Interim Distribution Ordered

Interim Distribution Ordered

An interim distribution of $250,000  of his maximum estate entitlement of $460,000 was ordered to a 76 year old former spouse of the deceased who needed funds in Davis v Burns Estate 2016 BCSC 1982.

The application was made  under section 155 of the Wills, Estates Succession Act, S.B.C. 2009, c.13, (the “Act“) and Rules 8 — 1, 14 — 1, and 22-1 of the Supreme Court Civil Rules for the payment of an interim distribution.

The remaining litigants were refused the same advance primarily as they had not applied and were left to continue their litigation over the remaining $2,250,000. in the estate. They had opposed the interim advance unless the court awarded them the same but the court stated since they had not applied, the court could not review their application in light of the required law as set out in the Hecht case below.

Discussion of the Legal Principle to be Applied

31      In Hecht v. Hecht Estate (1991), 62 B.C.L.R. (2d) 145 (C.A.) at paras. 42- 46 the Court of Appeal set out a number of the factors the court was to consider when deciding whether to exercise its discretion to grant leave to the executors to make an interim distribution when Wills Variation Act proceedings have been commenced. The Wills Variation Act, R.S.B.C. 1996, c. 490, was repealed and replaced by the Act under which proceedings have been commenced by Leslie. Those factors included:
a. the amount of the benefits sought to be distributed as compared to the value of the estate;
b. the claim of the beneficiaries on the testator;
c. the need of beneficiaries for money; and
d. the consent of the residuary beneficiary to the proposed transfer.
See also Henney v. Sander, 2014 BCSC 889 at para. 38.

Tracing Converted Assets

Tracing Converted Assets

Converted assets can be traced and reclaimed under certain circumstances if they can be identified.

For example a bank account of cash can be converted into a stock portfolio which in turn is used to buy a house that is subsequently sold and put into bonds. As long as the funds can be identified , they can be traced and accounted for and where appropriate by the court, re transferred into the name of the rightful owner.

The law on tracing funds was discussed inter alia in Jasmur Holdings Ltd.v Taynton Developments Inc. 2016 BCSC 1902.

169      With respect to tracing funds , In Tracy (Guardian ad litem of) v. Instaloans Financial Solution Centres (B.C.) Ltd., 2010 BCCA 357 (B.C. C.A.), the Court of Appeal stated

[41] . . . Although tracing is available both at law and in Equity (see Maddaugh and McCamus, supra, at chapters 6 and 7), the right which the plaintiffs are entitled to trace in this case is the constructive trust, an equitable property right. I agree with Professor Lionel Smith (The Law of Tracing (1997)) that the establishment of this proprietary right, which he refers to as the “proprietary base”, is sufficient to establish an entitlement to trace. It is not necessary, as was once argued, to demonstrate a pre-existing fiduciary relationship: see Citadel General Assurance Co. v. Lloyds Bank Canada, [1997] 3 S.C.R. 805 at para. 57.

[42] Of course, it may be difficult to identify the funds or other property into which the claimed Charges have been transformed or with which they have been mingled; and the process will come to a halt in certain conditions, including where the balance in an account has fallen below the amount being traced. (See generally Maddaugh and McCamus, supra, at Chapter 7, and Smith, supra, at Chapter 8.) As the Court stated in McTaggart v. Boffo (1975) 64 D.L.R. (3d) 441 (Ont. H.C.J.):

Tracing is only possible so long as the funds can be followed in a true sense, i.e., so long as, whether mixed or unmixed, it can be located and identified. It presupposes the continued existence of the money either as a separate fund or as part of a mixed fund or as latent in property acquired by the means of such a fund.

Two things will absolutely prevent the tracing of trust monies:

  1. If, on the fact of any individual case, such continued existence of the identifiable trust fund is not established, equity is helpless to trace it;
  2. the chain for tracing is also broken where the trust fund either in its initial form or a converted

Removed Executor Gets No Fees

Removed Executor Gets No fees

Watson v Strong 2016 BCSC 1897 dealt with a passing of accounts claim for executor’s fees by a removed executor  that was rejected by the court. The court instead awarded %4.5 fees on an interim basis to the executor who replaced the removed executor, with a further .5% fees when the estate is finalized.

The court outlined the criteria for determining executor’s remuneration and then listed all the reasons why the removed executor was not entitled to any fees.

45      Executor’s remuneration is contemplated by the will and by s. 88 of the Trustee Act, R.S.B.C. 1996, c. 464. The executor is entitled to a fair and reasonable allowance of a maximum of 5% of the gross aggregate value of all the assets of the estate for his or her care, pains and trouble and his or her time spent on the executorship.

46      The criteria to be considered in determining the executor’s remuneration are as follows:

a) the magnitude of the trust (or estate);

b) the care and responsibility involved;

c) the time occupied in the administration of the estate;

d) the skill and ability demonstrated;

e) the success achieved in the final result (McColl, Re (1967), 65 W.W.R. 110 (B.C. S.C. [In Chambers])).

1. Marian’s claim to Executor’s Remuneration

47      Applying the criteria as required, I have determined that Marian has not applied any skill or ability in her role as executor to justify any executor’s remuneration. She is a major cause of the excessive delay in getting Elwell Street sold, and of the associated legal expenses. I would be illogical to award a fee in light of the unnecessary delay and expense that Marian has caused. Marian says she spent 262 hours taking junk to the dump, arranging for curbside pick-up of junk by the City of Burnaby, and attending the property when the City of Burnaby bylaw inspector attended. The attendance of the bylaw inspector was due to debris on the property. The letter from the City dated September 13, 2013 to Marian and Rick refers to twelve previous Licence Office letters regarding a complaint about a sawmill business being operated on the property. The sawmill business was Gordon’s. The letter goes on to say:

A site inspection conducted on 2013 September 10 revealed: a dismantled portable saw, an accumulation of rough cut lumber, lumber, used building materials, construction debris, pieces of metal, sign, fridge drawer, sink, hand truck, rowing machine, seat from a [sic] automobile, wooden boxes, several pieces of outdoor furniture and various forms of debris stored on the property.

48      The letter states the City requires removal of all of the items listed and the lumber to be neatly stacked.

49      Finally, the City issued a ticket on August 22, 2014 based on the unsightly property. Rick appealed the ticket, but lost. The adjudicator noted that the City worked with the owner’s representative for three years to clean up the property and allowed debris to remain until the property was vacated on May 26, 2014. A second ticket was issued September 26, 2014 for unsightly property. In my view, it was inevitable that the City would take action regardless of Marian having attended the bylaw inspections. The bylaw inspector’s supervisor wanted him to close the file. It was inevitable that the patience of the City would eventually run out and a ticket would be issued. In any event, if Marian had not obstructed the timely sale of the property, the unsightliness issue would not have lingered as long as it did.

50      Marian says she preserved the property and because of her refusal to agree to an earlier sale of the property, the property increased in value and therefore, she should receive a care and management fee. Before being removed as executor, Marian resisted Rick’s attempts to sell Elwell Street. She wanted to buy the property herself, but had no realistic way of doing so.

51      The other beneficiaries wanted the property sold. If the property had been sold earlier, each beneficiary would have received his or her share to invest as he or she wished. Marian’s self-interest conflicted with her duties as executor to act for the benefit of all beneficiaries. I do not consider Marian’s hindering of the sale of the property a point in her favour in her claim for an executor’s fee.

52      Marian’s conduct as executor has resulted in her being removed by court order. That order was based on Marian obstructing the proper administration of the estate. She is responsible for the estate having to spend money on legal fees that would otherwise go to the beneficiaries.

53      Further, she has refused to claim the principal residence exemption (“PRE”) which would save the estate $60,000, $15,000 of which would go into her own pocket. She was only willing to claim the PRE if she were paid $30,000 for executor’s fees and that the estate dropped its claim for special costs. Needless to say, the offer was rejected. Even if I were to award Marian executor’s remuneration for junk clearing and attending at the property during the bylaw inspections, the amount of that fee would be very modest and eclipsed by the $60,000 she is costing the estate by refusing to claim the PRE. Marian’s own legal counsel advised her to claim the PRE and to leave her claim for executor’s remuneration to be determined by the court. Her refusal to claim the PRE is unreasonable. Marian still has the opportunity to act reasonably and claim the PRE because she is within the time limit for re-filing. She testified that “it’s still on the table”, which I take to mean that she may decide to claim the PRE. It is in her own interests to claim the PRE, even if she is not motivated by the interests of the other beneficiaries. If she requires some professional accounting assistance to re-file, Rick, as executor, might consider covering her reasonable accounting fees for this purpose. Such fees would be a reasonable estate expense.

Examinations for Discovery Ordered

Examinations for Discovery Ordered

Estate of Patricia Connor deceased, 2016 BCSC 1934 dealt with the court ordering examinations for discovery and production of various documents in an action between half siblings of the deceased and a purported spouse of the deceased as inter alia the parties knew little to nothing about the other .

20      Rule 25-14(8) of the Supreme Court Civil Rules provides the Court with discretion to direct examination for discovery or provision of documents in those matters of administration of estates. Accordingly, I direct that Mr. Chambers attend an examination for discovery for this purpose. With respect to the examination for discovery, counsel for Mr. Chambers will be able to object to questions that are too far-reaching as per the normal course.

21      I also order the production of the following documents as requested:

a) Tax returns for both Ms. Connor and Mr. Chambers for the past five years;

b) Separation Agreement in Mr. Chambers’ family law proceedings;

c) Ms. Connor’s medical records from 2000 to the date of her death;

d) Production of documentation dealing with Ms. Connor’s Registered Retirement Savings Plan;

e) Any documentation dealing with Mr. Chambers’ Registered Retirement Savings Plan, pension, and life insurance; and

f) Any documentation dealing with Ms. Connor’s funeral arrangements.

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.

Leave to Appeal

Leave to Appeal

The legal test for leave to appeal was restated in Ho Estate v. Ho 2016 BCCA 253 , upheld at 2016 BCCA 378, where the decision of one appeal judge was upheld by a panel when he refused leave to appeal on the basis that there was no reasonable chance of success.

16      Orders of a judge of the Supreme Court may be appealed as of right unless they qualify as limited appeal orders. The definition of a limited appeal order is set out in R. 2.1 of the Court of Appeal Rules. This definition includes “an order granting or refusing relief for which provision is made under … Part 7” of the SCCR, other than R. 7-7(6). Maisonville J.’s order is clearly an order made under Part 7 of the SCCR and qualifies as a limited appeal order; therefore, leave to appeal is required.

17      The test for leave to appeal was set out by Madam Justice Saunders in Goldman, Sachs & Co. v. Sessions, 2000 BCCA 326 (B.C. C.A. [In Chambers]) at para. 10:

[10] The criteria for leave to appeal are well known. As stated in Power Consolidated (China) Pulp Inc. v. B.C. Resources Investment Corp. (1988), 19 C.P.C. (3d) 396 (C.A.) they include:

(1) whether the point on appeal is of significance to the practice;

(2) whether the point raised is of significance to the action itself;

(3) whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and

(4) whether the appeal will unduly hinder the progress of the action.

18      The party who is seeking leave to appeal bears the onus of establishing that these four conditions have been met: B.C.T.F. v. British Columbia (Attorney General), (1986), 4 B.C.L.R. (2d) 8 (B.C. C.A. [In Chambers]) at 11.

19      The merits threshold on an application for leave to appeal is relatively low: Bartram (Guardian ad litem of) v. Glaxosmithkline Inc., 2011 BCCA 539 (B.C. C.A. [In Chambers]) at para. 16 (Prowse J.A. in Chambers). However, an appeal that is vexatious, frivolous, or has no reasonable chance of success will not meet this threshold: Gichuru v. Law Society (British Columbia), 2012 BCCA 159 (B.C. C.A. [In Chambers]) at para. 22 (Bennett J.A. in Chambers), aff’d 2012 BCCA 171 (B.C. C.A.).

20      The overarching concern on an application for leave is the interests of justice: Hanlon v. Nanaimo (Regional District), 2007 BCCA 538 (B.C. C.A. [In Chambers]) at para. 2 (Saunders J.A. in Chambers). Even if the applicant has satisfied the four conditions from Power Consolidated (China) Pulp Inc. v. British Columbia Resources Investment Corp. [1988 CarswellBC 615 (B.C. C.A.)], leave may be denied if granting leave is not in the interests of justice: Movassaghi v. Aghtai, 2010 BCCA 175 (B.C. C.A. [In Chambers]) at para. 27 (D. Smith J.A. in Chambers).

 

Mandatory Injunctions: Harm Must Probably Occur

Mandatory Injunctions: Harm Must Probably Occur

McLean v. Law Society of British Columbia 2016 BCCA 368 reviewed the law on injunctions and held that the court should only grant a mandatory injunctions when the harm complained of would probably occur.

 
[17]        Both declarations and injunctions, speaking as they do to actions in the always unknowable future, are uncommon relief. The principles in equity are clear that a permanent injunction will not be ordered in the absence of a determination that the enjoined conduct is likely to occur. In Aquila Networks Canada (B.C.) Ltd. v. Borgnetta, 2004 BCCA 188 (CanLII) at para. 13, this court said:

In order to obtain an injunction Aquila must establish the likelihood that the apprehended behaviour will occur: Operation Dismantle Inc. v. Canada, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441 at 458. …

[18]        This same approach applies in respect to declarations concerning future conduct. In Operation Dismantle Inc. v. Canada, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441 at 457-458 Justice Dickson, for the majority, discussed the sparing approach that courts must take on applications for prospective declaratory and injunctive relief:

… the preventative function of the declaratory judgment must be based on more than mere hypothetical consequences; there must be a cognizable threat to a legal interest before the courts will entertain the use of its process as a preventive measure. As this Court stated in Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821, a declaration could issue to affect future rights, but not where the dispute in issue was merely speculative. In Solosky, supra, one of the questions was whether an order by a director of a prison to censor correspondence between the appellant inmate and his solicitor could be declared unlawful. The dispute had already arisen as a result of the existence of the censorship order and the declaration sought was a direct and present challenge to this order. This Court found that the fact that the relief sought would relate to letters not yet written, and thereby affect future rights, was not in itself a bar to the granting of a declaration. The Court made it clear, however, at p. 832:

… that a declaration will not normally be granted when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise. [Emphasis added by Dickson J.]
A similar concern with the problems inherent in basing relief on the prediction of future events is found in the principles relating to injunctive relief. Professor Sharpe, Injunctions and Specific Performance (1983), clearly articulates the difficulties in issuing an injunction where the alleged harm is prospective, at pp. 30-31:

All injunctions are future looking in the sense that they are intended to prevent or avoid harm rather than compensate for an injury already suffered. …

Where the harm to the plaintiff has yet to occur the problems of prediction are encountered. Here, the plaintiff sues quia timet – because he fears – and the judgment as to the propriety of injunctive relief must be made without the advantage of actual evidence as to the nature of harm inflicted on the plaintiff. The court is asked to predict that harm will occur in the future and that the harm is of a type that ought to be prevented by injunction.

The general principle with respect to such injunctions appears to be that “there must be a high degree of probability that the harm will in fact occur”: (Sharpe, supra, at p. 31). In Redland Bricks Ltd. v. Morris, [1970] A.C. 652, at p. 665, per Lord Upjohn, the House of Lords laid down four general propositions concerning the circumstances in which mandatory injunctive relief could be granted on the basis of prospective harm. The first of these stated [at p. 665]:

1. A mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future…. It is a jurisdiction to be exercised sparingly and with caution but in the proper case unhesitatingly.

It is clearly illustrated by the rules governing declaratory and injunctive relief that the courts will not take remedial action where the occurrence of future harm is not probable. This unwillingness to act in the absence of probably future harm demonstrates the courts’ reluctance to grant relief where it cannot be shown that the impugned action will cause a violation of rights.

S 151 WESA – Court Allows Applicant to Sue as Executor

S 151 WESA - Court Allows Applicant to Sue as Executor

Werner v. McLean 2016 BCSC 1510 granted relief under S 151 WESA that the applicant be authorized to bring court action in the name of and sue on behalf of the personal representative of the estate as executor.

The court approval was in order to litigate whether an asset was or was not an estate asset. The court found that the applicant had satisfied the required criteria under S 151 WESA.

An application in the alternative that the executor be removed and the applicant substituted as executor  was dismissed on the basis that the executor had not acted improperly.

The court stated:

[9]             On an application for removal of a trustee, the court’s focus is on the welfare of the beneficiaries of the trust estate: Letterstedt v. Broers (1884), 9 App. Cas. 371 (P.C.); Conroy v. Stokes, [1952] B.C.J. No. 111 (C.A.). Not every act of misconduct should result in removal. The question is whether the acts or omissions endanger the trust property or show a want of honesty or proper capacity to execute the duties or reasonable fidelity: Letterstedt, at 386.

Section 151 of the Wills, Estates and Succession Act provides, in relevant part, as follows:
(1)  Despite section 136 [effect of representation grant], a beneficiary or an intestate successor may, with leave of the court, commence proceedings in the name and on behalf of the personal representative of the deceased person
(a)  to recover property or to enforce a right, duty or obligation owed to the deceased person that could be recovered or enforced by the personal representative, or
(b)  to obtain damages for breach of a right, duty or obligation owed to the deceased person.

(3)  The court may grant leave under this section if
(a)  the court determines the beneficiary or intestate successor seeking leave
(i)   has made reasonable efforts to cause the personal representative to commence or defend the proceeding,
(ii)   has given notice of the application for leave to
(A)  the personal representative,
(B)  any other beneficiaries or intestate successors, and
(C)  any additional person the court directs that notice is to be given, and
(iii)   is acting in good faith, and
(b)  it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a beneficiary or an intestate successor for the proceeding to be brought or defended.
(4)  On application by a beneficiary, an intestate successor or a personal representative, the court may authorize a person to control the conduct of a proceeding under this section or may give other directions for the conduct of the proceeding.

Deceased Assets Vest In Executor

Deceased Assets Vest In Executor

A deceased person’s assets vest in his or her executor or administrator after death.

If an executor is removed or renounces the new executor/trustee then holds the assets in trust as they now vest with the new executor/trustee.

Browne v Browne Estate 2015 BCSC 28, the court  removed an executor and stated:

[22]         At common law the executor derives title from the will: Sustrik Estate v. Floyd, 2005 ABQB 880.

Section 102 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 provides:

(2)        The estate of a deceased person vests in the person’s personal representative when the personal representative assumes or is appointed to that office.

Pleadings

Pleadings

The Public Guardian and Tristee for BC v Johnston 2016 BCSC 1388 discusses the requirements of proper pleadings and when the Court may intervene to strike out, stay the proceedings, or amend the pleadings of a party.

An application was brought under Rule 9-5 (1) to strike portions of a rambling 32 page response.

The Court stated the following about the requirements of proper court pleadings:

[39] The applicants rely on Rule 9–5(1) of the SCCR. It provides that, at any stage of the proceeding, the Court may order that the whole or any part of the pleading or other document be struck or amended on the ground that:
a) it discloses no reasonable claim or defence, as the case may be;
b) it is unnecessary, scandalous, frivolous or vexatious;
c) it may prejudice, embarrass or delay the fair trial of the proceeding; or
d) it is otherwise an abuse of the process of the court.

[40] Where one or more of the grounds enumerated in Rule 9-5(1) are made out, the Court may pronounce judgment or order that the proceeding be stayed or dismissed, and that the costs of the application be paid as special costs.

[41] The raison d’être of Rule 9-5(1) is as a mechanism to enforce the rules of pleadings: Doyle Construction Co. v. Carling O’Keefe Breweries of Canada Ltd., [1988] B.C.J. No. 831, 27 B.C.L.R (2d) 81 (C.A.) [Doyle].

[42] The paramount function of pleadings is to define the issues of fact and law with clarity and precision, in order to give the opposing party fair notice of the case to be met at trial. Equally important is that by defining the essential contours of the case, pleadings facilitate useful pretrial case management, establish the parameters of pretrial discovery and disclosure, and determine the necessity and scope of expert opinions: Keene v. British Columbia (Ministry of Children and Family Development) & Others, 2003 BCSC 1544; Sahyoun v. Ho, 2013 BCSC 1143 [Sahyoun].

[43] Pleadings are not a vehicle to outline a detailed narrative of the facts and events that may have bearing upon the case. Evidence is not to be included: Sahyoun at para. 29; Rule 3-7(1). Rather, pleadings must be summary in nature, setting out a concise and orderly statement of the material facts that give rise to the claim (or counterclaim), establish a defence, or relate to matters raised by the claim: Doerksen v. First Open Heart Society of British Columbia, 2010 BCSC 1291.

[44] Material facts are the facts that are essential to formulate each cause of action or defence; no averment crucial to success should be omitted: Pyke v. Price Waterhouse Ltd. , 40 C.P.C. (3d) 7, 1995 CarswellBC 907 (S.C.); Delaney & Friends Cartoon Productions Ltd. v. Radical Entertainment Inc. et al, 2005 BCSC 371; Skybridge Investments Ltd. v. Metro Motors Ltd., 2006 BCCA 500; Young v. Borzoni et al, 2007 BCCA 16 at para. 20.

[45] It is the expectation that material facts will be stated succinctly and with precision, and also be organized in a way that informs the Court of the issues of fact and law it is being called upon to decide: Homalko Indian Band v. British Columbia, [1998] B.C.J. No. 2703, 25 C.P.C. (4th) 107 (S.C.); Glenayre Manufacturing v. Pilot Pacific Properties, et al, 2003 BCSC 303.

 

[46] Particulars and material facts are different in their character and purpose. Broadly speaking, particulars are intended to limit the generality of the pleadings and the issues to be tried; enable the other side to properly prepare for trial; tie the hands of the party supplying the particulars; and inform the opposing party what the pleader intends to prove, as distinct from the mode in which the case is to be proved: Cansulex Ltd. v. Perry, 1982 CarswellBC 836 (C.A.). They should follow the material facts and be identified as such. Although particulars must supply sufficient detail of the case to be met, they are not to include the evidence that is anticipated will be adduced at trial to prove the pleaded facts.

 

[47] The distinctions between evidence and material facts, and between evidence and particulars can be difficult to draw in practice. Despite the challenges, the integrity of those lines must be maintained as stringently as is reasonably possible.

[48] Where a party pleads a legal conclusion such as, for example, the existence of a duty of care or of a fiduciary duty, sufficient material facts must be pleaded to support that conclusion: Ferstay v. Dywidag Systems International, 2008 BCSC 793; Rule 3‑7(9).

[49] Where, as in the case at hand, there are allegations of fraud, breach of trust, undue influence and misrepresentation, inclusion of full particulars, including the dates and items as they are known at the time of the pleading, are mandatory: Rule 3‑7(18).

[50] Rule 9‑5(2) confirms that no evidence is admissible on an application brought to strike a pleading on the ground that it does not disclose a reasonable claim or defence. The facts are to be taken as pleaded. Evidence is admissible, however, in relation to the other grounds.

[51] In Citizens for Foreign Aid Reform Inc. v. Canadian Jewish Congress, 36 C.P.C. (4th) 266, 1999 CarswellBC 2111 (S.C.), Romilly J. provided an overview of the key principles that inform the analysis of whether a pleading ought to be struck under the predecessor to sub-rules 9-5(1)(b) and (c) at para. 47:
[47] Irrelevancy and embarrassment are both established when pleadings are so confusing that it is difficult to understand what is being pleaded: Gittings v. Caneco Audio-Publishers Inc. (1987), 17 B.C.L.R. (2d) 38 (B.C.S.C.). An “embarrassing” and “scandalous” pleading is one that is so irrelevant that it will involve the parties in useless expense and will prejudice the trial of the action by involving them in a dispute apart from the issues: Keddie v. Dumas Hotels Ltd. (1985), 62 B.C.L.R. 145 at 147 (B.C.C.A.). An allegation which is scandalous will not be struck if it is relevant to the proceedings. It will only be struck if irrelevant as well as scandalous: College of Dental Surgeons of B.C. v. Cleland, (1968), 66 W.W.R. 499 (B.C.C.A.). A pleading is “unnecessary” or “vexatious” if it does not go to establishing the plaintiff’s cause of action or does not advance any claim known in law: Strauts v. Harrigan, [1992] B.C.J. No. 86 (Q.L.) (B.C.S.C.). A pleading that is superfluous will not be struck out if it is not necessarily unnecessary or otherwise objectionable: Lutz v. Canadian Puget Sound Lumber and Timber Co. (1920), 28 B.C.R 39 (C.A.). A pleading is “frivolous” if it is obviously unsustainable, not in the sense that it lacks an evidentiary basis, but because of the doctrine of estoppel: Chrisgian v. B.C. Rail Ltd. et al. (6 July 1992), Prince George Registry 20714 (B.C.S.C.).

[52] A pleading may be embarrassing or scandalous within the contemplation of the Rule where it: does not state the real issues in an intelligible form; is overly prolix; includes irrelevant facts; is calculated to confuse the opposing party and make it difficult, and perhaps impossible, to answer; or contains arguments or evidence: Kuhn v. American Credit Indemnity Co., [1992] B.C.J. No. 953 (S.C.); McNutt v. A.G. Canada et al., 2004 BCSC 1113 at para. 41; B.C./Yukon Association of Drug War Survivors v. Abbotsford (City), 2014 BCSC 1817 at paras. 93-94; Spillane v. United Parcel Service Canada Ltd. et al, 2006 BCSC 687 at para. 22; Budgell v. British Columbia, 2007 BCSC 991 at para. 20.

[53] That being said, so long as the pleadings do not confuse the opposing party or make it difficult for that party to understand the case that must be met, sheer verbosity does not ordinarily provide sufficient justification for striking a claim: Doyle at para. 4; 347202 B.C. Ltd. v. Canadian Imperial Bank of Commerce, [1995] B.C.J. No. 449 (S.C.); Stanley v. KCL West Holdings Inc. et al, 2004 BCSC 1555.

[54] A crucial consideration in determining whether to strike a pleading under Rule 9‑5(1)(a) is whether it can be preserved by amendment: International Taoist Church Canada v. Ching Chung Taoist Association of Hong Kong Limited, 2011 BCCA 149. The prospect of rectifying deficient pleadings by way of amendment is also a factor in considering whether the pleading ought to be struck on the other grounds: Ahmed v. Assu, 2014 BCSC 1768; Willow v. Chong, 2013 BCSC 1083 at para. 23.