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Listen to - The Willis Estate Case - Hull on Estates #172

The Willis Estate Case - Hull on Estates Episode #172

This week on Hull on Estates, Bianca La Neve and Rick Bickhram discuss the recent decision of Justice Brown regarding the Willis Estate case and the issues that can arise during contempt proceedings and appropriate sentencing in the field of estate and trust litigation. 

Re Willis Estate, 2009 CanLII 30681 (Ont.S.C.J.)

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

The Willis Estate Case - Hull on Estates- Episode #172

Posted on July 21, 2009 by Hull & Hull LLP

Rick Bickhram:  Hello and welcome to Hull on Estates.  You’re listening to episode 172 on Tuesday, July 21^st, 2009.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.   Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills.  Now, here are today’s hosts.

Bianca La Neve:  Hi and welcome to another episode of Hull on Estates.  I’m Bianca La Neve.

Rick Bickhram:  And I’m Rick Bickhram.

Bianca La Neve:  If you want to be heard on Hull on Estates, you can participate by leaving us a comment.  E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.

Hey Rick, how are you?

Rick Bickhram:  I’m not doing bad.  How are you doing Bianca?

Bianca La Neve:  Great.  So you just got back from the Bahamas.  How was that?

Rick Bickhram:  Bahamas was a lot of fun.  Very hot weather.  Humid.  I’m actually happy to be back here, a little bit cooler weather.  As you said earlier I believe it’s the summer we’re not having.

Bianca La Neve:  For sure.

Rick Bickhram:  How was your weekend?

Bianca La Neve:  Great.  Very busy with the little one but that’s always fun.

Rick Bickhram:  We’ll podcast on that next week.

Bianca La Neve:  On life, the trials and tribulations of a 22 month old and his mom.

So today I thought we’d talk about the recent decision of Justice Brown in Re Willis Estate.  It talked about the issue of contempt proceedings and appropriate sentences in the context of estates and trusts litigation, our field.  And in this situation, it was in the context of an attorney for property who had been found in contempt of a Court Order requiring him to account for his dealings with mom’s property.

Rick Bickhram:  And just by way of giving a very brief background of the facts here, there was the deceased who was the mother.  Her name was Amy Willis who died on March 17, 2006.  Amy had three children.  Their names were David, William and Eric.  During Amy’s lifetime, Eric acted as Amy’s attorney under a Power of Attorney for Property.  Subsequent to Amy’s passing, David and William, who are Eric’s brothers, brought an application seeking, amongst several relief being sought, that Eric pass his accounts with respect to his attorney under the Power of Attorney for Property.  The hearing was heard on January 23, 2008 in front of Justice Moore and during the hearing, the Honourable Justice Moore provided the brothers – which is William and David – with an Order permitting or compelling, I should say, Eric to provide a full accounting of all his dealings with respect to the Power of Attorney and any joint assets that he had with his mother, Amy, at the time.

Bianca La Neve:  But it didn’t end there, did it, Rick?

Rick Bickhram:  Well I hear we eventually had contempt proceedings at one point so presumably, no.  Moving ahead, on May 6, 2008, the Honourable Justice Wilson – this matter was returned to Court – and the Honourable Justice Wilson was listening to it and the reason why it returned was because Eric didn’t provide the accounting as required under the first Order giving Directions.  Madam Justice Wilson then set out an Order setting out specific deadlines and describing the type of disclosures that she required from Eric.  So, for instance, Eric had to provide an Affidavit of Documents, etc., etc.  It went back and forth where it returned to Court several times.  I think it’s important to note that the first Order giving Directions was set January 23, 2008 and the contempt proceeding fell in front of the Honourable Justice Brown on May 21, 2009.  The Honourable Justice Brown sets out a very thoughtful analysis on contempt proceedings.  He sets out what the Courts are looking for and specifically, the type of relief someone could obtain, given the gravity of the contempt.  Maybe Bianca could shed some light on this analysis.

Bianca La Neve:  Thanks Rick.  So Justice Brown began by outlining the general contempt power of a Court.  And a Court exercises its contempt power to uphold the dignity and process of the Court.  So therefore it’s sustaining the rule of law and maintaining orderly and fair and impartial administration of justice.  And the point of a contempt Order is to basically maintain respect and obedience to the rule of law.  When a person deliberately fails to obey a Court Order, that person is showing disregard for the obligations owed to others in the community and disrespect for our system of justice.  And so this is why the Courts have a contempt power to be able to remind us of the rule of law and that nobody is above the law.  And after outlining sort of the general power of the Court in terms of contempt, Justice Brown went on to outline the sentencing principles applicable to sentencing a person who has been found in contempt.  No surprise here, Eric was ultimately found in contempt.  And so Justice Brown outlines the penalties and the principles involved.  And he differentiates between contempt in the civil and contempt in the criminal context.  The sentence for criminal contempt is punishment and that makes sense; whereas the purpose of a sentence for civil contempt is coercive or persuasive.  It’s designed to enforce the rights of a private party and to secure compliance with the Court Order breached.  And he went on and outlined the case law applicable to civil contempt proceedings.  And he noted in a Court of Appeal decision out of the Ontario Courts one case, Chang v. Chang, which observed that custodial sentences for civil contempt are rare.  Lengthy custodial sentences even rarer and ordinarily incarceration is a sanction of last resort.  But just because it’s a sanction of last resort doesn’t mean a judge will shy away from putting someone in jail if the contempt is grave enough.

Rick Bickhram:  And I believe he actually cites a case there, it’s the Mercedes-Benz case.  And there are numerous other cases where Ontario Courts have imposed jail terms as sentences for civil contempt.  Justice Brown goes on in his analysis and he states pretty much that what the Courts are looking for when they’re making these sorts of sentences is proportionality.  They want to ensure that the gravity of the offence is associated with the degree of the responsibility of the offender.  So pretty much in this situation, Eric had shown disregard for the Court Order, not on just one occasion but on numerous occasions.  There were several Court Orders and there was at one point an Order that specifically set out what the Court required from him and the deadlines for it.  And again, he kind of thumbed his nose toward it so when the Honourable Justice Brown considered this analysis, he pretty much set out his rationale stating Eric had numerous attempts to purge the contempt if he had just went ahead and provided this sort of disclosure within the timelines prescribed.  And he had numerous opportunities to do so but he didn’t do it.  Accordingly the gravity of the conduct here was very heavy in the Honourable Justice Brown’s analysis.

Bianca La Neve:  And turning to sort of the particular fact situation, because obviously these cases are always very fact-specific.  In this case, we remember that Eric was an attorney for property and that he failed to account.  And so Justice Brown went on to state that a person’s failure to account for property over which you exercise control, is a very serious matter.  So that sort of was one of the aggravating factors.  You have control over someone’s finances.  That is serious when you can’t or won’t account for it.  And he even went on to say the gravity of the failure was compounded when a person, like you said Rick, ignores Orders from the Court to account.  So not only do you not account voluntarily, but then you ignore Court Orders to do so.  And he stated that contempt of such account merits significant sanction.  And this is not only to deter the particular person from ignoring their obligations and compelling them to perform their duties, but also to send a general message to all fiduciaries.  So all attorneys for property out there, beware.  If you’re going to ignore your accounting obligations, you’re going to be sanctioned for it.

And so there are mitigating factors.  So just because you’re found in contempt, like you said once you’re looking at, okay, you found someone in contempt.  What sort of sentence is a judge going to impose?  And there are mitigating factors that judges take into account.

Rick Bickhram:  Some of those mitigating factors are apologies.  Whether or not the offender looks remorseful.  Second condition is medical condition.  In this situation Eric was asserting that there was a medical condition which prevented him from diligently providing the accounting within the time lines prescribed.  The Honourable Justice Brown set out that he didn’t give very much weight to the medical condition just because the facts in this situation turned to how long Eric met with the doctor and to what extent Eric saw the doctor for the medical condition he was complaining of, which wasn’t a lot of time.  And accordingly, Justice Brown did not throw much weight in that regard.  Also some other mitigating factors are whether or not this is a first conviction for contempt.  And whether or not the offender has shown any willingness to comply with the Order.  So turning to this fact situation again is whether or not Eric has seen an accountant, has made any attempts to put his accounts together, what has he produced in the one year and a half.  So those are some examples of mitigating factors.

Bianca La Neve:  And of course, if the Court is going to look at the mitigating factors, they’re also going to look at aggravating factors and so in this case, an aggravating factor was obviously the fact that Eric failed to comply with an Order he had consented to.  That he made certain representations to the Court such as he was going to hire a professional to assist him like Rick mentioned, and he didn’t do so.  Another aggravating factor was again what we touched on, the seriousness of the offence, because Eric was a fiduciary as attorney for property and he breached his duties to account.  And also that the person at issue in this case attempted to shift blame. So there was no apology.  There was actually an effort to try to blame others for the fact that Eric hadn’t complied with the Orders.  So this all sort of weighed into Justice Brown’s analysis and rationale and in the end, Eric was found to be in contempt and the contempt wasn’t purged and so in terms of sentence, Justice Brown ultimately ruled that for being contempt there was a fine imposed of $7,000.  And so again, just to make a difference between the civil and the criminal context, this fine of $7,000 was payable to the Accountant of the Superior Court of Justice. So it wasn’t a costs award made in favour of Eric’s brothers.  It was actually a fine to show that, you know, again, the goal here isn’t to punish but it’s to deter and to enforce compliance with the rule of law.  And of course, I’m sure Eric’s brothers got their costs in the end of the motion in any event.

Rick Bickhram:  Hopefully.  Well I guess the moral of the story here is comply with Court Orders.

Bianca La Neve:  Especially if you consent to them.

Rick Bickhram:  I think that brings us to the end of this week’s discussion.  Thanks for listening and thanks for joining me today, Bianca.

Bianca La Neve:  It was a pleasure Rick.  I look forward to podcasting with you again soon.

Rick Bickhram:  And we look forward to hearing from you, our listeners.  You can send us an e-mail at hull.lawyers@gmail.com.  Please be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law on a daily basis.

Bianca La Neve:  Thanks Rick.

Rick Bickhram:  You’re welcome.  And until next week, so long.

This has been Hull on Estates with the lawyers of Hull & Hull.  The podcast you have been listening to has been provided as an information service.  It is a summary of current legal issues in estates and estate planning.  It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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