Pavlovich v. Danilovic

2020 BCCA 36 Pavlovich v. Danilovic

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Pavlovich v. Danilovic, 2020 BCCA 36 Date: 20200117 Docket: CA45939 Between: Ljuba Pavlovich Respondent (Plaintiff) And Alexander Gordon Danilovic Appellant (Defendant) Before: The Honourable Madam Justice DeWitt‑Van Oosten (In Chambers) On appeal from: An order of the Supreme Court of British Columbia, dated February 11, 2019 (Pavlovich v. Danilovic, 2019 BCSC 153, Vancouver Docket S158302). Oral Reasons for Judgment Counsel for the Appellant: J.M. Richter A.M. James Counsel for the Respondent: R.D. Bellamy Place and Date of Hearing: Vancouver, British Columbia January 17, 2020 Place and Date of Judgment: Vancouver, British Columbia January 17, 2020 Summary: The appellant applied to file an amended factum and supplementary appeal book, as well as to adjourn the hearing of the appeal. Held: Application allowed. The additional issue raised by the appellant stems from recent developments in the case law, was raised in the court below, and likely can be addressed on the already‑established factual record. An adjournment of the appeal carries little prejudice. [1] DEWITT‑VAN OOSTEN J.A.: The appellant, Alexander Danilovic, seeks three orders: (1) leave to file an amended factum; (2) leave to file a supplementary appeal book that includes the closing submissions at trial; and (3) an adjournment of the hearing of the appeal (scheduled

for January 22, 2020). [2] The appellant has also filed an application to adduce fresh evidence at the appeal; however, that application is not before me. Instead, it will be determined by the division that hears the appeal on its merits. Background [3] The appeal arises out of a dispute between the parties about their respective entitlement to beneficial interest in two residential properties purchased by the parties' parents, both of whom are now deceased. [4] After the mother's death, and at separate times, each of the properties was made the subject of a joint tenancy between the father and the appellant, Mr. Danilovic. I understand that the second of these transfers was executed solely by the appellant, relying on a power of attorney provided to him by his father that allowed the appellant to transfer the father's assets to himself. The father passed away and died intestate (a will has not been located). If the joint tenancies effected a transfer of the entire legal and beneficial interest in the properties to the appellant, including rights of survivorship, the properties would not form part of the father's estate for division amongst any deemed beneficiaries. [5] It is Mr. Danilovic's position that he is entitled to full legal and beneficial ownership of the properties and that his father intended such to be the case at the time the transfers were made. Ljuba Pavlovich,

the appellant's sister and respondent in this matter, contends that the appellant holds the properties in trust and she is entitled to a share of their value equal to that of any other deemed beneficiaries, including (but not limited to) the appellant. [6] The dispute between the siblings went to trial: Pavlovich v. Danilovic, 2019 BCSC 153 ["Trial Reasons"]. The trial judge rejected the respondent's submission in favour of an express trust. However, she found that the transfers into a joint tenancy with the appellant were "gratuitous" and, as such, subject to a rebuttable presumption of resulting trust. The judge further found that the appellant did not displace that presumption on the evidence. The judge could not determine the father's intention on a balance of probabilities. Instead, the "evidence [stood] in equipoise" (at para. 55). In light of this conclusion, and by operation of the presumption, the judge declared that the appellant holds both properties on a resulting trust for the father's estate (at para. 56). [7] The appellant seeks to overturn the judge's ruling. In his factum, filed May 31, 2019, he raises one ground of appeal, namely, that the judge committed palpable and overriding error in concluding the appellant failed to rebut the presumption of a resulting trust. [8] The ground of appeal has three components. Specifically, the appellant contends that the

judge: (1) failed to consider testimony provided by the appellant's spouse on the father's intention in transferring the properties; (2) failed to consider documentary evidence consistent with the appellant's position; and (3) speculated about the transfer of the properties reflecting an intentional financial strategy that was "aimed at saving the family money in probate". Appellant's Application [9] The appellant's notice of motion, brought on December 20, 2019, seeks to file an amended factum that adds an additional argument in support of his appeal. [10] In particular, he asks for leave to advance the proposition that the trial judge erred in law by limiting her analysis on the father's intention at the time of the impugned transfers to whether the father intended that the appellant receive beneficial ownership of the properties. The appellant says the judge should have also considered, as a separate possibility, that the father intended to transfer an immediate legal interest, retain beneficial ownership during his lifetime, but give the appellant a right of survivorship that would entitle him to full and exclusive beneficial ownership of both properties upon the father's death. The appellant says the trial judge failed to appreciate that a right of survivorship is a distinct right accompanying a joint tenancy. [11] The additional ground of appeal has been brought forward

seven months after the appellant filed his factum. The hearing of the appeal is less than a week away (as noted, it is scheduled for January 22). The appellant appreciates that the request to amend is late in the day; however, he says it is based on two decisions that were released after he filed his factum, one of which is this Court's decision in Herbach v. Herbach Estate, 2019 BCCA 370 (released October 11, 2019). The appellant says the case clarifies, at para. 24, that a transfer of property into joint tenancy may consist of an immediate grant of a legal interest and a beneficial right of survivorship, even though the transferor retains beneficial ownership of the property during their lifetime. With this kind of an arrangement, full beneficial ownership of the property vests in the joint tenant upon death. [12] The appellant says that Herbach and a decision out of the British Columbia Supreme Court (Petrick v. Petrick, 2019 BCSC 1319) raise a critical point that should have been considered by the trial judge on the evidentiary foundation before her. She did not do so and the appellant contends that as a result, the judge applied an incomplete legal test in deciding whether the evidence relied upon by the appellant was sufficient to rebut the presumption of a resulting trust. She could have found that the presumption had been rebutted, even though not satisfied of proof of

an intention to transfer beneficial ownership of the properties to the appellant at the time the relevant documents were executed. [13] In fact, the appellant intends to argue that this is the only logical conclusion the trial judge could have reached. She accepted that the father "organized his affairs including his property holdings so as to minimize his tax obligations" on death: Trial Reasons at para.

47. She also found that his actions in doing so were informed by an understanding of the legal consequences of a joint tenancy, based on his assumption of full legal and beneficial ownership of the impugned properties when his wife died many years prior (at para. 47). This would have included a right of survivorship. In light of the judge's findings, the appellant says that her conclusion about the evidence not rebutting a presumption of resulting trust cannot stand. Had she turned her mind to the right of survivorship as a distinct right, capable of transfer at the time the joint tenancy was created, she would have had to have found that the father's intention must have been to transfer a right of survivorship in both properties to the appellant, consistent with the results of his own joint tenancy with his spouse. He would have understood that that was the route by which to keep the properties out of his estate and free from the related tax implications. [14] The respondent is opposed to the request to file an amended factum. Among other things, she cites MacMillan Bloedel v. Youell (1993), 23 B.C.A.C. 214, 43 A.C.W.S. (3d) 7 (B.C.C.A.) and Block Bros. Realty Ltd. v. Boese and Gonzo (1988), 24 B.C.L.R. (2d) 178 (C.A.), which stand for the proposition that a party should not be allowed to amend their factum shortly before the hearing unless it is beyond doubt that all factual

issues relevant to the new issue were before the trial court (see para. 12 of MacMillan and para. 3 of Block Bros.). The respondent argues that in this case, it cannot be said that all factual issues relevant to the proposed amendments were before the court. To the contrary, the respondent says the issue now sought to be raised is closely entwined with the fresh evidence that the appellant seeks to introduce at the hearing of the appeal, making the point that the appellant cannot substantiate the additional alleged error in the absence of a buttressed evidentiary record. [15] After hearing submissions from both sides, and reviewing the application materials, I am satisfied it is in the interests of justice to grant the appellant leave to amend his factum as requested; grant leave to file a supplementary appeal book with the closing submissions from trial; and adjourn the appeal to ensure that the respondent has sufficient opportunity to respond to the amended factum. In light of this ruling, if the respondent considers it necessary to amend her factum to respond to the new ground of appeal, she has leave to do so. [16] In my view, the additional argument likely can be resolved on the factual record established in the court below, although, ultimately, that will be for the division to determine. The issue is not dependent on the admission of the fresh evidence. This is not a

situation akin to Shannon v. Gidden, 1999 BCCA 461 (Chambers), for example, in which leave to file an amended factum was denied because an entirely different body of evidence was required to properly assess the newly found challenge to the judge's ruling (at para. 6). A central issue at trial in this case was the father's intention at the time of the impugned transfers. Considerable evidence was called on that point, including the history involving the two properties, the father's involvement with the properties, and the effect of his spouse's death on his beneficial ownership of those properties. [17] The judge made specific findings in that regard. The additional legal argument in support of overturning the trial judgment can likely be assessed with reference to those findings, within the context of the reasons as a whole. I agree with the appellant that on the face of it, the supplemental issue is more legal in nature than it is factual and, consistent with the approach taken in MacMillan at para. 13, I am reluctant to deny the appellant an opportunity to advance an issue of that nature. In response to his sister's notice of civil claim, the appellant pleaded that the father intended to "gift an undivided one half interest" in both properties to the appellant. This pleading is broad enough in scope to include the argument now raised by the appellant. I am also satisfied,

based on the closing submissions, that the right of survivorship was addressed by both parties before the trial judge. It was a live issue at trial. [18] The orders sought by the appellant are discretionary. The appeal was filed in March 2019, less than a year ago. The January 22 date is the first hearing date for the appeal and I understand that if adjourned, there is time available for hearing in February and March. In fact, I have been advised that the parties have spoken of a new date and counsel agree the appeal could be heard on March 24. As such, an adjournment will not result in considerable delay. The appellant has provided a legitimate reason for the proposed amendments to his factum and request for an adjournment. I accept that clarity on the proper analytical approach for the assessment of a right of survivorship did not present itself to the appellant until October 2019, when Herbach was released. The proposed amendments to the factum have been articulated and the respondent has been aware of them since December. I do not consider the additional issue to be overly complex. In my view, the prejudice brought about by an amendment, the addition of the closing submissions (already known to the respondent), and a relatively brief adjournment of the appeal, is minimal. [19] The appeal is hereby removed from the hearing list for January 22, 2020, and adjourned generally. Counsel are to confirm March 24, 2020, as the new date as expeditiously as possible. [20] Costs on the application will be costs in the appeal. "The Honourable Madam Justice DeWitt‑Van Oosten"