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LAW REFORM COMMISSION OF BRITISH COLUMBIA ANNUAL REPORT 1981 British Columbia. Legislative Assembly 1982

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 The Law Reform Commission of British Columbia was established 6
the Law Reform Commission Act in 1969 and began functioning in 19m
The Commissioners are:
The Honourable Mr. Justice John S. Aikins, Chairman
Peter Fraser
Kenneth C. Mackenzie
Bryan Williams
Anthony F. Sheppard
Arthur L. Close
Anthony J. Spence is Counsel to the Commission.
The Commission's staff lawyers are Thomas G. Anderson and Gail
Sharon St. Michael is Secretary to the Commission.
The Commission offices are located:
(a) 10th Floor, 1055 West Hastings Street, Vancouver, B.C. V6E 2E
(to March 31, 1982)
(b) Fifth Floor, Toronto Dominion Tower, Pacific Centre, 700 Wei
Georgia Street, (Box 10135), Vancouver, B.C. V7Y 1C6 (a|§
March 31, 1982)
British Columbia Cataloguing in Publication Data:
Law Reform Commission of British Columbia.
Annual Report of the Law Reform Commission of
British Columbia.—1970-
"LRC 54".
ISSN 0381-2510 = Annual report of the Law Reform
Commission of British Columbia.
1. Law Reform Commission of British Columbia.    2.
Law reform-British Columbia-Periodicals.    I. Title.
KEB168.A72L38 340.309711
D General  l
II The Programme  1
I A. Carrying out the Programme  1
1. Research and Writing  1
2. The Consultation Process  2
I B. The Projects  2
1. Debtor-Creditor Relationships  2
(a) The Crown as Creditor: Priorities and Privileges  2
(b) Reviewable Transactions  2
(c) Joint Liability  3
(d) Enforcement of Judgments  3
2. Personal Injury Compensation  3
(a) Periodic Payments  3
(b) Compensation for Non-pecuniary Losses  4
(c) Family Compensation Act  4
3. Applicability of English Statute Law  4
4. Arbitration  4
5. Civil Procedure  5
(a) Foreign Money Liabilities  5
(b) Prejudgment Interest  5
6. Estates Projects  5
(a) The Making and Revocation of Wills  5
(b) The Interpretation of Wills  6
(c) Statutory Succession Rights  6
(d) The Effect of Testamentary Instruments  6
(e) Probate Procedure and Administration  6
7. Sale of Goods Legislation _.;.j.  7
8. Extrinsic Aids to Statutory Interpretation  7
9. Cable Television and Defamation  8
10. Office of the Sheriff  8
11. Benefits Conferred Under a Mistake of Law  8
12. Illegal Contracts  9
13. Distress for Rent  9
14. Torts and the Family  9
(a) Interspousal Immunity in Tort  9
(b) Miscellaneous Causes of Action  10
15. Following Trust Money: the Rule in Clayton's Case  10
16. Subjects of Interest  10
III The Availability of Commission Publications    11
V Action on Commission Recommendations  11
& Relationship With Other Agencies  12
5 Acknowledgments  13
■ Appendix A—Reports and Recommendations Made by
f» the Law Reform Commission of British Columbia  15
Appendix B—Matters Under Consideration  18
  lb the Honourable Allan Williams, Q.C.
Attorney General of the Province of British Columbia
I The Law Reform Commission of British Columbia has the honour to
f resent its Annual Report for 1981, outlining the progress made by the
IBnmission during that year.
I During the past year, formal Reports were submitted to you on Cable
I television and Defamation, Benefits Conferred Under a Mistake of Law, The
Ijraking and Revocation of Wills, and Distress for Rent. The Commission has
I Bo issued Working Papers on the Crown as Creditor: Priorities and Priv-
eges; Foreign Money Liabilities; and the Interpretation of Wills. These
| ocuments are described in greater detail below.
I As presently constituted the Commission consists of six members: the
Imailman, The Honourable Mr. Justice John S. Aikins; and Messrs. Peter
||aser, Kenneth C. Mackenzie, Bryan Williams, Professor Anthony F. Shep-
ard and Arthur L. Close. Messrs. Fraser, Mackenzie, Williams and Shep-
I ard serve on a part-time basis. Details of the appointments of our members
I lay be found in previous Annual Reports.
I In our 1980 Annual Report we referred to a "revitalization" of the
hommission that had commenced in 1979. We stated:
I   The work of the Commission has gained a momentum that is now beginning to
\    yield tangible results and which is expected to continue through 1981.
1 Ve believe this optimism was justified as we have had a most productive year.
Ilnumber of projects were completed through the submission of final Reports
luring 1981 and significant progress was made on other projects. We expect
ur work in 1982 will proceed at a comparable pace.
I  Our 1980 Annual Report also referred to our office space.
I   The only impediment [to our progress] is that the Commission's suite of offices is
now too small to house adequately its research staff and library. We are currently
exploring the possibility of obtaining more commodious premises with the
[    officials within your Ministry responsible for facilities management.
Ibis matter was taken in hand during 1981 and we are happy to report that the
Irajcess of rehousing the Commission in new premises is in its final stages. A
Imte of offices has been secured at the Toronto Dominion Tower, Fifth Floor,
TOO West Georgia Street, Vancouver, which is currently being altered to suit
Iffir needs. These premises will provide the room we need to house our
Iteration and allow for a degree of expansion. We expect our physical move
■rail occur in April 1982.
■Research and Writing
f  The research to carry out the programme calls for time-consuming work
iy qualified persons. This can be achieved by having the research done by
lersonnel who are employed as full-time staff, or by persons with special
l&pertise who are retained on a part-time or occasional basis. Although in the
larly years the Commission relied heavily on outside consultants, our experi-
IBce has led to a preference for the former approach. Consequently, most of
[re research and writing is now done by full-time members of the Commission
 2 british columbia
2. The Consultation Process
The Commission makes a general practice of inviting comment am
criticism on its research and analysis before submitting a formal Report to ySl
on any particular subject. This process of consultation greatly assists th'
Commission in developing proposals for the reform of the law that are botl 1
relevant and sound.
The chief means by which the Commission carries out this processHl
through the circulation of Working Papers to those who would find of interes I
the subject under study. A Working F^per sets out the views of the Commif I
sion, and the background on which these views are based, and invite)
Occasionally, when the topic under consideration makes wide circtffll
tion of a Working Paper inappropriate, copies of a draft Report may be gival
limited circulation for comment.
Whatever consultation mechanism is adopted, the tentative conclusiiM
are thoroughly re-examined in the light of the comment and criticism receival
and final recommendations developed accordingly.
The description below is limited to those projects upon which Report i
have been made in the past year or upon which work is in progress. Details o
other Reports, and of projects which have been discontinued may be found ii
earlier Annual Reports. Included as Appendix A is a table setting out al
Reports which the Commission has made to date, and references to legislatioi i
in which the recommendations have been implemented in whole or in part.ffl
Appendix B, another table sets out those matters which are now unde
1. Debtor-Creditor Relationships
(a) The Crown as Creditor: Priorities and Privileges
The Crown, in its capacity as creditor, enjoys a unique privilege unde I
our law. One aspect of its special position is its prerogative right to prio
payment. It also has the benefit of a large number of provincial statutes whKyl
create liens over real and personal property to secure money that is payable t<
the government or its agencies. Such liens tend to be legislated on an ad hml
basis and their scope and priorities are often uncertain. There is no evidencefj|
the statutes of any uniform policy or of a consistent set of principles witli
respect to such liens.
In June, the Commission issued a Working Paper (No. 31) whial
examined the priorities and privileges of the Crown at common law and undel
statute. Tentative proposals were made for the abolition or modifications!
some of the Crown's special privileges and priorities with a view to rationaliz
ing this area of the law and achieving an appropriate balance between thi 1
needs and expectations of government, its debtors, and third parties.
(b) Reviewable Transactions
A study on the operation of the Sale of Goods in Bulk Act, Fraudulent
Conveyance Act and Fraudulent Preference Act is currently in progress j
Background research on the law respecting the current operation of thi
fraudulent Conveyance Act and the Fraudulent Preference Act is virtually
Igmplete. Substantial research on the Sale of Goods in Bulk Act has also been
I Kne.
This project is a large one and we cannot predict with confidence when
IR will be in a position to issue a Working Paper. Work on this matter suffered
llsetback through the loss of our staff member who had carriage of the
t   Our work to date has raised questions about the utility of these Acts,
IBtticularly the Fraudulent Preference Act. It seems safe to say at this point
hat among the options for reform which we shall be considering will be one
Igr the outright repeal of one or more of the Acts, and a rationalization and
jnodernization of what remains.
c) Joint Liability
There are a number of aspects to the project on joint liability. The first is
lm examination of the distinction between joint liability and joint and several
lability, which can be crucial. For example, a judgment obtained against a
[grson jointly liable will bar any action against the others with whom he is
liable. If the liability is joint and several, judgment obtained against one will
Irot bar any action against the others.
, We also propose to examine the law concerning joint obligations and its
ISationship to the law of contributory negligence. In particular, the provisions
ISthe Negligence Act relating to the apportionment of liability, and rights of
IBntribution among persons jointly liable need to be examined. We expect to
Igofit from the work of the Uniform Law Conference in this area. The work of
Be Conference in developing new uniform legislation is nearing completion.
\\<i) Enforcement of Judgments
Our work on execution against shares and securities has been deferred
■sending the outcome of our study on the office of the sheriff. The latter study
■Bill provide us with much needed information concerning current practices in
Itelation to execution against shares and any conclusions arising out of that
■Sudy may well have an impact on the direction taken by our research and
Ifficommendations in respect of shares. We also expect to profit from the work
rf the Ontario Law Reform Commission in this area.
11. Personal Injury Compensation
Ira) Periodic Payments
A project on personal injury claims was added to the Commission's
■ program in 1978, largely as a result of the dissatisfaction with the present
Igfstem of personal injury compensation that had been voiced in the Supreme
Court of Canada and that arose out of work and studies in other jurisdictions.
IjThe scope and emphasis of the project were left undefined while background
■materials were gathered and certain preliminary research undertaken with a
Iffiew to developing appropriate terms of reference.
Our views on this topic have now sharpened considerably and we have
identified as the principal issue in this project whether a credible scheme can
p be developed whereby, as an alternative to the present "lump sum" awards, a
Iffourt award of compensation for personal injuries can take the form of a
stream of periodic payments. Active work on this topic has commenced i
will continue in 1982.
(b) Compensation for Non-pecuniary Losses
In August you requested that we undertake a study in the general are.'
compensation for non-pecuniary losses in personal injury cases and accoj
ingly we have added this matter to our programme.
At the present time we are gathering background materials and monito i
ing current developments in the courts, including the recent decision of th
Supreme Court of Canada in Lindal v. Lindal, with a view to formulating moi
precise terms of reference for the study. Those terms of reference includ
consideration of the $100,000 ceiling on damages in respect of pain, sufferinl
and loss of amenities said to have been established in 1978 by the Suprenjl
Court of Canada in the well known "trilogy" of personal injury cases. The)
will also include an examination of the mechanisms available for the asses
ment and review of damage awards.
(c) Family Compensation Act
Under the Family Compensation Act an action may be brought in respet
of the death of a person where the death is caused by the wrongful actn
another. The action may be brought only for the benefit of certain ne;
relatives of the deceased, and the claim is limited to the loss of futra
pecuniary benefits that the deceased would have provided. It has been sffll
gested that the class of persons for whose benefit an action may be brougl
under the Act is too limited and should be broadened. We will therefore^
examining the desirability of broadening this class to include other persffl
who may have been dependent upon the deceased.
3. Applicability of English Statute Law
Section 2 of the Law and Equity Act, R.S.B.C. 1979, c. 224 provill
that the laws of England, as they existed on November 19,1858 are in force i
British Columbia to the extent that they are not inapplicable through Iocs
circumstances and have not been repealed or superseded by federal or provujl
cial legislation. It follows from this that an uncertain number of Englisj
statutes are in force in this Province.
The aim of this project is to introduce a degree of certainty concernin
the extent to which English statute law is in force here. We hope to identujl
those statutes which are in force, with a view to rationalizing this aspect of ou
statute law.
This has always been recognized as a long-term project and much of ou
work has been devoted to gathering background information. Considerablj
progress has been made in organizing these materials, and a preliminary lisfSI
statutes has been established. Our research in this area will continue in 19823
4. Arbitration
The law covering Arbitration was the subject of intense research by t|
Commission in 1978 and 1979. The focus of our attention was commerjS
arbitration and the imperfections of the existing Arbitration Act. In April 197!
the Commission circulated a Working Paper that set out a number of proposal
Ijbr change. The process of developing our final recommendations is now
IRtually complete and we hope to submit our final Report early in 1982.
IS Civil Procedure
a) Foreign Money Liabilities
This project was added to our programme in 1981 and concerns the
Iffificulties that arise when a person's claim is based on a loss suffered in a
Irareign currency. The most widely accepted view is that judgment must be
[ffifen in Canadian currency in an amount determined by the conversion rate
lirevailing when the cause of action arose (date of breach). This can work a
Ipnificant injustice on the plaintiff when Canadian currency has declined in
Ifflue between the date of breach and the date his claim is satisfied.
In December we distributed a Working Paper which examines the issues
Iffl/olved and recent developments in other jurisdictions, and sets out tentative
iroposals for changes in the law.
b) Prejudgment Interest
| The Court Order Interest Act (formerly entitled the Prejudgment Interest
\%t) was enacted to implement recommendations made in a Report (LRC 12)
Imbmitted by the Commission in 1973. Seven years of experience under the
\ct has produced a growing body of jurisprudence and is sufficient time for
Inost difficulties in the legislation to have emerged. The Commission has
anbarked on an examination of the operation of the Act and will be reporting
n due course on what, if any, changes are desirable.
Complementing our own work in respect of prejudgment interest is that
Igthe Uniform Law Conference of Canada aimed at developing a uniform act
ffiitable for adoption across Canada. At the 1980 meeting of the Conference
Be underlying policy issues were the subject of intense consideration and it is
expected that in 1982 a Draft Act will be available to that body.
a Estates Projects
I A number of discrete studies are being carried out under this heading
Iwhich are more particularly described below. We are fortunate to have the
ISsistance and advice of Mr. J.C. Scott-Harston, Q.C. in connection with
liese studies and wish to express our gratitude for the time and effort he has
Irevoted to them.
(a) The Making and Revocation of Wills
I   In September the Commission submitted its final Report on the Making
and Revocation of Wills (LRC 52). The Report examines the formalities
imposed by statute on the making of testamentary instruments. This examina-
lum is not restricted to wills. It includes a consideration of the designation of
beneficiaries under registered retirement savings plans, registered home
jwnership savings plans, employee benefit plans, and insurance policies,
which have become increasingly significant.
The Report explores a number of issues concerning the validity of wills.
I These issues include the capacity of minors, soldiers' and mariners' wills, the
Iffiternational form of will, the effect of wills improperly executed, the capac-
I ity of witnesses, and the formal validity of wills which violate a foreign law
made relevant by British Columbia choice of law rules. The Commissi!
makes recommendations concerning all these matters.
(b) The Interpretation of Wills
Once a will has been admitted to probate, doubts may arise concerning
the meaning of words used by the testator. Over several hundred years the law J
has developed a bewildering array of rules concerning the construction 3
words used in a will. Many of these rules are both archaic and obscure. In tiffl
part of the project we examine these rules with a view to proposing changS
which will enable courts more readily to ascertain and give effect to iH
testator's true intent. A Working Paper setting out our tentative proposals \w
circulated in November.
(c) Statutory Succession Rights
The right of a person to succeed to the property of another on death rrffl
arise by will or by statute. In our Report on Making and Revocation of Wiffl
and our Working Paper on Interpretation of Wills, we were concerned mainffl
with testamentary succession rights. In this part of the project we propose tc
examine rights which flow from statute, and which exist regardless of 2
deceased person's intent. These rights may be mandatory, such as those whiffl
arise upon an intestacy under the Estate Administration Act, or they may be
discretionary like those accorded to certain persons under the Wills VariatiM
A number of fundamental issues arise. Who should enjoy a statutcS
succession right? On what basis should courts interfere with other vested
rights in exercising their discretion under the Wills Variation Act! What relia
should be granted under such an act? What should be the position of a
surviving spouse having regard to interests that may arise upon marriage
breakdown under the Family Relations Act!
Our background research in this area is complete and we are in tra
process of preparing a Working Paper which we hope to circulate in 1982.
(d) The Effect of Testamentary Instruments
Even where the testator's original intent is beyond dispute, events mffl
occur which render it impossible to give effect to his intent. A beneficiary ma>
predecease the testator. Property disposed of by will may have become alters]
in form. In this fourth part of the Estates Project the Commission will examine
a number of issues arising out of such occurrences. In particular, we wu]
examine the legal rules concerning lapse, ademption, conversion, electicra
disclaimer, and survivorship.
(e) Probate Procedure and Administration
It is planned that this study will examine the law of British Colum™
concerning the procedure used in obtaining letters probate or letters ffl
administration, and the law relating to the administration of the estatesffl
deceased persons, with a view to its consolidation, rationalization, ara
simplification. We will also consider the procedural implications of nra
ommendations made in other parts of the project. Since changes in the lavs
concerning procedure depend to some extent upon the substantive law, it is
anticipated that aspects of our work on this topic will be deferred until tffi
completion of the other parts of the Wills and Estates Project.
 report of the law reform commission, 1981 7
Sale of Goods Legislation
Early in 1979 the Ontario Law Reform Commission submitted a massive
Report on the law concerning the sale of goods. It recommended the enact-
Iment of new legislation to replace a statute similar to the Sale of Goods Act in
p force in this province. The adoption of the recommended Act in Ontario only,
i however, would lead to a serious departure from the high degree of legislative
Iffiiformity that presently exists among the common law provinces.
To meet this concern a special Committee of the Uniform Law Con-
Ifeence was struck to consider the desirability of promulgating a new Uniform
I Sale of Goods Act and whether the proposed Ontario legislation should form
r the basis of such a uniform Act. Those law reform agencies concerned with
this issue provided special assistance. We engaged Professor David Vaver of
p the Faculty of Law, University of British Columbia, as a consultant on this
IRoject and he has worked closely with the Committee.
The work of the Committee was completed in July 1981 and a Report
letting out its conclusions and recommendations was presented to the Uni-
) form Law Conference for consideration at the annual meeting in August. The
! Report consists of an introduction, a Draft Uniform Sale of Goods Act with
: extensive comments and annotations, a table of concordance to the work of the
! Ontario Law Reform Commission and a comparative analysis of the Draft
lElniform Act with the civil law of Quebec.
At the 1981 meeting of the Uniform Law Conference of Canada the
S Report of the Sales Committee was received and the Draft Act was formally
adopted by the Conference as a Uniform Act. The proceedings of the Uniform
Law Conference will soon be published and those proceedings should include
Ifflie full text of the Report. The Report and Uniform Draft Act will therefore be
widely available.
No doubt the Uniform Act will be the subject of intensive study and
IBiscussion by the legal profession and by the Ministries of Government
[concerned with this branch of the law with a view to its possible adoption.
We wish to thank Professor Vaver for the effort he has devoted to this
[Study and the significant contribution he made to the work of the Sales
8. Extrinsic Aids to Statutory Interpretation
Section 8 of the Interpretation Act provides that a statute shall be given
"such fair, large and liberal construction as best ensures the attainment of its
Ejects." In ascertaining these "objects," however, the courts are largely
Bonfined to an examination of the legislation itself. As a general rule a court
[hay not have regard to other sources that may assist in discovering the
"objects" of legislation or the "intention" of the legislature that enacted it.
Two sources that are frequently cited as being of potential assistance are
2he reports of legislative debates (Hansard) and the reports of Royal Commissions, law reform agencies and the like that may have preceded legislation.
The generally accepted legal position is that the former are wholly inadmissible as an aid to interpretation and that the latter are admissible only to identify
the "evil" sought to be remedied by the legislation.
A study on extrinsic aids to statutory interpretation was added to our
programme some time ago in which we proposed to examine the desirability
of modifying the law so as to allow these materials to be introduced, for whi
they are worth, as an aid to construction. Since that time, however, a numbi
of cases have emerged which tend toward a relaxation of the general positigf
described above, and it may be that judicial developments will eliminate any I
need for legislative intervention. Accordingly we have discontinued actival
work on this project, although we will maintain a "watching brief" bal
collecting and considering further materials as they become available.
9. Cable Television and Defamation
Cable television has become a significant medium of communication in
this province and its importance will likely continue to grow in the cominal
years. With this growth has come an increased vulnerability of cable operators
to defamation proceedings and an increased danger to persons who may be
defamed in an imputation disseminated by cable. The Libel and Slander Act J
contains special provisions that define the legal position of conventional
broadcasters but these do not apply to cable television operators.
In a short Report (LRC 50) issued in March 1981 we recommended that f
the legal position of cable television operators under the Libel and Slander Act:
be assimilated to that of conventional broadcasters so that they would share '
corresponding benefits and burdens.
10. Office of the Sheriff
An addition to the Commission's programme in 1980 was a study of tffll
office of the sheriff. It entails a comprehensive examination of the powers and i
duties of the sheriff and current practices in the day-to-day operation of thSI
sheriff's office. A historical review of the evolution of the sheriff's office iffll
British Columbia and an examination of the practice in other jurisdictions is
also being undertaken. Work on this study will continue in 1982. We are
indebted to the Law Foundation for financial support they have given the ■
11. Benefits Conferred Under a Mistake of Law
In September the Commission submitted its final Report on this topic
(LRC 51). The Report examines the common law rule that benefits conferred ;
under a mistake of law are not recoverable. Although that rule is nearly two j
hundred years old, it has long been a source of dissatisfaction and injustice. It
may be contrasted with cases involving mistakes of fact, in which a person i
who has conferred a benefit under a mistake has a prima facie right of
In recent years, Canadian courts have accepted the principle of unjust
enrichment as the foundation of our law of restitution. The Supreme Court of <
Canada has affirmed that the basis of an action to recover a benefit conferred j
under a mistake is unjust enrichment. The continued existence of an arbitrary
rule under which a person who has received a benefit under a mistake of law
may retain it is incompatible with that principle. The principle that a person i
who has been unjustly enriched at the expense of another is prima facie ■
obliged to return the benefit so received is well-entrenched in Canadian law. .
Moreover, Canadian courts have not been insensitive to the potential injustical
to which the common law rule might lead, and have therefore created a
vildering array of exceptions to the rule. The result is to make cases
Bving mistakes of law complex and uncertain. The recommendations
Imined in our Report are intended to rationalize the law respecting the
i hts of those who act under a mistake of law, and to ensure that the courts are
[le to grant relief in appropriate cases by application of restitutionary
In the last few years, our courts have been faced with a number of cases
I giving payments made to municipalities pursuant to the terms of an ultra
IB bylaw. We have made recommendations specifically addressing the
Iffiems arising from these cases which, if implemented, would simplify the
Ir and yield more just results.
IRaLEGAL Contracts
As a general rule, Canadian courts decline to grant relief to parties who
l^ither deliberately or unwittingly entered into an "illegal" contract. The
IBoncerning when a contract may be characterized as illegal, and the
eptions to the general rule, are uncertain and inconsistent. It may be
libted whether the drastic results which flow from characterizing a contract
["illegal" are necessary to uphold public policy.
I We are in the process of preparing a Working Paper examining the issues
Ising out of a total or partial abrogation of the general rule denying relief to
i parties to an illegal contract.
This project, added to our programme in 1980, examines the desirability
retaining the present right of a landlord of commercial premises to seize
pds belonging to the tenant and to sell them to satisfy unpaid arrears of rent.
IlKtfect of the present law is to give the landlord a priority over the rights of
:er creditors who may also wish to see their debts satisfied out of the tenant's
Batertv. It may also jeopardize the interests of innocent third parties.
In November 1981 we submitted our final Report on this matter (LRC
jut was recommended that the landlord's right of distress should be
[lined but in the context of a wholly new Rent Distress Act which would
iiedy a majority of defects in the existing law. A draft Act was included as
ft of our Report.
Torts and the Family
There are two projects under this heading, both concerning topics which
'have monitored for several years as subjects of interest. Developments in
lij>ast year suggested the time was ripe to add them formally to our
i gramme.
\wterspousal Immunity in Tort
This study will examine the rule enshrined in section 10 of the Married
Mmen's Property Act that one spouse cannot sue the other in tort except for
|1 protection of his or her separate property. We will also be examining the
implications of a change in this rule with respect to insurance legislation i
insurance contracts.
(b) Miscellaneous Causes of Action
There are a number of causes of action which are concerned with
interests of individuals in their family relationships. Some are based on toi
such as actions relating to the enticement or harbouring of a spouse or child
claims arising out of a personal injury to a family member. Others are based < I
contract such as an action for damages for breach of promise of marriage. St
others are founded on statute, such as an action for damages for adultery und
section 76 of the Family Relations Act. In this study these and similar causes
action will be examined to determine whether they still serve a useful fun
tion, and whether any new remedies would be desirable in this context. 1
15. Following Trust Money: the Rule in Clayton's Case
When trust monies are mingled in a single trust account, and the balanl
falls below the amount required to satisfy or repay the trust monies, the ctBI
may determine entitlement to the fund by applying the rule in Clayton's Cas
Devaynes v. Noble (1816), 1 Mer. 572, 35 E.R. 767. In the absencjl|
evidence to the contrary, this rule of convenience provides a presumptioriral
the sum first paid into the account is the sum first paid out, or that the firstHI
on the debit side of the account is discharged or reduced by the first item on tl
credit side.
The rule is based upon elementary accounting principles, and in t
usual course it is a practical and accurate description of banking practiceHI
rule itself, however, only applies when a claimant seeks an equitable remal
such as a declaration of equitable lien or charge, or constructive trust. I
The rule, while subject to exceptions which favour the interest of t
beneficiary vis a vis his trustee, operates harshly when the monies of mc
than one beneficiary are involved in a mixed fund which is depleted. Becffll
the competition is between innocent parties, the principles underlyinSI
exceptions to the rule do not come into effect. A beneficiary, merely becM
his money was deposited first in time, may be required to bear the era
An examination of this rule and its operation was added to our ral
gramme in 1981.
16. Subjects of Interest
Preliminary research or the gathering of material is proceeding old
number of matters which are not yet part of the Commission's programme!I
most cases this is to determine if a particular topic is appropriate for foal
inclusion in the programme as a Commission project.
Many of these matters which are under preliminary consideration ail
out of particular suggestions made, and problems drawn to the Commissi
attention, by the legal profession and members of the public. This kindf
assistance is always welcome. Even if the particular suggestion or problegj I
not one which is appropriate for Commission study we are often ablel
transmit it to a person or agency which is in a position to act.
All final Reports issued by the Commission have been published in a
beset format, with the intention that they be available to the public. Our
nnual Reports are distributed by the Commission and are available on
[quest and free of charge so long as stocks last.
I The Provincial Queen's Printer is responsible for the distribution of all
Ijports made by the Commission on particular topics. A nominal charge is
lade for copies of those Reports. Orders and inquiries as to prices should be
l^cted to:
The Queen's Printer
Parliament Buildings,
Victoria, B.C. V8V 4R6
Telephone: 387-1901
number of our early Reports are now out of print and are not available for
[Ba.hase. Those Reports are indicated with an asterisk in Appendix A.
■ The Queen's Printer maintains a "notification list" and upon publication
Ira Commission Report, all persons on the list are so advised. Anyone who
IShes to be added to that list should contact the Queen's Printer.
I Working Papers are produced in a typescript format by an offset process,
lid the Commission is responsible for their distribution. Working Papers are
Ipally produced in limited quantities and our supplies of them are invariably
[ousted by, or shortly after, their initial distribution. Usually, therefore, we
e unable to respond to requests for copies of past Working Papers.
■ All the Reports made by the Commission are listed in Appendix A
Kether with a note of the legislation implementing recommendations made
Hpose Reports. We think it helpful, however, to highlight legislation enacted
Iffiing the past year that is based upon recommendations we have made.
Section 28 of the A ttorney General Statutes Amendment Act 1981 imple-
i ents the recommendation made by the Commission in its Report on the
alculation of Interest on Foreclosure (LRC 47). The section amends the Law
^mEquity Act by the addition of a section 18.1 to follow section 18. The new
Kion provides that in foreclosure proceedings the court shall, unless excep-
->nal circumstances exist, order that the payment of interest is to be calculated
. id payable to the date payment is made to redeem the property. This reverses
Iffiresult of the decision of the Court of Appeal in North West Trust Co. v.
^amount Management Corp., (1979)8B.C.L.R. 199, which re-established
IHbractice that entitled mortgages to interest for the full period of redemp-
sn, usually six months, regardless of the actual date that the property was
\ deemed.
■ Section 30 of the Attorney General Statutes Amendment Act 1981 adds a
ction 51 to the Law and Equity Act which permits the Chief Justice of the
Iffireme Court to prescribe the discount rate to be used in calculating the
■ esent value of future damages in personal injury actions. The section is
based upon legislation suggested by the Commission to the Chief Justice
November 1980 in response to a request from the Deputy Attorney Genei >
that the Commission provide assistance to the Chief Justice and the Minist:
of Attorney General on this topic. The views of the Commission were set c
in a letter to the Chief Justice dated November 18, 1980. The text of this uW
and the suggested draft legislation (with drafting notes) are set out in Appel
dix C to the Commission's Annual Report for 1980.
Section 67 of the Financial Administration Act implements the recor
mendation made by the Commission in its Report on The Recovery
Unauthorized Disbursements of Public Funds (LRC 48). In that Report tl
Commission examined the rule in Auckland Harbour Board v. The Kin
[1924] A.C. 318 (P.C.), that the government has an unqualified rigBM
recover funds paid out of the Consolidated Revenue Fund without lawf,
authority. Section 67 partially abrogates that common law rule. Althoughml
provincial government retains its prima facie right to recover funds paid out.
error, a recipient may now raise any defence which would generally apply ■■
an action to recover money paid out under a mistake of fact in an analogo
situation. The provincial government's right is therefore no lonal
In its Report on the Replevin Act (LRC 38; now titled Recovery ofGooi
Act) the Commission recommended that the Act be repealed and replaced^!
new, more general, remedy contained in the Rules of Court permittingml
interim recovery of personal property. This new remedy is embodied™!
revised Rule 46 added to the Rules by Regulation in November (B.C. Re
467/81) which comes into effect on March 1, 1982. The Recovery cfGM
Act has not yet been repealed.
Our ties with other law reform agencies continue to strengthen ai
prosper, both through the reciprocal arrangements for the exchange of doc
ments and' through personal contacts. As has been usual in recent yetffll
meeting of Canadian law reform bodies was held in August. It was attendeal
behalf of British Columbia by the Chairman, A.L. Close and Antlffll
Spence, Counsel to the Commission. This resulted in a fruitful exchanjSI
information and discussion of mutual concerns. That meeting was followeml
the Annual meeting of the Uniform Law Conference of Canada. The Clgl
man and Messrs. Close and Spence were members of the British Columb
delegation to the Conference.
A useful result of our ties with the Uniform Law Conference has been o j
participation in the Committee on sale of goods legislation described earlier
this Report. In July 1981 we were pleased to host a meeting of a drafti:
subcommittee of the Sales Law Committee.
Although the Commission reported on Personal Property Securitgl
1975, it continues to keep abreast of more recent developments in this ar
through the participation of Mr. Close in the Special Committee of t
Canadian Bar Association on a Model Personal Property Security Act unc
the Chairmanship of Professor Jacob Ziegel. The work of the Committal
KjiVirtually complete and a revised Model Act was submitted to the
anadian Bar Association in August 1981.
I During the past year we were honoured by visits from members of three
her law reform agencies: Mr. Denis Gressier of the New South Wales Law
gform Commission; Professor Ronald C.C. Cuming, Chairman of the
askatchewan Law Reform Commission; and Mr. Frank Muldoon, Q.C.,
'Jiairman of the Law Reform Commission of Canada.
I Our relationship with other agencies of Government, both within and
ithout the Ministry of Attorney General, continues to be wholly satisfactory.
As we have pointed out in previous Annual Reports, our policy of doing
II greater part of our research work internally, rather than relying upon
Inside consultants, has placed a heavy burden of responsibility upon the
llpulders of our permanent staff. As usual they have responded to the
piallenge with energy, enthusiasm and careful scholarship.
Our research staff currently consists of Mr. Anthony J. Spence, Counsel
I the Commission, and Mr. Thomas Anderson and Ms. Gail Black, our staff
[•wyers. We wish to thank them for the very significant contribution they
I ake to our work.
In October 1981 we lost the services of Mr. Frederick Hansford who has
[.turned to private practice. During his two years as a member of our legal
p search staff, he made a notable contribution to our work. Our Reports on
pnefits Conferred Under a Mistake of Law, Recovery of Unauthorized
lisbursements of Public Funds, and the Making and Revocation of Wills all
■jar the stamp of his scholarship. He also left us with a legacy of draft
p aterials relating to reviewable transactions and illegal contracts which will
pime to fruition in due course. We wish to express our sincere thanks for his
■mtribution and wish him well in his future endeavours.
I Our support staff also make a notable contribution to the work of the
pmmission. They bring intelligence and efficiency to their duties and share a
nncern that our work should be of the highest quality in every respect. Our
pport staff presently consists of Sharon St. Michael, Secretary to the
Dmmission, and Terry Lesperance and Janet Ellis, stenographers. We thank
Iran for their efforts on our behalf.
I The support which we have received from the organized bar and its
■Dividual members in past years continued in 1981. We rely heavily on the
isistance of the legal profession in a number of ways. At the research stage of
ir projects, individual lawyers assist us in gathering facts and in acting as a
■rounding board" with respect to various approaches to difficult issues,
ipquests for help of this kind are invariably the subject of a generous
Isponse. At the more formal stage of consultation, various Sections of the
latish Columbia Branch of the Canadian Bar Association assist us in our
■(liberations with thoughtful submissions on the various proposals and tenta-
ie conclusions set out in our Working Papers. We wish to thank all members
p the bar who gave generously of their time and experience in the past year.
I We also wish to repeat our thanks to Mr. J.C. Scott-Harston, Q.C. for his
Instance in connection with our estates projects.
The two law schools in the Province have also greatly assisted us in ot:
consultation processes. New procedures have been established which ha\3
facilitated and co-ordinated comment from the faculty members. Then
sponse we have received in this way has been most valuable. We wS
particularly to thank Dean K.M. Lysyk of the Faculty of Law, University
British Columbia and Dean L.R. Robinson of the Faculty of Law, UniverjS
of Victoria and their colleagues.
Our thanks also goes to the Law Foundation of British Columbia. Im
Foundation has responded swiftly and generously to our requests for f inanci:
assistance in connection with particular projects.
We also wish to acknowledge the contribution of the Judges Law Refor I
Committee. This Committee provides a continuing point of contact withHj
judiciary. The members of the Committee are The Honourable Mr. JustitJ
Lambert of the Court of Appeal (Chairman), The Honourable Mr. Jusffll
Taylor, The Honourable Mr. Justice Hinds and The Honourable Mr. JusWI
Spencer of the Supreme Court, His Honour Judge Macdonald of the Coum j
Court and His Honour Judge Collings of the Provincial Court. The memfflj
of the Committee assist us through responding to our working papers ar|
other consultative documents and through bringing to our attention defectSI
the law that they are well-situated to identify. They bring a unique perspecml
to bear on our work and we are grateful for their participation.
The process of acquiring new premises has brought us into close contai j
with the Facilities Management Unit of the Ministry of Attorney General. W
wish to express our appreciation to Messrs. Tom Morris and Chris Brambeli||
that Unit for the assistance and advice they have given us throughout.
Finally, we wish to thank you, Mr. Attorney General, and others witffl|
your Ministry for the attention that has been given to the Commission and i
activities in 1981.
1 January 1982
 REPORT OF THE LAW REFORM COMMISSION, 1981                             15
Appendix A
Recommendations Implemented
,.                          Title
in Whole or in Part by
■ Limitations—Abolition of
Land Registry (Amendment) Act, 1971, S.B.C.
1971. c. 30 (see now Land Title Act. R.S.B.C.
1979, c. 219, s. 24)
II Annual Report, 1970*
Not applicable
■ Frustrated        Contracts
Frustrated Contracts Act, S.B.C. 1974, c. 37 (see
!    Legislation*
now Frustrated Contract Act, R.S.B.C. 1979,
c. 144); Landlord and Tenant Act, S.B.C. 1974,
c. 45, s. 61(e) (see now Residential Tenancy Act,
R.S.B.C. 1979, c. 365, s. 8(3)); Commercial
Tenancies Act, R.S.B.C. 1960, c. 207, s. 34
(see now Commercial Tenancy Act, R.S.B.C.
1979, c. 54, s. 33).
■ Debt Collection and Collec-
Debt Collection Act, S.B.C. 1973, c. 26(seenow
[    tion Agents
Debt Collection Act, R.S.B.C. 1979, c. 88).
H Expropriation
■ Annual Report, 1971*
Not applicable
§ Mechanics' Lien Act
[■Deficiency  Claims  and
Conditional Sales Act, S.B.C. 1973, c. 19 (see
now Sale of Goods on Condition Act, R.S.B.C.
1979, c. 373); Bills ofSale Act, S.B.C. 1973, c.
7 (see now Chattel Mortgage Act, R.S.B.C.
1979. c. 48).
■Legal Position of the Crown
Crown Proceedings Act, S.B.C. 1974, c. 24 (see
now Crown Proceeding Act, R.S.B.C. 1979, c.
86); Interpretation Act, S.B.C. 1974, c. 42, s.
13 (see now Interpretation Act, R.S.B.C. 1979,
c. 206, s. 14).
1   Annual Report, 1972
Not applicable
Interim Report on Evidence
Attorney-General Statutes Amendment Act, 1975,
S.B.C. 1975, c. 4, s. 6 (see now Evidence Act,
R.S.B.C. 1979, c. 116, s. 38).
Pre-judgment Interest
Prejudgment Interest Act, S.B.C. 1974. c. 65 (see
now Court Order Interest Act, R.S.B.C. 1979,
c. 76).
Landlord and Tenant—Resi-
Landlord and Tenant Act, S.B.C. 1974, c. 45 (see
1   dential Tenancies
new Residential Tenancy Act, R.S.B.C. 1979,
c. 365).
j: * Report is out of print.
Recommendations Implemented
in Whole or in Part by
Annual Report, 1973
Not applicable
Limitations Act, S.B.C. 1975, c. 37 (see nol
Limitation Act, R.S.B.C. 1979, c. 236).    j
Costs   of   Accused   on
Procedure Before Statutory
A Procedure for Judicial Re
Judicial Review Procedure Act, S.B.C. 1976. c..
view of the Actions of
(see now Judicial Review Procedure A\i
Statutory Bodies
R.S.B.C. 1979, c. 209).
Annual Report, 1974
Not applicable.
Costs of Successful Unas
sisted Lay Litigants
The      Termination      of
Powers of Attorney and
Attorney-General Statutes Amendment Act, 197
Mental Incapacity
S.B.C. 1979, c.2, s. 52 (see now PowSI
Attorney Act, R.S.B.C. 1979, c. 334, s. 7).
Personal Property Security
Security Interests in Real
Miscellaneous Statutes (Court Rules) Amendnul
Property: Remedies on
Act, S.B.C. 1976. c. 33, s.94(a) [in part] 11
now Law and Equity Act, R.S.B.C. 197*1
224, s. 16); Supreme Court Rules, Rule 50 (1 i
3(2) [in part]; Land Titles Act, S.B.C. 19781
25 [in part] (see now Land Title Act, R.S.B.'
1979, c. 219); Attorney General Statml
Amendment Act, S.B.C. 1980, s. 11 [in paffl
Annual Report, 1975
Not applicable
Minors' Contracts
Extra-judicial Use of Sworn
See, e.g., Mineral Act, 1977, S.B.C. 1977, c.i
Rule in Bain v. Fothergill
Conveyancing and Law of Property Act, S.Hl
1978, c. 16, s. 33 (see now .PrtJ/jer/y Law a I
R.S.B.C. 1979, c. 340. s. 33).
Annual Report, 1976
Not applicable
The Rule in Hollington v.
Evidence Amendment Act. 1977, S.B.C. 197f|
70 (see now Evidence Act, R.S.B.C. 197M
116, ss. 15(3), 80, 81).
Waiver of Conditions Prece
Attorney-General Statutes Amendment Act, 19',
dent in Contracts
S.B.C. 1978. c. 11, s. 8 (see now Law a'\
Equity Act, R.S.B.C. 1979, c. 224, s. 49»l
* Report is out of print.
 REPORT OF THE LAW REFORM COMMISSION,  1981                             17
Recommendations Implemented
in Whole or in Part by
Proof of Marriage in Civil
Attorney-General Statutes Amendment Act, 1979,
S.B.C. 1979, c. 2, s. 18 (see now Evidence Act,
R.S.B.C. 1979, c. 116, s. 58).
The Statute of Frauds
Tort Liability of Public
Offences Against the Person
Act, 1828, Section 28
Attorney-General Statutes Amendment Act, 1978,
S.B.C.  1978, c. 11, s. 8 (see now Law and
Equity Act, R.S.B.C. 1979, c. 224, s. 3).
Annual Report, 1977
Absconding Debtors Act and
Bail Act: Two Obsolete
Not applicable
Attorney-General Statutes Amendment Act, 1978,
S.B.C. 1978, c. 11, s. 8.
The Replevin Act
Rules of Court, Rule 46 as amended Nov. 26,1981
by B.C. Reg. 467/81.
The Attachment of Debts Act
Execution Against Land
!< 1   Annual Report, 1978              Jan. Not applicable
2 Creditor's Relief Legisia-    Jan.    	
tion: A New Approach        1979
3 Guarantees of Consumer   June Consumer Protection Amendment Act, 1980,
Debts                                 1979 S.B.C. 1980, c. 6, s. 3. [in part].
4 Parol Evidence Rule Dec.    	
5 Annual Report 1979               Jan. Attorney General Statutes Amendment Act, 1980,
1980 S.B.C. 1980, c. 1, ss. 7,17 (Limitationperiods
in actions against estates).
6 Civil Litigation in the Public   June
Interest 1980
7 Calculation of Interest on   Sept.   Attorney General Statutes Amendment Act, 1981,
Foreclosure 1980       S.B.C. 1981, c. 10, s. 28.
8 The   Recovery   of   Un-   Sept.   Financial Administration Act, S.B.C. 1981, c. 15,
authorized Disbursements    1980       s. 67.
of Public Rinds
9 Annual Report 1980 Jan.    Attorney General Statutes Amendment Act, 1981,
1981        S.B.C. 1981, c. 10, s. 30 (Discount Rates).
0 Cable    Television    and March
Defamation 1981
1 Benefits Conferred Under a   Sept.
Mistake of Law 1981
I '2   The Making and Revocation   Sept.
of Wills 1981
3   Distress for Rent Nov.
Appendix B
1. Debtor-Creditor Relationships
(a) The Crown as Creditor: Priorities and Privileges
(b) Reviewable Transactions
(c) Joint Liability
(d) Enforcement of Judgments
2. Personal Injury Compensation
(a) Periodic Payments
(b) Compensation for Non-pecuniary Losses
(c) Family Compensation Act
3. Statute Law Revision: Applicability of English Law
4. Arbitration
5. Civil Procedure
(a) Foreign Money Liabilities
(b) Prejudgment Interest
6. Estates Projects
(a) The Interpretation of Wills
(b) Statutory Succession Rights
(c) The Effect of Testamentary Instruments
(d) Probate Procedure and Administration
7. Office of the Sheriff
8. Illegal Contracts
9. Torts and the Family
(a) Interspousal Immunity in Tort
(b) Miscellaneous Causes of Action
10. Following Trust Money: the Rule in Clayton's Case
Queen's Printer for British Columbia d
Vicloria, 1982


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