2017 BCSC 2474 Goyal v. Estate of Maisie Meng

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:	Goyal v. Estate of Maisie Meng,
	2017 BCSC 2474

Date: 20171215

Docket: S130014

Registry: Vancouver

Between:

Gulshan Kumar Goyal, also known as Shawn Goyal

Plaintiff

And:

Estate of Maisie Meng, Deceased, by its litigation representative

Hsiao Chin Stephen Lo and Chyuan Lih Meng, a person under disability,

by his litigation guardian Hsiao Chin Stephen Lo

Defendants

And

Larry Tuan, Erwin Liem, Royal Pacific Riverside Realty Ltd.,

Angie Sun and Royal Pacific Realty (Kingsway) Ltd.

Third Parties

Before: The Honourable Madam Justice Adair

Oral Reasons for Judgment

Counsel for the Defendants:	M. Ganatra
Third Party Erwin Liem:	In Person
No other appearances
Place and Date of Trial:	Vancouver, B.C. December 12 and13, 2017
Place and Date of Judgment:	Vancouver, B.C. December 15, 2017

[1] THE COURT: This trial has involved a claim by the representatives of the defendants Mr. and Mrs. Meng (both of whom are now deceased) against one of the third parties, Erwin Liem. Mrs. Meng died in January 2014 at age 88, and Mr. Meng died earlier this year at age 96.

[2] Mr. Liem held a power of attorney (together with the third party Larry Tuan) dated November 15, 2011 from each of Mrs. Meng and Mr. Meng. The powers of attorney were revoked in November 2012.

[3] The action generally concerned a claim by the plaintiff for specific performance of a contract of purchase and sale of the Mengs’ former family home on Cambie Street in Vancouver (the “Cambie Property”). The contract of purchase and sale, dated September 10, 2012, had been signed by Mr. Tuan and Mr. Liem acting in their capacities as the Mengs’ attorneys under the Powers of Attorney. The purchase price was $1.4 million. In defence of the plaintiff’s claim, the Mengs asserted (among other things) that the Powers of Attorney were void, and the contract of purchase and sale was void on a number of grounds, including lack of capacity.

[4] The plaintiff’s claim was settled earlier this year. An order was pronounced by Mr. Justice Greyell on August 31, 2017, ordering that the Cambie Property be transferred to the plaintiff for the total purchase price of $1,650,000.

[5] I am advised by counsel for the defendants that the third party claims against the Royal Pacific companies and Angie Sun (a realtor involved in the listing and sale of the Cambie Property) have been settled, although the terms were not disclosed and are not in evidence. I have also been advised that Mr. Tuan, although served, has never participated in these proceedings and also that he is bankrupt (although there is actually no evidence of this).

[6] In the joint amended third party notice filed June 2, 2015, the Mengs asserted that Mr. Tuan and Mr. Liem had breached their duties as attorneys under the Powers of Attorney in a number of respects, including committing the Mengs to sell the Cambie Property for $1.4 million, failing to confirm with Mrs. Meng prior to signing the contract of purchase and sale that she was prepared to sell the Cambie Property for that price, and failing to act in the best interests of Mr. and Mrs. Meng.

[7] The Mengs now seek the following relief against Mr. Liem:

(a) judgment in the sum of $110,000 in respect of what the defendants say are cash withdrawals made from the Mengs’ account at the Royal Bank of Canada (“RBC”);

(b) judgment in the sum of $34,500 in respect of what the defendants say are cheques drawn on the Mengs’ RBC account and payable to Mr. Tuan; and

(c) indemnity for the legal expenses (as determined by an assessment by the Registrar) incurred by the defendants in respect of the defence of the plaintiff’s claim and this action generally (total legal fees to date are about $147,000).

[8] In closing submissions, Ms. Ganatra, counsel for the defendants, confirmed that the items of relief set out in paragraphs 5(a), (b), (c) and (e) of Part 2 of the amended third party notice are not being sought against Mr. Liem. On the evidence submitted, there is no basis to grant such relief against him in any event. The primary relief sought against Mr. Liem is the indemnity for costs claimed in paragraph 1(a) of Part 2 of the third party notice and judgment accordingly pursuant to paragraph 2, and judgment pursuant to paragraph 5(d) for the amounts relating to the Mengs’ RBC account.

[9] The evidence at trial consisted of excerpts from Mr. Liem’s examination for discovery read in as part of the defendants’ case and documents marked as Exhibit 2. Mr. Liem did not call any evidence and did not testify.

[10] I will deal first with some basic legal principles.

[11] Generally where there is a power of attorney, a fiduciary relationship exists between the attorney and the donor, although in some circumstances it may be necessary or appropriate to analyse whether the three indicators of a fiduciary relationship are present. See Egli v. Egli, 2004 BCSC 529, at paras. 76-79.

[12] Here, the evidence establishes that, in respect of the Powers of Attorney given to Mr. Liem and Mr. Tuan by the Mengs, the three indicators of a fiduciary relationship were present, namely:

(a) the fiduciary has scope for the exercise of some discretion or power;

(b) the fiduciary can unilaterally exercise this discretion or power to affect the beneficiary’s legal or personal interests; and

[13] In this case, the terms of the Powers of Attorney gave the attorneys (acting together) the power to do anything the donor could lawfully do by an attorney, provided that the power of attorney could be exercised during any subsequent mental infirmity on the part of the donor, and gave the attorneys the power to make decisions and to do anything on behalf of the donor that the donor may lawfully do by an agent in relation to the donor’s financial affairs. The Mengs, given their age and circumstances, were particularly vulnerable to their attorneys. Mr. Liem acknowledged that, as the Mengs’ attorney, he was required to act within the authority he was given and put the good of the Mengs ahead of his own interests.

[14] I find, therefore, that as their attorney under the Powers of Attorney, Mr. Liem had a fiduciary relationship with the Mengs and owed a fiduciary duty to each of them in respect of the exercise of his powers under the Powers of Attorney.

[15] I will deal next with the claims relating to the Mengs’ RBC account.

[16] Based on the evidence, after the Powers of Attorney were signed, Mr. Tuan and Mr. Liem went to the Bank. Mr. Liem believes that the Bank officer asked for the originals of the Powers of Attorney, although he was unsure whether the Bank kept the originals. However, I infer that, after this visit, the Bank at least had copies of the Powers of Attorney. Mr. Liem understood that, when acting under the Powers of Attorney, both he and Mr. Tuan needed to sign any documents, consistent with the term of the Powers of Attorney that they “shall act together.” In my view, it is reasonable to conclude that the Bank, being in possession of the Powers of Attorney, would also be aware of this term, and not allow bank business, relying on the Power of Attorney, to be conducted except in accordance with it. Mr. Liem also believed that if any business was to be conducted on behalf of the Mengs at the Bank relying on the Powers of Attorney, he and Mr. Tuan had to be at the Bank together. Mr. Liem’s evidence was to the effect that no withdrawals were made from the Mengs’ account in his presence, that he never signed any cheques drawn on the Mengs’ account and he never conducted any financial transactions on their behalf. The only time he acted under the Powers of Attorney was in relation to the listing and sale of the Cambie Property.

[17] According to Mr. Liem, he never saw any bank statement for the Mengs and never asked to. Until his examination for discovery, he had never seen any documentation about their accounts.

[18] Beginning at discovery question 596 and following, a number of questions were put to Mr. Liem concerning transactions shown on a bundle of documents relating to the Mengs’ bank account. This bundle is found at tab 7 of A for Identification. Mr. Liem had no knowledge of any of these transactions.

[19] With respect to the cash and PTB withdrawals, the evidence does not disclose who made them, the circumstances in which they were made or where the money went, other than it did not go to Mr. Liem. The money could have gone to Mr. Tuan. On the other hand, it could also have gone to the Mengs. The evidence does not support the conclusion that Mr. Tuan obtained a bank card allowing him to make withdrawals from the Mengs’ account using either of the Powers of Attorney. Indeed, my finding above that the Bank would not allow bank business to be conducted other than in accordance with the Powers of Attorney is against such a conclusion. In those circumstances, I am not prepared to find that the withdrawals are evidence of a breach of duty on the part of Mr. Liem, or that his role as attorney under the Powers of Attorney was connected with those withdrawals. In my view, the evidence does not support the conclusion that he should be liable in respect of them.

[20] I draw the same conclusion concerning the cheques that were drawn on the Mengs’ account and made payable to Mr. Tuan. Clearly, the recipient of the money is not in doubt. However, whether, in relation to the creation of these cheques, Mr. Tuan purported to use a power given to him as one of the Mengs’ attorneys is unknown. From the face of the cheques, it does not appear that he did. Since the Bank was aware of the contents of the Powers of Attorney and the requirement that the attorneys act together, I think it is unlikely that Mr. Tuan would have been allowed to write cheques drawn on the Mengs’ account without Mr. Liem’s signature (as the other attorney) being required.

[21] Not everything that Mr. Tuan did in relation to the Mengs was connected with his role as an attorney for the Mengs under the Powers of Attorney. Not everything that Mr. Tuan did in relation to the Mengs was something that Mr. Liem, as one of the Mengs’ attorneys, delegated to Mr. Tuan to do. The evidence simply does not support the conclusion that, whatever Mr. Tuan did in relation to the Mengs, he did in his capacity as attorney under the Powers of Attorney.

[22] Given Mr. Liem’s evidence, I am not prepared to find that Mr. Tuan’s activities concerning the cheques written to him are evidence of a breach of duty on the part of Mr. Liem, or that his role as attorney under the Powers of Attorney was connected with those activities. In my view, the evidence does not support the conclusion that Mr. Liem should be liable in respect of them.

[23] I am also not prepared to find, on the basis of the evidence presented and in the light of s. 19(1)(b) of the Power of Attorney Act, that the scope of Mr. Liem’s obligations as one of the Mengs’ attorneys required him, without being asked by the Mengs, to be constantly vigilant respecting their bank accounts, where he had no involvement as attorney with those accounts. He was not managing or making decisions about their bank accounts, nor had he been asked to do so.

[24] In summary, with respect to the claims relating to the Mengs’ RBC account, I find that the defendants have failed to establish any breach of duty on the part of Mr. Liem and that Mr. Liem is not liable for the amounts claimed.

[25] However, I have drawn a different conclusion concerning Mr. Liem’s conduct and his liability to the Mengs in relation to the sale of the Cambie Property.

[26] There is no question Mr. Liem was directly involved, in his capacity as attorney for Mr. Meng, in signing the listing contract. (Ms. Meng signed this herself.) However, Mr. Liem never communicated in any way at any time with Mr. Meng to determine his wishes. Mr. Liem was also directly involved in signing the necessary document to reduce the listing price. He acknowledged that he never contacted Mrs. Meng to discuss her wishes in that respect or to confirm what he had been told by Ms. Sun. He agreed that, acting in the Mengs’ best interests, it was important to independently satisfy himself that the price reduction was appropriate.

[27] Finally, Mr. Liem was directly involved in signing the contract of purchase and sale as attorney (with Mr. Tuan) for both the Mengs. By doing so, he committed the Mengs to selling the Cambie Property for $1.4 million, which was below even the reduced listing price. He had no good explanation for why, when the plaintiff’s offer came in, Mrs. Meng was not asked to sign it herself. He acknowledged that, so far as he was aware, there was never any urgency with respect to a sale or signing documents. He described how, when he, Mr. Tuan and Ms. Sun met at Starbucks when the plaintiff's offer came in, he asked Mr. Tuan to call Mrs. Meng, essentially to confirm that she was okay to go ahead with the sale at $1.4 million, but Mr. Tuan was not able to reach her. The contract was then signed by him and Mr. Tuan. Mr. Liem acknowledged that, when he found out a few days later that Mrs. Meng disagreed with the price, he instantly regretted that he had signed the offer without taking it to her.

[28] In my opinion, in acting in this way, Mr. Liem failed to act in the Mengs’ best interests and breached the duty that he owed to them as their attorney. I find that, as a result of Mr. Liem’s conduct and his breach of duty as the Mengs’ fiduciary, the Mengs were sued in this action and incurred legal expenses to defend themselves.

[29] Accordingly, I conclude that the Mengs are entitled to be indemnified for the legal expenses and costs they incurred in relation to this action.

[30] I order that the accounts rendered to the defendants by their legal counsel in relation to this action (which I will refer to as the “Bills”) be submitted to the Registrar for review, that the procedure under Rule 14-1 of the Supreme Court Civil Rules for the assessment of costs and review of bills shall apply to the review of the Bills, and that sections 71, 73, 75 and 76 of the Legal Profession Act, S.B.C. 1998, c. 9, shall also apply to the review of the Bills. On the issuance of the Registrar’s certificate following the review, I order that Mr. Liem pay to the defendants the amount certified by the Registrar.

[31] All other claims against Mr. Liem by the defendants are dismissed.

[32] Since I have ordered that the defendants be indemnified in respect of their legal expenses (as assessed by the Registrar) in connection with this action, I make no order as to costs.

[33] That concludes my Reasons.

“ADAIR J.”