Ontario Court Upholds Frivolous Action Award Against Losing Party

Ontario Court Upholds Frivolous Action Award Against Losing Party

Costs For Frivolous Action

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

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

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

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

 

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

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

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

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

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

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

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

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

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

Courts have awarded elevated, full indemnity costs when:

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

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

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

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

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

Court Inherent Jurisdiction to Protect Those Who Need Protection

Court Inherent Jurisdiction to Protect Those Who Need Protection

Supreme Court Inherent Jurisdiction to Protect Those Who Cannot Protect Themselves

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adverse Inference For Failure to Call Certain Evidence

adverse interest

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

For example:

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

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

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

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

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

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

 

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

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

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

 

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

 

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

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

Interim Injunctions

Interim Injunctions

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

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

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

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

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

which provides a two-pronged test as follows:

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

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

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

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

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

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

Administrator Appointed Pending Litigation

Administrator Appointed Pending Litigation

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

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

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

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

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

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

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

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

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

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

Production of Previous Wills File Refused Due to Solicitor Client Privilege

Solicitor Client Privilege

Wood v Wilkie and Millican 2012 BCSC 1120 involve an application for production of the will file of the solicitor who prepared the deceased previous will in 2008, that was subsequently replaced by a will, in contention, in 2009 the defendant opposes the application on the basis that the only will in contention is the 2009 will and that therefore the contents of the solicitors 2008 will file should remain privileged.

A master initially dismiss the plaintiffs application and the appeal to the Supreme Court judge was dismissed on the basis that the pleadings related only to the capacity of the testatrix to make a will in 2009, or undue influence in relation thereto, and no claim was made relating to the validity of the 2008 will.

The Court stated as follows:

“The court started from the general proposition that a lawyer’s file is absolutely privileged from production subject only to certain exceptions. The plaintiff argued that one of the exceptions is a claim based on undue influence. The plaintiff relied on Geffin v. Goodman Estate, [1991] S.C.J. No. 53. The plaintiff argued that case directed courts to allow production of the solicitor’s will file on the principle that the evidence obtained was likely to go to the deceased’s true intent. See also Gordon v. Gilroy, [1994] B.C.J. No. 1927.

[11]    At para. 18 of Fawcett, Chamberlist J. said:

As such, I am of the view that the exception to solicitor/client privilege is only made out where the issue is “what were the true intentions of the “testator” or, in Geffen, the settler of the inter vivos trust”. In the case at bar, the will itself is not being challenged.

[12]    The defendants argue that is precisely the situation in this case. The will that is challenged is the 2009 will and the defendants submit the solicitor’s file relating to that will has already been disclosed and it is the only file relevant to the testator’s intentions.

[13]    The plaintiff submits that the overall circumstances of this case, in particular the inter vivos transfer of the Christina Lake property, coupled with the allegations of undue influence, justify a more extensive disclosure order. However, the issues raised by the pleadings in the action relate only to the testator’s capacity to make the 2009 will or that she was coerced or under an improper influence when she did so.”

 

“Where There Is a Will, I Want To Be In It”- But Can I Say No?

Don't want it

“Where there is a will, I want to be in it” is one of the great   PARAPROSDOKIAN in the English language.

A PARAPROSDOKIAN is a figure of speech in which the latter part of a sentence or phrase is surprising or unexpected in a way that causes the reader or listener to reframe or reinterpret the first part.

It is frequently used humorous or dramatic effect, sometimes producing an anticlimax .

Other examples are :

The last thing I want to do is hurt you. But it’s still on my list.

Light travels faster than sound. This is why some people appear bright until you hear them speak.

If I agreed with you, we’d both be wrong.

War does not determine who is right – only who is left.

DISCLAIMER

There may be many reasons an intended beneficiary decides not to accept a gift.  Our law permits an intended beneficiary to simply disclaim the gift.

The purported gift is then deemed to be void ab initio (from the beginning).  It becomes as if the gift had never been given.

There are rare exceptions to this right of disclaimer, largely limited to situations such as where a trustee has agreed to accept a conveyance of property.

In this article we will review some situations where beneficiaries have disclaimed inheritances and the resulting legal consequences.

Requirements of Legal Disclaimer

The legal requirements for disclaiming a gift are minimal.  A disclaimer  may be effected by contract, by deed, by writing or even informally through conduct.

The intended recipient of the gift need only renounce the interest, in effect, by saying “I will not be the owner of it“. The key is doing so before dealing with the property in any way.

 

The decision of Re Moss, (1977) 77 D.L.R. (3d) 314, is a good illustration of disclaimer by an informal act.

This case involved an elderly man chewing tobacco on the lawn of his local Kingdom Hall.   As a result of this impropriety, the Jehovah’s Witnesses excommunicated him and a short time later he died –without having changed his will leaving everything to his church.

The church elders considered this gift and soon voted to disclaim the inheritance on the basis that it would be improper for them to accept such a gift from an excommunicated member.

When challenged in court, the court upheld the disclaimer, concluding the actions of the church elders were sufficient to disclaim the gift.   Nothing more was required.

In doing so, the court cited Townson vs. Ticknell (1819) 3 B & Ald. 31, as the authority for the proposition that an estate cannot be forced upon a person.  Further it is not necessary to go to trouble or expense to demonstrate that a gift is not accepted.

Note however the crucial question of timing.  A disclaimer may be made only before the beneficiary has derived any benefit from the assets.  Once a benefit has been taken, then the disclaimer can no longer be made. A. R. Mellows, The Law of Succession, p. 508.

All or Nothing

Where there is a single undivided gift, the law requires the donee to either take the gift entirely or disclaim it entirely: the donee cannot take only part of the gift and disclaim the rest.

This principle is illustrated in the following cases:

 

  1. Guthrie v. Walrond (1883), L.R. 22 Ch.D 573.  –Here the intended gift was “‘all my estate and effects in the island of Mauritius’”. The court held that the donee must take all or nothing and could not pick and choose.

 

  1.  Green V. Britten ( 1873) 42 L.J. Ch. 187.  This involved a gift of 6 leasehold villas together with an ornamental park. The court held that this was one entire gift and the recipient could not take the villas alone and leave the park.

 

Retroactive to the Date of Death

Once made, a disclaimer will be retroactive to the date of death of the deceased. A beneficiary who disclaims a gift is refusing to acquire the property of another.  Thus the effect of the disclaimer is that the property is never acquired.  Re Metcalfe (1972) 3 O.R. 598.

Objections to Hearsay Evidence Often Denied In Estate Litigation

objection cartoon

The Manitoba case of  Young v Paille 2012 CarswellMan 12  is a good example of how far the courts are prepared to go to allow hearsay evidence to be admitted in most estate litigation cases where it is the best evidence available.

(disinherited.com has previously blogged on the issue of hearsay and those comments can be reached through the search engine.)

The respondent elderly mother suffered a seizure in early 2007 and was soon thereafter diagnosed as showing signs of dementia.

Around this time the mother’s husband began to write letters to his brother about her situation.

On May 15, 2007 he reported that things were “going very badly”.

On the same day the mother signed a power of attorney.

Family members had contacted a lawyer to request that powers of attorney be prepared naming two of the mother’s children as the attorneys.

In 2010 the husband died

A third child of the mother brought an application for a declaration that the mother’s power of attorney was void because she lacked requisite mental capacity.

The Court declared that the mother was incompetent at the time she signed  her power of attorney, and  thus it was avoid.

Most importantly the husband’s letters were admitted into evidence and were given significant weight by the judge.

The letters provided detail about circumstances that were generally corroborated by medical information, and concern about the mother’s condition at precise times that were in  issue at trial.

There was no basis for the assertion that the husband was exaggerating to get sympathy.

There was no significant danger of perception, memory or credibility which would have rendered the letters unreliable.

The Court found that the letters were the best evidence available where his testimony was unavailable, and thus submitted his letters despite them being technically hearsay evidence.

disinherited.com applauds this sensible and practical type of decision that avoid the previous historically hard and fast rules that had related to and largely prevented the admissibility of hearsay evidence

Litigation Guardians Appointed For The Mentally Incapable

mentally incapableThe Ontario case of Richi v Kakaoutis  2011 Carswell 14616  is an example of what procedure was followed in Ontario when a litigant became mentally ill, requiring a litigation guardian to be appointed to represent his interests because he was incapable.

I suspect it would apply as good law in British Columbia.

The defendant had exhibited signs of paranoid during a trial in 2008 involving alleged negligence of another driver.

The public Guardian and Trustee for Ontario obtained an order declaring the plaintiff disabled and appointed itself to continue the court action on the plaintiff’s behalf.

The defendant sought to represent himself and other relatives in another court action relating to a real estate transaction.

The plaintiffs in the real estate action brought an application for an order declaring the defendant disabled and to appoint the Public Guardian and Trustee as litigation Guardians for all defendants, or for an order requiring the defendant to undergo medical testing.

The court ordered that the defendant attend a medical examination chosen by the court from a list of three, failing which the plaintiff could move to strike the statement of defence.

The defendants mental condition was very much in question, and the finding any prior decision was relevant and informative to the court on whether a mental assessment should be ordered.

The issue of the defendants mental state was raised by the adverse party in the litigation, and was relevant to the issue of whether the litigation Guardian should be appointed for all defendants.

The court found that there was good reason to believe there was substance to the alleged disability, including the admission by the defendant that he was subject to extreme mood swings.

The results of the mental assent examination were necessary to assist counsel and the court on the issue of whether a  litigation Guardian should be appointed for all defendants.

Dismissal of Court Claim For “Want of Prosecution”

Delay

McBeth-Kearns v Marples 2012 BCSC 714  is an estate litigation case that like so many, can often end up sitting on the lawyer’s desk or filing cabinet for  years.

Charles Dickens wrote about the inordinate delay in estate litigation back in his day in his lengthy novel Bleak House involving a 50 year estate lawsuit.

I recall that the first time I made an application on behalf of the defendant to have the plaintiffs claim dismissed for want of prosecution, that file that had been left undisturbed for four years, yet as a result of my application to dismiss, suddenly flourished into a 9 day trial, all of which my client ultimately blamed me

Sometimes there is merit in the adage “let sleeping dogs lie”.

In the McBeth-Kearns case the plaintiff had commenced a court action in 2005 claiming an interest in certain land.

Seven years later she consented to the removal of a certificate of pending litigation that she had filed, in order to permit the sale of the land, with the proceeds to be held in an interest-bearing lawyers account.

The defendant brought on an application in April of 2012 to have the plaintiffs claim dismissed for want of prosecution, given that she had taken no steps in the court action for more than three years.

The court found that the delay had been inordinate and  inexcusable, but did not dismiss the claim on the basis that justice would not require such a dismissal without a trial on the merits.

In support of that decision  Justice Joyce found that there would be no substantial prejudice to the defendants in having a trial, and finding that the plaintiff did have an arguable claim, that at best could succeed for no more than half of the funds.

Accordingly the judge ordered half of the funds held in trust to be released to the defendant, and ordered that the plaintiff set the matter down for trial.

Justice Joyce, as he usually does, gave an extensive review of the law, in this case  relating to an application to dismiss the plaintiffs claim for want of prosecution.

That excerpt of law is as follows:

 

DISMISSAL FOR WANT OF PROSECUTION The Legal Test

[29]    The starting point for a discussion of the law that applies on an application to dismiss an action for want of prosecution is Irving v. Irving (1982), 38 B.C.L.R. 318 (C.A.) [Irving], where Seaton J.A. referred to the judgments of the English Court of Appeal in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229 (C.A.). At para. 8, he referred to the following statement of Salmon L.J.:

In order for such an application to succeed, the defendant must show:

  1. that there has been inordinate delay. It would be highly undesirable and indeed impossible to attempt to lay down a tariff – so many years or more on one side of the line and a lesser period on the other. What is or is not inordinate delay must depend upon the facts of each particular case. These vary infinitely from case to case, but inordinate delay should not be too difficult to recognize when it occurs.
  2. that this inordinate delay is inexcusable. As a rule, until a credible excuse is made out, the natural inference would be that it is inexcusable.
  3. that the defendants are likely to be seriously prejudiced by the delay. This may be prejudice at the trial of the issue between themselves and the plaintiff, or between each other, or between themselves and the third parties. In addition to any inference that may properly be drawn from the delay itself, prejudice can sometimes be directly proved. As a rule, the longer the delay, the greater the likelihood of serious prejudice at the trial.

If the defendant establishes the three factors to which I have referred, the court, in exercising its discretion, must take into consideration the position of the plaintiff himself and strike a balance. If he is personally to blame for the delay, no difficulty arises. There can be no injustice in his bearing the consequences of his own fault.

In the end, the court must decide whether or not on balance justice demands that the action should be dismissed.

[30]    Further at para. 8, Seaton J.A. also referred to the following statement of Diplock L.J.:

It is thus inherent in an adversary system which relies exclusively upon the parties to an action to take whatever procedural steps appear to them to be expedient to advance their own case, that the defendant, instead of spurring the plaintiff to proceed to trial, can with propriety wait until he can successfully apply to the court to dismiss the plaintiffs action for want of prosecution on the ground that so long a time has elapsed since the events alleged to constitute the cause of action that there is a substantial risk that a fair trial of the issues will not be possible.

 

It is then a Draconian order and will not be lightly made. It should not in any event be exercised without giving the plaintiff an opportunity to remedy his default, unless the court is satisfied either that the default has been intentional and contumelious, or that the inexcusable delay for which the plaintiff or his lawyers have been responsible has been such as to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible at the earliest date at which, as a result of the delay, the action would come to trial if it were allowed to continue.

[31]    In Busse v. Chertkow, 1999 BCCA 313 [Busse], Goldie J.A. considered the question of who bears the onus with regard to the issue of prejudice if the defendant demonstrates inordinate, inexcusable delay. At para. 18, he said:

18       In my view, it is open to this Court to adopt the principle that once a defendant has established the delay complained of has been inordinate and is inexcusable a rebuttable presumption of prejudice arises. To continue imposing the evidentiary burden of proving prejudice after establishing inordinate and inexcusable delay is contrary to the object expressed in sub-rule (5) of Rule 1 of the Rules of Court.

[32]    In Tundra Helicopters Ltd. v. Allison Gas Turbine, 2002 BCCA 145 [Tundra Helicopters], Esson J.A., at paras. 35-36, made this comment with regard to the “rebuttable presumption of prejudice” referred to in Busse:

35         I also regard it as error in principle to dispose of the issue of prejudice by asking
whether the plaintiffs had rebutted* the presumption of prejudice that arises in the
circumstances’ and by going on to answer that question in the negative. The
“presumption of prejudice” is not a presumption of law. It can be termed a presumption
of fact but only in the sense, as it is put in Sopinka and Lederman “The Law of Evidence
in Civil Cases”, 1974 at p. 378:

The term “presumption of fact” is used in many instances in which it is desired merely to shift the secondary burden to a particular party. When used in this sense, it means that the facts are such that a certain inference should, but need not, be logically drawn.

36         It is in that sense that the word “presumption” is employed in Busse v. Robinson
Morelli Chertkow, supra. In considering whether the presumption of prejudice has any
application in a particular case, the question properly to be asked, as stated by Goldie
J.A. in para. 27 of Busse, is:

… has the plaintiff established on a balance of probabilities that the defendant has not suffered prejudice or that other circumstances would make it unjust to terminate the action?

In considering that question it may be misleading to approach it by asking whether the plaintiff offered evidence on the point. In most cases, it will only be the defendant who is in a position to offer evidence as to the existence of specific prejudice – as two of the defendants attempted to do in this case. The plaintiff often will be able only to point to the overall circumstances, including the absence of any evidence from the defendant of specific prejudice, as establishing on the balance of probabilities that serious prejudice has not been suffered.

[33]    In a relatively recent decision, PMC Builders & Developers Ltd. v. Country West

Construction Ltd., 2009 BCCA 535 at paras. 27-28, after reviewing Tundra Helicopters, Irving and Busse, Low J.A. summarized the test as follows:

27        These cases suggest to me that a chambers judge charged with the hearing of
an application for dismissal of an action for want of prosecution is bound to consider the
following:

  1. the length of the delay and whether it was inordinate;
    1. any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances;
    2. whether the delay has caused serious prejudice to the defendant in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be readied for trial after its reactivation by the plaintiff; and
  2. whether, on balance, justice requires dismissal of the action.

28        I consider the fourth question to encompass the other three and to be the most
important and decisive question.