The Stream

John Bilawich: Interesting Information on Pre-Judgment Interest

John Bilawich (Guest Blogger) — Wed, 30 May 2012 18:35:13 GMT

Pre-judgment interest is admittedly not, at first blush, the most scintillating subject, but there are some aspects of which counsel should be aware when prosecuting or defending a claim which can make a significant monetary difference to your client. This article focuses on pre-judgment interest claims in the context of debt and contract claims only.

Court Order Interest Act

Where no contractual rate of interest applies, one normally claims pre-judgment interest pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 79.

Section 1(1) addresses pre-judgment interest in cases involving a pecuniary judgment and specifies that the addition of interest is mandatory.

Court order interest
1 (1) Subject to section 2, a court must add to a pecuniary judgment an amount of interest calculated on the amount ordered to be paid at a rate the court considers appropriate in the circumstances from the date on which the cause of action arose to the date of the order.

Section 1 gives the court discretion when setting the interest rate, but in most cases the court applies the rate of pre-judgment interest fixed by the Registrar from time to time. That rate tends to be modest – at present it is 1% per annum.

Section 2(b) of the Act states that interest under section 1 is not awarded in certain cases, including if there is an agreement about interest between the parties.

Contractual Interest

Where the parties have an agreement which addresses interest on amounts due, how that interest rate is expressed is important. Failure to express it the right way can render the rate unenforceable.

Debt claims often arise in circumstances where there are relatively informal arrangements between the service provider /supplier and the customer. Often there is little in the way of negotiation or discussion about credit terms prior to the transaction. There may simply an interest term stuck into the fine print on the bottom of a printed invoice form.

If the parties did not apply their minds to interest rate before they formed the agreement, arguably there is no agreement about interest, and any interest rate unilaterally imposed after the fact would not be unenforceable for lack of consideration. If so, only Court Order Interest Act pre-judgment interest would be available.

In N.B.C. Mechanical Inc. v. A.H. Lundberg Equipment Ltd., 1999 BCCA 775 at para 35 the Court of Appeal found the trial judge in that case had erred in finding an agreement to pay interest could be inferred because the defendant was aware the plaintiff would be charging interest on overdue accounts based on the interest notation appearing on numerous invoices rendered. The most that could be said was that the defendant was aware the plaintiff was claiming the right to charge interest on overdue accounts, but that was not enough to create an obligation on the part of the defendant. It found that “A right to charge interest cannot be based simply on a unilateral assertion in an invoice”. See Alex Gair & Sons Ltd. v. Marr Holdings Ltd., [1987] B.C.J. No. 329 (BCSC).

Where parties do not have an express agreement to pay interest, in some cases agreement can still be inferred from a course of conduct or an acknowledgment by the defendant subsequent to the contract being entered into. See N.B.C. Mechanical at para 39, and Macklin Mailey Advisertising Ltd. v. Budget Brake & Muffler Distributors Ltd., [1987] B.C.J. No. 2268 (BCCA).

In N.B.C. Mechanical at para 41 the court comments that cases seemed to reflect a tendency in recent years to be less willing to imply a contract to pay interest in the absence of a clear intention between the parties. If one wishes to charge interest, the most direct path to success is to deal with this in a contractual document. How the interest rate is expressed is also critical.

One often sees estimates, quotations, agreements or credit agreements which express the interest rate as “per day” or “per month” For example, (a) “1.5% per month”, or an annual rate but compounded on a shorter time cycle, such as (b) “18% per annum, compounded monthly”. Contractual interest rates tend to be set relatively high to encourage timely payment. Interest rates expressed in this way, however, are not enforceable.

Interest Act (Canada)

Section 4 of the Interest Act (Canada), R.S.C. 1985 c. I-15 states that if an agreement about interest expresses the rate per day, week or month or at any rate or percentage for any period less than a year, no interest exceeding the rate or percentage of 5% per annum shall be chargeable, payable or recoverable unless the contract contains an express statement of the equivalent yearly rate or percentage of interest. The section is as follows:

4. Except as to mortgages on real property or hypothecs on immovables, whenever any interest is, by the terms of any written or printed contract, whether under seal or not, made payable at a rate or percentage per day, week, month, or at any rate or percentage for any period less than a year, no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable or recoverable on any part of the principal money unless the contract contains an express statement of the yearly rate or percentage of interest to which the other rate or percentage is equivalent.

A case which applies this section is Aluminex Extrusions Ltd. v. Double "D" Glass Ltd. (1987), 22 B.C.L.R. (2d) 220 (S.C.). In it the court found that a monthly interest rate was void because it did not include an effective annual rate, and as such contravened section 4 of the Interest Act. It found there was an agreement to pay interest, but because the rate was void, the court substituted interest at the rate 5% per annum.

Accordingly, in the examples used above:

(a) expressing the rate as 1.5% per month would make it unenforceable if no equivalent annual rate (18% per annum) is included; and
(b) expressing the rate as “18% per annum, compounded monthly” would make it unenforceable if no equivalent annual rate (19.56% per annum) is included.

Criminal / Unconscionable Interest Rates

I will not address criminal or unconscionable interest rates in this article. It is a topic deserving of its own article.

Conclusion

Counsel should apply their mind to pre-judgment interest issues when prosecuting or defending a debt or contract claim, including whether the interest rate claimed is contractual or statutory and whether a contractual rate is expressed in a form that is enforceable. The difference between a typical contractual rate (variable, but frequently between 12% and 30% per year), Interest Act (Canada) interest (up to 5% per year) and Court Order Interest Act pre-judgment interest (currently 1% per year) is significant.

Counsel should also make it their practice to warn their client when the form of invoice, credit agreement and/or contract they use in their business expresses the interest rate in a manner which runs afoul of section 4 of the Interest Act (Canada), and recommend changes to make the rate enforceable.

Cameras in the Court Room

Rebecca Slaven — Wed, 23 May 2012 19:59:19 GMT

The ongoing debate of cameras in the court room has heavily resurfaced with the BC Government pushing for broadcast coverage of the Vancouver riot cases. Opinions are strong and widespread, reaching beyond Canadian jurisdictions and generating some rather creative solutions. Michael McKiernan’s article, "Eyes to the Soul of Justice", in the February 2012 issue of Canadian Lawyer discusses both sides of the argument in further detail.

The first application to televise the trial of a rioter in mid-February was denied because it was believed there are not enough answers to questions about the safety of court personnel and rebroadcasting of footage. Crown attorneys have been resistant to the BC Government's enthusiasm and concerned about their personal security.

Others such as Robert Holmes, president of the BC Civil Liberties Association, have questioned government motives, wondering if the push for cameras in the court room is a long-term commitment or merely a public shaming tactic for rioters.

One of the biggest contributions to the argument against televising court room cases has been the 1995 OJ Simpson trial. According to McKiernan’s article, "The case has become a textbook argument against putting cameras in the courts, with grandstanding lawyers on both sides, an allegedly star-struck judge, and an orgy of commentary stoking a media frenzy around the televised trial.”

Dan Burnett, a media lawyer at Owen Bird, feels this issue is singular to the United States, stating, "they may have a problem there with celebrity trials, but I don't see us having that same problem in Canada, and of course if we did, the ongoing discretion of the judge to just turn off the cameras would kick in."

Burnett argues further for cameras in court room as a way of educating the general public about the justice system since most do not have the time to watch a trial in person. "Most Canadians haven't actually sat down and watched our courts in action. It might not be the most sensational thing around, but it is very impressive. You realize that this is a fair process, that these are serious people who are trying to treat witnesses and parties fairly, and it's a shame that citizens can't see that more for themselves."

But Jamie Chaffe, president of the Canadian Association of Crown Counsel, has foreseen additional problems especially with criminal cases, such as witnesses being afraid to come forward, knowing their image may be publicized. And Chaffe makes the argument that “he would rather see the money and court time being spent on applications to televise instead being used towards dealing with inadequacies in the court system.”

BC is not the only province, nor is Canada is the only country undergoing this debate. Reporters in Ohio recently faced the issue of being unable to broadcast one of the most notable corruption trials in the state’s history and came up with a unique solution: “The Puppet’s Court”. A local station uses 25 puppets to act out court room happenings and wiretapped conversations (many installments available on YouTube). In the screen-capture below, the reporter character "Nutty" summarizes the first day of a particularly seedy corruption trial.

There are some, such as the trial’s defense attorney, depicted by a lime green puppet, who do not appreciate this approach. While we likely won’t see Casey and Finnegan reenacting the Vancouver riot cases anytime soon, “The Puppet’s Court” costs the court system nothing, carries no privacy/security risks, and has captured the general public’s interest, as indicated by the station’s dramatic rise in ratings.

If you are interested in reading further about this issue, take a look at the articles below. The articles are available online or within the Courthouse Library.

Works Cited

Eyes to the Soul of Justice. M. McKiernan. Canadian Lawyer (2012) March: 32-5.

Show Trial: Puppets Act Out Corruption Case. D. Belkin. Wall Street Journal (2012). Retrieved from: http://online.wsj.com/article/SB10001424052970204653604577249391251534690.html

CLE-TV highlights from "Is Your Practice Ready for the New Family Law Act?"

Meghan Maddigan — Thu, 10 May 2012 23:54:14 GMT

On May 1, 2012, CLETV hosted Georgialee Lang, Mark Slay and Megan Ellis, QC, some of BC’s family law leaders, in a discussion of the new Family Law Act (FLA), which passed in its Third Reading as Bill 16 and awaits to be made law. A fascinating and fulsome 90 minutes whizzed by at lightening pace as the group covered a variety of topics of concern to family practitioners. Here are some highlights.

We’re okay with a little unfair…

Panelists agree the “significant unfairness” test leaves some uncertainty, while clearly raising the threshold for a judge to vary agreements. One tip from the panel: if your client is contemplating an application to vary, it may be advisable to get it on before the FLA is made law.

Moving Made Easy?

The FLA clarifies parental mobility considerably. Court of Appeal, in R.E.Q. v. G.J.K., 2012 BCCA 146, was reluctant to embrace the primary parent’s mobility rights (for additional reading, see JP Boyd’s blog post on mobility rights and R.E.Q. v G.J.K.). Despite this, the government seems prepared to endorse such mobility rights under the FLA.

In situations of two guardians, the parent wanting to move must give the other side 60 days notice, including both a destination and a proposal for what access should look like. The other side has 30 days to object. If an objection is made, the matter goes to Court for final determination. The Court will consider if the move is being proposed in good faith and whether reasonable arrangements can be made for access by guardians and other significant persons. Interestingly, the panelists point out, the inclusion of significant persons leaves the door open for grandparents and the like to have input on a move.

Where international mobility is a concern, Mr. Slay suggests considering an order under the Divorce Act to make custodial rights clear. The Hague Convention requires a designation of a custodial parent, language that is not embraced under the FLA.

Making Misconduct Relevant

Since Leskun v. Leskun, [2006] 1 S.C.R. 920, we have had an approach to spousal support which allows us to consider misconduct providing the misconduct can be tied to the need for spousal support. The FLA gives us a codification of this, but the panel disagreed on its impact. Georgialee Lang argued that placing the principle in the legislation gives it “a little boost”, arguably making it more persuasive for judges to consider evidence of this nature.

Ms. Ellis noted that there are two possible approaches to be undertaken when looking at misconduct. The first is to consider it a factor in looking at entitlement to spousal support generally. The second would be used in circumstances where the misconduct was particularly egregious so as to constitute something tortious. In this case, parties could choose to pursue a separate claim for the tort and seek compensation accordingly.

Noticeably Absent

While the panel agreed that we are still bound by Chutter v. Chutter, 2008 BCCA 507, the Spousal Support Advisory Guidelines (SSAG) are notably absent from the FLA (whereas Child Support Guidelines are specifically referenced). The Panel discussed how this leaves it open to counsel to argue the omission is significant, and that by failing to include the SSAG, the government is communicating that they do not fully endorse them. Whether or not such an argument would succeed, it is certainly a plausible analysis.

Whose Court is it Anyway?

Mr. Slay noted an interesting distinction that has arisen between the old and new jurisdictional provisions. For the most part, sections 5-8 of the Family Relations Act, R.S.B.C. 1996, c. 128 (FRA) and sections 192-194 of the FLA read as similar. An important distinction arises in section 194 of the FLA that seems to further restrict one’s ability to bring overlapping applications in Provincial and Supreme Courts.

Mr. Slay suggested that counsel may now want to be particularly certain, when starting an action in one forum, that this is where they want to stay. For example, counsel may elect to start a without notice application for custody in Provincial Court while they prepare some of the bigger issues for a trial in the Supreme Court. Starting the custody matter in the Provincial Court, however, would exclude the Supreme Court’s jurisdiction to hear any custody matters going forward. The panel notes that counsel sometimes mistakenly think that as long as all parties agree, a change can be made. In situations where the change is prevented by legislation, it will not matter if the parties agree.

Excluded rather than Included

Of course one of the major qualities of the FLA is the elimination of the term “family asset” with the introduction of excluded property. Essentially, this means that all property is considered to be fair game for apportionment unless a party demonstrates it is “excluded property”. The panelists noted that in essence, the test has not changed; rather, the onus is now a positive one. if you want it for yourself, the obligation is on you to prove it should be excluded.

This led the panel to discuss implications for family law counsel, including the greater need to be able to prove any asset’s value, if you intend to exclude it at a later date. One of the best ways to accomplish this is to include valuations in any marriage agreements that are drafted.

Unequal Division

Section 95 of the FLA sets out factors similar to those taken into account when doing a section 65 analysis under the FRA. It provides for the possibility of an unequal division of family property and while it is not necessary to do an account for excluded property, it may be done.

The panel pointed out that the analysis with respect to property will likely be:

1. What is included as property?

2. Of this property, what should be excluded?

3. Is there a basis for an unequal division?

Moving on up

What does the new Act say about transitions? Essentially, if you have started an action under the old Family Relations Act, the action will continue under the FRA unless parties agree. Given the length of some files, the determination of which Act applies will be critical.

The panel agreed that clients will need to be advised of the significant changes on the horizon in order to make informed changes about the impact. It was even suggested that a new area of negligence claims may arise if clients feel that they were not properly informed of the impact of the new Act.

The panel suggested that counsel should reference the FLA in any agreement that is currently being drafted.

No more Trigger Finger

Mr. Slay noted with concern that the FLA contains no more provision for triggering events. Instead under section 81, the event will now be the date of separation. The panel discussed how this may lead to uncertainty in a number of circumstances including cases of bankruptcy.

It will certainly be advisable to seek agreement as to the date of separation at an early point in the litigation.

Calling it like it is

According to Ms. Ellis, an important change is the recognition family violence receives. The FLA will require lawyers to inquire into issues of family violence which, Ms. Ellis comments, will lead to a need for a lot of education for lawyers on how to elicit this sensitive information effectively. One resource newly available to lawyers is A Lawyer's Guide to Relationship Violence.

Show up or Shut Up?

For parents who interfere with the other’s parental time (or fail to show up for their own), the panel embraced new consequences under the FLA. Consequences include the potential loss of parenting time or the requirement to post security.

One Thing is Certain – Family Law is Never Boring!

With repercussions for so many areas of family law, it is difficult to know where to begin. A key takeaway might be to recognize the need for collaboration among family lawyers. The scope of change is so large, the Family Bar’s best chance for success is their ability to work together.

Erik Magraken: Landlord found vicariously liable for assault by their relative

Erik Magraken (Guest Blogger) — Thu, 10 May 2012 19:07:49 GMT

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, dealing with the issue of vicarious liability following an assault.

In this week’s case, Van Hartevelt v. Grewal, 2012 BCSC 658, the Plaintiff was involved in a physical altercation with the Defendant R. Grewal. While there were competing versions of what occurred Mr. Justice Savage found that this Defendant pummelled the Plaintiff "with his fists…sending him to the ground” then “kicked (the Plaintiff) forcefully in the ribs as he lay on the floor".

The Defendant was found liable and ordered to pay over $65,000 in damages including punitive damages.

The Defendant was the son of the owners of the Rani Lynn Apartments which is where the altercation took place. The Plaintiff was a tenant there. The Plaintiff also sued the owners arguing they ought to be found vicariously liable for the assault. Mr. Justice Savage agreed and found the owners jointly and severally liable (except for the punitive damage award). In doing so the Court provided the following reasons illustrating that vicarious liability can flow beyond a formal employer/employee relation:

[52] I accept Mr. G. Grewal’s evidence that he did not charge family members rent while they were living at the Randi Lynn. However, he did not charge rent to Mr. R. Grewal, and at other times other relatives living at the Randi Lynn on the expectation that they would perform services for him at the apartment…

[54] …As a family member receiving free rent Mr. R. Grewal was beholden to the Second Named Defendants and was expected to do their bidding at the Randi Lynn…

[64] While it is true that independent contractors will not generally attract such liability and that employees generally will, it is not the case that the employer/employee relationship is the only one that can attract vicarious liability…

[65] Therefore, the main considerations in the present case are whether the relationship was sufficiently close to justify the imposition of liability, whether the tort was sufficiently connected to the assigned tasks of the tortfeasor to be regarded as the materialization of the risks created by the enterprise, and whether the imposition of liability would satisfy the policy goals outlined in Bazley. I answer all of these questions in the affirmative.

[66] The reason that employers are often found to be vicariously liable whereas those hiring independent contractors are not is that in the former case, the employer has created the risk and is in the best position to mitigate it. Thus, it is both efficient and fair to impose vicarious liability. In the present case, although it was not a typical employment relationship, the Second Named Defendants created the risk associated with Mr. R. Grewal, were or should have been aware of the risk, and were in the best position to mitigate this risk.

[67] The Second Named Defendants were aware of the violent history of Mr. R. Grewal and were aware of the recent confrontation between Mr. R. Grewal and Mr. Van Hartevelt; a confrontation that arose in the context of Mr. R. Grewal’s role as an on-site owner representative. As such, the risk of violent confrontations initiated by Mr. R. Grewal was caused by the enterprise of the Second Named Defendants and they were in a unique position to mitigate this risk. They were specifically made aware of the risk by Mr. Van Hartevelt’s letter of July 12, 2006. The fact that the Second Named Defendants did not take steps to mitigate the risk renders them blameworthy.

[68] There is also the assertion, albeit made by Mrs. R. Grewal, that the ‘owners’ of the building were entitled to enter Mr. Hartevelt’s suite. This was made in the presence of Mr. R. Grewal. Mr. R. Grewal, rather than correcting this misapprehension, schooled as he was in tenancy matters, remained and the events followed.

[69] In my opinion there is a sufficiently close relationship to justify the imposition of vicarious liability in this case.

Reposted with permission. The original post appeared on Erik Magraken's blog, www.bc-injury-law.com/blog, on May 9, 2012.

Making Sense of the New Criminal Omnibus Bill

Tracy McLean — Mon, 07 May 2012 17:54:55 GMT

The Safe Streets and Communities Act, S.C. 2012, c. 1 (Bill C-10), has been extremely controversial.

Combining amendments from nine separate bills that had failed to pass in previous sessions of parliament, Bill C-10 makes fundamental changes to almost every component of Canada’s criminal justice system:

New criminal offences
New and increased mandatory minimum sentences
The selective elimination of conditional sentences
Increased pretrial detention and new, harsher sentencing principles for young offenders;
Longer waiting times before individuals can apply for pardons
Increased barriers for Canadians detained abroad who wish to serve the remainder of their sentence at home

The Bill also introduces some changes outside the criminal justice system:

Amendments to the Immigration and Refugee Protection Act would grant the Minister of Immigration broad discretion to deny work permits to any foreign national who is ‘at risk of abuse';
Amendments to various pieces of legislation to allow victims of terrorism to sue certain foreign entities and governments for damages

Justice critic Jack Harris stated “We think it will lead to more punishment but not safer streets, not a deterrence against criminals and in fact there will be more victims, more crimes and less safety on our streets.”

The Canadian Bar Association (CBA) has concerns with several aspects of the omnibus crime bill, including mandatory minimum sentences and overreliance on incarceration, constraints on judges’ discretion to ensure a fair result in each case, and the Bill’s impact on specific, already disadvantaged groups.

“The impact on northern residents, Aboriginal people and people with mental illness will be especially profound,” says Dan MacRury, of Sydney, Nova Scotia, chair of the CBA’s National Criminal Justice Section. The CBA believes that the Bill will make already serious criminal justice system problems much worse, with huge resource implications.

The CBA Section released a position paper stating that bundling several critical and entirely distinct criminal justice initiatives into one omnibus Bill is inappropriate, and not in the spirit of Canada’s democratic process.

“Even more important than our concerns about the process is our concern about the general direction of these initiatives. The CBA is committed to public safety, and there is broad consensus among reputable Canadian criminal justice experts as to what is most effective in achieving a safer society.

In our view, the initiatives in Bill C-10 go in a contrary direction. They adopt a punitive approach to criminal behavior, rather than one concentrated on how to prevent that behavior in the first place, or rehabilitate those who do offend. As most offenders will one day return to their communities, we know that prevention and rehabilitation are most likely to contribute to public safety.”

Justice Minister Rob Nicholson said the implementation of the various aspects of legislation will be “spaced out” over a period of time.

IN FORCE INFORMATION

The Safe Streets and Communities Act, S.C. 2012, c. 1 (Bill C-10), received Royal Assent on March 13, 2012.

The sections that require proclamation to be brought into force are listed here, and so far, there has only been one proclamation.

P.C. 2012-559 brings sections 135 and 136 of the Act into force as of May 3, 2012. They are amending sections 3, 10(1) and 10(2) of the International Transfer of Offenders Act.

However, some sections also came into force upon Royal Assent – sections 32(2), 48, 108-146, 148-159, and 161-165.

Amending the Criminal Code:
s. 32(2) replaced Paragraph 515(6)(d) of the Criminal Code with the following:
(d) with having committed an offence punishable by imprisonment for life under any of sections 5 to 7 of the Controlled Drugs and Substances Act or the offence of conspiring to commit such an offence.

Amending the National Defence Act:
s. 48 replaced Subparagraph (a)(ii) of the definition “designated offence” in section 153 of the English version of the National Defence Act is replaced by the following:
(ii) an offence punishable by imprisonment for life under subsection 5(3), 6(3) or 7(2) of the Controlled Drugs and Substances Act, or

Amending the Criminal Records Act:
s. 108-146 – in summary, it substitutes the term 'record suspension' for the term 'pardon'.

Amending the DNA Identification Act; the Immigration and Refugee Protection Act; Limiting Pardons for Serious Crimes Act; National Defence Act; Youth Criminal Justice Act:
s. 148-159

And Transitional Provisions:
s. 161-165

Detailed information on the status of the Safe Streets and Communities Act, S.C. 2012, c. 1 (Bill C-10), can be found here.

RESOURCES

John Bilawich: Should I apply to dismiss for want of prosecution before the limitation period has expired?

John Bilawich (Guest Blogger) — Tue, 01 May 2012 00:00:00 GMT

The object of the Supreme Court Civil Rules is to secure the just, speedy and inexpensive determination of every proceeding on its merits. Our civil justice system relies on the parties to set the pace at which a proceeding is prosecuted, subject to the availability of scarce judicial resources. The plaintiff is responsible for moving its case to a timely conclusion. However, in some cases the plaintiff may lack either the will or the resources to do so.

When a proceeding has languished, a question which arises is whether and when a defendant should apply to dismiss the action for want of prosecution. Some believe applying before the relevant limitation period expires is futile. Even if successful, dismissal for want of prosecution does not dispose of the claim on its merits, meaning that the plaintiff could simply start a new action. If so, applying has dubious value, however, recent decisions suggest that in some cases it may be possible to obtain an effective remedy before the limitation period expires.

The Rule and Test

Rule 22-7(7) of the Supreme Court Civil Rules governs dismissal for want of prosecution. The test is found in Irving v. Irving, 1982 CanLII 475 (BC CA) [1982] B.C.J. No. 970 (BCCA):

There has been inordinate delay;
The inordinate delay is inexcusable; and
The delay has caused, or is likely to cause, serious prejudice to the applicant.
If these three elements are met, the court considers whether or not the balance of justice demands that the action should be dismissed.

Effect of Non-Expiry of Limitation Period

In Lui v. West Granville Manor Ltd. 1985 CanLII 155 (BC CA), (1985), 61 B.C.L.R. 315 (CA) Mr. Justice Lambert found that as a general rule dismissal for want of prosecution should only happen after the limitation period has expired:

“... It also seems to be a general rule that dismissal for want of prosecution should only be done if the limitation period has expired. Otherwise the dismissal would be likely to be pointless, because the plaintiff could always start a new action. And it seems to be the accepted view that the court has no power to prevent a plaintiff from suing, so long as the action is begun within the limitation period. …”

This was qualified in Rhyolite v. CanQuest, 1999 BCCA 36 (CanLII), 1999 BCCA 36 (paras 10, 11, 29), where two judges commented that the non-expiry of a limitation period is a relevant consideration but not determinative. In 0690860 Manitoba v. Country West Construction, 2009 BCCA 535 (CanLII), 2009 BCCA 535 at para 59 the court comments there is more to be said about the effect of expiry or non-expiry of a limitation period on dismissal for want of prosecution, but non-expiry should be taken into consideration when determining the balance of justice.

Two cases where actions were dismissed for want of prosecution before the limitation period help to illustrate how such a dismissal can provide the plaintiff an effective remedy. See Sea Gull Leasing Ltd. v. Wildcat Enterprises, 2012 BCSC 417 (CanLII), 2012 BCSC 417 and First National Properties Ltd. v. Northland Road Services Ltd., 2008 BCSC 569 (CanLII), 2008 BCSC 569. Both involved claims for recovery of environmental remediation costs for contaminated sites pursuant to the Waste Management Act, RSBC 1996, c. 482, replaced by the Environmental Management Act, SBC 2003, c. 53, s. 47. On April 1, 1997 the BC government created a new statutory cause of action that was absolute, retroactive and which imposed liability on a broad range of “responsible persons”. A party who voluntarily has incurred remediation costs can commence an action to recover reasonable remediation costs from responsible persons.

First National was a claim to recover remediation costs for salt contamination. The contamination was first complained of in 1992 and was known to the plaintiff by 1996. In December 2002 the plaintiff started an action and delayed serving the Writ until December 2003. The defendant filed an Appearance, after which the action was dormant. The plaintiff eventually carried out remediation, which was completed in 2006. In December 2007 the defendant applied to dismiss based on a missed limitation period or alternatively for want of prosecution.

Madam Justice D. Smith dismissed the application based on a missed limitation period on the basis that it had not started to run until the quantum of remediation costs was known in 2006. She went on to find that the defendant had established all four elements of the Irving test and dismissed the action for want of prosecution. She said plaintiffs who sought to rely on the advantages of this remedy had a parallel obligation to proceed in a diligent and expeditious manner in order to minimize the risk of prejudice to the defendants’ ability to effectively respond to their claim. She found the plaintiff’s delay in giving notice of the action (Dec 2003) and completing remediation (2006) had significantly diminished the defendant’s ability to defend the action and pursue a limitation defence. The plaintiff had the power to pursue its claim as early as 1997 but chose not to do so. She found the plaintiff’s deliberate conduct had exacerbated the extent of the defendant’s prejudice.

Sea Gull Leasing was a claim to recover remediation costs for historical hydrocarbon contamination. The action was started in March 2003. An endorsed Writ was served in March 2004. No further steps were taken in the action, and no substantive remediation was carried out to the property. In February 2012 the defendants applied to dismiss for want of prosecution. The plaintiff argued, among other things, that the passage of time could not have caused relevant prejudice because the limitation period had not expired. Madam Justice Humphries rejected that and found the defendant had established all four elements of the Irving test, dismissing the action for want of prosecution. She commented on the proposition that the plaintiff could simply start a new action.

[43] The object of the Rules, the passage of time, the necessity to gather evidence after many years on the issues of whether the site is contaminated, when it became contaminated, whose fuel pumps were responsible, what role, if any, each of the defendants’ played, “creates a significant imbalance in favour of the plaintiff that is a direct result of the plaintiff’s failure to pursue its claim in a timely manner,” to use the words of the chambers judge in First National. While the plaintiff may simply chose to file another claim, even though it has not incurred the majority of the remediation costs, the defendants will have the opportunity to mount arguments as to the effect of this delay on their ability to defend the action. [Underlining added]

A finding that the plaintiff’s conduct significantly prejudiced the defendant’s ability to defend the claim provide grounds for the defendant to argue that any new claim is an abuse of process, that the plaintiff is estopped by its conduct from pursuing it, and the action should be dismissed.

If a defendant has evidence that the plaintiff’s delay has caused specific prejudice to its ability to defend an action, dismissal for want of prosecution can be an effective remedy even if the relevant limitation period has not yet expired.

Courthouse Libraries and Law Week 2012...the Charter at 30

Mark Abbott — Mon, 30 Apr 2012 22:39:09 GMT

"Your Majesty, Your Royal Highness, Excellencies, Fellow Canadians, today, at long last, Canada is acquiring full and complete national sovereignty. The Constitution of Canada has come home."

Prime Minister Pierre Elliott Trudeau spoke these immortal words thirty years ago when the proclamation ceremony took place. Patriation happened on April 17, 1982. In 1960 Prime Minister John Diefenbaker enacted the Canadian Bill of Rights, the Charter's predecessor, but the Bill did not go far enough in protecting Canadian citizens' rights from their provincial governments. As a Federal statute, the Bill of Rights could only be applied to Federal laws and was ineffective on the matter of civil liberties that fell within provincial jurisdiction. The Bill of Rights could also be amended by Parliament whereas the Charter could not be so easily changed. The Charter ended parliamentary supremacy, and, being entrenched, meant Parliament was subject to the Charter, transforming Canada into a constitutional democracy, a boon for Canadian citizens across the Nation.

The Canadian Bar Association BC Law Week 2012 commemorated the thirtieth anniversary of the signing of the Charter with its theme "Access to Justice: The Celebration of the Charter of Rights." Courthouse Libraries BC took up the mantle in educating the public not only about the Constitution but also on how best to find and use legal information. Our Nanaimo, Victoria, Kelowna and Vancouver branches had their own unique way of celebrating Law Week 2012.

Janet Howey made the news in Nanaimo where she was interviewed by the local press. Janet had 50 people come through the law library, engaging them in a game of legal jeopardy as well as giving instruction on how legal databases work. Janet told the reporter, "Law Day helps increase awareness about the library and its availability for people to access." She drove the point home, "the law library can help them."

Victoria Courthouse Library kept the festivities simple but vital nonetheless. Sheila Folka and Liz Blackburn gave Clicklaw presentations, a free resource crafted for, and popular among, the public. To accompany their presentation Sheila and Liz put on display the Charter, Magna Carta, some historical information and Prime Minister Trudeau's speech to inspire visitors to learn more about our history.

Photo courtesy of the The Daily Courier

Perhaps the most intriguing event to happen during Law Week is the arrest of the Girl Guides. Yes, you read that correctly. Kelowna's Evelyn Lindsay reported a scaled down version of Law Day included the RCMP arresting a group of Girl Guides: they were read their rights, fingerprinted, given a tour of cells and a trial. The Boy Scouts also attended, but were not arrested. Fear not, the Guides and Scouts were simply earning their law awareness badges. The Kelowna Law Day was not open to the public this year, but the local bar association hosted a BBQ on the courthouse steps.

Last but not least Vancouver paired up with Access Pro Bono and the CBABC to host Law Day on the Vancouver Art Gallery lawn. Although attendance by the roaming public was sparse, 250 students attended as part of a field trip. Brenda Rose, Meghan Maddigan and Kerry Taillefer played an exhilarating game of legal jeopardy. The kids also got to play "Are You Smarter than a Lawyer" and a Charter-inspired version of Wheel of Fortune. Law Week culminated with the Law Week Fun Run. Vancouver courthouse library staff, led by Executive Director Johanne Blenkin, took part in the run with proceeds going to Access Pro Bono.

This year is a special one for Law Week and the Nation. Taking a continued and active interest in CBABC Law Week is an important step towards keeping the spirit of the Charter alive; it's essential for Canadians to understand how our justice system and government works. Law Week is leading the way in capturing the essence of our Charter by advocating for--and promoting--an open system and by educating. Courthouse Libraries BC stands beside the CBABC in this practice and looks forward to many Law Weeks to come.

Erik Magraken: A scam warning for personal injury lawyers

Erik Magraken (Guest Blogger) — Thu, 19 Apr 2012 18:50:27 GMT

There is a scam making the rounds targeting personal injury lawyers that my colleagues should be aware of. Here’s how it works…

1. A potential client contacts you, tells you he/she was injured in a collision in your jurisdiction.

2. The tort-feasor was uninsured. They negotiated a settlement directly.

3. The injuries are severe. A medico-legal report is provided to corroborate this.

4. The tort-feasor is now not paying. The client needs to retain you to collect.

5. After you agree to act the tort-feasor agrees to honour the settlement.

6. The tort-feasor sends you a cheque which you deposit.

7. The cheque looks legitimate and your bank tells you it is.

8. The client is pleased. He/She asks for their share after deducting your reasonable fee.

9. You pay out, less your fee, oh so pleased with your lawyering skills…

10. The cheque does not clear leaving you holding the bag.

11. Worse yet, the retainer happened over the Internet. You did not follow the ‘know your client rule’. Your BC lawyer’s insurance also leaves you holding the bag

Remember, there’s no free lunch. If it looks too good to be true it probably is.

The Law Society of BC has ample resources to assist and should be contacted when you suspect a scam is in the works.

Reposted with permission. The original post appeared on Erik Magraken's blog, www.bc-injury-law.com/blog, on April 19, 2012.

Relationship violence and the threat to clients and legal staff

Nate Russell — Tue, 17 Apr 2012 23:33:00 GMT

At some point in their careers, virtually all family lawyers will struggle to keep the stress and hardship of a challenging client file from invading their personal life and sense of well being. Regardless of whether you are the more hands-on, helping lawyer, who finds reward in coaching clients through difficulty (hopefully preserving some sembelance of the client's dignity), or the pragmatic, results-driven problem solver, who dismantles collapsing marriages with more concern for potential economic, rather than emotional, breakage... at some point trouble may simply find you.

A violence prone ex-spouse will not always respect a stern letter, nor even the terms of a protection order, and such files can quickly overwhelm lawyers who are otherwise careful with setting boundaries. When this is the case, clients, lawyers and staff could face serious safety risks.

In a recently published set of Legal Services Society fact sheets entitled "Is Your Client Safe?", the LSS, along with co-publisher Ending Violence Association of BC, has tackled issues of both client and lawyer and staff safety in the context of relationship violence.

Safety Planning for You and Your Staff

While Clicklaw, our public legal education website, has posted the brochures that deal with client safety, not all lawyers will know that there is also a particular brochure written for staff and lawyer safety, which is available here from the website of the LSS. It contains sixteen tips or ideas for safety protocols.

One suggestion that leaps out is, "Do not reveal your or your staff’s personal contact information, including last names, to the abusive partner." While as a lawyer it is surely impossible to hide ones last name merely out of fear that some disgruntled future party in a family proceeding may eventually direct harm to you or those who share your last name, it could raise the question as to whether legal assistants to family lawyers should use their full names in letters, or be listed on the website. Because those with bad intentions are also often equipped with some degree of determination, I have doubts as to whether such measures would really put off any but the most feckless stalker.

A good number of the tips are good sense, however, and include protocols such as never leaving voicemails unless you can be sure only the client will hear them, never leaving messages identifying you as a lawyer with others who answer, and other protocols such as establishing code words she can use when it's not safe to talk by phone.

The safety fact sheets (which are available as part of a broader "Abuse & Family Violence" series of fact sheets) are for family law lawyers and advocates and describes relationship violence, the indicators of abuse, the risk factors, and what to do if your client has been victimized. They include safety planning information, and links to resources for further information.

BC lawyers team up for new Clicklaw wikibook

Nate Russell — Wed, 21 Mar 2012 19:00:00 GMT

One Profession, one Public and oneself

Among the Canons of Legal Ethics—that earnest list of 'shalls' and 'shall nots' comprising the first chapter of the Professional Conduct Handbook—you'll find time-honoured practical criteria mixed with aspirational principles to which each BC lawyer is beholden, stated to the benefit of five key groups: the state; the courts and tribunals; the client; other individual lawyers; and oneself.

Oddly absent, at least from explicit mention, are the public and the legal profession. Strange, since these are the groups that many, many BC lawyers dedicate countless hours in service to, whether in pro bono clinics, serving CBA committees and sections, teaching CLE conferences, or any number of pursuits that underscore the inherent collegiality and service-mindedness of the profession. Strange, at least until one realizes that, in fact, accountability to the profession and the public lay at the heart of canons otherwise embedded awkwardly in the class of duties owed to oneself.

You'd be forgiven for assuming that self-owed duties would involve more self-interested ones, such as collecting ample retainers, billing clients regularly, and not letting the pressures of practice drive you into the office on Sundays. For better or for worse, a lawyer's self-owed duties are not of self-interest. Rather, they are to protect the profession, and, yes, serve the public.

Specifically the legal ethical canons pertaining to guarding the profession speak to the lawyer's obligations to root out dishonest and incapable characters from the profession, respect oneself and one's oath, and espouse the "time-honoured virtues of probity, integrity, honesty and dignity". OK, some of the language directed at purifying the profession is a shade McCarthyesque in tone. You are to "expose without fear or favour", "accept without hesitation a retainer against any lawyer who is alleged to have wronged the client" (really? not even hesitation for a conflicts check?), but you can also tease out of this fervent language and rectitude a keen desire to ensure the profession thrives. And it is nice to see that for the most part the bar proactively pursues this through mentorship, peer-to-peer education and leadership by example. A glance at the list of contributors in any CLE publication, or the long list of names serving as executives for CBA sections, is proof of that.

As for the public, ethical canon 5(3) demands that lawyers "make legal services available to the public in an efficient and convenient manner that will command respect and confidence." Rarely has as much focus been placed on this issue, and the underlying issue of access to justice, than as of late. There is a hardly a chief judge who has yet to speak on the failure of access to legal services in the past year, nor a report that has failed to opine on the gap between the need for legal assistance and its supply, nor a lawyers' organization in this province who has not made it a priority to improve awareness on the decrepit state of access to justice in BC.

Volunteerism, helping others alongside Courthouse Libraries BC

It's encouraging to see commitment to public service renewed by a large group of volunteer contributors in new initiatives, such as with last week's launch and announcement of the third edition of the public legal information guide Legal Help for British Columbians, which now takes the form of a Clicklaw wikibook. Over a dozen lawyers and key staff with legal organizations have joined to make a new edition of this popular guide that promises to remain up-to-date even after the first copy is printed off.

You can check out the wikibook here, which combines a familiar online experience (as it is powered by an instance of the same wiki software platform that powers Wikipedia) with the promise of accessibility that is only possible when you can print a resource to hand out in person at clinics, doctor's offices, community centres, libraries, and other places people with limited income and all-too-common legal troubles often go for support. The wiki platform also makes the Guide easier to update, enabling multiple contributors to update content as soon as the law changes, giving it an advantage over print-only publications that risk being outdated from the date of printing.

While you may have caught the news release, or maybe have already learned about the wikibook through the Clicklaw blog or through Access ProBono or Povnet (or on Twitter, where a number of folks, including CanLII's Colin Lachance, Steve Matthews, Legal Aid BC and others tweeted the release), we wanted to pass along direct thanks to the editors, writers and reviewers of the Guide (see here for a complete list of contributors) for exemplifying the principle of public-service—at a time when it's needed most.

Courthouse Libraries BC and Clicklaw will be developing more collaborative resources of this type in the near future, using platforms like the Mediawiki platform behind this Clicklaw wikibook, to bring legal information forward in efficient and convenient ways. Doing so in conjunction with practitioners is part of our vision of partnering with the legal profession to accomplish more in the realm of legal information and shared knowledge, for the good of the public and the profession.

If you are a lawyer interested in knowing more about ways you can contribute through upcoming initiatives, please let us know!

John Bilawich: Improving prospects for offers to settle

John Bilawich (Guest Blogger) — Thu, 08 Mar 2012 01:20:17 GMT

The offer to settle process in the Supreme Court Civil Rules should be straight-forward, but in practice is unpredictable. The amount of court time and legal resources spent arguing about costs consequences of an offer can become substantial and disproportionate. To maximize the chance that an offer will be effective, it is important that when formulating the offer counsel consider the requirements of the rule and the process the court will follow.

There is extensive case authority and commentary dealing with offers to settle. This article is not intended as an exhaustive review of offers generally. My intention is to focus on one of the court’s considerations, whether the offer was one which reasonably ought to have been accepted, and offer suggestions on how to make an offer more effective.

Overview

Formal offers to settle are governed by Rule 9-1

Rule 9-1(1) sets out the required form for an offer to settle. Offers must be made in writing, served on all parties of record and include the sentence:

“The [parties], [names of parties] reserve(s) the right to bring this offer to the attention of the court for consideration in relation to costs after the court has pronounced judgment on all other issues in this proceeding.”

Rule 9-1(5) sets out the costs options available to the court. Rule 9-1(6) sets out considerations of the court when making an order under sub-rule (5). These factors include:

(a) whether the offer to settle was one that ought reasonably to have been accepted on the date served or on any later date,

(b) the relationship between the terms offered and the final judgment of the court,

(d) any other factor the court considers appropriate.

I will focus on factor (a) only.

Purposes of Offers to Settle

It is useful to keep in mind the general purposes for an offer to settle. A recent summary in Hartshorne v. Hartshorne, 2011 BCCA 29 (CanLII) is as follows at para 25:

[25] An award of double costs is a punitive measure against a litigant for that party's failure … to have accepted an offer to settle that should have been accepted. Litigants are to be reminded that costs rules are in place "to encourage the early settlement of disputes by rewarding the party who makes a reasonable settlement offer and penalizing the party who declines to accept such an offer" … Mr. Justice Frankel's comments in Giles [Giles v. Westminster Savings & Credit Union, 2010 BCCA 282 (CanLII)] are apposite:

[74] The purposes for which costs rules exist must be kept in mind in determining whether appellate intervention is warranted. In addition to indemnifying a successful litigant, those purposes have been described as follows by this Court:

• “[D]eterring frivolous actions or defences”
• “[T]o encourage conduct that reduces the duration and expense of litigation and to discourage conduct that has the opposite effect”:
• “[E]ncouraging litigants to settle whenever possible, thus freeing up judicial resources for other cases:
• “[T]o have a winnowing function in the litigation process” by “requir[ing] litigants to make a careful assessment of the strength or lack thereof of their cases at the commencement and throughout the course of the litigation”, and by “discourag[ing] the continuance of doubtful cases or defences”:

[citations omitted]

Rule 9-1(6)(a) – Considerations – whether the offer ought to have been accepted

Counsel should be aware of what the court considers under this factor when drafting the offer. The considerations are described in Hartshorne at para 27.

It is not determined by reference to the award ultimately made. Rather, the court must determine whether, when the offer was open for acceptance, it would have been reasonable to accept it.
“The reasonableness of the plaintiff’s decision not to accept the offer to settle must be assessed without reference to the court’s decision.”
Reasonableness is assessed by considering such factors as the timing of the offer, whether it had some relationship to the claim (as opposed to simply being a “nuisance offer”), whether it could be easily evaluated, and whether some rationale for the offer was provided.
This is not a comprehensive list.

Another consideration is whether the offer provided a genuine incentive to settle - Giles v. Westminster Savings & Credit Union, 2010 BCCA 282 (CanLII), para 88.

Timing and Duration

The offer should remain open for acceptance until the offeree has had an opportunity to assess the strength of both sides’ cases. In Houston v. O'Connor, 2011 BCSC 509 (CanLII), the judge found the plaintiff had a detailed understanding of the defendant's case when the offer was made due to completion of exchange of documents and examinations for discovery.

Offers can have an expiry date, but should remain open for a reasonable time. Making it expire quickly or making it too close to trial can render it ineffective. In Bailey v. Jang, 2008 BCSC 1372 (CanLII), the court found that an offeree should have at least 7 days to consider an offer.

In Coquitlam (City) v. Crawford, 2008 BCSC 1507 (CanLII), the judge found the offeree should have a “reasonable time” to consider it. How long is “reasonable” depends on the circumstances.

Content-Narrative

I recommend counsel include in the offer an analysis which sets out factual and legal reasons why the offer is reasonable. This gives the offering party the opportunity to create a self-serving advocacy piece which will become a key exhibit when costs are argued and allows the offeror to ensure that facts and law supporting their offer are brought to the offeree’s attention.

When costs are argued, the offeree will be able to tender affidavit evidence setting out what they knew and understood about the merits of the case when the offer was open. This allows them to craft a self-serving explanation of why they they thought the offer was unreasonable. It can be difficult to test and respond to this. It may include subjective evidence and require production of documents, cross-examination on affidavits and responding material. Framing the issues with a detailed narrative in the offer can help the offeror address the merits of the offer in an efficient manner.

Where an action includes claims and counterclaims, consider addressing the merits of each separately in the narrative. This may help the court assess reasonableness in relation to each component of the action.

Nominal Offers

Failure to accept a nominal offer will normally not trigger costs consequences because it confers no benefit on the plaintiff. Coquitlam (City) v. Crawford, 2008 BCSC 1507 (CanLII), BCSPCA v. Baker, 2008 BCSC 947 (CanLII). An offer that confers significant benefits is more likely to have costs consequences. Where a claim is obviously lacking in merit the court may find that a nominal offer should have been accepted. MacKinlay v. MacKinlay Estate, 2008 BCSC 1570 (CanLII).

In Exclusive Flor Sales v. Fipke, 2010 BCSC 1551 (CanLII), a plaintiff’s offer to settle for mutual abandonment of its claim and the counterclaim resulted in double costs. The judge said the offer was not nominal because the plaintiff offered to waive monetary damages.

Conclusion

By investing time and thought when formulating an offer, counsel can improve its chances of success.

Elder law and estates issues from latest BarTalk

Nate Russell — Sat, 25 Feb 2012 00:30:00 GMT

Enduring Powers of Attorney, Representation Agreements v. Advance Directives, Statutory Capacity, Certificates of Incapacity, the Health Care (Consent) And Care Facility (Admission) Act…

Yes, you'd better believe you're the intended market for the February 2012 edition of BarTalk (volume 24, issue 1)—assuming you have a wills, estates and trusts practice of course.

Elder and Guardianship Mediation, In its first issue of the year, the bi-monthly publication deals fastidiously with all (OK some) of the juicy wills and estates reforms accumulated over recent years.

In fact, save an unexpected tip of the hat to 2012 doomsday prophecies in a satirical partner's memo clarifying how billable targets will ease (very slightly) should Nibiru initiate planet-on-planet violence with Earth or a Zombiepocalypse ruin Christmas, nearly the whole of the issue is reserved for elder law, incapacity planning and general wills & estates updates.

"And here’s a news flash: if you are reading this column, you too are facing potential incapacity and certain death." — Sharon Matthews

Yes, this issue leans to the macabre. And yes, that is a direct quote from CBA BC President, Sharon Matthews, in her opening column pointing out the importance of incapacity planning, not only for clients, but lawyers too.

This BarTalk issue is timely as a reminder to lawyers that a whole area of law is changing dramatically. September 1, 2011 brought into force a number of estates law reforms from recent years and this BarTalk issue canvasses some of the changes in the law.

Here is a bit of a rundown (which may convince you to read the whole issue, available in PDF online):

CBA BC Section Meetings Dealing with Estates Issues

BarTalk runs a regular update on notable section meetings. This issue drew heavily on section meetings with estates law themes:

November 29, 2011, Pensions and Benefits Law discussed how WESA will impact designation of beneficiaries in benefit plans (i.e. RRSPs, tax-free savings accounts, and many pension plans), but not life insurance policies.
September 27, 2011, Wills and Trusts (Vancouver) met regarding new Health Care (Consent) and Care Facility (Admission) Act "advance directives", review of substitute decision makers' decisions, and other legislative updates.
November 8, 2011 Elder Law also met to discuss the interplay between advance directives and substitute decision makers. An advance directive when written in accordance with the HCCFA, allows a person to give instructions respecting health interventions that they either want or don't want, in advance of their health failing them.

Feature: The Power of Attorney Act Has Changed

Lawyer Geoff White discusses the repeal of s.8 of the Power of Attorney Act, RSBC 1996, c. 370 which for many years was a very short act providing little guidance on what was involved when a power of attorney was made to endure incapacity of the donor. Now, 32 new sections exist in the act (compare old and new versions of the Power of Attorney Act). These new sections set out default and mandatory rules (mainly as adopted from common law) on what an attorney must, may and may not do, and also sets out a very useful stautory test for incapacity. General highlights include:

Statuory capacity test [I think this is found at s.12(2)(a)]
Restrictions on who can be an Attorney (e.g. not a paid caregiver).
New signature requirements for a power of attorney (more like what is needed in a will).
Attorneys must be prepared to act once they sign the acceptance of the power of attorney.
Attorney's obligation to keep records.
Gift limits of $5,000 per year by default.
Limits on beneficiary designations, and delegation and compensation of Attorneys unless stated in the document.
Rules for revoking, pausing or resigning power of attorney.

Wolfman-Stotland v. Stotland, 2011 BCCA 175

Trevor Todd and Judy Milliken, QC comment on this case accentuating the different degrees of capacity required for entering into or dissolving a marriage, on the low end of the capacity range, versus directing legal and financial affairs, on the upper end. Such a low threshold for capacity to end spousal unions, the authors argue, calls for the need for a statutory capacity test in family law matters, just as there is now for powers of attorney under s.12 of the Power of Attorney Act.

Leaving aside BarTalk and picking up the January 2012 Advocate for a moment—but on the same general point—the Hon. Madam Justice Marion Allan, in her review of a new book on estate litigation, called these discrepant distinctions between marital versus testamentary capacity anomalous. "While the marriage automatically revokes the testator's will, it may be impossible for him or her to make a new will."

Elder and Guardianship Mediation: A BCLI Report

The BCLI released a 200 page report in January this year on mediation in elder law situations. One of its authors, Emma Butt, gives a short description of the report and the quick emergence elder and guardianship mediation will have once the relevant provisions of the Adult Guardianship Act come into force. The report provides a summary of best practices for mediation, and includes a background of elder mediation in US and Canada.

The Public Guardian and Trustee of BC: Responding to elder abuse

This review by The Public Guardian and Trustee of BC of various sources of authority for investigating reports of elder abuse or neglect, includes reference to the fact people who make reports now have their identities protected... including against Freedom of Information Act and Personal Information Protection Act requests. Both s. 46 (2) of the Adult Guardianship Act and s. 17 (3) of the Public Guardian and Trustee Act now foreclose freedom of information requests from revealing the identity of who filed a report.

Again leaving aside BarTalk for a moment, but while on the topic of the PGT, this is a good time to give a plug for PGT publication "It's Your Choice: Personal Planning Tools", which is intended for the public, but is also an excellent plain summary of personal planning options.

Advance Directives and Representation Agreements: How do they differ?

Stan Rule serves a practical rundown of how advance directives, pursuant to Part 2.1 of the Health Care (Consent) and Care Facility (Admission) Act, and personal representatives appointed pursuant to the Representation Agreement Act can be reconciled when both purport to govern a particular medical need or procedure. Simply put, an advance directive can expressly exclude the representative from being consulted by the health care provider, but unless this exclusion is expressly contained in the advance directive, the representative must be consulted and the advance directive shall be treated as an expression of the adult's wishes before she was incapable.

Assuming the next BarTalk to be dedicated exclusively to estate and elder law issues is some ways off, consider subscribing to our RSS or email alerts for new and notable developments in this area. If you're on Twitter, use hashtag #clbcWE to discuss and see posts about wills and estates law in BC.

JP Boyd: More than "merely" less than "grossly", "significant unfairness" and the Family Law Act

JP Boyd (Guest Blogger) — Fri, 03 Feb 2012 02:01:42 GMT

The phrase “significantly unfair” is new to the law on domestic relations in British Columbia. Whatever “significantly unfair” might turn out to mean, the concept is of critical importance under the new Family Law Act [see Third Reading of Bill 16-2011 on the BC Legislative Assembly's website], as “significant unfairness” is the test that must be met before the court may:

1. divide family property or allocate family debt other than equally, under s. 95(1)

“The Supreme Court may order an unequal division of family property or family debt, or both, if it would be significantly unfair to equally divide family property or family debt, or both …”

2. divide excluded property, under s. 96(b);

“The Supreme Court must not order a division of excluded property unless… it would be significantly unfair not to divide excluded property …”

3. set aside agreements dealing with property and debt, under s. 93(5); and

“… [T]he Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that … the agreement is significantly unfair …”

4. set aside agreements dealing with spousal support, including agreements waiving spousal support, under s. 165(5).

“… [T]he court may set aside or replace with an order made under this Division all or part of an agreement if satisfied that … the agreement is significantly unfair …”

Fairness by Degrees

The Family Law Act is chock full of new language that will require the court’s interpretation. One of the first, I suspect, will be to determine what it is that “significant” adds to the meaning of “unfairness.”

“Unfair” without a modifying adverb is used at s. 65 of the Family Relations Act, RSBC 1996, c 128, where it marks the threshold that must be passed before the court reapportions property. “Grossly unfair” is deployed at s. 96 of the FRA with respect to the reduction of arrears of child support or spousal support, and we are all familiar with the case law dealing with “grossly” as a modifier of “unfairness” in this context; see Semancik v. Saunders, 2011 BCCA 264.

The plain language meaning of “significant” suggests that the threshold of “significantly unfair” is a higher standard more burdensome than mere “unfairness,” yet less burdensome than the zenith of “gross unfairness.”

notable, weighty, important for what it indicates: The Century Dictionary and Cyclopedia, The Century Co., 1897, New York
noteworthy, important, consequential: The Concise Oxford English Dictionary, Clarendon Press, 1995, Oxford
important, momentous: The Imperial Dictionary, The Gresham Publishing Co., 1906, London
sufficiently great or important to be worthy of attention, noteworthy: Dictionary 2.2.1, my MacBook

Few clues as to the legislature’s intent are found in the Family Law Act itself. The factors set out in ss. 93(5) and 165(5) are of course mutually consistent but have nothing in common with the factors set out at ss. 95(2) and 96(b), and of the two factors listed at s. 96(b), only one, the duration of the spousal relationship, makes an appearance in the nine specific factors described at s. 95(2) [roll mouse over here to see the nine factors]; see the excellent discussion of statutory construction by reference to related provisions in Sullivan on the Construction of Statutes [KL35.1.D75 2008]. As a result, it will likely be necessary to look beyond the new act for guidance.

“Significantly unfair” is used in only one other British Columbia statute, the surpassingly dull Strata Property Act, SBC 1998, c 43. In the context of owners’ suits against strata corporations, s. 164(1) provides as follows:

On application of an owner or tenant, the Supreme Court may make any interim or final order it considers necessary to prevent or remedy a significantly unfair
(a) action or threatened action by, or decision of, the strata corporation, including the council, in relation to the owner or tenant, or
(b) exercise of voting rights by a person who holds 50% or more of the votes, including proxies, at an annual or special general meeting.

Dollan v. Strata Plan BCS 1589, 2011 BCSC 570 helpfully summarizes the law on the interpretation of “significantly unfair”, at paragraph 24:

“The phrase ‘significantly unfair’ in s. 164 has been described in Reid v. Strata Plan LMS 2503, 2003 BCCA 126 as ‘burdensome, harsh, wrongful, lacking in probity or fair dealing, or has been done in bad faith’, ‘unjust or inequitable’, or unreasonable. Moreover, the word ‘significantly’ means that a court should only interfere if the actions or decision of a strata council results in ‘more than mere prejudice or trifling unfairness’ …”

In Gentis v. Strata Plan VR 368, 2003 BCSC 120, the court held that, at paragraph 28:

“… I understand the use of the word ‘significantly’ to modify unfair in the following manner. Strata Corporations must often utilize discretion in making decisions which affect various owners or tenants. At times, the Corporation’s duty to act in the best interests of all owners is in conflict with the interests of one particular owner or group of owners. Consequently, the modifying terms indicates that the court should only interfere with the use of this discretion if it is exercised oppressively, as defined above, or in a fashion than transcends beyond mere prejudice or trifling unfairness.

[29] I am supported in this interpretation by the common usage of the word significant, which is defined as ‘of great importance or consequence’: The Canadian Oxford Dictionary.”

In Strata Plan VR1767 v. Seven Estate Ltd., 2002 BCSC 381, the court emphasized the behavioural dimension of significant unfairness, at paragraph 47:

“The meaning of the words ‘significantly unfair’ would at the very least encompass oppressive conduct and unfairly prejudicial conduct or resolutions. Oppressive conduct has been interpreted to mean conduct that is burdensome, harsh, wrongful, lacking in probity or fair dealing, or has been done in bad faith. …”

Although some caution must be extended in recognition of the imbalance of power I expect to be characteristic of proceedings by owners against strata corporations, the general tenor of the case authority leans toward a definition of “significant unfairness” which sets the threshold somewhere beyond the “mere prejudice or trifling unfairness” mentioned in Reid v. Strata Plan LMS 2503, 2003 BCCA 126.

Whatever “significant unfairness” may ultimately be found to mean, the varying factors prescribed by ss. 93, 95, 96 and 164 to guide the court in its consideration of a case will likely result in the formulation of three different tests, each built up on a notion of unfairness that is more than merely unfair but less than grossly unfair.

Rose Keith: BCCA confirms test for failure to mitigate

Rose Keith (Guest Blogger) — Thu, 02 Feb 2012 00:19:00 GMT

In personal injury litigation, defenses to plaintiff injury claims are predictable – causation and failure to mitigate. Rarely does a personal injury trial occur without these two issues being in the forefront of the assessment of damages. In Cassells v. Ladolcetta 2012 BCCA 27 (CanLII) the Court of Appeal recently considered the proper test to be applied in claims of mitigation. In so doing it confirmed the test as established by the Supreme Court of Canada in Janiak v. Ippolito 1985 CanLII 62 (SCC), [1985] 1 S.C.R. 146 remains good law. In applying Janiak, the Court of Appeal confirmed that the test of failure to mitigate is an objective one.

In the case of Cassells, the Court considered the interesting issue of what is novel scientific evidence and also considered whether the trial judge had properly applied the Janiak test in assessing the plaintiff’s mitigation efforts. In Cassels the Plaintiff had delayed following advice to commence a form of drug therapy. The trial judge appears to have taken into consideration subjective factors in assessing the plaintiff’s decision to delay commencement of the drug therapy, holding in part as follows at paragraph 193 of his reasons in J.F.C. v. Ladolcetta, 2009 BCSC 1151:

…In the circumstances of this case, there is no question that based on a pure objective test, the plaintiff ought to have followed his doctors’ advice. Likewise, if that were all that needed to be considered, the correct result again is obvious because in Canada the law does not excuse objectively unreasonable choices, so long as the plaintiff has the requisite capacity to make them…

The trial judge, in analyzing whether the plaintiff had the requisite capacity to make the choice, stated in part as follows at paragraph 196:

However, the case becomes less obvious when accident-induced injuries take away the capacity to make the objectively rational decision. If the plaintiff’s capacity is reduced completely, that is a straightforward case – but less so when the accident-induced injuries have substantially inhibited, though not completely removed the plaintiff’s capacity to think through rationally the risks and benefits of the recommended treatment.

The appellants submitted that the trial judge erred in taking a “modified subjective” approach to determining whether and to what extent a plaintiff has failed to mitigate loss, contending that the failure to mitigate must be assessed on an objective basis.

Although declining to interfere with the award at trial, the Court of Appeal agreed with the appellant that the test for failure to mitigate is objective and is not subjective, modified or otherwise. In confirming that Janiak provides for an objective person test, Lowry J.A. writing for a unanimous bench said as follows:

[26] … I consider that if a plaintiff had the capacity to make the decision about treatment it is said ought to have been made, and the advice was sound, the mitigation question in each instance must be what would be expected of a reasonable person in the circumstances having regard for the plaintiff’s medical condition at the material time and the advice given concerning treatment. If, through no fault of his own, the plaintiff did not have the capacity to make the decision, or the advice was not sound, the question would not arise.

[27] It is not simply a matter of a plaintiff having to follow the advice given in order to mitigate the loss claimed, as the judge appears to suggest at the outset of his legal analysis; rather it is a matter of considering what a reasonable recipient of such advice would be expected do to in the circumstances having regard for the nature of the advice and any explanation of the risks and benefits given.

No new law is established by this recent decision, however it provides a very useful summary and explanation of Janiak and the proper way of applying the test of failure to mitigate. Given the clear and concise wording I expect it will become an oft quoted decision, relied on by counsel arguing both sides of a case.

Kim Wallis: Context-sensitive assessments of patient competence

Kim Wallis (Guest Blogger) — Wed, 01 Feb 2012 01:10:37 GMT

Case Comment: The Public Trustee of the Province of British Columbia v. Dorothy Stewart Batiuk 1996 CanLII 2097 (BC SC)

Batiuk is a case that is as fascinating for its facts, and the attempts by both sides to prove those facts, as it is for its holding.

Dorothy Stewart Batiuk was an elderly woman who had suffered a stroke, and who lived with and was cared for by her husband until his death on May 6th, 1994, at which time she became the subject of a very heated committeeship application by the Public Trustee.

Shortly after Mr. Batiuk’s death, his sister and his niece arrived from Calgary to assist with funeral arrangements. They testified that they found Mrs. Batiuk living in appalling living conditions, and they immediately fired the housekeeper and discharged Mrs. Batiuk’s doctor of 14 years. The niece moved in and remained in Mrs. Batiuk’s home permanently.

The executor of Mr. Batiuk’s estate was Harry Rankin. He came to Mrs. Batiuk’s house on two separate occasions to interview her, and on two separate occasions he was denied access. The niece then informed Mr. Rankin that Mrs. Batiuk had executed a Power of Attorney in her favour, which caused Mr. Rankin to contact the Public Trustee, and the Public Trustee in turn contacted the niece, questioned her care and advised her that Mrs. Batiuk was mentally incompetent.

At this time, less than two months after the death of her husband, and before any judicial decisions had been rendered on the question of Mrs. Batiuk’s competence, the Public Trustee advised Royal Trust that Mrs. Batiuk’s Power of Attorney was invalid and caused her bank accounts to be frozen. The Public Trustee also placed a caveat on Mrs. Batiuk’s home preventing her from mortgaging or selling it.

In order to successfully argue that he should become Mrs. Batiuk’s committee, the Public Trustee is required to produce two medical affidavits (under the former provisions of s.2 in the old Patients Property Act, now contained within s. 3 of the Patients Property Act, RSBC 1996, c 349 “PPA”) setting out that, in the opinion of the affiant, the subject of the application (here, Mrs. Batiuk) is incapable of managing him or herself because of “mental infirmity arising from disease, age or otherwise” or the misuse of recreational drugs.

Battle of Medical Affidavit Evidence

As Madam Justice Allan put it in her decision, most committeeship applications are supported by medical affidavits that are “brief and desultory.” Not in this case: no fewer than seven medical experts became involved and numerous medical affidavits were filed with the court as evidence.

The descriptions of Mrs. Batiuk in those medical affidavits ranged from: “mental infirmity due to chronic paranoid schizophrenia” and “[Mrs. Batiuk has] cerebrovascular brain disease particularly evidenced by cognitive impairment including impaired orientation, attention, memory and language” all the way to “[Mrs. Batiuk] definitely knows what she wants, is mentally competent…is quite capable of mentally making the decision to appoint [the niece] to manage her financial affairs...” and “no indication of chronic paranoid schizophrenia…”

The judge addressed the question of the threshold of proof required to establish, as required by the PPA, that Mrs. Batiuk was incapable of managing her affairs. She commented as follows (at paragraph 58):

While the threshold appears to be a low one, in the sense that s.2(4) only requires the “opinion” of 2 medical practitioners…the Court must be “satisfied” [by those affidavits]…Drs. Horricks. James and Donnelly have expressed their “opinion” that Mrs. Batiuk lacks capacity [but] I am not “satisfied” with that conclusion. Each of their opinions is outdated, incomplete and flawed…”

In the result, Madam Justice Allan found Mrs. Batiuk to be capable of managing her own affairs. In the battle of the affidavits, she found that the affidavit evidence that supported Mrs. Batiuk’s competencies were more current, and were sworn by medical experts who had spent more time with her. She further suggested that some of the conclusions drawn by the medical experts in the affidavit evidence which she rejected were based on collateral evidence; in other words, those doctors had formed opinions based on information supplied to them by third parties rather than exclusively by direct examination and observation. The context of the medical interviews was also important. For example, it was established at trial that Mrs. Batiuk herself was aware, when being interviewed by doctors working with the Public Trustee, that she could be declared legally incapable if she “failed” the interview. It was accepted by the judge that this caused Mrs. Batiuk extreme stress and caused her performance to deteriorate.

Importance of Context-Sensitive Assessments

I think this case confirms that it is important, legally, to ensure that clients are given the opportunity to perform as well as they can during medical examinations, and that the context of a medical examination can very significantly alter the weight given to any affidavit evidence sworn as a result of the interview. This is what is meant by a “context-sensitive assessment”, a term used, but not really described, in my previous post, The Capability Continuum.