Tag: British Columbia
In the decision of Knowles v LeBlanc, 2021 BCSC 482, the Supreme Court of British Columbia was tasked with determining which party was entitled to insurance proceeds pursuant to the doctrine of unjust enrichment.
This case involved a life insurance policy held by the Deceased, Peter Knowles, with the CUMIS Life Insurance Company. The policy named the Deceased’s ex-wife, Ms. Knowles, as the sole beneficiary. On the date of Mr. Knowles’ death, the benefit payable under the policy was $100,000.
The Deceased designated Ms. Knowles as the sole beneficiary in 1987, shortly before the two separated. Their divorce was finalized in 1991, when they entered into a consent order, which provided that each party would retain their own property and chattels in their possession or control.
After his separation, the Deceased met Ms. LeBlanc in 1988. They lived in an exclusive common-law relationship until the time of his death in 2019. Throughout their relationship, they shared expenses and made joint decisions about their family property.
After Mr. Knowles passed, Ms. LeBlanc received the proceeds from every other life insurance policy that he held as well as all of his other assets by way of right of survivorship. When she did not receive the proceeds from the CUMIS policy, Ms. LeBlanc contacted the company, who advised her that she was not the named beneficiary of the policy. Ms. Leblanc and Ms. Knowles subsequently made competing claims over the proceeds of the insurance policy.
The Court discussed Mr. Knowles’ intentions, as well as whether he ever attempted to change his beneficiary designation in the life insurance policy. The Court found that Mr. Knowles maintained feelings of hostility toward Ms. Knowles after their divorce, and that he not only intended to change the designated beneficiary on his life insurance policy to Ms. LeBlanc, but that he verily believed that he had done so. As a result, the Court concludes that Mr. Knowles clearly intended to remove Ms. Knowles as a beneficiary from his CUMIS life insurance policy but forgot or neglected to do so.
The Court then considered whether the consent order that Mr. and Ms. Knowles entered into in 1991 precluded Ms. Knowles from recovering the life insurance proceeds. The Court ultimately found that the consent order did not prevent Ms. Knowles from claiming the proceeds of the life insurance policy for three reasons. First, the order did not explicitly refer to the life insurance policy. Second, the order did not specifically revoke Mr. Knowles’ designation of Ms. Knowles as a beneficiary of the life insurance policy. Third, the order did not refer to a “full and final” settlement, or a relinquishment of all claims
Finally, the Court considered whether Ms. LeBlanc had a claim in unjust enrichment giving rise to a constructive trust remedy. In doing so, the Court applied the test for unjust enrichment from Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 which requires:
- an enrichment of the defendant;
- a corresponding deprivation of the plaintiff; and
- an absence of juristic reason for the enrichment.
The Court easily found that the first two factors had been met. Ms. LeBlanc suffered a deprivation because the premiums of the life insurance policy were automatically deducted from her joint account with Mr. Knowles for many years. Moreover, because Ms. Knowles stood to benefit from receiving the proceeds of the life insurance policy, there was also a corresponding enrichment to Ms. Knowles at the expense of Ms. LeBlanc.
The third element of an unjust enrichment claim is twofold. First, the plaintiff must show that no juristic reason from an established category exists to deny recovery. Second, the defendant may rebut the plaintiff’s recovery by showing that there is another reason to deny recovery.
In their analysis, the Court concluded that the Insurance Act, RSBC 2021, c 1 does not preclude Ms. LeBlanc’s claim in unjust enrichment. In other words, it does not provide a juristic reason for Ms. Knowles to retain the proceeds against Ms. Leblanc’s corresponding deprivation. The Court also failed to find another juristic reason that would apply in the circumstances of the case.
Ms. Knowles was not able to show that there was a residual reason to deny Ms. LeBlanc’s recovery of the life insurance proceeds. The Court focused on the fact that Mr. Knowles was estranged from Ms. Knowles and their two children since their divorce. As a result, it was not reasonable for Ms. Knowles to expect that she would benefit from the insurance policy. The Court was also not able to find a basis in public policy to rebut Ms. LeBlanc’s recovery.
In determining the appropriate remedy, the Court acknowledged that a personal remedy against Ms. Knowles would not be appropriate, as CUMIS had not paid out the proceeds of the life insurance policy to her. Ultimately, the Court imposed a constructive trust to the full extent of the life insurance proceeds in Ms. LeBlanc’s favour.
Finally, the Court cautioned CUMIS to consider updating its records more frequently and to remind its long-standing policyholders of their designated beneficiaries to avoid similar disputes in the future.
This case was similar to Moore v. Sweet, 2018 SCC 52, where the Supreme Court of Canada held that a beneficiary designation was not a juristic reason to deprive the appellant of the insurance proceeds to which she was entitled under an oral agreement. As you may recall, Ian M. Hull, Suzana Popovic‑Montag and David M. Smith represented the appellant before the Supreme Court of Canada, and blogged about their experience here.
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In Ontario, the Succession Law Reform Act, R.S.O. 1990, c. S.26 allows a deceased person’s dependants, to whom the deceased has not made adequate provision for his or her proper support, to seek an order for support to be made to the dependant out of the deceased’s estate. In order to qualify as a “dependant”, a person must be a spouse, parent, child, or sibling of the deceased “to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.” There are therefore several conditions for a person to be able to obtain an order for dependant’s support:
- they must have one of the required relationships with the deceased (spouse, parent, child, or sibling);
- the deceased must have been providing them with support, or have a legal obligation to provide support, immediately before the deceased’s death; and
- any provision made for the person in the deceased’s Will (if any) must be inadequate.
British Columbia deals with dependant’s support differently than Ontario. In B.C.’s Wills, Estates and Succession Act, S.B.C. 2009, c 13, s. 60 provides that if a testator does not make adequate provision for the proper maintenance and support of his or her spouse or children in his or her Will, the court may order the provision that it thinks adequate, just, and equitable in the circumstances for the spouse or children out of the testator’s estate. Unlike the Ontario law, it is not a requirement that the testator had been providing support to his or her spouse or children prior to death. This difference is significant because in Ontario, independent adult children are typically not able to obtain dependant’s relief as they do not meet the requirements of a “dependant”. In BC case law, there is also a greater emphasis on a testator’s moral duty to his or her dependant’s than there is in Ontario.
The BC Supreme Court decision in Jung v Poole Estate, 2021 BCSC 623 provides an example of how the difference in the law in Ontario vs. B.C. can result in vastly different outcomes. In Jung v Poole, the testator was survived by his two twin daughters, Courtney and Chelsea. Courtney and Chelsea’s mother had been dating the testator when she became pregnant. The testator suggested an abortion but the mother chose to keep the twins, and raised them as a single mother without any involvement or financial assistance from the testator. The mother died when the twins were 4 years old, and a custody battle ensued between the testator and the twins’ grandmother on their mother’s side, on the one hand, and a couple who were friends of the mother’s and whom the mother had named in her Will to be the twins’ joint guardians, on the other hand. The testator expressed a desire to be involved in raising the twins at that time.
Ultimately, the court determined that the couple chosen by the mother to be the twins’ guardians would become the twins’ custodial parents. The testator and the grandmother were allowed specific and generous parenting time, access, and consultations regarding major areas of the twins’ lives. However, the testator never exercised any of these rights and, with the exception of one attempt to contact the twins the year after the custody decision, ceased to have any involvement in their lives.
The testator executed two Wills after the custody decision, both of which disinherited the twins. In one Will the testator referred to the twins as his illegitimate children, and in the other he explained that one of his reasons for disinheriting them was that they had not made efforts to contact him.
As stated by the court, if the court concludes that the testator owed a moral obligation to the twins and did not make adequate provision for their proper maintenance and support, the court has the authority to vary the testator’s Will to make the provision for them that, in its view, is adequate, just and equitable in the circumstances.
The court did ultimately conclude that the testator abandoned the twins from the outset, as well as after the custody battle, and had a strong moral obligation to them, which he failed to meet during his lifetime. As a result, the court varied the testator’s Will to provide 35% to each of Courtney and Chelsea, and 15% to each of the two friends of the testator who had been named as estate trustees and sole beneficiaries of his estate. The court was of the view that the testator had blamed the twins for the decision in the custody battle, even though that was beyond the twins’ control, and also blamed them for the lack of relationship, notwithstanding what the court found were valid and rational reasons given by the twins in this regard (including that they were hurt that the testator had wanted their mother to abort them, and the testator’s actions during their lives made it clear to them that he did not want them in his life).
It is unlikely that the same decision would have been reached had this situation occurred in Ontario. The fact that the twins were independent adults, and that the testator had not been providing them with support, nor under a legal obligation to provide them with support, immediately before his death, would likely have resulted in a decision that the twins were not entitled to support, regardless of the unfortunate circumstances between the twins and the testator.
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In a recent decision from the British Columbia Court of Appeal, Mayer v Mayer Estate, 2020 BCCA 282, the court considered an application to reopen a trial to admit new evidence or to have a mistrial declared (the “post-trial application”). The post-trial application arose as a result of an email between the respondent’s daughter-in-law (who had been assisting the respondent with the litigation) and the respondent’s counsel. The appellant had obtained the email from the deceased’s computer. The deceased and the respondent had shared an email address, and when the appellant connected the computer to the internet some emails were downloaded from the shared account, including the email in question. The appellant took the position that the email that she had obtained impugned the respondent’s credibility by contradicting evidence she had given in the previous proceedings. The post-trial application was dismissed, and the appellant appealed the decision.
The Court of Appeal dealt with the question of the email fairly briefly. The post-trial application judge had concluded that the email was a communication that was subject to solicitor-client privilege. The Court of Appeal appears to have accepted that finding.
The content of the email is not specifically set out in the decision, but appears to have related to the purpose for which the respondent had made certain transfers to the deceased. It appears that, notwithstanding the finding that the email was privileged, the court still considered whether the contents of the email did impact the respondent’s credibility.
The respondent swore affidavit evidence in the original proceedings that she had made two transfers to the deceased to assist him in paying some tax debts. The email apparently indicated that at the time the respondent swore her affidavit, she knew that the deceased did not, in fact, have any tax debt. The post-trial application judge’s analysis stated that it appeared the deceased may have been untruthful with the respondent at the time the transfers were made, and probably used the funds for something other than tax debts, which he did not have. However, the respondent’s evidence in this regard was not a lie, because at the time of the transfer, all she knew was what the deceased had told her, namely that he intended to use the funds to pay his tax debts.
Additionally, the post-trial application judge had already addressed minor inconsistencies of this nature in the respondent’s evidence in his reasons from the original proceeding, noting that they were not consequential and fully explained by the respondent.
The Court of Appeal dismissed the appeal. In making this decision, the Court of Appeal notes that “it is apparent that the appellant is seeking largely to re-argue the case as originally tried before Justice Crossin, particularly as to credibility, which is not open to her.”
The Court of Appeal also awarded the respondent special costs (on a higher scale), based on its conclusion that the very serious allegations made and maintained by the appellant against the respondent constituted “sufficiently reprehensible conduct to merit rebuke in the form of an award of special costs”.
Although scenarios may exist where new evidence could have such an impact on credibility that it would warrant reopening a trial, one should be careful to fully assess the nature and strength of such evidence. The award of special costs also serves as further caution that serious allegations such as fraud and perjury should be made very selectively, when they are appropriate and fully supported by the evidence.
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In Hubschi Estate 2019 BCSC 2040, it was found that the notation left on a computer by the deceased was sufficient to be ordered as his valid electronic will.
Mr. Justice Armstrong reviews the facts and the law in a sixteen-page decision which includes the following paragraphs edited for brevity:
On Mr. Hubschi’s death, his family did not find a will meeting the requirements of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (WESA). His family did, however, find a document/record on a computer in his home indicating as follows:
“Get a will made out at some point. A 5-way assets split for remaining brother and sisters. Greg, Annette or Trevor as executor”.
The document does not meet the formal requirements of the Wills Estates and Succession Act (WESA). The issue on this application is whether the document can be cured, pursuant to s. 58 of WESA. If the document can be cured, Mr. Hubschi’s significant assets will be distributed to the foster siblings he grew up with in accordance with the intentions set out in the document. If the document cannot be cured, Mr. Hubschi has died intestate, and his assets will be distributed, in accordance with s. 23 of WESA, to blood relatives in Switzerland with whom he had no relationship.
Although the words in his computer record contemplate preparation of a formal will at some time in the future, I conclude that Mr. Hubschi’s testamentary intentions were reflected at the time he created the computer entry and when he reviewed the document on the day he died…
Thus, although the deceased’s words are noncompliant with the provisions in WESA, I conclude that it was the deceased’s testamentary intention that his estate should be divided by “A 5 – way split for remaining brother and sisters.”
I order that the document prepared by Mr. Hubschi will be fully effective as though it had been made as the testamentary intention of Mr. Hubschi and that probate of the will be granted to Gregory Kenneth Stack on the basis each of the Stack children will receive a one-fifth interest in his estate.
It should be noted that, at present, the governing legislation in Ontario is significantly different than in British Columbia. In Ontario, laws would not allow the judge the discretion to make a decision like this. Ontario is a “strict compliance” jurisdiction, and the note left by the deceased on his computer would not be a valid will. In Ontario, the result would have been an intestacy. Then the Office of Public Guardian and Trustee of Ontario would likely distribute the estate to the legal heirs in Switzerland. This was clearly not the result the deceased had intended as he had been given for adoption by his mother at birth and had no contact with his blood relations in Switzerland. It was his foster siblings who he had lived with all of his life, and he wanted to leave his estate to them on his death.
In this particular case, it would appear that the discretion provided by the “substantial compliance” legislation in British Columbia has resulted in a more just result than that of Ontario’s “strict compliance” legislation.
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An oft-repeated maxim of equity is that “equity regards substance rather than form”. Just outcomes, it is thought, should not be frustrated by mere technical shortcomings or other superficial flaws. However, in applying this principle, courts are mindful not to neglect form in every case or to too great an extent, lest legal drafting becomes slipshod and legal results unpredictable.
A recent British Columbia decision dealt with, in part, the dichotomy of form and substance in the context of will drafting errors. In Conner Estate v. Worthing, there were three patent errors on the face of the deceased’s will: (1) the will provided for 150% of the sale proceeds of the deceased’s house, owing to, seemingly, a mathematical error (50% given to the husband, 20% to five others); (2) the residue was gifted twice, once to the husband and once to the children; and (3) several lines appeared to have been missing. While the court acknowledged that it was generally barred from adding words to erroneous wills (though it had the power to delete words), it found that this case was an exception to the rule, for the deceased’s intentions could be clearly ascertained from the extrinsic evidence – the solicitor’s notes and the deceased’s letter of instructions – and the solicitor was responsible for the errors:
“While the exception to the prohibition against adding words on an application to rectify a will at the court of probate stage in Moiny Estate is extremely narrow, I conclude that the facts in this case fit within that narrow exception. Ms. Conner’s stated intentions should not fail simply because her solicitor failed to draft her will in a manner that gave effect to her wishes.”
A similar result likely would have been reached in Ontario, where it has long been held that in matters of “equivocation” – when the words in a will apply to two or more persons – courts can look to extrinsic evidence to infer a testator’s actual intention. If a will is not equivocal, and the testamentary intention can be discerned in the will, the courts cannot examine extrinsic evidence – and whatever the substance, the form will prevail.
As we have previously written, the courts may be hindered from rectifying drafting errors in scenarios where the errors are subtle and there is little extrinsic evidence of true testamentary intention. It is important, therefore, for both drafting solicitors and testators to carefully review their wills before executing them, and to watch out, in particular, for those minor errors which may burn while emitting no smoke.
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Suzana Popovic-Montag and Devin McMurtry.
Medical records are frequently key evidence in estate disputes. Often, a testamentary document or inter vivos transaction is challenged on the basis that the deceased lacked testamentary capacity or the mental capacity to make a valid gift.
The British Columbia Supreme Court recently reviewed the issue of admissibility of medical records within the context of a will challenge. The parties propounding the last will asserted that the deceased’s medical records were inadmissible on the basis that (1) the parties challenging the will were attempting to admit the records for the truth of their contents, (2) the records included third party statements from family members, which was suggested to constitute double hearsay evidence, and (3) the records were entirely inadmissible because they were not relevant, none of them being within weeks of the date of execution of the challenged will.
In Re Singh Estate, 2019 BCSC 272, the estate trustees named in the deceased’s will executed in 2013 only learned of the existence of a subsequent will executed in 2016 after they provided notice to the beneficiaries of the estate that they intended to apply for probate in respect of the 2013 will. The 2016 will disinherited two of the deceased’s eight children (including one of the two adult children named as estate trustee in the 2013 will) on the basis that they had received “their share” in their mother’s estate from the predeceasing husband’s estate. Between the dates of execution of the 2013 and 2016 wills, the deceased had suffered a bad fall and allegedly experienced delusions and had otherwise become forgetful and confused.
At trial, medical records are typically admitted under the business records exemption of the Evidence Act (in Ontario, section 35). Justice MacDonald acknowledged this general treatment of medical evidence, citing the Supreme Court of Canada (at para 48):
While clinical records are hearsay, they are admissible under the business records exception both at common law and under s. 42 of the Evidence Act. The requirements for the admission of medical records as business records are set out in Ares[ v Venner,  SCR 608]. The Supreme Court of Canada held at 626:
Hospital records, including nurses’ notes, made contemporaneously by someone having a personal knowledge of the matters then being recorded and under a duty to make the entry or record should be received in evidence as prima facie proof of the facts stated therein.
Subsequent case law cited by the Court addressed the second objection of the parties propounding the will, which provided that the observations that a medical practitioner has a duty to record in the ordinary course of business (including those involving third parties) are generally admissible (Cambie Surgeries Corporation v British Columbia (Attorney General), 2016 BCSC 1896). Lastly, the Court considered the issue of relevance of the medical records and found that evidence relating to the mental health before and after the making of a will can be relevant in supporting an inference of capacity at the actual time of execution of the will (Laszlo v Lawton, 2013 BCSC 305).
After finding the medical records to be admissible as evidence of the deceased’s mental capacity (and in consideration of all of the available evidence), the Court declared the 2016 will to be invalid on the basis of lack of testamentary capacity.
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