IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120223

Docket: S19882

Registry:
Chilliwack

Between:

Brian Victor
McDonald

Plaintiff

And

The Estate of
Samuel Alexander McDonald,

Sylvia McDonald as
Executor of the Estate of Samuel Alexander McDonald,

Sylvia McDonald, Robert
Samuel McDonald and

McDonald Landing
Farms Ltd.

Defendants

And

Docket: S21532

Registry:
Chilliwack

Between:

Brian Victor
McDonald

Plaintiff

And

Sylvia McDonald as
Executor of the Estate of Samuel Alexander McDonald,

Sylvia McDonald,
Robert Samuel McDonald, Julie Madeline Rothenbausch, Dean William McDonald and

McDonald Landing
Farms Ltd.

Defendants

Before:
The Honourable Mr. Justice Joyce

Reasons for Judgment
In Chambers

NATURE OF THE APPLICATION

[1]          
The plaintiff applies for production of various documents and
information requested at the examinations for discovery of the defendants.

BACKGROUND

[2]          
The plaintiff is the son of the late Samuel McDonald, who died on June
9, 2005. Sylvia McDonald is the plaintiff’s mother. Robert McDonald, Julie
Rothenbausch and Dean McDonald are the plaintiff’s siblings. McDonald Landing
Farms Ltd. (the “Company”), is a British Columbia company that owns and
operates a dairy farm that has been in the McDonald Family for many years. For
convenience, I will refer to Samuel McDonald and the individual parties by
their first names.

[3]          
Samuel incorporated McDonald Landing Farms Ltd. on February 14, 1983.
Samuel held 51 common voting shares and Sylvia held 49 common voting shares in
the Company. Over the years, Samuel and Sylvia were issued approximately 7000 preferred
shares in the Company.

[4]          
The children were raised on the farm. When they reached adulthood, both
Robert, the eldest son, and Brian, the youngest son remained on the farm and
operated the farm with their father.

[5]          
In 1989, Brian suffered a serious injury while working on the farm.

[6]          
On June 15, 2000, Samuel transferred his common voting shares in the Company
to Robert, pursuant to an agreement, the material parts of which read as
follows:

IN CONSIDERATION OF his natural love and affection for
Robert, Sam hereby grants, transfers and assigns to Robert, his successors and
assigns, by way of gift for Robert’s own use and benefit absolutely, 51 Class
“A” voting common shares with a par value of $1.00 per share each presently
registered in the name of Sam.

…

2.00     ACCEPTANCE

Robert hereby accepts the gift
from Sam made by this Agreement.

[7]          
On the same date, and pursuant to an identical agreement, Sylvia
transferred her 49 Class “A” voting common shares to Robert.

[8]          
Samuel and Sylvia also gave Robert a letter dated June 15, 2000, which
read:

We are transferring to you by gift all of our common shares
in and loans to McDonald Landing Farms Ltd. at this time.

We wish you to know that it is
our wish that you will continue to provide a home on the farm for your brother,
Brian, without any rent therefrom for the remainder of his life.

[9]          
The transfers of shares were without the knowledge of Brian McDonald.

[10]       
In 2004, Brian began to operate a small farm on a parcel of land owned
by the Company.

[11]       
Samuel died on June 9, 2005, leaving a will by which he left his entire
estate to Sylvia.

[12]       
On March 31, 2009, Brian commenced Action No. S19882 in Chilliwack. He asserts
that he contributed both work and money to the farm over a period of over 30
years and claims remedies based on unjust enrichment. In particular, the
plaintiff seeks:

1.         An
order be made in favour of the plaintiff as against all the defendants, under
the principle of unjust enrichment, and a declaration of constructive trust, or
resulting trust, that he is entitled to a share in the Farm,

…

5.         In the alternative, an order
that the plaintiff be compensated for his financial contributions and labour
contributions to the operation of the Farm … under the principle of unjust
enrichment, constructive trust, and alternatively on a quantum meruit
basis.

[13]       
On August 28, 2009, Brian commenced Action No. S121970 in New
Westminster seeking variation of the will of his late father under the Wills
Variation Act, R.S.B.C. 1996, c. 490.

[14]       
By order made on March 18, 2011, Action No. S121970 was transferred to
the Chilliwack Registry under Chilliwack Registry No. S21532.

[15]       
By order made on January 5, 2011, the two proceedings were ordered to be
tried at the same time.

[16]       
Brian now brings an application in both proceedings seeking various
information and documents that were requested at the examination for discovery
of Robert and Sylvia.

NATURE OF THE DOCUMENTS IN QUESTION

[17]       
The documents and information that Brian seeks fall into three broad
categories: (1) all documents of the solicitor who prepared the agreements and
letter at the time Samuel and Sylvia transferred their shares to Robert; (2)
documents that relate to the assets, and operation of the Company; and (3)
documents that relate to money and goods provided to Brian by the Company.

DISCUSSION

[18]       
Brian submits that the documents in the first category are relevant in
the wills variation action because he seeks to establish that Robert holds the
shares of the Company upon a resulting trust for Sylvia and the estate of
Samuel, and that the estate of Samuel, in which he seeks to share, includes
voting shares in the company.

[19]       
The lawyer who has possession of these documents is a partner in the
firm that represents Sylvia, Robert and the Company. He was not formally served
with the application and the notice of application does not seek an order as
against him directly. However, counsel for Sylvia, Robert, and the Company do
not resist the application on that ground and was content to deal with the
application on the merits.

[20]       
Robert, Sylvia and the Company submit that these documents are not
relevant, privileged and that, in any event, they have already provided copies of
all documents relating to the transfer to Brian.

[21]       
It appears to me that privilege has been waived by providing some of the
documents relating to the transaction and because the lawyer who has possession
of the documents has sworn an affidavit in which he disclosed matters
concerning his instructions.

[22]       
In the circumstances, I believe that the most expeditious way to
determine whether there are any other documents that ought to be produced to Brian
is for the court to review them. I therefore order that any additional
documents in the possession of the lawyer relating to the transfer of shares be
provided to the Court for review within five business days.

[23]       
Brian says the second category of documents is relevant in the unjust
enrichment action because they relate to the value of the Company and are
therefore relevant to the quantification of his claim. While I agree that some
of the documents or classes of documents are relevant to that issue, it is my
view that a number of them are unrelated to or unnecessary for a determination
of the value of the Company. The Company has provided copies of its financial
statements, which I would think are the primary documents in connection with
establishing the value of the Company. Brian appears to be attempting to
establish, through the documents that he seeks, that certain actions undertaken
by Robert, including the use of funds obtained through a line of credit, have
been harmful to the Company, although there is nothing in the pleadings to
support such allegations.

[24]       
With regard to what money and goods were provided to the plaintiff, the
documents sought may relate to the question of whether the plaintiff suffered a
deprivation and should be produced if they exist.

[25]       
I therefore order that within 21 days the Company, Robert and Sylvia
produce the following kinds of documents to the plaintiff:

1.         Documents that show the
Company’s current milk quota;

2.         Documents
relating to money that the defendants provided to the plaintiff in connection
with the plaintiff’s application for milk quota;

3.         Documents
relating to money and goods provided to or on behalf of the plaintiff by the
defendants, including sawdust, insurance, property taxes, and feed.

[26]       
Neither party was wholly successful on this application. Accordingly, I
think the appropriate order is that each party bear their own costs.

“B.M.
Joyce J.”