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Joint Bank Accounts and the Presumption of Resulting Trust in Estates

Written by Krystin Kempton, Associate

Joint tenancy is a form of ownership by two or more parties. In general, full ownership of assets held jointly passes to the surviving joint owner by operation of the right of survivorship when one owner dies. For example, if married couple Bob and Mary have a joint bank account and Bob dies, Mary is now the sole owner of that bank account. However, the right of survivorship does not always apply and there may instead be a presumption of resulting trust. The determination of true joint tenancy is dependent on the relationship of the parties and the circumstances in which joint ownership is created. In Pecore v. Pecore, 2007 SCC 17, the Supreme Court of Canada confirmed that the presumption of resulting trust applies to a gratuitous transfer from a parent to an adult child, such as adding a child to a bank account without the child providing money or other consideration to the parent for that asset. It is presumed that the bank account was not intended to be gifted to the child – although legal title passes to the child, the beneficial owner is the parent alone. After the parent’s passing, the child is presumed to hold that asset in trust for the parent’s estate.
The presumption of resulting trust places the onus on the adult child added as a joint owner to that asset to prove that it was in fact intended to be a gift. There are a number of factors courts will consider when determining the actual intention of the transferor and deciding whether the presumption of resulting trust has been rebutted. A non-exhaustive list of factors courts consider include evidence of the deceased’s intention at the time of the transfer, bank documents, control and use of the funds in the account, whether a power of attorney was granted and the tax treatment of joint accounts. Unless the child provides sufficient evidence to rebut the presumption on a balance of probabilities, the asset is treated as an estate asset and is distributed in accordance with the terms of the deceased’s Will or, when there is no Will, in accordance with sections 20-24 of the Wills, Estates and Succession Act, SBC 2009, c. 13 (“WESA”). If you wish to rebut a presumption of resulting trust, we recommend you seek legal advice.
Often an elderly parent will add a child to his or her bank account to help manage day to day finances. If the parent intends for that account to pass to that child on death and not in accordance with the terms of his or her Will or in accordance with sections 20-24 of WESA, it is important that the parent execute a deed of gift or provide clear intentions in writing that the account is intended to be a gift to ensure that the presumption of resulting trust does not affect that gift. If the child has been added for convenience only and the elderly parent wishes for the account to be shared with all of his or her children on death, this should also be clearly expressed.
If you are the personal representative of an estate of a person who added a child as a joint owner to an asset, you will need to make inquiries as to whether the deceased intended the asset to be a gift to the surviving joint tenant(s) and not for the benefit of the estate (i.e., were bank accounts intended to be gifted solely to one child or to be distributed equally among all of the deceased’s children pursuant to their last Will or in accordance with sections 20-24 of WESA?). The personal representative ought to review any documentation which would demonstrate the deceased’s intent. If the presumption of resulting trust applies, the accounts will need to be listed as assets in the application for a Grant of Probate for the estate of a deceased.
While the presumption of resulting trust applies to gratuitous transfers from a parent to an adult child, there is a presumption at law that the right of survivorship applies to joint assets between spouses and between a parent and minor children.

August 2, 2017

Ademption – After all, it`s the thought that counts

Wills and Estates, Blog

Written by Andrew Powell, Partner

What happens when a will promises that a specific asset goes to a beneficiary– but after the will-maker has died, it is discovered that the asset doesn’t exist?

For items of personal property, this is a common occurrence. For instance, a father may leave his watch to his son, but it is later discovered that he actually gave the watch to somebody else several years prior to his passing. In those circumstances, the gift is said to have “adeemed”, and is simply void, presumably much to the irritation of the son. The fact that the father, the will-maker, had made a decision to dispose of the property during his lifetime is deemed to be a revocation of the gift set out in his will.

The doctrine of ademption applies when any specific gift, at the time of the death of a will-maker, no longer exists, has ceased to conform to the description of it in the will, or has been wholly or partially destroyed or otherwise disposed of. The doctrine applies regardless of the testator’s intentions in this matter: Wood Estate v. Arlotti-Wood [2004] BCCA 556. Ademption has two potential outcomes, neither of which amount to pleasant news for a beneficiary. First, as in the case with the father’s watch, if money or property has been spent or given away, then obviously there is nothing left to give to the beneficiary and the gift fails completely. Second, even if the money or property has only been altered – provided it has been altered so much that it no longer meets its description in the will – then the gift may also have adeemed. In the latter case whatever is left of the gift, in whatever form it is in, will form part of the residue of the deceased’s estate. The beneficiary it was intended for may get nothing, other than the warm feeling that they were mentioned in a will.

Trouble, and disputes, can arise when a gift identified in the will has not been completely altered or destroyed, but has only changed somewhat. For instance, a particular investment account may have been willed to a beneficiary, but in the time that passes between the will being written and the estate being administered, that investment account may have been diminished, added to, moved, or combined with other accounts.

The Courts have found that, if funds can be traced, then the gift will not necessarily fail just because it no longer exists in the precise form it had when the will was written. For instance, if a bank account has been closed, and the funds moved to another institution, the Court may overlook the fact that the particular asset described in the will (ie, the original bank account) no longer exists, because the intention of the testator was clearly to make a gift of the contents of that bank account, and those contents are still ascertainable and are substantially the same as the thing described. The same type of analysis can apply if a deceased person had described a certain asset which was later liquidated by the deceased – provided that the proceeds of that liquidation were kept distinct and separate from the rest of the deceased’s assets while the deceased was still alive.

But, in cases where money has been mingled with other money, and those combined monies are drawn down by the Deceased during his or her lifetime, then there has been an “appropriation” of the whole amount without differentiation, and the co-mingled monies are all subject to ademption: Wood Estate (supra); Re Stevens [1946] 4 D.L.R. 322 (NSSC).

When disputes of this nature arise, it can be important to determine whether the gift in the will was “specific” (in which case, if the specific description no longer applies, the gift would fail), or “general” (for example, a gift of money regardless of its source, which would never fail provided there is enough money to cover it from somewhere in the estate).

Under section 59 of the Wills, Estates and Succession Act, in British Columbia it is possible to apply to rectify wills in some circumstances, including when the will fails to carry out the will-maker’s intentions. Where there is the threat of ademption, it may be that this section can provide the will’s beneficiary with a remedy, providing it can be proven that the will-maker’s genuine intention to provide a gift to a beneficiary is being frustrated by an overly restrictive, technical, or outdated description of the asset.

July 13, 2017

Commercial Arbitration

Litigation, Blog

Written by Kent Burnham, Partner
Many Contracts have a clause that says that disputes shall be resolved by arbitration and then make reference to the British Columbia Commercial Arbitration Act. If this clause exists, or if the parties agree, the parties are able to have their dispute resolved by way of arbitration without the necessity of going through the entire Court process.
Arbitration is, essentially, a private judicial process whereby disputes are resolved by an appointed Arbitrator instead of a Judge. The Arbitrator’s decision is in accordance with established law.
In its simplest description, arbitration is effectively hiring a private judge to hear the dispute and make a binding decision. It can be much more complex than that as the parties can agree on the extent to which the Rules of Court apply, how much or how little evidence will be given by way of written statements, oral evidence, the extent of cross-examination, or even how rigidly the Rules of Evidence will apply. The parties can incorporate other rules or values upon which they agree or by which their business, trade, or profession is governed. The Arbitrator assists the parties in agreeing to the parameters by which they will resolve their dispute. Once they are agreed upon, the process is very similar to the usual Court process with the parties presenting their cases, being submitted to cross-examination or some other test of the evidence, each party having an opportunity to present their argument, and then the decision being rendered by the Arbitrator.
Arbitral awards can be subject to appeal, or the parties can agree to have the one decision be final.
If there is improper conduct on the part of the Arbitrator, it is always reviewable by the Courts and, as a general rule the Courts have the jurisdiction to review decisions where there has been an error in law.
Arbitration is not inexpensive. It is, however, more accessible to the parties and can be structured in such a manner as to proceed more quickly than matters would through the Courts. It allows for the parties to select a decision maker (the “Arbitrator”) or a panel of decision makers (the “Tribunal”) in whom they have confidence and who have special knowledge of the kind of claim being arbitrated.
With the increasing costs of litigation and the inaccessibility of the Courts due to overbooking and too few judges, arbitration is an option that should be considered to resolve commercial disputes. It permits a flexibility unknown to the Court and allows resolutions to be fashioned in a matter that best serves the parties’ interests. Properly prepared and organized, the Rules of Court and Rules of Evidence can be utilized to their best advantage and a decision maker selected that provides consistency and predictability.
If you are involved in a legal dispute, consider and discuss the possibility of resolving it through arbitration with your lawyer.

May 8, 2017

Distracted Driving Now Exceeds Impaired Driving in Vehicle Accidents and Deaths

Blog

Written by Michael Yawney, Q.C.

To help combat a move towards a no fault tort regime, the Trial Lawyers Association of BC, has started a campaign to promote more awareness around distracted driving and how it today is a significant cause of accidents throughout North America.
The Trial Lawyers Association of BC, alongside community groups and professional associations from across the province, launched a public awareness campaign called the BC Coalition to End Distracted Driving.

This recent news headline and article are an example why the TLABC and its members are taking a stand against distracted driving.

“A 20-year-old in Texas killed 13 people because he chose to text while driving” http://news.nationalpost.com/news/world/truck-driver-20-said-im-sorry-i-was-texting-after-collision-that-killed-13-witness

Distracted driving is becoming a huge problem and one that is costing lives. It is now responsible for more motor vehicle deaths than drunk driving.

While distracted driving is responsible for countless serious crashes and devastating injuries every year, it is also driving up everybody’s insurance costs through the everyday fender benders that are caused by people thinking it’s okay to check their phones while driving in traffic. When society finally decided it was not “okay” to drink and drive and there was a significant social stigma attached to it (coupled with harsher penalties), drunk driving rates and fatalities went way down. We want the same thing for distracted driving.

As an active TLABC Board of Governor, I encourage you to please check out the website http://distracteddrivingkills.ca/ and have a look through some of the stories from people who have been affected first hand by distracted driving. Please also sign up for the email list and like it on Facebook https://www.facebook.com/distracteddrivingkills.

Share the message with as many people as you can. The broader the message can be spread, the better.

April 7, 2017

Employers Beware: Is it an Employee or a Contractor?

Employment Law, Blog

Written by Andrew Powell, Partner

In many businesses, the owners attempt to avoid employee issues altogether by just not using them. They say, “I don’t have any employees. I use contractors.” To which, as lawyers, we generally say “are you sure”? because quite often, perhaps even usually, they are wrong. Hence, one major area of surprise liability for an employer is when they wrongly identify an employee as an independent contractor.
There are many reasons that an employer might want to use independent contractors instead of employees. For one thing, the Employment Standards Act doesn’t apply to contractors, so you can be freer with work hours and overtime and holiday pay. There are also tax reasons on both the part of the employer and the worker that make a contractor-type relationship more attractive: as an employer, you are responsible for withholding taxes and remitting them, and also for making payroll deductions – but if you use only independent contractors, you can pass that responsibility on to the worker by having them simply submit an invoice and pay them like they are an independent business. The employer doesn’t have the administration headache, and the worker can get all sorts of benefits too, such as the ability to write expenses off against their “business” income.
But beware! There are enormous issues with this structure, and you have to be extremely careful.
First: the Canada Revenue Agency is very skeptical by nature. Your business will likely be subject to audit from time to time, and contractor status is an issue where the CRA likes to shine a very bright light. You can insist up and down that your worker is a contractor, but it won’t matter. If it is determined that the worker is an employee and not a contractor, then all the remittances that were not made will suddenly need to be made, and not by the employee, but by the company. The liability for this is very real, and can be quite significant.

Next: provincially, the Employment Standards Branch is also very skeptical. A contractor may well change his mind about his status, especially if his contract ends. If for some reason, whatever reason, the worker decides that they want to take advantage of some provision of the Employment Standards Act, then that worker can file a complaint with the ESB. If the ESB determines that the contractor is in fact an employee, then the Act and all its regulations will apply, and you can be subject to penalties and orders for violating hours of work or overtime or any other of a number of things, all in one sudden retroactive flash. You may also be responsible for providing back pay – to someone you thought was an independent contractor.

Third: Courts are very skeptical. If the relationship ends (and eventually, for some reason, it will) the Courts will look at a contractor status and see right through it like it was a piece of stretched plastic wrap . It is such a standard question that the Courts may not even bother going through a detailed analysis: they can just say, “dependent contractor”, and your company can be liable for employee rights, including severance or notice periods at common law.

So, at the end of the day, if you are going to have “contractors”, make sure they are actually independent contractors. There are well established indicators for spotting true independent contractors:

              – Do they own their own tools?
              – Do they control their own schedule?
              – Can they hire or fire someone to help them do their work?
              – Do they have a chance of profit or a risk of loss?
              – Can they, and do they, work for other businesses?
– And, basically, if you sniff this relationship, does the worker smell like an employee or a contractor?

Look at it like an outsider and decide. If you are using a contractor status as a favour to an employee, then on behalf of your Company, think again. The administrative savings to your business are likely not worth the risk. If someone works for you, and only you, then you are better off to just call the relationship what it is: employment.

March 31, 2017

How to Choose a Personal Injury Lawyer

Blog

Written by James Cotter, Partner

If you or your loved ones are injured in an accident, the need for legal advice often arises. Bringing a claim for damages arising from a motor vehicle accident can be complicated, and in many cases you will need the expertise of a lawyer to deal with the sophisticated insurance company.
It is stressful enough to have gone through a traumatic incident, however further stress can be incurred going through the process of selecting a lawyer. Many people feel intimidated or stressed going to a law firm or even contacting a lawyer. In addition, there appears to be many lawyers in the marketplace wanting your business. It may come as a surprise to the reader to know that any lawyer can hang out his or her shingle and say that they do personal injury law. Any lawyer can put together a fancy website and place an ad in the yellow pages, on a billboard, or the local paper proclaiming that he or she will look after your interests. I am sure you have seen billboards along our highways on which law firms advertise personal injury law. But how do you tell which lawyers are the “real deal”.
As a personal injury lawyer with 20 years’ experience, I can tell you what I would do. Firstly, I would determine if lawyers in your region or community claiming to be a “ personal injury expert” actually have experience in the area. The lawyer should have years of experience doing this type of law, including trial experience. As I said before, any lawyer can hang out his or her shingle and say that they do personal injury work. Any lawyer can settle a personal injury claim without going to court, but you don’t want a lawyer who is afraid of the trial process. From my perspective, it is essential that a personal injury lawyer is someone with experience doing trials so that not only do they have the experience to understand the risks and the potential of your personal injury claim, but also that the insurance company that you are dealing with will know that the lawyer who is representing you will go to trial if a fair settlement is not reached. ICBC, for instance, tracks which lawyers go to trial and which ones just settle. Those lawyers who just settle are treated with less respect, as they know that it is likely the lawyer will likely accept a suboptimal settlement, rather than pushing the matter to trial.
Secondly, I would want my lawyer to be part of a team, with excellent support systems in place. By that, I mean the lawyer has other lawyers to help, and the law firm has deep resources that can be used for managing the case. As a personal injury lawyer, I find it invaluable to be part of the team of 6 lawyers at Nixon Wenger, whom I know will help me make tough decisions on claims, and will back me up if I need extra help on the claim. As well, when it is time to take the matter to trial, we have a policy of always assigning two lawyers to do the trial. It won’t cost the client more, as almost all cases are done on a straight percentage fee basis. From my perspective, you want a lawyer who is 100% committed and involved in your claim, and is not worried about time and resources put into the case.

Finally, and perhaps most importantly I would look for references or testimonials from past clients of that lawyer. In my experience, word of mouth and personal referrals continue to be the main way of attracting clients. By seeking out references, or reading testimonials, you can satisfy yourself as to whether the lawyer you are considering is really the “real deal”.

January 23, 2017

Understanding Estate Litigation

Wills and Estates, Blog

Written by Andrew Powell, Partner

There isn’t really a definition of estate litigation – mostly, it is just litigation that involves estates. Almost any kind of litigation can involve an estate. Estate representatives are allowed to start or defend actions that a deceased could have started or defended. On the other hand, sometimes the estate isn’t involved in the dispute at all: the dispute is over the estate. It is a misnomer to say an estate itself is involved in litigation – an estate is not itself a legal entity. An estate is just a collection of stuff – money, land and personal property – that once belonged to a Deceased person.
Very broadly, estate litigation can be slotted into five broad categories.

1. The Will is Invalid
Chances are strong that if there is a will, it is a valid one. The deceased had to go to a lawyer or notary who would assess their capacity, and take instructions, and then have it signed and witnessed. In particular cases, however, there may be a serious question as to whether a will is valid.

The action to have a will declared valid is called proving the will “in solemn form”. The action proceeds like a normal Supreme Court action and the evidence has to call into question, for instance, the capacity of the person, or whether there was undue influence, or whether the will is otherwise legally problematic.

Also, there may be a question of whether the will comprises a violation of an agreement made between the deceased and another person, usually another deceased person. If, for instance, the deceased person had made mirror wills with a spouse, and there was a term that the wills were irrevocable and expressed the joint desires of both parties, then they create a testamentary contract so if one spouse dies, the surviving spouse is no longer free to dispose of all of her property as she sees fit. Any will that is drawn up after that would be invalid, because the property wasn’t hers to give away except as per the terms of the original will.

If a will is invalid, then the estate may be distributed based on a previous will, or the estate may go by way of intestacy.

2. The will is unfair
This is probably the most common type of actual estate litigation, and it occurs when a spouse or child feels that they have not been remembered appropriately by the Deceased. Taking an example from folklore, assume that a miller had two sons. In his will, he left his mill to his first son and to his second son he left only his cat. All other things being equal, the second son would very likely have a strong claim that he was treated unjustly, and would have a case to vary his father’s will. (Of course, in that story, as it turned out, the cat was far more valuable than the mill.)

There is a statutory cause of action under the terms of the Wills, Estates and Succession Act (or “WESA”). WESA provides that a spouse or child of a deceased person can, even where a will is valid, challenge it because it violates a legal or moral duty owed to that spouse or child.

3. The will is irrelevant or non-existent
Not all property devolves by will. Sometimes people go to great lengths to avoid having property pass within their estate by creating trusts or jointures. Litigation can frequently arise when you have someone who would have been a beneficiary discover that property or accounts owned by the Deceased were put jointly into the names of the Deceased and some other sibling years previously. That potential beneficiary may well complain that the joint interests created were not an honest-to-goodness transfer of title, but were only a transfer of the legal interest, and the now-hated sibling actually holds the property or account in trust for the estate.

This is often a two-prong problem – anyone who transfers property in this way may also have disinherited the unfortunate plaintiff. So the plaintiff would have to bring a trust claim and a wills variation claim at the same time.

4. The will is incomplete or imperfect
A major problem with estate litigation is that the one person who would be the perfect witness to explain or interpret the will is no longer available to testify. But what if the solicitor drawing the will misunderstood instructions? What if something was left out? What if the testator changed his mind but that change of mind isn’t reflected in the will?
WESA introduced a new chapter in the ability of Courts to tweak imperfect wills. That act has provisions which govern the correction (or “rectification”) of wills, and also recognizes other documents, videos, emails, letters, or notes on napkins as testamentary documents that can become part of a will. Also, the WESA provides litigants the ability to bring the solicitor’s file into evidence, open it up and see if the will truly reflects the instructions of the testator.

5. Other
There seems to be no end of ways that people can get into fights when an estate is in the balance (and usually paying the bills). Other common ones are cases where one party claims that another is not fit to be an executor, or where a party appears and claims to be the spouse of the Deceased, much to the surprise of other parties. Disputes can develop over ill-defined beneficiaries or where beneficiaries cannot be located, over property whose value changes in different circumstances, over mistakes made in the management of an estate, and more. Estate litigation is a complex and growing area where both emotions and stakes can run high.

December 7, 2016

Preparing to Transition Under the New Societies Act (B.C)

Business Law, Blog

Written by Krystin Kempton, Associate.

The new Societies Act comes into force on November 28, 2016. All societies in British Columbia will have two years to transition under the Societies Act or face dissolution. To transition, a society must submit a transition application, which contains the society’s updated constitution and bylaws (as prescribed by the Societies Act and described below) along with a statement of its directors and registered offices. The Society will need to consider whether to identify itself as a “member funded” society, as discussed below. The transition application is submitted online through the BC Registry Services website.

Constitution and Bylaws under the new Societies Act

The content of a society’s constitution will be limited under the Societies Act. Each society will need to prepare a version of its constitution that consists of nothing but the society’s existing name and purposes, word for word as it appears in the society’s constitution on file with the Corporate Registry. Any provisions of the existing constitution other than the society’s name and purposes must be relocated to the society’s bylaws.

The society will need to prepare a complete set of its existing bylaws in consolidated form, including any amendments to the original bylaws that have been filed with the Corporate Registry. The provisions of the constitution, other than the society’s name and purpose, must also be added to the bylaws, without alteration. Any provisions from the constitution currently identified “unalterable” for a society must now be identified as “previously unalterable”.

Alternatively, a society may wish to prepare a new set of bylaws – either adopting the standard form of bylaws under the Societies Act or tailoring the standard bylaws to fit the needs of the society. Preparing to transition is a good opportunity to clarify or refine provisions. However, if the society adopts new bylaws on transition, it cannot change or delete any of the “unalterable provisions” that were in its constitution. Those must be added in, without alteration, to the new bylaws and identified as having been “previously unalterable”. Once the society has transitioned, it can then alter previously unalterable provisions by complying with the Societies Act bylaw amendment procedures.

Procedure for Transitioning

A society does not need to have a general meeting and a vote in order to reorganize its constitution and bylaws if it is simply moving provisions from the constitution to its bylaws, marking certain provisions as having been previously unalterable, and consolidating its bylaws.

If the society adopts new bylaws or amends its bylaws (other than adding the provisions shifted from its constitution and marking them as previously unalterable, or consolidating its bylaws), the members of the society must approve the bylaws or the bylaw amendments by a special resolution. What constitutes a special resolution will vary depending on the society’s bylaws.

In the transition application, the society will be asked whether it wishes to designate itself as a “member funded society” by including a statement to that effect in its constitution. A member funded society is funded primarily by its members to carry on activities for the benefit of its members (i.e., sports clubs, golf courses and professional associations). Member funded societies have modified standards applicable to them under the Societies Act. The members of the society need to authorize this designation by a special resolution.

Finally, the directors and registered office information must be updated. The society must also be up to date with annual reporting in order to transition.

There is no filing fee payable to transition under the Societies Act.

November 14, 2016

Your Local Legal Experts

In the Community, Blog

When you need the services of a lawyer, what motivates you to choose a specific law firm?
At Nixon Wenger we have been committed to providing exceptional legal service to the North Okanagan and beyond. We pride ourselves on being a law firm that can assist with the everyday issues of the people in our community, from preparing wills and conveyancing real estate to advising multi-national corporations with complex transactions or litigation.

Watch our recent promo video below and see how Nixon Wenger can be your firm.

We are your local legal experts.
Choose local, choose experience, choose Nixon Wenger.

November 8, 2016

Glover v. Leakey: Mistrial, ICBC Abuse of Process

Personal Injury, Blog

Written by Mike Yawney, Partner.

Senior Litigation partner Michael Yawney and associate Ryan Irving recently obtained an interesting decision in a case called Glover v. Leakey. In that case, the Defendant was involved in a crash and injured two passengers. One sued and fault was specifically admitted; only quantum was then in issue and that issue was settlement. The second passenger was our client, Ms. Glover, she also sued, but fault for the accident was specifically denied. Both claims were defended by ICBC.
In the midst of a two week jury trial Mr. Yawney and Mr. Irving discovered the inconsistent pleadings and brought an application claiming that this was unfair and amounted to an abuse of process, asking for a directed judgment on liability. The application was heard and the decision on abuse of process deferred, by agreement with counsel and the judge. This apparently was misunderstood by defence counsel. Due to the apparent misunderstanding the matter proceeded to verdict on liability and the jury found the Defendant was not negligent. Before the order was entered the Court considered the matter and found that the liability denial was an abuse of process, set aside the jury verdict and granted judgment on liability in favour of the plaintiff. In reaching this result Madam Justice Gropper provided the following reasons:

[67] In considering my analysis of this application, I must note that the Insurance Corporation of British Columbia (ICBC), the Province’s public mandatory motor vehicle insurer had conduct of both the Glover and the Yeomans actions. The evidence provided is sparse, but it is clear that the adjuster in the Yeomans Action determined that liability would be admitted on behalf of Mr. Leakey whereas the adjuster in the Glover action determined that liability would be denied. I expressly find that ICBC knew of the inconsistent pleadings and that the insured, Kenneth Leakey knew or ought to have known of the inconsistent positions.

[68] Courts retain jurisdiction to dismiss actions that are an abuse of process where the principles such as judicial economy, consistency, finality and the integrity of the administration of justice will be violated. This doctrine is flexible and the categories of abuse of process are open. In my view, the defendant’s inconsistent positions on liability offend all these principles which are fundamental to our system of law.

[69] Before this action was filed the defendant admitted liability for the subject accident in the Yeomans Action. He obtained the benefit of settlement with that defendant. It cannot be open to him to re-litigate something that he already conceded in the Yeomans Action. That offends the principle of judicial economy, unnecessarily expending the resources of the justice system and in this particular instance it is more egregious as the case called upon the wisdom of the community in the form of jurors. It is also contrary to the principle of finality to permit something that has been admitted to be re-litigated.

[70] Consistency is also compromised. A position that Mr. Leakey is on one hand negligent but on the other not negligent cannot be anything but irreconcilable and inconsistent. The only distinction in the pleadings is that in the Yeomans Action the defendant asserted that Ms. Yeomans failed to properly adjust and securely fasten her seatbelt. That does not alter the bare fact of the defendant’s negligence.

[93] The defendant claims that to find these pleadings as inconsistent and an abuse of process will discourage admissions, contrary to public policy. I find that there is much larger public policy at stake. It is an abuse of process to allow a defendant to admit liability in respect of one passenger and deny liability in respect of the other where there are no facts to distinguish the two. Requiring a party, even ICBC, to file consistent pleadings is not onerous and, with respect, is a principled way to proceed. The pleading of inconsistent positions in this case cannot be condoned.

[94] I have declared a mistrial in this case. It may appear that my decision on the abuse of process application is moot. It is not for three reasons:

1. A declaration of mistrial means that the matter will proceed to a new trial.
2. I grant judgment on the liability issue in favour of the plaintiff.
3. The plaintiff seeks special costs related to the abuse of process and has asked for leave to provide further submissions in that regard.

[95] Both parties may seek to appear to address the issue of special costs based on my finding of an abuse of process.

This decision is an important one in terms of ensuring more fairness to injured Plaintiffs bringing claims. It is also important in terms of the cost of this type of litigation; putting more onus on insurance companies like ICBC to fairly adjust and settle claims, rather than playing fast and loose with the truth. Extra court days, preparation and costs had to be devoted to dealing with the issue of liability when the Corporation had already accepted that it’s insured defendant was responsible for causing the subject accident. In a time where insurer’s like ICBC pay for ads that like to promote blame against claimants for rising claims costs, this case demonstrates that it is in fact ICBC that conducts itself in a way that adds unnecessary costs.

The Nixon Wenger legal team will be applying for special costs against the defendant and his insurer as ordered by Madam Justice Gropper; that decision will be an interesting one as well.

October 28, 2016