The Implied Confidentiality of Documents In Litigation

Implied Confidentiality

deals with the issue of confidentiality of document exchange in litigation relating to the disclosure of documents to non-parties to the litigation, without the consent of the actual parties to the litigation.

The court held that to disclose discovery information by the parties to nonparties, constitutes a breach of the implied undertaking of confidentiality which attaches to information obtained through discovery.

This rule will not be affected by the introduction of the new WESA legislation.

The Court of Appeal in Hunt v. T&N plc (1995), 4 B.C.L.R. (3d) 110 at paragraph 64 applies in British Columbia:

“Accordingly, we would uphold the obligation which the law has generally imposed upon a party obtaining discovery of documents, and we would require such party, in appropriate cases, to obtain the owner’s permission or the court’s leave to use the documents other than in the proceedings in which they are produced.”

The court in Sovani went on to discuss, apparently without the argument of counsel, that the matter would also be given the force of law by the freedom of information and protection of privacy act:(FIPA)

Use of personal information
32 A public body must ensure that personal information in its custody or under its control is used only
(a) for the purpose for which that information was obtained or compiled, or for a use consistent with that purpose (see section 34),
[35] Section 33 provides:
Disclosure of personal information
33 A public body must ensure that personal information in its custody or under its control is disclosed only as permitted under section 33.1 or 33.2.
[36] Section 33.1 (1 )(j)(i) & (ii) provide:
Disclosure inside or outside Canada


2007 BCSC 403 Sovani v. Gray et al; Jampolsky v. Shattler et al

33.1 (1) A public body may disclose personal information referred to in section 33 inside or outside Canada as follows:

0) in the case of the Insurance Corporation of British Columbia, if
(i) the information was obtained or compiled by that public body for purposes of insurance provided by the public body, and
(ii) disclosure of the information is necessary to investigate, manage or settle a specific insurance claim;

[37] Section 34 provides:

Definition of consistent purposes

34 (1) A use of personal information is consistent under section 32 or 33.2 with the purposes for which the information was obtained or compiled if the use

(a) has a reasonable and direct connection to that purpose, and
(b) is necessary for performing the statutory duties of, or for operating a legally authorized program of, the public body that uses or discloses the information or causes the information to be used or disclosed.

[38] Assuming, without deciding, that information obtained through the litigation discovery process by counsel retained by ICBC to represent insured parties is thereby “in the custody and control” of ICBC, the combined effect of these sections appears to be that such information may be disclosed to a non party to the litigation only where that is “necessary to investigate, manage or settle a specific insurance claim”, again assuming, without deciding, that litigation is comprehended by those words.

[39] It is therefore arguable that the disclosure of the fruits of discovery in these two cases to non parties by the defendants’ counsel, in the process of further discovery, was not necessary to obtain non party discovery and therefore not “necessary” under s. 33.1(1)(j) and accordingly not permitted under sections 32 and 33.
[40] If disclosure was not “necessary” under s. 33.1 (1 )(j), a point I need not decide, then the plaintiffs have whatever remedies, if any, are available to them under FIPA, which may impose on the defendants in the case before the court a higher obligation to limit disclosure of the fruits of discovery to non parties than the implied undertaking as to confidentiality imposes on litigants generally.

[41] The effect of the plaintiffs’ submission is to invite the court to expand the scope of the implied undertaking to comprehend the policy as stated in s. 8.3.2 of the Manual.

[42] I decline to do so for the following reasons.

[43] The implied undertaking applies to all litigants, not just those insured and represented by ICBC. It is not self-evident that the policy adopted by a public body, ICBC, in response to FIPA should determine or inform the common law as developed by the courts in respect of the scope of the implied undertaking.

[44] It is a matter of judgment to be exercised by counsel what information obtained by parties through the litigation discovery process needs to be disclosed to non parties in furtherance of the litigation in which that information has been obtained.

Pleading Invalid Will and Wills Variation Claim Together Allowed

Inconsistent Pleas

From time to time during the almost 40 years that I have practiced estate litigation, I have been told by various opposing counsel that it is inappropriate to plead in the same court action that a will is not valid, and therefore must be proved in solemn form, together with a claim alleging that if the will is valid, then it should form part of the estate, and the will should be varied under the wills variation act.

I have been told by countless counsel that there is a case that says this but upon my challenge I have never had it produced, but have still had it recently argued.

I have done it many times myself, but here is a case where it was clearly dealt with on that basis.

I am pasting in the head note of the decision Petrie v Burnett 2008 BCJ 2094, where Mr. Justice Nathan Smith allowed such inconsistent pleas.

He in fact found the will valid and then buried it under the provisions of the wills variation act.

Application by plaintiffs for proof of the testator’s 2005 will in solemn form allowed but will varied to provide a distribution of 40 per cent to the plaintiffs, 35 to the son and 12.5 to each of the daughters.

The  Will incorrectly stated testator’s children had not repaid loans and had made no attempt to correspond with him.

The  Testator had testamentary capacity but had disinherited his children for no reason .The  Plaintiffs received testator’s real property as joint tenants and daughters received an interest in that property through a settlement — Wills Variation Act, s.2.

Application by plaintiffs for proof of the testator’s 2005 will in solemn form; application by the tes­tator’s son for proof in solemn form of the testator’s 1982 will, of which he was the executor and sole beneficiary. In the alternative the son relied on the Wills variation act to claim a share of the estate.

Two of the testator’s daughters had reached a settlement with the plaintiffs with respect to the 2005 will, the thir daughter was not involved in the proceeding. The testator executed the 2005 will a few hours before his death, leaving all he owned to the plaintiff husband and wife, who were his friends. The 2005 will incorrectly stated that the testator’s children had not repaid loans to the testa­tor and had made no attempt to correspond with him or provide him comfort. The plaintiffs were living in rental accommodations as their house had been destroyed by fire and they did not have in­surance. Prior to his death the testator transferred residence to himself and the plaintiffs as joint tenants and instructed that the purchase of another property, completed after his death, was to be done with the plaintiffs added as joint tenants. The properties were worth approximately $300,000 and the testator’s estate was worth approximately $460,000; the settlement of the two daughters’ claims resulted in them each receiving a 25 per cent interest in both properties. It was the evidence of multiple witnesses, including a doctor to whom the testator had given a “do not resuscitate” or­der, that the testator was able to understand and communicate with them and none testified to any concerns about the testator’s mental condition or capacity. There was some evidence of memory lapses and the testator’s physical condition had been rapidly deteriorating due to pancreatic cancer.

HELD:  The 2005 will was valid but was varied to provide a distribution of 40 per cent of the estate to the plaintiffs, 35 per cent to the son and 12.5 per cent to each of the daughters.

While there were suspicious circumstances, the plaintiffs established that, on a balance of probabilities, the testator had testamentary capacity when he signed the will. The testator had disinherited the children for no valid or rational reason.

Provision was to be made for the testator’s children, the plaintiffs should receive the largest share but they had retained the testator’s real property and the daughters’ settle­ments had allowed them to share in the real property.

Court of Appeal Rules on Res Judicata, Abuse of Process and Estoppel

Bronson v. Tompkins Ranching Ltd., 2013 BCCA 477

The Beneficiaries of a trust obtained a judgment against the trustee for a breach of trust in relation to the sale of shares by the trust. They then commenced a second action, against the recipient of the shares, seeking the return of property to the trust.

On an application in the second action, the defendant purchaser of the trust’s shares sought confirmation that the plaintiff could not rely on findings of fact made by the trial judge in the first action.

The chambers judge held that the purchaser was not bound by those findings of fact.

On appeal the beneficiaries argued the purchaser was seeking to re-litigate the first action and ought to be barred from doing so, relying on the principles of res judicata and abuse of process. Before the hearing of the appeal the judgment in the first action had been overturned on appeal.

Held: appeal dismissed. The chambers judge appropriately considered whether the issues in question were res judicata and there is no basis upon which to interfere with this conclusion.

(i) Jurisprudence

[31] This Court has recently canvassed the circumstances in which a plea may be barred by the application of the doctrine of res judicata or as an abuse of process of the court, in Cliffs Over Maple Bay (Re), 2011 BCCA 180 (CanLII), 2011 BCCA 180; and again in Erschbamer v. Wallster, 2013 BCCA 76 (CanLII), 2013 BCCA 76.

[32] In the latter case, the principles were summarized as follows:

[12] The general principles of the doctrine of res judicata were reviewed by this Court relatively recently in Cliffs Over Maple Bay. The doctrine has two aspects, issue estoppel and cause of action estoppel. In brief terms, issue estoppel prevents a litigant from raising an issue that has already been decided in a previous proceeding. Cause of action estoppel prevents a litigant from pursuing a matter that was or should have been the subject of a previous proceeding. If the technical requirements of issue estoppel or cause of action estoppel are not met, it may be possible to invoke the doctrine of abuse of process to prevent relitigation of matters.

[13] In Cliffs Over Maple Bay, Madam Justice Newbury set out the requirements of issue estoppel at para. 31 (from Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853 at 935, as quoted with approval in Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), [1975] 2 S.C.R. 248 at 254):

(1) that the same question has been decided;

(2) that the judicial decision which is said to create the estoppel was final; and,

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised, or their privies. …

[14] With respect to cause of action estoppel, Newbury J.A. quoted, at para. 13, from the seminal case of Henderson v. Henderson (1843), 3 Hare 100, 67 E.R. 313 at 319 (Ch.):

In trying this question, I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.

She noted, at para. 14, that this language has been somewhat narrowed by the decision in Hoque v. Montreal Trust Co. of Canada, 1997 NSCA 153, 162 N.S.R. (2d) 321, where Mr. Justice Cromwell stated that the doctrine should apply to “issues which the parties had the opportunity to raise and, in all the circumstances, should have raised” (para. 37).

[15] Madam Justice Newbury set out the requirements of cause of action estoppel at para. 28 (from Grandview v. Doering, 1975 CanLII 16 (SCC), [1976] 2 S.C.R. 621, as summarized in Bjarnarson v. Manitoba reflex, (1987), 38 D.L.R. (4th) 32 (Man. Q.B.) at 34, aff’d reflex, (1987), 45 D.L.R. (4th) 766 (Man. C.A.)):

1. There must be a final decision of a court of competent jurisdiction in the prior action [the requirement of “finality”];

2. The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action [the requirement of “mutuality”];

3. The cause of action in the prior action must not be separate and distinct; and

4. The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence.

[16] Although it is referred to as cause of action estoppel, the principle applies to defences as well as claims. This is explained in Donald J. Lange, The Doctrine of Res Judicata in Canada, 3d ed. (Markham, Ontario: LexisNexis, 2010) at 137-38:

While the plaintiff may not split a cause of action or pursue litigation by instalments, the defendant may not split the defence by turning around and, as the plaintiff in a subsequent action, sue on an issue which, if successful, would challenge the integrity of the previous judgment. This is what was attempted in Henderson.

* * *

In other words, a cause of action in a second action which could have been a defence in the first action, but was not raised, is barred … The cloak of cause of action estoppel is woven the same for both the plaintiff and the defendant in subsequent proceedings.

[Footnotes omitted.]

[33] Although the Court in Erschbamer found the issue in question was res judicata, it also addressed the abuse of process argument:

[29] Even if cause of action estoppel is not technically available in the circumstances of this situation, it was nevertheless open to the chambers judge to strike para. 3 of Part 1, Division 2, of the amended response as being an abuse of process. In his reasons, the judge referred to Toronto v. C.U.P.E., the decision of the Supreme Court of Canada which held that the doctrine of abuse of process is available to prevent the relitigation of an issue in circumstances where the technical requirements of issue estoppel had not been met because the parties to the two proceedings were different.

[30] Lange refers to the doctrine in this context as “abuse of process by relitigation”. He confirms that, in addition to issue estoppel, it may be employed when the technical requirements of cause of action estoppel have not been met (at 215-16):

Abuse of process by relitigation applies to proceedings which would normally be governed by cause of action estoppel and to proceedings which do not meet the technicalities of that doctrine. As with cause of action estoppel, abuse of process by relitigation has sometimes been described as a rule against litigation by instalment, or the rule in Henderson. To breach the rule in Henderson, even though the parties are not the same, is an abuse of process. In applying abuse of process by relitigation, the courts have taken a stern view of raising in new proceedings issues that ought reasonably to have been raised in earlier proceedings.

[Footnotes omitted.]

(ii) Res Judicata

[34] The appellants rely primarily upon the doctrine of abuse of process, recognizing that it is difficult to bring the respondents (as non-parties to the First Action) within the strict technical confines in which the doctrine of res judicata is applicable. That doctrine would only have an application to the case if the appellants could establish privity between the beneficiaries and trustee, defendants in the First Action, and the purchaser of the trust shares, TRL, the defendant in the Second Action.

[35] Such privity, the appellants argue, may arise from active participation in the previous proceedings or actual benefit from them.

[36] The appellants say TRL was aware of the first proceedings, was aware of the issues being litigated, had an interest in those issues, could have applied to be joined in the action, and chose not to do so. The chambers judge considered and rejected these arguments. There is ample basis, in my view, upon which she could reasonably conclude that the respondents had not become so identified with the defendants in the First Action as to be bound by findings fact in that case. The plaintiffs could not establish the requisite “mutuality” between the beneficiary defendants in the First Action and TRL. The lengthy argument in the appellants’ factum and before us, to the effect that TRL stood by and watched the First Action being fought out and gave evidence and documents in support of the trustee, amounts to nothing more than a restatement of the case before the chambers judge.

[37] There is, in my view, no basis upon which it can be found that the chambers judge applied an inappropriate test or gave no weight, or no sufficient weight, to relevant considerations in relation to the argument that the issues in question are res judicata. In my view, there is no basis upon which we can, or should, interfere with that assessment of the case by the chambers judge.

(iii) Abuse of Process

[38] The more substantial argument advanced by the appellants is that it would amount to an abuse of process to permit the defendants in the Second Action to argue that the trustee had the power to sell the shares or the shares were not sold at an undervalue. In addressing these questions, the appellants say the chambers judge failed to consider whether the doctrine of abuse of process, as described in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII), 2003 SCC 63, “was or could be engaged.”

[39] The appellants say whenever a litigant seeks to have a court make findings directly contrary to findings of a trial judge in prior litigation, the integrity of the judicial process is challenged and the court must consider whether the litigation amounts to an abuse of process. In such circumstances, the court must determine whether permitting issues to be twice-litigated would violate the principles of judicial economy, consistency, finality, and the integrity of the administration of justice. The appellants say permitting re-litigation of the two identified issues in this case would diminish public respect for the judicial process.

[40] In exercising its discretion to permit issues to be re-litigated, the appellants say, the Court must consider whether the First Action is tainted by fraud or dishonesty, whether there is new, previously unavailable evidence that conclusively impeaches the original results, and whether fairness dictates the original results should be binding in the new context. The appellants say the chambers judge failed to engage in that analysis. Further, the appellants say the trial judge failed to consider that the primary focus of the doctrine of abuse of process is the integrity of the adjudicative functions of the court and not principally the interests of the parties.

[41] The chambers judge expressly considered the C.U.P.E. decision and cited the following passage from it at para. 24 of the reasons:

[37] In the context that interests us here, the doctrine of abuse of process engages “the inherent power of the court to prevent the misuse of its procedure, in a way that would . . . bring the administration of justice into disrepute” (Canam Enterprises Inc. v. Coles 2000 CanLII 8514 (ON CA), (2000), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved 2002 SCC 63 (CanLII), [2002] 3 S.C.R. 307, 2002 SCC 63)). Goudge J.A. expanded on that concept in the following terms at paras. 55-56:

The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. See House of Spring Gardens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).

One circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined.


Cost Awards in BC Estate Litigation

Cost Awards in Estate Litigation


Cost awards are the amount of monies that a Court awards one litigant against another as a contribution towards legal fees incurred.

Until recent years, practitioners in estate litigation , had little to fear with respect to costs awards. Win or lose, the costs of the court action were usually paid out of the estate.

In the last ten years however, the courts have shown a growing inclination to let costs follow the event. This means that one litigant, usually the successful one is awarded party and party costs against the other. In real terms this amounts to a contribution of about 20% of the actual legal fees incurred.

More recently, in some circumstances judges are allowing full indemnity for or nearly full indemnity for legal fees. This paper will attempt to provide an overview of some the principles emerging in the law of costs.


In some respects, cost awards in estate litigation are different from such awards in most other types of litigation. A number of factors contribute to this distinction, including the following:

(i) the litigation may arise as a result because of the actions of the testator or the residuary beneficiaries. For example, the will may be ambiguous and thus require interpretation by the court. In such situations the court will generally order that costs be paid out of the estate;

(ii) executors and trustees are usually entitled to be indemnified for all costs that they have reasonably incurred, including the cost of legal proceedings. Courts generally regard this approach as necessary in order not to discourage executors and trustees from carrying out their duties;

(iii) in some cases there may be good cause to question matters such as the capacity of the testator or the execution of the will. In such cases the court may feel the litigation was justified and thus not order costs against the unsuccessful parties;

The principles to be applied in relation to estate and estate trust litigation were summarized in Turner v. Telecommunications Workers’ Pension Plan, [2001], 197 D.L.R. (4th) 533 (B.C.C.A.).

(i) “an application made by trustees of the will or settlement, asking the court to construe the trust instrument for their guidance; to ascertain the interest of the beneficiaries; or to answer a question which arises in the administration of the trusts. In such instances, the costs of all parties, which are necessarily incurred for the benefit of the estate, should be taxed as between solicitor and client and paid out of the estate;

(ii) an application made by the beneficiaries as a result of difficulty of construction or administration of the trust which would have justified an application by the trustees. Again the application is necessary for the administration of the trust and the costs of all parties, which are necessarily incurred for the benefit of the estate, are paid out of estate;

(iii) an application made by the beneficiaries who make claims adverse to other beneficiaries. Such litigation is adversarial in nature and, subject to the court’s discretion, the unsuccessful party bears the costs of those whom he or she brings to court.

Subject to the above, in most cases the costs of litigation will follow the event, unless the court directs otherwise. In other words, the winning party will generally be awarded costs against the losing party. These costs are usually awarded on scale three of a tariff, with each unit awarded representing $80. Unfortunately, the amount of costs awarded is usually in the range of 20-25% of the actual amount of legal fees incurred.

On the one hand, the courts are showing an increasingly willingness to punish frivolous or vindictive litigation by imposing special costs against the unsuccessful party.

Conversely, the courts do not wish to discourage legitimate court actions, particularly those brought by the executor or trustee.

Given these competing concerns with respect to costs, there is a great variation in awards given.


Despite the Rules of Court dealing with costs, the court retains inherent jurisdiction with respect to costs.

As Justice Lambert said in Oasis Hotel Ltd. and others v. Zurich Insurance Company and others, (1981) 28 B.C.L.R. 230 (C.A.) at page 232:

“The full powers of the high court of Chancery in the ancient courts of common law have descended to us unimpaired.”

In Oasis, the court invoked inherent jurisdiction to award costs personally against the principal of an insolvent company. He was found to have abused the court to attempt to perpetrate a fraud.

The existence of inherent equitable jurisdiction, independent of the rules of court, was reiterated in Baart v. Kumar, (1985) 21 D.L.R. 4th 706 B.C.C.A. and Moore v Dhillon, (1993) 85 B.C.L.R. (2d) 69 (C.A.).

Although the court has a wide discretion in relation to costs, that discretion must be exercised judicially and with due regard to accepted legal principles.


The law relating to special costs in estate litigation has evolved greatly in the last ten years. The cases show an increasing willingness by the courts to award special costs, particularly where the behaviour of the plaintiff warrants rebuke.


Special costs are where one party is ordered to pay the entire legal fees of the other party. They were formerly called solicitor and client costs.

A primary function of special costs awards is to provide a penalty as a deterrent for conduct worthy of rebuke.

In the leading case of Bradshaw Construction Ltd. v. Bank of Nova Scotia, (1991) 48 C.P.C. (2d) 74, Bouck J. states that special costs are more or less the old solicitor and client costs as described in the 1989 rules, Rule 51(1); Appendix C.

When taxing special costs there is no detailed scale corresponding to the scale that applies to ordinary costs and Appendix B. Instead those fees that the Registrar considers were properly and reasonably necessary to conduct the proceeding to which the fees relate are allowable at a special costs assessment.

This analysis of Bouck J. in Bradshaw was adopted by the Court of Appeal in Laye v. College of Psychologists of British Columbia, Vancouver Registry Docket C.A. 024099, March 19, 1998.

Rule 57(3) covers special costs and is stated as follows:

57(3) Where the court orders that costs be assessed as special costs, the registrar shall allow those fees that the registrar considers were proper or reasonably necessary to conduct the proceeding to which the fees relate, and, in exercising that discretion, the registrar shall consider all of the circumstances, including,

(a) the complexity of the proceeding and the difficulty or the novelty of the issues involved,
(b) the skill, specialized knowledge and responsibility required of the solicitor,
(c) the amount involved in the proceeding,
(d) the time reasonably expended in conducting the proceeding,
(e) the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the proceeding,
(f) the importance of the proceeding to the party whose bill is being assessed, and the result obtained, and,
(g) the benefit to the party whose bill is being assessed of the services rendered by the solicitor.

In fact an award of special costs or solicitor and client costs may be made even if the award will extend beyond indemnity of the successful party.

In Fullerton v. Matsqui, 1992, 74 B.C.L.R. (2d) 311, the Court of Appeal held that unlike party and party costs, which are designed to indemnify, special costs or costs awarded on a solicitor and client basis may be awarded on a higher scale as a penalty or deterrent for certain conduct” (page 316), and when the court “seeks to disassociate itself from some misconduct” (page 318). In such circumstances the award may go beyond indemnity and into the realm of punishment.



In Hicks v. Hicks, 16 E.T.R. (2d) 179, Mr. Justice Shaw awarded full indemnity for costs against the defendant, as a result of his reprehensible conduct in exercising undue influence over his elderly mother. The costs in that case were approximately $70,000.

In doing so, Justice Shaw stated as follows:

“In my opinion, the surreptitious and dishonest conduct of Edward was so highly reprehensible as to warrant an award of full indemnity, that is, solicitor and own client costs. I make this order under the inherent jurisdiction of the court.”

In Stiles v. Workers Compensation Board of British Columbia (1989), 38 B.C.L.R. (2d) 307 (C.A.) Justice Lambert stated that full indemnity for legal fees should not be awarded unless there is some form of reprehensible, scandalous or outrageous conduct in the circumstances giving rise to the cause of action, or in the proceedings themselves that warrants chastisement.


In Louie v Louie Estate, Unreported, Vancouver Registry No. A971301, September 3, 1998, Boyd J., the court awarded special costs against the plaintiff in a Wills Variation action. She did so because she found that the action “was not brought bona fides, but rather as a vehicle to force or coerce the other beneficiaries of the estate to bend to the plaintiff’s will”. The court found that the plaintiff had been relentless in his campaign of making outrageous false allegations and attacking the moral turpitude and professionalism of the defendant lawyer.


In Fong v. Lee, 2002 B.C.S.C. 678 – Mr. Justice Hood ordered special costs against defendant executors on the basis that their conduct deserved reproof or rebuke.

Mr. Justice Hood made the following comments:

“The test I proposed to apply is that stated by Chief Justice Esson of this court, and which was adopted by the Court of Appeal in Laye v College of Psychologists (British Columbia, (1999), 59 B.C.L.R. 3d) 349 (C.A.) at p. 355. Can the conduct of the defendant brothers be described as misconduct deserving of reproof or rebuke? The answer without question is in the affirmative.

The Court of Appeal has stated that the general rule is that special costs are awarded only for misconduct in the proceedings in which the costs order is made. See Laye and the cases at page 355. The court also stated earlier in Stiles v. Workers Compensation Board of British Columbia, (1989), 38 B.C.L.R. (2d) 307 (C.A.) at p. 311 that special costs should not be awarded unless there is some form of reprehensible conduct, “either in the circumstances giving rise to the cause of action, or in the proceeding, which make such costs desirable as a form of chastisement.

Without doing a detailed analysis of the cases, I have concluded that the general rule that special costs are ordered only for misconduct in the proceeding is not absolute, although it would follow that pre-litigation conduct alone is not a basis on which to award special costs. This was the conclusion reached by my brother Cohen J. in Okanagan Similkameen (Regional District) v. Blackwell Stores Ltd., (1998) 15 C.P.C. 68 (B.C.S.C.) at p. 73.”

Mr. Justice Hood awarded special costs on the basis of both pre-litigation misconduct as well as continuing misconduct throughout the proceedings

See also Ram v. Prasad, 1999, 28 E.T.R. (2d) 140, where the B.C. Court of Appeal upheld the trial judge who awarded special costs against the defendant. In that case the defendant improperly backdated a document and propounded a purported will that was executed before the deceased was admitted to hospital in a paranoid, confused, agitated, and suicidal state.


There is an increasing trend by the courts to award special costs if the allegations of fraud, undue influence, or other unfounded serious allegations are not proved. Litigators who routinely allege undue influence should pay heed.

In Kouwenhoven Estate v. Kouwenhoven, 2001 B.C.S.C. 1402, Vickers J., an award of special costs was made against three sons who brought an action for fraud and undue influence against their deceased father’s second wife. The action was dismissed as being founded on speculation and innuendo, and special costs were ordered. Special costs were ordered at a rate of 100% of the actual legal fees. This order, made pursuant to Rule 57(3) of the Rules of Court, was made both against the estate and personally against the executor who had initiated the action.

See also Danchuk v. Calderwood, 1996, 58 E.T.R. (2d) 193, (see additional Reasons for Judgement dated June 16, 1997). In that case Justice Harvey concluded that the plaintiff exercised undue influence upon the deceased testator and that the circumstances surrounding the preparation of the will were suspicious. The plaintiff’s application for costs was dismissed, however the defendant’s application for special costs was granted. These awards were made on the basis of the plaintiff’s reprehensible conduct.


In British Columbia (Public Trustee) v Batiuk, 14 E.T.R. (2d) 18, Vickers, J. set aside an ex parte order obtained by the Public Trustee that required a patient to submit to examination by a geriatric psychiatrist. The court found, inter alia, that the Public Trustee had failed to disclose all relevant information and had provided incorrect information to the court.

The court awarded special costs against the Public Trustee even though it was found that the Public Trustee made the application in good faith.


If the court does not wish to punish a party on the basis of full indemnity for costs, it may still award a certain percentage of special costs.

Examples of awards of a partial percentage of full indemnity for costs include the following:

(i) In Shipp v. Tremblay, June 26, 1998, Macaulay J. awarded 80% of special costs where the plaintiff succeeded in an action to recover essentially all of his assets that were transferred to the defendant through undue influence. The court refused to consider the plaintiff’s claim at trial for punitive damages under the guise of the claim for special costs. The court found that the actual legal fees incurred were approximately $165,000, while costs at scale 3 awarded only $36,300, and costs at scale 4 ( now abolished) only $45,250.

The judge found that to award ordinary costs would amount to an unjust result, and accordingly awarded $131,000, which represented 80% of special costs.

(ii) In Re Woodward Estate, 40 E.T.R. (2d) 306, Mr. Justice Edwards proposed 75% of special costs against the petitioner for advancing a mischievous claim against an estate. The petition had been brought by an executor, and the court held that there was no question as to the validity or the meaning of the will or the capacity of the testator. Accordingly the special costs at 75% in favour of both the estate executors and the residuary beneficiary were awarded.

(iii) Easton v. Easton, 2002 B.C.S.C. 1076, District Registrar Bouck assessed 60% of special costs in favour of the petitioner. An order had been obtained that the respondent be passed over as executor. The main issue was whether the petitioner, himself a lawyer during most of the litigation, was entitled to charge for his time and disbursements. He had initially acted on his own, but later hired other counsel and assisted them throughout.

The court held that a solicitor who acts for him or herself is nonetheless entitled to all necessary costs as assessed in the ordinary way. Most services however could not be claimed during times when the petitioner was represented by other counsel. The amount allowed had to be moderate and reasonable.


In Clucas v. Clucas Estate, Unreported, Vancouver Registry No. A973288,October 15, 1999, Madam Justice Satanove, made the following statement:

“Before the advent of special and increased costs, successful plaintiffs in wills variation actions were often indemnified at least in part, by an order of solicitor/client costs. The reason appeared to be that where widows (and children) had to proceed to trial to obtain what should have been given to them, then they should not be expected to pay the costs of the proceedings or to suffer financially because of it.” See Campbell v. Campbell 1986 B.C. J. No. 1221 (S.C.)

In Clucas, Madam Justice Satanove awarded increased costs on the basis of 70% of special costs to avoid the unjust result which would otherwise result.

In Rampling v Nootebas, 2003, B.C.S.C. 1225, August 5, 2003, Mr. Justice Truscott in a Wills Variation action, exercised his discretion and awarded special costs out of the estate to both the plaintiffs and the executrix.

In Chan v. Lee Estate, 2003 B.C.S.C. 513, Mr. Justice Hood awarded successful plaintiffs in a wills variation action against their brothers, special costs. The plaintiffs were entitled to special costs against the brothers in view of the brothers’ pre-action conduct, which they carried over throughout the trial.


In Tamboline v. Dobbs Estate, Unreported Vancouver Registry No. A951001, January 31, 1997, Mr. Justice Dross refused to award special costs where the applicant unsuccessfully sought to remove an executor for alleged improper conduct. The court did not find that the allegations advanced were so reprehensible or seriously prejudicial to the executor so as to warrant special costs, and accordingly the court awarded only scale 3 costs against the applicant.


In Schippmann Estate v. Schippmann, 38 E.T.R. (2d) 96, the Court of Appeal dealt with an appeal between an estate beneficiary and the executrix beneficiary, disputing their responsibility for an anticipated tax liability.

The court found that neither party had any complete success on the appeal, and held that the beneficiary and the executrix beneficiary should be awarded special costs to be paid out of the estate.

The court essentially determined that the application was made in the context of an application to pass accounts.

The court followed Re Kanee Estate (1992), 69 B.C.L.R. (2d) 89, where the majority of the B.C. Court of Appeal stated as follows:

“Thus, in my view, the statutory scheme mandates that the costs of these remuneration proceedings, being non-contentious (although opposed) should be assessed as special costs unless the court otherwise orders. In fact … the Rule makes special costs in these circumstances the “normative” assessment.”


A significant development occurred here when by order in council effective July 1,2002 increased costs were abolished.

This development is unfortunate in that the Courts now have one less discretionary tool with which to fashion cost awards that approach the appropriate level of indemnity for legal fees incurred.


In Behnsen Estate v Behnsen, Unreported, Victoria Registry No. 4993/99, December 14, 1999, Mr. Justice Wilson dealt with a plaintiff executor who brought an action to resolve a simple property dispute with the defendant.

The judge was critical of the procedure followed by the plaintiff, and found that the plaintiff should have applied to strike out the relevant portions of the defendant’s materials. The plaintiff instead responded to the defendant’s irrelevant materials with further disputatious affidavits, said to be necessary to counter the defendant’s assertion of good character.

The court disallowed the plaintiff his costs of those latter affidavits, and the defendant was directed to pay all remaining costs of the action on a scale 1.


In Stangland v.Wiebe, Unreported, New Westminster Registry No. S046956, November 19, 1998, Madam Justice Martinson ratified her previous award of special costs to an estate beneficiary, by making those costs payable by the executor personally, rather than by the estate. The basis for purportedly making this change was that there were not funds left in the estate. The dispute centered over monies which the beneficiary alleged were owing to her, while the executor took the position that the monies were his. The court found that the money belonged to the beneficiary.

The general rule is that, in the absence of misconduct, a trustee should be reimbursed for his or her costs, charges and expenses out of the trust estate, even in cases of unsuccessful litigation.

There is ample authority, however for the principle that an executor should be personally liable for costs where he or she institutes proceedings that are entirely without merit, and the executor may be required to indemnify the estate for such costs where they have been paid out of the estate.

For example in Re Preymak, (1964), 45 D.L.R. (2d) 554, an administrator who brought a motion for construction of a will, and circumstances were the wording of the will was clear, was ordered to pay not only his own costs, but also those of the successful applicant.

In Re Olenchuk Estate (1991) 43 E.T.R. 146, an executor who proceeded on the issue of undue influence to trial, without having any appropriate grounds to do so, was ordered to be personally liable for costs.


In Jones and The Public Trustee for the Province of British Columbia v. Humeston, Unreported , Kelowna Registry No. 3/1999, Madam Justice Beames dealt with an estate litigation matter arising out a motor vehicle accident. There appeared to a mix-up between the instructions given by the Public Trustee’s office to the lawyer for three infant plaintiffs.

The court found that the lawyer allowed himself to become too close to the proceedings, and failed in his obligations as a lawyer, to ensure that he was receiving instructions, from someone capable of providing instructions to bring the matter to court. The court awarded the defendant’s costs up to March of 1995, and the plaintiff’s counsel was ordered to pay the defendants’ costs incurred thereafter.

In Johnson v. Pelkey, 1999 B.C.C.A. 348, the Court of Appeal declined to interfere in the trial judge award of special costs against the solicitor and one defendant who supported the will. It was determined that the solicitor who drafted the testator’s will, and who was named the executor of his estate, and who applied unsuccessfully for an order upholding the validity of the will, should have to pay 60% of the defendant’s special costs. The facts of this case are somewhat unsual.


In Carpe Investments Corporation v. Creative Prosperity Capital Corporation and others, Unreported, Vancouver Registry C974863, November 18, 1998. In this case Mr. Justice Tysoe dismissed proceedings brought on behalf of the petitioner by its trustee in bankruptcy.

The court awarded costs personally against the trustee in bankruptcy at scale 4. The court found that as general proposition, trustees in bankruptcy should not be allowed to pursue litigation with immunity against personal liability for costs in the circumstances where there is no statutory duty to prosecute a litigation and the trustee knows or ought to know that there will likely be insufficient assets in the estate to satisfy an award of costs in the event the litigation fails.


Generally speaking, estate litigation cases will now follow the general rule that costs follow the event. The general rule as found in Rule 57(9) is that costs follow the event unless the court otherwise orders.

In Romaine v. Romaine, the trial judge, Madam Justice Smith, dealt with the issue of costs at 35 E.T.R. (2d) 218. The action involved that of a donor making an apparent gift of property to the defendant, and then suing to set aside the transfer. The donor died before the conclusion of the action and his estate carried it forward to a successful conclusion. The Court of Appeal reversed the trial judge’s decision as to the result of the outcome, but the trial judge held that the cause of the litigation may have been the uncertainty of the donor’s intention, but the object of that was uncertainty was his alleged inter vivos gift and not his will, and that accordingly the general rule had to prevail that costs should follow the event.

In Perry, Executrix of the Estate of Margaret Hall v. Marshall, Unreported, Vancouver Registry A992882, January 29, 2001, Mr. Justice E.R.A. Edwards dismissed the plaintiff’s claim involving an alleged inter vivos transaction, and awarded the defendant costs on scale 3. The plaintiff proposed that there be no order as to costs. The court held that the plaintiff proceeded to trial on a good or arguable point, but found that the fact that the plaintiff proceeded to trial on a good or arguable point is not a proper basis for depriving the defendant of costs. The court followed Pierce, Van Loon v. Davro Investments Ltd. et al C.A. 19833, May 7, 1996 B.C.C.A.


Generally speaking, where a matter becomes contentious such that there is potential liability for the trustees, the courts have held that the trustee should pay their legal expenses personally with later indemnification by the estate, if appropriate. The courts are not willing to permit estate trustees to finance their personal legal expenses out of the estate, while the beneficiaries are obliged to fund their own expenses until judgment.

Thus in Wilcox v. Wilcox, 2002 B.C.C.A. 574, the Court of Appeal dealt with a situation where the executor was joined in the court action both as an executor and as a beneficiary. The court found that under the Wills Variation Act, it was necessary for the executor to be made a party to the action, and was expected to play a neutral role in the litigation. As a result of having to play a neutral role, an executor would generally receive special costs from the estate. However the executor was also a beneficiary and the court held that the costs must be separated. The court followed Ewasew v. Ewasew 1996, 11 E.T.R. (2d) 309.

The court held that the executor/beneficiary performed two separate functions. One was bringing the will forward on behalf of the estate for the assistance of the court. The other was representing her own interests as a beneficiary.

The court held that it is necessary to break out whatever part of the costs were attributable to the executrix’s duties as executrix, as opposed to her actions as a defending beneficiary.


In O’Hagan v. O’Hagan, Unreported, Vancouver Registry No. A940325, April 26, 1999, Mr. Justice Henderson declined to make any award for costs where the Public Trustee had asked for special costs payable from the estate, where a novel application had been made and presented to the court that was something akin to a “test case”. The court followed the B.C. Court of Appeal case of The Public Trustee v. Macht (1991) 53 B.C.L.R. (2d) 390.

In Singh v. Bhandar, Unreported, Victoria Registry No. 99/5629, March 15, 2001, Mr. Justice E.R.A. Edwards declined to make an order for any costs to either party, where both parties had sought an order for special costs. The court found that if special costs were awarded, there would be no monies left in the estate for the beneficiary. The court found that all parties involved in the court application were acting in what they believed was the petitioner’s best interests.


In 2002 B.C.S.C. 1128, Mr. Justice Sigurdson handed down supplementary reasons for judgment dealing with the matter of costs concerning litigation between a lawyer and his former client.

The court found that both parties were successful. The lawyer was awarded $275,000 legal fees from his initial claim of $778,000. The client defendant in turn had argued that the lawyer was not entitled to any fees because the services rendered were valueless.

The court ordered that the lawyer was to receive 70% of his costs and the client received 30% of his costs, and that the costs would be set off against each other.

In Walter v. Crum, Unreported, New Westminster Registry No. S018935, July 31, 1998, Mr. Justice Collver. The court dealt with some rather unusual circumstances in this estate litigation dispute. The court awarded the plaintiff scale 3 costs up to the date of trial, and then awarded the defendant scale 3 costs of the actual trial.

In Hadlen v. Boose, 2001 B.C.S.C., 1792, Mr. Justice Williamson in a wills variation action, found that as both parties had a divided success, they should each therefore bear their own costs.


Applications for prospective costs in British Columbia are being made more frequently than in the past. In England there is more jurisprudence directly on point. The applications are usually made where there is a large fund of monies and the applicant will try to have use of the funds to pay for the litigation. The application is usually based on the principle that the application is being made to ascertain the interests of the beneficiaries, or to answer a question which arises in the administration of a trust, or for the Court to construe a document, or the like. Generally there will not be an award for prospective costs when the nature of the proceedings is truly adversarial.

However, it is often not clear if the nature of the proceedings is truly adversarial or whether it can be more characterized as necessarily incurred for the benefit of the estate so as to warrant that the entire fees should be paid out of the estate.

I expect that there will be an increasing number of such applications in the future.

In Turner v. Andrews, the Court of Appeal upheld the dismissal of an application for prospective costs brought by approximately 189 members out of some 14,000 to 15,000 employees against the trustees of their pension plan. The members alleged that the surpluses were distributed in a manner so that the plaintiffs did not receive their fair share. Because the litigation was expensive, and involved extensive expert evidence and legal fees, the plaintiff applied for the award of prospective fees and disbursements from the pension plan trust fund.

Both the trial judge and the Court of Appeal held that the case was adversarial, and was not being brought for the benefit of or in the interests of the plan as a whole, but for the particular class of plan members representative by the plaintiffs. Accordingly the application for prospective costs was dismissed.

The Court of Appeal reasons for judgment are Unreported, Vancouver Registry No. CA 026505, February 6, 2001.

The reasons for judgment of the Supreme Court Chambers application are found at 1999, 30 E.T.R. (2d) 126.

A more recent case heard on September 3.03, dealing with prospective costs is The Bank of Nova Scotia Trust Company, executor of the estate of Harry Mudrie, deceased v. Powlik and others unreported 2003 BCSC 1382, where Justice Rogers dismissed an application by the executor bank for payment of past and future legal fees in litigation between the parties involving two conflicting wills prepared by the deceased. The bank sought access to the deceased’s monies to fund the litigation on the basis that the executor had a duty to protect the estate and its proper beneficiaries and because there were tow wills, with testamentary capacity in issue, then it was proper for the estate to indemnify the executor for their legal fees.

The Court rejected this argument and applied the criteria as stated in Alsop Wilkinson v. Neary (1996) 1 W.L.R. 1220 (Ch.) as follows:

(1) the strength of the party’s case;
(2) the likely order as to costs at the trial;
(3) the justice of the application; and
(4) any special circumstances.

The Court reviewed the evidence as it related to each of the criteria and refused the application. The Court stated :

“ The BNS is an amply solvent litigant. Its desire for indemnity is not motivated by concern its limited resources will prevent an important question form being tried, but rather by a desire to avoid the risk of [paying its lawyers out of its own pocket rather than out of the estate. The relief the BNS seeks is so unusual, so extraordinary, so out of the realm of the usual that the court should grant it only in the most narrow and deserving of circumstances. An order for prospective costs might go in a different case on a different set of facts, but it cannot go in this case on these facts.”

For other cases dealing with prospective costs, I refer you to:

(a) Discovery Enterprises Inc. v. Ebco Industries Ltd. (1999) 70 B.C.L.R. (3d) 299

(b) In the matter of Westar Mining Retirement Plan, (Vancouver Registry No. A92477, April 8, 1994,

(c) Bentall Corp. v. Canada Trust Company, 1996, 26 B.C.L.R. (3d) 181.

(d) McDonald v. Horn (1995) 1 All E.R. 961 ( C.A.)


Clearly there are valid social policy reasons for the historic approach of the courts to cost awards in estate litigation. Accordingly in many estate litigation cases, the court will continue to grant costs out of the estate, even to an unsuccessful litigant.

It is clear however from a review of the case law over the last ten years, that the courts are increasing letting costs follow the event.

Accordingly, the financial stakes in estate litigation have increased significantly. Not unlike family litigation, parties in estate litigation cases are often emotionally charged. If the conduct of a party is such as to warrant rebuke by the Court, then the unsuccessful party runs a significant risk of having special costs awarded against him or her. The amount of special costs can be very substantial. The courts have become far less hesitant to award personal costs against executors, solicitors, trustees in bankruptcy, and the Public Guardian, for conduct which the court finds is inappropriate.

Litigators routinely proceeding to trial with serious allegations, such as undue influence, run the risk of an award of special costs being made against their client, should such allegations be unproved.

Counsel would be well advised to ask for special costs, or increased costs, where the nature of the case, or the conduct of the parties, might lead the court to exercise its discretion to award same. It is increasingly necessary to provide evidence to the court as to the amount of the actual legal fees, versus what ordinary costs would amount to, so as to persuade the court that it may be unjust if special costs or increased costs were not awarded.

What is Solicitor-Client Privilege?

In Skogstad v Law Society of BC 2007 BCCA 310 the Bc Court of Appeal held:

“6. Solicitor-client privilege is a substantive rule of law, a core legal value. The protection of the confidentiality of communications between a lawyer and his or her client is fundamental to our legal system and the privilege of such communications is a fundamental right (Solosky v. The Queen, [1980] 1 S.C.R. 821; R. v. Gruenke, [1991] 3 S.C.R. 263; Descôteaux et al. v. Mierzwinski, [1982] 1 S.C.R. 860; R. v. McClure, [2001] 1 S.C.R. 445, 2001 SCC 14; Ontario (Ministry of Correctional Services) v. Goodis, [2006] 2 S.C.R. 32, 2006 SCC 31).

[7] The purpose of solicitor-client privilege is to ensure that a client may communicate openly and frankly with his or her lawyer, without risking disclosure to others, whether voluntary or compelled, of information imparted to the lawyer in order to obtain legal advice (Anderson v. Bank of British Columbia (1876), 2 Ch. D. 644 (Eng. C.A.), cited in Smith v. Jones, [1999] 1 S.C.R. 455 at para. 45).

[8] The Law Society draws the connection between the protection of solicitor-client privilege and the fundamental importance to our legal system of the independence of the legal profession from state interference (Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143 at 187-88, per McIntyre J. dissenting in part; Canada (Attorney General) v. Law Society of British Columbia, [1982] 2 S.C.R. 307 at 335-36). It makes the point that if lawyers were subject to regulation by the state and the state had access to privileged information during an investigation of a lawyer, solicitor-client privilege would be a hollow right. The independence of the legal profession is in turn protected by self-regulation. (Finney v. Barreau du Québec, [2004] 2 S.C.R. 17, 2004 SCC 36). Proper regulation by the Law Society of the competence and integrity of lawyers requires access to confidential, and occasionally, privileged information, such as client instructions.

[9] Over the years courts have examined the need to balance the competing values of protecting solicitor-client privilege, to enable clients to communicate freely with legal advisors and the need to ensure the integrity of the legal profession, which is a self-regulated body requiring public confidence.

[10] The Supreme Court in British Columbia and courts in other provinces have considered these competing values in the context of interpreting relevant legislation (Law Society (Saskatchewan) v. Robertson Stromberg, [1995] 3 W.W.R. 601 (Sask. C.A.);Greene v. Law Society (British Columbia) (2005), 40 B.C.L.R. (4th) 125, 2005 BCSC 390;Stewart McKelvey Stirling Scales v. Barristers’ Society (Nova Scotia) (2005), 236 N.S.R. (2d) 327, 2005 NSSC 258; and Law Society (Saskatchewan) v. E.M. & M Law Firm (2006), 287 Sask. R. 140, 2006 SKQB 369). The differences in outcome reflect the differences in the underlying legislation.

[11] E.M. & M. is an illustrative example. The legislation in Saskatchewan provided that the court had discretion to order the production of documents and records demanded by the Law Society. In para. 6, the Court stated:

…The issue is whether this Court should exercise its discretion in favour of the Law Society and grant the discretionary order requested even though the documents and records are subject to solicitor-client privilege.

[12] After discussing the leading cases involving privilege the court referred to and quoted from Greene, noting in para. 17; “[i]n the British Columbia legislation, it is deemed that the disclosure by the lawyer is not a breach of solicitor-client privilege”. The Court then discussed the decision of the Nova Scotia Supreme Court in Stewart McKelvey.

[13] The issue in Stewart McKelvey was whether the production of privileged documents could be compelled. Unlike other provincial acts, the Nova Scotia legislation did not provide specifically for production. Based on the common law and the court’s construction of the legislation the court concluded that production could be ordered. A factor in reaching that conclusion was a provision in the legislation that essentially was the same as s. 88(1) of the British Columbia Act.

[14] The Court in E.M. & M. stated in paras. 21 and 22:

. . . in British Columbia disclosure of the information is prohibited by those who of necessity must acquire the information. In the Nova Scotia legislation the clients’ privilege is maintained.

The question then is what legislative protection of solicitor-client privilege exists in Saskatchewan?

The Court concluded in para. 38 “. . . the Saskatchewan Act and Rules in their current form allow too much discretion to adequately address the protection of the solicitor-client privilege”.

[15] The member asserts that s. 88(1) protects the lawyer, but not the client and the privilege is the client’s privilege. He says that the section absolves, but does not authorize and relies on Bell v. Smith, [1968] S.C.R. 664 for the proposition that in the absence of waiver, a lawyer has a duty to maintain privilege. It is asserted that s. 88 should be construed in light of that truism to apply only where a client is the complainant.

[16] As was stated by Gerow J. in Greene at para. 52, a client who complains does not waive privilege. The fact that a lawyer may be able to give information to protect him or herself does not waive the client’s privilege as against the world. This being the case, I see no distinction in the application of s. 88 to the complaints however initiated: client, non-client, the Law

Solicitor/client privilege is an exception to the general rule that the court requires all relevant information to be received as evidence to determine trials on their merits. It is part of the “constant conflict between two countervailing policies” (The Law of Evidence in Canada (Toronto:
Butterworth’s, 1999, at 713 (“Evidence”)).

The Collateral Attack Rule

Collateral damageThe trusts of the late Sam Cohen reported in Re Newton Trust 2013 BCSC 1665 involved an issue relating to the collateral attack rule.

One of the trustees sought $800,000 in past fees for periods covered in previous passing of accounts.

Various legal issues such as res judicata were discussed , as well as the “Collateral attack rule”.

67] In essence, the real question that I must determine is whether a party can bring a second action in relation to a previous proceeding he commenced that challenges the constitutional basis for that action.

[68] Mr. MacKenzie has attempted to frame this claim as an entirely new proceeding on the basis of the substantive issues he raises in the petitions. However, he expressly asks this Court to set aside the impugned judgment of Registrar Blok. These circumstances raise the question of whether the collateral attack rule is engaged.

[69] In Wilson v. The Queen, [1983] 2 S.C.R. 594 at 599, Mr. Justice McIntyre described the rule of collateral attack:

It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. It is also well settled in the authorities that such an order may not be attacked collaterally—and a collateral attack may be described as an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgment. Where appeals have been exhausted and other means of direct attack upon a judgment or order, such as proceedings by prerogative writs or proceedings for judicial review, have been unavailing, the only recourse open to one who seeks to set aside a court order is an action for review in the High Court where grounds for such a proceeding exist. Without attempting a complete list, such grounds would include fraud or the discovery of new evidence.

[70] In Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62 at para. 60, the Court affirmed this description of collateral attack and reviewed the principles underpinning the rule:

[61] The rule is a judicial creation (which must therefore yield to a contrary legislative enactment) based on general considerations related to the administration of justice, as explained in Garland v. Consumers’ Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 72:

The fundamental policy behind the rule against collateral attack is to “maintain the rule of law and to preserve the repute of the administration of justice” (R. v. Litchfield, [1993] 4 S.C.R. 333, at p. 349). The idea is that if a party could avoid the consequences of an order issued against it by going to another forum, this would undermine the integrity of the justice system. Consequently, the doctrine is intended to prevent a party from circumventing the effect of a decision rendered against it. [Emphasis added.]

[62] In R. v. Litchfield, [1993] 4 S.C.R. 333, the criminal case referred to in Garland, the Court declined to apply the rule against collateral attack. In Garland itself, class action plaintiffs brought a claim against a gas company seeking restitution on the grounds of unjust enrichment of late payment penalties previously approved by the Ontario Energy Board. In its defence, the gas company argued that the claim for restitution was a collateral attack on the Board’s order. The defence failed.

[71] As noted by Madam Justice Arbour, writing for the majority in Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, the focus of the collateral attack rule is on attacking the order itself and its legal effect (para. 34).

[72] In her summary of the law of collateral attack, Arbour J. referred to R. v. Sarson, [1996] 2 S.C.R. 223, which is also raised in the applicant’s arguments in this case. The circumstances in that case are relevant to this application. Mr. Justice Sopinka, writing for the majority, held that a prisoner’s habeas corpus attack on his criminal conviction pursuant to a law later declared unconstitutional must fail under the rule of collateral attack and the doctrine of res judicata. The offender’s conviction was a matter of settled law as a judgment of a court of competent jurisdiction. Citing from Professor Hogg, Sopinka J. noted that only an absence of jurisdiction, rendering a decision a nullity, would expose a judicial decision to collateral attack (para. 35).

[73] Counsel for Mr. MacKenzie argues that the rule of collateral attack does not apply as it first requires that the impugned order be made by a court of competent jurisdiction. He says that Registrar Blok was not of competent jurisdiction to grant his order. Therefore, collateral attack cannot be raised.

[74] Donald Lange’s text The Doctrine of Res Judicata in Canada, 3rded. (Markham: LexisNexis, 2010) states at 464 – 465:

There are two kinds of lack of jurisdiction for the purpose of a judgment. An important distinction must be made between a judgment rendered where there is no jurisdiction, in and of itself, and a judgment rendered where there is no jurisdiction although jurisdiction is assumed to exist because of a set of facts which are assumed to exist. The former is a nullity and assailable in a subsequent proceeding as a defence to an estoppel argument. It is not viewed as a collateral attack on the judgment. The latter is only assailable by way of appeal. If it is attacked in a subsequent proceeding, it is viewed as a collateral attack on the judgment.

[75] As stated by the Manitoba Court of Appeal in Volhoffer v. Volhoffer, [1925] 3 D.L.R. 552 (M.B.C.A.) at 556 – 557:

From these authorities, the law would appear to be that, if a tribunal which has jurisdiction over a subject-matter, provided a given state of facts exists, makes an order in respect of that subject-matter in the absence of the existence of that state of facts, and, therefore, without jurisdiction, such order must be treated as valid and binding until it is reversed upon an appeal, and, generally speaking, it cannot be attacked in a collateral proceeding. But where the tribunal has not been given any jurisdiction over the subject-matter, no matter what state of facts may exist, an order made in respect of it is a nullity, and need not be appealed against, and its invalidity may be set up as an answer in any proceeding taken under it.

[76] I also note the British Columbia Court of Appeal’s findings in R. v. J.L.S., 2002 BCCA 174:

[36] The appellant argues that just as the Provincial Court has no power to issue injunctions, the Youth Court has no power to place young persons on recognizances.

[37] As counsel for the respondent has pointed out, the distinction between errors of law or fact on the one hand and errors of jurisdiction on the other is sometimes difficult to draw but, in the context of the rule against collateral attack, the distinction may be drawn by asking whether the judge who had the order under attack had the general power to make the type of order in question, even if he or she arguably should not have made the order in the particular circumstances of the case under consideration. If the question is framed that way, Mr. Ehrcke argued, then the issue is not whether Judge Lemiski should have placed the appellant on the recognizance nor whether he erred in law in doing so. Instead, the question is whether he lacked the power to place young persons on recognizances at all.

[38] While a Youth Court judge cannot order a young person to enter into a recognizance under s. 810 of the Criminal Code, Youth Court judges do have the power to place young persons on recognizances. Clearly they do so in the context of bail applications and s. 49 of the Young Offenders Act makes explicit reference to “a recognizance binding a young person”. In my view, the recognizance order made by Judge Lemiski falls into the category of an erroneous exercise of jurisdiction and, as such, would be immune from collateral attack. The proper forum in which to attack the order placing the young person on a recognizance was an appeal from the original order, not in proceedings commenced for breach of recognizance.

[39] As the order was immune from collateral attack, the appeal from Mr. Justice Romilly’s order must be dismissed.

[77] If Mr. MacKenzie was concerned about the jurisdiction of Registrar Blok, he could have raised that issue at the hearing of the matter or upon appeal. I agree with the submission of the applicant that he could have discovered this challenge by exercising reasonable diligence.

[78] It is inappropriate for this Court to allow a proceeding to continue on the basis the litigant has now come up with a constitutional argument six years later that attacks the legal basis of the original judgment, which obviously did not fall in his favour. He has squandered his right to appeal the decision for want of prosecution. That was the proper avenue for challenging Registrar Blok’s decision.

[79] It is also well established under the doctrine of res judicata that the courts will not permit the same parties to open the same subject of litigation in respect of a matter which the parties, exercising reasonable diligence, might have brought forward at the time. As stated by Madam Justice Newbury in Cliffs Over Maple Bay (Re), 2011 BCCA 180 at para. 28:

Although grounded in the same basic considerations, each form involves, or has traditionally involved, criteria that have been expressed in slightly different terms. The traditional criteria for cause of action estoppel, confirmed in Canada in Angle, supra, were summarized by Chief Justice Hewak in Bjarnarson v. Manitoba (1987) 38 D.L.R. (4th) 32 (Man. Q.B.) at 34, aff’d. (1987) 45 D.L.R. (4th) 766 (Man. C.A.), as taken from Grandview v. Doering [1976] 2 S.C.R. 621:

1. There must be a final decision of a court of competent jurisdiction in the prior action [the requirement of “finality”];

2. The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action [the requirement of “mutuality”];

3. The cause of action and the prior action must not be separate and distinct; and

4. The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence. [At para. 6; emphasis added.]

It is perhaps unnecessary to state that the doctrine contemplates two “causes” – the first having ended in a final judgment that bars a “second claim for the same cause”: see Mohl v. University of British Columbia, 2006 BCCA 70 at paras. 23-4. In this context, “cause of action” does not refer to the name or classification given to the wrong or remedy, but to a factual situation which entitles one to a remedy: see also Lange at 147; Comeau v. Breau (1994) 145 N.B.R. (2d) 329 (C.A.) at para. 18; and Letang v. Cooper [1965] 1 Q.B. 222 (C.A.) at 242-43.

[80] In Braithwaite v. Nova Scotia Public Service Long Term Disability Plan Trust Fund, 1999 NSCA 77 Mr. Justice Cromwell declined to strike out the action at the preliminary stage because he was concerned that it was far from clear, based on the incomplete record, if the matter was a collateral attack (para. 60). That is not a concern for me: I have the full factual record before me.

The Tort of Conversion

The tort of conversion was discussed in Ast v Mikolas 2010 BCSC 127 .


[125] The tort of conversion involves the wrongful interference with another person’s chattels such as taking, using or destroying the goods in a way that is inconsistent with the owner’s ownership of or title to the goods. See: Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727 at para. 31.


[126] The three elements that must be proven to establish the tort of conversion are:

(a) a wrongful act by the defendant involving the goods of the plaintiff;

(b) the act must consist of handling, disposing, or destroying the goods; and

(c) the defendant’s actions must have either the effect or intention of interfering with (or denying) the plaintiff’s right or title to the goods.


[127] Conversion is a tort involving strict liability where even an innocent third party recipient of stolen goods may commit the tort of conversion. In MacKenzie et al. v. Blindman Valley Co-Operative Association Ltd., [1947] 2 W.W.R. 443, [1947] 4 D.L.R. 687 (Alta. S.C.), cited with approval in General Securities Ltd. v. Parsons, [1955] B.C.J. No. 22 (C.A.), Chief Justice Howson stated:

The principle under which the liability for conversion is determined is stated in the headnote of the report of the House of Lords decision in the Fowler v. Hollins case, supra, at p. 169: “Any person who, however innocently, obtains the possession of the goods of a person who has been fraudulently deprived of them, and disposes of them, whether for his own benefit or that of any other person, is guilty of a conversion, unless the possession was obtained by him as finder or as bailee, or by purchase in market overt or from an agent, so as to be protected by the Factors Acts.”

Passing of Executor’s Accounts

Passing of accountsThe following article is that of Master Young on the passing of executor’s accounts, as presented to the Wills and Trusts Subsection in April 2012.

Master Young ,described the registry procedure for probate grants. The initial vetting of probate applications goes to senior registry staff to ensure that all the formalities are completed. The master has to review all probate applications before the Deputy District Registrar signs the grant.

There were no concerns about the process raised by the registry. As most counsel know, when an application is bounced, a checklist is attached that indicates as how the application was deficient and counsel are encouraged when the application is re-submitted to include the checklist so that it goes back to the appropriate person who is familiar with the file.

If counsel have an application that is time sensitive in nature they are invited to indicate this in the Requisition or in a cover letter. State why it is urgent and it will be delivered directly to the Registrar for approval.

Further, if something in the application is odd, difficult, or questionable, include the details in a cover letter and possibly a supplemental affidavit to avoid having it returns by registry staff.

Passing of Executor’s Accounts

The formal passing of estate accounts is fairly rare as most are consented to.
The Rules of Court provide that the application for passing of accounts is by Rule 21-5(70)-(72) and in Form 106.
If you intend to give Notice of your application to pass accounts then follow Rule 8-1. An Application without Notice can be made under Rule 8-4 in which case the interested parties would receive notice after the order to refer the matter to a registrar is obtained.
If a beneficiary is requesting the passing of accounts they may do so by filing a Petition pursuant to Rule 16.
In some circumstances the personal representative may wish to formally pass accounts in situations where the accounts are not opposed by any party. This can be done by Notice of Applications using the Rule 8 procedure. The standard form 106 account will be filed but in the
event that you will be requesting higher than average executor or legal fees this affidavit should contain further information to satisfy the master that the higher fees are justified. This additional affidavit material can be included in the form 106 or in a separate affidavit. Even if everyone consents, the master will want evidence to justify the higher fee.

Applications for a Formal Passing of Accounts before the Registrar

When the accounts are opposed, a registrars hearing will be required.
The first step it to obtain an order from the master setting the matter down for a registrar’s and setting out the terms of the reference to the registrar. This application in master’s chambers can be made without notice because the interested parties will be notified of the registrar’s hearing. The method of service of the interested parties may be a term that you ask the master to set.
You should decide whether to ask the master to order that the registrar has authority to certify her findings or not. If the findings are certified by the registrar at the time the report is filed, then the findings become a court order and do not require a third court appearance to certify the findings. This power to certify does save the estate some time and money but as was pointed out by one attendant at the meeting it does limit the interested parties’ opportunities to challenge the registrar’s findings. Essentially, you will be removing one level of appeal. On reflection, the master would likely be willing to grant the power to certify if all interested parties had notice of that first stage application but may be less likely to do so if the first order is applied for without notice.
In situations where accounts are not consented to but you are unable to ascertain what the issues are, you are encouraged to set down a pre-hearing conference first.
You may request leave to leave to attend a prehearing conference by phone. This request will ordinarily be approved. However, if the other party is self represented it may be advisable to appear in person so you have an opportunity to talk to the person prior to attending the prehearing conference. It is the master’s observation that in-person conferences are always more effective than telephone conferences, but of course, they are more time consuming and expensive for the parties.
At the prehearing conference, the Registrar will determine the length of time required for the hearing. If it is more than a half-day, a pre-conference is mandatory. She may make the following orders or directions:
o An order for production of documents in advance of the hearing date. The registrar will generally wish to see the legal account as well as the executors accounts in cases where the executors remuneration is being challenged or is in the higher end of the range;

o Ascertain what witnesses will be called and ensure adequate time is reserved for the hearing.

o Confirm if evidence is by affidavit (Form 106) or viva voce; generally counsel will want to have the personal representative take the stand and give some evidence in chief even if affidavits are filed.

The Standard Hearing Procedure

Give your opening statement to focus the registrar’s attention on what the issues are, who the witnesses are and etc. You may ask to have witnesses excluded from the courtroom during testimony of earlier witnesses
There is no requirement for filing a Chambers Record because registrars hearing do not fall under Rule 8 but if you will be referring to a number of documents then a document binder is highly
recommended. You are also encouraged to bring an entire exhibit book for the witness who is in the witness stand, so that the court is not passing their book back and forth.

To prepare your personal representative in files where you know from the start that matters will be opposed, advise your personal representative to keep a journal log and write all their estate activities in it. Caution them that the journal may have to be disclosed to the other parties so it should not contain anything that they do not wish to be read out in court..
Be prepared to make your argument for costs at the end of the hearing. If the estate was put to unnecessary or unreasonable expense you may submit that the beneficiary causing the expense and not the estate should bear some of the costs.
• In a simple matter you may wish to bring a draft report.

• If there is no Order for certification then your next step is to make a chambers application before a
judge to certify or vary the registrars report and recommendations and to discharge the personal
representative. A notice of application must be filed and served again using Rule 8 procedure and
a Chambers Record. The report of the registrar should be attached to the notice of application
which will be served on all interested parties. If you seek to vary the recommendations then the
terms you wish to vary and the order you seek should be clearly set out in the Notice of
Application. An affidavit supporting the application is required. You are directed to the CLE manual
“Practice before the Registrar” which sets out the procedure and precedents.

Seeking Court Directions By The Executor/Administrator

Executors often do not know what to do and may be faced with decisions that are difficult to make without Court guidance. Where there is no certainty in the law, and no consensus amongst the beneficiaries affected, the Executor has recourse to the court by way of an application for directions under s. 86 of the Trustee Act.

Chapter 9 of the BC Probate and Estate Administration Practice Manual (CLE, 2nd Ed), gives examples of the court declining to give directions include:

determining what property should be included in the estate;
the time or price of the sale of shares;
the distribution of the estate on an intestacy; and
whether a respondent was the common law spouse of the deceased.
In Re Lohn Estate (1991) 41 E.T.R. 159 (B.C.S.C), the court declined making an order approving a scheme to minimize taxes and subsequently refused to allow the trustees to “unload the responsibility they have assumed, as trustees, upon the court”.

In Re Royal Trust Co. (1962), 39 W.W.R. 638 (B.C.S.C), the court held that its jurisdiction is restricted to questions of “management or administration” and will not determine question of ownership or other matters “affecting the rights of the parties”.

Examples of situations in which the court did give advice and directions include:

the proper disposition of interest earned on a hold back for taxes;
the extent of a discretion or power;
determining the beneficiary under an RRSP where there was a general revocation clause in the will;
approving a resettlement of a trust;
whether terms of a will were against public policy;
whether a trust was charitable;
whether the doctrine of acceleration applied in a disclaimer situation; and
where trustees cannot reach a unanimous decision.


Res Judicata, Issue Estoppel and Abuse of Process

res judicata



McIntyre V Richardson Estate 2012 BCSC 1347 provides a good summary of the law of the related legal principles of res judicata, issue estoppel, and abuse of process .

They were also  thoroughly canvassed by Madam Justice Ballance in Tylon Steepe Homes Ltd. v. Pont, 2011 BCSC 385 at paras. 52 to 56:

[52] The doctrine of res judicata is a time-honoured cornerstone of Canadian justice. Where a cause or a fundamental issue has been decided, it is said to be res judicata and, absent special circumstances, is precluded from being adjudged a second time. When res judicata applies, a litigant is stopped by the prior suit, from proceeding in the subsequent action. The maxim has been traditionally regarded as an exclusionary rule of evidence. The paramount policy considerations include the avoidance of duplicative litigation, potential inconsistent results and inconclusive proceedings. Finality to litigation is the prime objective. (See generally: Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248 [Angle]; Grdic v. The Queen, [1985] 1 S.C.R. 810 [Grdic]; Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 1 S.C.R. 460 [Danyluk]).

[53] Res judicata takes two distinct forms: issue estoppel and cause of action estoppel, indicating that there can be estoppel with respect to the entire cause or a discrete issue(s). Much of the judicial analyses of the doctrine spring from a scenario where it is a plaintiff who is attempting to relitigate a matter; however, the principles apply, with obvious modifications, to the attempted recycling of a defence.

[54] Generally speaking, the authorities require fastidious adherence to the constituent elements of res judicata in order to permit its application. However, even where the requisite ingredients are present, the court retains a residual discretion to decline to apply it if doing so would cause unfairness in the particular case: Danyluk at para. 33; British Columbia (Minister of Forests) v. Bugbusters Pest Management Inc. (1998), 159 D.L.R. (4th) 50, 50 B.C.L.R. (3d) 1 (C.A.) [Bugbusters, cited to D.L.R.]. As Finch J.A. (now the Chief Justice) emphasized at para. 32 in Bugbusters, the doctrine “inevitably calls upon the exercise of a judicial discretion to achieve fairness according to the circumstances of each case”.

[55] The three-fold requirements which must be established in order to successfully invoke issue estoppel are:

(1) that the same question has been decided and was fundamental, as opposed to collateral or incidental, to the decision;

(2) that the decision in the first proceeding said to create the estoppel was final; and

(3) that the parties to the first proceeding or their privies are the same persons as the parties, or their privies, to the subsequent proceeding:

(See Angle; Grdic and Danyluk).

[56] The “same question” test is a crucial element and a focal point of both types of estoppel under the res judicata umbrella.

[44] Later in her reasons, Madam Justice Ballance addressed the relationship between res judicataand abuse of process. She said this at paras. 79 to 80:

[79[ In response to perceived difficulties in demanding strict adherence to the constituent elements of res judicata, modern Canadian courts have developed the independent but related concept of abuse of process as a means of barring relitigation where permitting it to proceed would offend vital principles such as judicial economy, consistency, finality of legal disputes, and, perhaps most importantly, the integrity of the judicial decision-making process. Abuse of process is a flexible doctrine that finds its roots in the Court’s inherent residual discretion to prevent an abuse of its process.

[80] The concepts of res judicata and abuse of process are inter-related and share several overlapping features and common policy objectives. They are each extraordinary remedies to be applied sparingly: Chapman. Indeed, the decision in Saskatoon ultimately rested on abuse of process. It is key to appreciate that with respect to abuse of process the proper focus is on the integrity of the administration of justice and not the motive of the parties in terms of their treatment of the judicial process.

[45] Ballance J. cited the decision of Madam Justice Arbour in the leading Supreme Court of Canada decision concerning abuse of process, that is Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 at para. 43:

…the primary focus of the doctrine of abuse of process is the integrity of the adjudicative functions of courts. …the focus is less on the interest of parties and more on the integrity of judicial decision making as a branch of the administration of justice…. When that is understood, the parameters of the doctrine become easier to define, and the exercise of discretion is better anchored in principle.