_________________ Write your exam code here: Return this exam question paper to your invigilator at the end of the exam before you leave the classroom. THIS EXAMINATION CONSISTS OF FOUR (4) PAGES PLEASE ENSURE THAT YOU HAVE A COMPLETE PAPER THE UNIVERSITY OF BRITISH COLUMBIA FACULTY OF LAW FINAL EXAMINATION - DECEMBER, 2017 LAW 453.001 & LAW 552C.006 EQUITABLE REMEDIES Professor Sheppard TOTAL MARKS: 100 TIME ALLOWED: 2 HOURS and 15 MINUTES *********** NOTE: 1. This is an open book examination. You may bring into the examination room and use during the examination your casebook, notes and summaries, but use of library books, textbooks, or materials prepared by someone other than you, is prohibited. 2. Please answer each specific question asked. If, in answering a question, alternative legal arguments are reasonably possible, state and discuss them. If you need additional facts to fill in a gap or resolve an ambiguity, state what the facts are and why they are necessary. Give reasons for each answer. You have a choice of answering question 2.1 or 2.2. Do not answer both. 3. Suggested times are given for each question. The times have been allocated according to the marks, and on the following assumptions: Total examination time: 135 minutes Allocated to general reading: 15 minutes Allocated to questions: 120 minutes TOTAL 135 minutes THIS EXAMINATION CONSISTS OF TWO (2) QUESTIONS. ANSWER 2.1 or 2.2. DO NOT ANSWER BOTH. 2 MARKS 1. Assume you are employed as an associate lawyer working for Springfield, British Columbia’s sole practitioner, Lionel Hutz. Lionel Hutz, who has no familiarity with equitable remedies, requires your advice on the issues of equity arising out of the following situations. 20 (a) (Suggested time: 24 minutes) One ofHutz’s clients is Lindsey Nagel. Lindsey’s legal file with Hutz concerns a landlord and tenant matter. Lindsey decided to take up a new occupation and livelihood: self-employment as a public relations consultant. She decided to rent an office in a prestigious high-rise office block because, although it was relatively expensive, it was in Springfield’s downtown core and she felt it was an appropriate location for a young professional. When the landlord showed Lindsey the office, she noticed that the elevators, hallways and staircases were shabby and she asked whose responsibility it was to keep them clean and maintained. The landlord assured Lindsey that their poor condition was only temporary due to sudden lack of maintenance and janitorial employees, that he took personal responsibility for the deplorable conditions and promised that they would be spic-and-span by the time Lindsey moved in. Lindsey and the landlord agreed that cleaning up and refurbishing the elevators, stairs and halls would be a term of their ten-year lease. The clean-up and refurbishment clause was written into the agreement but a formal lease was never executed. Lindsey was disappointed when she inspected the premises immediately before moving in and found that the areas had not been cleaned or repainted as promised. Nevertheless, Lindsey decided to go ahead with the move. She had exhausted her savings in purchasing office furnishings and supplies for her new office. Lindsey moved in, because she assumed that the landlord had simply forgotten, and that if reminded, he would arrange for fixing up the state ofthe elevator, stairs and halls, but despite her repeated phone calls and letters over several weeks to him, nothing was done. The landlord ignored Lindsay’s repeated attempts to contact him. Finally the landlord responded to her that the other tenants were not complaining about the state of the building but they would complain or move out if he tried to raise rents. The landlord has estimates ofthe cost ofthe proposed work that would require increased rents from all the tenants, to which they are openly opposed. On top of all these objections, he told Lindsey that they only had an agreement to lease and they had never signed a formal lease. Hutz wants your advice on whether Lindsey should apply for the equitable remedy of specific performance against the landlord to resolve their difficulties. 40 (b) (Suggested time: 48 minutes) Two of Hutz’s clientele are the First Church of Springfield and the Bouvier Family Trust. Reverend Timothy J. Lovejoy is senior pastor of the First Church of Springfield, but who, as a result of addiction to gambling, recently become 3 financially insolvent. Reverend Lovejoy, as the senior pastor, had access to the bank account of the First Church of Springfield, of which he was sole trustee. Lovejoy was also sole trustee of the Bouvier Family Trust, which was set up by the late Jacqueline Bouvier, the mother of the three sisters: Marge Simpson, and twins, Patty and Selma Bouvier, who are the beneficiaries ofthe trust. In March 2017, Lovejoy transferred $12,000 from the church’s bank account to his own personal bank account, bringing the balance in his account up to $14,000. Then in April, 2017, Lovejoy transferred $12,000 from the Bouvier Trust’s bank account into his personal account, which brought his balance up to $24,000. Lovejoy withdrew $14,000 from his personal bank account to buy a car as a gift to his wife, Helen, which was written off as the result of her motor-vehicle accident later that month. When he gave her the car, Lovejoy told Helen that he used funds from the church to pay for it. In settlement of the accident claim, ICBC paid Helen Lovejoy $11,000, which she deposited into her own bank account. Then in May, Lovejoy withdrew $2,000 from his personal bank account to purchase publicly-traded corporate shares in his own name, which are now worth $14,000 and kept in his safe deposit box at the Springfield Savings and Loan. Then in June, Lovejoy took $5,000 from his account squandering the funds to pay for a gambling spree, which left only $3,000 in his bank account. Reverend Lovejoy and his wife, Helen, have suddenly disappeared and cannot be found, leaving behind in Springfield vast unpaid personal debts to numerous creditors, and their assets as described. Hutz would like you to advise the elders of the First Church and the Bouvier family members: what can they do immediately to prevent the Lovejoys from transferring their bank balances away from Springfield or disposing of the shares. The church elders and the Bouviers would like to gain access to the Lovejoy’ s rental apartment in Springfield to search for detailed financial records located there, before the Lovejoys can have them destroyed. The Lovejoys’ assets are insufficient to satisfy all the financial claims against them. What amounts, if anything, can the Church and the Bouvier Family Trust reclaim of their trust monies from the Lovejoys’ available assets in Springfield? How, if at all, would ICBC’s decision to claim repayment of the $11,000 paid to Helen Lovejoy as paid out to a fraudster, affect their recovery? Advise Hutz. 20 (c) (Suggested time: 24 minutes) Hutz’s client, Ned Flanders, who owns and occupies the house next-door to Marge and Homer Simpson on Evergreen Terrace, Springfield, has a legal problem, which requires your advice. A Springfield Internet service provider, called Compu-Global-Hyper-Mega-Net (“Mega”, for short) wants to supply high-speed Internet to the residents on Evergreen Terrace. To provide this connection, Mega requested permission from the residents to run an underground cable along their backyards, inside the fence or wall at the end of each property. Except for Ned, all the residents enthusiastically agreed: the cable was small, the installation was only minimally intrusive and Mega would pay the residents for the privilege of installing its cable. Even Principal Skinner of the Springfield Elementary School supported the installation, because it would mean students 4 would have the advantages of educational Internet programs, enhancing their educational opportunities. Ned objected because he did not want anyone messing with his prized flower- garden, and he disapproved of the “racy smut”, which he felt pervades the Internet. Undaunted by Ned’s objection, Mega surreptitiously installed the cable across his property during his temporary absence from home one day. Ned discovered the intrusion when he saw a foot-print in his prized flower-bed. Twelve months later, Ned seeks legal advice on whether or not to apply for a temporary or final court order against Mega to remove the cable for trespassing on his property. Mega has detected that Ned secretly, and without its permission, cut into the cable at the back ofhis garden to illicitly download adult-only shows and avoid subscription charges. Ned would like primarily to apply for a court order requiring Mega to remove the cable from his property, but he is also interested in whatever other remedy might be available. Advise Ned of his chance of obtaining any remedy (equitable or legal) against Mega. ANSWER EITHER 20 2.1 (Suggested time: 24 minutes) Eleanor Abernathy, M.D., J.D. (known as the “Crazy Cat Lady”) is an aging and eccentric retiree, but still has the mental capacity to make a binding contract. She agreed to sell her residence in Springfield to Angelo of J&J Construction for $1,500,000, with an option to lease the property back rent-free as long as Eleanor wanted to live there. Angelo has worked in construction for years and saw the potential to build an apartment block on the site. Eleanor exercised the option to remain in the property for two years. During this period the local economy deteriorated unexpectedly, and property values suddenly declined.