Legal Fees Agreements

Legal Fees Agreements

The test as to whether a legal fees agreement was “fair and reasonable” was recently reviewed in Hammerberg Lawyers LLP v Ikeda 2016 BCSC 621.

The agreement in question was a contingency fee agreement. The lawyers worked on a difficult case for a long time but found that the client would not co operate and eventually obtained an order removing the firm as the lawyers for the -plaintiff. The plaintiff then settled her case directly with the insurance company and the lawyers sued the plaintiff for their fees and won.

The court found that it was a difficult case, the client could not have afforded to prosecute it without a contingency fee and that the settlement was a result of the work performed by the law firm.

In reviewing the law on fee agreements the court stated :

[86]         Registrar Nielsen has summarized the framework for this type of analysis in Spraggs & Company v. Carnaby, 2015 BCSC 1504:

[25]      Section 65 of the Legal Profession Act allows a lawyer or a law firm to enter into an agreement with any other person, requiring the payment for services provided or to be provided.

[26]      Section 68 of the Legal Profession Act allows a person who has entered into an agreement with a lawyer to have the agreement examined and cancelled if the agreement was unfair or unreasonable at the time it was entered into. However, section 68(3) of the Legal Profession Act provides a strict limitation period for such a review which has not been met in this case. The client’s failure to properly challenge the agreement within the time provided by the Legal Profession Act is sufficient to dispose of this issue.

…

[28]      The test for determining whether an agreement is fair and reasonable was established in Commonwealth Investors Syndicate Ltd. v. Laxton, 50 BCLR (2d) 186 (BCCA), leave to appeal refused [1990] S.C.C.A. No. 479 QL. The Court stated at pages 198 and 199:

In our opinion s. 99 contemplates a two-step enquiry.

The first step investigates the mode of obtaining the contract and whether the client understood and appreciated its contents. The enquiry would include whether, at the time the contract was entered into, there was any lack of capacity on the part of the client, whether there was any undue influence exercised or unfair advantage taken by the solicitor, whether any mistake was made, or whether any other flaw arose in the formation of the contract which would indicate that the client did not understand and appreciate its content. The onus would be upon the solicitor to satisfy the foregoing requirements of the enquiry. Should any of those be found, the contract would not be “fair” in the sense of the statute and Re Stuart. The court would declare the contract cancelled, or would modify it, or the bill could be remitted for taxation.

The second enquiry, assuming the contract is found to be fair” involves an investigation of the “reasonableness” of the contract. On this investigation, extending from the time of the making of the contract until its termination or its completion, all of the ordinary factors which are involved in the determination of the amount a lawyer may charge a client are to be considered, and each factor may be the subject of professional evidence to assist the judge in determining the reasonableness of the fee in the particular circumstances.

[29]      This approach continues to be endorsed by the court. See Mide-Wilson v. Hungerford Tomyn Lawrenson & Nichols, 2013 BCCA 559, at paragraphs 22 and 23.

…

[35]      Having found the agreement to be fair and reasonable is not the end of the matter. It remains to be determined whether the agreement results in a “fair fee” (see Mide-Wilson, supra, at paragraphs 69 to 73, 76 to 77, and 100.

[36]      Section 71(5) of the Legal Profession Act provides that the discretion of the Registrar is not limited to the terms of an agreement between the lawyer and the client. Therefore, the bill is to be reviewed keeping in mind the principles of review which are summarized in s. 71 of the Legal Profession Act which provides:

71(1) This section applies to a review or examination under section 68 (7), 70, 77 (3), 78 (2) or 79 (3).

(2) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services:

(a) those reasonably necessary and proper to conduct the proceeding or business to which they relate;

(b) those authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate.

(3) Subject to subsections (4) and (5), the registrar may allow fees, charges and disbursements for the following services, even if unnecessary for the proper conduct of the proceeding or business to which they relate:

(a) those reasonably intended by the lawyer to advance the interests of the client at the time the services were provided;

(b) those requested by the client after being informed by the lawyer that they were unnecessary and not likely to advance the interests of the client.

(4) At a review of a lawyer’s bill, the registrar must consider all of the circumstances, including

(a) the complexity, difficulty or novelty of the issues involved,

(b) the skill, specialized knowledge and responsibility required of the lawyer,

(c) the lawyer’s character and standing in the profession,

(d) the amount involved,

(e) the time reasonably spent,

(f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time spent by the lawyer, whether the rate was reasonable,

(g) the importance of the matter to the client whose bill is being reviewed, and

(h) the result obtained.

(5) The discretion of the registrar under subsection (4) is not limited by the terms of an agreement between the lawyer and the lawyer’s client.

Quantifying Special Costs and Contingency Fees

Quantifying Special Costs and Contingency Fees

Norris v Burgess 2016 BCSC 1451 stated the law for quantifying special costs and then applied that amount towards the plaintiff’s contingency fees.

Norris was an ICBC case where the judge in a Jury trial found fault on the insurer for the late production of a video and photos and awarded special costs in the same amount as the plaintiff’s entire %30 contingency fee , amounting to $155,340 plus out of pocket expenses for the court action ( disbursements).

The same reasoning should apply to estate litigation cases where the opposing party is awarded special costs against them in the same amount as the plaintiff’s legal fees work out to be on a contingency fee basis between the client and the lawyer.

[79]         Rule 14-1(3) of the Rules of Court refers to “special costs” as “those fees that were proper or reasonably necessary to conduct the proceeding”. In its entirety, R. 14-1(3) reads:

(3) On an assessment of special costs, a registrar must

(a)   allow those fees that were proper or reasonably necessary to conduct the proceeding, and

(b)   consider all of the circumstances, including the following:

(i)               the complexity of the proceeding and the difficulty or the novelty of the issues involved;

(ii)              the skill, specialized knowledge and responsibility required of the lawyer;

(iii)            the amount involved in the proceeding;

(iv)            the time reasonably spent in conducting the proceeding;

(v)             the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the proceeding;

(vi)            the importance of the proceeding to the party whose bill is being assessed, and the result obtained;

(vii)           the benefit to the party whose bill is being assessed of the services rendered by the lawyer;

(viii)         Rule 1-3 and any case plan order.

[80]         In Gichuru, our Court of Appeal summarizes the general principles related to the assessment of costs by a judge:

[154]    We would briefly summarize the principles as discussed above. The decision to fix the quantum of costs under R. 14-1(15) is a matter of judicial discretion that should be sparingly exercised. The court officer best placed to conduct an assessment is usually the registrar, whose knowledge and experience in assessing legal bills is extensive and seldom matched by that of a trial judge. An exception may arise in cases when the judge is intimately familiar with the litigation or the time and cost of a registrar’s hearing cannot be justified or where the parties consent. The fact that a judge has heard the trial does not necessarily lead to the conclusion that the best use of judicial resources is for the judge to assess costs. A concern that a party who might have to pay costs will prolong the costs assessment by requiring a microscopic review of the services provided by counsel must be balanced against the right of that party to challenge the reasonableness of the proposed costs.

[155]    When assessing special costs, summarily or otherwise, a judge must only allow those fees that are objectively reasonable in the circumstances. This is because the purpose of a special costs award is to provide an indemnity to the successful party, not a windfall. While a judge need not follow the exact same procedure as a registrar, the ultimate award of special costs must be consistent with what the registrar would award in similar circumstances. Thus, a judge must conduct an inquiry into whether the fees claimed by the successful litigant were proper and reasonably necessary for the conduct of the proceeding as set out in R. 14-1(3)(a), taking into account all of the relevant circumstances of the case and with particular attention to the non-exhaustive list of factors in R. 14-1(3)(b).

[156]    A special costs assessment, whether before a judge or a registrar, cannot proceed in absence of evidence of the amount of legal fees incurred. Usually this will be provided in the same form as a bill between a solicitor and client under the Legal Profession Act. This is necessary to allow a court to inquire as to the objective reasonableness of the fees claimed by a litigant, as the fact that a solicitor has billed a certain sum does not necessarily make the fee reasonable. Where production of a bill of special costs would lead to a loss of solicitor-client privilege, the party seeking special costs must either waive privilege or can elect to preserve privilege by having its costs assessed after all appeals are exhausted.

Special Costs and Contingency Fees

[1]             The plaintiff was successful at trial with the jury awarding her $462,374 in damages resulting from a June 2, 2010 motor vehicle accident. The Insurance Corporation of British Columbia (“ICBC”) had conduct of the defence.

[2]             The defendants elected a jury trial. The plaintiff applied unsuccessfully to strike the jury: Norris v. Burgess (14 October 2015), Vancouver M123216 (B.C.S.C.)

[3]             On October 23, 2015, the defendants made an offer to settle for $678,500 which complied with R. 9-1 of the Supreme Court Civil Rules, [Rules of Court]. The plaintiff did not accept the offer.

[4]             The defendant admitted liability just before the commencement of the scheduled 20-day trial, which began on November 16, 2015.

[5]             The defendants now seek to be awarded costs at Scale B, Appendix B of the Rules of Court, from the date of the offer until the start of trial, and special costs for the trial as a result of the late disclosure of various photographs and copies of some hunting licences. In the alternative, for the trial, the defence seeks costs at Scale C, Appendix B of the Rules of Court. In either case, the plaintiff would have her costs prior to the date of the offer at Scale B.

[6]             The plaintiff states that the Court should not consider the defendants’ offer in exercising its discretion in relation to costs.

[7]             The plaintiff seeks special costs for the entire proceeding, equalling plaintiff’s counsel’s contingency fee. In the alternative, the plaintiff seeks costs at Scale B until the start of the trial and at Scale C for the trial.

[8]             The plaintiff’s basis for seeking special costs is the timing of ICBC’s disclosure of surveillance video for 2015 (“2015 Video”). By an October 20, 2015 Court Order, the defendants were required to list any surveillance video on or before October 23, 2015 (approximately three weeks before the scheduled trial). The 2015 Video was not disclosed until after the third week of trial.

[9]             Prior to the October 20, 2015 Court Order, surveillance videos for 2013 and 2014 had been disclosed.

[10]         For the reasons that follow, the plaintiff is awarded the special costs she seeks as a result of ICBC’s late disclosure of the 2015 Video.

 

Settlement Offers and Court Costs

Settlement Offers and Court Costs

Norris v Burgess 2016 BCSC 1451 deals with settlement offers and court costs, that is how courts adjust cost upwards or downwards either in favour of one party or against the other party depending on the parties conduct and the terms of any formal offers to settle made in accordance with the rules.

Costs are increasingly being awarded against unsuccessful estate litigants on a personal basis and the amount of them has escalated over the years almost like property prices in the lower mainland.

In writing for our Court of Appeal in C.P. v. RBC Life Insurance Company, 2015 BCCA 30, leave to appeal ref’d [2015] S.C.C.A. No. 136, Justice Goepel, in considering a trial award of double costs, sets forth generally the purpose of the costs rules related to settlement offers:

[94]      The underlying purpose of the offer to settle rule was set out in Hartshorne:

[25] An award of double costs is a punitive measure against a litigant for that party’s failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted. Litigants are to be reminded that costs rules are in place “to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer” (A.E. v. D.W.J., 2009 BCSC 505, 91 B.C.L.R. (4th) 372 at para. 61, citing MacKenzie v. Brooks, 1999 BCCA 623, Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 (C.A.), Radke v. Parry, 2008 BCSC 1397). In this regard, Mr. Justice Frankel’s comments in Giles are apposite:

[74] The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

  • “[D]eterring frivolous actions or defences”: Houweling Nurseries Ltd. v. Fisons Western Corp. (1988), 37 B.C.L.R. (2d) 2 at 25 (C.A.), leave ref’d, [1988] 1 S.C.R. ix;
  • “[T]o encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”: Skidmore v. Blackmore (1995), 2 B.C.L.R. (3d) 201 at para. 28 (C.A.);
  • “[E]ncouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases: Bedwell v. McGill, 2008 BCCA 526, 86 B.C.L.R. (4th) 343 at para. 33;
  • “[T]o have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”: Catalyst Paper Corporation v. Companhia de Navegaçao Norsul, 2009 BCCA 16, 88 B.C.L.R. (4th) 17 at para. 16.

[95]      A plaintiff who rejects a reasonable offer to settle should usually face some sanction in costs. To do otherwise would undermine the importance of certainty and consequences in applying the Rule: Wafler v. Trinh, 2014 BCCA 95 at para. 81. The importance of those principles was emphasized by this Court in A.E. Appeal at para. 41:

[41] This conclusion is consistent with the importance the Legislature has placed on the role of settlement offers in encouraging the determination of disputes in a cost-efficient and expeditious manner. It has placed a premium on certainty of result as a key factor which parties consider in determining whether to make or accept an offer to settle. If the parties know in advance the consequences of their decision to make or accept an offer, whether by way of reward or punishment, they are in a better position to make a reasoned decision. If they think they may be excused from the otherwise punitive effect of a costs rule in relation to an offer to settle, they will be more inclined to take their chances in refusing to accept an offer. If they know they will have to live with the consequences set forth in the Rule, they are more likely to avoid the risk.

[40]         With respect to the first factor in R. 9-1(6), whether the offer ought reasonably to have been accepted, Goepel J.A. in C.P. states:

[97]      Whether an offer to settle is one that ought reasonably have been accepted, is assessed not by reference to the award that was ultimately made, but under the circumstances existing when an offer was open for acceptance: Bailey v. Jane, 2008 BCSC 1372 at para. 24 and Hartshorne at para. 27. This factor is considered from the perspective of the person receiving the offer. It has both a subjective and objective component. The court is entitled to take into account the reasons why a party declined to accept an offer to settle. The court must consider whether those reasons are objectively reasonable.

[41]         I emphasize that R. 9-6(1)(a) uses the word, ought. “Ought” is defined in The Oxford English Dictionary, 2d ed. as follows:

b. In present sense: = Am (is, are) bound or under obligation: you ought to do it = it is your duty to do it; it ought to be done = it is right that it should be done, it is a duty (or some one’s duty) to do it. (The most frequent use throughout. Formerly expressed by the pres. t., OWE v. 5.)

[42]         The use of the word “ought” in R. 9-6(1)(a) evinces a legislative intent that the court may consider whether the offer was one that the offeree should have accepted. Where the offeror is the plaintiff, this wording encourages an offer that falls at the low end of the range of potential trial awards the plaintiff is anticipating. Where the offeror is the defendant, it encourages an offer that falls at the high end of the range of potential trial awards the defendant is anticipating. In short, the word “ought” brings the respective positions of the parties closer, with the object of reaching an agreement and conserving judicial and other resources.

Estoppel By Convention

estoppel

Estoppel By Convention.

The Supreme Court of Canada has set out the criteria as to what establishes estoppel by convention in Ryan v. Moore, 2005 SCC 38, [2005] 2 S.C.R. 53. In paragraphs 53 and 54, the Court sets out how the forms of estoppel have been established in law.

 

An estoppel by convention,  is an estoppel by representation of fact, a promissory estoppel or a proprietary estoppel, in which the relevant proposition is established, not by representation or promise by one party to another, but by mutual, express or implicit, assent. This form of estoppel is founded, not on a representation made by a representor and believed by a representee, but on an agreed statement of facts, or law, the truth of which has been assumed, by convention of the parties, as a basis of their relationship. When the parties have so acted in their relationship upon the agreed assumption that the given state of facts or law is to be accepted between them as true, that it would be unfair on one for the other to resile from the agreed assumption, then he will be entitled to relief against the other according to whether the estoppel is as to a matter of fact, or promissory, and/or proprietary.

 

57      The Court, then, in para. 59, said that the following criteria form the basis of the doctrine of estoppel by convention:

 

(1) The parties’ dealings must have been based on a shared assumption of fact or law: estoppel requires manifest representation by statement or conduct creating a mutual assumption. Nevertheless, estoppel can arise out of silence (impliedly).

(2) A party must have conducted itself, i.e. acted, in reliance on such shared assumption, its actions resulting in a change of its legal position.

(3) It must also be unjust or unfair to allow one of the parties to resile or depart from the common assumption. The party seeking to establish estoppel therefore has to prove that detriment will be suffered if the other party is allowed to resile from the assumption since there has been a change from the presumed position.

 

58      With respect to estoppel by representation, the Supreme Court of Canada’s decision in Canadian Superior Oil Ltd. v. Hambly, [1970] S.C.R. 932, [1970] S.C.J. No. 48, which set out in para. 19, the factors giving rise to estoppel.

They are:

(1) A representation or conduct amounting to a representation intended to induce a course of conduct on the part the person to whom the presentation is made;

(2) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made;

(3) Detriment to such person as a consequence of the act of omission.

 

59      It is to be noted, however, that estoppel by representation cannot arise from silence unless a legal duty is owed by the representor to the representee to make the disclosure. See: Ryan v. Moore, 2005 SCC 38at para. 76.

 

62      Blake therefore accepted the terms of the Wills and acted upon those terms, not just once but 4 times, when he sold the house, sold the California condo, took the art he wanted, and divided various household goods and personal effects, and signed the corporate documents. Thus, all the parties involved took steps based on the shared assumption that the Wills were valid. Their mutual conduct shows this. Blake was silent about litigating anything in connection with the Wills until September 2013, although his lawyer had contacted the Estate Trustees in early February 2012. The Estate Trustees acted in reliance of this shared assumption, paid the taxes, and did not apply for an Income Tax Clearance Certificate, as there were still unadministered corporate assets to be divided between Blake and Cody under the Wills.

 

63      Blake should not be allowed now to resile from all of the actions he took during the two-year period after Eleanor’s death. As Mr. Justice Brown said, in Lawless, supra, a prospective litigant cannot wait until he or she determines that a claim is winnable or viable.

 

64      Blake’s conduct, in my view, induced the Estate Trustees to continue the administration of the Estate, since they had no legal document to show that Blake was in any way objecting. They organized the payment to CRA to stop any penalties and interest from running on the amount owing. They placed themselves in a precarious position, not knowing that Blake would later want Orders removing them as Estate Trustees, accusing them of improper conduct and accusing Ms. Rintoul of negligence. They took a course of making distributions to Blake out of the Estate before receiving an Income Tax Clearance Certificate, for which they possibly could be personally liable.

65      In Hayes v. Montreal Trust Co., 1977 CarswellBC 69 (B.C.S.C.), the Court said in para.8, that a plaintiff:

… accepted what was done and co-operated with the executor for over a year in administering the estate in according with the will to the point where all legacies have been paid, the life interest has terminated and all that remains is distribution to the residual beneficiaries.

 

66      Blake took no steps until September 2013 to challenge the Will. He co-operated with the Estate Trustees in administering the Estate for over 2 years to the point where all that remains to be done is to divide the residue between him and Cody, which he now opposes.

 

67      In my view, whether one says that Blake is estopped from taking the position he now has by estoppel by convention or estoppel by representation, he falls within both categories, given the facts of this case. Blake had counsel in February 2012, who stated there was an issue regarding Eleanor’s capacity to make the 2011 Wills but never took the legal step to go forward with any challenge. Is this silence? Did Blake receive legal advice that he should or should not move forward? The fact remains that nothing happened and the administration of the Estate continued in legal silence until the Application was finally made.

 

Mutual Release

mutual release 2At the end of each court case, the lawyers generally have each party sign a Mutual release that in layman’s terms means they will never sue each other for the same matter again, it being a final settlement.

The mutual release signed by the parties as part of their all-inclusive settlement of the prolonged estate litigation is a valid contract.

Accordingly, like any other contract, the parties are bound by the terms to which they have agreed.

A valid mutual release typically releases the other parties to the agreement from any subsequent claims related to the claims that have been released in exchange for valuable consideration.

Such releases are executed by the parties when litigation claims are settled in order to give the parties peace from potential liability from the claims and to avoid any further proceedings that might flow from the claims released.

Such releases operate as a legal bar to the pursuit of any subsequent claim that purports to raise an issue that has already been extinguished by the release.

See: Browne v. McNeilly, [2001] O.J. No. 970 (Ont. S.C.J.), at paras. 9, 13; Sinclair-Cockburn Insurance Brokers Ltd. v. Richards (2002), 61 O.R. (3d) 105, [2002] O.J. No. 3288 (Ont. C.A.), at paras. 14-16; Marjadsingh v. Walia, 2012 ONSC 6659, [2012] O.J. No. 5788 (Ont. S.C.J.), at paras. 16-18.

 

Credibility – Who Is Believed Wins

True or falseCredibility  is whoever is believed , usually wins the case.One can have the best of court cases, but if the Judge does not believe your client’s testimony, as  there is no witnesses credibility, usually results in a lost trial.

The BC  Court of Appeal in Faryna v. Chorney, [1952] 2 D.L.R. 354 (B.C.C.A.), . stated at page 357:

The credibility of interested witness,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 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. …

 

 

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Abuse of Process: Misusing the Court’s Process for Ulterior Purpose

Abuse of Process: Misusing the Court's Process for Ulterior Purpose

The tort of abuse of process is made out when a party shows a misuse or perversion of the Court’s process for an exterior or ulterior purpose.

In other words, using a certificate of pending litigation to tie up a property and prevent it being sold to anyone else as a negotiation tactic regarding an unrelated agreement would be an abuse of process:

In D.K. Investments Ltd. v. S.W.S. Investments Ltd., [1984] 59 B.C.L.R. 333 (S.C.), aff’d [1986] 6 B.C.L.R. (2d) 291 (C.A.) it was held:

In the plaintiff’s action for specific performance arising out of an agreement for the purchase and sale of real estate, the defendant counterclaimed for damages for abuse of process in bringing the action, in filing a lis pendens and caveat on false grounds, in swearing a false affidavit and in producing a fabricated letter in court. The trial judge gave judgment on the counterclaim, awarding $75,000 damages for abuse of process and exemplary damages of $15,000. The plaintiff appealed the award of damages for abuse of process, but it was dismissed.

For the tort of abuse of process, damages are at large. Thus the award is not limited to the pecuniary loss than can be specifically proved. As in defamation and in malicious prosecution cases, the injured party may have considerable difficulty in leading evidence to show the full extent of his loss. Frequently, it will be a matter of great difficulty for the trial judge. However, upon taking into account all the circumstances, including but not limited to the pecuniary loss proved, he will be in a position to make an appropriate award. In this case, the trial judge considered especially not only the manner in which the plaintiff had prolonged the litigation by use of the fabricated letter, but the effort to push the defendant to the brink of financial disaster in order to gain the advantage which it sought. The award of $75,000 was appropriate in the circumstances.

The Courts Power to Amend Pleadings

Rules

It is frequent in estate litigation that new facts arise and the claim must be amended to provide for the adequate remedy.

This blog is a summary of the courts power to make such an order.

 

Rule 6-1(1) of the Supreme Court Rules provides that a court may grant leave to amend the whole or any part of a pleading filed by the party.

Discretion to permit amendments is unfettered, subject only to the general rule that it be exercised judicially.

Considerations are: the length of the delay, reasons for the delay; prejudice to the defendants and the overriding question of what is “just and convenient”?

Teal Cedar Products v Dale Intermediaries Ltd ( 1996) 19 BCLR (3d) 282

16. Amendments should be allowed unless actual prejudice can be demonstrated by the opposing
party or the amendment would be useless.

Langret Investments S.A. v. McDonnell (1996), 21 B.C.L. R. (3d) 145,  at paras. 34.

  1. Potential prejudice is not enough to defeat an application for amendment of the pleading: Langret, supra, at para 43.
  2. There is a wide discretion in the court to determine what is in the interests of justice and to do what is just and convenient between the parties. Prejudice to the respondents can be dealt with in costs. In Jones, the court found actual prejudice arising from the amendment of the pleading, which would cause the respondent’s re-evaluation of his entire case, but the court found that this prejudice could be compensated with costs:

Jones v. Lululemon Athletica Inc., 2008 BCSC 719,

Victoria Grey Metro Trust Company v. Fort Gary Trust Company (1982), 30 B.C.L.R. (2d)
45, Mclaughlin J. (as she then was)  nicely brings together other considerations regarding the test to amend a
pleading:

“Before addressing the proposed pleadings, I refer to the principles which govern the granting of amendments to pleadings. The basic rule, set out expressly in the former rules and no doubt still applicable, is that such amendments should be permitted as are necessary to determine the real question in issue between the parties. Rule 1(5) requires an interpretation of the rules which permit the just and speedy determination of the dispute on its merits. Similarly, the Law and Equity Act, R.S.B.C. 1979, c. 224, s. 10, requires the court to grant all such remedies as any of the parties may appear to be entitled to “so that, as far as possible, all matters in controversy between the parties may be completely and finally determined …” These provisions arguably support a generous approach to the question of amendments. However, the court will not allow useless amendments: Gesman v. Regina (City) (1907). 1 Sask. L.R. 39. 7 W.L.R. 307: Hubbuck & Sons Ltd. v. Wilkinson, Heywood & Clark Ltd.. 11899) 1 Q.B. 86 (C.A.). Similarly, it seems to me obvious that the court will not give its sanction to amendments which violate the rules which govern pleadings. These include the requirements relating to conciseness (R. 19(1)); material facts (R. 19(1)); particulars (R. 19(11)); and the prohibition against pleadings which disclose no reasonable claim or are otherwise scandalous, frivolous or vexatious (R. 19(24)). With respect to the latter, it may be noted that it is only in the clearest cases that a pleading will be struck out as disclosing no reasonable claim; where there is doubt on either the facts or law, the matter should be allowed to proceed for determination at trial: Mimes v. Minnes (1962). 39 W.W.R. 112. 34 D.L.R. (2d) 497 (B.C.C.A.); B.C. Power Corp. v. A.G.B.C (1962), 38 W.W.R. 577, 34 D.L.R. (2d) at 211 (B.C.C.A.). If there is any doubt, it should be resolved in favour of permitting the pleadings to stand: Winfieldv. Interior Ener. Services Ltd. (1969). 68 W.W.R. 383. 4 D.L.R. (3d) 71 (B.C.S.C). While these cases deal with striking out claims already pleaded, consistency demands that the same considerations apply to the question of amendment to permit new claims.”

 

 

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

http://www.courts.gov.bc.ca/jdb-txt/sc/07/04/2007bcsc0403.htm

17/03/2014

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.