Saunders v. Nelson, [1994] B.C.J. No. 3039 (QL), 35 C.P.C. (3d) 168 (S.C.) [Saunders cited to QL], at para. 4.

[36]         The table below summarizes the Rules of Court pertaining to document discovery relevant to my analysis of the case before me.

 

 

Former Rules

Current Rules

Court’s general power to ORDER production

R. 26(10)

R. 7-1(17)

Obligation to LIST documents in party’s possession or control

R. 26(1)

R. 7-1(1)

Right to INSPECT listed documents

R. 26(7)

R. 7-1(15)

Right to COPIES of listed documents

R. 26(9)

R. 7-1(16)

Listing and producing documents in party’s POWER (includes extra-provincial third party records)

R. 26(1.1) and

R. 26(10) respectively

R. 7-1(11); if party does not comply

R. 7-1(14)(b)

Production of documents referred in PLEADINGS or AFFIDAVITS

R. 26(8)

No equivalent rule

Intra-provincial DIRECT THIRD PARTY production, inspection and copying

R. 26(11)

R. 7-1(18)

 

Each of the above can be seen as a separate stage in document discovery. However, in many cases, the first stage (listing of documents) flows, without incident, to the next stages (production, inspection and copying).

[37]         I turn now to application of the formerRules to the facts in this case. R. 26(11), which allows for direct third party production, is of no assistance to the Olsons because this Court cannot order non-parties in Saskatchewan to directly produce the requested records in its possession or control. However, Mr. Nikolic has a right of access to the documents sought and therefore has power over them. Accordingly, he may be required to list those requested records (pursuant to R. 26(1.1)) and to produce them (pursuant to R. 26(10)) in a manner the court thinks is just (pursuant to R. 1(12)), for example, by way of an order compelling authorization.

CONCLUSION & ORDER

[93]         In British Columbia, relevant non-privileged documents are compellable in a civil action. Full and complete disclosure between or among litigants prior to trial is essential to the truth-seeking function of the litigation process and proper administration of justice.

[94]         This Court has the authority under the formerRules to compel production and to specify the mechanics of its production orders. Rule 26(1.1) permits the court to order a litigant to list documents in his or her power, which may include those held by foreign non-parties. Rule 26(10) empowers the court to order a litigant to produce a document for inspection and copying in the manner it thinks just. Furthermore, R. 1(12) grants the court wide discretionary powers, in the making of orders, to impose terms and conditions and give directions as its thinks just. Read collectively, a master or judge of this Court has the jurisdiction to create the mechanisms by which relevant non-privileged documents in a litigant’s “power” will be produced, including the jurisdiction to order him or her to execute the necessary documentation allowing a record-holder, whether residing in or outside British Columbia, to effect the release of those documents.

[95]         In my view, the following excerpt from para. 110 of Hood J.’s reasons in Lewis is apt:

There is also no doubt that the Court has substantive jurisdiction or power pertaining to the discovery and inspection of documents under Rule 26, particularly the compelling or ordering of production of documents. … In my opinion, the manner in which production is achieved is for the Court. The Court’s substantive jurisdiction or power to compel the production of documents includes the jurisdiction or power to create the mechanisms or the means by which production is made.

[96]         As expressed in the jurisprudence, there are, no doubt, potentially unwieldy implications of a court order compelling authorization of third party production. Given these concerns, such orders should not be granted lightly. In this respect, L. Smith J. in McKay v. Passmore, 2005 BCSC 570, [2005] B.C.J. No. 1232 (QL), offers worthwhile guidance. That was a personal injury case arising from a motor vehicle collision. An application was brought for an order that the plaintiff execute an authorization allowing the defendants to obtain records held by the Manitoba Workers Compensation Board. Her Ladyship held, at para. 36, that while the court has jurisdiction to grant such an application, there was insufficient basis on the evidence to do so. She concluded, at para. 40, that the circumstances of the case before her did not warrant the order sought in light of the R. 26(11) criteria provided by the Court of Appeal in Dufault, which she outlined at para. 38:

1.         The applicant must satisfy the court that the application is not in the nature of a “fishing expedition.”

2.         He or she must show that a person who is not a party to the action has a document or documents in his or her possession that contains information which may relate to a matter in issue.

3.         If the applicant satisfies those criteria, the court should make the order unless there is a compelling reason not to make it (i.e. because a document is privileged or because grounds exist for refusing the application in the interests of persons not parties to the action who might be affected adversely by an order for production and the adverse affect would outweigh the probative value of the document.)

[97]         Obviously these criteria, among other relevant factors, ought to be considered by a court considering an application for an order compelling a litigant to authorize production of documents held by a third party whether located within or outside British Columbia.

[98]         For two examples as to how the McKay/Dufault criteria may apply, see Distinctive Photowork Co. v. Prudential Assurance Co. of England Property and Casualty (Canada) (1994), 98 B.C.L.R. (2d) 316, [1994] B.C.J. No. 3231 (QL) (S.C. Chambers); and Tetz v. Niering, [1996] B.C.J. No. 2019 (QL), 1996 CarswellBC 1887 (S.C. Chambers).

[99]         These cases, although they raise slightly different issues, do not detract from, but rather inform, the basic proposition that where a litigant is under an obligation to make disclosure of documents, then that obligation must be honoured. Where such documents are in the hands of third parties, the usual format will entail the litigant voluntarily agreeing to provide a document authorizing the record holder to release the material, and that will resolve the matter. However, in other cases, where consent is refused, litigants are entitled to seek relief and the court has jurisdiction to enforce the disclosure obligation, specifically by making an order whereby the party whose records are being sought will “consent” to their release. While the wording is unfortunate and has engendered a regrettable state of controversy, the underlying concept is, in my view, straightforward.

[100]     The Olsons have a legitimate interest in obtaining the requested records and I am satisfied that their application is not in the nature of a fishing expedition. I also find that the third parties named by the defendants in their application possess the requested records which relate to a matter or matters in this case. By way of obiter dicta, I note that the common law test for relevance under the formerRules is broader than what seems to be provided by the wording of the current Rules. There are, furthermore, no compelling reasons why the order sought should not be made.

[101]     Accordingly, I order the respondent/plaintiff, Mr. Nikolic, to provide signed authorizations allowing the applicants/defendants, Josiah Olson and Joel Olson, to obtain from the third parties named the records listed in clauses (c), (d), (e) and (f) of the proposed order reproduced at para. 3 of these reasons.

“The Honourable Mr. Justice Williams”

Credibility – Who Does the Judge Believe?

credible hulkCredibility-Who Does the Judge Believe?

One of my favourite observations about estate litigation, is that invariably, the opposing parties tell such diverging and completely contrary stories from the other, that I often think I am in the wrong court room conducting the wrong trial.

IN that situation, the Judge is then left with the burden of choosing which witnesses to believe, and which to not believe.

This is called determining the credibility of the witness and is not exactly a science, nor something that people always agree with when one witnesses testimony is chosen over anothers.

Credibility is defined as “worthiness of belief, that quality in a witness which renders his or her evidence worthy of belief.

The leading case in British Columbia is the often quoted statement of O’Halloran J.A. in Faryna v. Chorny, [1952] 2 D.L.R. 354 at 357, 4 W.W.R. (N.S.) 171 (BCCA), :

“The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour

of the witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that

surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the

preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. ”