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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This past weekend, I was in Niagara Falls and decided to cross the border for some shopping therapy at the Buffalo area outlet malls. As I made my way from store to store, and clothing rack to clothing rack, I was struck by how many items, designer or otherwise, are manufactured in far-flung places like China, India, Bangladesh and Indonesia. It reminded me of the prevalence of outsourcing in today’s economy, from clothing to customer-support hotlines.

As I pondered the phenomenon of outsourcing, I thought about its use and effects on the legal profession. Could the world of law be next? Would we soon have “Made in India” legal documents such as contracts and court briefs?

To clarify the terminology, “outsourcing” refers to using any third party to provide services previously provided by full-time employees. “Offshoring” refers to outsourcing to a non-domestic provider.

Many law firms and legal departments in the U.S. are already offshoring legal work. For decades, American businesses have found economic advantage in outsourcing work overseas. Much more recently, outsourcing overseas has begun to command attention in the legal profession, as corporate legal departments and law firms endeavour to reduce costs and manage operations more efficiently. The types of work being outsourced and offshored by U.S. law firms and legal departments are:

• Document drafting by lawyers
• Legal research
• IP legal work, substantive or administrative
• Review of discovery documents
• Paralegal services
• Administrative and secretarial support services, excluding digital dictation

The work is outsourced to either a foreign lawyer not admitted to practice in any U.S. jurisdiction or to a layperson.

More on this topic tomorrow. Have a great day!

Bianca La Neve

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During Hull on Estate and Succession Planning Episode 36, we discussed:

• dealing with different family issues in a global sense;
• the family cottage and/or "special properties";
• dealing with fairness issues;
• how to equalize the gifting of a cottage; and
• the grandchildren effect.

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During Hull on Estates Episode 36, we discussed:

• mandatory mediation;
• the types of matters that have mandatory mediation;
• how mediation works in general;
• what the general timelines are for proceeding to mediation; and
• considerations for selecting a mediator.
  

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Limitation provisions generally aim to strike the appropriate balance between an aggrieved party’s right to seek redress and a potential defendant’s right not to remain under the cloud of litigation indefinitely or to answer for a wrong where it has become difficult, if not impossible, to marshal the evidence.

The case of Webster v. Webster Estate , a recent decision of the Ontario Superior Court of Justice, attracted notoriety in the media, as the Webster family is well known in Montreal and the world of philanthropy. The case is interesting to read given the amount of money at stake and the family dynamics. The case also deals with limitation periods in the estate context. Today, I will discuss the facts. Tomorrow, I will discuss the law and the court’s decision.

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Title fraud is an issue that has garnered a significant amount of press over the last few months. All of us want to know that the title we hold in our homes is secure and that our homes cannot be sold from under us or otherwise encumbered. This is true whether buying a first home, transferring a home to a joint owner, or selling a home pursuant to the terms of a Will. Forged powers of attorney for property can also be problematic in this regard.

Recently, the Ontario Government introduced legislation to address the issue of title fraud. If passed, the proposed legislation would ensure that ownership of a property could not be lost as a result of the registration of a falsified mortgage, fraudulent sale, or counterfeit power of attorney. Instead, an innocent homeowner’s title would be restored to them and the fraudulent document would be nullified. The proposed legislation will also introduce new safeguards for suspending and revoking the accounts of fraudsters so that they cannot register documents, and raise existing fines for real estate fraud related offences from $1,000 to $50,000.

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Yesterday, I reviewed the facts in Godwin v. Bolcso [1993] O.P.J. No. 297. Today, I will review the law and consider the court’s decision.

According to the court, section 32 of the FLA required three questions to be asked: (1) Did Veronica provide support to her children? (2) Did she provide care? (3) Was she in financial need?

The court held that Veronica was, in fact, in financial need. Given her age, Veronica had difficulty securing employment. She owed income tax. Veronica also had health needs and could not afford proper medical care.

In terms of care and support, the question the court posed was what care and support for children would reasonably have been expected from a parent in the circumstances in which the family found itself? Minimum or maximum measurements were to be avoided.

The court defined support as such things as housing, food, clothing, health, recreational activities, vacation, travelling expenses, as well as nursing and medical attention during illness. Reasonable care was defined as such care as an ordinarily prudent person would exercise under the conditions existing at the time he or she was called upon to act.

The Court found that Veronica did provide as much care as reasonably might be expected of her in the circumstances. Moreover, the conditions existing in the 1950s and 1960s were relevant in judging Veronica’s level and skill of parenting.

In the end, the court held that Veronica’s children had a financial obligation to support their mother and so ordered. The court invited the parties to agree on an amount; otherwise the court would fix an amount. The court also declined to impose a termination date and held that support could run for an indefinite period of time.

In conclusion, the Godwin case stands for the clear proposition that a court can order a child to financially support a destitute parent, who had provided the requisite level of care in support.

Have a good day.

Justin de Vries.

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During Hull on Estate and Succession Planning Podcast #35, we discussed:

• Special needs beneficiaries;
• What the definition of a special needs beneficiary is;
• The use of trusts for special needs beneficiaries; and
• The proper planning for special needs beneficiaries and what happens to the assets and the trust when the special needs beneficiary dies.
  

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During Hull on Estates Podcast #35, we discussed the following:

• Competing beneficiaries who join forces to challenge a Will when they do not have identical interests;
• People that need to be served in a Will Challenge;
• How to decide if you need your own lawyer or if you should join forces with the same solicitor; and
• How to deal with the costs of the Will Challenge when dealing with several lawyers.
  

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Today’s BLOG will consider the issue of an adult child’s obligation to support a parent(s), who is financially destitute.

Unfortunately, we hear all too often of an elderly person living in poverty. While it is widely recognized and accepted that a parent has an obligation to financially support a minor child, it is less known that the law may impose an obligation on an adult child to financially support a parent.

The Parents’ Maintenance Act was originally enacted in 1921. It was eventually superseded by section 17 of the Family Law Reform Act, which was, in turn, superseded by section 32 of the Family Law Act (the “FLA”). However, applications for support are extremely rare and there is little case law. However, the case of Godwin v. Bolcso [1993] O.P.J. No. 297 provides some insight into when support will be ordered for parents. Today, I will discuss the facts. Tomorrow, I will discuss the law and the court’s decision.

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Regardless of this apparent unease, on issues of the validity of a Will or a person’s interest in or claim against an Estate, some clients are increasingly tending to favour contingency arrangements. 

Where the legal issue at stake is the validity or otherwise of a Will, then a litigation result will often be an all-or-nothing proposition. Such an issue is well-suited to contingency fees. 

Some of the practical issues raised by the arrival of contingency fees at this early stage are:

1. These cases are not immediately profitable, so any law firm wanting to explore contingency opportunities ought to be prepared to wait a few years to see substantial return;

2.  Lawyers must allow the client to make all major decisions, knowing that some of those decisions may be unreasonable or risky, thereby lessening the possibility or value after costs of recovery, thereby lessening what the lawyer will be paid in case of success, and this business frustration cannot be allowed to interfere in the lawyer’s function as advocate and legal service provider. The lawyer is still restricted to giving advice, taking instructions and fulfilling them even if those instructions impact on the chances of getting paid;

3.  Lawyers ought to be very clear with clients at the outset that they may obtain a windfall in case of early settlement, even to the extent of putting those very words to the client in writing.

Early indications are that contingency fees in litigation offer a further avenue for lawyers to take on otherwise marginal cases from a business perspective, and an avenue for access to justice for clients of lesser means, albeit lawyers must take care not to allow the fee arrangement to interfere with their fundamental role as advocating, advising and fulfilling the client’s legitimate instructions, however that may impact on the chances of getting paid.

Thanks for reading.

Sean

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Today I finish my discussion of the Regulations governing contingency fees agreements between lawyer and client in the Province of Ontario. All section references are to Regulation 195/04 to Ontario’s Solicitors Act.

Section (3) of the regulations require the lawyer to ensure that a contingency agreement includes the following, in addition to the requirements discussed in yesterday’s blog:

1. If the client is a plaintiff, a statement that the lawyer cannot recover more in fees than the client recovers as damages or receives under a settlement;

2. A statement about disbursements and taxes including GST payable on the solicitor’s fees indicating whether the client has to pay disbursements and taxes. If the client is to pay, a general description of disbursements likely to be incurred, and that if the lawyer pays them during the matter, the solicitor is entitled to be reimbursed out of a judgment or settlement of the matter;

3. A statement explaining costs and the awarding of costs in litigation. This statement must indicate that the client is entitled to receive any costs contribution or award unless the agreement states otherwise, and that the client is responsible for paying any costs contribution award if the client is found liable to pay costs; 

4. If the client is a plaintiff, a statement that indicates that the client agrees and directs all monies claimed by the lawyer for legal fees, costs, taxes and disbursements shall be paid to the lawyer in trust from a judgment or settlement money;

5. If the client has a disability, then there must be a statement by the litigation guardian that the contingency fee agreement must be reviewed by a judge before being finalized, a statement that the amount of legal fees, costs, taxes and disbursements are subject to the approval of a judge, and a statement that any money payable to a person under a disability under an order or settlement shall be paid into court unless a Judge orders otherwise.

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Having addressed yesterday the treatment of contingency fees under Ontario’s Solicitors Act, we now turn to Regulation 195/04 to that Act, which addresses contingency fee requirements in greater detail. (Section number references are to those Regulations.)

Contingency Fee agreements must be in writing, must be entitled “Contingency Fee Retainer Agreement”, must be dated and must be signed by both lawyer and client with both signatures being verified by a witness. The lawyer must provide a signed copy of the contingency fee agreement to the client and must retain a copy as well. (Section 1)

Section 2 mandates certain inclusions in the written contingency fee agreements:

1. The name, address and telephone number of both solicitor and client;

2. A statement of the basic type and nature of the matter with respect to which the solicitor is providing services;

3. A statement that indicates that the client and solicitor have discussed options for retaining the solicitor other than by contingency fee, including hourly rate retainer, that the client has been advised that hourly rates may vary among lawyers, that the client is free to speak with other solicitors to compare rates, that the client has chosen to retain the lawyer by way of contingency fee agreement, and that the client understands all usual protections and controls on retainers between lawyer and client apply to the contingency fee agreement. This last protection ensures that clients know that if there is a breakdown in the relationship or a disagreement as to the contingency fee agreement and the value of services and the amount of payment to be made, the client can apply to the Court for an assessment of the contingency fee agreement;

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Ontario’s Solicitors Act, R.S.O. 1990, c.S.15 (the “Act”) now broadly allows, in section 28.1(1) for the possibility of contingency fee arrangements between lawyers and clients, meaning that lawyers agree to be paid a percentage of the amounts recovered in a lawsuit. If nothing is recovered, the lawyer is paid nothing on account of legal fees.

However, not all types of cases can are amenable to contingency arrangements. For some types of proceedings, contingency fees are still not allowed, such as proceedings under the Criminal Code or any other criminal or quasi criminal proceeding, or family law matters. One obvious reason for contingency fees not being allowed in these cases is that it is extremely difficult to measure success in economic terms with respect to criminal or quasi criminal proceedings. With respect to family law, many entitlement are determined primarily by recourse to statute based on financial calculations. There is also likely a perception that family law proceedings, and the lawyers acting for clients in them, should not be motivated by the desire to obtain as high a contingency fee as possible. Measuring the benefit of securing custody of children is virtually impossible, not to mention fundamentally distasteful.

If contingency fee arrangements are to be enforceable, they must be in writing according to section 28.1(4) of the Act. Contingency fees cannot exceed a specified maximum percentage determined by regulation of the value of property recovered, although such a maximum percentage is not yet specifically set out.

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During Hull on Estates Episode 34, we discussed Security for Costs Motions in the context of Estate Litigation including the cases of:

• Re Bisyk (1979), 23 O.R. (2d) 600;
• Moses Estate, Re (2001), 38 E.T.R. (2d) 231 (Manitoba Master);
• Boutzios Estate, Re (2004), 5 E.T.R. (3d) 51 (Ont. S.C.J.); and
• the changing landscape of the law in respect of Security for Costs Motions.

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During Hull on Estates and Succession Planning Episode #34, we continued to discuss the need for full disclosure during the Family Conference process detailing specific situations including:

• extramarital relationships and how they can affect estate planning;
• unequal treatment of children;
• the spend thrift beneficiary; and
• the making of specific trusts to protect inheritance

We also discussed Family Law concerns such as children's spouses and family businesses.

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The 9th Annual Estates and Trusts Summit, a presentation of the Law Society of Upper Canada, was held in Toronto on November 2 and 3, 2006.

This popular program featured a number of excellent speakers, including Rodney Hull, Ian Hull, Justin de Vries and Jordan Atin from our firm.

Estate Litigation issues discussed on Day One included the following:

1.   A review of recent estate law developments including, solicitor's liability arising from errors committed in the drafting process such as:  the improper witnessing of a will; taking too long to complete the will, and failing to obtain and maintain evidence of testamentary capacity; limitation periods, joint tenancy, and the presumptions of resulting trust and advancement, summary judgment, conditional gifts, and mediation;

2.  A review of the principles to be applied when bringing a proceeding to set aside a will;

3.  A discussion of dependant's support and family law claims in the post Re Cummings environment;

4.  A discussion of unjust enrichment, constructive trusts and quantum meruit claims;

5.  A discussion of considerations to be made when the question of the removal of an estate trustee or attorney arises;

6.  Dealing with disputes among the co-trustees, including deadlock and the distribution of compensation;

7.  Costs, and the liability of an executor for costs, and the ability of an executor to obtain indemnification from the estate for costs;

8.  The duty of a solicitor to substantiate and document testamentary capacity; and

9.  The duty of care that an estate solicitor owes to the estate trustee.

Excellent materials were prepared and are available from the Law Society of Upper Canada.

Tomorrow, I will outline the matters discussed on Day Two.

Have a great day.

Paul E. Trudelle.

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In reviewing case law on the issue of gifts, and the presumption of advancement, I came across the family law case of Hansen v. Hansen, [2000] O.J. No. 5148, a decision of Fleury J. of the Ontario Superior Court of Justice.

Issues of credibility arose and the judge made the following observations as to his “initial impression of both main characters”. I will leave it to you to decide who came out ahead on the issue of credibility:
The Wife: “Mrs. Hansen, the plaintiff, was a pleasant woman who appeared to be her stated age. She testified at length and appeared for the most part to be attempting to shed some light on a very confusing picture. She was testy at times with the cross-examiner, but no more so than any bright witness would have been in similar circumstances. She struck me as an honest witness who was intent on telling the truth as she remembered it.”

The Husband: “Mr. Hansen, the defendant, has a mellifluous voice and he appears to enjoy listening to it. He struck me as somewhat of a pompous individual who is full of himself. He would use most questions as an occasion for a speech. He was definitely not a yes and no kind of man. I agree with counsel for the plaintiff's description of him as it appeared in paragraph 47 of his main argument:

Even in examination-in-chief, Mr. Hansen had great difficulty in giving straightforward and direct answers. Most of his evidence required a huge explanation. He would have to take three steps back, cover evidence that he had covered in the past and finally get around to answering his own counsel's questions. It would appear that Mr. Hansen fancies himself as an orator and thinks of himself as a captivating speaker. It is submitted that this type of conduct in the witness box was consistent with him trying to convince himself and all those listening of a long winded, concocted story full of exaggeration and misstatements.

Notwithstanding the outcome, it does not appear that the Husband appealed.

Have a great day.

Paul Trudelle

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During Hull on Estate and Succession Planning Podcast #33, we discussed the Family Conference and the need for full disclosure of:

•  the details of the Family Constitution to all parties;
•  the estate plan to all family members; and
•  the parents'  honest feelings to their children.

 We also provided an illustration of how to work through a Family Conference.

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During Hull on Estates Episode 33, we highlighted Hull & Hull LLP's new website including outlining the resources on the website such as:

•  Blogs;
•  Podcasts;
•  Video Streaming; 
• The Probator;
• News and Events;
• Links and;
• Hull Estate Mediation.

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Part V of the Succession Law Reform Act (“SLRA”) provides the legislative framework for claims by a dependent of an estate. It sets out:

(i) who is a dependent;
(ii) what rights a dependant has in relation to the estate;
(iii) the circumstances the court should consider in determining the amount of support that should be awarded; and
(iv) the kinds of orders the court can make for the satisfaction of a dependent support claim.

Rule 60.11 of the Rules of Civil Procedure explicitly states that a party may pursue a contempt motion in order to pursue those who violate court orders other than for the payment of money.

Some have argued that, even in the face of the language of Rule 60.11, support orders involving the payment of money should be enforceable through a contempt proceeding.

In 2000, in its decision of Forrest v. Lacroix Estate (2000) 187 D.L.R. (4th) 280, (Ont. C.A.) the Court of Appeal set aside a contempt order made as a result of a failure to pay a SLRA dependent support award, affirming that Rule 60.11 does not permit contempt orders for the payment of money.