What Factors Contribute to a Successful Will Variation Claim?

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While will-makers have flexibility regarding how they dispose of their assets upon death, if they fail to adequately provide for a surviving spouse or child, their will may be varied by the Court. Section 60 of the Wills, Estates and Succession Act of British Columbia authorizes a court to order compensation that it finds adequate, just, and equitable, out of the will-maker’s estate. Only spouses and children of the testator may seek a variation and must commence an action within 180 days from the Grant of Probate. Spouses include common-law partners, with whom the will-maker was in a marriage-like relationship for at least two years. Case law has excluded stepchildren not adopted by the will-maker and birth-children adopted by third parties from being proper applicants of a will variation claim.

The seminal case regarding wills variation is Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (“Tataryn”), where the Court held that a will-maker must meet both their legal and moral obligations to surviving children and spouses. The legal obligations are those which would have been imposed if property division and support were considered during the will-maker’s lifetime. Moral obligations represent society’s reasonable expectations of what should be done in the circumstances and are linked to community standards. While the Court in Clucas v. Royal Trust Corporation of Canada, 1999 CanLII 5519 (BC SC) held the will-maker’s autonomy should only be interfered with to the extent statute requires, there are some factors which often lead to variation, even in the situation of adult children who are financially independent.

The standard of living which the will-maker allowed a Plaintiff to become accustomed to will influence their level of moral obligation. In Wilson v. Lougheed, 2010 BCSC 1868, the Court considered the large size of the estate (nearly $20 million), the daughter’s current financial circumstances, and how the will-maker had historically treated her very generously when deciding to vary the will. While there is a general principle that Plaintiffs should continue to be maintained in a manner which they’ve become accustomed to, it is balanced against the estate’s ability to meet competing claims. Adult children who have financially contributed to their parents’ estates, but who are then not adequately provided for in the will are often successful under wills variations claims. This was seen in Wilcox v. Wilcox, 2000 BCCA 491, where the Court varied a mother’s will in favor of the daughter who’d made contributions to the financial purchase and running of the mother’s house. The years which the daughter had cohabitated with her mother, and the mother’s promise that the daughter would inherit the house portion of the estate also had weight in court.

The case law regarding when will-makers can limit or disinherit is ever-evolving and hinges around many factors. Will-makers’ wishes to limit inheritance may come into conflict with the moral obligations set out in Tataryn, specifically when a will-maker’s reasons might not be sufficient under community standards of what a judicious parent would have done. This was seen in Lamperstorfer v. Lamperstorfer Estate, 2018 BCSC 89, where the Court held that the will-maker’s mental health challenges and reclusiveness from society prevented him from meeting his moral obligation to his sons. Absent reasons otherwise, there’s an expectation that adult children will share equally in their parents’ estate, as seen in Laing v. Jarvis Estate, 2011 BCSC 1082. Yet reasons can be various, and the Court is hesitant to interfere with a will-maker’s wishes so long as they were made with a sound mind. In particular, Williams v. Williams Estate, 2018 BCSC 711, where a father arranged his affairs to leave all but approximately $5,000 of his estate to his favorite son, Brent, to the detriment of the other son, Ron. The will-maker had a much stronger relationship with Brent, and Brent also had dependants to support. Further, the will-maker had entirely lost contact with Ron for several years. Despite how the prevailing son Brent was financially stable before his father’s passing, and how the financial outcome was unequal, the Court refused to vary the will.

 

 

 

 

 

 

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What Happens if the City/Municipality Decides to Expropriate Land?

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Local governments, such as the City of Nanaimo, are empowered by section 31 of the Community Charter to expropriate land. Section 289 of the Local Government Act gives the same power to regional districts. Expropriation is the taking of land without the owner’s consent and is an exceptional power which isn’t often exercised. The Expropriation Act must be adhered to by the local government and covers procedural requirements to be taken, as well as compensation for the land itself and disturbance caused to the landowner. Local governments can expropriate in order to provide services for the benefit of all or part of the community or in order to provide any services which are considered necessary or desirable.

In 2011 Nanaimo City Council adopted bylaw no. 7130 to expropriate land along Bowen Road. The purpose was to improve the public road and to carry out the replacement of the Quarterway Bridge. The city was unable to acquire the land through negotiation, although negotiation is the preferred option. Local governments secure certainty of costs if able to negotiate a set purchase price, while under expropriation, expenses and damages to be paid to the landowner are much less certain. Local governments are statutorily obligated to pay the market value of the property plus reasonable damages for the disturbance caused by the expropriation – amounts that are challenging to predict.

After a decision to expropriate, the local government will need to physically inspect the land, as certain issues can affect the value of the property. Under section 6 of the Expropriation Act, notice of intent to expropriate the land must be given to the owner, as well as posted on the land itself. Section 32 of the Community Charter provides authority for a local government to enter and inspect the land. Section 290 of the Local Government Act provides the same power for a regional district to enter and inspect, as does section 9 of the Expropriation Act. Consent of the owner is not necessary, but the local government is responsible for paying any compensation related to loss or damage caused by entrance and/or inspection. In compliance with the Expropriation Act, the local government will conduct an appraisal of the market value of the land which would have been obtained had the owner sold under normal circumstances. Reasonable compensation to be paid to the owner must also be calculated, covering factors such as moving expenses, legal expenses, and potentially increased mortgage rates for the owner’s subsequent property purchase.

 

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Trademark Infringement and The Tort of Passing Off

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In Royal Pacific Real Estate Group Ltd. v. Dong, 2020 BCCA 323, the British Columbia Court of Appeal made it clear that unauthorized use of a trademark carries legal consequences. The Court found that the Defendant, Mr. Dong, had committed the tort of passing off, despite his arguments that he had proper consent from the Plaintiff, Royal Pacific Real Estate Group Ltd., to use the Royal Pacific trademark. Mr. Dong had signed an agreement with the Plaintiff whereby he would work under the real estate group as an independently contracted real estate representative. The agreement allowed and even encouraged Mr. Dong to use the Royal Pacific trademark in this capacity, because the group is well-known for success in the Vancouver area, having arranged billions of dollars of sales. But Mr. Dong could only properly use the trademark for his work under the real estate group; he was not authorized to use the trademark for his other private businesses. One of these included his business named Bliip Box, which he’d hoped to have as a supplier of real estate websites.

Mr. Dong took several actions which constituted trademark infringement including making available the contact information of the Royal Pacific group on his personal website, such that the public would consider Royal Pacific to be endorsing or associated with Mr. Dong’s personal site. The Defendant also sent solicitation emails to various real estate agents, saying that Royal Pacific was seeking to endorse local businesses through his personal Bliip Box company, while Royal Pacific had no intent of this. Even after Royal Pacific lawfully terminated their agreement with the Defendant, and as such he no longer had authority to use the trademark whatsoever, he continued to do so. Bliip Box continued to display Royal Pacific’s trademark, and in launching this business relied on the Royal Pacific online domain name. The Court of Appeal upheld the trial judgement that Mr. Dong had committed the tort of passing off outlined under section 7 of the Trademark Act. The Court recognized that the three elements of passing off were present, being: The existence of reputation or goodwill, a misrepresentation leading the public to believe an association between the parties, and damage or potential damage to the Plaintiff, as outlined in Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2017 BCCA 41.

The goodwill associated with familiar trademarks has commercial value, and companies such as Royal Pacific will not stand silent in the face of passing off. The Defendant passing off his goods and services as being endorsed by and associated with the trademarked name can be viewed as the unauthorized use of goodwill, and wrongful confusion of the public. While the trial judge only awarded nominal damages of $6,000 to the Plaintiff, an injunction restraining Mr. Dong from continued trademark infringement was also granted. The Court held that the Plaintiffs underwent considerable inconvenience, but that Mr. Dong hadn’t financially benefited from his conduct.

 

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Minority Shareholder Oppression Rights In British Columbia

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In the recent case of Canex Investment Corporation v. 0799701 B.C. Ltd., 2020 BCCA 231, the British Columbia Court of Appeal showed its flexibility in offering oppression remedies for wronged minority shareholders. The case involved exceptionally high-handed conduct by the two directors of Canex Investment Corporation (“Canex”), leading to their personal financial gain at the expense of the minority shareholder Plaintiffs. Neither Canex nor its minority shareholders benefited from the $500,000 loan taken out and secured by Canex’s properties, rather, the loan was used to finance a related company (Flame Engineering & Construction) controlled by the Defendants. Further, the Defendants falsified financial records related to the Flame Engineering loan, manipulated Canex’s records to reduce the Plaintiffs’ investment through charging excessively high interest and management fees, and advanced arguments which Justice Harris termed as “bogus”.

Section 227 of the Business Corporations Act allows shareholders to apply for remedies when they’ve suffered harm that is typically, but not necessarily, separate from the harm suffered by the corporation as a whole. The remedy granted in this case was the return of the minority shareholders’ initial investment plus interest. In addition, the Court of Appeal found that punitive damages of $100,000 were appropriate, considering the egregious conduct of the Defendants. While the Defendants tried to assert that a derivative rather than an oppression action ought to have been brought by the shareholders, meaning that the Plaintiffs would have additional hurdles in order to obtain financial relief, the Court held that the oppression action was supported. Typically, if harm has been done to the company itself, a derivative action is appropriate. Oppression actions are brought when harm has been done to individual shareholders. But the Court held that the remedy of oppression will not be limited by mere corporate structure, and that the substantive reality of how a company is operated, instead of the legal from, is what matters.

On appeal, the Defendants argued that the trial judge had failed to recognize the formalities of corporate governance when imposing personal liability on the Defendants as directors. But based on the Defendants’ wrongful conduct and taking financial advantage, personal liability had to be imposed despite the separate legal personality of Canex as a corporation. Further, one of the Defendant’s personal liability survived beyond her declaration of bankruptcy because the fraud was committed while acting in a fiduciary capacity. While directors typically only owe fiduciary duties to a company itself rather than individual shareholders, the Court recognized the reality of this closely held corporation. Here, the two shareholders were in a special relationship of trust and dependency with the directors; the directors were expected to manage the company’s financial records honestly and in good faith, yet breached those duties. The Court brought home its disapproval of the Defendant’s oppressive conduct by imposing punitive damages. These types of damages are appropriate when conduct is so high-handed or malicious that it offends the Court’s sense of dignity. Particularly relevant for closely held corporations such as Canex, this case highlights the Court’s willingness to offer expanded remedies to minority shareholders based on the substantive conduct that occurred, and to turn down arguments based on technical corporate structure.

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Is a Strata Corporation Able to Disallow Residents Under a Certain Age?

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Strata corporations (“stratas”) are legal entities with all the powers of natural persons at full capacity. They’re often created to divide buildings and/or parcels of land into individually owned pieces, while the common land and amenities are owned together. Stratas have certain responsibilities under the Strata Property Act and Regulations, including being responsible for common expenses and disclosing Rules and Bylaws which apply to occupiers. Stratas also have the power to provide Bylaws for the management and use of the lots, including prohibiting occupants under certain ages.

Age is not a protected ground of discrimination under the Human Rights Code in the context of property purchases, but race and gender, among other factors, are included. Stratas have the power to disallow would-be owners who are not of a certain age. The Human Rights Code gives broader protection covering age-based discrimination to tenants, as opposed to owners. Stratas may only require that tenants be at least 55 years of age. They cannot require, for example, that tenants be at least 19 years of age, but the strata could require that owners be at least 19 years of age. Individuals who resided within the strata before the time that an age restriction bylaw was passed are considered ‘grandfathered’ in and may continue residing despite the new provision.

Age-based requirements can occasionally make it challenging for young families to find housing for purchase, but the Condominium Homeowners Association of BC reported that buildings with 19-plus age restrictions represented only a small portion of the overall market. Affordable and accessible housing is a developing area and age-based provisions may undergo further legislative reform in the future.

 

 

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