Special Costs 2021

It is a common public belief that the losing party in litigation pays the winning parties legal fees, but that is not the case unless the court makes an extraordinary award of special costs.

The usual award of costs is to the winning party on a “party and party” basis tied to a scale of units in the Supreme Court Rules for steps in the litigation process that essentially awards only a portion of what the actual legal fees.

Special costs provide a much greater degree of indemnity than the usual award of costs .

In Negas v Yehia 2021 BCSC 254 the court awarded approximately $1.2 million dollars in legal fees against the respondent in a protracted family case that lasted 7 years concerning $19 million assets.

The award of special costs was essentially an award of full indemnity to the wife of her legal fees by reason of the “ reprehensible conduct” of her partner during the course of the litigation that resulted in the award of special costs against him.

 

What Are Special Costs?

 

The nature and purpose of special costs were described by our Court of Appeal in 567 Hornby Apartment Ltd. v. Le Soleil Restaurant Inc., 220 BCCA 69 (“Le Soleil”):
“Special costs are not compensatory; they are punitive: Smithies Holdings Inc. v. RCV Holdings Ltd., 2017 BCCA 177 at para. 56.
The purpose of special costs is to censure and deter litigation misconduct, not to compensate the plaintiff: Tanious v. The Empire Life Insurance Company, 2019 BCCA 329 at para 53”

Special costs are fees a reasonable client would pay a reasonably competent solicitor to do the work described in the bill: Bradshaw Construction Ltd. v. Bank of Nova Scotia (1991), 54 B.C.L.R. (2d) 309 (S.C.), para. 44.

A special costs award is to provide an indemnity to the successful party, but not a windfall; Gichuru v. Smith, 2014 BCCA 414, at para. 155.

Although there may be a close relationship between actual legal expenses and special costs, they are not necessarily the same: Tanious v. The Empire Life Insurance Company, 2019 BCCA 329, para. 49.

This is because legal fees that a lawyer can recover from a client are determined on a subjective standard, pursuant to the Legal Professions Act, whereas only fees that are objectively reasonable in the circumstances are recoverable as special costs: Gichuru, para. 155;

 

REPREHENSIBLE CONDUCT

Special costs are not generally awarded unless the parties conduct has been reprehensible during the course of the trial, including conduct that is scandalous, outrageous, or other forms deserving of rebuke.

In Mayer v Osborne Contracting Ltd 2011 BCSC 914 at para. 11 the court set out those circumstances that warranted the attraction of special costs:

1) where a party pursues a meritless claim and is reckless with regard to the truth;

2) where a party makes improper allegations of fraud, conspiracy, fraudulent misrepresentation, or breach of fiduciary duty;

3) Where a party has displayed reckless indifference by not recognizing early on that it’s claim was manifestly deficient;

4) Where a party made the resolution of an issue, far more difficult than it should have been;

5) Where a party in a financially superior position to others brings proceedings, not with a reasonable expectation of affairs are favorable outcome, but in the absence of merit in order to impose a financial burden on the opposing party;

6) Where a party presents a case so weak that it is bound to fail and continues to pursue its meritless claim after it is drawn to its attention that the claim is without merit;

7) Where a party brings a proceeding for an improper motive;

8) Where a party maintains unfounded allegations of fraud or dishonesty ( include undue influence);

9) Where a party pursues claims frivolously or without foundation.

Smithies Holdings Inc. v RCV Holdings Ltd 2017 BCCA 177 held that special costs should only be awarded to punish reprehensible conduct in the course of the litigation, and should not be awarded for pre-litigation conduct.

The court also noted however that there may arise circumstances where special costs may be awarded because of reprehensible conduct giving rise to the litigation, particularly where the fruits of the litigation do not provide any appropriate compensation in relation to the reprehensible conduct.

Allegations of pre litigation fraud or undue influence where there is scant evidence have been known to incur awards of special costs.

In Wilson v Lougheed 2012 BCSC 1166 the court awarded special costs for four of the 14 day trial against an executor who crossed the line in a highly charged wills variation case advanced by his daughter.

 

Registrar’s Criteria In Assessing Special Costs

Generally speaking the trial judge will not specify the amount of special costs and will instead refer the matter to a registrar to conduct a hearing. Registrars develop knowledge and skill in the assessment of legal bills and court costs that is seldom matched by that of a trial judge. It is however within the jurisdiction of a trial judge to assess the amount of costs.

Rule 16-1(2) sets out matters that apply on an assessment of special costs:

On an assessment of special costs, a registrar must

(a) allow those fees that were proper or reasonably necessary to conduct the family law case, and

(b) consider all of the circumstances, including the following:

(i) the complexity of the case and the difficulty or the novelty of the issues involved;

(ii) the skill, specialized knowledge and responsibility required of the lawyer;

(iii) the amount involved in the case;

(iv) the time reasonably spent in conducting the case;

(v) the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the family law case;

(vi) the importance of the case to the party whose bill is being assessed, and the result obtained;

(vii) the benefit to the party whose bill is being assessed of the services rendered by the lawyer;

 

Applies to a Team of Lawyers

The test to be applied does not necessarily limit special costs to fees that would be charged by one lawyer only.

It now is quite common for a law firm to have more than one lawyer work on a file. Delegating some of the work to a competent lawyer who bills at a lower hourly rate than the lead lawyer can benefit the client by reducing overall legal fees.

When assessing special costs the overall handling of the file is to be considered to determine if the fees claimed as special costs are objectively reasonable in all the circumstances.

That standard applies whether one lawyer or more than one lawyer performs the legal services claimed as special costs.

The fees charged by the claimant’s lawyers are fees a reasonable client would pay reasonably competent counsel for the work done to conduct this case.

When a trial judge orders special costs of a proceeding, the award of special costs includes the cost of any special costs application and any subsequent proceedings to assess costs unless the court otherwise orders.

 

FIDUCIARIES

Special costs are routinely awarded to a party who is a fiduciary in circumstances where there has been no reprehensible conduct by that party or any other litigant. Mawdsley v Meshen 2011 BCSC 923.

For example an executor/trustee , in the absence of misconduct, is ordinarily entitled to recoup from the estate the legal costs reasonably incurred in litigation such as in a wills variation claim where the executor must be named as a party.

In Re Campbell Estate 2015 BCSC 774 an administrator was removed and ordered to pay special costs of the application on the basis that his conduct throughout was reprehensible and called for rebuke.

 

CONTINGENCY FEE

 

In an ICBC case Norris v Burgess Oct.14, 2015 Vancouver registry M123216 BCSC the plaintiff was awarded special costs for a 20 day jury trial in the amount of the plaintiff’s contingency fee based on the award of $462,000 in damages. We don’t know the percentage of the fee agreement but it is likely in the range of %25-331/3.

The defendant insurance company had produced videotapes of the plaintiff in 2013 and 2014, but contrary to a court order to disclose all surveillance videos on or before October 23, 2015, a video from 2015 was not disclosed until after the third week of trial.

 

SUMMARY OF APPLICSABLE PRINCIPLES

In Westsea Construction Ltd. 0759553 BC ltd 2013 BCSC 1352 stated:

1) the court must exercise restraint in awarding special costs;

2) The party seeking special costs must demonstrate exceptional circumstances to justify a special costs order;

3) Simply because the legal concept of reprehensible and he captures different kinds of misconduct does not mean that all forms of misconduct are encompassed by this term;

4) Reprehensible conduct will likely be found in circumstances where there is evidence of improper motive, abuse of the court’s process, misleading the court and persistent breaches of the rules of professional conduct and the Rules of Court that prejudice the applicant;

5) Special costs can be ordered against parties and non parties alike; and

6) the successful litigant is entitled to costs in accordance with the general rule that costs follow the event. Special costs are not awarded to a successful party as a bonus for further compensation for that success.

The question in every case is whether on a consideration of the substandard conduct of the party making the allegation and the conduct of the litigation itself, the person or persons against whom the order is sought has acted in a manner that is sufficiently reprehensible to a warrant chastisement of the court.

 

 

CONCLUSION

Two trends have emerged with respect to the issue of court costs in estate litigation over the last 20 years:

1) the usual rule that costs follow the event, as opposed to the estate paying all the parties costs has become the norm. Exceptions occur such as when the litigation is as a result of the testator’s actions.

2) the increased willingness of the court to award special costs as a means of discouraging and chastising a litigant whose conduct is considered by the court to fall within the classification of reprehensible. Reprehensible conduct is defined broadly and encompasses misconduct ranging from scandalous and outrageous at one extreme, to milder forms of misbehavior warranting judicial rebuke at the other.

Stated bluntly, the courts are extremely busy and a litigant who wastes the court’s time runs a significant risk of having to pay the other parties legal fees by an award of special costs.

Cost Awards Against Non Parties

The BC Court of Appeal in Hollander v Mooney 2017 BCCA 238 discussed the rare circumstances where the court may award costs against  non parties.

One or more of the circumstances that might warrant an award of costs against a non party are occasionally seen in estate litigation

The Court’s jurisdiction to order costs against a non-party is limited to special circumstances such as:

– fraudulent conduct,
– abuse of process,
– gross misconduct,
– or circumstances where the non-party is the “real litigant”

Anchorage Management Services Ltd. v. 465404 B.C. Inc., 1999 BCCA 771 at para. 21; Perez v. Galambos, 2008 BCCA 382 at paras. 17–18; and Animal Welfare at paras. 53–58.

The previous appeal decision Perez v Galambos summarized the jurisdiction to award costs against a non-party:

“ The court does have jurisdiction to order costs against a non-party: Oasis Hotel Ltd. v. Zurich Insurance Co. (1981), 1981 CanLII 433 (BC CA), 28 B.C.L.R. 230 (C.A.).

However, an award of costs against a non-party is unusual and exceptional, and should only be made in “special circumstances”: Anchorage Management Services Ltd. v. 465404 B.C. Inc., 1999 BCCA 771, 72 B.C.L.R. (3d) 389, at para. 21.

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

Executor Remuneration When Stipulated

The Supreme Court of British Columbia has no inherent jurisdiction to award or vary  remuneration to an executor/ trustee where the remuneration is agreed to or stipulated  in the trust agreement or  in a will. Re Edy 1982 CarswellBC 311.

The court’s power to fix the remuneration of a trustee is statutory under the Trustee act.

The court found it significant that the provisions of section 90 of the Trustee act RSBC, the section which provides that it is lawful for the Supreme Court to allow a trustee, a fair and reasonable allowance, not exceeding 5% of the gross aggregate value, including capital and income of all of the assets of the estate, by way of remuneration for the trustees care, pains, trouble and time expended in or about the trusteeship.

The court held that it was bound by the previous decision of re Holmes (1916) 10 OWN 354 and re Robertson 1949 OWN 390 to mean that there is no inherent jurisdiction in the Supreme Court to increase the remuneration to a trustee, where the remuneration has been agreed to in the trust agreement.

The same reasoning would likely apply to the trustee of a will

What Is a Trust

PKMB v DHL 2018 BCSC 186 reviewed some of the basic principles relating to what is a trust.

A trust is the relationship, which arises whenever a person called the trustee is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons, of whom he may be one, and who are termed beneficiaries, or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustee, but to the beneficiaries or other objects of the trust.

In order for a trust to be valid, there must be evidence of the three certainties, namely the certainty of intention, the certainty of subject matter, and the certainty of objects.

In the Bankruptcy of Taylor Ventures, LTD 2004 BC SC 1612, the court described the three certainties as follows

Certainty of Intent:

It must be established that there was a clear intention to create a trust and the language used by the settler must be imperative.

As well, the intention of the settlor of the trust must be ascertained at the time of the settling of the property transferred upon the trustee. For a trust to be valid, the certainty of intent must be made known to the trustee. Re New Home Warranty of British Columbia (2000) 29 CBR 232 BCSC;

Certainty of Subject Matter

A trust cannot be established if the subject matter of the alleged trust is undefined;

Certainty of Object

The beneficiaries must be clearly identified as must the way in which the properties to be applied.

There must be no uncertainty as to whether a person is a beneficiary. If a description of a class of beneficiaries is used, the description must be certain, and it must be possible to ascertain who are the members of the class in the total membership in the class.

Wills Variation: The Judge’s Discretion

The BC Court of Appeal in Kish v Sobchak 2016 BCCA 65 reviewed the discretion of the trial judge in a wills variation claim and how that discretion should be exercised.

The Facts:

A woman and the testator were in a relationship for over 20 years, but kept their finances separate and did not wish to be married. After the woman develop memory problems, the testator rented out his house to his brother and moved in with the woman, and became her full-time caregiver.

The testator developed cancer and executed a new will, leaving the estate to only his daughter who was a single mother of three.

The woman executed a new will leaving her estate to her son and grandson.

The woman became incompetent and was placed in a care facility.

The testator died and left his estate of just under $200,000 and his daughter who also received $250,000 outside of the will.

The mother’s son brought a successful action on her behalf under the wills variation act.

The trial judge found that the woman and testator were in a marriage like relationship, that the woman was his spouse for the purposes of the act, the testator had a moral and legal obligation to the woman and failed to adequately provide for her in his will.

The woman was awarded $100,000 and on appeal the award was reduced to $30,000.

The appeal court found that while the testator would have some legal obligation to support the woman during his lifetime, the testator and the woman clearly wished to benefit his and her own children to the exclusion of each other.

It was inappropriate to disregard the express wishes that modest estates, built up through their parties individual effort should be their own, and that the respective children should benefit exclusively therefrom.

A parties particular circumstances and relationship with strongly in favor of respecting testamentary autonomy. And the trial judge should have given more weight to that principle.

The Exercise of Judicial Discretion in Wills Variation

The court examined, discretion and held that the line between the exercise of judicial discretion and the finding of facts is not easy to enunciate.

A judge has no discretion in making his or her findings of fact, and has no discretion in his or her rulings on the law.

But when having made any necessary finding of fact the necessary ruling of law, the judge has to choose between different courses of action, orders, penalties or remedies that he or she then exercises the discretion. It is only when he or she has reached the stage of asking him or herself. What is the fair and just thing to do, or order in the instant case that embarks on the exercise of a discretion.

A judge must exercise judgment, not discretion in finding the facts, and is usually the most difficult and often most exacting task which the civil trial judge has to undertake.

The standard of review applicable in Canada to the exercise of judicial discretion is found in Friends of the Oldman River Society v Canada (Minister of Transport) (1922) 1 SCR 3:

“ The law as to the reversal by a court of appeal of an order made by the judge below in the exercise of his discretion is well-established, and any difficulty that arises is due only to the application of well-settled principles in an individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves of exercised the original discretion, headed attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been her wrongful exercise of discretion in that no wait, or no sufficient weight, has been given to relevant considerations such as those urge before us by the appellant, then the reversal of the order on appeal may be justified..”

A discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounta to an injustice. Elsom v Elsom (1989) 1 SCR 1367 at p.1365

Converting a Petition to an Action

Kerfoot v Richter 2018 BCCA 238 reviewed the law relating to the test on an application to convert a proceeding brought by petition to an action.

The petitioner’s application to convert the petition to an action was dismissed by the chambers judge, and the Court of Appeal held that the chambers judge did not properly administer the legal test in the exercise of his discretion.

The petition was to dispute the validity of the petitioner’s mother’s will, in which the bulk of the estate was left to the respondent. It was alleged that the testator lacked mental capacity, and the will was procured as a result of the undue influence of the respondent.

The chambers judge dismissed the application without formal reasons.

The Court of Appeal held that the proper test was set out in British Columbia Milk Marketing Board v Saputo Products 2017 BCCA 247, that proceedings brought by petition should be referred to the trial list when there are disputes of fact or law, unless the party requesting the trial is bound to lose( at para. 43)

The application to convert the petition into an action was made pursuant to Supreme Court Rules 22- 1 (7) and 25-14(8)(e).

The appeal court in Kerfoot v Richter held that the Saputo test precluded a judge from weighing the evidence.

Applying the decision Robertson v Dhillon 2015 BCCA 469 the appeal court confirmed that the test is akin to the test to be applied for summary judgment: whether on the relevant facts and applicable law, there is a bona fide triable issue.

In the context of this case where there are factual disputes, the chambers judge was to determine whether the petitioner, as the party requesting the trial, was bound to lose; more particularly whether there was a triable issue with respect to the deceased testamentary capacity were the issue of undue influence.

Where there are disputed facts in the pleadings, the party who seeks either summary judgment or dismissal bears the evidentiary burden of showing that there is no genuine issue to be tried, and that is proven through evidence. McLean v law society, British Columbia , 2016 BC CA 368 at paragraphs 36 – 39.

In considering evidence, however, the court must not weigh it, but is limited to assessing whether it establishes a triable issue. Sky Bridge Investments Ltd v . Metro Motors LTD 2006 BC CA 500.

While a judge is not to weigh evidence, he or she may draw inferences that are strongly supported by undisputed facts.
Importantly, a party seeking to establish that there is a triable issue cannot rely on mere allegations, but must establish the existence of material issues. Canada Atty. Gen. v Lameman 2008 SCC 14 at paragraph 11.

Minority Shareholder Oppression

Minority Shareholder Oppression
Minority shareholders, or their representatives if deceased, can bring an action for oppression under section 227 of the BC Companies act (BCA) to inter alia force a sale of their minority shares if the affairs of the company are being conducted in a manner, oppressive or unfairly prejudicial to one or more of the shareholders.

The courts are particularly sensitive to the rights of minority shareholders in family businesses.

Oppression is an equitable remedy that seeks to ensure fairness that is just and equitable. It gives the court a broad discretion to enforce not only what is legal, but what is fair.

One of the leading cases is BCE. Inc. v 1976 Debentureholders 2008 SCC 69.

Under section 227 (3) of the BCA, the court has vast powers to make any orders it sees appropriate, interim or final, to remedy or bring an end to the oppressive conduct.

These orders include:

• directing are prohibiting any act;

–                      regulating the conduct of the company’s affairs;

–                      appointing a receiver or receiver manager

–                      -directing the company, subject to subsections five and six to purchase some or all of the shares of a shareholder, and if required, to reduce its capital in the manner specified by the court;

–                      directing a shareholder to purchase some or all of the shares of any other shareholder

–                      -directing the company, or any other person to pay to a shareholder all or any part of the money paid to that shareholder for shares of the company

–                      directing the company subject to sections 5 and six to compensate an aggrieved person

–                      authorize new directing the legal proceedings be commenced in the name of the company against any person on the terms the court directs.

Oppression is fact specific as to whether conduct is just and equitable, as measured by the reasonable expectations of the stakeholders in the context in regard to relationships at play. BCE at paragraph

The onus is on the petitioners to establish that the affairs of the company are being conducted in a manner that is oppressive to them or that they there have been ask of the company or its shareholders that are unfairly prejudicial.

The courts further recognize that family companies bring different expectations than other commercial businesses.

The Court of Appeal in Safarik v Ocean Fisheries Ltd 12 BC LR(3d) 342 stated:” family companies are very different from non-family companies. They are different because usually when a young man joins his father in the business, he does so trust in his father to do right by him, and the father intends to do right. The snow contracts are drawn up. It is not unusual for differences to arises they did here, not because he their father, her son is dishonorable, but because he sees the world through different eyes.

 

It is not erroneous to take a more liberal approach to the words just and equitable in the case of family company in which one of the family after many years services is no longer permitted to participate in the business.
In determining if there is oppression of a minority shareholder the court must ask two questions:

1.                   does the evidence support the reasonable expectation asserted by the claimant; and

2.                   does the evidence established that the reasonable expectation was violated by conduct falling within the terms oppression, unfair prejudice, or unfair disregard of a relevant interest in?

Examples of the court, having determined that it would be just and equitable to grant relief under section 227 (3) BCA from conduct that was unfairly prejudicial include:

1.                   The loss of confidence in inability to communicate with one another. Where the termination of a minority shareholders employment was inextricably interwoven with his or her position as an officer and director and the business was in fact a partnership operated under the guise of a private company

2.                   unequal repayment of shareholders loans and the failure to repay shareholder loans within a reasonable period of time

3.                   exclusion of a shareholder from continued participation in the management of the business, contrary to past practice( Safarik at 94-95)

 

It is not erroneous to take a more liberal approach to the words just and equitable in the case of family company in which one of the family after many years services is no longer permitted to participate in the business.
In determining if there is oppression of a minority shareholder the court must ask two questions:

1.                   does the evidence support the reasonable expectation asserted by the claimant; and

2.                   does the evidence established that the reasonable expectation was violated by conduct falling within the terms oppression, unfair prejudice, or unfair disregard of a relevant interest in?

Examples of the court, having determined that it would be just and equitable to grant relief under section 227 (3) BCA from conduct that was unfairly prejudicial include:

1.                   The loss of confidence in inability to communicate with one another. Where the termination of a minority shareholders employment was inextricably interwoven with his or her position as an officer and director and the business was in fact a partnership operated under the guise of a private company

2.                   unequal repayment of shareholders loans and the failure to repay shareholder loans within a reasonable period of time

3.                   exclusion of a shareholder from continued participation in the management of the business, contrary to past practice( Safarik at 94-95)

 

Express Trusts

The BC Court of Appeal in Xu v Hu 2021 BC CA 2   overturned a finding of the trial judge who had found an express trust over a parcel of property.

The appeal court found that the findings of fact did not establish the certainties of intention and object necessary to establish an express trust.

In order for a valid trust to be constituted, there must be certainties of intention, subject and object of the trust, and when the property has been vested in the trustee, and express trust is created.

Very often in the X decision, the question is one of what was the intention of the settlor- to make a gift or a trust?

 

What Is a Trust?

“A trust is the relationship which arises whenever a person (called the trustee) is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (of whom he may be one, and who are termed beneficiaries) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustees, but to the beneficiaries or other objects of the trust.”

 

 

What Is an Express Trust?

 

In Suen v Suen 2013 BCCA 313  the court stated:

 “     An express trust is created when the requirements of certainty of intention, subject, and objects of the transfer have been established and the trust property has been vested in the trustee: Waters at 132 and 167. Where the trust property has not been vested in the trustee, and there is no way of compelling the settlor to do so, this “incompletely constituted trust” or “shell of a trust” does not operate as a trust and has no legal significance: Waters at 167. Waters describes the “one golden rule” for the creation of a trust (at 168):”

 

The onus of establishing each of the certainties lies with the party asserting the trust’s existence: McInerney v. Laass, 2015 BCSC 1708at para. 36. The standard of proof is the usual civil balance of probabilities: Pavlovich v. Danilovic, 2020 BCCA 239at para. 27.

Certainty of intention is a question of fact; certainty of subject and object are questions of mixed fact and Law: Grewal v. Khakh, 2018 BCCA 357at para. 24. Thus, the trial judge’s conclusion that the requisite certainties were satisfied is reviewable on a standard of palpable and overriding error, except for any extricable questions of law, which are reviewable on a standard of correctness: Housen v. Nikolaisen, 2002 SCC 33.

 The settlor’s intention is the critical element for the creation of an express trust. As explained by Deschamps J.: “Express or ‘true trusts’ arise from the acts and intentions of the settlor and are distinguishable from other trusts arising by operation of law”: Century Services Inc. v. Canada (Attorney General), 2010 SCC 60at para. 83. As explained by A. H. Oosterhoff, Robert Chambers & Mitchell McInnes in Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed. (Toronto: Carswell, 2014) at 193 — 194:

Certainty of intention is a question of construction.

The intention may be express or implied, it may arise from words or acts.

Technical language need not be used. A settlor may create a trust without using the word “trust” and, indeed, without fully understanding the concept of trusteeship.

Intention ultimately is a matter of substance rather than form. Language alone cannot create a trust.

In the Xu decision the evidence was that Mr. HU told Ms. Hu and others that the property in dispute was being GIFTED to Ms. Hu.

The use of the word gift while not conclusive , is very strong indication that a gift was intended, not a trust.

 

There is a presumption that parties usually intend to gift, but rarely constitute themselves as trustees. ( Oosterhoff at 256)

 

The court is not at liberty to constitute words other wise that according to their proper meaning.

 

Further complicating what the intention of the settlor was, in British Columbia trusts are exempted from the general requirement that dispositions of land must be evidenced in writing as per S. 59 (1) of the Law and Equity Act.

Abusive Parents

In my practice of acting for disinherited people, I frequently encounter adult children who have been raised by abusive, even toxic parents. It comes with the territory.

I have frequently told clients that it takes absolutely no skill to become a parent, but takes a combination of lots of skill, love, dedication, and some luck to become a good parent and raise a functional family.

Probably most parents are not evil, they simply are people with the wrong set of tools to adequately raise a loving family.

Ironically, I have seen many cases where a mommy dearest for example, disinherits her children and leaves her estate to charities involving care for children.
Many of the parents in fact will state that they have no idea what they’ve done wrong, that they did everything for their children, and that they in fact are the victims. These are typically the parents that states “ I did everything for you, I brought you into this world and could take you out of it so fast her head would spin.”

I find this hard to believe in that many of these parents do in fact know what they did wrong, they were there, and they were the ones who acted abusively to their children.
The fact is that abusers are manipulative and manipulate their victims and the people around them.
Children do not want to break off the relationships with their parents, no matter what their age, but sometimes for their own medical well-being, they must.

 

                    Signs of Abusive Parental Behavior

 

1. Favouring One Child Over Another

Needless to say, this can lead to unfavoured children growing up with the distorted, negative view of themselves, and the favored child, the exact opposite.

2. Teasing and Humiliation

this can be as simple as teasing your child that they are overweight, ugly and other harsh statements that can seriously damage a child’s self-esteem. This is particularly the case if the child is put down in front of an audience.

3. Threatening Physical Violence

even if no physical harm is actually done, this kind of fear tactic is emotionally abusive and is very damaging in terms of inflicting emotional scars on the child.

 

4. Making Siblings Compete For Love and Approval

This abusive behavior actually encourages the pitting of one sibling against the other, and reinforces the lie that parental love should be earned. Instead of freely and unconditionally given

5. Being Absent

Ignoring a child emotionally and being absent from their lives can be extremely damaging to the child. Some children are in effect simply ignored.

6. Guilt Tripping

Some parents make their child feel guilty over the smallest things. It’s abuse when it occurs. For years, and possibly their entire life as the child will grow up fearing that he or she will disappoint their parent. This can lead to anxiety and depression and the constant fear of getting into trouble.

7. Perfectionism
some parents demand perfectionism in all aspects, whether it be school, behavior, extracurricular activities, and so forth. This can cause children to become excessively self-critical and undermine their confidence and self belief. This parent will typically never give praise even though well-deserved.

8. Invalidation

Invalidation is essentially ignoring the concerns of the child and telling them such things as back in my day we had it so much worse. It basically is a complete failure of the parent to be concerned and involved in their child’s development and growing pains.

9. Failure to Allow the Child to Communicate His/Her Needs

Similar to invalidation, this is the parental curbing of a child’s ability to speak for him or herself and express their needs and emotions.

10. Withholding or Making a Child Earn Basic Necessities

some parents deprive their children of basic needs, such as food, clothing, shelter and make the children feel guilty for receiving these things that a parent is in fact obligated to provide. These parents typically emphasize things like I feed you, I clothe the do, I don’t beat you, I put a roof over your head.

11. Lack of Privacy

Children need their own space in order to grow, and parental invasion of privacy, such as reading the child’s diary, searching through their cell phone, searching their room, and such can certainly cause friction between the parent and the child, let alone the child to become defensive, protective and secretive, even to the point of paranoia.

12. Using Religion for Shaming

The negative aspects of a strict shaming type religious upbringing are well known .

13. Conditional Love

When parent show love unconditionally. Children learn they are loved and wanted even when they make mistakes. However, when parents give love conditionally, children are taught the opposite and may struggle with perfectionism and trying to earn love.

14. Getting Back at the Other Parent

A well-known phenomena is when separated/divorced parents use children as pawns to inflict pain on the other parent. This may be as simple as using the children to get information about the other party, and denial of access, bad mouthing, and other abusive behaviors. In extreme examples. One parent may turn the children completely against the other, causing permanent estrangement.

15. Too Close For Comfort.

Some parents are simply too emotionally and even physically close to their children. Incest, of course, would be an extreme example, but this is rare. However, a relationship can be too close without it being sexual, and still have an abusive effect upon the child. `
16. Making the Child Who the Parent Wants Them to Be vs Who They Want to Be

While every parent will state that they want the best for their child, some deluded parents in their quest to have their children realize their potential. Try and mold their children and to who they think they should be, rather than who the child wants to be. I have had adults tell me that their parent picked their spouse, and demanded that they enter a certain profession, despite the unwillingness of the child to do so. Problems can arise when the child deviates from the parents. Ideal, and can result in rejection of the child. Many parents seem to have the view that a child lives to” make the parents proud” rather than the child simply be happy.

17. Verbal Abuse as Discipline

Although we all know the adage “sticks and stones will break my bones but names will never hurt me”and, the reality is this is simply not true and that words do hurt. This is particularly the case when the person inflicting harm for words is a parent or adult in charge of protecting the child.

Executor Remuneration In Large Estates

There are surprisingly few decisions in British Columbia relating to the appropriate amount of remuneration for an executor of a large estate.

Re Chau estate 2016 BCJ No. 2843 dealt with a $16 million estate which was comprised primarily of half an interest in a house, and liquid investments.

While the estate was somewhat complex, the administrator had the assistance of lawyers and accountants, making in effect the administrator’s job relatively straightforward.

The executor claimed remuneration of $400,000 on an interim passing of accounts, consisting of a capital fee of $289,500, being 1.8% of $16 million, and the care and management fee of $111,000.

The opposing party submitted that $60,000 would be generous and this was calculated on the basis of 176 hours of work at $340 an hour.

The court reviewed the case law and awarded $150,000 raised on a quantum meruit basis.

Thus it could be said that just because the estate is large does not entitle an executor to an automatic “lottery win”.

 

THE LAW

 

 

The criteria to be considered in determining the appropriate amount of remuneration has been well settled law for over 100 years as per the leading case of return Toronto General Trust Corp. v. Central Ontario Railway Company (1905) 6 OWR 350 at 354

The criteria are:-

1) the magnitude of the estate

2) the care and responsibility involved

3) the time occupied in administering the trust of the estate

4) the skill and ability displayed

5) the success achieved in the final result

 

Re McColl estate (1967) 65 WWR 110 is another leading case on executor remuneration, and held that when assessing interim accounts, it would be inappropriate to award the full 5% to an executor, as adequate allowance has to be made for work yet to be done in a continuing estate, or by a successor administrator.

 

Remuneration does not need to be fixed as a percentage of the gross aggregate value of the estate, it may be calculated on a lump sum, provided it does not exceed 5% of the total value of the estate- Re Turley Estate (1955) 16 WWR 72 ( BCSC)

 

S. 88 of the Trustee Act is the prevailing statute in this regard:

88.(1) states:

“ A trustee under a deed, settlement or will, an executor or administrator, a guardian appointed by any court, a testamentary guardian, or any other trustee, however the trust is created, is entitled to, and it is lawful for the Supreme Court, or registrar of that court if so, directed by the court, to allow him or her a fair and reasonable allowance, not exceeding 5% of the gross aggregate value, including capital and income, of all the assets of the estate, by way of remuneration for his or her care, pains in trouble and his or her time spent in and about the trusteeship, executorship, guardianship or administration of the estate and effects of vested in him or her under any will or grant of administration, and administering, disposing of an arranging and settling the same, and generally and arranging in settling the affairs of the estate as the court, or registrar of the court if so, directed by the court thinks proper.

88. (3)

“ A person entitled to an allowance under subsection 1 may apply annually to the Supreme Court for a care and management fee and the court may allow a fee not exceeding 0.4% of the average market value of the assets.”