2008 BCSC 670 Flack v. Rossi

Before: The Honourable Mr. Justice Parrett

Reasons for Judgment

Counsel for the plaintiffs:	G. J. Dykstra
Counsel for the defendant:	A. Kemp
Date and Place of Trial:	May 28, 29, 30, 31, June 1, 2007
	Prince George, B.C.

Plaintiffs’ written submissions received:	June 20, 2007
Defendant’s written submissions received:	July 27, 2007
Plaintiffs’ reply received:	August 23, 2007

INTRODUCTION

[1] In this action the plaintiffs seek to recover from the defendant pension benefits he received as a result of his designation as a beneficiary of those benefits. The pleadings also seek an accounting from the defendant of the assets and liabilities of the estate of Cosimino Caputo, also known as Cosimo Caputo also known as Cosmo Caputo, deceased, and for the recovery of various funds the defendant received from accounts in the name of the deceased.

AMENDMENTS

[2] At the opening of the trial the plaintiffs, through counsel, advised the court of their intention to seek a series of amendments to their statement of claim and with the agreement of opposing counsel asked that those amendments be addressed in their closing arguments.

[3] The plaintiffs seek to make further amendments to their statement of claim by adding to para. 15, subpara. (a), (b) and (c), and by adding an alternative claim against the defendant that he holds the funds received from the pension plan on a constructive trust for the plaintiffs.

[4] With respect to the bulk of those amendments, the defendant, while making no admission, takes no position with respect to the amendments sought.

[5] The exception is a portion of the proposed amendment to add para. 15(b) in so far as it includes references to ss. 50, 51 and 52 of the Insurance Act. The defendant submits that these sections have no bearing on the case at bar and should not be allowed.

[6] In my view, the amendments sought reflect the case as presented by the plaintiffs and the amendments should be granted to allow them, in their view, to bring their pleadings into conformity with the case as they see it.

[7] The amendments are allowed and the statement of claim is amended accordingly.

[8] The plaintiffs seek to recover the benefit in issue in one of three ways. They submit that –

(a) there was an enforceable agreement between the deceased and the plaintiff, Natalina Flack;

(b) that the deceased did not sign the “purported” designation of beneficiary on the pension form; and

BACKGROUND

[9] Cosimino Caputo, the deceased, and the plaintiff, Natalina Flack, were married at Edmonton, Alberta, on September 3, 1966. They agreed to separate on January 4, 1988 according to their separation agreement, and on March 30, 1988 they executed that separation agreement.

[10] During the course of their marriage the couple had two children, the plaintiffs, Assunta Teresa Rosa Caputo and Carmen Peter Adam Caputo. At the time of trial they were 39 and 35 years of age respectively.

[11] Mr. Caputo died at Prince George on April 7, 2000 at the age of 61 years.

ISSUES

[12] In their written submissions the plaintiffs frame the issues, in para. 67, in this way:

[67] In conclusion it is respectfully submitted that the defendant, Nevio Rossi, holds the amounts received from the Pension Corporation of British Columbia under plan number 189363 in trust for the plaintiffs, Assunta Teresa Rosa Caputo and Carmen Peter Adam Caputo, and, in the alternative, that the designations of July 19, 1993 and July 8, 1998 be declared voidable on the grounds of the undue influence of the defendant, Nevio Rossi, upon the deceased, and the plaintiffs ask for:

(a) a judgment for the total of the monthly amount paid to the defendant, Nevio Rossi, from May, 2000, being the amount of $1,109.45 per month to the date of judgment, August, 2007, being 88 month[s] times $1,109.45 plus adjustments for inflation, plus interest thereon;

(b) for an order directing the Pension Corporation of British Columbia to pay all further payments payable under the said plan number 189363 to the plaintiff, Assunta Teresa Rosa Caputo and Carmen Peter Adam Caputo;

(d) for the costs of this actions.

[13] This is a significant narrowing of the issue set out in the amended statement of claim and emerges in part as a result of the following position set forth in para. 66 of the plaintiffs’ written submissions:

[66] The plaintiffs abandon any and all claims to the assets of or an accounting for the assets and liabilities of the estate of Cosmo Caputo, Deceased.

THE SEPARATION AGREEMENT AND ITS IMPLEMENTATION

[14] On or about March 30, 1988, Cosimino Caputo and Natalina Caputo (Flack) executed a separation agreement resolving issues between them. The agreement was prepared by the deceased’s law firm, Wilson King and Company, after discussions that had gone on for some weeks or months. Aside from the general provisions in the agreement it deals with Custody, Guardianship and Access; Debts and Credit; Disclosure; Maintenance; Property; Taxes and Mutual Releases amongst other things.

[15] Under the category of Property, two provisions are of interest:

27. The Wife shall immediately transfer to the Husband all of her interest in the Family Residence in consideration of which the Husband will pay to the Wife the sum of $25,000.00.

28. The Husband shall immediately transfer to the wife all of his interest in the property more particularly known and described as:

Lot A,

District Lot 810,

Cariboo District,

Plan 8762

In consideration of which the Wife renounces and reliquinshes [sic] any interest she may have in any Pension Benefits or Plan available or provided to the Husband through his employer, the City of Prince George.

[Emphasis added}

[16] Under the heading Mutual Releases, the provisions include the following:

35. The Wife renounces and relinquishs [sic] all interest in the estate of the Husband and all right to participate in, benefit from or administer the estate of the Husband and the Wife shall not commence any proceedings under any statute against the estate of the other, except for the purposes of enforcing this Agreement.

36. The Husband and the Wife each acknowledge the [sic] he or she has no legal or equitable interest in any property in the name of the other, including but not limited to any interest either the Husband or the Wife may have in any pension plan.

37. The Wife acknowledges that this Agreement is a full and final settlement of all her rights against the Husband arising out of the marriage or ownership of property, including all her rights for maintenance for herself and all other claims of every kind except her claims for the dissolution of the marriage but including the rights that the Wife now has or may in the future have as a result of the provisions of the Divorce Act of Canada, the Family Relations Act, the Divorce and Matrimonial Causes Act, the Wills Variation Act, the Canada Pension Plan Act, the Partition of Property Act, the Estate Administration Act, the Homestead Act, the Land (Spouse Protection) Act, and/or any other statute hereafter enacted to the same or similar effect.

[17] The agreement concludes with the following provisions:

44. The Husband and the Wife have been fully advised and informed of the fortune, estate and prospects of the other, before each of them signed this Agreement.

45. The Husband and the Wife acknowledge that this Agreement has been entered into without any undue influence, duress, fraud, coercion or misrepresentation and that each has read this Agreement in its entirety and knows and understands the contents and has signed this Agreement voluntarily.

46. The Husband and the Wife acknowledge that this Agreement divides all assets, including but not restricted to family assets, fairly between them.

[18] Following the execution of this document, the plaintiff, Natalina Flack, transferred her interest in the former matrimonial home to the deceased on April 8, 1988 and received from him a payment of $25,000 plus the transfer of the other property located in Shelley which was registered as well on April 8, 1988.

[19] Two days prior to these transfers, on April 6, 1988, the deceased executed a will which named his daughter Assunta as his executrix and divided his estate amongst his children.

[20] On November 23, 1988 Mr. Caputo executed a codicil which deleted the appointment of Assunta as executrix and substituted Nevio Rossi as executor.

[21] The separation agreement, as noted, made specific reference to the deceased’s “Pension Benefits or Plan” available to him through his employment with the City of Prince George.

[22] The deceased provided to the provincial Superannuation Commission a series of documents. The first of these is dated March 16, 1988. This document is entitled Nomination of Beneficiary. In paragraph 2 of that form the deceased nominates his children, “Assunta & Carmen A. Caputo to receive my superannuation entitlement pursuant to the terms and conditions of the superannuation plan in the event of my death”.

[23] The second document is a similar form dated July 19, 1993 which nominates “Assunta Caputo, Carmen Adam Caputo, Nevio Alfonzo Rossi to receive my superannuation entitlement in the event of my death”.

[24] The third document is a Pension Application, apparently filed by the deceased, under the Municipal Pension Plan and stamped as received by the Superannuation Commission on July 16, 1998. This document bears a number of dates and its authenticity is contested by the plaintiffs.

[25] A signature, apparently of the deceased, appears on the form opposite the date May 28, 1998. Above that signature the deceased has nominated Nevio Rossi as his beneficiary to receive the pension benefit in the event of his death.

THE AUTHENTICITY AND EXECUTION OF THE APPLICATION AND DESIGNATION OF NEVIO ROSSI AS BENEFICIARY OF THE PENSION BENEFIT

[26] The plaintiffs maintain in their written submission the position that “. . . the designation of July 8, 1998 may not have been signed by the deceased”.

[27] The reference to July 8, 1998 is, in fact, the date that the authorized signing officer for the City of Prince George completed their portion of the Pension Application Form and certified it. The reference is to the same form purporting to be signed by the deceased on May 28, 1998 and received by the Superannuation Commission on July 16, 1998.

[28] In support of their submission the plaintiffs rely upon the opinion evidence of Mr. David Babb who is described as a forensic document examiner/handwriting expert. Mr. Babb was found qualified as an expert at this trial, in no small measure, because of the fact that Mr. Kemp, on behalf of the defendant, did not challenge his qualifications.

[29] Mr. Babb graduated from what he described as ‘Forensic Document School out of Handwriting University in Dallas, Texas’. When asked about that program Mr. Babb advised that it was a remote distance training school which he attended by telephone and that, in addition, he had attended two “live” seminars. Mr. Babb has never previously been qualified as an expert in this area and has not previously given evidence in this court.

[30] Mr. Babb’s opinion is found in a one page letter with a second page which sets out some additional detail. Mr. Babb’s opinion, as found in both his written report and his direct evidence, was that the five known samples he compared and the signature on the pension application were signed by “different authors”. This carefully phrased opinion, particularly within the context of the case presented by the plaintiffs, is an allegation of forgery and fraud.

[31] Such an allegation must be examined with the utmost care, including a careful examination of all the surrounding evidence. Mr. Babb, with respect, has limited experience and training on which to base that initial opinion.

[32] In the course of his examination of the questioned signature he examined four known samples all of which were signed 10 years before in 1988, and one signed 5 years before in 1993, and compared these signatures to the questioned signature from 1998. In addition, the questioned document was the only original he examined. Each of the other samples were photocopies.

[33] During the course of his cross-examination Mr. Babb acknowledged that a variety of factors can affect and change the appearance of a signature, including:

a)	physical changes
b)	aging
c)	disease
d)	the size of the space left for the signature
e)	being rushed or writing slowly

[34] In the end Mr. Babb acknowledged that it was possible that the author of the questioned signature and that of the known samples could have been one and the same and that it really depended on whether there was credible evidence of who had signed.

[35] The defendant called Andres Ribul as a witness. Mr. Ribul testified that he had retired in 2005 after 30 years working for the City where he was the deceased’s immediate supervisor from 1989 until his retirement in 1998. Mr. Ribul described in some detail the deceased’s diabetes and his gradual physical deterioration, particularly in the last 3 to 4 years leading up to his retirement in 1998.

[36] Mr. Ribul described a series of conversations with the deceased which outlined his disappointment with his children Assunta and Adam, his concern about them and his apparent intention that they not have his pension benefits.

[37] Mr. Ribul went on to identify the pension application form which is a part of Exhibit 3 which he testified he saw when the deceased asked him to help fill it out on May 28, 1998. He testified that the first four lines of the form and the name of the beneficiary are filled out in his handwriting and that he had asked the deceased who he was leaving the benefits to and had him spell Nevio Rossi’s name. He went on to testify that the deceased signed his name to the form in front of him and he watched him do it. He described his actions at the time as slow and shaky.

[38] Mr. Ribul testified that at the time he assisted the deceased with filling out the form, the two of them were alone in his office and that prior to the deceased’s death he had never spoken to Nevio Rossi about the deceased, although he had spoken to him on one or two occasions about school issues.

[39] I have no hesitation in accepting the evidence of Andres Ribul in all respects. He was careful and, in my view, candid in his testimony and had both a clear recollection of the events and a reason for remembering them as well as the assistance provided by his own handwriting. I am satisfied that Mr. Ribul had no interest in the outcome of these proceedings and that he gave an accurate account to the best of his ability.

[40] I specifically find that the signature placed on the pension application on May 28, 1998 is that of the deceased Cosimino Caputo and that the designated beneficiary Nevio Rossi was completed on the form at his direction.

THE EXISTENCE OF A SECOND ORAL AGREEMENT

[41] At the heart of the present action from the plaintiffs’ perspective is the assertion that Natalina Flack insisted, at the time of the separation agreement, that “. . . she would not claim the benefits of his pension with the City of Prince George if he would agree to designate his children as the beneficiaries of the death benefit”.

[42] This extract from the plaintiffs’ written submissions is expanded by the following submissions:

[24] The evidence of the plaintiff, Natalina Flack, was corroborated by the evidence of Ms. Rita Bulger. She testified that she was present during some of the negotiations relating to the terms of the separation agreement. She said that the deceased and the plaintiff, Natalina Flack, had at first agreed that the plaintiff, Natalina Flack, and the children would leave without anything except personal effects. Ms. Bulger said that she persuaded both parties that such division would not be acceptable and would be overturned by the courts. Consequently, Ms. Bulger assisted the negotiations between the parties further and the result was the nomination of Beneficiary form of March 16, 1988 and the Separation Agreement of March 30, 1988.

[25] The evidence of the plaintiff, Natalina Flack, and that of Ms. Bulger was not contradicted by any of the evidence of the plaintiff. In fact, it was corroborated by the evidence of the defendant, Nevio Rossi, and that of the witness, Maria Rossi. Both of those witnesses said that the deceased spoke about the separation and said to them that he was pleased that after all was said and done, he remained entitled to his “superannuation” and that the plaintiff, Natalina Flack, did not get a portion of it. They both said that on difference occasions the deceased said to them “. . . She got Shelley and I got my superannuation . . .” and flashed a “thumbs up”. . . .

[43] Mr. Dykstra goes on to submit that:

[26] The separation agreement consists of two parts, the Nomination of Beneficiary form of March 16, 1988 and the Separation Agreement signed on March 30, 1988. In the Nomination of Beneficiary form the deceased agrees to designate his children as the beneficiaries of the death benefit and in the Separation Agreement the plaintiff, Natalina Flack, and the deceased agree, inter alia, that she release all her rights to claim whatever benefits to which she may be entitled under the pension pursuant to Part V of the Family Relations Act.

[44] As Bouck J. noted in Miller v. Miller Estate (1987), 14 B.C.L.R. (2d) 42, at one time the Evidence Act, R.S.B.C. 1960, c. 134, s. 11, required corroboration before a claim could succeed against “the heirs, executors, administrators or assigns of a deceased person . . . in respect of any matter occurring before the death of a deceased person . . .”. This section was repealed in 1976 but as Bouck J. noted at page 50:

. . . Despite the repeal, it seems reasonable that a court should require a high standard of proof from a person who claims he is owed a sum of money by way of a debt due him from a deceased individual. This is because the deceased cannot, of course, appear in court and present his or her side of the argument. The only evidence that can be introduced in most instances is the evidence of the survivor. Support for the idea that a court must view this kind of evidence with care comes from a decision of Rae J. in Kong v. Kong, 14 B.C.L.R. 357, [1979] 6 W.W.R. 673, 5 E.T.R. 67 (S.C.). He describes the requirement of adequate proof as a rule of practice which a court should follow as a consequence of the repeal of s. 11 of the Evidence Act. At pp. 361-62 His Lordship said this:

In the absence of the statutory provision, one must at least examine the evidence with the most careful scrutiny and indeed, at the outset, with some suspicion: see Re Garnett: Gandy v. Macaulay (1885), 31 Ch. D. 1 (C.A.). One should also give consideration to whether corroborative evidence of a material nature exists and, if it does not, then whether in the particular circumstances it is necessary in order to render the other evidence believable. Under the rule of practice referred to, it was not invariably necessary to have corroboration of the nature indicated before the evidence could be acted upon: Re Garnett, supra; and Re: Hodgson; Beckett v. Ramsale (1885), 31 Ch. D. 177 (C.A.), as cited in Bayley v. Trusts & Guar. Co. Ltd.,, 66 O.L.R. 254, [1931] 1 D.L.R. 500 at 504, per Middleton J.A.

[45] At page 51 he concludes:

Therefore, while corroboration is no longer necessary, it still seems to me the evidence of a claimant in these types of situations should be examined with “the most careful scrutiny and indeed at the outset with some suspicion”.

[46] This statement applies more broadly, in my view, than in simply the debt action that was before the court in Miller, for it recognizes the difficulty in adequately responding to such a claim where the primary witness is deceased.

[47] In the case at bar those concerns are even more pronounced for here there is not only a contemporaneous written agreement that does not contain the agreement being advanced but it is one which materially contradicts the existence of such an agreement.

[48] When Mr. Dykstra asserts that the evidence of Natalina Flack was corroborated by the evidence of Ms. Rita Bulger and goes on to assert that their evidence “. . . was not contradicted by any of the evidence of the plaintiff” he, with respect, takes a very one-sided and simplistic view of the evidence.

[49] It is the obligation of this court to examine this evidence with the most careful scrutiny and suspicion. To say, as Mr. Dykstra does, that the evidence of Natalina Flack was corroborated by that of Rita Bulger is to ignore the numerous material contradictions found within the evidence of these two witnesses as well as the fact that these two witnesses are giving oral evidence about events that occurred 19 years before and without any notes or memoranda made at the time.

[50] A measure of the accuracy of Ms. Bulger’s evidence can be found in the fact that during her evidence on the second day of the trial she denied during cross-examination that she had in fact typed Schedules A and B to the separation agreement and that she went on to testify that they were typed in a font that she didn’t use.

[51] On the third day of trial she was recalled to clarify her evidence. On this occasion she testified that while she did not type Schedules A and B they were typed at a different office. When she was asked to explain what her answer meant she responded that:

My answer is I typed this in the area manager’s office and that the last two lines [of Schedule A] are in the font I used.

[52] Among the many significant discrepancies between the evidence of Ms. Flack and that of Ms. Bulger are the following:

(1) Ms. Flack testified that before Ms. Bulger got involved in their settlement discussions in early 1988 she and the deceased had settled the superannuation but only that, and that after she became involved she could not recall any discussion about the superannuation. Ms. Bulger, in her testimony, described specific discussions about the superannuation.

(2) Ms. Bulger testified that it was only after she told the deceased Ms. Flack was entitled to half his pension and invited him to call a lawyer that he reluctantly agreed to divide his assets.

(3) Ms. Flack testified that she and the deceased would discuss things and that when they had agreed they would call Ms. Bulger to write down their agreement.

(4) It is clear from Ms. Bulger’s evidence that she was not a neutral party recording the agreements but an open advocate resisting the deceased’s position and advocating for Ms. Flack. This role as an advocate on her behalf continued, in my view, at this trial.

(5) Both Ms. Flack and Ms. Bulger testified on more than one occasion that during their discussions the deceased showed them the nomination of beneficiary form with Carmela Canino’s signature as a witness. Both insisted that they were shown the original document. Ms. Canino, in her evidence, testified that as the long time pension and benefits administrator for the City she always retained the original forms in her office after they were signed and could not recall ever having made a photocopy of one.

(6) Ms. Flack and her daughter Assunta both testified that they told the lawyer they retained with respect to the estate that the deceased had agreed to designate the children as irrevocable beneficiaries. Mr. Madill, in his evidence, denied that had occurred and his recollection and his notes reflect his inquiries concerning assets.

[53] Quite apart from these difficulties it is, in my view, inexplicable that Ms. Bulger, a banker of 11 years experience at the time, who had worked for Revenue Canada before that and who says her role was to take notes of and document the agreements reached, made no apparent note or documentary record of the agreement they now say was the prerequisite to the agreement the parties actually signed.

[54] Ms. Flack’s evidence about the pension and their agreement varied and, at times, became irreconcilable with her assertion in these proceedings that she would never have given up her interest in the pension without his agreement that he would irrevocably designate the children as beneficiaries.

[55] This extract from her evidence at trial is but a single example of this process:

Q	Mr. Caputo didn’t want to give you half of his pension at first, is that right?
A	Which pension are you referring to, sir?
Q	City of Prince George pension.
A	That was never an issue.
Q	Mr. Caputo didn’t want to give you half of his City of Prince George pension, is that right?
A	That’s wrong.
Q	He was happy to give it up?
A	To the children.
Q	My question was whether he wanted to give it to you?
A	I didn’t want it.
Q	Did he want to give it to you?
A	I didn’t want it.
Q	Did he offer to give it to you?
A	No, it was going to the children.
Q	So you’re saying it never came up as a topic of discussion, the question of whether you would get a share of his City of Prince George pension, is that what you’re saying?
A	That’s right.

[56] This portion of Ms. Flack’s evidence is completely inconsistent with the existence of the agreement on which the plaintiffs have based their action.

[57] It does not end at this point, however, for if one examines the plaintiff’s actions after the death of Mr. Caputo, especially in light of their assertions of this unequivocal agreement, their conduct becomes even more indicative and contradictory.

[58] The deceased died on April 7, 2000. Within days the plaintiffs met with and had discussions with Ron Madill, a lawyer with over 30 years experience. In meetings and discussions on April 10, 2000, April 11, 2000 and April 14, 2000, a variety of concerns were discussed and questions appear to have been specifically raised about who was the named beneficiary of the superannuation and of the deceased’s RRSP’s, but, and here I specifically prefer and accept the evidence of Mr. Madill, never once was it suggested that there was an irrevocable designation of the children as the beneficiaries of his superannuation plan.

[59] On May 9, 2003 the relationship with Mr. Madill was terminated and on May 20, 2003, more than 3 years after Mr. Caputo’s death, a new lawyer, Mr. D.N. Patten, wrote to the B.C. Superannuation Pension Services. The body of this letter reads:

Dear Sirs:

We act for Natalie Caputo who is the former wife of the late Cosimino Caputo aka Cosimo Caputo aka Cosmo Caputo. Mr. Caputo died April 7, 2000 and we understand that Letters Probate to his Estate were issued on July 11, 2001. At the time Mr. and Mrs. Caputo divorced Mr. Caputo had agreed to leave his two adult children as beneficiaries to whatever pension benefits he was entitled. I am advised by Mrs. Caputo that that is not the case and she has asked me to inquire as to who the beneficiaries of his pension benefits might be. Mr. Caputo’s Social Insurance Number is . . .

Thank you for your assistance in the matter.

[60] This is the first documented assertion of any agreement to designate the children as beneficiaries of his pension benefits and the word irrevocable is not evident.

[61] On July 20, 2003 the plaintiff Assunta Teresa Rosa Caputo sent two letters, one to a Notary Public in Ontario requesting a property search and one to KPMG, who by then had taken over as Trustee in Bankruptcy for the estate. In her correspondence she summarizes her interest in these words:

My brother Carmen Caputo (called Adam) and I are the named beneficiaries in our father’s will. To date the Executor has not been diligent in providing us with all of the probate documents regarding this estate. We were informed of your appointment as Trustee one year after the estate was placed in bankruptcy.

Executors and Trustees have certain duties to inform the beneficiaries of the progress of an estate. It is my opinion that due diligence has not been performed in the matter of our father’s estate. I assume that beneficiaries must be notified that an Executor will be placing an estate in bankruptcy, prior to the event. We were never notified that this was contemplated. I would like your clarification of this notification.

[62] In a letter addressed to Karen Harper (the Chief Knowledge Officer for the Pension Corporation) Assunta Caputo again pleads for information. The file copy of this letter, found in Exhibit 1, Tab 11, is undated but the reply appears to respond to her letter of November 12, 2003. The contents of this correspondence are, in my view, significant:

Dear Ms Harper

I appeal for information, regarding my late fathers pension.

S.I.N. . . .

Date of birth . . .

Date of Death April 7, 2000

Ms Harper my brother and I were informed May 15, 2003 that we were not the beneficiaries of my fathers pension, even though we were named as the beneficiaries of his estate.

Please we can not see our father doing that.

I appeal to you for help.

Please tell us who was named, so that we can put an end to this.

We can not believe that our father would name us as beneficiaries to the estate and not to the pension.

If possible can you send us copies of the signed forms, or please tell us who was named.

[63] The plain inferences arising from this letter are that they were surprised that as beneficiaries of the estate they were not beneficiaries of the deceased’s pension. This is surprising language from someone who, at trial, testified that her father had told her ‘all the time that my brother and I would get the pension’. Ms. Caputo repeated that assertion during her cross-examination and when confronted acknowledged that at her examination for discovery she had testified that there were only two occasions when her father spoke to her about the pension – once before her parents’ separated and once after.

[64] On September 24, 2003 Mr. Dykstra wrote to the defendant advising him that he was acting for “Natalina Caputo” who was in turn acting for her children Assunta Caputo and Adam Caputo. The substantive part of this correspondence is found in the following:

I am instructed by my client that Cosimino Caputo, Deceased, had a pension which paid a death benefit in the approximate amount of $80,000.00. My client has been informed that the death benefit was paid out to a person “in the east”. More information the pension administrators would not give her. Indeed they referred all further inquiries to you.

My client entered into a Separation Agreement with Cosimino Caputo, Deceased, on March 30, 1988. One of the reasons that she agreed to its terms was that she was promised by Cosimino Caputo, Deceased, that he named and would continue to name his two children as the designated beneficiaries of the death benefit from his pension plan. Now it appears that was not done.

[65] This correspondence was the first notice to the defendant of this claim and the first assertion of any agreement that the naming of his children as beneficiaries of the pension plan was to be continuing. This notification came more than 3½ years after the deceased’s death.

[66] Andres Ribul, during the course of his evidence, testified that on three or four occasions the defendant had told him that he had given his ex-wife a piece of property in exchange for him keeping his pension. Similar evidence was given of different conversations with the deceased in which he made similar statements to the defendants Nevio Rossi and his sister Maria Rossi (Novak).

[67] I accept and find that those various statements were made by the deceased at various times to those three different people.

[68] Those statements are completely consistent with the language of the separation agreement (clause 28) and with the transfers which took place approximately a week later on April 8, 1988. They are also, in my view, consistent with the extract of the evidence of Natalina Flack quoted above, if not other parts of her evidence.

[69] The plaintiffs submit that the separation agreement in fact consists of two parts – the Nomination of Beneficiary Form of March 16, 1988 and the separation agreement itself. In the alternative they submit that the separation agreement was entered into after fulfillment of a condition precedent which Natalina Flack insisted upon.

[70] Mr. Dykstra submits that this view of the agreement is consistent with the terms of the agreement itself and was the reason she renounced and relinquished her interest in his pension benefits. With respect, this submission distorts both the language of the agreement and the evidence in this trial.

[71] The language of clause 28 of the separation agreement could not be clearer. It requires the deceased to immediately transfer all of his interest in a specified parcel of land to his wife. He did. The language then continues that in consideration of [that transfer] “the Wife renounces and relinquishes any interest she may have in any Pension Benefits or Plan available . . .”.

[72] Mr. Dykstra is, with respect, not arguing, despite the language of his submissions, a proposition consistent with the written agreement signed by the parties but a proposition that fundamentally contradicts and refutes the written agreement.

[73] His submissions amount to the following propositions:

(a) the consideration actually given to her for the release of any claim to his City pension was not the transfer of the property expressly identified in the agreement (and in fact transferred contemporaneously) but his agreement, nowhere documented, to irrevocably designate the children as beneficiaries of his pension;

(b) the transfer of the property was simply part of the overall division of assets and not, as specified, the consideration of the release of her claim to the pension.

[74] This is not an example of an attempt to explain an ambiguity or to give context to an agreement but an outright attempt to deny what was the essence of the agreement to the deceased.

[75] If as asserted by the plaintiffs there was a condition precedent to the agreement that required the children to be irrevocably designated as the beneficiaries under the pension plan it would have been the simplest thing in the world to have included that language in clause 28 as the consideration for her release. Not only was that not done but a completely different type of consideration was identified and given.

[76] Mr. Dykstra cites in support of his submissions the decisions of Huddart, L.J.S.C., as she then was, in Lyons v. Great-West Life Assurance Co. and Phillips (1985), 67 B.C.L.R. 251. The decision in that case was on an application by the defendants to strike out the plaintiff’s statement of claim under R. 18(24) on the basis that they had no standing to bring the claim. This decision allowed the pleadings to stand and the action to proceed. It is of no assistance in determining the substantive issues in the case at bar.

[77] The execution by the deceased of the Nomination of Beneficiary Form on March 16, 1988 is perfectly consistent with the deceased’s stated intention of removing Natalina Flack as a beneficiary of his pension benefits and with the evidence that she had agreed to release her interest in the pension in exchange for the Shelley property.

[78] The form and the date of its execution is neutral in the sense that it is consistent with either version of events.

[79] Mr. Dykstra, in his submissions, seeks to elevate the significance of that event to evidence that establishes the existence of the collateral agreement. In doing so he overstates the significance of that evidence. Among the many facts that are glossed over or ignored in his submissions is the fact that the deceased executed the transfer for the Shelley property on March 22, 1988, six days after he apparently signed the Nomination of Beneficiary Form and presumably eight days before he signed the separation agreement.

[80] I note however that the plaintiff, Natalina Flack, appears to have signed the separation agreement on March 4, 1988 (Exhibit 1, Tab 1, page 12).

[81] These various events establish, in my view, that an agreement was reached but they are completely consistent with the agreement being that set out in the separation agreement.

THE PAROL EVIDENCE RULE

[82] I have already concluded that the existence of the oral agreement alleged by the plaintiffs is not consistent with the written agreement executed by the parties but rather materially contradicts its terms. The contradictions, however, are not limited to those identified earlier in these reasons. Among the other direct contradictions are found the following:

(a) Recital (g) on page 2 is in essence a ‘whole agreement provision’ which of course contradicts the existence of a contemporaneous oral agreement; and

(b) Clause 4 on page 3 is a provision which specifically revokes all previous written or oral agreements of the categories stipulated which would include the oral agreement alleged if it was in fact entered into.

[83] What the plaintiffs allege here is the existence of a collateral contract.

[84] In Ahone v. Holloway (1988), 30 B.C.L.R. (2d) 368 (B.C.C.A.) at p. 373, McLachlin J.A., as she then was, wrote:

A collateral contract is an oral agreement ancillary to a written agreement. As with any contract, the party alleging it must establish the agreement of all parties to its terms. He must also establish consideration, which in the case of a collateral contract consists in entering into or promising to enter into the principal contract.

The Supreme Court of Canada has repeatedly held that a collateral contract – which is one way of characterizing the agreements as to interest and accommodation in this case – cannot contradict the main written contract: Hawrish v. Bank of Montreal, [1969] S.C.R. 515, 66 W.W.R. 673, 2 D.L.R. (3d) 600, affirming 61 W.W.R. 16, 63 D.L.R. (2d) 369 [Sask.]; Bauer v. Bank of Montreal, [1980] 2 S.C.R. 102, 33 C.B.R. (N.S.) 291, 10 B.L.R. 209, 110 D.L.R. (3d) 424, 32 N.R. 191 [Ont.]; and, Carman Const. Ltd. v. C.P.R., [1982] 1 S.C.R. 958, 18 B.L.R. 65, 136 D.L.R. (3d) 193, 42 N.R. 142 [Ont.].

[85] The reasoning in Ahone has been subsequently considered and applied by Shaw J. in Norman Estate v. Norman (1990), 43 B.C.L.R. (2d) 193 at 202 and by Lowry J., as he then was, in Bourgeois v. McMurchy, [1992] B.C.J. No. 2707 at p. 4-5.

[86] This analysis leads to the following conclusion:

(1) The plaintiffs have not established on a balance of probabilities that there was an agreement, irrevocable or otherwise, to designate the children as the beneficiaries of the deceased’s pension plan benefits;

(2) The evidence in this case overwhelmingly points to the fact that no such agreement existed;

(3) The inherent contradictions found within the evidence of Natalina Flack and Rita Bulger as well as the fact that they are now reconstructing events some 19 years in the past makes their evidence unreliable;

(4) The evidence seeking to establish the existence of a collateral agreement or, as the plaintiffs’ characterize it, a condition precedent is materially inconsistent with the written agreement entered into between Natalina Flack and the deceased, and by virtue of the parol evidence rule is inadmissible for that purpose; and

(5) As I indicated earlier, I am satisfied that the deceased, in fact, executed the Nomination of Beneficiary portion of the Pension Application on May 28, 1998.

UNDUE INFLUENCE

[87] In Fontana v. Fontana (1987), 28 C.C.L.I. 232, Callaghan J., after reviewing the authorities, found, at p. 236, that:

I am therefore led inexorably to the conclusion that a designation of a beneficiary is more closely akin to a will than a gift inter vivos and, as such, should be treated in law like a will. Consequently a presumption of undue influence is not available to the plaintiff in this case.

[88] In Re Rogers: Rogers v. Rogers (1963), 39 D.L.R. (2d) 141, the B.C. Court of Appeal had for consideration an appeal in which a deceased, two weeks before committing suicide, executed a change of preferred beneficiaries under his life insurance policy naming his wife of three months in place of his mother and father. The parents contested the change on the basis the deceased lacked the necessary mental capacity to effect such a change. At p. 148, Wilson J. concludes that:

Having concluded that the testamentary test is the right one to apply, I cannot see that, so far as degree of understanding or capacity is concerned, there is any real difference. I do not think that a man requires any higher or lower degree of capacity to consider his own interest than he needs to consider the interests of other persons. Nor do I think that the degree of capacity required differs in respect to any disposition by gift or otherwise.

My statement that the rule in the cases of testamentary dispositions is the right rule to apply does not carry with it any finding that the designation of a new preferred beneficiary was a testamentary disposition so that the burden of proof of capacity was cast on the respondent. The application of this arbitrary rule, peculiar to testamentary dispositions, is not to be extended to other matters, such as the exercise of a power. The ordinary rule prevails that the person (here the appellants) attacking the disposition carries the burden of proving mental incompetence.

[89] Within these principles the 1993 Nomination Form and the 1998 Pension Application beneficiary designated are considered to constitute testamentary dispositions under which the plaintiffs cannot rely on any presumption of undue influence.

[90] With respect to these documents the plaintiffs bear the onus of proving that the defendant exerted undue influence on the deceased to cause him to name the defendant as one of three beneficiaries in 1993 and as the sole beneficiary in 1998.

[91] As Callaghan J. noted in Fontana, at p. 236, to establish undue influence:

Mere persuasion is insufficient; the influence exerted on the deceased must amount to coercion in order to be characterized as undue influence.

[92] In Stewart v. Nash (1988), 33 C.C.L.I. 34 at p. 39, Steele J. observed that:

To establish undue influence there must be force or coercion destroying the free agency of the person involved. Normal influence or affection or attachment, or the mere desire of gratifying a beneficiary’s wishes, does not establish undue influence.

[93] The plaintiffs’ begin their submissions on this issue in this way:

[46] While there is no direct evidence of undue influence of the defendant upon the deceased, the inference that there was is inescapable. The separation agreement was made on March 16 and 30, 1988. The evidence of Mr. MacKenzie was that the deceased made a Last Will and Testament on April 6, 1988 wherein he appointed the plaintiff, Assunta Caputo, to be executor and his children as the beneficiaries. (Tab 5, Plaintiff’s Book of Documents)

[47] It appears from the file of Mr. Mackenzie that on November 23, 1988, the executor was changed from the plaintiff, Assunta Caputo, to the defendant, Nevio Rossi. At that time the parents of Nevio Rossi may have been living at the residence of the deceased while their house was being built. On February 9, 1989 there is an entry in the file that asks Mr. MacKenzie to use Nevio Rossi as a contact person, Re Caputo. On November 6, 1989 Mr. MacKenzie receives a telephone call from the defendant, Nevio Rossi, that the beneficiaries of the Last Will and Testament of the deceased may be changed and the persons to be named are set out. On November 21, 1989 the deceased communicates to Mr. MacKenzie that no changes are to be made to his Last Will and Testament and confirmed on January 12, 1990. (Tab 6, Plaintiffs Book of Documents)

[48] As early as July 19, 1989 the defendant, Nevio Rossi, is communicating with the Superannuation Commission respecting the payments that need to be made on the arrears to attain full benefits. On July 19, 1993 the defendant, Nevio Rossi, is present when the deceased signs a further designation of beneficiary form and, in fact the said defendant, changes the form that was prepared by writing in the names of Assunta Caputo and Adam Caputo. Finally, the defendant, Nevio Rossi, is involved when the deceased applies for his pension benefits and at that time designates the defendant, Nevio Rossi, as the designated beneficiary of the death benefit. The witness, Carmella Canino, confirmed that when the deceased went to her offices to apply for his retirement benefits the defendant, Nevio Rossi, was there with him.

[49] While simply being present on various occasions may not in and of itself constitute undue influence, the context within which these events occurred make undue influence an inescapable conclusion.

[94] To properly assess the evidence it is necessary to place the events in context. The uncontested evidence in this trial is that the deceased was a member of the Italian community who took no English training in Canada. While he could read very simple words in English, his English skills were on about the level of a five year old, although he was fluent in Italian.

[95] Carmella Canino was in the Pension and Benefits Administration of the Human Resources Department for the City of Prince George. She was of Italian background and was fluent in both English and Italian and knew the deceased as a part of the Italian community.

[96] Ms. Canino described the deceased coming to her office two or three times a year with either Andres Ribul, his supervisor, or Al LeBrun, another fellow employee. She described these two as the deceased’s “safety net” to ensure that she gave him the right information. She described the deceased as very much a typical Italian male of a different generation who needed assurance that an Italian woman was not trying to pull something.

[97] The defendant, Nevio Rossi, is a well educated member of the Italian community with both a Bachelor’s degree and a Master’s degree in education. His mother, Lena Rossi, was the sister of the deceased.

[98] Nevio Rossi was known within the Italian community and assisted people within that community from time-to-time, including his uncle, the deceased. The defendant denies doing anything to influence his uncle to name him as beneficiary of his superannuation benefits, or ever assisting the deceased with his banking.

[99] It is clear from the evidence that the deceased had a whole series of people including Nevio Rossi, Maria Rossi, Andres Ribul, Al LeBrun and Sandra Rosberg, his long-time apartment manger, who assisted him from time-to-time. It is equally clear that the deceased would talk to different people about the same topic before deciding on a course of action.

[100] I found Mr. Rossi throughout his evidence candid, forthright and credible.

[101] The sequence of events which Mr. Dykstra repeatedly urges as leading “inescapably” to a finding of undue influence must be examined carefully recognizing, firstly, that the burden rests with the plaintiffs, and secondly, that undue influence must be established within the meaning described in Fontana and Stewart.

[102] A significant aspect of the sequence of events never touched on within Mr. Dykstra’s submissions is the actual progression of the changes in question. On April 6, 1988, two days before the property transfers set out in the separation agreement, the deceased executed his will which was witnessed by R.H. Mackenzie, his solicitor, and Wendy Bergeron.

[103] Mr. Mackenzie’s file notes for April 6, 1988 contain the notation:

- daughter read will to him as well and translated it to him

This was yet another example of the deceased attending such meetings with one of his ‘support people’ but more importantly it was a step taken prior to the execution of the separation agreement, and it clearly establishes the daughter’s knowledge of the contents of the will.

[104] It was on November 23, 1988 that the deceased executed a codicil to his will. Once again one of the witnesses is a solicitor from Wilson King, in this case Gregory J. Brown. The sole change affected is the change of his executor by deleting Assunta Caputo and appointing Nevio Rossi. The beneficiaries under the will remained unchanged.

[105] As noted by Mr. Dykstra in his submission, there is a file entry on February 9, 1989 that they should use Nevio Rossi as a contact person “for Cosmo”. The note does not specify how that information was conveyed but one must assume that in a law office those instructions were received from the client, in this case the deceased.

[106] In November 1989 there are notes in the will file at Wilson King that appear to have come through Nevio Rossi that the deceased may have wished to change his will. The file contents then indicate an interview with the deceased and a letter dated January 5, 1990 confirming that during that interview the deceased had declined to change his will. While Mr. Dykstra presents this incident as an example of interference and undue influence, the fact is that information was conveyed by Mr. Rossi to the deceased’s solicitors, who then communicated with the deceased, interviewed him, obtained his instructions, and acted accordingly. Rather than showing interference by Mr. Rossi it shows exactly the reverse – an attempt to assist the deceased.

[107] On January 12, 1990 another interview took place with the deceased. The notes indicate that he did not want to change the will at that time – maybe later.

[108] The file contents and the evidence of Mr. Mackenzie make clear, in my view, that the deceased had continuing access to his solicitors for advice, that he availed himself of it, and that, on occasion, he was assisted in that process by Mr. Rossi.

[109] While this is a portion of the sequence of events that Mr. Dykstra suggests leads “inescapably” to the inference of undue influence, there is nothing in it that remotely suggests force or coercion being used to overcome the deceased’s free will.

[110] On July 19, 1993, Nevio Rossi was added along with the two children on a new Nomination of Beneficiary form. The deceased’s signature is witnessed by a third party.

[111] The final step occurred in May 1998 when the deceased retired and completed his Pension application. It is clear on the evidence that Mr. Caputo did that process in at least two steps. He initially spoke to his supervisor Mr. Ribul and had him assist him in completing the initial portion of the form. At that time the two of them were alone in Mr. Ribul’s office.

[112] Ms. Canino described a meeting between herself, Mr. Caputo and Nevio Rossi. She described going through Mr. Caputo’s options and explaining them to him. She described Mr. Rossi as being quite comfortable and not appearing to pressure Mr. Caputo at all.

[113] What occurred between May 28, 1998 when Mr. Ribul helped the deceased complete the portion at the top and July 8, 1998 when Ms. Canino completed her portion is not clear on the evidence, but what is clear is that the deceased had assistance from others besides Mr. Rossi and that he had time for consideration after telling Mr. Ribul who he intended his beneficiary to be.

[114] It is unnecessary to go into details which are clear in the evidence but there was ample evidence from virtually every witness that from 1989 on both children gave the deceased ample grounds to be disappointed in them. As those matters progressed he reduced their share of his pension benefits in 1993 and eliminated them in 1998 while maintaining them as beneficiaries under his will.

[115] The replacement beneficiary to the pension benefits was not a stranger, he chose his nephew who had continued to assist him over the years and with whom he spent time at family dinners from time-to-time.

[116] In contrast, the deceased’s daughter Assunta had seen him once since 1994 and only remembered that occasion when prompted during cross-examination. While the deceased’s son Adam had seen him more, particularly during the year that he returned to Prince George in 1998 to 1999, there were proven difficulties during that time which caused further difficulty between them.

[117] The deceased was, by all accounts, a very traditional Italian man with traditional views and a stubborn disposition. He did not attend the wedding of either of his children and had limited contact with them for years before his death.

[118] Despite these many concerns the deceased never altered the dispositions of his estate from that set out in his will of April 6, 1988 which divided his estate equally between the children. The only change was made by the codicil of November 23, 2006 which substituted Nevio Rossi for Assunta Caputo as his personal representative and executor.

[119] What the deceased did change in two steps was the beneficiary of the benefits under his City of Prince George pension.

[120] If the deceased had lived 10 years after his retirement and collected his pension benefits over that time period the value to Nevio Rossi would have been nothing. In other words, while obviously it could be considered a benefit, particularly after the fact, at the time its value was completely unknown. The real assets and dispositions remained under the 1988 will which he left precisely as he had in 1988 with an equal division going to his children.

[121] There is, in this action, a clear and unequivocal denial by the defendant Nevio Rossi of any actions by him that would have encouraged or influenced the deceased to benefit him over his children as well as a denial of each of the specific allegations found in the plaintiffs’ pleadings.

[122] Inferences are not to be drawn from a complete absence of evidence and what the plaintiffs seek to have the court do here is to speculate on a series of separate events, each of which has been explained, in the absence of evidence.

[123] There is, in the body of evidence before the court, no evidence whatsoever of any steps or actions taken by the defendant to influence or coerce the deceased’s decisions to alter the beneficiary of his pension benefits. There is, in fact, no evidence of the defendant exercising influence, coercion or duress on the deceased at any time.

[124] I agree with Mr. Dykstra in one respect. The conclusion on the evidence before the court is inescapable. Not only does the evidence not establish the exercise of undue influence by the defendant, it establishes a pattern over the years of the defendant assisting the deceased in the course of dealing with his affairs.

[125] The evidence also establishes that at each and every material step the deceased had access to others who could and did assist him and discuss matters with him, as well as time for consideration and reflection.

[126] Despite this overwhelming body of evidence, the plaintiffs proceeded to trial on pleadings which alleged not just undue influence but fraud against the defendant and called evidence purporting to prove a forgery. Even after careful reflection on the evidence led at trial the plaintiffs, through counsel, prepared and delivered a written argument that maintained those positions.

[127] Only in the penultimate paragraph of those submissions, para. 66, do they finally announce for the first time:

[66] The plaintiffs abandon any and all claims to the assets of or an accounting for the assets and liabilities of the estate of Cosmo Caputo, Deceased.

[128] Even at this stage, however, the plaintiffs have not withdrawn their allegations of fraud, despite the fact that no evidence of fraud was ever placed before the court.

[129] The plaintiffs’ action is dismissed. As counsel requested, costs may be addressed if they cannot be agreed upon.

“Parrett J.”
The Honourable Mr. Justice Parrett

Citation:	*Flack v. Rossi,*
	2008 BCSC 670