Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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A joint tenancy may be severed in one of three ways: (i) unilaterally acting on one’s own share in a manner that is registered on title; (ii) a mutual agreement between the co-owners to sever; or (iii) any course of dealing sufficient to suggest that the interests were mutually treated as constituting a tenancy in common.

The third of these rules is often referred to as the "the course of dealing rule."   This is an equitable concept: the course of dealing rule operates so as to prevent a party from asserting a right of survivorship where doing so would not do justice between the parties. 

In Hansen Estate v Hansen 2012 ONCA 112, the Ontario Court of Appeal considered whether a course of dealing between spouses in the midst of a legal separation equitably severed the joint tenancy in place at the time of Mr. Hansen's death.  In its analysis of the applicability of the course of dealing rule, the Court applied a quote from Professor Ziff: “the best way to regard matters is to say that equity will intervene to estop the parties, because of their conduct, from attempting to assert a right of survivorship.” The key factor is the expression of intention by the co-owners as evidenced by their conduct.  The Court goes on to say "the mutuality for the purposes of Rule 3 is to be inferred from the course of dealing between the parties and does not require evidence of an agreement."

The Court of Appeal found that the facts of the case established a course of dealing that severed the joint tenancy.  It is worth noting that the Court enphasised that each case in which this analysis is applied must be considered in the context of its specific fact matrix.

David Morgan Smith - Click here for more information on David Smith. 

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In Key v. Key [2010] EWHC 408 (Ch), a Will made by a British widower shortly after his wife's death in 2006 was challenged. The drafting solicitor's attendance was arranged by one of the testator's two daughters, who had discovered that her father's 2001 Will favoured his two sons. The Court found that:

 “Mary explained to her father in her usual forthright manner how very unfair she regarded his 2001 Will, and told him that she regarded the only fair disposition of his remaining property as being one under which she and her sister should be the beneficiaries, so as to take account of the substantial gifts of farmland which her father had already made to her brothers, and thereby bring about some semblance of equal treatment. I infer also that, in response, her father gave in to her request that he change his will accordingly.”

Two days later, the daughter drove the testator to a lawyer's office to make a new will.  

The Judge considered evidence from two expert psychiatrists, family members, neighbours, and the drafting lawyer. The psychiatrists agreed that the testator was suffering from cognitive impairment, possibly a precursor to dementia. 

Witnesses who saw the testator in the weeks following his wife’s death described him as "devastated" and "having taken a turn for the worse, mentally and emotionally." 

The Judge found that capacity is not determined solely by whether the deceased had the mental capacity to understand what he was doing: “The evidence of the experts in the present case shows… that affective disorder such as depression, including that caused by bereavement, is more likely to affect powers of decision-making than comprehension. A person in that condition may have the capacity to understand what his property is, and even who his relatives and dependants are, without aving the mental energy to make any decisions of his own about whom to benefit.”

The Court accepted expert evidence that bereavement can impede concentration, attention, and the ability to  retain information. Depression caused by bereavement could exhibit symptoms similar to dementia.

David Morgan Smith - Click here for more information on David Smith. 

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The Children's Law Reform Act (the "CLRA"), is the governing statute in Ontario for guardianship applications for children.  Specifically, guardianship of a child is dealt with under sections 47 to 58 of the CLRA.  In bringing such an application, there are a number of key considerations to take into account.
 

According to section 48(1) of the CLRA, the parents of a child are equally entitled to be appointed as guardians of property of the child.  It thus follows that upon the passing of one parent, the default position under the CLRA is for the surviving parent to have guardianship.  Furthermore, under section 47(1) of the CLRA, the court can appoint a guardian of property upon an application made by, "…a child's parent or by any other person, on notice to the Children's Lawyer".  By including 'any other person' into the section opens the gates for non-parents to apply for guardianship.  In furtherance to a surviving parent or 'any other person' as mentioned above, a guardian of property can also be appointed by a testator under their will as per section 61(2) of the CLRA.
 

After considering who is eligible to become a guardian, it is important to consider the factors the court considers in the appointment process.  Section 49 of the CLRA lists the criteria considered by the court in deciding the appointment of a guardian of the property of the child.  These include: the ability of the applicant to manage the property of the child; the merits of the plan proposed by the applicant for the care and management of the property of the child; and the views and preferences of the child, where such views and preferences can reasonably be ascertained.  As well, the courts will consider the best interests of the child as noted in section 19(a).  It is important to remember that since the application is for a guardianship of property, the CLRA only requires submitting a management plan for property.
 

Ian Hull - Click here for more information on Ian Hull. 

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The perception that there is a mutual exclusivity between fame and wealth in many cases can create a great deal of publicity surrounding the estate of a public figure. However, the reality is that those who are famous do not always pass away with riches. The famed deceased, like the rest of us, usually had people who cared them, and who might take an interest in the administration of the Estate for reasons beyond the wealth they may gain.

This is the case with the Estate of Gary Coleman of ‘Diff’rent Strokes’ fame. Coleman passed away in 2010 of a brain hemorrhage. Reports of the value of his Estate vary, but the Chicago Tribune notes in a recent online article that the Estate primarily consists of his cremated remains, future rights to ‘Diff’rent Strokes’ and other intellectual property. Despite what appears to be an Estate of moderate worth, Coleman’s ex-wife and his long time friend and CEO of his company, have been locked in a legal battle since his death. 

Coleman left two wills, one made in 1999 and one made in 2005. The 2005 Will names his long time friend as Executor and sole heir. However, the 2005 Will also has a handwritten amendment, purportedly made in 2007, which names his ex-wife as sole heir. Coleman’s ex-wife has also alleged that while her 2007 marriage to Coleman ended in a divorce in 2008, she and Coleman continued to live together as husband and wife in a common-law marriage until his death, and that Coleman wanted to benefit her on his death.  

Coleman’s long time friend is reported in an online article in The Salt Lake Tribune as saying that her fight isn’t about the money.   What she claims to want are Coleman’s assets, and to ensure that his name is not exploited, and that it is only used for projects that he would have approved. The Estate and the positions of the two litigants were explored this week in a Utah Court, and Fourth District Judge James Taylor has said that he will issue a ruling at a later date.   The Court has been charged with determining whether the 2005 Will stands (including whether the holograph change is valid), whether the 2005 Will fails, and whether his ex-wife can claim control over the Estate on the basis that she was Coleman’s common law spouse at death. 

Regardless of the outcome, it seems that this matter is very emotionally charged, and both sides are placing a large part of their focus on their emotional connection with Coleman, and Coleman’s wishes. Although Estate disputes are almost always fraught with emotion, with the costs of litigation being what they are, in this matter, two years of litigation, culminating with a two day trial, all over an Estate that could very well be insolvent, would seem a risky endeavour but for the emotional side of things. Regardless of the legal implications it is almost certain that the fame factor will keep us tuned in.

Have a nice weekend,

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz. 

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One cannot benefit from one’s crime. Even in this most basic form, this statement is unlikely to cause shock to many. Generally, in the Estate world this means that where a person is the beneficiary of an Estate, but is the cause of the death of the Deceased, they are not permitted to inherit from the Estate. The very commonplace nature of my above ramblings is the reason you should read this article.

The Ontario Court of Appeal was recently asked to consider a nuance of this particular issue, and rendered its decision in the Dinghra v. Dinghra Estate 2012 ONCA 261 on April 24, 2012. The decision notes that Mr. Dinghra took out a group life insurance policy in 1998. He was the beneficiary of the policy on his wife’s life. He later killed his wife in 2006, but, in 2008, was found not criminally responsible for her death (Criminal Code, R.S.C., 1985, c. C-46, s. 16).  In 2007, a claim was made by the Respondent, the Estate Trustee of the wife’s Estate, who submitted to the insurer an Accidental Death Claim, claiming the proceeds of the insurance policy on behalf of the Applicant/Appellant, Mr. Dinghra. Payment was not immediately made, and after the criminal trial, the Respondent requested that the proceeds of the insurance policy be paid to the Estate. In response, the insurer brought an application to have the funds paid into Court, which relief was granted in 2009.  Thereafter, the Applicant made an Application to the Superior Court of Justice to have the proceeds paid to him.  

The lower court found that the public policy rule that ‘one cannot benefit from one’s crime’ was not limited to intentional killing, on the basis of the trial judge’s interpretation of the decision in Ontario Municipal Employees Retirement Board v. Young (1985), 49 O.R. (2d) 78.   The lower court judge found that the Applicant committed ‘second-degree murder’ as he physically committed the crime, even though he was found not criminally responsible.  This rationale lead to a finding that the Applicant was not entitled to the proceeds of the life insurance policy. 

On appeal, the Appellant submitted that he was entitled to the funds, and that even if he wasn’t, the Estate had no claim as the Estate was not a named beneficiary of the policy.   The Respondent agreed that the Estate was not entitled to the proceeds.   Upon consideration, the Court of Appeal found that pursuant to the rule of public policy, a party found not criminally responsible, is not prevented from taking under an insurance policy. The Court then considered whether the rule had been varied because of the Civil Remedies Act, an issue which the Court of Appeal referred to as ‘novel’[1].   The Court of Appeal disposed of the matter by setting aside the order of the lower court and granted that the insurance proceeds held by the Accountant of the Superior Court of Justice (along with interest) were rightfully payable to the Appellant. Interestingly, the Order was stayed for 30 days, allowing the Attorney General time to consider whether he wishes to apply for an interlocutory order under s. 4 of the Civil Remedies Act.

Professor Erik Knutsen of Queen’s University, an insurance law specialist, was quoted in the above noted article, saying “the court has stated that you need criminal intent before you can deny someone an insurance benefit on public policy grounds”. Although it may be that this issue isn’t seen often in the Estate context, and even here it was generally accepted that the Estate did not have an interest, it is not without possibility that we may see more claims given the new clarity in the law. 

There are still a few weeks before the stay on the order of the Court of Appeal is lifted.   Perhaps this isn’t the last of this case. We’ll just have to wait and see.

Thanks for Reading,

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz. 

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In many parts of the world, the most beautiful and most used ‘parks’ are where the dead are laid to rest.  From Paris to New Orleans, Buenos Aires to London some of the world's greatest cities boast cemeteries that are known both for their famous ‘inhabitants’ and their open and public space. If you’ve ever had the opportunity to venture to mid-town Toronto and walk the pathways of Mount Pleasant Cemetery, you know that the resting place of some of Toronto’s (and even Canada’s) most notable historical figures is also one of the most beautiful and peaceful places to visit. 

Yet, peaceful is probably not the word that would describe the Mount Pleasant Cemetery board of directors this week, as speculation has been raised about whether the land should technically be a Crown Corporation.   The creation of the “Mount Pleasant Group of Cemeteries” was created by an act of provincial legislature nearly 200 years ago, as a public trust. The status of the organization has morphed into what is now self-identified as ‘Commercial’ and ‘Privately-owned’. Exactly how much revenue is being generated is unknown.  

Critics have recently been claiming that that land ought to be public; with responses being that the original legislation did not indicate that the land was to be publically owned.   There has been discourse between the two factions, with the current status being that Mount Pleasant Cemeteries is not obliged to be transparent.   The parties attempting to declare the Cemeteries public are relying on legislation that dates back before confederation, and the interplay between the original legislation and the subsequent variations is being hotly debated.  

The academic legal questions and areas of interest are certainly numerous in this debate. For the moment we can all take some comfort from the fact that the current use of the land isn’t in dispute, and that those at rest will remain at peace. The question of who owns the land however, may be up for debate for years to come; the ramifications of that question are still unknown.

Until Tomorrow,

Nadia M. Harasymowycz - Click here for more information on Nadia Harasymowycz. 

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Listen to: Hull on Estates #291 - Solicitor-Client Privilege

This week on Hull on Estates, David Morgan Smith and Nadia Harasymowycz discuss Solicitor-Client Privilege. They touch on the importance of lawyers’ notes relating to Estate Litigation, and reference the recent Nortel Fraud Trial, which can be found here. 

If you have any questions, please email us at hull.lawyers@gmail.com or leave a comment on our blog.

Click here for more information on David Smith. 

Click here for more information on Nadia Harasymowycz. 

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As of last night, the parents of Junior Seau, who are from the island of Aunu’u, American Samoa, were meeting with Samoan elders to discuss how to respond to requests by researchers for the opportunity to study Seau’s brain. Last Wednesday, Seau, former linebacker for the San Diego Chargers, was found dead in his Oceanside, California home. His death was ruled a suicide. The media is saturated this week with discussion of whether Seau’s NFL career played a role in his early death. There are a number of indisputable facts, between which one can interpolate:

• Seau took his own life by shooting himself in the chest. Fifteen months ago, former NFL safety Dave Duerson died of a self-inflicted gunshot wound to the chest, having left a suicide note asking for his brain to be donated for research. The Boston University School of Medicine Center for the Study of Traumatic Encephalopathy determined that Duerson’s brain indeed showed signs of CTE, the progressive, degenerative disease associated with repetitive closed head injuries.

• Up until April 19, 2012, Former Atlanta Falcons safety Ray Easterling was the lead plaintiff in a class action lawsuit against the NFL over concussion-related injuries. Since his death last month, by suicide, his widow has vowed to continue to fight the lawsuit her husband started after 20 years of suffering from symptoms of repetitive head trauma including memory loss, mood changes and depression.

• According to a 2011 study conducted by the Matthew A. Gfeller Sport-Related Traumatic Brain Injury Research Center at the University of North Carolina, the average life expectancy of a retired NFL player is 55 years. Some insurance providers have indicated that this is actually an overestimation, and that in fact the average age is somewhere closer to 51 years. For comparison purposes, the average male life expectancy in the United States is 78.2 years. [Note: If you played for the San Diego Chargers in 1994’s Super Bowl XXIX, then the odds against you are significantly grimmer. Eight of those teammates are dead, all before reaching the age of 45; a statistical anomaly since the 8 deaths lacked common cause.]

• The same UNC study  suggested that retired NFL players suffer from dementia at a 37% higher rate than average.

• A 2006 report in the St. Petersburg Times found that the more games and practices an NFL player survives, the quicker he dies. In his first 14 pro seasons, Seau missed only 9 games.

If Seau’s parents decide not to donate his brain for research, we may never know with certainty whether he suffered from Chronic Traumatic Encephalopathy. One thing is for sure, there’s something about playing in the NFL that doesn’t bode well for one’s life trajectory. Are repeated head hits causing organic damage to the brain, after which depression is the next domino to fall? Or perhaps, as in Easterling's case, organic brain damage brings on intolerable shifts in personality and cognitive functioning, but in an unkind twist, leaves one with just enough insight to see what lies ahead. Roger Goodell has made great strides since becoming NFL commissioner in 2006, introducing preseason baseline concussion testing, for example, not to mention the unprecedented smackdown of the Saints players implicated in the bounty scandal earlier this month.  His work is far from finished.

Jennifer Hartman, guest blogger

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"To the Children's Hospital on Main Street I leave $100,000.00." On its face there is nothing wrong with this bequest. If all goes to plan, upon the Deceased's death the Children's Hospital will receive the money, and the Deceased's intentions to benefit the charity will be carried out. What if, however, subsequent to the Deceased executing their will the "Children's Hospital on Main Street" moves two streets over and is now located of Lake Street? What if the "Children's Hospital on Main Street" is actually now actually the "Children's Hospital on Lake Street"? Does the gift fail? Can the testator's intentions to benefit the Children's Hospital be undone by a simple change of address?
 

Through the doctrine of cy-pres not all hope is lost for the Children's Hospital. The cy-pres doctrine can be roughly thought of as the "near to" doctrine. It allows the court to apply funds which were intended for one charitable purpose (but for which distribution has now become impossible or impracticable) to instead apply those funds to another charity which has a "near to" charitable purpose. In our own example, through the doctrine of cy-pres, the "Children's Hospital on Lake Street" can receive the $100,000 that was intended for the "Children's Hospital on Main Street".
In order to apply the cy-pres doctrine, the court must first find that the charitable purpose has become impossible or impracticable. Examples of a charitable purpose being found impossible or impracticable can include a charity changing its name, the incorrect name being included within the actual trust document itself, or even when although the charity to which you left the money still exists, the task you left it for has now become impracticable (i.e. leaving money to the church to build a new steeple, but by the time you die the steeple has already been built).
 

Subsequent to the finding of impossibility or impracticability, you must next look to when the impossibility or impracticability with respect to the property being transferred occurred. If the failure occurred before the trust has taken effect (i.e. before the person dies in the case of a will), the court must also find that there was a "general charitable intention" on the part of the testator before the cy-pres order can be made. If, however, the failure occurs after the trust has taken effect, there is no need for the court to also find a general charitable intention on the part of the testator, and the cy-pres order is automatic.
 

In looking for whether there was a "general charitable intention" on the part of the testator, the court will look to the general circumstances surrounding the execution of the gift, and whether it was the intention of the testator to benefit only the specific cause to which they referred, or the more general heading or purpose to which the money was left to. If it was the testator's intention to simply benefit a specific cause then the cy-pres doctrine cannot be applied and the gift must fail. If, however, the testator intended to merely benefit the charitable purpose under which the gift fell, then through cy-pres the gift can be saved. Take for example the scenario used before of a person who left money to the church so that they may build a new steeple, but by the time the testator actually dies the church is no longer in need of such funds. If the court concludes that it was the intention of the testator to only give money to the church so that they may build a new steeple (and not simply to the church generally) the gift will fail. If, however, the court concludes that it was testator's intention to benefit the church in general then through the doctrine of cy-pres the gift can be saved, and the money can go to the church.
 

Ian Hull - Click here for more information on Ian Hull.