Dear Kenneth,

Welcome to January, the wet, the cold & the dark. While I am sincerely hoping you have a fantabulous 2024, if you are anything like me, you are struggling with the dark months and the restless anticipation of the sunny months to come. I truly feel it is a lesson in perseverance, resilience, willful intent, and with mindful navigation that I try diligently to crusade through the winter unscathed. Everyday I, like many, walk to and from the office in the dark. Gleefully she says, at the time of writing, I am on a plane to Cayman (hardly seems fair-I know!). I am attending the STEP CAYMAN Conference and combining a holiday. It used to be when Sammi was in school that I had a winter reprieve in that she and I would usually visit a sunny beach over Christmas/New Year’s. During the post-grad years however, Sam has resided in the U.K., so when she comes home at Christmas to see her friends, its definitively NOT to go to an Island. Alas, I have had to work around her. A dose of sun amid winter gives the soul a little help along the way. If you cannot get a little dose, then I send my WEL wishes in support of your successful survival strategies.

My primary holiday read this time is Geddy Lee’s, My Effin’ Life (a Christmas gift), though I am also editing the WEL Will Challenge Publication and have brought along some extras in case I am an over-achiever. My latest watch is BEEF on Netflix, that I only learned of during the Golden Globes-wow-for all those who watched the awards show, the Host simply couldn’t read his audience, though admittedly, it was a tough audience to entertain-nevertheless it was cringeworthy. I now truly understand the concept of second-hand embarrassment. Not sure how I feel about Beef. It started off as relatable in characterizing a modern-day society and the frustrations people face everyday which require patience, lest we all become road rage obsessed fuse-blowing victims, but it seems to have taken a twisted turn. We’ll see if I finish this one. Still, documentaries are more my thing! Oh, and I loved the documentary, “Welcome to Wrexham”(football (aka soccer) team in Wales).

Speaking of second-hand embarrassment-funny story, I first learned of second-hand embarrassment years ago from a work-related event (vicarious embarrassment, also known as second-hand, empathetic, or third-party embarrassment is the feeling of embarrassment from observing the embarrassing actions of another person). I am not inclined really to feel such empathy but nevertheless, I can relate. I too, am not sure why I am sharing this with you since it’s entirely irrelevant but i feel like a little silliness is in order. 

So, in the said work-related-event, a new to the firm, young associate lawyer took a new to the firm, young summer student (just happened to be my daughter) to court-back in the days when we attended court for everything! So, said young summer student, while awaiting the judge in a crowd of other lawyers awaiting the judge, decided to share something on her phone with said young associate lawyer while awaiting the judge who could have appeared at any second… (now we all know that no phones are allowed in court and if we dare to brandish them in court, they should be silenced-right?!) Ok, so, when said summer student opened her phone, the rapper Nelly, deep into a rendition of “It’s getting hot in here” started playing extremely loudly…..in a sea of very serious lawyers-you know what I mean right?

I am quite certain both said associate and said summer student in this instance both felt second hand embarrassment. The funniest part of the story however is that the several lawyers present in court that fateful morning informed me of what had happened by email in real time which prompted me to be a little devious in writing to said summer student (still brandishing her phone) advising her that I had learned what had happened from the judge via the registrar and there would be consequences……perhaps contempt…I think the response was something like “wot? actually mom?” So funny.

So, there you have it an entirely irrelevant story, but it makes me laugh every time i think of it ……. usually prompted by second-hand embarrassment.

We are busy here at WEL these days and if any of you know of an experienced litigator looking for a career change, please send them my way for a chat.

See you next month for Valentine’s Day.

As ever, enjoy the read,

Kim

STEP MENTAL CAPACITY GLOBAL SPECIAL INTEREST GROUP STEERING COMMITTEE

WEL congratulates Holly Cunliffe, TEP, and Sheree Green, TEP, on their election to the Mental Capacity Global SIG Steering Committee. Kimberly Whaley is a member of this SIG.

WEL also congratulate Gareth Ledsham, TEP, and Martina Moscardi, TEP, who have been newly elected unopposed to the position of Co-Deputy Chairs to the Committee. Yue-En Chong, TEP, remains as Chair.

CANADIAN LAWYER, BEST IN LAW 2023

WEL is honoured to be joined by these top boutique firms in Canada and accolades those  listed in Best in Law 2023:

i. Hull & Hull LLP

ii. Horne Coupar LLP

iii. Schnurr Kirsh Oelbaum Tator LLP

iv. Bales Beall LLP

v. Casey & Moss LLP

vi. De Vries Litigation LLP

vii. Goddard Gamage LLP

viii. Legacy Tax & Trust Lawyers

ix. O’Sullivan Estate Lawyers

TLA 2024 AWARD OF DISTINCTION

WEL congratulates the Honourable Gloria Epstein, K.C. on being the recipient of the TLA Award of Distinction, 2024, in recognition of her outstanding contribution to the legal profession, throughout a distinguished and lengthy career. The gala event will be held on Thursday, February 29, 2024, at Ricarda’s, Toronto. https://www.acficonference.ca/

TLA 2024 HONSBERGER AWARD

WEL congratulates Rebecca Durcan on being the recipient of the 2024 Honsberger Award. The Honsberger Award is presented annually to a member of the TLA in recognition of a single unique accomplishment or ongoing contributions to the legal community and the community at large, exemplifying the TLA's three pillars: Knowledge, Community, and Advocacy. The Award will be presented on February 29, 2024.

2024 TLA EMERGING EXCELLENCE AWARD

WEL congratulates Jessica Brant on receiving the 2024 TLA Emerging Excellence Award. The TLA Emerging Excellence Award recognizes a lawyer who has been in practice for 10 years or less and exemplifies leadership and/or innovation in advancing TLA's three pillars: Knowledge, Community, and Advocacy.

Mary Louise Dickson was a former law partner of mine when I was a partner at Dickson MacGregor Appell LLP. Mary Louise was a partner working from the offices of Dickson Appell until recently retiring. I would often see her in my neighbourhood which was also her neighbourhood, in between offices on Alcorn and her home on St. Clair. Mary Louise always had a story to share and a smile on her face. Mary Louise sadly passed away on January 22nd. Her obituary can be accessed here:

https://www.humphreymiles.com/obituaries/Mary-Louise-Dickson?obId=30501427

Both Mary Louise and I had in common that we were Bishop Strachan School Graduates-old girl alumnae! BSS honored Mary Louise for her contributions to the school and as a leader in the community. Mary Louise often said that BSS saved her life and taught her to be confident and that showed in her great strengths. Overcoming many obstacles including Polio, she became one of only three women in a class of 150 attending Osgoode Hall law school. Mary Louise was a Q.C., she was a bencher, she was a highly respected lawyer, she received the Order of Ontario, she received a number of distinguished awards from the Ontario Bar Association including for distinguished service and excellence in estates and trusts, she was an author, she was an advocate for her clients and for persons under disability, and she could throw a wicked dinner party-like no other! She supported her friends and colleagues and always was on the right side of fairness. She spoke up and did not shy away from approaching difficult issues head on. I learned later in life how she confidentially stood up for me, advocated for me on a sensitive matter early in my career. She never told me about having done so, but 2 senior respected colleagues did so many years later and I thanked her for her kindness. 

My condolences to her friends, colleagues, and family. My life was enriched for having known Mary Louise, my practice was enriched by her wisdom, my heart was touched by her kindness. I trust wherever she is now she will be remembered for her courageous appetite for helping people and her unwavering integrity.

By Albert H. Oosterhoff

1. Introduction

Applications for the appointment of a committee of an absentee are not an everyday occurrence, but they are made with fair regularity. People disappear for various reasons. A person may perhaps have suffered an accident but the body is never found. Or the person may have intentionally staged a disappearance and cannot be found. Grover v Vaid,^[1] is an interesting case. It concerned a woman who chose to return to India, her domicile of origin and to remain there. She could not be found afterwards.

2. Facts

Ms. Vaid immigrated to Canada from India in 2013 and bought a house with her husband, Mr. Grover, in 2016. They took title as joint tenants. In 2017 the two returned to India, their native country, to visit relatives, and two days after their arrival she decided not to return to Canada. Mr. Grover did return. He saw her last at the home of her parents in India. The parties were divorced in 2019 and Mr. Grover remarried. Since then he asked her to sign the necessary documents to refinance the mortgage on the house, but she failed to respond, and he was unable to reach her, despite many attempts. In 2023 he brought an application under the Absentees Act^[2] for a declaration that he was the sole owner of the house.

3. Analysis and Judgment

The court rightly concluded that the applicant was not entitled to that remedy, since the Act only permits the court to appoint an absentee. Besides, there was no evidence that Ms. Vaid had died, and therefore the applicant could not claim entitlement by right of survivorship. However, he could be named a committee of Ms. Vaid’s joint interest in the house.

The court noted that the legislation was enacted originally in 1920^[3] in order, as mentioned by the court, to deal with the death of a wealthy Toronto man who disappeared without any evidence that raised a suggestion of his death.^[4]

Section 1 of the Act defines ‘absentee’ as a person who, ‘having had his or her usual place of residence or domicile in Ontario, has disappeared, whose whereabouts is unknown and as to whom there is no knowledge as to whether he or she is alive or dead’.

Section 2(1) empowers the court to declare a person to be an absentee ‘if it is shown that due and satisfactory inquiry has been made’. But the court may direct the applicant to make further inquiries.

Section 8 deals with the issue of land in Ontario that belongs to a foreign absentee. This section was relevant since Ms. Vaid was now domiciled in India. It provides:

Where a person who has had his or her usual place of residence or domicile out of Ontario and who has an interest in land in Ontario has been declared to be an absentee by a court of competent jurisdiction, the Superior Court of Justice may by order, upon being satisfied that the person has disappeared, that his or her whereabouts is unknown and that there is no knowledge as to whether the person is alive or dead, appoint a committee with such authority to manage, sell or otherwise deal with the interest in land as in the opinion of the court is in his or her best interests and those of his or her family.

The court concluded that it was impractical in the circumstances for the applicant to go to India and spend potentially a lot of time looking for Ms. Vaid. It also concluded that Ms. Vaid’s decision to live indefinitely and incognito in India satisfied the absentee requirements of the Act. The difficulty in this case was that under the common law rules of conflict of laws and section 8 a person such as Ms. Vaid should be declared an absentee in accordance with the laws of India. Thus, the applicant might have had to obtain such a declaration of an Indian court. Alternatively, he could prove Indian law in the Ontario court.

However, in the absence of proof of the law of a foreign jurisdiction, the domestic court is entitled to assume that the law of the foreign jurisdiction is the same as the law of Ontario. Accordingly, the court was entitled to exercise the jurisdiction under section 8 in accordance with the requirements of section 2(1). In light of the applicant’s attempts so serve the divorce application on Ms. Vaid through the usual channels, the court was satisfied that the applicant had made due and satisfactory inquiry into the whereabouts of Ms. Vaid. The court then concluded, by reference to the provisions of section 8, that the absentee order served the best interests of the absentee and those of her family. However, as the court noted, the power to declare Ms. Vaid an absentee is limited to her interest in the Ontario property.

The effect of the absentee order was that the applicant could deal with the property as joint owner and as committee. Thus, he was at liberty to sell and convert the property and use the proceeds to purchase another house. Of course, if the absentee should return to Ontario and obtain an order declaring her no longer to be an absentee, she could require the applicant to account. However, her claim would be subject to the equities, the legal requirements associated with net family property under the Family Law Act,^[5] and limitation of actions.

Accordingly, the court declared Ms Vaid an absentee under section 8 of the Act and appointed the applicant as the committee of her interest in the property with power to manage, encumber, sell, or otherwise deal with it.

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[1] 2023 ONSC 5931.

[2] RSO 1990, c A.3.

[3] Absentee Act, SO 1920, c 36. The name was pluralized in the 1980 statute revision: Absentees Act, RSO 1980, c 3.

[4] See Re Taylor (1925), 27 OWN 497. The case is referred to in Kamboj v Kamboj Estate, 2007 CarswellOnt 2785.

[5] RSO 1990, c F.3.

By Albert H. Oosterhoff 

1. Introduction

Cases in which the compensation of trustees is contested are not as common as formerly because the law has been well-settled for some time. However, when parties do not adhere to the legal principles, the matter will usually come before the courts. It appears that this happened in Fitzhenry v Stevens,^[1] although there were no mala fides involved. Accordingly, it is appropriate to consider this issue again.

2. Facts

The settlor, Robert Fitzhenry (the “Settlor”), established the Fitzhenry (1994) Family Trust (the “Trust”) in 2008, to distribute his wealth among his family. Ultimately it was valued at $35 million. The Settlor was one of the trustees. Initially, a number of professionals – lawyers and accountants – also served as trustees but over time they resigned. In 2008 the Settlor invited Linda Stevens (the “Ms. Stevens”) to become a trustee. She was a very dear friend of the Settlor and his wife, and a highly qualified trustee. She negotiated compensation at $1,000 per day initially and that was later increased to $200 per hour. She had been paid approximately $250,000 in compensation by the time of these proceedings. Her co-trustees agreed to the periodic amounts she claimed over the years until 2019.

The Settlor died in 2019. Ms. Stevens failed to appoint another trustee in his place, as required by the Trust and remained the sole trustee. She resigned in 2022, at which time she claimed further compensation of approximately $266,600 for the years 2019 through 2022. She also claimed approximately $50,000 in addition for care and management of the trust property from 2013 until she retired. Ms. Stevens did not claim entitlement to these additional funds under any agreement.

The beneficiaries then brought this application for orders declaring that Ms Stevens was not entitled to compensation beyond what she had already invoiced and received. They argued that the trustees ignored their right to notice and to approve Ms Stevens interim compensation. They did not demand that Ms. Stevens return improperly taken fees but were of opinion that the compensation to which she had agreed, and which was paid to her was more than fair and reasonable compensation.

3. Analysis and Judgment

Justice Myers began his analysis by referring to section 61(1) of the Trustee Act.^[2] It provides that a trustee “is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge …” He also quoted section 61(5) of the Act, which provides that section 61 does not apply if the compensation is fixed by the instrument creating the trust’. Clause 4.5 of the Trust did in fact provide that the trustees were to be paid compensation for their services as agreed. But that clause went on to provide that if any beneficiary should object to the amount of the compensation, the trustees’ compensation shall be fixed by a judge of the court. This meant, therefore, that section 61(1) of the Act applied.

Ms. Stevens’ counsel agreed that the beneficiaries were entitled to be informed to the trustees’ compensation. Indeed, Justice Meyers found that it was implicit that the beneficiaries had to be informed of the Trustee’s compensation, had a right to consent to the compensation claimed, or to ask a judge to determine it. Moreover, the failure of the trustees to tell the beneficiaries about Ms. Stevens’ compensation agreements meant that those agreements were not legally enforceable. Ms. Stevens’ counsel also agreed that the Trust did not authorize Ms. Stevens to take interim compensation without the approval of the beneficiaries or the court. Justice Meyers noted that, apart from the beneficiaries’ concession not to contest the compensation already received, this could have meant that Ms. Stevens might have to pay interest to the Trust on the amounts taken without approval.

Ms. Stevens understood that as a fiduciary she had to make reports to the beneficiaries about the affairs of the trust. She did not do so while the Settlor was still alive because he did not want his children to know how the Trust was being administered. However, as Justice Meyers rightly pointed out, if a Trustee cannot carry out her duties because of the Settlor’s demands, she must resign. Even if Ms. Stevens was not aware of her obligations, she could have learnt of them by reading the Trust deed. While she may have acted in good faith by relying on others, such as the lawyer trustees, that did not excuse her failure to make disclosures to the beneficiaries. She did make disclosures to the beneficiaries after the Settlor died.

Justice Meyers then went on to consider the well-known legal tests that the court uses to assess the fair and reasonable compensation under section 61(1) of the Trustee Act. He referred to the judgment of the Killeen, Surr Ct J in Re Jeffery Estate,^[3] in which that learned judge applied the old cases: (a) Re Toronto General Trust and Central Ontario Railway;^[4] and (b) although he did not mention the case by name, Re Farmer’s Loan and Savings Co.^[5] In the first, Teetzel J adumbrated the five factors approach. The factors are: (1) the magnitude of the trust; (2) the care and responsibility involved; (3) the time occupied in performing the duties; (4) the skill and ability shown; and (5) the success resulting from the administration. In the second, the court referred to the well-settled practice of awarding compensation by way of percentages, namely 2.5% on each of capital receipts, capital disbursements, revenue receipts, and revenue disbursements, and an additional annual care and management fee of 2/5 of 1% of the average value of the gross assets under administration if the estate would not be distributed immediately. However, the cases have made it clear that the care and management fee is not automatic and should be awarded only in special circumstances. The cases made it clear that the court should first apply the percentage approach and should then check the result against the five factors to ensure that the compensation claim is not excessive and to make adjustments as necessary. In Laing v Laing^[6] the Ontario Court of Appeal endorsed this approach.

Ms. Stevens calculated that in applying the percentage approach, she would be entitled to approximately $880,000, plus a care and management fee of about $290,000, for a total amount of approximately $1.17 million. However, she was claiming less than half that amount.

The beneficiaries argued that this approach was inappropriate for the trust, since it contained only two assets. The first was an investment portfolio worth between $15 and $18 million, that was managed by two investment management firms. Hence, the trustees had very little responsibility over the portfolio and did not have to spend much time on it. The second was a condominium in Barbados. The trustees delegated its management to a professional manager in Barbados. The condominium had cost $3 million but its value declined substantially. Its annual operating costs exceeded the rental revenue. It had been for sale since Ms. Stevens assumed oversight of the condominium in 2013 but few offers had been received. It was finally sold in 2020 for 1.2 million USD. Ms. Stevens’ other duties were limited.



His Honour first applied the percentage approach and concluded that Ms. Stevens was not entitled to the amount calculated by 2.5 percentage guideline from 2019 to 2022, since much of the work for which she claimed compensation was performed by others. Then he checked the percentage approach against the five factors approach. He agreed that the size of the trust favoured a higher level of compensations. However, considering that Ms. Stevens had little responsibility herself, that the time spent on fulfilling her duties was relatively minor, that she exercised very little independent judgment while the Settlor was alive, failed to keep the beneficiaries informed, failed to appoint a successor trustee, committed a number of breaches of trust, and failed get the Barbados condominium sold promptly when it was losing a large amount of money each year, Justice Myers concluded that it would not be fair or reasonable for Ms. Stevens to be paid anything more for her services. He also ordered her to pay costs to the applicants.

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[1] 2023 ONSC 5645.

[2] RSO 1990, c T.23.

[3] (1990), 39 ETR 173 (Ont Surr Ct).

[4] (1905), 6 OWR 350, 1905 CarswellOnt 449.

[5] (1905), 6 OWR 350, 1904 CarwellOnt 462 (HC).

[6] (1998), 41 OR 3d 571 (CA).

By Brett Book

I have previously written on the Endorsement of the Honourable Mr. Justice F.L. Myers in White v. White^[1] in July of 2023. In that article, found here, I discussed how Myers J. questioned whether section 9 of the Estates Act^[2] could apply as well to a document that one hopes might qualify as a will-equivalent under s. 21.1 of the Succession Law Reform Act.^[3]

To briefly recap, section 9 of the Estates Act is designed to help beneficiaries find and obtain a deceased person’s will. Under this section, the court can order a person to produce “any paper or writing being or purporting to be testamentary.”^[4]

Section 21.1 of the SLRA allows a court to validate wills documents that are not properly executed as wills.

The issue raised in White v. White^[5] is whether a potential beneficiary is entitled to compel disclosure of documents in the possession of a lawyer for a deceased person for the purpose of ascertaining whether any of those documents might be close to a will to be recognized under section 21.1. As this is a novel question, the latest decision in White v. White will likley have some valuable precedential value.

The central matter argued in White v. White is whether lawyers’ notes leading to an unsigned draft will would suffice for section 21.1, however, Myers J. recognized that the issue more-or-less concerned whether the applicant ought to be entitled to call for production of counsel’s file to determine if section 21.1 might apply to anything contained therein.

Facts

The deceased had discussed changes to her will with a lawyer. An appointment was set to meet and finalize a new will, however, the deceased was hospitalized and died several days later, without having met with the lawyer.

The applicant was not challenging the prior Will but rather, wanted to see if “he can do better without undermining what he already has.”^[6] Myers J. recognized that looking for a document that might be testamentary in nature before a will challenge is brought is pre-litigation discovery, which is generally unavailable (one can agree or not with this given for public policy reasons the court must be interested in the preparing of the last valid testamentary document).

As such, His Honour’s Endorsement of June 21, 2023, ultimately deferred consideration of the application to allow the applicant an opportunity to respond with evidence and further legal submissions.

In the applicant’s new affidavit, additional facts were adduced including:

• That his mother told him that her financial advisors at RBC questioned the residuary gifts in her prior will, leading her to rethink her Will;
• Several conversations between the applicant and his mother, including one on August 1, 2022, where the mother discussed her new will would have changes which included:
• Updating her estate trustee;
• Decreasing one beneficiary’s residuary share in her estate;
• Increasing the residuary share of two beneficiaries; and
• Increasing the applicant’s residuary share from 10 per cent to 30 or 40 per cent.; and
• In hospital, in preparation for her meeting with the drafting lawyer, his mother asked him to help ensure that these figures were included in the draft will.^[7]

Analysis

Myers J. reviewed section 21.1 of the SLRA and the case law interpretations which followed its inception including his reasons in the case of Kertesz v. Kertesz et al.,^[8] where His Honour recognized as a valid will under section 21.1, an unsigned note prepared by a deceased person who knew his death was imminent.

In each of the cases reviewed, the court found the document being recognized represented a “fixed and final” expression of the deceased person’s testamentary intentions as at the time of its creation.^[9]

Myers J. was concerned that applications of this nature could become a way for disgruntled relatives and thwarted heirs to inflict costs and delay on an estate and its beneficiaries, as addressed in Johnson v. Johnson.^[10] However, in light of the applicant’s evidence of the existence of a written will document and the fact that the applicant is not a disgruntled or excluded relative, His Honour was of the view that his concerns in this case were alleviated. Moreover, the positions of the respondent and the estate trustee (who did not oppose the relief sought by the applicant and in fact, consented to the release of the solicitor’s file) were satisfactory to Myers J. that “the application is not an abuse or overbroad or just a fishing expedition.”

Disposition

In this case, Myers J. was able to read section 9 of Estates Act as applying to a particular written will document that, as described in uncontested evidence, may meet section 21.1.

His Honour carefully explained that his decision is as narrow as it can be on the facts and held that the consents of the respondent and estate trustee in this case were significant. While His Honour was hesitant to consider an application where a party simply hoped to come across a document that might suffice a claim under section 21.1, that was not the case here.

In explaining the importance of this decision to the question of whether the scope of section 9 of the Estates Act was effectively expanded by section 21.1 of the SLRA, His Honour held that:

Nothing that I have said above is intended to allow s. 9 of the Estates Act to be used with section 21.1 of the SLRA to encourage fishing expeditions or to foster litigation that may be brought by a disgruntled relative to leverage a settlement by the threat of costs and delay of the litigation itself.^[11]

The decision of Myers J. granted an Order which required the drafting lawyer to deliver copies of all solicitor’s records, correspondence, notes and files relating to the 2022 testamentary wishes and/or estate planning of the deceased.

Concluding Thoughts

The most-recent decision in White was well-reasoned and recognized the importance of the fact that the applicant’s relief sought was unopposed and based on some evidence which would meet any minimal evidentiary threshold that may apply by analogy to Johnson, notwithstanding our view that Johnson is wrong in the result and leave was not granted to SCC.

This case was fact-specific and the decision therefore, fact-driven. While all cases are unique, this decision certainly speaks to the fact that section 21.1 of the SLRA will allow for the application of section 9 of the Estates Act where there is sufficient evidence that a potential testamentary document exists and where the relief sought is not simply a ‘fishing expedition,’ looking for something that may fit.



We look forward to reading the next section 21.1 decision as the jurisprudence in Ontario surrounding the validating provision evolves.

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[1] 2023 ONSC 3740 [White Endorsement].

[2] RSO 1990, c E.21 [Estates Act].

[3] RSO 1990, c S.26 [SLRA].

[4] Estates Act, supra note 2 at s. 9.

[5] 2023 ONSC 7286 [White v. White].

[6] White v. White, supra note 4 at para. 13; see also White v. White, supra note 4 at para. 14 where it was held that the deceased’s 2014 will contains a clause that disinherits anyone who challenges its terms. Here, His Honour noted that “without a will challenge, the applicant has a tougher time dealing with the lawyer client privilege that seemingly applies to his mother’s communications with her lawyer,” and citing with approval Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 SCR 353, at p. 386 post b., that a will challenge is a recognized exception to a deceased person’s lawyer client privilege.

[7] White v. White, supra note 4 at para. 27.

[8] 2023 ONSC 7055 [Kertesz].

[9] White v. White, supra note 4 at para. 38.

[10] 2022 ONCA 682 [Johnson]; For more on the evidentiary threshold, see: Albert Oosterhoff, “Entitlement to Proof of a Will in Solemn Form” (June 11, 2021), WEL Partners Blog, accessed online at: http://welpartners.com/blog/2021/06/entitlement-to-proof-of-a-will-in-solemn-form/ and most recently, Brett Book, “Relying on the Respondent’s Evidence to Meet the Minimal Evidentiary Threshold” (November 14, 2023), WEL Partners Blog, accessed at: http://welpartners.com/blog/2023/11/relying-on-the-respondents-evidence-to-meet-the-minimal-evidentiary-threshold/.

[11] White v. White, supra note 4 at para. 63.

By Brett Book



On January 16, 2024, Manitoba Provincial Court Justice Michael Clark delivered his oral reasons for Judgment in a case where a mortgage broker had stolen over half a million dollars from a widowed older adult. While I have previously written extensively on a mortgage scheme targeting older adults in Ontario,^[1] this month, I felt it is appropriate to highlight an example of impropriety at the hands of a trusted advisor/investor.

On January 22, 2020, the Manitoba Securities Commission (“MSC”) warned seniors about the red flags of financial abuse after numerous charges were filed against a Manitoba mortgage salesperson (the “Former Mortgage Broker”).

The Former Mortgage Broker engaged in 18 illegal transactions between April 2016 and June 2017 was subsequently charged in Manitoba provincial court with multiple violations of The Securities Act^[2] and The Mortgage Brokers Act,^[3] including:

• 18 counts in violation of The Securities Act, including trading without being registered; and
• 36 counts in violation of The Mortgage Brokers Act, including acting as a mortgage broker and salesperson on his own behalf and failing to pay the registered broker with whom he was registered.^[4]

The Manitoba provincial court heard evidence that while the Former Mortgage Broker wasn’t very close to the victim, he knew her because their mother’s attended the same church. In fact, the Former Mortgage Broker had previously met with the woman and her now deceased husband and offered to handle their money. This offer was declined, however, after the husband died, the Former Mortgage Broker approached the woman again and asked her to give the $500,000 she had remaining to him, instead of the bank.

Justice Clark in his oral reasons held that, the Former Mortgage Broker “promised he would take care of her until she died,” and, “made promises about giving her principal back within two years, and in the meantime, every month, she would receive a cheque for interest.”^[5]

In sentencing the Former Mortgage Broker to a 15-month sentence in the community, Justice Clark held that this was “not a one-time act…[i]t was a repeated and an ongoing abuse of trust.”^[6]

Interestingly, the conditions of the Former Mortgage Broker’s sentence will allow him to continue to go to the victim’s home to help with household tasks and errands. The court noted that while the offences occurred, the Former Mortgage Broker would drive his victim to church and appointments and take her to run errands.

While the Former Mortgage Broker did pay back a large portion of the money he stole, he still owes an undetermined amount in the range of $200,000 to $400,000.^[7]

^

One of the aggravating factors is the fact that in 2006, the Former Mortgage Broker was banned by the MSC from registration under The Securities Act for 10 years. The court heard that he was sanctioned after being previously fired from Edward Jones Investments in 2002 for stealing from a widowed client.^[8]

Know How to Spot the Signs of Financial Abuse

The MSC provides that some of the warnings and red flags of the financial abuse of an older adult can include:

• Social isolation or withdrawal;
• Dependence on another or financial support;
• Substance abuse or misuse;
• Depression or mental illness;
• Sudden change in appearance (such as poor hygiene or weight loss);
• Discrepancies between the adult’s standard of living and their financial assets; and
• An individual who is overly protective or controlling of an older person.

The MSC operates an anti-fraud line in Manitoba at 1-855-FRAUD-MB.

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[1] See “Notice to the Professions: Exploitative Loan Agreements” (August 31, 2023), WEL Partners Blog, accessed online at: https://welpartners.com/blog/2023/08/notice-to-the-professions-exploitative-loan-agreements/; See also, “The Alarming Rise of Scams Targeting Older Adults” (November 30, 2023), WEL Partners Blog, accessed online at: https://welpartners.com/blog/2023/11/the-alarming-rise-of-scams-targeting-older-adults/; See further, Brett Book, “Reviewing the Utility of Notices of Security Interests in the Context of Rampant Fraud” (December 23, 2023), WEL Partners Blog, accessed online at: https://welpartners.com/blog/2023/12/reviewing-the-utility-of-notices-of-security-interests-in-the-context-of-rampant-fraud/.

[2] RSM 1988, c S50.

[3] CCSM c M21.

[4] Manitoba Securities Commission, “MSC Warns Seniors of Financial Abuse Following Charges Against Manitoba Mortgage Broker” (January 22, 2020), accessed online at: http://www.mbsecurities.ca/news/current/dobbin.html.

[5] Caitlyn Gowriluk, “Man who obtained $500K from elderly widow sentenced to 15-month community sentence” (January 17, 2024), CBC Manitoba, accessed online at: https://www.cbc.ca/news/canada/manitoba/bret-allan-dobbin-sentencing-1.7086958 [Gowriluk].

[6] Gowriluk, supra.

[7] This figure is contested by counsel for the Former Mortgage Broker and counsel for the Manitoba Securities Commission.

[8] See Manitoba Securities Commission, “Orders and Exemptions” (January 25, 2006), accessed online at: http://docs.mb.securities.ca/msc/oe/en/item/107509/index.do.

By Brett Book

On January 21, the government of Ontario celebrated the memory of Lincoln M. Alexander by unveiling his bust in the West Wing of Queen’s Park. The bust was sculpted by Award-winning Toronto artist, Quentin VerCetty.^[1]

Lincoln Alexander was Canada’s first Black member of Parliament, the first Black person to hold a viceregal position in Canada and is now the first Black Canadian political figure to have a parliamentary bust in a legislature in Canada. In 2013, January 21^st was officially declared ‘Lincoln Alexander Day’ in Ontario.^[2]

In celebration of the life of Lincoln Alexander, we would like to highlight some of the obstacles he overcame as well as his many achievements.

The Early Life of “Linc”

Lincoln M. Alexander (colloquially known as “Linc”) was born on January 21, 1922, in Toronto. Linc was the eldest of two sons, born to Mae Rose and Lincoln MacCauley Alexander Sr.

Growing up as the only Black child in his classes at Earl Grey Public School, Linc admittedly earned the respect of his classmates by fighting. In his memoir, Linc said that standing up for himself taught him “to always walk tall, and with a certain bearing, so people knew [he] meant business.”^[3]

Despite his tendency to mix it up on the playground, Linc valued his education and was consistently ranked in the top-ten in his classes at elementary school and at Riverdale Collegiate High School.

When he was fifteen, his mother left an abusive relationship with his father and moved to Harlem, New York. It was there that Linc enrolled in DeWitt Clinton High School in the Bronx, which was notably the alma mater of famous writer, James Baldwin.

After he was sent back to live with his father, Lincoln enlisted in the Royal Canadian Air Force where he served as a wireless operator during World War II. After the War, Linc attended McMaster University, graduating in 1949.

Overcoming Adversity

After graduation, Linc applied for a sales position with a Hamilton steel plant that he worked at during the summers. Unfortunately, the company was unwilling to hire a Black person for their sales department and offered him his old job instead.

This early rejection convinced Linc that he wanted to work for himself and so, he enlisted at Osgoode Hall to become a lawyer. However, even as a war veteran with a law degree and exceptional academic credentials, Linc struggled to enter the legal field.

Eventually, another minority, a Jewish lawyer Sam Gotfried Q.C. hired him as an articling student. Linc practiced in commercial and real estate law and eventually, criminal law. He was appointed a Queen’s Counsel in 1965. That year, he also received a personal invitation to enter politics from Prime Minister John Diefenbaker.

In 1968, Lincoln Alexander won the federal seat for the Hamilton West riding. After a memorable career as a Member of Parliament, Prime Minister Brian Mulroney recommended that Lincoln Alexander be appointed as the 24^th lieutenant-governor of Ontario. He was sworn in on September 20, 1985. The three goals in his mandate were advancing the cause of youth, fighting racism and advocating on behalf of seniors.

As a lieutenant-governor, Lincoln Alexander met 290 dignitaries, received 72,283 guests, visited 704 communities, held 715 receptions, visited 2,235 schools, signed 60,000 orders-in-council and cabinet documents, and gave royal assent to 551 bills. In 1991, he was appointed Chancellor of the University of Guelph. In his fifteen years as Chancellor, he conferred more than 20,000 degrees.^[4]

In 1992, Lincoln Alexander was appointed as a Companion of the Order of Canada and to the Order of Ontario. Osgoode Hall Law School’s Alumni Association gave him an Award of Excellence in 1996 and in 1997, the Canadian Association of Black Lawyers gave him a Lifetime Achievement Award.^[5]

Lincoln Alexander’s Legacy Lives On

On October 19, 2012, Lincoln Alexander died at the age of 90. His legacy is noteworthy and in testament of it, he has many eponyms in his honour, including Lincoln M. Alexander Parkway (Highway) in Hamilton; Lincoln Alexander Public Schools in Ajax, Hamilton, and Markham; Lincoln M. Alexander Secondary School in Mississauga; Alexander Hall at the University of Guelph; and Lincoln Alexander School of Law at the Toronto Metropolitan University.



His public service honours also include the 876 Lincoln Alexander Royal Canadian Air Cadets Squadron and the Lincoln M. Alexander Building (the OPP headquarters building in Orillia).

Lincoln Alexander was a familiar face in my hometown of Hamilton, where he could often be found on downtown streets on his scooter, striking up friendly conversations with anyone who had time to chat. He was without a doubt, a great Canadian, and an inspiration to many.

---

[1] Much like me, Quentin met Lincoln in high school (at his namesake in Mississauga) where Lincoln told him, “Young man, I can see you doing great things.” I met Lincoln at St. Jean de Brebeuf in Hamilton where he told me, a young troublemaker, that “I could do anything I put my mind to.” It’s safe to say Lincoln Alexander inspired us both to reach for greater heights.

[2] Joanna Lavoie, “Bronze bust honouring Lincoln M. Alexander unveiled at Queen’s Park” (January 23, 2024), accessed online: http://cp24.com/news/bronze-bust-honouring-lincoln-m-alexander-unveieled-at-queens-s-park-1.6736110.

[3] Sandra Martin, “Obituary: Former lieutenant-governor took discrimination as personal challenge” (December 30, 2018), Globe and Mail, https://www.theglobeandmail.com/news/national/obituary-former-lieutenant-governor-took-discrimination-as-personal-challenge/article4623578/

[4] Sandra Martin, supra.

[5] Lincoln Alexander also received the government of Ontario Award for Outstanding Achievement in Human Rights in 1998. In 2002 he was a recipient of Queen Elizabeth II’s Golden Jubilee Medal and in 2012 he received Queen Elizabeth II’s Diamond Jubilee Medal (Toronto Metropolitan University – Lincoln Alexander School of Law, “Our Namesake” (May 6, 2021), accessed online at: https://www.torontomu.ca/law/about/our-namesake/.

By Gabriella Banhara

The recent decision of Roe v Roe^[1], 2024 ONSC 62 (“Roe’”) addressed exorbitant cost submissions by parties, and the final cost order by the court in regard to a failed Will challenge. Additionally, this decision reiterated how the court will reward a litigant who chooses a conciliary approach during litigation.

Brief Overview of Costs in Estate Matters & Rule 49

The modern approach to costs in litigation has been described as the “loser pays”, determined by the seminal case of McDougald Estate v Gooderham, 2005 ONCA 21091.^[2] This approach was implemented as a way for the court to deter unnecessarily litigious claims or claims that have been brought to solely deplete an estate.

If a party has submitted reasonable offers to settle, to which the opposing side rejects, the court may be incentivized to penalize such unreasonable behavior through the liability of costs. In regard to Rule 49, the court in Roe stated^[3];

[5] A will challenger could be relieved from paying the trustee’s cost on an unsuccessful will challenge if they raise a bona fide concern with the will that warrants judicial scrutiny.  On the flipside, a court may deprive an estate trustee from using estate coffers to cover the cost of litigation where they have acted unreasonably or in substance for their own benefit^[4].

Facts

The cost submission of Roe, is based on the will challenge decision of Roe v. Roe, 2022 ONSC 5821^[5]. Beverly (the “Deceased”) was the mother to the Applicant, Mark, and her other three sons: Rick, Randy, Chris, who formed the Responding party. After several disputes regarding the division of the Deceased’s assets, tensions grew strong enough for the Deceased to execute a Will in 2005 (the “Will”) disinheriting Mark. The Deceased’s previous Will from 2004 (the “2004 Will”) had divided her estate equally amongst all of her sons.^[6]

On July 12, 2014, the Deceased passed away, disposing the assets of her estate to Rick, Randy and Chris.^[7]

On January 24, 2022, Mark’s Will challenge regarding the Deceased’s lack of testamentary capacity began. After a three-week trial, the Application was converted into an action. Mark also began a cause of action against Rick and Randy personally, but abandoned it mid trial.^[8] 

Mark provided sufficient evidence to indicate that the Deceased’s Will had been executed under suspicious circumstances.^[9] However, it was proven by Randy that the Deceased had the requisite testamentary capacity to execute a Will. On this basis, Mark’s Will challenge ultimately failed.^[10]

Randy’s total costs are between “$1,005,583.01 or $1,159,029.15 in all-inclusive fees, disbursements and HST”.^[11]

The court ordered as follows: 

a. Randy owes Mark $25,114.53 for the Faieta, J. order of July 4, 2019;

b. Mark shall pay Randy $330,000 in all inclusive costs;

c. Mark shall bear his own costs;

d. The estate shall cover $260,338.03 of Randy’s litigation costs;

e. Randy cannot recover any other litigation costs from the estate and is personally responsible for the balance of the fees and disbursements; and

f. Chris shall be reimbursed $170,000 from the residue of the estate.

Analysis

The court asserted that Randy was entitled to “to recover total fees of $500,000 as the propounder of the Will of which Mark shall pay $300,000 and the estate shall pay $200,000”.^[12] The court’s reasoning for such decision is broken down into four sections.

Complaints to the LSO

Randy complained to the Law Society of Ontario (the “LSO”) when he was unhappy with the legal position advanced by his counsel. The court described such behavior as reprehensible, failing to permit Randy from recovering costs for such baseless complaints.^[13]

The Rolls Royce of Legal Service

Randy retained 9 lawyers on his file, whom all billed at “relatively high rates”.^[14] The court asserted that Randy would not be able to recover from Mark, nor, the estate for his voluntarily choice of the “Rolls Royce of legal service”, despite Randy’s entitlement to “retain whomever he wants”.^[15] The court went on to say that retaining 9 lawyers likely lead to a “duplication of time” and that some of the fees charged by the lawyers did not relate to the action.^[16]

Propounder of the Will challenge where there were suspicious circumstances proven

Turning to Mark’s costs, the court asserted that Mark was entitled to some “discount” in his costs because the circumstances regarding the Will were “worthy of court scrutiny”.^[17] Mark cited Di Nunzio v Di Nunzio^[18], 2022 ONCA 889 (“Nunzio”) to exemplify where the court “had all trustee costs paid out of the estate and relieved the unsuccessful challenger of paying any”.^[19] The court denies fully relieving Mark’s costs from the deceased’s estate, given that it would unfairly impact Chris’ share of the estate. The courts stated Chris took a conciliary approach to litigation, unlike Mark and Randy, so his share of the estate should not be depleted by his brothers’ unreasonable litigation.

The Respondent Acted in His Best Interest

The court agreed with Chris’ position, who stated that Randy’s conduct was reprehensible on the basis that Randy refused to settle despite the five offers that were submitted by Chris. The court again affirmed Chris’ conciliary approach to the litigation stating that Randy should not deplete Chris’ share from the estate. The court goes on to state:

[20] I agree with Chris that Randy acted in his own best interest in the litigation, more than that of the estate, was unnecessarily adversarial, and unreasonable in refusing to properly entertain his settlement offers. This warrants a reduction in what Randy can recover from the estate in fees.^[20]

Despite this, the court contended that Randy was entitled to have some of his costs covered by the estate’s funds because he propounded the Will due to the suspicious circumstances present during its execution.

Commentary

In the decision of Roe, the court made it clear that a litigant who takes a conciliary approach to litigation will be rewarded in respect of costs. Chris not only made various offers to settle but avoided a combative approach during litigation like his brothers. This decision reiterates the importance of Rule 49, and incentivizes parties to settle as well as demonstrate that the court will impose cost consequences on a litigant who displays reprehensible or unreasonable behavior during litigation.

---

[1] Roe v Roe, 2024 ONSC 62 (“Roe’”)

[2] McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA)

[3] Roe at para 5.

[4] Roe at para 5.

[5] Roe v. Roe, 2022 ONSC 5821 (“Roe 2022”)

[6] Roe 2022 at para 28.

[7] Roe 2022 at para 1.

[8] Roe at para 5.

[9] Roe at para 20.

[10] Roe at para 3.

[11] Roe at para 7.

[12] Roe at para 16.

[13] Roe at para 17.

[14] Roe at para 18.

[15] Roe at para 18.

[16] Roe at para 18.

[17] Roe at para 19.

[18] Di Nunzio v. Di Nunzio, 2022 ONCA 889

[19] Roe at para 18.

[20] Roe at para 20.

By Fabiana Araujo M S Kennedy

On December 14, 2023, Ontario Regulation 388/23 was filed to amend the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”) and forms for Estate Court proceedings in the Superior Court of Justice.

The regulation will come into effect on April 1, 2024. The main objective is to simplify the probate application processes.

The amendments are as follows:

1.  Form Amendments

Form 74F, which is now named Affidavit Attesting to the Handwriting and Signature of a Holograph Will or Codicil, amended to Affidavit Regarding a Holograph Will or Codicil; ^[1]

The amendments are mainly to expand the information that may be relevant to the issue of the validity of a holograph will.

Forms 74G (Renunciation) and Form 74H (Consent) dated September 1, 2021, are revoked;

New Form 74G (Renunciation and Consent) is created;

This form is a combination of Forms 74G and 74H and provides instructions on when a renunciation and when a consent should be filed and reduces the number of forms that must be prepared and filed to demonstrate the consent of beneficiaries and renunciation of persons who are entitled to act as estate trustees.^[2]

• Consequential amendments to Forms 74A (Application for a Certificate of Appointment of Estate Trustee) and 74J (Application for Certificate or Confirmation of Appointment) to replace Form 74H with a new reference to New Form 74G;

• Form 74.1A (Application for Small Estates Certificate) consequential amend to replace Form 74H with a new reference to New Form 74G, and it removes the optional line about a will with the assets referred to in the will since this type of will cannot be probated through a small estate application.^[3]

2. Rule Amendments

Rules 74.04(1)(e)(f), 74.06(1) (b)(c), 74.07(1)(b) and 74.11(6) of the Rules are amended to replace the references to Form 74H with a reference to the new Form 74G.^[4]

It is recommended for estate practitioners to be diligent and be familiar with the amendments to reduce risk of applicant errors, thereby reducing the risk of refusal to grant a probate certificate due to missing form filings.^[5]

A summary of all of the amendments can be found on the Ontario Regulatory Registry.

---

[1] Ontario's Regulatory Registry

[2] Ontario's Regulatory Registry

[3] Ontario's Regulatory Registry

[4] Ontario's Regulatory Registry

[5] Ontario's Regulatory Registry

By Oliver O'Brien & Gabriella Banhara

Below are 5 of the more notable estates and trusts decisions that we saw in 2023.

#1. Palichuk v. Palichuk^[1]

Summary

In March, Nima Hojjati wrote on the Ontario Court of Appeal decision in Palichuk v. Palichuk where the court re-affirmed that a Last Will and Testament cannot be challenged during the lifetime of the testator.^[2]

Facts

The case concerned Ms. Palichuk, who was 90 years old at the time of the appeal. The parties included Ms. Palichuk and her two daughters, Linda (the “Appellant”) and Susan (the “Respondent”). The dispute concerned the validity of four documents executed by Ms. Palichuk:

a)  A Will disinheriting the Appellant, and naming the Respondent as her sole beneficiary (the “Will”);

b)  A Continuing Power of Attorney for Property appointing the Respondent as her attorney;

c)  A Power of Attorney for Personal Care appointing the Respondent as her attorney; and

d)  A transfer and declaration of trust transferring her home to the Respondent as a bare trustee.^[3]

At first instance, the Appellant brought an application in the Ontario Superior Court to declare Ms. Palichuk incapable of managing her property and personal care and sought a guardianship order. The Applicant also sought the “opinion, advice and direction of the Court” in respect of the validity of the four documents, including the Will, including whether Ms. Palichuk was unduly influenced. The court found Ms. Palichuk capable of managing her property and personal care and refused a guardianship order. Moreover, the court found that Ms. Palichuk was capable of executing the four documents.^[4]

On Appeal, the Appellant submitted that the application judge erred by not considering the issue of undue influence in respect of the four documents, including the Will.

Decision

In challenging the Will, the Appellant relied on Rule 14.05(3)(a) of the Rules of Civil Procedure^[5] which provides:

14.05(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,

(a) the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust. [Emphasis added.]

The Court of Appeal noted that the Rule does not contemplate the court providing an “opinion, advice or direction” on the Will of a living person. Moreover, that determining the validity of a Will depends upon the future contingency of a testator’s death. This position is in accordance with section 26 of the Succession Law Reform Act^[6] (“SLRA”) which states:

22 Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to,

(a) the property of the testator; and

(b) the right, chose in action, equitable estate or interest, right to insurance proceeds or compensation, or mortgage, charge or other security interest of the testator under subsection 20 (2).

The Court of Appeal noted that some cases have considered Wills during a testator’s lifetime and took issue with some comments made in Dempster v. Dempster^[7]. In that case, the Superior Court stated that the law in Ontario “may well be moving towards” permitting claims of undue influence during a testator’s lifetime.^[8]

The Court of Appeal disagreed, stating that it is neither necessary nor desirable for the law to permit such a challenge and cited public policy reasons why. First, the testator may change their Will as often as they like prior to death. Second, there is no way to determine what property will be left, if any, to distribute until after a testator dies. Finally, beneficiaries may predecease the testator. If Will challenges were permitted during a testator lifetime, “the courts would be inundated with litigation that is hypothetical during the lifetime of the testator, with the potential for re-litigation after their death.”^[9]

#2, Vojska v. Ostowski^[10]

Summary

In July, Brett Book wrote on several of the 2023 decisions that have applied section 21,1(1) of the SLRA. One of those decisions was Vojska v. Ostowski.^[11]

Facts

In Vojska v. Ostowski, Ms. Vojska (the “Deceased”) died on September 9, 2022. The Deceased prepared a will on October 7, 2011. That day, the Deceased and her husband attended a lawyer’s office to sign new wills and powers of attorney. Each spouse signed a will and two power of attorney documents. A lawyer and a law clerk witnessed the signing ceremony. The lawyer, however, in the midst of the six documents to be signed, failed to sign the Deceased’s Will.^[12]

Decision

The court considered section 21.1(1) of the SLRA which provides:

Court-ordered validity

21.1(1) If the Superior Court of Justice is satisfied that a document or writing that was not properly executed or made under this Act sets out the testamentary intentions of a deceased or an intention of a deceased to revoke, alter or revive a Will of the Deceased, the Court may, on application, order that the document or writing is as valid and fully effective as the Will of the deceased, or as the revocation, altercation or revival of the will of the deceased, as if it has been properly executed or made^[13].

The effect of section 21.1(1) of the SLRA is that it “grants the court a discretion to treat as a valid will, a document that expresses the testamentary intention of the deceased but was not properly executed as required for a will”.^[14] The formal requirements for a Will are included in section 4 of the SLRA and include that the Will must be signed by the testator, in the presence of two attesting witnesses who also sign the document. Section 21.1(1) only applies if the deceased died on or after January 1, 2022.

In his decision, Justice Myers held that the Will was valid and fully effective, and used his discretion under section 21.1(1). In doing so, His Honour stated “it is hard to imagine a more textbook example of a case for which the new power was intended.”^[15]

In Vojska, Justice Myers, provided a thorough analysis which included consideration of two previous decisions rendered by him which considered section 21.1(1): Cruz v. Public Guardian and Trustee^[16] and White v. White.^[17] Justice Myers opined how in Cruz, he mentioned the test out of British Columbia, requiring “a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death.”^[18]

Interestingly, Justice Myers also discussed the decision in White, and remarked how he “mused in obiter dictum about whether an unsigned draft will can ever be sufficiently fixed and final for the purposes of that section. His Honour went on to ask, will the phrase “not properly executed” in s. 21.1 include “unexecuted” (i.e. unsigned) documents.”^[19]

It will be interesting to see how section 21.1(1) decisions continue to develop and in light of some of the considerations addressed by Justice Myers in White.

#3. D.L v E.C^[20]

Summary

In this case, the Ontario Court of Appeal upheld a decision from the Superior Court in respect of a claim for dependant support under the SLRA. In their decision, the Court of Appeal considered the definition of a dependant, specifically a ‘child’ under section 57 of the SLRA.

Facts

The dependant support claim was brought by a mother (known as “E.C.”) on behalf of her minor child (known as “P.C.L..”) against the estate of the deceased (known as “B.L.”). The parents, E.C. and B.L., had been involved in an on again off again romantic relationship for several years including when P.C.L. was born. They were both in other relationships at the time P.C.L. was conceived. Eight months after P.C.L.’s birth, B.L. passed away unexpectedly from a drug overdose. During that eight-month period, there was evidence that he treated P.C.L. as his child.^[21]

E.C. and B.L. lived together when P.C.L. was born. On the child’s baptismal certificate, B.L. was named as their father. B.L.. named the child and the mother on his life insurance policy as beneficiaries and were listed as dependants on his work’s medical insurance. However, he was not actively involved in P.C.L.’s care, given he suffered from various addictions. Shortly after their birth, B.L.’s right to see P.C.L. was revoked due to his continued drug use. Moreover, a DNA test conducted during the litigation demonstrated that B.L. was not the biological father of P.C.L.^[22]

The Law

In Ontario, a claim for dependant support is brought under section 58 of the SLRA, which provides:

Order for support

58 (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.^[23]

The question in D.L. v. E.C. was whether P.C.L. met the definition of a dependant, specifically a ‘child’, which is found in section 57(1) of the SLRA:

“child” means a child as defined in subsection 1 (1) and includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody.^[24]

The application judge, with the Court of Appeal concurring, found that while there was insufficient evidence that B.L.. had demonstrated “a settled intention” to treat P.C.L. as a child,  there was found to be a basic intention to treat P.C.L. as a child, yet, it was not a “settled intention”.^[25]

The application judge concluded that:

i. E.C. had not met the onus to demonstrate P.C.L. was the dependant of the deceased;

ii. E.C. and B.L. were not common-law spouses under the SLRA; and

iii. The DNA demonstrated that P.C.L. was not the biological child of the child.

Moreover, the court found that B.L. believed that P.C.L. was his biological child whereas E.C knew that either he was not the father or may not have been. She took no steps to dissuade him of this belief. Importantly, the application judge stated that “[h]ad E.C. been forthright and honest with B.L. about the parentage, the eight months may have been a sufficient time frame to have allowed for the settled intentions to be manifested”.^[26]

Which factor will figure more predominantly in the analysis of whether a person has “a settled intention” to treat a child as his or her own will therefore depend on the circumstances of the case. As the application judge noted, the finding of a settled intention is a fact-driven exercise.^[27]

In the circumstances, the state of B.L.’s knowledge was relevant but not determinative factor given the very short time period involved and the limited evidence of B.L.’s relationship with P.C.L. The application judge did not consider it to the exclusion of other relevant factors, including P.C.L.’s need for support and her relationship with B.L. as manifested in the very short time they were together.^[28]

For these reasons, the Court of Appeal dismissed E.C.’s appeal, finding that P.C.L. was not a dependant of the deceased for the purpose of a dependant support claim.

#4. Jackson v. Rosenberg^[29]

Summary

In November, Professor Oosterhoff wrote on the Ontario Superior Court decision in Jackson v. Rosenberg that concerned a matter of joint tenancy and the presumption of resulting trust.^[30]

Facts

The deceased, Mr. Taube (the “Deceased”) and Mr. Jackson (the “Applicant”), were partners since in or around 1963. In 2005, both the Applicant and the Deceased executed mirror wills, naming “each other as the sole beneficiary of their respective estates”^[31]. The Deceased also listed his great niece, Ms. Rosenberg (the “Respondent”), as his alternate beneficiary given he had no other family to support.^[32]

Since 1999, the Applicant and the Deceased shared a condominium (the “Condo”) in Toronto. The Condo was owned by the two of them as joint tenants with a right of survivorship.^[33]

The right of survivorship provides that when property is owned jointly in joint tenancy and one owner dies, their interest automatically flows to the other owners. This is distinguishable from tenancy in common, whereby two or more persons may hold property jointly, but each have a distinct share. When an owner dies owning property as tenants in common, their share may flow to a third party and not the remaining owners.

Upon the Deceased death in 2010, the Applicant sold the Condo and used the proceeds to purchase a house in Port Hope (the “Port Hope Property”). In February 2012, the Applicant transferred title to the Port Hope Property as the sole owner to the Respondent as joint tenants with the right of survivorship.^[34]

A decade later, the Applicant grew worried he would be forced out of the home due to the Respondent’s discussions of selling the house with her husband. In September 2020, the Applicant requested his lawyer to sever the joint tenancy with the Respondent, creating a tenancy in common.^[35]

The Respondent’s position was that the Applicant transferred the property to her as joint tenant as a gift. Meanwhile, the Applicant maintained that it was not a gift, and that he intended to transfer the property to the Respondent to avoid probate fees, while retaining full beneficial interest in the Property until he died. The Applicant’s position was that the Respondent was holding the Port Hope Property on resulting trust for the Applicant. The Applicant also stated that he did not understand the implications of joint tenancy from his lawyer when such a transfer was made[36].

Decision

The issue for the court was twofold:

i. Did the Applicant have the right to sever the joint tenancy?

ii. Did the Applicant rebut the presumption of resulting trust?

The court considered and applied Kennedy v. Smith^[37], in which the court summarized the three potential scenarios that can arise when a gratuitous transfer/gift of property into joint tenancy is made:

a)  A true joint tenancy, in which the joint tenants are each owner of the whole. Each enjoys the full benefit of property ownership, and the ultimate survivor will enjoy the whole title for him or herself;

b)  A resulting trust, wherein only one joint tenant has any beneficial interest in the property and the other joint tenant, usually a gratuitous transferee, holds title in trust for the other and has no beneficial interest in the property;

c)  A scenario which is sometimes referred to as a “gift of the right of survivorship,” wherein a joint tenant is gratuitously placed on title and has no beneficial entitlement to the property during the lifetime of the donor, but if the donee survives the donor, the donee will receive the entire property by rights of survivorship. In Bergen v. Bergen,[16] Newbury J.A. described a gift of the right of survivorship in a joint account as “an immediate gift of a joint interest consisting of whatever balance exists in the account on the transferor’s death, assuming he or she dies first.”

The court noted that when a person makes a transfer without consideration to a third person who is not his minor child, a presumption of resulting trust arises. Justice Sanfilippo provided a helpful summary of the law of resulting trust in Bradshaw v. Hougassian:

As the Supreme Court has explained, “the underlying notion of the resulting trust is that it is imposed ‘to return property to the person who gave it and is entitled to it beneficially, from someone else who has title to it. Thus, the beneficial interest ‘results’ (jumps back) to the true owner’”

A resulting trust arises where the property is in one party’s name, but impressed with an obligation to return the property either because the holder is a fiduciary or because the transferee gave no value for the property. To determine whether the transfer of property was made for no value, the actual intention of the transferor at the time of the transfer is the governing consideration. Where a gratuitous transfer is made, there is a rebuttable presumption that the transferor intended to create a trust rather than to make a gift, on the principle that “equity presumes bargains and not gifts”. The onus is on the person receiving the transfer to demonstrate that a gift was intended, failing which the transferee holds the property in trust for the transferor.^[38]

Pecore v. Pecore^[39] is the seminal case for resulting trusts in Canada. In Pecore, the Supreme Court of Canada stated that three factors are required to establish an intention of a gratuitous transfer / gift:

1) an intention to make a gift on the part of the donor, without consideration or expectation of remuneration;

2)  an acceptance of the gift by the donee; and

3)  a sufficient act of delivery or transfer of the property to complete the transaction.^[40]

Having considered the evidence as a whole, the court was satisfied that, at the time of the transfer, the Applicant intended to gift the right of survivorship in the property to the Respondent, so that whatever equity remained on his death would pass to her. He did not intend to give the property to the Respondent during his lifetime but wanted to retain control of it while he lived. Thus, he intended that the Respondent’s beneficial interest would arise only when he died. As made clear by Pecore, this does not preclude a conclusion that he intended to give the right of survivorship to the Respondent.^[41]

In consequence of the severance, the court found that the Respondent had a 50% interest in the Port Hope Property. However, since the severing transfer was a gratuitous transfer the presumption of resulting trust also applied to it and thus the Respondent held her 50% interest on resulting trust for the Applicant. Nevertheless, the Applicant could not and did not revoke the right of survivorship with respect to that 50% share. Thus, when the Applicant dies his 50% interest in the Port Hope Property will become part of his estate, whereas the Respondent’s 50% share will pass to her if she survives the Applicant in accordance with the intention of the 2012 transfer.^[42]

#5, Queripel v. Shaddock^[43]

Summary

In September, Professor Oosterhoff wrote on the decision in Queripel v. Shaddock wherein the court awarded punitive damages against an estate trustee for breach of their fiduciary duties.^[44] The case demonstrates that the court will step in where an estate trustee falls below their standard of care and acts contrary to the best interests of the beneficiaries of an estate.

Facts

Queripel v. Shaddock concerned the estate of Ms. Shaddock (the “Deceased”) who died in 2002. The Deceased was survived by her daughter, Lorali (the “Respondent”), and sons Clifford and Robert. The Deceased left a Will dated June 28, 1996, which appointed the Respondent as one of her co-estate trustees.^[45]

The Will provided Robert with a life interest in the Deceased’s property or any other residence as might be substituted for it. Following the Deceased’s death in 2002, the Respondent sold the Deceased’s residence as estate trustee and purchased a condo for Robert. The respondent lived rent-free at the condo with Robert until his passing in 2022. A title search on the condo demonstrated that title liens had been registered against it for default in payment of common expenses like rent.^[46]

In February 2022, counsel for Clifford wrote to the Respondent asking for an accounting and an explanation about the liens. He also sought occupation rent, damages, payment of legal fees, and the Respondent’s agreement to be removed as estate trustee. In June 2022 Justice Kimmel made an order requiring the Respondent to pass her accounts. She failed to comply with the order.^[47]

In December 2022, Justice Dietrich removed the Respondent as estate trustee and named Clifford as the succeeding estate trustee. The court also ordered the Respondent to comply with Justice Kimmel’s order, transfer all estate assets to Clifford, inform him of all debts and assets of the estate, have the title to the condo changed to reflect that Clifford, as executor, was the new owner. The court also issued a writ of possession for the condo.^[48]

In an email in March 2023, the Respondent promised to deliver all documents in her possession to Clifford’s counsel, and informed him that there were property tax arrears, legal fees, and a special assessment. However, the Respondent failed to deliver any of the documents.^[49]

Accordingly, Clifford brought a motion for the following relief:

i. to determine the damages caused by the Respondent while estate trustee, and requiring her to pay the damages;

ii. requiring the Respondent to pay punitive damages for failing to comply with court orders and otherwise;

iii. requiring the Respondent to comply with various court Orders for her to pass her accounts, transfer all estate assets to Clifford.

The motion was heard 23 May 2023. The Respondent had plenty of notice of it, but, did not appear.

Decision

Justice Gilmore found that the Respondent breached her fiduciary duties as estate trustee in that:

(a) she failed to communicate with the beneficiaries for 20 years and failed to respond to communication from their counsel other than one recent email;

(b) she failed to provide an accounting of the estate’s assets despite three court orders requiring her to do so (two of which required her to pass her accounts);

(c) resided in the condo and did not pay rent to the estate, failed to sell it after Robert died as required by the Will, failed to pay real property taxes since 2018, and failed to pay the condo fees and the special condo assessment;

(d) her failure to maintain estate assets resulted in a lien being placed on the condo and caused the City of Toronto to take steps to distrain for taxes; further, the moving parties incurred legal fees to remove the lien, and they had to use their own resources to remove the line and pay other expenses.^[50]

With respect to the claim for punitive damages, her Honour applied Walling v. Walling,^[51] in which the court awarded punitive damages for the egregious actions of the executor. She held that, as in Walling, the court needed to send a message in this case regarding ‘the abhorrence’ of the Respondent’s conduct when she was estate trustee, which included the fact that her actions caused increased costs, a failure to communicate with vulnerable beneficiaries, and a failure to account. She concluded:

[The Respondent’s] conduct in this matter cannot be considered as anything other than egregious, abhorrent and dismissive of Court authority. An award of punitive damages will communicate to those named as Estate Trustees that breaches of fiduciary duty, and a continuing failure to account or communicate with beneficiaries will be considered conduct that should be the subject of deterrence.^[52]

The Respondent awarded full indemnity costs on the motion to the Applicants in the amount of $49,601.09.^[53]

--

[1] Palichuk v. Palichuk, 2023 ONCA 116 (CanLII) (“Palichuk”)

[2] See Nima Hojjati, “Barriers to Challenging a Will During Life” March 20, 2023, WEL Partners Blog, accessible online: https://welpartners.com/blog/2023/03/barriers-to-challenging-a-will-during-life/

[3] Palichuk at para 2.

[4] Palichuk at paras 3-5

[5] Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”)

[6] Succession Law Reform Act, R.S.O. 1990, c. S.26 at s.26 (“SLRA”)

[7] Dempster v. Dempster, 2008 CanLII 2747 (ON SC)

[8] Palichuk at para 70

[9] Palichuk at para 71

[10] Vojska v. Ostowski, 2023 ONSC 3894 (CanLII) (“Vojska”)

[11] See Brett Book, “Recent Applications of Ontario’s Validating Provision in S. 21.1 (1) of the Succession Law Reform Act” July 31, 2023, WEL Partners Blog accessible online: https://welpartners.com/blog/2023/07/recent-applications-of-ontarios-validating-provision-in-s-21-1-1-of-the-succession-law-reform-act/#_ftn15

[12] Vojska at paras 1 - 6

[13] SLRA at s. 21(1)(1) [Emphasis added]

[14] Vojska at para 11

[15] Vojska at para 12.

[16] Cruz v. Public Guardian and Trustee, 2023 ONSC 3629 (CanLII)

[17] White v. White, 2023 ONSC 3740 (CanLII)

[18] Vojska at para 21

[19] Vojska at para 24

[20] D.L v. E.C., 2023 ONCA 494 (CanLII) (“D.L.”)

[21] D.L. at para 6

[22] D.L. at para 7

[23] SLRA at s.58(1)

[24] SLRA at s.57(1) (emphasis added)

[25] D.L. at para 11

[26] D.L. at para 8

[27] D.L. at para 8

[28] D.L. at para 14

[29] Jackson v. Rosenberg, 2023 ONSC 4403 (“Jackson”)

[30] See Albert Oosterhoff, “Can you make an irrevocable Gift of The Right of Survivorship?” November 30, 2022, WEL Partners Blog accessible online: https://welpartners.com/blog/2023/11/can-you-make-an-irrevocable-gift-of-the-right-of-survivorship/

[31] Jackson at para 13.

[32] Ibid.

[33] Jackson at para 16

[34] Jackson at para 18.

[35] Jackson at para 28.

[36] Jackson at para 54.

[37] Kennedy v. Smith, 2022 BCSC 1622

[38] Bradshaw v. Hougassian, 2023 ONSC 3266 at paras 38 – 39 [Emphasis added]

[39] Pecore v. Pecore, 2007 SCC 17

[40] Ibid.

[41] Jackson at para 120

[42] Jackson at paras 122-124

[43] Queripel v. Shaddock, 2023 ONSC 3114 (“Queripel”)

[44] See Albert Oosterhoff, “Awarding Punitive Damages Against an Executor” September 19, 2023, WEL Partners Blog accessible online: https://welpartners.com/blog/2023/09/awarding-punitive-damages-against-an-executor/#_ftn1

[45] Queripel at para 8

[46] Queripel at para 9

[47] Queripel at para 13

[48] Queripel at para 17

[49] Queripel at para 17

[50] Queripel at para 35

[51] Walling v. Walling, 2012 ONSC 6580 (CanLII)

[52] Queripel at para 44

[53] Queripel at para 47

OBA 2024 Ontario Legal Conference

Family, Estates & Real Estate Law

February 7, 2024

Speaker: Kimberly Whaley

https://www.oba.org/olc

STEP 2023-2024 Branch/Chapter Bundles – National Webinar

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February 22, 2024 – 12:00 pm – 2:00 pm EST

Moderator: Kimberly Whaley

https://web.cvent.com/event/25853b02-c044-4c2e-95ae-84991762a023/websitePage:72e3a99c-16ea-4577-a625-dbc5dbfaf0b6?RefId=Calendar

2024 Osgoode Intensive Program in Wills & Estates, Managing Consent and Capacity Issues in Wills & Estates Practice

March 19, 2024

Chair: Kimberly Whaley

https://osgoodepd.ca/professional-development/short-courses-and-conferences/managing-consent-and-capacity-issues-in-wills-and-estates-practice/  

2024 Osgoode Intensive Program in Wills & Estates, Passing of Accounts and Fiduciary Accounting

April 2, 2024

Chair: Kimberly Whaley

Speakers: Albert Oosterhoff, Tracey Phinnemore

https://osgoodepd.ca/professional-development/short-courses-and-conferences/the-osgoode-intensive-program-in-wills-estates/

2024 Forum on Estate Planning and Litigation, Banff Springs

April 7-9, 2024

Steering Committee Member, Kimberly Whaley

https://www.cambridgeforums.com/forums/eplf/ 

CBA Elder Law Webinar

April 16, 2024

Scams and Fraud Targeting Older Adults

Speaker: Kimberly Whaley

LSO – Six-Minute Estates Lawyer, 2024

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Dealing With Emotional Clients and grieving Clients

Speaker: Kimberly Whaley

Co-Chairs Andrea Hill and Ian Hull

https://store.lso.ca/the-six-minute-estates-lawyer-2024

2024 Osgoode Intensive Program in Wills & Estates, Power of Attorney and Guardianship: Contentious and Non-Contentious Matters

April 22, 2024

Speaker: Kimberly Whaley

ACFI Conference – Association of Certified Forensic Investigators of Canada

May 13, 2024

ACFI Fraud Conference

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Speakers: Kimberly Whaley and Bryan Gilmartin

https://www.acficonference.ca/

Testamentary Capacity, Undue Influence and ‘Insane Delusions’: A Review Of The Bermuda Decision Of Lauretta Stoneham V. Bertram Fraser 

The Power to Protect Vulnerable Individuals Under the Doctrine of Parens Patriae

New Trust Reporting Requirement for Tax Years Ending On or After December 31, 2023

STEP Webinar: Mental Capacity: A Global Perspective

Squandering of Funds by a Statutory Guardian: Public Guardian v. Deforest et al

Can a Breach of Fiduciary Duties Disentitle an Attorney from their Beneficial Share in an Estate?

Reviewing the Utility of Notices of Security Interests in the Context of Rampant Fraud

Joint Tenant’s Presumptive Right to Partition or Sale

Genuine Issue for Trial Required for Proof of Will in Solemn Form

Albert’s Occasional Interesting Words and Musings

Procedure When Lack of Capacity and Undue Influence Alleged