Judge Seeks To End Long Running Estate Trial of Thirty Court Actions

Long Running Estate Trial

In a case he called “Ontario’s long running estate trial legal drama,” a Superior Court judge has declared a plaintiff who launched dozens of lawsuits in an estate dispute a vexatious litigant.

The property at 140 Dunvegan Rd. in Toronto is at the heart of the long-running legal battle over the estate of Edward Assaf. Photo: Laura Pedersen

William Assaf has been fighting for a bigger share of his father’s estate since Edward Assaf died in 1971. According to a recent ruling, his battles were “motivated by a belief that a terrible injustice had been done by his father to his mother, who he felt had been abused in life and cruelly treated in the will.”

There have been more than 30 lawsuits and over 100 different court orders in the matter, according to the March 6 ruling by Justice Edward Morgan. Assaf has brought motions against the administrator of his father’s will, the current owners of the elder Assaf’s estate, and a lawyer involved in the case. Courts in several instances have ruled his motions were meritless.

In the absence of action to control future claims, Assaf “will remain a Pirandellian character in search of an author, re-enacting past struggles in a dramatic loop he cannot seem to escape,” wrote Morgan in Burton v. Assaf.

Judges who presided over previous motions in the same matter described the Assaf litigants using similar language. Former Superior Court justice David Cromarty said the litigants were “figures in a classical tragedy, bent upon destroying that which surrounds them, especially their monetary inheritance.” That was back in 1980 in Assaf v. Koury that dealt with an application by Vivian Assaf against her late husband’s estate.

Attempting to bring the legal saga to a close, Morgan said the court has to play the role of gatekeeper to protect the publicly funded justice system. “William Assaf has persistently attempted to re-litigate issues already determined by the court,” wrote Morgan. “He has brought claims and appeals that no reasonable person could expect to win. What’s more, he has initiated actions, motions, and appeals that contain no legally recognizable claim and that do little more than oppress and harass his opponents with repetitions of prior claims.”

The Assaf family’s litigation is “long and painful,” Morgan said, adding the matter is “so extensive that it would be counter-productive to attempt to trace it all.”

The case relates to the will Assaf’s father left upon his death that favoured his daughter, Barbara Laroq, while leaving only small annual payments to Assaf and his mother Vivian. Assaf produced a different will and “claimed to have found [it] among his father’s possessions,” wrote Morgan.

“The found will was held to be a forgery.”

Assaf was convicted of uttering a forgery and sentenced to four years in jail, a number later reduced to 2-1/2 years. The executor of his father’s estate, Robert Bosada, was also found to have forged a document at one point. The judge who presided over that case admonished Bosada but said his actions had no bearing on the ownership of the property.

“In any case, the continued litigation of issues respecting the property and the damages claims in the action would certainly amount to an abuse of process,” wrote Morgan, whose alphabetical list of the claims to the property extends to the letter Y.

Assaf “has attempted to appeal virtually every ruling, often simply for the sake of filing an appeal and then having it dismissed for failure to perfect,” wrote Morgan, adding Assaf has also consistently failed to pay costs awarded against him.

In addition to their own family members, Assaf and his mother brought claims against the purchasers of the property in question. The owners of the home in Toronto’s Forest Hill, Mary Matthews and James Archer-Shee, have, “doubtless to their lasting regret, stumbled into the Assaf family maelstrom,” wrote Morgan.

Although Matthews and Archer-Shee are the rightful owners of 140 Dunvegan Rd., Assaf and his mother have challenged their ownership since their 1998 purchase, Morgan added.

Assaf also sued Bernard Burton, the lawyer who once represented Bosada.

“In about 2003 or 2004, somewhere in that area, we had been in court about 135 times,” says Burton.

“Imagine this, including appeals to the Court of Appeal,” he adds.

While family law matters often lead to heated disputes, estates litigation “in some ways can be even worse,” says Toronto lawyer Garry Wise.

“Sibling rivalries go back to the beginning of time; they’re hugely entrenched,” he says.

“When parents make choices in the way they construct their wills and plan for their estates that leave one child or more than one child feeling out of the favoured circle, it’s just a prescription for this stuff to go on and on and on.”

There’s a cautionary tale for lawyers in cases like this one, says Wise. When they help clients draft a will, they should warn them about what could happen if they exclude someone or favour one child over others, he notes.

“The vast majority of their estate could get swallowed up by litigation if they don’t act in a way that is perceived as even-handed.”

There are no administrative controls in the justice system that stop persistent litigants from suing repeatedly, says litigation lawyer James Morton.

“In Ontario, pretty well anyone is allowed to sue anyone for anything. The controls on that are costs and in an extreme case an order, as in this decision, for declaring someone a vexatious litigant. There is nothing administrative to stop me from suing again and again and again for the same relief against the same people.”

Although courts have discretion to use the vexatious litigant label on their own accord, it’s unusual for them to make such an order unless there’s an application asking for it, says Morton.

“The court upon seeing an abusive process could make an order to ensure that things proceed in an orderly fashion without useless motions, but it would be very, very, very unusual for the court to take such a dramatic step without anyone asking,” he adds. “The role of a judge or judicial officer is not to litigate for people; it is to decide questions they’re asked.”

At a time when courts are seeing greater numbers of self-represented litigants, Wise says this case is a caricature of what he calls a broader problem of loose gatekeeping in Ontario’s courtrooms.

“I think there’s a question that’s bound to be asked sooner rather than later about our court system as a whole, which is: How much longer will our country be able to afford to maintain a robust court system to all to deal with what are essentially personal and private disputes?” he asks.

As a fundamental tenet of democracy, tinkering with the court system isn’t easy, says Wise. But “at a certain point, we are going to have to as a society draw lines,” he adds.

For his part, Morgan noted the vexatious litigant declaration “does not deprive a person of access to justice; rather, it provides extra scrutiny by the court, and impresses potential claims with a form of orderliness without prejudicing their merits.”

Still, Morton calls the vexatious litigant declaration an effective deterrent. “In my experience, when you have a vexatious litigant, it is extremely rare that they would bring an application or a claim that the judge will permit to go forward,” he says.

But Burton says an appeal of the recent decision wouldn’t come as a surprise.

“Judging by the past, of course he will appeal,” he says.

“However, this is the first step, I hope, on the way to some sort of finality.”

He adds: “We are prepared, when we get the order, to send a copy of it around to every court registrar in Ontario just to make sure he doesn’t walk in and, you know, not tell them and put something down.”

Assaf’s agent, Daniel Barna, says the pair disagree with the notion that Bosada’s forged documents didn’t have any bearing on the ownership of the property.

“What we were hoping Justice Morgan would do was recognize that the only way previous orders had been obtained was through lying to the courts,” he tells Law Times.

The true owner of the property, Barna maintains, is Savarin Ltd., a Bay Street nightclub once owned by Assaf’s father. Assaf is now the owner of the company.

“The judges have chosen to believe Bosada, found to be a forger and a perjurer,” he says. Assaf will appeal the vexatious litigant declaration, he adds.

Asked about the costs still unpaid by Assaf, Barna says: “Well, of course these guys have siphoned all the money out of the estate.”

Introducing Fresh Evidence At An Appeal Hearing

Fresh evidence is not new evidence- fresh evidence existed at the time of the initial trial, but for various reasons could not be put before the court.

New evidence is that which has become available subsequent to the trial, and is much harder to gain admissibility in evidence that is fresh evidence.

This was discussed by Rowles J.A. in Struck v. Struck, (2003), 20 B.C.L.R. (4th) 242, 2003 BCCA 623 at para. 37:

The evidence admitted in this case was not “fresh” evidence as that term is generally understood, for it was not evidence in existence at the time of trial that could have affected the result. Instead, it is evidence of events that occurred subsequent to the trial judgment. Generally speaking the need for certainty and finality leaves no room for the admission of such evidence on appeal: North Vancouver (District of) v. Lunde (1998), 60 B.C.L.R. (3d) 201 at 210 (C.A.)

In order to adduce fresh evidence on appeal, the appellant must meet the test set out in Palmer v. The Queen, [1980] 1 S.C.R 759; Spoor v Nicholls (2001), 90 B.C.L.R. (3d) 88 (CA) at para. 16.
.

The criteria for the admission of fresh evidence set out in R. v. Palmer, supra, at 775 and applied by this Court in C.fB.A.), supra, are these:

  1. The evidence should generally not be admitted if, by due diligence, it could have been adduced at trial provided that this general principle will not be applied as strictly in a criminal case as in civil cases: see McMartin v. The Queen [[1964] S.C.R. 484].
  2. The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial.
  3. The evidence must be credible in the sense that it is reasonably capable of belief, and
  4. It must be such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.

See also Stav v. Stav, 2012 BCCA 154 at paras. 30 and 32.

 

Another method of attempting to introduce fresh evidence is through the natural justice as per  Dagneault v. Hatton (1994), 99 B.C.L.R. (2d) 109 (CA) at paras. 13-14.

  1. In Dagneault, the Appellant, ICBC, was seeking to appeal the chambers judge’s decision to dismiss its application for an extension of time for filing the appeal book and transcript because he refused to accept the volume of litigation faced by ICBC as justification for the delay. In his reasons, he found that granting the extension would be tantamount to giving ICBC special treatment as an appellant to not have to follow the court rules regarding filing deadlines. On appeal, ICBC sought to adduce fresh evidence in an affidavit, where they stated they were not trying to receive special treatment, but that the delay in filing the appeal books was due to a muddle and confusion caused by various employees and solicitors of ICBC due to sickness and communication problems.
  2. At paragraph 19 of the judgment, Madam Justice Southin holds:

“But when, as here, the cause of the failure is muddle caused in part by illness and in part by the dilatoriness of the litigants’ advisors, then, unless that dilatoriness is malevolent or there is prejudice to the respondent, I do not think the order to extend the time should be refused unless the appeal is without merit.”

 

Limitations Act -June 1.13

limitationsBC Limitations Act

It is essential that each specific type of court action be brought within the time limits set by the statute of limitations, or the perspective claimant is “out of time”and barred from doing so.

There are a number of substantial changes being made in the area of estate claims when the new Limitation Act in British Columbia is brought into effect on June 1, 2013.

The link is : http://www.ag.gov.bc.ca/legislation/limitation-act/pdf/LA_Explained.pdf)

Some of the most substantial claims from a quick review of the draft legislation, and thus not yet law until proclaimed, are as follows:

 

1. There is a general 2 year limitation period and 15 year ultimate limitation period for claims except for exempt claims under the Act or specified under other acts.  No more distinguishing between 2, 6, and 10 year limitation dates, and the ultimate limitation period is 15 years instead of 30 years.

 

2.Trust claims which previously had a 10 year limitation period now have a 2 year limitation period, but the discoverability rule says it has to be actual knowledge of a claim in order for the limitation period to begin running.  In all other claims, it’s actual or constructive knowledge (i.e. should have reasonably known).

 

3.Property claims for title or possession of property are exempt from a limitation period.

 

4. Claims for spousal support and child support arrears are exempt from a limitation period.

 

5.Sexual assault claims are exempt from a limitation period.

 

6. Negligence is not 6 years and is now 2 years for limitation period.

 

7. The new act applies to claims discovered AFTER June 2013.  Otherwise, the old act still applies.

8. The Limitation time to commence a Wills Variaion action remains at of 6 months from the date of probate is NOT changed

 

Equity Demands “Clean Hands”

clean hands2Equity  demands  “clean hands”  or it will not be exercised.

Wachter v Carlson 2012 BCSC 1390 is a good example of the horrendous legal predicament elderly couple can find themselves in by entering into well intentioned, but poorly thought out, and not legally prepared, arrangements commonly known as “care for life” situations.

 

They typically involve the wealthier elderly couple moving in with a child and his or her family, often within a self contained suite, and often after putting up most if not all of the funds to purchase the house.

There is often a complete failure to protect their legal interests such as by registering the property on their own names.

These great plans can go very much sideways, and  often do as a result of a matrimonial split, or family dispute of some significance.

 

The Wachter case is one of those situations that occurred and fortunately the court rectified through the application of the application of unjust enrichment, while denying the defendants arguments that the plaintiff’s did not have the “clean hands” maxim demanded of  equity, and returned the home to the parents.

The plaintiffs were the parents of the female defendant and her husband who had entered into an arrangement,  whereby the defendants would arrange mortgage financing for the purchase of a house in the Okanagan, in which the plaintiffs will also live.

The plaintiffs located and bid on the house, confirmed with the defendants that the mortgage financing was in place, put down the down payment, performed an inspection, and paid all closing costs re-its purchase.

The defendants however were named as the purchaser on the contract for the purchase and sale of the property, and title was registered only in their names.

The parties had entered into a rental agreement for 60 months, which was the length of the mortgage.

Under the agreement, the plaintiffs were responsible for rent at the same amount as the mortgage, property taxes all utilities and insurance.

After five years the relationship between the parties broken down and the plaintiffs brought court action claiming ownership of the house.

The court allowed the action and ordered that title to the house be transferred by the defendants to the surviving plaintiff and her deceased’s estate, as tenants in common.

The court based its decision on both the laws of unjust enrichment and resulting trust.

The court found that virtually all of the documents such as the rental agreement, were provided for at the request of the bank so as to be entitled to mortgage financing, and did not accurately reflect the landlord and tenant relationship between the parties.

The correspondence between the parties acknowledge the defendants understanding that the plaintiffs have an equitable interest in the house, and that they would benefit from an increased equity in the house as a result of renovations that the plaintiffs had completed at their own expense.

The court found that title to the house was placed in the defendants names only to enable them to obtain more the mortgage necessary to purchase the house, as the plaintiffs could not obtain mortgage financing giving their poor financial situation.

The plaintiffs had performed all of the tasks, and paid all of the costs related to the home ownership, except securing the mortgage financing.

The court found that it was clear that the agreement between the parties was that the plaintiffs would hold the house as equitable owners, and pursuant to that agreement, the court declared the plaintiffs to in fact be been the beneficial owners of the house.

Furthermore the defendants failed to prove that the plaintiffs had not come to court with clean hands, and were thus precluded from an equitable remedy.

The Wachters plead the applicability of the doctrines of unjust enrichment and resulting trust as the basis upon which title to the Vernon home be transferred to them. The concepts of unjust enrichment and resulting trust are discussed in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269 (S.C.C.). The determination of whether there has been unjust enrichment requires findings to the following questions:

a) Have the Carlsons, as defendants, been enriched?
b) Have the Wachters, as plaintiffs, suffered a deprivation?
c) Is there no reason in law or justice for the Carlsons’ retention of the benefit conferred by the Wachters?

In Kerr, Cromwell J., writing for the court, states:

[40] The third element of an unjust enrichment claim is that the benefit and corresponding detriment must have occurred without a juristic reason. To put it simply, this means that there is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention “unjust” in the circumstances of the case: …

Court Prefers Lawyers Opinion Over Doctor’s On Mental Capacity

Testimony

 

Moore v Drummond BCSC 1702 is not the first decision where the evidence of the lawyer who  prepared a will  is preferred over that of a family doctor, on the issue of whether or not a deceased  had mental capacity to prepare a will.

One year before her death the testatrix made a new will naming her neighbours as executors and soul beneficiaries, to the exclusion of her son.

The solicitor who drafted her will had no concerns about her testamentary capacity.

Whoever just one week before, the testator’s family Dr. told the Public Guardian and Trustee that the deceased had dementia and was no longer capable of managing her affairs.

After her death the executors brought action to prove the will in solemn form, and the sons brought a counterclaim to find the will invalid.

The court found the will of valid, and specifically found that the testator had the requisite capacity to make a new will.

The executors could not rely upon the presumption of validity because the suspicious circumstances caused by the fact that the doctor had expressed an opinion that the testator was incapable of managing her affairs.

However the doctors opinion was found to by the court to be a general one that commented in abstract on the testator’s ability to manage her affairs.

The solicitor who met with the deceased was more focused on the question of testamentary capacity, and was satisfied on the basis of his interview with her, observations and extensive experience.

The testator was able to accurately tell the solicitor what her property consisted of, and articulate reasons for disinheriting her son and favouring her neighbours.

The court found that the testator’s decision was consistent with the negative attitude previously expressed about her son and long-standing friendship with her neighbours.

The court commented as follows on the law relating to testamentary capacity:

 

The frequently quoted test for testamentary capacity comes from Banks v Goodfellow (1870), 5 QB 549 at 567:

… [The testator] ought to be capable of making his will with an understanding of the nature of the business in which he is engaged, a recollection of the property he means to dispose of, of the persons who are the objects of his bounty, and the manner in which it is to be distributed between them. It is not necessary that he should view his will with the eye of a lawyer, and comprehend its provisions in their legal form. It is sufficient if he has such a mind and memory as will enable him to understand the elements of which it is composed, and the disposition of his property in its simple forms.

[34]         In Leger v. Poirier, [1944] SCR 152 at 161, the Supreme Court of Canada used the term “disposing mind and memory”, which it defined as “one able to comprehend, of its own initiative and volition, the essential elements of will-making, property, objects, just claims to consideration, revocation of existing dispositions, and the like …”

[35]         A more recent formulation of the test is found in Re Schwartz, [1970] 2 OR 61  at 78 (CA), aff’d [1972] SCR 150where Laskin J.A. (dissenting on other grounds) summarized the elements of testamentary capacity:

… The testator must be sufficiently clear in his understanding and memory to know, on his own, and in a general way (1) the nature and extent of his property, (2) the persons who are the natural objects of his bounty and (3) the testamentary provisions he is making; and he must, moreover, be capable of (4) appreciating these factors in relation to each other, and (5) forming an orderly desire as to the disposition of his property….

[36]         This does not mean the testator must have perfect mental capacity for all purposes or be able to remember all details. Diminished capacity does not equate to lack of capacity and a person who has been deemed incapable of managing his or her own affairs may still be able to make a valid will: Royal Trust Co v Rampone, [1974] 4 WWR 735 at 743 (BCSC).

[37]          In Banks the court said at 566:

In these cases it is admitted on all hands that though the mental power may be reduced below the ordinary standard, yet if there be sufficient intelligence to understand and appreciate the testamentary act, in its different bearings, the power to make a will remains.

And at 567:

… his capacity may be perfect to dispose of his property by will, and yet very inadequate to the management of other business, as, for instance, to make contracts for the purchase or sale of property. For, most men, at different periods of their lives, have meditated upon the subject of the disposition of their property by will, and when called upon to have their intentions committed to writing, they find much less difficulty in declaring their intentions than they would in comprehending business in some measure new.

[38]         The existence of testamentary capacity does not depend on scientific or medical definitions and medical opinions are not necessarily determinative: Field v James, 2001 BCCA 267 at para 77; Baker Estate v Myhre (1995), 168 AR 248 at para 39.

[39]         The party seeking to prove a will must show that it is in fact the will of a “free and capable testator,” but there is a presumption in favour of validity where the will has been duly executed, with the requisite formalities, after having been read by or to a testator who appeared to understand it. That presumption may be rebutted by evidence of suspicious circumstances, in which case the burden reverts to the propounder to prove validity on the balance of probabilities. The suspicious circumstances that may rebut the presumption may relate to the preparation of the will, the capacity of the testator, or a suggestion of coercion or fraud: Vout v Hay, [1995] 2 SCR 876. The court in Vout added at paragraph 25:

Since the suspicious circumstances may relate to various issues, in order to properly assess what effect the obligation to dispel the suspicion has on the burden of proof, it is appropriate to ask the question “suspicion of what?”

[40]         The “suspicious circumstances” must do more than create “a general miasma of suspicion”; they must create “a specific and focussed suspicion that the testator may not have known and approved of the contents of the will”: Clark v Nash (1989), 61 DLR (4th) 409 at 425 (BCCA).

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