Chan et al. v. Lee Estate et al., (2004) 205 B.C.A.C. 188 (CA)

• Judge: Newbury, Low and Levine, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: December 16, 2004
• Jurisdiction: British Columbia
• Citations: (2004), 205 B.C.A.C. 188 (CA);2004 BCCA 644

Chan v. Lee Estate (2004), 205 B.C.A.C. 188 (CA);

    337 W.A.C. 188

MLB headnote and full text

Temp. Cite: [2004] B.C.A.C. TBEd. DE.050

Margaret Chan and Maureen Fong (respondents/appellants by cross-appeal/plaintiffs) v. Gordon Yuen Lee, William Yen Lee and Gilbert Tong Lee, Executors of The Estate of Peter Wah Lee, and Gordon Yuen Lee, William Yen Lee and Gilbert Tong Lee (appellants/respondents on cross-appeal/defendants) and Yen Kam Lee (respondent/appellant by cross-appeal/defendant)

(CA030328; 2004 BCCA 644)

Indexed As: Chan et al. v. Lee Estate et al.

British Columbia Court of Appeal

Newbury, Low and Levine, JJ.A.

December 16, 2004.

Summary:

In 1964, Lee and his first wife transferred their class B, C and D non-voting shares in their company to their three sons and retained their class A voting shares. The sons became involved in the company. Lee's first wife died in 1969. Her will left her class A shares to Lee. Lee remarried in 1973 and died in 1996. His will left $50,000 to each of his two daugh­ters, divided his class A shares equally among his three sons and divided the resi­due equally amongst his wife and three sons. Lee's two daughters commenced an action, seeking a variation of his will on the ground that it failed to make just and equitable provision for them and unfairly favoured their brothers. The action was brought out­side the limita­tion period in s. 3(1)(a) of the Wills Vari­ation Act. Lee's widow argued that if the will did not provide prop­erly for the daugh­ters then it had also not made adequate provision for her. An issue also arose with respect to ownership of the B, C and D non-voting shares in the com­pany because it was dis­covered that various docu­ments prepared in connection with the 1964 transfer to the sons were unsigned.

The British Columbia Supreme Court, in a decision reported at [2002] B.C.T.C. 678, held that the sons were estopped from rely­ing on the defence that the action was statute barred. The court also found that the sons became the owners of the class B, C and D shares in 1964. The court concluded that one-half of Lee's class A shares and one-third of the residue of the estate would be adequate, just and equitable provision for each of the daughters and that one-third of the residue was appropriate for the widow.

The British Columbia Supreme Court, in a decision reported at [2003] B.C.T.C. 513, held that the sons' cost should not be paid from the estate and that given the sons' conduct, the daughters were entitled to special costs. The court declined to order the widow's costs payable from the estate and declined to award her costs against the sons. The sons appealed from the redistribution of the estate. The daughters cross-appealed from the find­ing that the class B, C and D shares had been transferred to the sons in 1964. The widow also cross-appealed.

The British Columbia Court of Appeal, Newbury, J.A., dissenting in part, allowed the sons' appeal to the extent of quashing the trial judge's order with respect to the dispo­sition of the class A shares. The court also allowed the widow's cross-appeal and ordered that Lee's will be varied to provide for the distribution of one-half of the residue to the widow and one-quarter to each daugh­ter. The daughters' cross-appeal was dis­missed. The court set aside the order of special costs made by the trial judge against the sons in favour of the daughters and substituted an order that the daughters recover their trial costs on Scale 3. The court also ordered that the widow recover from the residue of the estate her full costs of trial and her costs of both the appeal and her cross-appeal. Because of the divided success on the appeal, the court ordered that the sons and the daughters bear their own costs of the appeal and the daughters' cross-appeal.

Company Law - Topic 3371

Share transfer - Transfer - General - After Lee's death, his two daughters com­menced an action under the Wills Variation Act seeking a variation of his will on the ground that it failed to make just and equit­able provision for them and unfairly favoured their three brothers - It had ap­par­ently been accepted over the years that in 1964 Lee and his then wife had trans­ferred their non-voting shares in a com­pany to the three sons - However, owner­ship of those shares was a contentious issue at trial because it was discovered that various docu­ments in the company's records prepared in connection with the 1964 transfer were unsigned - The British Columbia Court of Appeal held that the trial judge did not err in finding that the sons became the owners of the shares in 1964 - The absence of signa­tures on the various documents did not over­come the presumption that arose from the positive evidence of the register of members and the belief of the family over the years that the transfer had been carried out - See paragraphs 32 to 35.

Estoppel - Topic 1164

Estoppel in pais (by conduct) - Representa­tion - By conduct - Course of conduct by litigant - Almost three years after Lee's death, his two daughters commenced an action under the Wills Variation Act, seeking a variation of his will on the ground that it failed to make just and equitable provision for them and unfairly favoured their three brothers - The action was brought outside the limitation period imposed by s. 3(1)(a) of the Act (six months from the date of the issue of pro­bate of the will) - The trial judge held that the brothers, who were also executors, were estopped from relying on the six month limitation period - The trial judge considered that the sons had led the daugh­ters to believe that they would address the unfairness or imbalance in the distribution of their father's estate, while at the same time they had stalled and put off the unin­formed plaintiffs whenever they could - The British Columbia Court of Appeal found no error in the trial judge's con­clusions - See paragraphs 29 to 31.

Family Law - Topic 6603

Dependents' relief legislation - General principles - What constitutes "adequate, just and equitable" - [See Family Law - Topic 6625 ].

Family Law - Topic 6625

Dependents' relief legislation - Persons entitled to relief - Widow - General - In 1964, Lee and his first wife transferred their class B, C and D non-voting shares in their company to their three sons and retained their class A voting shares - The sons became involved in the company - Lee's wife died in 1969 - Her will left $10,000 to each of their two daughters, but noth­ing to their sons - The resi­due of her estate, including her class A shares, was left to Lee - Lee remarried in 1973 and died in 1996 - His will left $50,000 to each of his two daugh­ters, divided his class A shares equally among his three sons and divided the resi­due equally amongst his wife and three sons - Lee's daughters sought a variation of his will, arguing that it failed to make just and equitable provi­sion for them - The trial judge concluded that one-half of Lee's class A shares and one-third of the residue of the estate would be adequate, just and equitable provision for each of the daugh­ters and that one-third of the residue would be appropriate for the widow - The British Columbia Court of Appeal quashed the trial judge's order with respect to the disposition of the class A shares - The court also ordered that Lee's will be varied to provide for the distribu­tion of one-half of the residue to the wid­ow and one-quar­ter to each daughter - The value of the shares gifted to the sons in 1964 could not have been substantial - The trial judge erred in treating the sub­stantial value of the com­pany at the date of Lee's death as the equivalent of a testa­mentary disposi­tion at the time of the 1964 transfer of the shares to the sons - The 1964 gift to the sons was also partially offset by the bequests to the daughters under their moth­er's will - The difficulty in this case was that, exclud­ing the class A shares, the estate assets were prob­ably not suffi­cient to rec­tify any im­balance - Lee's obligation to his widow took prior­ity - See para­graphs 63 to 68.

Family Law - Topic 6638

Dependents' relief legislation - Persons entitled to relief - Child - Adult children - [See Family Law - Topic 6625 ].

Family Law - Topic 6753

Dependents' relief legislation - Practice - Time for application - [See Estoppel - Topic 1164 ].

Family Law - Topic 6753

Dependents' relief legislation - Practice - Time for application - The British Colum­bia Court of Appeal held that estoppel could apply to disentitle a defendant from relying on a limitation period in the Wills Variation Act - See paragraph 29.

Limitation of Actions - Topic 1521

Estoppel - General - [See Estoppel - Topic 1164 ].

Cases Noticed:

Mann v. Minister of Finance, [1973] 4 W.W.R. 223 (B.C.C.A.), affd. [1974] 2 W.W.R. 574; 1 N.R. 514 (S.C.C.), refd to. [para. 13].

MacDonald. v. MacDonald Estate (1996), 21 B.C.L.R.(3d) 379 (S.C.), refd to. [para. 21].

Litwin Construction (1973) Ltd. v. Pan, Nicholson and Nicholson (1988), 29 B.C.L.R.(2d) 88 (C.A.), refd to. [para. 21].

Charles v. Insurance Corp. of British Col­umbia (1989), 34 B.C.L.R.(2d) 331 (C.A.), refd to. [para. 21].

Tataryn et al. v. Tataryn Estate, [1994] 2 S.C.R. 807; 169 N.R. 60; 46 B.C.A.C. 255; 75 W.A.C. 255, consd. [para. 24].

Morris v. Morris (1982), 41 B.C.L.R. 239 (C.A.), consd. [para. 26].

Swain v. Dennison, [1967] S.C.R. 7, af­fing. (1966), 54 W.W.R.(N.S.) 606 (B.C.C.A.), refd to. [para. 37].

Walker v. McDermott, [1931] S.C.R. 94, refd to. [para. 38].

Clucas v. Clucas Estate et al. (1999), 7 B.C.T.C. 154; 25 E.T.R.(2d) 175 (S.C.), refd to. [para. 41].

Erlichman v. Erlichman Estate (2002), 165 B.C.A.C. 115; 270 W.A.C. 115; 99 B.C.L.R.(3d) 26; 2002 BCCA 160, refd to. [para. 54].

Vielbig v. Waterland Estate et al. (1995), 54 B.C.A.C. 219; 88 W.A.C. 219; 1 B.C.L.R.(3d) 76 (C.A.), refd to. [para. 57].

Lee v. Lee Estate (1993), 84 B.C.L.R.(2d) 341 (S.C. Master), refd to. [para. 57].

Bowe Estate, Re, [1971] 4 W.W.R. 234 (B.C.S.C.), refd to. [para. 57].

Stiles v. Workers' Compensation Board (B.C.) (1989), 38 B.C.L.R.(2d) 307 (C.A.), refd to. [para. 58].

Wilcox v. Wilcox Estate et al. (2002), 174 B.C.A.C. 98; 286 W.A.C. 98; 8 B.C.L.R.(4th) 14; 2002 BCCA 5744, refd to. [para. 60].

Counsel:

J.B. Rotstein, for the appellants;

C.A. Millar, for the respondents, Margaret Chan and Maureen Fong;

C.N.L. Chui, for the respondent, Yen Kam Lee.

This appeal and cross-appeals were heard on October 26 and 27, 2004, at Vancouver, British Columbia, before Newbury, Low and Levine, JJ.A., of the British Columbia Court of Appeal. The judgment of the Court of Appeal was delivered on December 16, 2004, including the following opinions:

Newbury, J.A., dissenting in part - see paragraphs 1 to 62;

Low, J.A. (Levine, J.A., concurring) - see paragraphs 63 to 69.