Rectification of a Document

Rectification of a Document

Re McDonald Bankruptcy 2017 BCSC 1957 deals with an attempt to rectify  the terms of a written agreement in a bankruptcy proceeding.

The court refused to do so based on the following legal rationale.

103      In Snell’s Equity, (32nd ed., 2011) in the first supplement to this edition, the author commented on the limits to rectification at page 35. He says the intention of the parties at the time the deed was executed is relevant, rather than the intention if they had they realised the mistake at the time. The author says:
There can thus be no rectification if the omission of a term was deliberate, even if this was due to an erroneous belief that the term was unnecessary or that it was sufficiently dealt with in the antecedent oral agreement, or that the term was illegal, or a breach of covenant, and similarly if the instrument intentionally contains a provision which in fact means something different from what the parties thought it meant. Rectification ensures that the instrument contains the provisions which the parties actually intended it to contain, and not those which it would have contained had they been better informed.”

[emphasis added]

104      In the recent case of Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, the Supreme Court of Canada reaffirmed the limitations on the remedy of rectification. Fairmont Hotels Inc. (“Fairmont”) was involved in the financing of Legacy Hotel’s purchase of two other hotels. The financing was intended to be tax-neutral. However, the financing mechanism resulted in unexpected tax liability when Fairmont was acquired and Legacy Hotel terminated the financing agreement. Fairmont sought to avoid that liability by rectification of the directors’ resolutions. The Supreme Court of Canada allowed the appeal and found rectification was not available to Fairmont. In doing so, the Court said:

[3] . . . Rectification is limited to cases where the agreement between the parties was not correctly recorded in the instrument that became the final expression of that agreement . . . It does not undo unanticipated effects of that agreement. While, therefore, the Court may rectify an instrument which inaccurately records the party’s agreement respecting what was to be done, it may not change the agreement in order to salvage what a party had hoped to achieve.
. . .
[13] Because rectification allows courts to rewrite what the parties had originally intended to be the final expression of their agreement, it is “a potent remedy” (Snell’s Equity (33rd ed.
2015), by J. McGhee, at pp. 417-18). It must, as this Court has repeatedly stated . . . be used “with great caution”, since a “relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine the confidence of the commercial world in written contracts”: Performance Industries, at para. 31. It bears reiterating that rectification is limited solely to cases where a written agreement has incorrectly recorded the parties’ antecedent agreement (Swan and Adamski, at 8.229). It is not concerned with mistakes merely in the making of that antecedent agreement . . . In short, rectification is unavailable where the basis for seeking it is that one or both of the parties wish to amend not the instrument recording their agreement but the agreement itself.

105      A claim for rectification requires evidence that a legal instrument does not accord with what it was intended to record, and the way the instrument was actually recorded: Fairmont at para. 12. The specific terms or omissions in the error must be identified for the court: Fairmont, at para. 32. The prior agreement must have definite and ascertainable terms and must have been in effect when the instrument was executed: Fairmont, at para. 38.

106      A court’s role in a rectification action is only to correct errors and not to speculate about a party’s intentions: Fairmont, at para. 32. A court can only determine whether the written agreement properly records a prior oral agreement of the parties. The prior oral agreement must be definitive and ascertainable, and the error must be in the way the agreement was transcribed into the instrument.

107      Rectification is not concerned with mistakes in the underlying agreement. If parties use an ambiguous term in the prior oral agreement or otherwise make a mistake, the doctrine of rectification is not available to interpret or correct a term in a manner that a party wishes the term to be corrected or interpreted. Rectification is not intended to be a substitute for due diligence: Fairmont, at para. 13. Neither is rectification a method to rectify a party’s error of judgment, or rectify an instrument to better reflect what would have been a more beneficial arrangement at the time.

108      Simply, the court’s task is to “restore the parties to their original bargain” and not to import intention, reflecting what could have been done.

Adjournment of a Trial

For a number of reasons it is sometimes necessary to seek an adjournment of a scheduled trial.

38      The adjournment of a trial is a discretionary matter. This discretion must be exercised in accordance with the interests of justice. There are a number of considerations to take into account.

39      In Navarro v. Doig River First Nation, 2015 BCSC 2173, the court provided a comprehensive review of the legal principles to be considered on an adjournment application with the paramount consideration being the interests of justice in ensuring that there will remain a fair trial on the merits of the action. As noted in that case at paras. 18 to 26:

[18] A judge exercises discretion when an adjournment is sought and has wide powers in relation to the order that is made (Cal-Wood Door v. Olma, [1984] B.C.J. No. 1953at para. 13 (C.A.) (Cal-Wood Door)). The discretion must, of course, be exercised judicially in accordance with appropriate principles (Dhillon v. Virk, 2014 BCSC 745at para. 8 (Dhillon)). The exercise of discretion is a delicate and difficult matter that addresses the interests of justice by balancing the interests of the plaintiff and of the defendant (Sidoroff v. Joe (1992), 76 B.C.L.R. (2d) 82 at paras. 8-11 (C.A.) (Sidoroff)). This balancing requires a careful consideration of all of the elements of the case including the nature of the proceedings and the parties (Sidoroff at para. 10). The Court of Appeal will be extremely reluctant to interfere with a decision of a trial judge on an adjournment matter which is integral to exercise of judicial discretion (Sidoroff at para. 11;Toronto-Dominion Bank v. Hylton, 2010 ONCA 752at para. 36 (Toronto-Dominion Bank)).

[19] There are numerous factors to be considered on an adjournment application. However, the paramount consideration is the interest of justice in ensuring that there will remain a fair trial on the merits of the action (Cal-Wood Door at para. 13; Graham v. Vandersloot, 2012 ONCA 60at para. 12 (Graham)). Because the overall interests of justice must prevail at the end of the day, courts are generous rather than overly strict in granting adjournments, particularly where granting the request will promote a decision on the merits (Graham at para. 12). The natural frustration of judicial officials and opposing parties over delays in processing civil cases must give way to the interests of justice, which favours a claimant having his day in court and a fair chance to make out his case (Graham at para. 12).

[20] Other factors or considerations include (in no particular order of priority):

– the expeditious and speedy resolution of matters on their merits (Rule 1-3(1); Sidoroff at para. 10);
– the reasonableness of the request (Dhillon at para. 16);
-the grounds or explanation for the adjournment (Dhillon at para. 16; Toronto-Dominion Bank at para. 38);
– the timeliness of the request (Dhillon at para. 16);
– the potential prejudice to each party (Dhillon at paras. 16-17);
– the right to a fair trial (Dhillon at para. 16);
– the proper administration of justice (Dhillon at paras. 16 and 39; Toronto-Dominion Bank at para. 36);
– the history of the matter, including deliberate delay or misuse of the court process (Toronto-Dominion Bank at para. 38); and
– the fact of a self-represented litigant (Toronto-Dominion Bank at para. 39).

[21] Securing a fair trial on the merits of the action is the ultimate goal. This requires consideration of the nature of the claim. If the claim is novel, then the prospect for success is one factor to consider (Sangha v. Azevedo, 2005 BCCA 184at para. 15 (Sangha)). However, the prospect for substantive success should not be the sole basis for refusal of an adjournment (Toronto-Dominion Bank at para. 41).

[22] The expeditious and speedy resolution of a matter raises the question of whether there has been a previous adjournment and, if so, the reasons for that prior adjournment. If the circumstances have not changed, a subsequent application will likely not be successful (Kendall v. Sirard, 2007 ONCA 468at para. 46).

[23] Timeliness of the request is a factor. An application made at the opening of trial on the grounds that a party cannot be present will be carefully scrutinized as to the effect upon other parties, whether the party’s evidence is crucial, and what other recourse was available (Warner v. Graham (1945), 62 B.C.R. 273 at 277-278 (S.C.)). If the trial is already underway and an adjournment may be indefinite, the court will want to consider whether it is certain that granting an adjournment would resolve the issue that was the cause of the adjournment request (Dhillon at para. 11).

[24] The explanation for the need of an adjournment is an important consideration. It has been said that simple neglect to get properly ready for a hearing, while irksome for the other party, will still usually lead to an adjournment on the theory that the prejudice to the person denied the adjournment will be greater than prejudice to the person who is forced to accept an adjournment (Michel v. Lafrentz, 1998 ABCA 224at para. 12). It would be unjust to decide, without more, that a party who has been less than diligent will be forced to go to trial unprepared (Trumbley v. Belanger, [1994] B.C.J. No. 2178at para. 4 (S.C.)). Failure of a party’s lawyer to take appropriate and/or timely steps should not irrevocably jeopardize the client under the “often applied principle that the sins of the lawyer should not be visited upon the client” provided that relief can be given on terms that protect the innocent adversary as to costs thrown away and as to the security of the legal position he has gained (Graham at para. 10). However, counsel’s simple statement that he is not ready for trial may not be sufficient (W. Thomson & Co. v. British America Assurance Co. (1930), 43 B.C.R. 194 at 196 (C.A.)). The fact of a medical condition that may impair a party’s ability to conduct his case as well as he might does not, in itself, mandate an adjournment, but it is a serious consideration (Sangha at para. 15).

[25] Prejudice to the parties if an adjournment is granted or is not granted must be considered. Any prejudice to be suffered by either side must be weighed and balanced. However, it is non-compensable prejudice that is pivotal (Khimji v. Dhanani (2004), 69 O.R. (3d) 790 at para. 19 (C.A.); Graham at paras. 7 and 9). If the problems raised by an explanation of prejudice can be met by conditions of an adjournment, then, upon consideration of all of the circumstances, an adjournment may be granted (Cal-Wood Door at para. 17).

[26] Overall delay in the history of proceedings may be a factor. Prolonged delay due to tactical considerations may be inexcusable and result in injustice to the other side because a fair trial is no longer possible (Irving v. Irving (1982), 140 D.L.R. (3d) 157 at 160-163, [1982] B.C.J. No. 970 at paras. 8-11 (C.A.) (Irving)). However, a delay forced on a party by negligent solicitors, impecuniosity, or illness is distinguished from tactical delay. The issue is whether the delay is excusable in light of the reason for it and other circumstances (Irving at 163 D.L.R., para. 11 B.C.J.).

40      As referenced in Wright v. Sun Life Assurance Company of Canada, 2014 BCSC 2621, the following are factors that may support the denial of an adjournment:

[6] Factors that may support the denial of an adjournment may include: a lack of compliance with prior court orders; previous adjournments that have been granted to the applicant; previous peremptory hearing dates; the desirability of having the matter decided; and a finding that the applicant is seeking to manipulate the system by orchestrating delay.

41      In Wright, the court noted the factors which may support an adjournment:

[7] Factors which may favour the granting of an adjournment include: the fact that the consequences of a hearing are serious; that the applicant would be prejudiced if the request were not granted; and a finding that the applicant was honestly seeking to exercise

Summary Judgement Principles

Summary Judgement Principles

Summary Judgment Principles were discussed in Winter v Sherman 2017 ONSC 5492

[25]           Summary judgment is available where there is no genuine issue for trial: Hyrniak v. Mauldin, 2014 SCC 7 (CanLII), 366 D.L.R. (4th) 641, at para. 34.

[26]           The court will find that there is no genuine issue requiring a trial when it is able to reach a fair and just determination on the merits.  The motions judge should determine if there is a genuine issue requiring a trial based only on the evidenece before her, without using the fact-finding powers in Rule 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:  Hyrniak, at paras. 49 and 66.

[27]           The standard for a “fair and just determination” is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.  The evidence need not be equivalent to that at trial but must be such that the judge is confident that she can fairly resolve the dispute: Hyrniak, at paras. 50 and 57.

[28]           On a summary judgment motion, the court is entitled to assume that the parties have advanced their best case and that the record contains all of the evidence the parties would present at trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (CanLII), [2014] O.J. No. 851, at para. 33.

[29]           While summary judgment can operate as a timely, fair, and cost-effective means of adjudicating a civil dispute, it has its limits.  Not all civil disputes are amenable to a final adjudication on the merits by summary judgment.  In certain cases, adjudication exclusively on a written record poses a risk of substantive unfairness.  Great care must be taken to “ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial”: Baywood Homes Partnerships v. Haditaghi, 2014 ONCA 450 (CanLII), 120 O.R. (3d) 438, at para. 44; see also Cook v. Joyce, 2017 ONCA 49 (CanLII), 275 A.C.W.S. (3d) 399, at para. 91.

Highest Court Encourages Alternatives to Trial

Highest Court Encourages Alternatives to Trial

The Supreme Court of Canada released its decision in Hryniak v. Mauldin (2014 S.C.C. 7, [2014] 1 S.C.R. 87) and encouraged alternative solutions to a trial.

In her decision, Karakatsanis, J. called for “a shift in culture” (para. 20). She recognized that the adjudication of civil disputes by way of a full trial has become illusory for many litigants (para. 24). She encouraged litigants and members of the judiciary to consider alternatives to a trial, including motions for summary judgment.

27      Karakatsanis, J. began her analysis of the issue of access to justice by emphasizing that “Our civil justice system is premised upon the values that the process of adjudication must be fair and just. This cannot be compromised.” (See para. 23.)

28      The principles of fairness and justice, the latter in particular, are reflected in Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194. In determining whether there is a genuine issue requiring a trial, a judge hearing a motion for summary judgment is entitled to exercise fact-finding powers “unless it is in the interest of justice for such powers to be exercised only at a trial” (rule 20.04 (2.1)).

29      With respect to the interest of justice, Karakatsanis, J. concluded that, “What is fair and just turns on the nature of the issues, the nature and the strength of the evidence and what is the proportional procedure” (para. 59). She also emphasized consideration of the litigation as a whole:

The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach. (para. 60)

30      The Ontario Court of Appeal has, in a number of recent decisions, emphasized the obligation on a judge hearing a motion for summary judgment “to assess the advisability of the summary judgment process in the context of the litigation as a whole”. (See: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 35 and Hamilton (City) v. Thier & Curran Architects Inc., 2015 ONCA 64, at para. 22.)

Ordering Court Costs Against a Non-Party

Ordering Court Costs Against a Non-Party

Hollander v Mooney 2017 BCCA 238 discussed the Court’s jurisdiction to order costs against a non-party and held that it is limited to special circumstances such as fraudulent conduct, abuse of process, gross misconduct, or circumstances where the non-party is the “real litigant”: Anchorage Management Services Ltd. v. 465404 B.C. Inc., 1999 BCCA 771at para. 21; Perez v. Galambos, 2008 BCCA 382at paras. 17 — 18; and Animal Welfare at paras. 53 — 58.

55      This Court summarized the jurisdiction to award costs against a non-party in Perez, where Madam Justice Rowles said:

[17] The court does have jurisdiction to order costs against a non-party: Oasis Hotel Ltd. v. Zurich Insurance Co. (1981), 28 B.C.L.R. 230 (C.A.). However, an award of costs against a non-party is unusual and exceptional, and should only be made in “special circumstances”: Anchorage Management Services Ltd. v. 465404 B.C. Inc., 1999 BCCA 771, 72 B.C.L.R. (3d) 389, at para. 21.

[18] “Special circumstances” have been held to include situations where the non-party has engaged in fraudulent conduct, an abuse of process, or gross misconduct in the commencement and/or conduct of the litigation, or when the non-party is the “real litigant”: Anchorage.

56      More recently, the Court in Animal Welfare applied Anchorage Management and Perez in setting aside an award of costs against the principal of a litigant company. 

Anchorage management Services Ltd v 465404 BC Inc. 1999 BCCA 771 stated interia:

21      That the court has an inherent jurisdiction to impose costs to achieve justice between parties is undeniable but the imposition of costs upon non-parties is an unusual event and such a costs order should, I venture to suggest, be made only in special circumstances. Such an order is very much an exception to the usual rules governing costs. In the Sturmer case, a case challenging a local option by-law, the court upheld Chancellor Boyd’s order for costs against non-parties who were found to have put up “a man of straw” in whose name the litigation would be carried on so as to avoid anticipated liability for costs upon dismissal of the action. The court agreed with Chancellor Boyd that the proceedings were in the nature of an abuse of the process of the court. Middleton J. in the Divisional Court put it this way:

Can there be a fraud which this court ought to visit more strongly than the conduct pursued in this case in which in order to avoid the payment of the costs of a doubtful litigation to which the plaintiff might be made liable, the real plaintiff procures a pauper to become the nominal plaintiff?


Fiduciary Duties of Corporate Directors

Fiduciary Duties of Corporate Directors

Ascent One Properties Ltd v Liao 2017 BCSC 1017 dealt with an aborted real estate development project that alleged inter alia a breach of fiduciary duties by a corporate director and officer.

The case outlines the law relating to the fiduciary duties owed by a director and officer of a corporation.


173      It is trite law that directors owe duties to the companies they serve.

174      The Business Corporations Act, S.B.C. 2002, c. 57 (“BCA“) provides in relevant part as follows:

Powers and functions of directors

136(1) The directors of a company must, subject to this Act, the regulations and the memorandum and articles of the company, manage or supervise the management of the business and affairs of the company.

Duties of directors and officers

142(1) A director or officer of a company, when exercising the powers and performing the functions of a director or officer of the company, as the case may be, must

(a) act honestly and in good faith with a view to the best interests of the company . . .

175      The statutory fiduciary duty requires company directors and officers to respect the trust and confidence that have been reposed in them to manage the assets of the company in pursuit of the realization of the objects of the company. They must avoid conflicts of interest and abusing their position for personal benefit: Peoples Department Store Inc. (Trustee of) v. Wise, 2004 SCC 68at para. 35.

176      A director must not usurp for herself a maturing business opportunity.

177      As was stated by the Supreme Court of Canada in BCE Inc. v. 1976 Debenture Holders, 2008 SCC 69:

[37] The fiduciary duty of the directors to the corporation originated in the common law. It is a duty to act in the best interests of the corporation. Often the interests of shareholders and stakeholder are co-extensive with the interests of the corporation. But if they conflict, the directors’ duty is clear — it is to the corporation . . .

[38] The fiduciary duty of the directors to the corporation is a broad, contextual concept. It is not confined to short-term profit or share value. Where the corporation is an ongoing concern, it looks to the long-term interests of the corporation. The content of this duty varies with the situation at hand . . . the fiduciary duty owed by directors is mandatory; directors must look to what is in the best interests of the corporation.

. . .

[40] In considering what is in the best interests of the corporation, directors may look to the interests of, inter alia, shareholders, employees, creditors, consumers, governments and the environment to inform their decisions. Court should give appropriate deference to the business judgment of directors who take into account these ancillary interests, as reflected by the business judgment rule. The “business judgment rule” accords deference to a business decision, so long as it lies within a range of reasonable alternatives [citations omitted]. It reflects the reality that directors, who are mandated under s. 102(1) of the CBCA to manage the corporation’s business and affairs, are often better suited to determine what is in the best interests of the corporation. This applies to decisions on stakeholders’ interests, as much as other directorial decisions.

. . .

[66] . . . However, the directors owe a fiduciary duty to the corporation, an only to the corporation . . . not to stakeholders, and that the reasonable expectation of stakeholders is simply that the directors act in the best interests of the corporation.

178      The fiduciary duty is to maximize the value of the corporation: Carr v. Cheng, 2005 BCSC 445at para. 25. A director’s interests as a shareholder must be subservient to his fiduciary duty: Polar Star Mining Corp. v. Willock (2009), 96 O.R. (3d) 688 (Ont. S.C.); Peoples Department Stores at para. 43.

179      It is a breach of fiduciary duty to use, for personal advantage or gain, information acquired as a director in order to attempt to take control of the company: Dockside Brewing Co. Ltd. v. Strata Plan LMS 3837, 2007 BCCA 183 at para. 54.

180      In determining whether a director has acted in the best interests of the company, the court will consider whether the director has applied informed judgment which had a reasonable basis: Maple Leaf Foods Inc. v. Schneider Corp., (1998), CanLII 5121 (Ont. C.A.) at p. 42. This “business judgment rule” operates to shield from court intervention business decisions which have been made honestly, prudently, in good faith and on reasonable grounds: Krynen v. Bugg, 2003 O.J. No. 1209 (Ont. C.J.) at para. 74(7).

181      A director will not be liable for breach of fiduciary duty when the conduct at issue is qua shareholder and not qua director: Polar Star Mining at paras. 33-34.

182      The court must scrutinize the circumstances of each case to determine whether the director has acted honestly and in good faith and with a view to the interests of the company. A finding that there was no fraud or dishonesty on the part of a director’s who was attempting to solve the company’s problems stands in the way of a finding of breach of fiduciary duty: Peoples Department Stores at paras. 39 — 40.

183      When assessing whether a breach of fiduciary duty has occurred, the subjective motivation of the director is relevant: Peoples Department Stores at paras. 62 — 63; Dockside Brewing Co. at paras. 54 — 55.

Court Orders Mental Capacity Exam

The Court Orders Mental Capacity Exam

In Re Singh 2017 BCSC 984 the court invoked its parens patriae jurisdiction and  ordered a 93 year old father to undergo a mental capacity examination by two geriatric doctors .

Two of his six children claimed that their father was mentally incompetent to manage his own affairs and asked the court to order an assessment by two geriatric doctors. Based on his mental capacity exam, if he was found to be incapable then they sought to be appointed his committee under the Patients Property act. The other four children opposed the application. The family doctor stated that he showed signs of vascular dementia and had good days and bad days.

The court held that while it was an intrusion into the patients life it was important enough to order the mental capacity examinations under the inherent jurisdiction of the court to protect those who were incapable of protecting themselves.

35   Sections 3 and 5 of the Patient’s Property Act govern the procedure for obtaining a declaration of incapability. Those sections provide, in relevant part:

Hearing of application

3(1) If, on

(a) hearing an application, and

(b) reading the affidavits of 2 medical practitioners setting out their opinion that the person who is the subject of the application is, because of

(i) mental infirmity arising from disease, age or otherwise, or

(ii) disorder or disability of mind arising from the use of drugs, 

(iii) incapable of managing his or her affairs or incapable of managing himself or herself, or incapable of managing himself or herself or his or her affairs,

The court is satisfied that the person is, because of

(c) mental infirmity arising from disease, age or otherwise

Examination 5(1) If

(a) an application is made or an issue is tried under section 3,

(b) an appeal is taken from an order under section 3, or

(c) an application is made under section 4,

the court hearing the appeal or application or trying the issue may order the person who is the subject of the application or the patient to attend and submit at the time and place the order directs to examination.

(2) An examination under this section must be made by

(a) one or more medical practitioners other than those whose affidavits were before the court on the appeal, application or trial, or

(b) a board of 3 or more medical practitioners designated by the College of Physicians and Surgeons of British Columbia at the request of the court.

36   In the leading case of Temoin v. Marlin 2012 BCCA 250, Neilson J.A., for the Court, observed at para. 27 that this legislation “reflects the tension between the right to personal autonomy and the protection of vulnerable individuals”.

37   I take the following principles from Temoin:

  • There is no statutory authority to order a person to undergo the medical examinations required for an application under s. 3 of the Act (at para. 48).
  • There is a gap in the Act, which provides no protection for individuals who appear to be incapable but have no access to physicians, or who refuse to be medically examined (at para. 51).
  • The parens patriae jurisdiction is founded on the need to protect those who cannot care for themselves. The court’s discretion must be exercised to do what is necessary for the protection of the person for whose benefit it is exercised (at para. 55, citing Re Eve, [1986] 2 S C.R 388).
  • The Court may exercise its powers under its parens patriae jurisdiction to fill in the gap by making what is effectively a provisional finding of incapacity for the limited purpose of bringing an individual within the Act and its procedural safeguards. However, this power must be exercised cautiously, and only on a proper evidentiary basis (at para. 56).
  •  The Court’s parens patriae jurisdiction must be used for the benefit of the person in need of protection, and not to benefit others (at para. 60).
  • The application to compel a person to undergo the two medical examinations required for a declaration of incapability engages the Charter values of liberty, autonomy and equality. “Those values are given meaning by requiring a level of proof that is commensurate with both the importance of the individual interests and the seriousness of the intervention at stake” (at para. 60).
  • The test for the exercise of the parens patriae power requires the applicant to present evidence establishing a serious question to be tried, both with respect to the individual’s capacity and his or her need for protection (at para 61).

38  In Temoin, at para. 61, the court also approved the test stated by the chambers judge: a requirement for “prima facie evidence of incompetence and a compelling need for protection

Loan or Gift Within the Family?

s it a Loan or Gift Within the Family?

ABP v KGW 2017 BCSC 977 provides a template of the criteria a court will examine in determining if a gratuitous advance of monies or property within a family from parents to children will be a loan or a gift.

5      The topic of gratuitous transfers between parents and adult children was covered in Pecore v. Pecore, [2007] 1 S.C.R. 795, in which it was held that these come freighted with a rebuttable presumption of resulting trust putting the transferee to the onus of demonstrating that a gift was intended. What matters is the intention of the transferor at the time of handing over the property.

6      A template for evaluating whether the presumption has been rebutted was set up in Locke v. Locke, 2000 BCSC 1300, and applied and approved in Kuo v. Chu, 2009 BCCA 405 at para. 9, where the questions to be considered on the loan/gift issue in a family law context were said to include:

a. whether there were any contemporaneous documents evidencing a loan;

b. whether the manner for repayment is specified;

c. whether there is security held for the loan;

d. whether there are advances to one child and not others, or advances of unequal amounts to various children;

e. whether there has been any demand for payment before the separation of the parties;

f. whether there has been any partial repayment; and

g. whether there was any expectation, or likelihood, of repayment.

Undue Delay: Laches

Undue Delay: Equitable Defence of Laches

Hrenyk v Preiss estate 2017 SKQB 151 contains a through discussion of the equitable defence of laches- the plaintiff’s undue delay in proceeding with a court action to resolution.

26 Laches is discussed in Ahone v. Holloway (1988), 30 B.C.L.R. (2d) 368 (C.A.), at page 378:

… Laches is established when two conditions are fulfilled:

(1) there must be unreasonable delay in the commencement or prosecution of proceedings, and

(2) in all the circumstances the consequences of delay must render the grant of relief unreasonable or unjust.

27 Laches was more recently considered by Gabrielson J. in Turcot v. Slade, 2010 SKQB 367, 364 Sask. R. 36at para. 15:

[15] … The equitable doctrine of laches was discussed by the Supreme Court of Canada in M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, [cites omitted] where the court stated at paras. 97 and 98:

97 The leading authority on laches would appear to be Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221, in which the doctrine is explained as follows, at pp. 239-40:

… the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent of a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

. . .

In turn, this formulation has been applied by this Court; see Canada Trust Co. v. Lloyd, [1968] S.C.R. 300; Blundon v. Storm, [1972] S.C.R. 135.

98 The rule developed in Lindsay is certainly amorphous, perhaps admirably so. However, some structure can be derived from the cases. A good discussion of the rule and of laches in general is found in Meagher, Gummow and Lehane, supra, at pp. 755-65, where the authors distill the doctrine in this manner, at p. 755:

It is a defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either (a) acquiesced in the defendant’s conduct or (b) caused the defendant to alter his position in reasonable reliance on the plaintiff’s acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb …

Thus there are two distinct branches to the laches doctrine, and either will suffice as a defence to a claim in equity. What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches under either of its two branches. Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.

(Emphasis added)

. . .

35      The applicant asserts that the respondent bears the burden of establishing laches, relying on the following comments of Caldwell J.A. in Olney Estate v. Great-West Life Assurance Co., 2014 SKCA 47, 438 Sask. R. 47 (Sask. C.A.):

75 … the doctrine of laches is an equitable defence which must be made out on the evidence by the party who asserts it. If the evidence adduced by the party relying on the doctrine makes out the availability of the defence, the onus shifts and the other party is logically and properly put to the burden of adducing evidence to dispel its application; however, the law does not require a party to make out the party opposite’s defence.

[emphasis in original]

36      I must first determine whether the respondent has established that the applicant acquiesced in the respondent’s position. In Gottselig Estate v. Gottselig Estate, 2014 SKQB 20 (Sask. Q.B.) at paras 51, 54 and 55, (2014), 436 Sask. R. 144 (Sask. Q.B.), Barrington-Foote J. explained the relationship of acquiescence to the doctrine of laches:

51 Laches is an equitable doctrine. In Waters’ Law of Trusts, supra, the principled justification for the doctrine is described as follows: (at p. 1242-43)

No legal system could allow a person who has a legal claim to do nothing over a long period of time to then assert it, and bring his action because it pleases him at that moment to do so. A would-be defendant is reasonably entitled to ask that action shall be brought when the evidence, particularly in his own favor, is still available and at least relatively fresh. Nor is it unreasonable for him to assume, if the would-be plaintiff does nothing for a considerable period of time, that the latter has condoned the wrongdoer’s act or omission, and intends that the wrongdoer may arrange his affairs accordingly. Courts of equity traditionally adopted these views, and applied them in the doctrine of laches. The claimant who delayed bringing his claim for an unreasonable period of time was taken to have acquiesced in the circumstances brought about by the wrongdoing. (footnotes omitted)

. . .

54 Laforest J. [in M. (K.) v. M. (H.), [1992] 3 S.C.R. 6] also explores the concept of acquiescence, which is not only relevant to a consideration of laches, but is a separate equitable doctrine. The following comments in Waters’, supra, are instructive: (at p. 1254)

[The doctrine of laches] is also closely related to the doctrine of acquiescence which in recent years has increasingly become associated with delay in bringing action. Indeed, it is more likely that what the courts are really concerned with is implied acquiescence rather than delay itself. This is particularly true today when limitation statutes expressly apply to so many actions brought in equity…[Acquiescence] is something more than a mere abstaining from legal proceedings; it is an adoption established by some positive evidence of the transaction or dealing which the claimant now disputes. … (footnotes omitted)

55 This statement is consistent with Laforest J.’s explanation of acquiescence, and its relationship to laches, which is as follows:

100 Acquiesence [sic] is a fluid term, susceptible to various meanings depending upon the context in which it is used. Meagher, Gummow and Lehane, supra, at pp. 765-66, identify three different senses, the first being a synonym for estoppel, wherein the plaintiff stands by and watches the deprivation of her rights and yet does nothing. This has been referred to as the primary meaning of acquiescence. Its secondary sense is as an element of laches — after the deprivation of her rights and in the full knowledge of their existence, the plaintiff delays. This leads to an inference that her rights have been waived. This, of course, is the meaning of acquiescence relevant to this appeal. The final usage is a confusing one, as it is sometimes associated with the second branch of the laches rule in the context of an alteration of the defendant’s position in reliance on the plaintiff’s inaction.

101 As the primary and secondary definitions of acquiescence suggest, an important aspect of the concept is the plaintiff’s knowledge of her rights. It is not enough that the plaintiff knows of the facts that support a claim in equity; she must also know that the facts give rise to that claim: Re Howlett, [1949] Ch. 767. However, this Court has held that knowledge of one’s claim is to be measured by an objective standard; see Taylor v. Wallbridge (1879), 2 S.C.R. 616, at p. 670. In other words, the question is whether it is reasonable for a plaintiff to be ignorant of her legal rights given her knowledge of the underlying facts relevant to a possible legal claim.

Avoiding Duplicate Litigation (Res Judicata)

Duplicate Litigation

Duplicate litigation is to be avoided and thus the legal concept of res judicata- when a court has decided the legal issue already it constitutes a bar to a subsequent action involving the same claim.

Alexander v Alexander 2017 BCSC 914 is a recent case dealing with this concept and states inter alia:

16      The doctrine of res judicata and its application was summarized by Ballance J. in Tylon Steepe Homes Ltd. v. Pont, 2011 BCSC 385beginning at para. 52:

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

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

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

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

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

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

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

(See Angle; Grdic and Danyluk).

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

17      With respect to the last of the three requirements, issue estoppel can be established through privity of blood, title or interest: Genesee Enterprises v. Abou-Rached, 2001 BCSC 59at para. 234; Giles v. Westminster Savings Credit Union, 2006 BCSC 1600at para. 45.

18      The test under Rule 9-5(1)(d) for striking an action on the basis of res judicata is whether it is “plain and obvious” that res judicata applies. The burden is on the applicant to establish the applicability of res judicata: see Worldwide Treasure Adventures Inc. v. Trivia Games Inc. (1996), 17 B.C.L.R (3d) 187 at 195.

19      Ballance J. continued at paras. 79 and 80 of Tylon Steepe Homes with a discussion concerning the relationship between the doctrine of res judicata and the doctrine of abuse of process:

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

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