Estate Conflicts, Real Estate Fiascos, and Fisheries Act Violations

In the ever-evolving realm of legal disputes, few areas are as emotionally charged and complex as estate litigation and real estate transactions. The stakes are high, the emotions run deep, and the law often finds itself navigating through a maze of facts, allegations, and fiduciary duties. Add to this mix the stringent regulations governing our fisheries, and you have a potent concoction of legal challenges that reflect the broader societal values of fairness, integrity, and due process.

Transitioning from the political arena to the private sphere, we navigate the stormy seas of estate litigation. The scenario where an executor is also a beneficiary is a recipe for conflict, a situation that can turn the administration of an estate into a battleground. Michael Mulligan, with his wealth of experience in legal defence, elucidates the path of fiduciary duty. He guides us through the complexities, demonstrating how legal safeguards, such as appointing a neutral administrator, can restore balance and uphold the integrity of the estate administration process.

The episode then shifts focus to the volatile world of real estate. We dissect a case where the dream of making a quick profit from flipping pre-sale condos in Vancouver turned into a legal quagmire. The court’s distinction between negligence and a breach of fiduciary duty serves as a critical lesson for agents and clients alike. The heavy responsibilities both parties bear in such transactions underscore the need for diligence and transparency.

Finally, we delve into the legal depths of a Fisheries Act violation case. Here, the concepts of circumstantial evidence and the high threshold for criminal conviction are examined through the lens of a man with a history of non-compliance with fisheries regulations. The case is a prime example of the judicial system’s dedication to impartiality and due process, even when suspicions and a person’s past may cast long shadows over the proceedings.

The legal insights offered in this episode are not merely academic. They affect real lives and real situations. Whether it’s an estate conflict that could tear a family apart, a real estate transaction gone awry with significant financial implications, or a Fisheries Act case that highlights the importance of environmental stewardship, the law plays a critical role in ensuring that justice is not only done but is seen to be done.

Join us on this journey through the complexities of law and the steadfast pursuit of justice. Each decision made in the courtroom has the potential to send ripples through our society, reinforcing the need for a legal system that upholds the highest standards of fairness and integrity.

 

Legally Speaking with Michael Mulligan is live on CFAX 1070 every Thursday at 10:30 a.m. It’s also available on Apple Podcasts or wherever you get your podcasts.

 

A transcript of the show:

 

Legally Speaking Dec 28, 2023

Adam Stirling [00:00:00] Legally Speaking with Michael Mulligan from Mulligan Defence Lawyers joining us for the very latest in legal Affairs. Morning, Michael. How we doing?

Michael T. Mulligan [00:00:07] Hey, good morning. I’m doing great. Always good to be here.

Adam Stirling [00:00:09] So interesting topics on the show for today. I’m just reading this when the executor of a will is one of the people fighting about the will, to me, that seems like there’d be some sort of a conflict in that person’s duties and interests.

Michael T. Mulligan [00:00:23] Indeed. And that that happens. And I think one of the takeaways here for people, if you’re planning your affairs, is to consider whether it’s a good idea, or not, to have one of the beneficiaries of a will also acting as the executor. Right. And the way it works with the will is the executor would be responsible for collecting all of the assets of the deceased and distributing them in accordance with what a will should happen. Right, that’s their job. And indeed, in some simple circumstances, it might make sense to have the beneficiary and the executor is the same person. Like, for example, if somebody was leaving their entire estate to their spouse. Right.

Adam Stirling [00:01:06] hmm.

Michael T. Mulligan [00:01:06] It might be very clear, look, you’re the executor and you get everything separate, which would usually not be contentious. But where there is a possibility of there being a dispute about things, having those people, somebody having both those rules, beneficiary and executor can be a cause for exactly what you’ve said, which is a conflict of interest. Right. And if there’s litigation ensuing, then there could be issues about is the executor doing what they should be doing as an executor, which would be to make sure that the wishes of the deceased are carried out. Right.

Adam Stirling [00:01:41] hmm.

Michael T. Mulligan [00:01:41] And a recent case describes, or utilizes a section of the wheels of states and succession that people should be aware of to try to resolve this kind of a problem when it arises in the course of litigation and the particular case involved a dispute about which of three things was a valid will. And sometimes that can arise when there are issues about things like, was the person competent to make the will or was the will properly executed? Or indeed, is that even a real will? Right. All those sort of things can be an issue. And in this case, one of the beneficiaries was appointed as the executor. And then this dispute arose about hey is that a valid will and could the person properly made it this kind of thing. And so the case went before a judge to consider an application under Section 103 of the Wills Estates and Succession Act. And that particular section, which was the one I thought people should be aware of if they find themselves in this kind of a position, is that that section allows the court, B.C. Supreme Court, the authority to appoint an administrator pending legal proceedings. And the idea there is that if a person like that is appointed, then that person would take over the role of the executor, except for the authority to distribute things right, to sort of pass out money from the estate. But the person would be able to manage the litigation, ensure that assets are properly protected. And so that was an issue in this case because the primary asset was real property that to be taken care of and rented out of taxes paid and all of this. And then there were other issues such as, you know, were all the relevant was all the relevant material going to be provided to the court as part of that litigation? Things like diaries from the deceased, medical records, instructions to the lawyer, that kind of thing. And if you’ve got two parties fighting about something and one person controls everything, there could be suspicion about whether they were doing the right thing and turning over all of that material. And so in this case, the judge utilized that section of the Wills Estates and Succession Act to appoint an administrator pending the legal proceedings. And what that will mean is that a third party, a neutral party, will wind up administering the estate and controlling the litigation from the estate’s perspective until that issue is sorted out, like which of these wills is valid and who should be the executor. And then at that point that person could take over to distribute the funds. And so this is worth, I think people knowing about that there is this power. And so if you wind up in a position where there is a dispute over a will or the validity of a will and whether the executor has got a conflict of interest and is not doing something properly, there is this power which is quite broad, that a court has to put somebody in the place of the executor, while those things are being sorted out. Now, there is some cost to that, right, because that person who is taking on that job is going to have to be paid to do it. It’s going to be a pile of work for somebody. And so, again, if you were planning your estate and you can’t solve all problems because of course, there could be issues about the validity of wills and so on, But it would be prudent to think about whether you should have somebody who’s in that job as the executor and you get to pick that in your will. Whether you should pick somebody who would be a neutral party, who’s not a beneficiary to the will so that you could trust they’re doing their job, which is to carry out your wishes and distribute your estate in accordance with what your will tells them to do. And so that there wouldn’t be an issue about, Hey, is that person doing something to favour themselves, not providing some relevant document if there is a dispute about that. So that’s, I think, both a useful information from a planning perspective and a useful thing for people to know about, if unfortunately you wind up in a dispute like in this case, there is that provision to go to court and have somebody neutral appointed to administer things until the litigation is sorted out. Section 103 of the Wills Estates Succession Act.

Adam Stirling [00:06:12] And it touches on a concept that you and I have discussed any number of times, and that is under the law, certain individuals at certain times will have a duty imposed upon them. It’s not that they may do something, it’s that they shall do something.

Michael T. Mulligan [00:06:25] That’s right. And when somebody uses, another important thing to know when somebody is acting in the role of an executor. Right. You’re sort of you’re like you’re a trustee. And the obligation there is that the person who’s acting as an executor has a fiduciary duty, which is something, you know, come up in another case we going to talk about.

Adam Stirling [00:06:44] Yup.

Michael T. Mulligan [00:06:44] Has a fiduciary duty to the beneficiaries of the estate, which means that the executor needs to make decisions which are in the interests of those people, not in their own interests. Right. And that can get pretty tricky, if you wind up in a circumstance where you are also one of the people who could be benefiting from something. And so that’s why it would be a prudent idea to organize things in your will so that if there’s any possibility of there being a conflict about things and unfortunately those things arise not infrequently when siblings or other relatives are fighting about who should get what. If your affairs are going to be in any way even possibly complicated in that fashion, it can be a prudent thing to pick somebody to do that job who have no interest in it so that there isn’t even a suggestion that the person is doing something to favour themselves at the expense of others. And in fact, they’re acting as a fiduciary and making decisions which are in the interests of the beneficiaries and not in their own interest. But this is a safety valve. It is important to know the safety valve exists. If you don’t know about it, you may not ask for it, but hopefully you can plan your affairs so that nobody has to go off the court and make an application and spend money and hire lawyers and then appoint somebody to work in that capacity. If things are organized in advance, you might be able to avoid all that and save a lot of time and difficulties later.

Adam Stirling [00:08:19] You mentioned our next story involves fiduciary duty. This one real estate agents, fiduciary duty and standard of care.

Michael T. Mulligan [00:08:27] Indeed. So this next story involves a one of those issues you’ve probably heard about going on, which was the issue of people purchasing presale condominium contracts and then trying to resell them to make a profit. That was a particularly booming business in the lower mainland for a period of time. And I imagine in some buildings in on the island as well. And the idea there is that many condominium projects are pre-sold which would help the developer get financing to build the building. And some people would purchase a unit or the right to purchase once it gets built and then try to resell that for a profit before the unit even exists. And there were a few things which incentivized that, including trying to some avoiding some of the costs that might exist if you actually had to purchase and sell a real thing that existed. Like once you purchase a property, if you want to sell it, you’re then going to have property transfer taxes, you might wind up with issues about now, things like the vacancy tax, all these things. And so some people tried to short circuit that by buying the right to purchase the unit before it exists, hoping prices will go up and then trying to resell it.

Adam Stirling [00:09:47] hmm.

Michael T. Mulligan [00:09:47] That’s the basis of this case. And it was a woman in Vancouver who had done that several times and she in fact purchased three units as a pre-sale in a condominium development with the hope of reselling them. Now, the problem was that the woman, while, she had done that several times and she didn’t have the money to, in fact, complete on all three of these transactions. Of all the units quite finished, she didn’t have enough money to actually purchase all of them. So the entire plan was premised on I’ll just flip these for a profit before they ever existed before you have to pay anything. Pretty appealing business model.

Adam Stirling [00:10:25] Yeah.

Michael T. Mulligan [00:10:26] What happened, though, is that she didn’t have the money to complete them. They were not all resold and she was only able to flip one of them, for which she did make a tidy profit. She purchased one of the units for $587,000 and sold it for $865,000 for a pretty tidy profit for buying and selling a contract.

Adam Stirling [00:10:49] Yeah.

Michael T. Mulligan [00:10:49] Not even taking possession of the unit, but the other two units that she didn’t complete on, she decided to sue her real estate agent, claiming that the real it was the real estate agents fault that she didn’t complete on them. And her argument was, well, look, the real estate agent failed to have a send the contract to a notary to complete the purchase of the units. And so on that basis, it was the real estate agents fault that she didn’t make a profit on these two other units. And she made two claims. She, first of all, made a claim that the real estate agent was negligent, careless in not sending the contract to a notary to complete the purchase. And then she made a second claim, which was by not doing that, the real estate agent breached a fiduciary duty, which we just talked about.

Adam Stirling [00:11:42] Yeah.

Michael T. Mulligan [00:11:42] And so that’s what the court had to wrestle with. And on the first point, the court found that indeed, the real estate agent was not careless in not sending the contract over to the notary and the court analyzed how do these real estate transactions work ordinarily, and what is the responsibility of a real estate agent? Do they have the duty to make sure that somebody completes, the transaction completes? And here the court rejected the woman’s argument that she was just completely reliant on the real estate agent on the basis that she’d engaged in multiple transactions like this previously. And the real estate agent was able to point to multiple emails that he sent to her, pointing out that she should advise, where do you want these sent? And you should get a notary or hire a lawyer? And the date is coming up. And except of the real estate agents evidence that on multiple occasions they met about other deals where there was no request to send the contract over to the notary. And so the judge found that there was nothing careless about how the real estate agent had conducted themselves. It wasn’t the real estate agents obligation to make sure that the entire transaction completed, that the woman was sophisticated, did know that that was her responsibility. And the fundamental problem was the woman didn’t have enough money to do that. It wasn’t the real estate agents fault. It was she didn’t have enough money to, in fact, purchase the units once they were built. She had just hoped to flip the contracts to make a few thousand dollars on each unit. That wasn’t the end of the analysis. So the court had to then go on and look at that issue of fiduciary duty. Right. Is there some does a fiduciary duty extend to the real estate agent making sure that the transaction completes somehow?

Adam Stirling [00:13:38] Yeah.

Michael T. Mulligan [00:13:38] And first of all, the court found that real estate agents do owe presumptively a fiduciary duty to their client. That’s kind of inherent in the concept of being somebody’s agent. When you’re doing something for somebody else, like a real estate agent, the agent, real estate agent should be making decisions and doing things which are in the interests of their client, not for their own purposes. But here, not only was there no negligence or carelessness on the part of the real estate agent. The court also distinguish those ideas, that concept of negligence or carelessness.

Adam Stirling [00:14:15] hmm.

Michael T. Mulligan [00:14:15] From that concept of breaching a fiduciary duty. Okay. So those are separate things.

Adam Stirling [00:14:20] hmm.

Michael T. Mulligan [00:14:20] And the Court found that in order to be fined, somebody breached a fiduciary duty. The language sometimes used is that the action has to be something which would carry the stench of dishonesty.

Adam Stirling [00:14:34] The stench of dishonesty. wow

Michael T. Mulligan [00:14:36] Yeah. The idea that a breaching a fiduciary duty is more than somebody being careless. Right. Like, let’s say the real estate agent and just not carefully followed up. That could be negligence. It wasn’t here. Right. But somebody’s just being absent minded or not diarizing something or making a mistake, could, in some cases, constitute negligence, carelessness. But in order to be a breach of a fiduciary duty, that idea that the concept there is, hey, you started to do things for yourself rather than for the person you were supposed to be helping here.

Adam Stirling [00:15:12] Yeah.

Michael T. Mulligan [00:15:12] Which is that concept of, that would be the concept of sort of stench of dishonesty. The idea that, hey, you started to engage in self-dealing. You made decisions to help yourselves and not help the person that you were required to help. And so even though there is a fiduciary duty that real estate agents have presumptively to make decisions and act in the interests of their clients, not in their own interests. Right. That that doesn’t extend to making sure that the person completes on their transaction has enough money to finish the deal or something. But it doesn’t go that far. The fiduciary duty would be to make decisions and act in a way that would be in accordance with the client’s interest. And there was no basis to conclude that in this case. So it’s a useful decision because it pushes those concepts, the idea of carelessness from the idea of a fiduciary duty and how one of them is a matter of whoops, you made a mistake. and the other is, hey, you started to engage in something which was sort of self-dealing or dishonest. That’s what a breach of a fiduciary duty would really amount too. But in this case, neither of those things existed. The fundamental problem was that the woman who was trying to flip these condo contracts just didn’t have enough money to complete the deal and that’s why the other two condos contracts wound up lapsing. She didn’t have the money to complete what she was trying to do, and that’s why she lost out on the opportunity to make a few hundred thousand dollars on those units as well. It wasn’t the real estate agents fault. It wasn’t the notaries fault. It was her. And so I suppose at the end of the day, it’s hard to feel too sorry for her. That is to say, the condo flipper. She did clean up pretty well, flipping a condo with not much work or the contract to purchase a condo over a year and a bit. And so that was a tidy profit. But she won’t get to collect from the other people involved for the two that she missed out on.

Adam Stirling [00:17:28] All right. Legally speaking, we’re going to take our first break. Will be back right after this.

[00:17:32] COMMERCIAL.

Adam Stirling [00:17:32] Back on the air here at CFAX1070 with Legally Speaking with Michael Mulligan for Mulligan Defence lawyers. Michael. Am I reading this correctly? It says an acquittal for a charge of having an interest in a fishing boat. Is that a chargeable offence?

Michael T. Mulligan [00:17:45] Now if that is indeed an offence, and you might ask how do you ever get there.

Adam Stirling [00:17:50] Yeah.

Michael T. Mulligan [00:17:51] And the answer is this is a Vancouver Island case and the background of it is a man who has, would appear, a notorious history of not complying with the Fisheries Act and somebody who has multiple convictions under that Act, I’ll get to that in a moment. But as a result of this terrible background for not complying with the Fisheries Act, he eventually wound up back in 2016 being forbidden from applying for licenses under the Fisheries Act, being on board any fishing vessel, possessing or acquiring any interest, legal or equitable,.

Adam Stirling [00:18:28] Wow.

Michael T. Mulligan [00:18:29] In such vessel or owning any fishing gear of any kind.

Adam Stirling [00:18:33] I didn’t know that was possible. Wow.

Michael T. Mulligan [00:18:36] Well, I must say, some of these things are a pretty broad powers to protect fish and wildlife, and this would be an example of that.

Adam Stirling [00:18:43] Okay.

Michael T. Mulligan [00:18:44] And so the man was banned from possessing having an interest in a fishing vessel. And indeed, he’s charged with doing exactly that. And the case is interesting for a couple of reasons. One is that it’s an example of how judges are required to approach what would amount to a quasi criminal charge. He’d be subject to going to prison for doing that. In fact, the man had gone to jail for months for breaching Fisheries Act requirements in the past.

Adam Stirling [00:19:15] hmm.

Michael T. Mulligan [00:19:15] And it’s an example of a few things that’s, first of all, an example of how judges are to address circumstantial evidence. And it’s an example of how judges address evidence from the defence, which would suggest innocence. And then finally, in the thing which is really notable about the case is the judge’s frank acknowledgement about knowing about this man’s background and still coming to the judicial decision about the outcome in this case. So first of all, the circumstantial evidence, the Crown’s case that this man had an interest in a fishing boat was circumstantial and there was a fair bit of it. There was evidence that he had paid mortgage fees for a particular boat. And I should see the defence theory was that it wasn’t his, it was his wife’s, the corporation. But he paid some of the mortgage fees for the boat. He was present at a storage facility where the boat was being stored. He was present when the boat was originally launched, along with his wife and another man. And so there was evidence the judge described as evidence of a significant difference connection between the accused and this alleged fishing boat. Moreover, a Facebook account that was associated with him because there were things like birthday wishes to him on the account.

Adam Stirling [00:20:27] hmm.

Michael T. Mulligan [00:20:27] Was used to list the boat for sale. And so that was the Crown’s case. Just extremely suspicious.

Adam Stirling [00:20:35] Yeah. Yeah.

Michael T. Mulligan [00:20:37] Now, the man’s wife testified at her evidence was essentially it wasn’t my husband’s boat. He had nothing to do with it. It was me. He might have been around from time to time, but it was mine, not his. And so that’s what the judge had to wrestle with. And the way a judge has to approach that in a criminal or quasi criminal case like this is they need to, first of all, say, do you believe the wife? And the answer was no. She lied about another important point under oath. So he didn’t believe her, but he then had to analyze, might she be telling the truth about her being the owner of the boat and the husband not having an interest in it? And that’s where it became a bit of a struggle, because there were other things about her evidence, like her use of the Facebook account or her interactions with that ad with a person who was, it was very interesting for me to even know we even though we have such a person like an investigator under the Fisheries Act. So we’ve got people who are intelligence analysts under the Fisheries Act.

Adam Stirling [00:21:35] huh.

Michael T. Mulligan [00:21:35] So there are some things that both are evidence that could be true. And so in the context of a criminal or quasi criminal case, it’s not enough to be very, very suspicious.

Adam Stirling [00:21:46] no.

Michael T. Mulligan [00:21:46] That somebody did something. It’s got to be proof beyond a reasonable doubt.

Adam Stirling [00:21:50] Yeah.

Michael T. Mulligan [00:21:50] And even where somebody lies about something like the wife under oath as she did, that’s not necessarily evidence of guilt. Right.

Adam Stirling [00:21:57] yep.

Michael T. Mulligan [00:21:58] You can’t say, well, that means the man’s must be guilty. So the judge didn’t do that. And so at the end of the day, the crown the judge found that, look, the crown had a compelling argument on the circumstantial evidence about this man being all around and about this boat. But and if he had to determine whether probably he had some interest in the boat. Yes. Even addressed this, an argument the Crown made saying, well, what if he got divorced? Would he then get some interest in the boat? Well, he thought that was just too speculative.

Adam Stirling [00:22:26] hmm.

Michael T. Mulligan [00:22:26] And so the final thing, which was interesting and I think notable, is that the judge pointed out that he was aware of the man’s background from the other reported court cases about him. And some of them had very harsh language about the man describing as morally bankrupt.

Adam Stirling [00:22:43] hmm.

Michael T. Mulligan [00:22:43] There was one describing him as being sort of a menace to fisheries and others and shockingly dishonest and all of these things which were very strong judicial comments about how this man conducted himself in terms of fishing.

Adam Stirling [00:22:56] Yeah.

Michael T. Mulligan [00:22:57] And it was notable that the judge pointed it out and said, look, we’re judges. We don’t operate in a vacuum. I’ve read these cases. I’m aware of them. But that’s not what I need to take into account when deciding whether he’s guilty or not. Right.

Adam Stirling [00:23:08] yeah.

Michael T. Mulligan [00:23:08] I have to look at the evidence in this case, not previous findings of dishonesty.

Adam Stirling [00:23:12] yeah.

Michael T. Mulligan [00:23:13] So the judge ultimately found him not guilty. So that’s why you have an interesting case, including that relatively rare, frank acknowledgement that, look, I know about this man’s background. I’ve read the cases, but that’s not the basis to convict him. So a good example of a judge doing their job and even though extremely suspicious, not enough to prove beyond a reasonable doubt that he had an interest in the boat despite having paid for the mortgage and been there for various reasons.

Adam Stirling [00:23:39] Indeed, an arguable case of criminality not sufficient in our system, it has to be higher.

Michael T. Mulligan [00:23:45] That’s right. He better not find himself with a fishing rod or he’s not going to have a much simpler option.

Adam Stirling [00:23:50] Michael Well, again, that’s all the time we have for today. But thank you, as always.

Michael T. Mulligan [00:23:54] Thank you so much. Have a great day. All right.

Adam Stirling [00:23:56] You to see in the New year, legally speaking. We’ll continue next week. Now for the break.

Automatically Transcribed on January 5, 2023 – MULLIGAN DEFENCE LAWYERS