The Doctrine of Fraudulent Concealment Postpones a Limitation Period

The doctrine of fraudulent concealment  . . .  was succinctly articulated by Justice Dickson (as he then was) in Guerin v. Canada, [1984] 2 S.C.R. 335 at 390, 13 D.LR. (4th) 321:

. . .  The fraudulent concealment necessary [to postpone a limitation period] need not amount to deceit or common law fraud. Equitable fraud, defined in Kitchen v. Royal Air Force Association, [1958] 1 W.L.R. 563, as ‘conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other’, is sufficient.”
Halloran v. Sargeant (2002), 217 D.L.R. (4th) 327 at 338, (sub nom. Halloran v. Ontario (Employment Standards Act Referee)) 163 O.A.C. 138, 23 C.P.C. (5th) 23, (sub nom. Halloran v. Crown Cork & Seal Canada Inc.) [2002] O.L.R.B. Rep. 765 (C.A.).

(2) In summary, the doctrine of fraudulent concealment applies in cases when:

a) the defendant and plaintiff are engaged in a special relationship with [each other];
b) given the special or confidential nature of their relationship, the defendant’s conduct amounts to an unconscionable thing for the one to do towards the other;
c) the defendant conceals the plaintiff’s right of action (either actively, or as a result of the manner in which the act that gave rise to the right of action is performed).

When these elements are satisfied, the doctrine of fraudulent concealment will be used to postpone limitation periods: Giroux Estate v. Trillium Health Centre, 2004 CarswellOnt 569 (Ont. S.C.J.).

(3) “Fraudulent concealment that suspends a limitation period requires three findings:

(1) that the defendant perpetrated some kind of fraud;

(2) that the fraud concealed a material fact; and

(3) that the plaintiff exercised reasonable diligence to discover the fraud: H. (V.A.) v. Lynch, 2000 ABCA 97, 255 A.R. 359 [(C.A.)]  . . .

Fraudulent concealment requires an element of unconscionability, ‘some abuse of a confidential position, some intentional imposition, or some deliberate concealment of facts’: M. (K.) v. M. (H.), [1992] 3 S.C.R. 6 at 57, 96 D.L.R. (4th) 289. Unconscionable conduct can be either active concealment or a failure to disclose  . . .  As well, the defendant must know of the wrong.”: Ambrozic v. Burcevski, 2008 ABCA 194, 2008 CarswellAlta 652 (Alta. C.A.), per curiam at paras. 21 and 23.

(4) It has been held that the “fraudulent concealment” of a cause of action postpones the running of a limitation period. Quaere the meaning of “fraudulent concealment”. Per Hughes, J.: “In M.(K.) [M.(K.) v. M.(H.), [1992] 3 S.C.R. 6 (S.C.C.)] the Supreme Court noted at 57 that the factual basis for fraudulent concealment is described in Halsbury’s, 4th ed., vol. 28, para. 919, at p. 413: ‘It is not necessary, in order to constitute fraudulent concealment of a right of action, that there should be active concealment of the right of action after it has arisen; the fraudulent concealment may arise from the manner in which the act which gives rise to the right of action is performed.’” (At para. 77 of instant case.)

The fact that a sexual abuser of a child is a trusted family authority masks the wrongfulness of the abuser’s incestuous conduct. Hence, it amounts to a “fraudulent concealment” of the victim’s cause of action: T. (J.) v. H. (E.E.), 2007 ABQB 537, 2007 CarswellAlta 1172 (Alta. Q.B.).

– See more at: http://www.disinherited.com/blog/doctrine-fraudulent-concealment-postpones-limitation-period#sthash.LGKha2SB.dpuf

“Proprietary Estoppel” Can Be Used as a Cause of Action

The following extensive quote relating to the law of Proprietary Estoppel has been excerpted from the reason for judgement of Cowderoy v Sorkos Estate, 77 ETR (3d) 246, which was briefly blogged about on February 7.13 on this website. 

 

P  68  “The modern doctrine of proprietary estoppel has its roots in two types of cases:

encouragement and acquies­cence.

In the first, one party encourages the other in the expenditure of money or in doing something to their detriment in anticipation of having a right over certain land.

In the second, one party, who knows the true situation, stands by while the other spends money on land over which the latter mistakenly believes to have a right. More on that dis­tinction below

. Another important aspect of modern proprietary estoppel is that it can be used as a cause of action, rather than just a defense: see Crabb v. Arun District Council (197’5). T1976] 1 Ch. 179 (Eng. C.A.) and Eberts v. Carleton Condominium Corp. No. 396(2000). 136 O.A.C. 317(Ont. C.A.). This is contrary to the well known mantra that estoppel may be used as a shield, but not a sword.

  • The foundation of modern proprietary estoppel is the House of Lords decision in Ramsden v. Dvson (1 866). L.R. 1 H.L. 129 (U.K. H.L.). In that case, it was alleged that a landlord had encouraged the belief in his tenants that if they took his land and built on it they would be entitled to a sixty year lease, renewable every twenty years. Two classic statements of the principle of proprietary estoppel have been extracted from the judgments in this case of Lord Cranworth, for the majority, and Lord Kingsdown, in dissent.
  • Lord Cranworth focused on the requirement of mistake:

 

pp6-7 If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own. It considers that, when I saw the mistake to which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion, in order afterwards to profit by the mistake which I might have prevented.

But it will be observed that to raise such an equity, two things are required, first, that the person expending the money supposes himself to be building on his own land; and, secondly, that the real owner knows that the land belongs to him and not to the person expending the money in the belief that he is the owner.

71       On the other hand, Lord Kingsdown took a broader approach, saying:

P21 The rule of law applicable to the case appears to me to be this: If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or en­couraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.

  • These two statements, one requiring mistake and the other not, illustrate the two branches from which pro­prietary estoppel arose: acquiescence and encouragement. Both statements were considered by the Privy Council in Plimmer v. Wellington Corp. (1884). (1883-84) L.R. 9 App. Cas. 699 (New Zealand P.C.). In that case, the plaintiff had erected a wharf and jetty on Government land with the Government’s permission. The Government then en­couraged the plaintiff to extend the jetty and erect a warehouse, which the plaintiff did at his own expense. After some time, the Government took the position that the plaintiff was trespassing on Government land. In considering Ramsden v. Dvson.the Privy Council stated that there was actually no disagreement on the principles in law in that case. The two judges merely placed different interpretations on the facts before them, and therefore arrived at different legal conclusions. The Court appeared to take Lord Cransworth’s statement as relating to acquiescence and Lord Kingsdown’s as relating to encouragement. Following Lord Kingsdown’s statement of the law, the Court held that the instant case was not one where the landowner stood silently by while the plaintiff mistakenly improved the landowners land. Rather, it was a case where the landowner had encouraged the plaintiffs improvement. The court held that it would therefore be unjust of the Government to later seek to deprive the plaintiff of his use of the land.
  • Willmott v. Barber (1880). 15 Ch. D. 96 (Eng. Ch. Div.) laid down what came to be known as the “five pro­banda” required to establish the “fraudulent conduct” necessary to ground proprietary estoppel:

p.5 A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that de­scription? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiffs mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the Court to restrain the possessor of the legal right from exercising it,

 

but in my judgment, nothing short of this will do.

  • In the English jurisprudence, at least, there appears to have been movement away from the strict application of the five probanda in favour of asking whether it would be unconscionable to allow the Defendant to rely on a strict application of his or her legal right. The English Court of Appeal in Shaw v. Applesate. \ 19771 1 W.L.R. 970 (Eng. C.A.) after citing the above statement from Willmott v. Barber,noted at p.6-7 that while it was doubtful that it was necessary to comply strictly with the five probanda, if they were established, then unconscionability was likely proven.
  • A similar determination was reached in Taylors Fashions Ltd. v. Liverpool Victoria Trustees Co. (1979). r 19821 1 O.B. 133(Eng. Ch. Div.). In that case, an important question was whether, at the time when A’s expectation is created and encouraged, B had to know of A’s expectation and also of B’s true rights. The court noted that the strict application of the five probanda might be necessary in a bare acquiescence case (where all that has happened is that B has stood by and allowed A to act to his detriment). However, the court went on to state that at p. 13:

I am not at all convinced that it is desirable or possible to lay down hard and fast rules which seek to dictate, in every combination of circumstances, the considerations which will persuade the court that a departure by the acquiescing party from the previously supposed state of law or fact is so unconscionable that a court of equity will interfere.

76       And at p. 15:

…the application of the Ramsden v. Dyson, L.R. 1 H.L. 129 principle – whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial – requires a very much broader ap­proach which is directed rather at ascertaining whether, in particular individual circumstances, it would be un­conscionable for a party to be permitted to deny that which, knowingly, or unknowingly, he has allowed or en­couraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable be­haviour.

77       In Ontario, the Court of Appeal in Eberts v. Carleton Condominium Corp. No. 396. supra, at para. 23 accepted
the following test for proprietary estoppel:

23 Proprietary estoppel is a form of promissory estoppel. It is commonly supposed that estoppel cannot give rise to a cause of action, but proprietary estoppel appears to be an exception to that rule: see Lord Denning in Crabb v. Arun District Council. \ 19761 1 Ch. 179 at 187-188(C.A.). But there must be an estoppel. The basic tenets of proprietary estoppel are described in McGee, Snell’s Equity, 13 ed. (2000) at pp. 727-28:

Without attempting to provide a precise or comprehensive definition, it is possible to summarize the essential elements of proprietary estoppel as follows:

(i) An equity arises where:

(a)the owner of land (O) induces, encourages or allows the claimant (C) to believe that he has or
will enjoy some right or benefit over O’s property;

(b)in reliance upon this belief, C acts to his detriment to the knowledge of O; and

(c)O then seeks to take unconscionable advantage of C by denying him the right or benefit which he

expected to receive.

(iv) The relief which the court may give may be either negative, in the form of an order restraining O from asserting his legal rights, or positive, by ordering O to either grant or convey to C some estate, right or interest in or over his land, to pay C appropriate compensation, or to act in some other way.

  • The Ontario Court of Appeal recently considered the application of the doctrine of proprietary estoppel to the facts in Schwark Estate v. Cutting. 2010 ONCA 61.316 D.L.R. (4th) 105 (Ont. C.A.).
  • In Schwark. ibid, the dispute was over access to a beach from cottages. The defendant owners of vacant beach front lots had granted permission to the plaintiffs to access the lakefront over their waterfront lots in return for per­mission to use stairs the plaintiffs had constructed to access the beach. That arrangement continued for more than 30 years over which period the defendants acquiesced the use the plaintiffs made of the defendant’s beachfront lots to gain access to the waterfront.
  • When the defendants withdrew their permission for access to the waterfront, the plaintiffs started the action claiming that they had obtained a right based on proprietary estoppel for access to the waterfront.
  • The Court of Appeal in Schwark. ibid, noted at para. 16:

16 The law with respect to proprietary estoppel is well-settled. This court has accepted that Snell’s Equity properly discloses the elements necessary to establish proprietary estoppel as:

  1. encouragement of the plaintiffs by the defendant owner,
  2. detrimental reliance by the plaintiffs to the knowledge of the defendant owner, and
  3. the defendant owner now seeks to take unconscionable advantage of the plaintiff by reneging on an earlier promise.

82       In allowing the appeal in favour of the defendant owners of the waterfront lots, the Court stated:

  • The facts established in this case fall far short of what is required to establish proprietary estoppel.
  • …the respondents knew they had no legal right to use the water lots….
  • There was no evidence of any holding out or inducement… which could be said to have caused the respondents to believe they had some right or benefit over …the water lots. They were merely granted permission to use it for a time. There is no evidence that they acted to their detriment in any way by relying on a belief that they had such a right….
  • Lastly, there is nothing unconscionable about a property owner, who, having permitted his neighbor to use his property for a time, withdraws that permission.

83       In considering whether the doctrine of proprietary estoppel applied to the facts in Schwark. supra, the Court of
Appeal reviewed Willmott v. Barber,supra and Crabb v. Arun District Council, supra. The court noted the separate
reasons of Scarman L.J. in Crabb v. Arun District Councilwhere he considered the judgment of Fry J. in Willmott v.

Barber,supra at pages 105-6 of that judgment in which he identified what came to be known as the “five probanda” required to establish the “fraudulent conduct” for a finding of proprietary estoppel. The Ontario Court of Appeal in Schwark.supra, stated:

291 take from this that in order to establish unconscionabihty one must meet the five-part test laid out by Fry J. in Willmott.

84       I note that the court Willmott v. Barber, suprat was faced with acquiescence, rather than encouragement, the
two branches of proprietary estoppel as developed in the reasons of Lord Carnworth and Lord Kingsdown respec­
tively, in Ramsden v. Dyson,supra. In my view, the five probanda, as developed in Willmott v. Barber,supra, apply to
the acquiescence branch of proprietary estoppel. Not all five are necessarily required to support the application for
proprietary estoppel founded on encouragement. In support of that position, I rely in part on this prefix of the outline
of the five probanda by Fry J. in Willmott v. Barber,supra:

… What, then, are the elements or requisites necessary to constitute fraud of that description?

It is clear from the development of the doctrine of proprietary estoppel that a finding of fraud may, in some instances, be a necessary element, but is not required in others. The latter instance would appear to apply to Scliwark Estate v. Cutting,supra. As the Court of Appeal in Schwark held that the elements necessary to establish a proprietary estoppel were not made out in that case, I note that the observation by the court that “to establish unconscionability”, one must meet the five-part test laid out by Fry J. in Willmott v. Barber,supra, is obiter to its decision.

  • I also note that the British Columbia Court of Appeal in Erickson v. Jones. 2008 BCCA 379 (B.C. C.A.) at pp. 10-11, adopted the statement in the concurring judgment of Newbury J. A. in Trethewey-Edge Dyking (District) v. Coniagas Ranches Ltd.. 2003 BCCA 197(B.C. C.A.) that “the five elements or ‘probanda’ famously cited by Fry J. in Willmott v. Barber…have now been overtaken by a broader and less literal approach to proprietary estoppel.”
  • A brief view of the development of testamentary cases in English jurisprudence may now be in order.
  • Perhaps the earliest case involving the roots of proprietary estoppel and testamentary dispositions is Dillwyn v. Llewellyn (1862). 45 E.R. 1285 (Eng. Ch. Div.). The Court found that the son was entitled to the property, because the father had given the son the land in order for him to build a house, and the son had expended a large amount of money in doing so.
  • Later cases did not require that the claiming party build or expend money on the land. It was sufficient if they behaved in a way that was to their detriment. In Greasley v. Cooke, \ 19801 1 W.L.R. 1306 (Eng. C.A.). the plaintiffs claimed possession of a house occupied by the defendant. The defendant had entered into the home of Arthur Greasley, a widower with four children, as a housekeeper. She later lived in that house with one of his sons, Kenneth, as husband and wife. During this period, the defendant ran the household and cared for his mentally ill younger sister. As a result of his father’s death, Kenneth had a half share in the house, which on his death went to his brother. The remaining family sought to turn the defendant out of the house. The defendant claimed that Kenneth and other members of the family had led her to believe that she could stay in the home for the rest of her life. The trial judge found that the claim of proprietary estoppel could not succeed because the defendant had not acted to her detriment.
  • On appeal, Lord Denning concluded that expenditure of money was not a necessary element of proprietary estoppel. He stated at p.5:

[i]t is sufficient if the party, to whom the assurance is given, acts on the faith of it- in such circumstances that it would be unjust and inequitable for the party making the assurance to go back on it.

In Gillett v. Holt (2000). r20011 Ch. 210 (Eng. C.A.), the plaintiff Gillett spent his life working as a farm manager and as a friend to the defendant Holt. When Gillett was 15, Holt asked him to leave school and work full time at Holt’s farm, which he did. Over the years, Holt made several statements to Gillett that he would have the farm when he died. Holt had also made a will, leaving the entire estate to Gillett absolutely.

  • However, there was a falling out between the parties which occurred when a Mr. Wood appeared on the scene. Mr. Wood and Holt quickly developed a strong attachment and Mr. Wood replaced Gillett as the principal beneficiary in Holt’s will. Gillett brought a claim in proprietary estoppel.
  • The Court reviewed Taylor v. Dickens (1997). T19981 1 F.L.R. 806 (Eng. Ch. Div.) which required that the defendant not only encourage a belief in the plaintiff that he will be given a right over the defendant’s property, but must also encourage the belief that the defendant will not exercise his right to change his mind. The Court in Gillett v. Holt, supra, disagreed with this statement of the law, noting at p. 14:

the inherent revocability of testamentary dispositions…is irrelevant to a promise or assurance that ‘all this will be yours'”. …even when the promise or assurance is in terms linked to the making of a Will… the circumstances may make clear that the assurance is more than a mere statement of present(revocable) intention, and is tantamount to a promise.

  • The Court found that Holt repeated his assurances over a long period of time, in front of other family members and usually in relatively unambiguous language. The Court held that Gillett relied on these promises to his detriment and subordinated his wishes to those of Mr. Holt. The Court held that Gillett had satisfied the requirements of pro­prietary estoppel.
  • The House of Lords considered the issue of proprietary estoppel in the setting of a testamentary disposition in Thornerv. Major. r20091 UKHL 18 (U.K. H.L.). In that case, the claimant had helped the deceased (his uncle) on his farm until the latter’s death, with no payment for his services. The uncle had made various remarks which led the claimant to hope and later, to expect that he would inherit the farm on his uncle’s death. The uncle had also made a Will leaving his estate to the claimant, but destroyed it after felling out with one of the other beneficiaries. The court held that it was a necessary element of proprietary estoppel that the assurances given to the claimant should relate to identified property and that there had been assurances made by the uncle to the claimant that the latter would inherit the farm. As mere was sufficient certainty of the subject matter to found proprietary estoppel, the court held for the claimant
  • On the question of the application of proprietary estoppel to testamentary dispositions, I reviewed the Cana­dian decisions of Tarling Estate, Re. r20081 O.J. No. 3009 (Ont. S.C.J.), Anderson v. Anderson. 2010 BCSC 911 (B.C. S.C.) and Belvedere v. Brittain Estate. 2009 ONCA 1 (Ont. C.A.). These cases, in my view, do not apply in a helpful way to this question.”

Claim For Property Promised Years Before Upheld

verbal-agreement

A Claim For Interest In Property Verbally Promised Years Before, Was Upheld By Court As  An Agreement

Verbal promises to provide property years in the future, in return for services  for the life of the promissor, are increasingly common in estate litigation.

Such arrangements, usually made between loved ones, and  with the best of intentions, can go “sideways” very easily, simply due to the vagaries of life.

 

Such was the recent Ontario decision of Cowderoy v Sorkos Estate 77 ETR (3d) 246

(The decision contains an exhaustive review of the equitable principle of proprietary estoppel, which I will reproduce in the February 10.13 blog)

 

The Testator was involved in a common law relationship with plaintiffs’ grandmother for approximately 40 years.

During the relationship, the  testator purchased a farm and cottage, and ran various businesses .

The Testator and plaintiffs had a close relationship, substantively as grandfather and grandchildren

the Plaintiffs claimed they entered agreement with testator in 1985, when they were 17 and 13, that in exchange for their ongoing assistance with farm and

cottage testator would leave them properties, and money for maintenance, on his death

The Plaintiffs assisted the testator with maintenance and improvements to both properties over next 25 years ,and on his death in 2009, the  testator left three wills:

1)  2001 will bequeathed farm and property, as well as $500,000 each, to plaintiffs;

2)  2003 will bequeathed $50, 000 to plaintiff P, $1,000 to plaintiff M, and did not bequeath properties to plaintiffs ;

3)  2008 codicil increased bequest to M to $25,000, but otherwise 2003 will remained unchanged

The  Plaintiffs brought action against estate for interest in farm and cottage.

The action was allowed

The conduct of both plaintiffs and testator could be considered to determine if sufficient acts of part performance took alleged agreement outside operation of Statute of Frauds

From the time of the 1985 agreement, the  testator and the plaintiffs unequivocally ordered their affairs with each other on basis of agreement .

The  Plaintiffs had clearly assisted testator with maintenance and improvements to both properties over 25 years

The witness testimony was evidence of testator’s actions, and was corroborative of 1985 agreement .

The 2001 will was also corroborative of existence of agreement, despite changes made in 2003 will and codicil .

The contract was one which, if it were properly-evidenced by writing, would have been specifically enforceable .

Proprietary estoppel applied in circumstances.

The  Testator had made representations on numerous occasions, over course of years, and in front of third parties.

The Testator’s representations were clear and unequivocal and at all times related to farm and cottage .

No question arose that plaintiffs had relied on representations made by testator in 1985 to their detriment, often subordinating their lives to testator’ s wishes and demands.

The Testator was no longer in legal position in 2003 to leave farm and cottage to beneficiaries other than plaintiffs

The plaintiffs were granted interest in farm and cottage, but purported transfer of funds claimed by plaintiffs lacked necessary corroboration

Parol Evidence Rule Not Permitted to be Instrument of Fraud

Parol Evidence Rule Not Permitted to be Instrument of Fraud

“Parol evidence”‘ that is verbal evidence to show that the written contract was not the true contract,  admitted to prevent a fraud upon a trust.

The BC Court of Appeal upheld the finding of a trust in the decision Bradshaw v Stenner 2012 CarswellOnt 1936

The plaintiff transferred her property to the defendant, allege deadly on terms of trust, that the defendant would re convey the property upon request

The defendant ultimately refused to do so, and the plaintiff successfully sued the defendant and both the trial and appeal courts held that there was a trust.

The defendant had paid no funds for the property and the plaintiff always remained in possession of it.

The trial judge found the plaintiffs version to be more credible.

At issue was the legal predicament that the attempted to prove the trust through the introduction of “Parol evidence”‘ that is verbal evidence to show that the written contract was not the true contract, and that a trust should be imposed over the entire transaction

The Parol evidence rule is a hard and fast concept in contract law that basically says Parol evidence cannot be introduced into evidence to refute the written terms of a contract.

Both courts here did allow the Parol evidence to be admitted on the basis that the Parol evidence rule did not apply to render in admissible evidence used to create a trust, as where a trust is alleged and proven, then the Parol evidence rule has no application.

To have not permitted the oral evidence to be admitted would have permitted the said rule to be used asan instrument of fraud.

disinherited.com applauds this decision in estate law as the law of contracts re the Parol evidence rule can lead to misjustice if oral evidence is not admissible.

There are many cases where the courts have worked around the rule by finding such as two contracts rather than one.

– See more at: http://www.disinherited.com/blog/parol-evidence-admitted-prove-trust-so-parol-evidence-rule-not-permitted-be-instrument-fraud#sthash.gd1yWRYc.dpuf

No Punitive or Aggravated Damages In Wrongful Death Claims

No Punitive or Aggravated Damages In Wrongful Death ClaimsSpanking

Glenn v Seair Seaplanes and others, 2012 BCSC 1726  arises from a seaplane crash in November  2009.

The action has been brought against the owner and operator of the seaplane, Seair Seaplanes Ltd. and the pilot, Francois St. Pierre.

The plaintiffs also plead negligence on the part of the other defendants, Viking Air Ltd., which holds the aircraft type certificate for the seaplane, Victoria Air Maintenance Ltd., which maintained and serviced the seaplane and the Attorney General of Canada who regulates commercial aviation in Canada.

Mr. Glenn survived the crash but was unable to exit the cabin. He subsequently drowned. Ms. Glenn was able to escape the cabin and was rescued.

Mrs Glenn brought an action for damages and at issue before the court on a rule 9-4 application was whether aggravated and punitive damages are available or not in claims arising from a wrongful death.

 

The Court held that they are not and followed BCCA authority for such, whether under the Family Compensation act or the Estate Administration act.

The following authorities were quoted:

The British Columbia Court of Appeal in Lodge v. Fraser Health Authority, 2009 BCCA 108  accepted that it was settled law that a claim for aggravated damages or punitive damages was not available under the EAA. Bauman J.A. (as he then was) put it this way:

[53]     In my view, the trial judge and this court, sitting as a panel of three, are bound by the decisions in Campbell v. Read [(1987), 22 B.C.L.R. (2d) 214 (C.A.)], and Allan Estate v. Co-Operators Life Insurance Co., 1999 BCCA 0035, 62 B.C.L.R. 3d 329.

[54]     In Campbell v. Read, this court held that a claim for aggravated damages could not be maintained under the Estate Administration Act, R.S.B.C. 1996, c. 122.

[55]     The same result in respect of a claim for punitive damages was reached in Allan Estate.

[56]     Here, the Estate could not maintain these claims.

[10]    I turn now to the FCA. The Court of Appeal has also addressed the questions of law at bar under the FCA squarely. In Campbell v. Read, (1987), 22 B.C.L.R. (2d) 214 at 217, Wallace J.A. stated:

Circumstances which may aggravate the loss or damage sustained by an injured party are personal to that individual in the same sense as is the pain, suffering and loss of amenities experienced by the injured party. Such loss is not an injury of the kind dependants sustain as a “result of the death of the deceased”.

[11]    In Allan Estate v. Cooperators Life Insurance Co., 1999 BCCA 35, 62 B.C.L.R. (3d) 329, Lambert J.A. stated:

[71]     Punitive damages are not damages proportioned to the injury resulting from the death. The remedy under the [Family Compensation Act] is a statutory one. There is no authority in the statute to award punitive damages. So punitive damages cannot be assessed or awarded in a Family Compensation Act action.

– See more at: http://www.disinherited.com/blog/claims-punitive-and-aggravated-damages-cannot-be-made-wrongful-death-claims#sthash.ZP3BOdr6.dpuf

Ontario Court Upholds Frivolous Action Award Against Losing Party

Ontario Court Upholds Frivolous Action Award Against Losing Party

Costs For Frivolous Action

The recent Ontario decision involving Smith Estate v Rotstein 2012 CarswellOnt 9064, provides a detailed examination of recent awards for court costs involving lengthy but frivolous action estate litigation fights.

Here a sibling engaged in lengthy and complex litigation alledging undue influence and lack of testamentary capacity when there was little or no evidence of same.

The trial Judge awarded her brother full indemnity for his legal expenses which totalled over $700,000 in fees and $30,000 in disbursements.

This award was upheld by the courts with the following excerpts:

 

“As the Court of Appeal made clear in its decision in McDougald Estate v. Gooderham,[2] two fundamental principles now govern the award of costs in estate litigation.

First, the starting point remains the general principles for determining the responsibility for costs applicable to all civil litigation, as expressed in Section 131 of theCourts of Justice Act, Rule 57 of theRules of Civil Procedure and, since January 1, 2010, the principle of proportionality articulated in Rule 1.04(1.1).

Second, public policy favours a departure from those general costs principles and the payment of the parties’ litigation costs by the estate in two circumstances:

(i)      where reasonable grounds existed upon which to question the execution of the will or the testator’s capacity in making the will; or,

(ii)   where the difficulties or ambiguities in the will that gave rise to the litigation were caused, in whole or part, by the testator.

In those two circumstances it is reasonable to look to the estate to bear the costs of resolving those questions because public policy requires courts only to give effect to valid wills that reflect the intention of competent testators.

[9]               The discipline imposed on litigants by the “loser pays” principle in civil litigation was viewed by the Court of Appeal as appropriate in estate litigation:

The modern approach to awarding costs, at first instance, in estate litigation recognises the important role that courts play in ensuring that only valid wills executed by competent testators are propounded. It also recognises the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.[3]

[10]           It is crucial to note that the two exceptions to the “loser pays” principle in estate litigation are not class exceptions – i.e. the exceptions do not apply to all will challenge cases or all will interpretation cases.  On the contrary, as revealed by the four cases pointed to by the Court of Appeal in McDougald Estate as examples of the application of the modern approach to costs, responsibility for the costs of will interpretation or will validity litigation may well be placed on the shoulders of the individual litigants.[4]  Only where the parties can demonstrate that reasonable grounds existed to question the execution of the will or the competency of the testator, or the presence of a reasonable dispute about the interpretation of a testamentary document, will the courts consider whether it is appropriate to award costs of the litigation from the estate, rather than apply the “loser pays” principle.  The costs inquiry therefore will be specific to the facts and issues raised in each particular piece of estate litigation – no general class exceptions from the standard civil rules of costs exist for types of estate litigation.

Courts have awarded elevated, full indemnity costs when:

(i) one party was an innocent party to the proceeding and the court concluded that she should not experience any loss as a result of the conduct and actions of the defendant which resulted in the litigation;[14]

(ii) one party made baseless allegations of wrongdoing[15] or meritless claims of fraud, deceit, and dishonesty based on pure speculation against the other;[16] or,

(iii) it was clear shortly after the event in question that the plaintiff was blameless, but was required to proceed to trial because of disputes amongst the defendants about their share of liability.[17]

Ms. Rotstein persisted in a will challenge which, on the facts of this family’s history, really should never have been brought in the first place or, at least, should have been abandoned at a very early stage once Mr. Smith filed his evidence for the summary judgment motion.  There was no justification, in law or in fact, for Ms. Rotstein to have taken her challenge through to the hearing of the summary judgment motion

– See more at: http://www.disinherited.com/blog/ontario-court-upholds-award-against-losing-party-over-700000-costs-frivilous-action#sthash.EgOqwOHU.dpuf

Court Inherent Jurisdiction to Protect Those Who Need Protection

Court Inherent Jurisdiction to Protect Those Who Need Protection

Supreme Court Inherent Jurisdiction to Protect Those Who Cannot Protect Themselves

Referring  again to the Kenny Ng case, the wife as committee for the person of Kenny, had decided after seven years of him being in a coma, to remove his life support system.

His family applied to remove the wife as committee and substitute themselves so that they could essentially keep him alive.

The wife’s counsel argued that there was no legal basis to remove her as committee, and that she alone had the right to make that decision which was based on medical advice.

Kenny’s family appealed  to the Court to invoke its inherent jurisdiction, or parens patriae, to protect those who cannot protect themselves

Under the Patient’s Property Act,  ( PPA) the court may appoint a committee to take custody of a person who has been declared incapable due to mental infirmity.

Under the Health Care (Consent) and Care Facility (Admission) Act [HCCCFA] committees of the person are defined under that act to be permitted to make medical decisions on behalf of individuals who are in their custody.

The wife was appointed as Kenny’s committee under s.6(l) the PPA to both manage his affairs and to take custody of his person, including the power to make decisions under the HCCCFA.

The decision to withdraw Kenny’s food and water was made by the Respondent under the authority of s.l 1 of the HCCCFA.

Pursuant to s.6(2) of the PPA, a court has the power to rescind the appointment of a committee. The PPA does not, however, prescribe any criteria for that rescission.

The result is a legislative gap in the PPA, which invokes the parens patriae jurisdiction of the court.

In Re Bowman, 2009 BCSC 523, a 2009 BC Supreme Court Chambers decision, the court stated at paragraph 32 that:

On an application for either the appointment or removal of a committee [under the Patients Property Act], the test for determining who is appropriate to act as a committee invokes the parens patriae jurisdiction of this court and is governed by an assessment of who will serve the patient’s best interests.

The purpose and extent that the court can exercise its parens patriae jurisdiction is trite law, as set out by La Forest J. in the seminal Supreme Court of Canada case of Re Eve, [1986] 2 S.C.R. 388 at paras. 73, 74, and 77:

The parens patriae jurisdiction is, as I have said, founded on necessity, namely the need to act for the protection of those who cannot care for themselves. The courts have frequently stated that it is to be exercised in the “best interest” of the protected person, or again, for his or her “benefit” or “welfare.” (para. 73)

The situations under which it can be exercised are legion: the jurisdiction cannot be defined in that sense. As Lord MacDermott put it in J v. C., [1970] A.C. 668, at p. 703, the authorities are not consistent and there are many twists and turns, but they have inexorably “moved towards a broader discretion, under the impact of changing social conditions and the weight of opinion…” In other words, the categories under which the jurisdiction can be exercised are never closed. Thus I agree with Latey J. in R. X, supra, at p. 699, that the jurisdiction is of a very broad nature, and that it can be invoked in such matters as custody, protection of property, health problems, religious upbringing and protection against harmful associations. This list, as he notes, is not exhaustive, (para. 74)

…Though the scope or sphere of operation of the parens patriae jurisdiction maybe unlimited, it by no means follows that the discretion to exercise it is unlimited. It must be exercised in accordance with its underlying principle. Simply put, the discretion is to do what is necessary for the protection of the person for whose benefit it is exercised… The discretion is to be exercised for the benefit of that person, not for that of others. It is a discretion, too, that must at all times be exercised with great caution, a caution that must be redoubled as the seriousness of the matter increases. This is particularly so in cases where a court might be tempted to act because failure to do so would risk imposing an obviously heavy burden on some other individual [emphasis addedl. (para. 77)

– See more at: http://www.disinherited.com/blog/bc-supreme-court-has-inherent-jurisdiction-protect-those-who-cannot-protect-themselves#sthash.nEtu3UfJ.dpuf

Adverse Inference For Failure to Call Certain Evidence

adverse interest

There are certain cases where it is simply necessary and expected to call a particular witness who might have extensive knowledge as to the facts in question, and failing to do so, will lead the court to draw an adverse inference as to what that witnesses evidence would have been.

For example:

A plaintiff suffered whiplash injuries in two rear-end motor vehicle accidents which occurred six months apart.

Following the first accident, he attended a hospital emergency ward and saw his family physician once. He received physiotherapy treatments for one month.

His symptoms had resolved to a large extent by the time of the second accident which exacerbated his problems.

One year after the first accident, his symptoms had improved but had not disappeared.

The plaintiff, who was a 50 per cent owner in a carpet business, did not call his partner to testify regarding his injuries or regarding the company’s alleged income loss as a result of the plaintiff’s incapacity.

He produced no business records and had kept no record of his lost work days. The plaintiff sued for damages for personal injuries.

 

The Court held that although the plaintiff did suffer some loss of income, the substantial amount he claimed was not proven.

It was an appropriate case in which to draw an adverse inference against the plaintiff because of his unexplained failure to call his business partner to testify.

The partner could have attested to the plaintiff’s physical suffering and loss of ability to work, as well as to the income loss the company and plaintiff indirectly suffered as a result of the plaintiff’s incapacity.

 

Barker v. McQuahe(1964), 49 W.W.R. 685(B.C. C.A.) was applied, which stated:

 

An inference adverse to a litigant may be drawn if, without sufficient explanation, he fails to call a witness who might be expected to give important supporting evidence if his case were sound, Royal Trust Co. v. Toronto Transportation Commn., [1935] S.C.R. 671, 44 C.R.C. 90, 28 Can Abr 109; Murray v. Saskatoon (City)(1951) 4 WWR (NS) 234, at 239, 5Abr Con (2nd) 9 (C.A.), applied.“

– See more at: http://www.disinherited.com/blog/adverse-inference-be-drawn-failure-call-certain-evidence#sthash.1C2t0w6L.dpuf

Interim Injunctions

Interim Injunctions

Black’s law dictionary defines “injunction” as a “court order prohibiting someone from doing some specified act or commanding someone to undo some wrong or injury”.

In the Ng life support application blogged about yesterday, tINjunction sshhe patient’s family applied to the court for an injunction to raise the level of care from the lowest, level one,  that the committee wife had lowered it down to, up to level four or at least two where it had previously been.

If granted the court may grant the injunction on an interim basis, for a specific period of time, or until trial for example, or could grant a permanent injunction raising the level of care for the remainder of his life.

It remains to be seen if the court will interfere with the medical decision and the decision of the committee to lower the care down to level one.

The test for granting an interim injunction is set out in the case of British Columbia (Attorney General) v. Wale (1986), 9 B.C.L.R. (2d) 333 at p. 345 (C.A.),

which provides a two-pronged test as follows:

First, the applicant must satisfy the court that there is a fair question to be tried about the existence of the right alleged and a breach of the right, actual or reasonably apprehended; and

2. Second, the balance of convenience must favour the pronouncement of the order.

Canadian Broadcasting Corporation v. CKPG Television Ltd., [1992] 3 W.W.R. 279 (tab 3, Book of Authorities #1 of Petitioners, p. 6) sets out the factors

that must be considered by the court in determining the balance of convenience:

The adequacy of damages as a remedy for the applicant if the injunction is not granted and for the respondent if an injunction is granted;
The likelihood that if damages are finally awarded they will be paid;
The preservation of contested property;
Other factors affecting whether harm from the granting or refusal of the injunction would be irreparable;
Which of the parties has acted to alter the balance of their relationship and so affect the status quo;
The strength of the applicant’s case;
Any factors affecting the public interest; an
Any factors affecting the balance of justice and convenience.

– See more at: http://www.disinherited.com/blog/interim-injunctions#sthash.Y1WWdXe5.dpuf

Administrator Appointed Pending Litigation

Administrator Appointed Pending Litigation

Independent Administrator Appointed For  Estate Assets Pending Litigation, aka administrator pendent lite.

A common feature of many estate  disputes  is the acrimonious nature between the various claimants to the assets of the deceased.

In fact, certain cases become renowned within the profession and the courts for the extreme degree of the acrimony between the various parties.

The most  recent  decision of the ongoing saga Karsonas v. Karsonas Estate 2012 BCSC 1604 is yet another example of  litigation that seemingly never will end.

Without going into the details of why and who were involved in the acrimony, suffice to say that there were many previous contested court applications relating to this estate, and appeals there from.

In situations such as this, smart counsel will or should apply to the Supreme Court of British Columbia for the appointment of an administrator pendente lite,  ( Latin for “pending the outcome of the litigation”)

Mdm. Justice Ballance, who is vastly experienced in estate disputes, made such an order noting the extensive deterioration of the estate properties, a partition action between the testator and his children in regard to one property, and another court action by the plaintiff children disputing the testator’s last will and certain trust documents.

There was a contested cross -application by the niece of the deceased  to be appointed as executrix or administrator pendente lite, or trustee without compensation, that was dismissed.

The court noted that the hostility between the parties, and that the administration of the estate was fraught with obvious difficulties, required the appointment of an experienced neutral third-party which was vastly preferable to the niece, being blood related .

The court in fact allow the application of the testator’s children to have an independent trust company appointed as administrator pendente lite.