The recent Court of Appeal decision in Volovsek v. Boisvenu Alter‐Ego Trust #1, 2021 BCCA 179 dealt with a claim for damages in trespass against a woman who refused to give up possession of a Vancouver condominium after the death of its owner, her partner, until her claim to the property was determined. Her claim to an interest in the property was dismissed and she was ordered to pay $100,000 damages in trespass. Reconsiderations and appeals followed. Her lawyer, Candace Cho, ultimately succeeded in having damages vastly reduced to the nominal amount of $2,500.
Death of partner
Yasmine Volovsek and Fernand Boisvenu were in a relationship from 1989 until his death in March 2015. They kept separate residences for most of their relationship. She owned a property on West 5th, and he owned a condominium on Harwood Street in Vancouver (the “Condo”). Ms. Volovsek started renovations on her property, and in 2010 she and Mr. Boisvenu moved into the Condo. In 2014, Mr. Boisvenu was diagnosed with late-stage bladder cancer, which led to his death in 2015. The value of Mr. Boisvenu’s assets on death was more than $8 million.
Estate plan transferring assets to alter ego trusts
Ms. Volovsek cared for Mr. Boisvenu during his illness. Unbeknownst to Ms. Volovsek, on December 18, 2014, Mr. Boisvenu had transferred virtually all of his assets (including the Condo) into two alter-ego trusts. At the same time, he made a will. The combined effect of the will and trusts was to distribute his estate to his six siblings and Ms. Volovsek in equal shares. A friend of Mr. Boisvenu was to receive one half of what the others are to receive.
Vancouver estate litigation commenced
Ms. Volovsek continued to live in the Condo after Mr. Boisvenu’s death. Renovations on her condominium were not completed. In February 2016, Ms. Volovsek commenced an action against Mr. Boisvenu’s estate, the two alter ego trusts, Mr. Boisvenu’s siblings, and the friend named in the will. She asserted that she was entitled to, among other things, the remedy of a constructive trust over the estate’s and trusts’ assets, and she registered a certificate of pending litigation (“CPL”) against the Condo.
Counterclaim in trespass
On January 10, 2017, the trustee of the alter ego trusts, Larry Donaldson, wrote to Ms. Volovsek advising that Mr. Donaldson wished to sell the Condo and giving notice that Mr. Donaldson was terminating Ms. Volovsek’s licence to occupy the unit effective February 28, 2017. Ms. Volovsek refused to give up possession pending the outcome of her constructive trust claim. In July 2017, Mr. Donaldson filed a counterclaim within Ms. Volovsek’s action, seeking an order of possession and damages for trespass. Ms. Volovsek continued to reside in the Condo up until the end of the trial.
Trial decision in Vancouver estate law claim
The trial judge dismissed the constructive trust claim and ordered that Ms. Volovsek pay damages for trespass of approximately $100,000. The judge later reconsidered the decision in light of facts that Ms. Volovsek had registered a CPL against the condominium and the trustee took no steps to remove the CPL or to challenge its registration on the basis of abuse of process. The judge vacated the earlier decision and dismissed the trustee’s counterclaim for damages in trespass.
Foundation for an action in trespass
The trustee appealed. The Court of Appeal held that to the degree that the trial judge found that the continued registration of the CPL was a bar to the trespass claim, it was an error, as a CPL went to transfer of title, whereas a trespass claim related to possession. Once Ms. Volovsek’s constructive trust claim was dismissed, it followed that her possession of the unit had not been lawful, and she was subject to a claim in trespass. The Court of Appeal agreed with the trial judge’s initial finding that the trustee had standing to bring an action in trespass. The January 10, 2017 letter terminating her licence to occupy the unit evinced an intention to take possession of the Condo for the purpose of listing and selling, which was sufficient to found an action for trespass.
Actual damages for trespass not proven
Having determined that there was a proper basis for the action in trespass, the Court of Appeal then turned to the issue of damages. In the absence of extenuating circumstances giving rise to claims of exemplary and aggravated damages, the types of damages available for a trespass are the following:
- nominal damages if the owner has not proven any actual loss;
- actual damages suffered by the owner; or
- damages equal to a sum that should reasonably be paid by the trespasser for the use of the land (also known as “mesne profits” of the trespasser).
The Court of Appeal agreed that the trust had not established its entitlement to any damages other than nominal damages (which were conceded by Ms. Volovsek). Damages were fixed at $2,500—a significant success for Ms. Volovsek compared to the $100,000 order the trial judge would have made.
Trustee’s claim for amount beyond nominal damages failed
The trustee could have proven actual damages caused by the trespass in two ways, but failed to do so in the circumstances of this case:
- By proving that it would have been able to sell the Condo had Ms. Volovsek not been occupying it. The Court of Appeal held that Ms. Volovsek’s trespass did not cause any additional loss to the trust because of its inability to sell the unit. Even if Ms. Volovsek was not occupying the unit, the Condo could not have been sold because no reasonable person would have purchased a property with a CPL registered on title.
- By proving that it would have been able to rent the unit to a third party had the trespass not been occurring. The Court of Appeal noted that the Condo could not have been rented because the strata bylaws prevented the renting of units in the building, even if Ms. Volovsek were not in possession.
The third type of damages, known as mesne profits, were not considered by the trial judge. A non-exhaustive list of the factors relevant to assessment of mesne profits includes:
- The terms on which the owner could have let the property to another during the trespass period;
- The rent the occupier paid before the trespass began;
- Actual profits obtained by the occupier during the trespass; and
- Rents paid by occupiers of similar properties.
The Court of Appeal held that none of these four factors existed because: 1) the condo could not have been rented under the strata bylaws; 2) Ms. Volovsek did not pay rent prior to her trespass; 3) Ms. Volovsek did not obtain any profits from her trespass; and 4) the trustee had not introduced any evidence to establish what comparable rents might have been.
Take home point from this complex Vancouver estate litigation
A certificate of pending litigation (“CPL”) can be a powerful tool to prevent transfer of title to property pending outcome of an estate claim. But be warned: a CPL does not immunize an estate law claimant from a trespass action. A person who believes they have an interest in land should seek legal advice on the merits of their claim and carefully consider the potential for a trespass action arising from interference with the owner’s right to possession of the land. The onus is on the property owner to prove damages. Only nominal damages will be awarded if the owner has not proven any actual loss occasioned by the trespass.