eLaw

eLaw - Property & Succession Update | April 2017 - No. 86

The Law Society of Manitoba
Professional Education and Competence

eLaw Property & Succession Update

April 2017

In This Issue

Historical Adverse Possession and the Inconsistent Use Requirement: SCC
Capacity to Provide Instructions “Plain Enough”: MBQB
Gross Abuse of Trust Bars Equitable Relief: MBQB
Caveat Emptor is Alive and Well in Manitoba: MBQB
Neutral Third Party Needed to Advance Estate: MBQB
Administrator Ordered to Repay Estate: MBQB
Committee Expenditures Raise Questions: MBQB
Changes to Rule 74
Property Registry Notice and Directives
Report on Substitute Powers of Attorney: MLRC
Recommended Reading
Continuing Professional Development: LSM

Historical Adverse Possession and the Inconsistent Use Requirement: SCC

In Nelson (City) v. Mowatt, 2017 SCC 8, the Supreme Court overturned the BC Court of Appeal and upheld the original decision of the chambers judge that a four-year gap in possession of a BC property (from 1916 to 1920) was fatal to the historical adverse possession claim of the current claimants, owners of the adjacent lot. Although the Court of Appeal correctly held that the inconsistent use requirement forms no part of British Columbia law governing the proof of adverse possession, it erred by substituting its own findings of fact for those properly arrived at by the chambers judge, according to the Supreme Court. The SCC saw no error in the chambers judge’s application of the test for adverse possession (in particular from his seeming interchangeable use of the terms ‘possession’ and ‘occupation’), and noted that while an alternative finding on the issue of whether the possession was continuous was certainly possible depending on how the evidence was weighed, this did not present a basis for overturning the findings of the original fact-finder. The Court of Appeal erred, said the court, “by interfering with a factual finding where its objection, in substance, stemmed from a difference of opinion over the weight to be assigned to the evidence.” (para. 38) The court noted that in the context of historical adverse possession claims, the quality of the supporting evidence must merely be “as satisfactory as could reasonably be expected, having regard to all the circumstances” (para. 40), and in this case the chambers judge was “carefully attuned to the historical nature of the…claim and to its implications for the quality and availability of evidence.”

The issue of whether the inconsistent use requirement is properly applicable in other provinces “remains an open question subject to examination of their respective legislative histories, the wording of their particular limitations statutes, and the treatment of these matters by the courts of those provinces,” according to the court at para. 27.

These articles discuss the decision:

Nelson (City) v Mowatt : Don’t Apply the Inconsistent Use Doctrine in BC (and Don’t Meddle with the Trial Judge) - The Court

Top court revisits test for adverse possession – Lawyers Weekly

Capacity to Provide Instructions “Plain Enough”: MBQB

In Schrof v. Schrof et al., 2017 MBQB 51, a son who had a history of conflict with his family was unsuccessful in challenging the validity of three codicils to his mother’s will (removing him as a joint executor and completely disinheriting him), which he argued were made in suspicious circumstances and without the requisite testamentary capacity. Among the many allegations made were assertions that the testator’s lawyers did not meet their obligations in preparing and witnessing the documents, in assessing testamentary capacity, and in taking notes. The court found, however, that the medical evidence did not raise suspicious circumstances and that the more onerous duty on a lawyer taking instructions once suspicious circumstances have been raised (set out in Slobodianik) did not apply. Even if it had, the court was satisfied that the codicils had been executed with the appropriate degree of knowledge, approval and testamentary capacity. As a side note, the court also comments on the difficulty of hearing this type of case (involving factual disputes and credibility issues) as an application rather than an action, and notes that Rule 38.09 gives judges the discretion to refuse to proceed on the basis of an application and to order a trial.

Gross Abuse of Trust Bars Equitable Relief: MBQB

A son who abused his power of attorney over his mother’s affairs by using her credit and bank cards without her permission and moving into and renovating her home while she was hospitalised was denied equitable relief in Krawchuk v. Krawchuk, 2017 MBQB 47. The son argued that his mother had approved both the renovations and the manner in which her monies were expended, but the court was of the view that none of the expenses were legitimately incurred or in the mother’s best interests. The court dismissed the son’s application for a resulting/constructive trust in light of his “gross abuse of trust and abandonment of any sense of legal or moral duty” and ordered him to pay his mother $153,351.35.

Caveat Emptor is Alive and Well in Manitoba: MBQB

The court dismissed an action for damages for misrepresentation in the purchase and sale of a house in Brown et al. v. Lambrechts et al., 2017 MBQB 45, finding that the purchasers had failed to prove that the doctrine of caveat emptor did not apply. The purchasers alleged that the sellers misrepresented or covered up problems such as water damage, leakage, mould, a rodent infestation, and problems with the roof and septic field, but the court found no proof of these allegations or of compensable damages.

Committee Expenditures Raise Questions: MBQB

Concerns about the manner in which the Public Trustee administered the small estate of the victim of an unprovoked assault who, due to his injuries and subsequent hospitalization, was unable to manage his own affairs, led the master to decline to pass the Public Trustee’s accounts in The Public Guardian and Trustee of Manitoba v. Marcel Blanchette, 2017 MBQB 29. During the 15-month committeeship, the victim’s financial assets were substantially depleted and his personalty was completely depleted (his only RRSP was liquidated to pay debts and his apartment contents were surrendered to the landlord). The application was sent back to the referring judge for further consideration.

Changes to Rule 74

Practitioners are reminded of recent amendments to Rule 74, one of which is already in force, and others which will come into force on July 1, 2017. As detailed in this notice from the Court of Queen’s Bench, these include the recent repeal of Rule 74.13 (concerning deposit of wills with the Registrar), as well as amendments to Rules 74.12 (concerning procedures for passing of accounts) and 74.14 (detailing changes to Form 74AA).

Property Registry Notice and Directives

There have been a lot of developments at the Property Registry over the last month:

Electronic registration of land titles documents will be available for use starting December 17, 2017, and will become mandatory for law firms and other high volume registrants on April 3, 2018. For further details see the announcement issued April 13, 2017 and this notice which sets out the system requirements for electronic registration.

Plans deposited in the Manitoba Land Titles System for examination – this Registrar-General directive indicates that effective June 26, 2017, all plans deposited for examination in the Manitoba Land Titles System must be deposited online through Plan Deposit Submissions.

Approval of updated electronic Mortgage form (version e6.2) - an updated version of the electronic Mortgage (version e6.2) form has been approved and is available for download from The Property Registry website according to this directive, issued March 30, 2017.

Destroyed Duplicate Titles – pursuant to this March 21, 2017 directive Land Titles District Registrars are authorized to dispense with the production of duplicate titles where they are satisfied that those titles have been deliberately destroyed.

Approval of updated electronic Discharge form (version e 7.2) – this directive announces that an updated version of the electronic Discharge (version e7.2) form has been approved and is available for download from The Property Registry website.

Report on Substitute Powers of Attorney: MLRC

The Manitoba Law Reform Commission released Final Report 133, Substitute Powers of Attorney, on February 22, 2017. The report focuses on s. 21 of The Powers of Attorney Act, which requires that once an attorney has assumed power under a power of attorney he or she can only resign with judicial approval. As noted in the executive summary, the Commission recommends that the Act be amended to allow an attorney to renounce without judicial approval in order to carry out the donor’s intention.

Recommended Reading

Appropriation of personality after death issue in estates – Manitoba is the only province in which the statutory right to “wrongful use of personality” survives death, according to the author of this Law Times article, who also notes that with advances in technology and social media this is a growing area of concern for estates lawyers.

Mortgage Sale and Foreclosure Proceedings in Manitoba – Unregistered Amending Agreements – this Taylor McCaffrey LLP article identifies a recent development that has contributed to the complexity of the mortgage sale and foreclosure practice in Manitoba: the strict enforcement of mortgage amending agreements that have not been registered against title. The author suggests best practices to follow to avoid problems in this area.

Working with a full house - estate planning groundwork is needed to avoid blended family conflicts. This Lawyers Weekly article explores some of the options.

Things You May Not Know About The Farm Debt Mediation Act – this Miller Thomson article highlights the less well-known details of how the FDMA operates and the relevant case law.

Court of Appeal Upholds Mortgage Exit Fee in Face of Interest Act Challenge – this article discusses how commercial lenders can set up incentives for borrowers to meet their obligations without worrying about running afoul of the Interest Act.

Continuing Professional Development: LSM

10th Annual Hot Topics In Real Estate - An “all star” panel will present at the 10th anniversary edition of this annual program chaired by Jeff Shypit. Due to the popularity of this program it is being offered on two dates: April 24(pm) and April 25(am), 2017. Both dates are now sold out, but you can add your name to the waiting list and you will be contacted in the event of a cancellation.

Dealing with Pre-Acquired, Inherited and Gifted Assets in Family Property Accounting – this half-day program in Brandon on May 17, 2017, will look at the intricacies of gifts, inheritances and pre-acquired assets in the Family Property Act accounting and reference process, including a discussion of the legislation, case law, and court documentation. Students are eligible for a 50% reduction in the registration fee.

Women Thriving in the Law with a Grit and Growth Mindset (May 15, 2017, half-day) and Getting and Growing Grit: The Secret to Success (May 16, 2017, lunch session) – these programs, presented jointly with the MBA’s Women Lawyers’ Forum, will help attendees to develop and apply a “grit and growth” mindset to the challenges of legal practice.

ISSN 1916-3916

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