WEL Partners helps clients navigate dispute resolution throughout Ontario. We hope you enjoy our newsletter.
1. WEL WISHES ALL THE BEST TO DYLAN CROSBY
Dylan's last day at WEL was Friday, April 13th. Dylan will be moving to Ottawa to join his fiancée and will be working at Borden Ladner Gervais LLP. WEL will miss Dylan.
2. LEXIS NEXIS CANADA, HEALTH LAW MATTERS
3. OSGOODE HALL, MANAGING CONSENT & CAPACITY ISSUES IN WILLS & ESTATES PRACTICE, MARCH 27, 2018
Mark Handelman attended the Osgoode Hall, Managing Consent & Capacity Issues in Wills & Estates Practice on March 27, 2018, and presented on: "Understanding the Health Care Consent Act: Informed Consent and Advance Care Planning".
4. OBA ESSENTIAL EVIDENCE SERIES FOR ESTATE LITIGATORS, PART 1, APRIL 5, 2018
Lionel Tupman, Ian Hull, and Noah Weisberg co-chaired the OBA, Essential Evidence Series for Estate Litigators, Trust & Estates Law Section, Part 1, on April 5, 2018. Part 2 and Part 3 of this program are on May 17, 2018 & June 6, 2018 respectively.
5. OSGOODE CERTIFICATE IN ELDER LAW, APRIL 4, 2018
Mark Handelman presented at Osgoode Professional Development on:
Effective Advocacy for the Elderly: Advising the Elderly Client, with Graham Webb of Ace; and a Roundtable Panel Discussion on "The Future of Elder Law".
6. LAW SOCIETY FEED THE HUNGRY, APRIL 4, 2018
WEL sponsored The Law Society Foundation, Toronto Lawyers Feed the Hungry Program on April 4, 2018, and volunteered and served meals at the Law Society of Ontario's cafeteria at 130 Queen St. West, Toronto.
The Toronto Lawyers Feed the Hungry Program has provided hot, healthy community meals to Toronto residents in need since 1998. This important year-round program, providing more than 60,000 meals a year, is made possible thanks to generous donations to The Law Society Foundation and the work of their committed volunteers. We encourage others to donate.
For those searching for a way to give back - this is a great way to do it!
7. MONEY AND FAMILY LAW MAGAZINE
Kimberly's article "
Can an Obligation to Pay Spousal Support Survive the Death of the Recipient Spouse?: Marasse Estate (Re)"
will be republished in an upcoming issue of Money and Family Law.
Kate Stephen's article "M.R.R. v. J.M.: You are not the Father" will be republished in an upcoming issue of Money and Family Law.
Amanda Bettencourt's articles:
Court Finds that Boxer George Chuvalo Lacks the Capacity to Decide whether to Reconcile
" and "Family Law Act Election: Delay Must Be Incurred in "Good Faith""
will be republished in an upcoming issue of Money and Family Law.
8. CANADIAN GERIATRICS JOURNAL, VOLUME 21, ISSUE 1, MARCH 2018
A Case for the Standardized Assessment of Testamentary Capacity, written by Megan Brenkel, Kimberly Whaley, Nathan Hermann, Kerri Crawford, Elias Hazan, Dr. Adrian Owen and Dr. Kenneth Shulman was published in the Canadian Geriatrics Journal, Volume 21, Issue 1, March 2018.
9. ONTARIO SECURITIES COMMISSION
On March 20, the Ontario Securities Commission released their Seniors Strategy Report, which outlines initiatives to respond to the needs of Ontario seniors and the investment industry.
10. STEP CONNECTION, TORONTO BRANCH NEWSLETTER, APRIL 2018
Kimberly's article: "Ademption by Advancement & the Presumption of Double Portions, Campbell v Evert, 2018 ONSC 593 (CanLII)", was published in the STEP Connection, Toronto Branch Newsletter, April 2018, Vol. 5. No. 6.
11. 2018 EASTER SEALS TELETHON, APRIL 8, 2018
Kimberly Whaley and Tony Lalonde of Scotia Wealth Managementpresented a cheque to Easter Seals at the Easter Seals Telethon on Sunday, April 8, 2018 on behalf of the 2017 Drop Zone Toronto Event which they both participated.
(i) THE "RULE OF CONVENIENCE" & INTEREST PAYABLE TO BENEFICIARIES: RIVARD V. MORRIS
by Kimberly A. Whaley
In Rivard v. Morris, the Ontario Court of Appeal found that pursuant to the common law principle of the "rule of convenience"
the appellants were entitled to interest, at a rate of 5% per annum on amounts payable to them under the Last Will & Testament (the "Will") that had been delayed for more than a year after the testator's death.
The testator was survived by his two daughters and one son. He executed a Will on August 1, 2013, which divided his estate equally between his three children. On August 24, 2013, he executed a second Will which left the residue of his estate (including significant farmland) to his son
. The daughters were to receive legacies of $530,000.00 each. All three children were named as estate trustees. The testator died in October of 2013.
The sisters challenged the validity of the second will. The challenge held up the division of the estate until August of 2016 when the dispute was settled with a finding that the second Will was valid. Payment of the sisters' legacies occurred in October of 2016.
The sisters then brought an application for interest payable on each of their legacies, out of the brother's residuary estate, commencing one year after their father's death.
The application judge found that Rule 65.02 of the Rules of Civil Procedure (which directs interest to be paid) did not apply to this case, but the common law "rule of convenience" was applicable (although he did not refer in name to the "rule of convenience"). He then used his discretion to deny the interest sought. He reasoned that the sisters had been estate trustees during the administration of the estate and the delay in payment was caused by their challenge to the Will. While he accepted the sisters' right to bring the application, he held that in the circumstances, neither the sisters nor the brother should be rewarded or penalized by the passage of time.
The sisters appealed the decision raising the following issues for determination:
- did the application judge err in holding that r. 65.02 does not apply?
- did the application judge err in exercising discretion to deny interest?
- if interest was payable, what rate of interest should have been applied?
Does Rule 65.02 apply?
Justice Paciocco, writing on behalf of the Court of Appeal, found that Rule 65.02(2) applies where courts administer an estate, while the "rule of convenience" applies where personal representatives administer the estate. Since the estate was not administered by the Court, in this case, r 65.02 did not apply.
Does the parallel common law "rule of convenience" apply?
Subject to the testator's instructions, pursuant to the "rule of convenience", if a specific legacy is payable under a will but is not paid to the beneficiary by the anniversary date of the testator's death, the beneficiary will begin to earn interest on the value of the property from that date until receipt of the property. This principle is a mechanism for promoting full enjoyment of specific legacies.
By imposing interest payment obligations at the end of the "executor's year", specific legatees can more fully enjoy the benefits of the gifts that were intended where distribution is delayed beyond the executor's year.
Justice Paciocco describes the rule as one that is blunt and intended to "exact rough justice".
In this case, the appellants were provided with legacies of $530,000 each without any conditions or contingencies stipulated within the Will. It was thus presumed that the testator wanted the legacies to be distributed within a year. Yet payment was delayed beyond the executor's year. As such, interest was payable.
The brother argued that the executor's general powers of postponement set out in the Will were indicative of the testator's intention not to apply the "rule of convenience". Justice Paciocco disagreed, noting that the powers are not specific enough to achieve the result sought.
Did the Judge err in using his discretion?
Justice Paciocco ultimately declined to decide whether a Judge has the discretion to deny interest, where the "rule of convenience" applies. However, he did note that for a variety of reasons, including the absolute nature of the rule and need for certainty, such discretion would be undesirable: "If such a discretion does exist, then the value of certainty and simplicity would require that the discretion be exercised only in the clearest of cases. This is not one of those cases."
The Court went on to find the decision of the application's judge to deny interest cannot stand. The Judge's reliance on the reasonableness of the expectation of payment within a year was an error in principle. Interest payable under the "rule of convenience" is not predicated on the possibility of payment within a year.
It was also contrary to the principle to deny interest because the appellants had started litigation that caused the delay: "If simply commencing litigation against the estate is a ground for denying entitlement to interest, even meritorious litigation will be discouraged."
Moreover, what the "rule of convenience" provides is an entitlement, based on the presumed intention of the testator. It is neither a reward to the beneficiary, nor, a punishment to the beneficiaries of the estate.
Applicable interest rate
The Court found that even though a 5% interest rate may seem aggressive relative to the current prime rate, given the state of authority (previous case law and English authorities) and the manner in which this case was presented, there was no reason to deviate from the established 5% rate.
The decision underscores the certainty of the "rule of convenience" and reaffirms the requirement for estate trustees to be informed of their responsibilities and the importance of the timely administration of an estate. When advising clients on estate planning and administration, it is important to consider the consequences of any delayed payment to beneficiaries of bequests/legacies and the application of the "rule of convenience".
(ii) PREDATORY MARRIAGE CASE LEADS TO SOLICITOR'S NEGLIGENCE CLAIM AGAINST LAWYER .....BROUGHT BY THE PREDATOR, NOT THE VICTIM: BARON V. MAMAK
By Kimberly A. Whaley
By way of brief background,
a younger woman met an elderly gentleman, Mr. Juzumas, when she began providing him with housekeeping services. Mr. Juzumas was born in Lithuania and spoke very little English. He had no family in Canada. The housekeeper, was also born in Lithuania, and she had been married several times before. The two married, on the understanding that the housekeeper would look after Mr. Juzumas and take care of the house until his death, as he did not want to live in a nursing home. The housekeeper, did not hold up her end of the bargain and preyed on the elderly man for financial gain, including by taking steps to have title to his house transferred into the name of her son.
Eventually, through the assistance of a neighbour, the older man was able to bring a claim to have his home transferred back into his name and obtained a divorce, but not before suffering emotionally, physically, and financially from the actions of the housekeeper. Justice Lang, who presided over the original action, also dismissed claims brought by the housekeeper and her son against Mr. Juzumas (i.e. quantum meruit claim) with costs.
Subsequently, the housekeeper and her son brought this solicitor's negligence claim seeking damages from the lawyer who prepared the transfer of the house and various other documents.
The Lawyer's Involvement
The day before their marriage, the housekeeper and Mr. Juzumas attended at a lawyer's office and prepared a Will naming the housekeeper as the sole executor and beneficiary of Mr. Juzumas' estate. The lawyer did not meet with Mr. Juzumas separately. He did not arrange for an interpreter.
There was no discussion with Mr. Juzumas as to the value of the house or whether a marriage contract might be appropriate.
Later Mr. Juzumas went to a different lawyer and executed a new Will, leaving most of his estate to his niece in Lithuania. He left a bequest of $10,000.00 to the housekeeper.
When the housekeeper became aware of this new Will she consulted with the original lawyer, and decided that Mr. Juzumas' house, which formed a significant part of his estate, would be transferred to the housekeeper's son, subject to a life interest to Mr. Juzumas.
The housekeeper, her son, and Mr. Juzumas then had a brief meeting at the lawyer's office. The lawyer did not explain what a "life tenancy" to Mr. Juzumas; there was no discussion about the value of the property being transferred during the meeting; and there was no interpreter present. There was a suggestion that the housekeeper had drugged Mr. Juzumas prior to the meeting.
After receiving the lawyer's confirmation letter in the mail confirming the transfer of the house, Mr. Juzumas contacted the lawyer on three separate occasions asking to reverse the transfer. The lawyer consistently advised him that the transfer could not be undone because it was "in the computer".
With the assistance of his neighbour, Mr. Juzumas consulted another lawyer and ultimately brought an action to reverse the transfer.
Madam Justice Lang, in the original action, made the following comments regarding the transfer:
At the time he executed the transfer, the then 91-year-old Kazys was in failing health. He was vulnerable and in fear of being abandoned to a nursing home. He signed the transfer under the domination, control, and intimidation of his significantly younger wife/housekeeper Galina, as well as under the influence of her son, Yevgeni. The transfer in my view resulted from their undue influence of a vulnerable elder. Kazys did not have the benefit of legal advice or any understanding of the irrevocable nature of the document he signed. In addition, the inequality of the bargaining power and the unfairness of the transaction render it unconscionable. The transaction must be set aside.
Solicitor's Negligence Analysis
The defendant lawyer conceded that his actions fell below the standard of care.
Justice Gray noted that under the circumstances, the lawyer was clearly not in a position to represent both the housekeeper and her son on the one hand, and Mr. Juzumas on the other. He was obliged to obtain separate representation for Mr. Juzumas. Furthermore, Justice Gray stated that it clearly would have been prudent to ensure that Mr. Juzumas understood what was going on given his limited language skills.
However, despite the lawyer's failure to meet the requisite standard of care, Justice Gray concluded that it was impossible to find that the breach of care caused any of the damages claimed by the plaintiffs, the housekeeper and her son.
As clearly found by Justice Lang, the transfer of the property from Mr. Juzumas to the son was the product of a scheme perpetrated by the plaintiffs on an elderly and unwell man. It was the product of their undue influence. Even if the defendant lawyer had fulfilled his duty of securing separate representation for Mr. Juzumas, that would have simply prevented the transaction from occurring.
Justice Gray dismissed the plaintiffs' claim.
This case provides helpful guidance on the best practices when dealing with more vulnerable clients and the steps required when assisting clients with estate planning. Had this claim not been brought by the perpetrators of what was previously determined by the Court to be a clear case of undue influence, the results may have been different.
2018 ONSC 2169 (CanLII)
2012 ONSC 7220 (CanLII)
PART III: UPCOMING EVENTS
Six Minute Estate Lawyer
May 3, 2018
Speaker: Kimberly Whaley
Northwind Professional Institute
Northwind's High Net Worth Invitational Forum
May 9-11, 2018
Speaker: Andrea McEwan
STEP Canada 20th National Conference
May 28-29, 2018
Medical-Legal Issues Involving Capacity, Estate and Trust Planning, and Litigation (May 29, 10:30 am - 12:00 pm)
Moderator: Kimberly Whaley
Panelists: Dr. Adrian Owen, Dr. Kenneth Shulman, D. Adrian M. Owen, Ed Esposto
Predatory Marriages & Powers of Attorney for Property and Personal Care: The Good, the Bad, and the Ugly (May 29 2:30 pm - 4:00 pm)
Moderator: Corina Weigl
Panelists: John Poyser, Albert Oosterhoff, Nancy Golding, Charles Wagner
B'nai Brith Trusts and Estate Seminar
Estate Planning Gone Awry
May 30, 2018
Presenters: Kimberly Whaley &
International Federal on Aging (IFA) 14th Global Conference on Ageing
August 7 - 10, 2018
Master Class - Concepts of Ageism: Arguments in favour of the need for protections
Andrea McEwan & Erin Cowling
Presenters: Lionel Tupman, Arieh Bloom, and Kate Stephens
Administration of Estates and Probate Essentials
September 21, 2018
Chairs: Kimberly Whaley and Tim Grieve
WEL/Hull Webinar Series
Client Capacity: A Lawyer's Retainer
September 26, 2018
Client Capacity and the Real Estate Lawyer's Retainer
October 24, 2018
Client Capacity and the Family Law Lawyer's Retainer
November 28, 2018
Client Capacity and the Corporate Lawyer's Retainer
December 5, 2018
Live Webcast presented by
Ian Hull and Kimberly Whaley
Save the dates, registration to begin in May
Toronto Police Seminar
Civil and Criminal Remedies, Elder Abuse
September 28, 2018
Speakers: Andrea McEwan and Amanda Bettencourt
Toronto Police Seminar
Civil and Criminal Remedies, Elder Abuse
November 2, 2018
Speakers: Kimberly Whaley and Alex Swabuk
PART IV: RECENT BLOG POSTS
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