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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Whether as a result of the increased prevalence of mediation and alternative dispute resolution in the legal profession today, or as a result of the ever increasing costs of litigation, more cases seem to settle today than ever before. With settlement often comes Minutes of Settlement, and if all goes to plan, a relatively peaceful conclusion to the legal process. But what happens if subsequent to signing Minutes of Settlement one of the parties refuses to abide by the agreement? What options are available to an aggrieved party to ensure that what they agreed to actually comes to fruition?
 

Rule 49.09 of the Rules of Civil Procedure provides that where a party to an accepted offer fails to comply with the terms of the offer, the other party may make a motion to a judge for judgment in the terms of the accepted offer. The effect of turning the settlement into a judgment of the court is to gain access to the enforcement mechanisms available pursuant to the Rules of Civil Procedure. These include Writs of Seizure and Sale for monetary awards, and contempt orders should the party in breach continue to refuse to abide by the settlement.
 

Turning the settlement into an order of the court is not the only mechanism available to enforce the Minutes of Settlement against a party in breach.Olivieri v. Sherman, a 2007 decision of the Ontario Court of Appeal, provides that a settlement agreement is a contract, and as such is subject to the general laws of contract. So long as the court is satisfied that at the time the settlement was entered into the parties (a) had a mutual intention to create a legally binding contract; and (b) reached agreement on all of the essential terms of the settlement, the court will find that a valid contract exists between the parties. As a valid contract exists between the parties, the general remedies available for a breach of contract are available in the event that one of the parties refuses to abide by the settlement. These remedies include damages in the event that the settlement concerned a monetary award, or specific performance in the event that the settlement concerned specific actions such as the return of property.
 

Thankfully, in my experience, most people tend to enter into settlement agreements in good faith, and will more often than not abide by what they agreed to. Between Rule 49.09 and the general remedies for breach of contract however, should you find yourself in the situation where a party refuses to abide by a settlement agreement, there are options available to remedy it.
 

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

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In our fast paced and busy lives, we can often overlook the basics, getting bogged down in the details and not seeing the forest for the trees. Seeing as this is the case, I thought it might be a good exercise to have a quick review of one of the basic tenants of trust law; the three certainties.
 

Most people are fairly comfortable with a basic understanding of what constitutes a trust. The loose idea that a trust is created when a person transfers property to another person under the instructions and understanding that the property is to be used for the benefit of a third party is fairly universally understood. But what may not be as universally understood are the basic criteria that must be met in order to have the transfer of property constitute a valid trust.  In order for the property transfer to constitute a valid trust, it must meet what are known as the three certainties: (i) The Certainty of Intention; (ii) The Certainty of Subject Matter; and (iii) The Certainty of Objects.
 

The Certainty of Intention refers to the intention on the part of the person transferring the property (more correctly referred to as the "Settlor") to create a trust. The expression of the intention to create a trust can be oral or written, and should be supported by some expression of the intent to create a trust. Put simply, when the Settlor transferred the property, they had to do so with the intention that the property be held in trust for a third party.
 

The Certainty of Subject Matter has two aspects to it, being: (i) the certainty of the property that is subject to the obligation that it be held in trust; and (ii) the certainty of the amount, or share, of the trust property that each beneficiary is to receive. At the time that the property is transferred, it must be certain what property is to form the subject of the trust, and you must know how much each beneficiary of the trust is entitled to receive. 
 

The Certainty of Objects refers to the fact that you must be certain who the beneficiaries of the trust are. For a trust to be valid, the trustee must know who they are to direct the benefits of the trust property towards, and who can hold the trustee to account in the event of anything going wrong. As such, a group so large or so vague that the trustee would unable to identify who the beneficiaries are would not be valid. The Objects have to be easily ascertainable and identified in order to be a valid trust.
 

If an alleged trust lacks any one of the three certainties it will fail as a trust. As such, when approaching a trust for the first time, a good practice tip is to quickly run through the three certainties to make sure that the trust is valid in its most basic form. Why waste hours on a more minute detail, only to realize that the trust was not valid from the start as a result of its objects being too vague. I hope this review of one of the basic tenants of trust law has provided you with a valuable refresher. Sometimes a review of the basics does us all a little good
 

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

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Rule 75.1 of the Rules of Civil Procedure provides for the mandatory mediation of estates, trusts, and substitute decisions matters which are commenced in Toronto, Ottawa, or the County of Essex.
Rule 75.1 provides that, except in a contested Passing of Accounts, the Applicant shall make a motion, in the same way as under R. 75.06 (Application or Motion for Directions), seeking directions for the conduct of the mediation. Rule 75.1.05(2) provides that the Notice of Motion for mediation directions is to be served within 30 days after the last day for serving a Notice of Appearance.
 

In terms of who actually conducts the mandatory mediation session, R. 75.1.06 provides that the mediator can be a person chosen from the list for the county by agreement of the designated parties, a person assigned from the list by the mediation co-ordinator for the county (at the request of a designated party), or a person who is not named on the list, if the designated parties consent.
 

Most clients are vaguely familiar with the court process and think they know what to expect - they know it involves a judge, their lawyer, a trial, and a courtroom. Not many clients however know what to expect at mediation. As a result, it is important for counsel to take time to describe the process, answer any questions, and prepare their client for what they can expect to happen at mediation. By doing so, counsel can help reduce their client's anxiety about the attendance.
 

Estate mediations can be a very emotionally draining experience. Apart from any legal foundation to the dispute, many intangible factors tend to also be present in estate matters. Jealously, anger, and greed are difficult emotions to overcome and can be sever stumbling blocks in settlement. Sometimes, steering clients away from the emotional aspects and towards the financial implications of continued litigation assists them in moving past those types of difficulties.
 

Clients need to be assured that the mediation process is completely confidential and that anything that is said or admitted cannot be used against them at a later date. The fact that there will be no public record of the proceeding may provide some clients with the comfort to say things that might otherwise not be said. In addition, clients can be advised that any information they provide to the mediator to try to help him or her understand their position better can remain confidential, and that the mediator will not disclose any information unless expressly authorized by the client. Having the opportunity to participate in open and frank discussions may be the key to resolving outstanding issues, issues which might not otherwise be addressed in the litigation process.
 

In jurisdictions not governed by mandatory estate mediation, r. 75.06(2)(f.1) allows a judge hearing an Application or Motion for directions to direct that a mediation session be conducted nonetheless. Counsel may want to keep this provision in mind when otherwise seeking directions in respect of a matter which may, in whole or in part, benefit from a mediation session.
 

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

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Mistakes are a fact of life. Even the most careful person, who always makes sure to double check their work, may one day inadvertently make a mistake. If luck is on your side hopefully these mistakes do not have too large an impact, and can easily be corrected. But what happens when a mistake is made in the drafting of a will? Can these mistakes easily be corrected, or is the testator (and their intended beneficiaries) stuck with the will as written, mistakes and all?
 

There has long been a debate over whether the court has the power to add new words to a will in order to correct a mistake, or merely the power to delete mistakenly included words.  Indeed A.H. Oosterhoff in his seminal text "Oosterhoff on Wills and Succession", states that while a court of probate may strike out errors, it may not substitute new words.  But is this truly the case? Are the words as written in the will the only words that may be admitted to probate? Can no additions be made?
 

Recently in Lipson v. Lipson, the Ontario Superior Court of Justice gave some guidance in understanding under which circumstances the court can add or delete words to a will. In coming to his decision, Justice Pattillo states that after reviewing the jurisprudence on the matter, it has long been an established principle in Ontario that the court has the power to delete or add words to a will by necessary implication.In Lipson, Justice Pattillo formulates a test to determine under what circumstances the court can add or delete words to a will. Justice Pattillo states that this test is to apply not only in circumstances where words are omitted, but also in circumstances in which the incorrect words were inserted. Before the court can delete or insert words to correct an error in a will, the court must be satisfied that:
 

i. Upon a reading of the will as a whole, it is clear on its face that a mistake has occurred in the drafting of the will;
ii. The mistake does not accurately or completely express the testator's intentions as determined from the will as a whole;
iii. The testator's intention must be revealed so strongly from the words of the will that no other contrary intention can be supposed; and
iv. The proposed correction of the mistake, by the deletion of words, the addition of words, or both, must give effect to the testator's intention, as determined from a reading of the will as a whole and in light of the surrounding circumstances.
 

So long as the proposed addition or deletion meets all four elements of the test as contained in Lipson, the court should be willing to rectify the mistake and allow the true intentions of the testator to become reality. Whether the courts will openly embrace Lipson remains to be seen, but hopefully with this test we will now finally have some closure on the debate of when mistakes can be rectified in a will. Mistakes happen. Hopefully we now have a mechanism to correct them.
 

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

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"Relief of the aged, impotent, and poor people; maintenance of sick and maimed soldiers and mariners, schools of learning, free schools, and scholars in universities, repair of bridges, ports, havens, causeways, churches, seabanks, and highways, education and preferment of orphans, for or towards relief of stock, or maintenance for houses of correction, marriages of poor maids, supportation, aid, and help of young tradesmen, handicraftsmen, and persons decayed, relief or redemption of prisoners or captives, aide or ease of any poor inhabitants concerning payments of fifteens, setting out soldiers of soldiers and other taxes."
 

The above is the preamble to the Statute of Charitable Uses, passed by Queen Elizabeth I in 1601. Although more than 400 years have passed since the statute came into force, to this day these words play an important role in what organizations may receive the benefit of being officially registered as charities under the Income Tax Act.

In Commissioners for Special Purposes of the Income Tax v. Pemsel, [1891] A.C. 531 (H.L.). ("Pemsel") the Statute of Charitable Uses was broken down into four headings under which a charitable purpose must fall. They are: (1) the relief of poverty; (2) the advancement of education; (3) the advancement of religion; and (4) certain other purposes beneficial to the community. If a charity's "purpose" does not fall within one of these four headings, the charity cannot receive the benefit (i.e. tax free status and ability to give tax receipts) of being officially registered as a charity under the Income Tax Act.
 

The courts in Canada have strictly adhered to the charitable purpose headings contained in Pemsel (and by implication the preamble to the Statute of Charitable Uses written in 1601). In A.Y.S.A. Amateur Youth Soccer Association v. Canada (Revenue Agency) ("A.Y.S.A."), a 2007 decision of the SCC, a youth soccer association applied to the Canada Revenue Agency to become a registered charity pursuant to the Income Tax Act. The CRA refused to register the soccer association, and the soccer association appealed its ruling. In the end the SCC agreed with the Canada Revenue Agency, and refused to allow the soccer association to be registered as a charity.
 

In A.Y.S.A. the soccer association argued that its purpose was charitable as it fell under the fourth heading "certain other purposes beneficial to the community", arguing that the promotion of sport and physical fitness amongst youth was for the public benefit. The court rejected this argument, focusing on the fact that the soccer association had as its main purpose in its letters patent the "promotion of soccer" and to "increase participation in sport", goals that the court says are not charitable. In a way, because sport was not seen as "charitable" in 1601, the SCC could not accept it as "charitable" today.
 

I would like to think that in the 21st Century an organization that promotes health and physical activity amongst children would be considered "beneficial to the community". There is certainly no lack of information out there about the growing obesity rates amongst children, and the impact that it is having on their overall health. Perhaps it is finally time that we move away from our 17th Century definition of what a charity can be, and allow for a definition that is more in tune with life in the 21st Century.
 

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

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If you are considering making a large donation to charity, but are unsure if you want to give up the use or benefit of the asset during your lifetime, a charitable remainder trust may the correct vehicle to implement your wishes. In its most basic form, a charitable remainder trust is created when you transfer an asset to charity, but retain the use of or income derived from the asset for your own lifetime or the lifetime of another. It permits the donor to ensure that a designated individual will have a steady stream of income for life, with the knowledge that ultimately the donation they have given will go to the charity of their wishes. A charitable remainder trust can be either inter vivos or created through a Will, and can be created so that the benefit is received by the person who created it, or by someone else such as a family member.
 

The main benefit of creating a charitable remainder trust is that even though you retain the use of or income derived from the property, the tax benefit of the transfer is immediate. The Canada Revenue Agency has stated that an immediate tax receipt is available to a person creating a charitable remainder trust provided that the transfer was done voluntarily, that the property vests in the recipient charity at the time of the transfer, the transfer is irrevocable, and the recipient charity will eventually receive full ownership and possession of the property. The ability to receive a tax receipt for donating money to charity, yet still retain the ability to use the property or derive income from it, may be a huge incentive to a person considering leaving a large amount of money to a charity to do so through the use of a charitable remainder trust.
 

The attractiveness of charitable remainder trusts as a potential revenue source for charities has lead many leading organizations in Canada to dedicate pages on their websites to advise potential donors of the availability of the charitable remainder trust as a potential donation tool. Organizations such as the Canadian Red Cross, Feed the Children Canada, the Alzheimer Society, and McGill University all have pages on their websites dedicated to encouraging potential donors to use charitable remainder trusts as a tool to implement their donation.
 

While the use of a charitable remainder trust may not be for everyone (the Cancer Society encourages only those leaving gifts of $100,000 and more to use it to offset the administrative costs associated with it), the ability for a person to receive the tax benefit of a charitable donation immediately, yet still be able to retain an interest in the property, may be a highly attractive option. If you are considering donating a large amount of money to charity either during your lifetime or in your will, perhaps a charitable remainder trust is the correct vehicle to implement your wishes.
 

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

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Mele Kalikimaka is the thing to say
On a bright Hawaiian Christmas Day.
That's the island greeting that we send to you
from the land where palm trees sway.
- Mele Kalikimaka, as sung by Bing Crosby, or Don Ho, or Jimmy Buffett, or the tormenting little gremlin in my head at 3 a.m.  Take your pick.

It all started on November 1st, 2011.  I am referring, of course, to the launch of "Continuous Christmas music" on Star 102.5, your friendly station from across the puddle in Buffalo, New York.   I was in the car, surfing radio stations, when I made the grave error of landing on 102.5 FM.  With the kids in the backseat.  No putting the toothpaste back in the tube on that one.  Every day since then (when did Christmas morph into an 8-week affair, I ask you?) I am forced to listen to Madonna's DNA-unraveling attempt at "Santa Baby", the thankfully-only-occasional "Last Christmas" (WHAM.  Oh George - why didn't you answer any of my fan mail in high school?) and the radiator-rattling Mannheim Steamroller.  And then it happened, really, I'm not sure how, but it just did: Mele Kalikimaka was stuck in my head.  Didn't matter if I was working, vacuuming, driving, cooking... that piece of tropical treacle was doing laps in my head and there was no off-ramp in sight.   

James Kellaris, associate professor of marketing at the University of Cincinnati refers to this phenomena as 'getting bitten by an earworm'.  As detailed in an article in the December issue of Mental Floss magazine, "certain pieces of music may have properties that excite an abnormal reaction in the brain - a cognitive itch".  We rehearse the tune in our heads in order to scratch said itch, but the outcome is a form of perseveration hell - you have, in fact, exacerbated the itch so that the rehearsal becomes involuntary and you are trapped, like me, on a bright Hawaiian Christmas Day.  According to Kellaris, songs that are simple, repetitive or have some aspect of incongruity in them are most likely to get stuck.

Fear not, my friend.  For every problem, there is a solution.  Kellaris states that the best cure for an earworm is to unleash an 'eraser tune'.  He theorizes that the eraser tune devours the earworm by 'combining the benefits of both distraction and replacement.'  Prudence dictates that the eraser tune of choice is itself not too sticky.

Whoomp...     ...there it is.

Jennifer Hartman, guest blogger

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Given our aging demographic, it is becoming increasingly common for seniors to outlive their income.  A not uncommon scenario is one in which a senior wishes to continue to live at home, has insufficient income to support herself, yet has significant equity in her home. What options are available? 

A recent article posted online in the Globe and Mail considered the availability of two different options: (i) a Reverse Mortgage and (ii) a Home Equity Line of Credit ("HELOC"). Both offer a way to borrow money and defer repayment to some degree until the home is sold.

With a HELOC you can borrow up to 80 per cent of the equity in the home at the lowest cost possible.  HELOCs are typically priced at prime, which is currently 3 per cent, plus an additional 0.5 to 1 percentage points. 

The HELOC is usually the preferable choice because of the way that interest is charged with both borrowing options. With a reverse mortgage, you are not required to repay the debt until the home is sold; however interest is applied not only to the principal, but also to the unpaid interest - which will continuously accumulate over time.

A HELOC, on the other hand, requires monthly payments of at least the interest owed on the loan. For example, if you borrow $100,000 on a HELOC at 3.5 per cent interest every month, you will be required to pay about $300 each month in interest. Repayment of the principal is optional. Of course, in order to make the monthly payments, you will need to have a separate stream of income – if you use the line of credit to pay the interest, then you are still paying interest on interest, and in the same position as you would be if you had a reverse mortgage.

Moira Visoiu

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One of the unique challenges of estate litigation is that the star witness is, almost always, dead.  How do we then address the myriad of allegations that can be made against the Deceased or his or her Estate - which are unfortunately easy to make and expensive to defend - when an estate trustee has limited information available to defend against such allegations?

Section 13 of the Evidence Act R.S.O. 1990, c. E.23 specifically addresses this unique aspect of estate litigation, and aims to prevent claims against estates that are based on mere allegations.  This provision requires that there be independent corroboration of evidence in claims against estates. 

Section 13 of the Evidence Act provides, as follows: “In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.”

In the recent Ontario Superior Court decision in Botnick et al. v. The Samuel and Bessie Orfus Family Foundation et al., 2011 ONSC 3043 (“Bessie Orfus Estate”), the Honourable Mr. Justice Penny considered Section 13 of the Evidence Act in the context of a summary judgment motion. 

Following the Ontario Court of Appeal’s decision in Burns Estate v. Mellon, 2000 CanLII 5739 (ON CA), Justice Penny stated that “Section 13 of the Evidence Act requires that there be corroboration of material facts alleged by an opposite or adverse party of any matter occurring before the death of the testator.  This requirement exists to address the obvious disadvantage faced by the dead: they cannot tell their side of the story or respond to the livings’ version of events.”

Justice Penny went on to provide the following direction to litigators: “Not every particular of the party’s evidence need be corroborated but the material evidence in corroboration must be independent of the opposite or adverse party and must appreciably help the judicial mind to accept one or more of the material facts deposed to.  It must materially enhance the probability of the truth of the adverse party’s statement.”

The decision in the Bessie Orfus Estate reminds us that in all stages of prosecuting or defending a claim against an estate – whether determining the initial terms of an Order Giving Directions, considering a summary judgment motion, preparing for mediation, examinations, productions, trial, etc. - one must keep in mind the requirement of corroboration under Section 13 of the Evidence Act. 

Thanks for reading,
Saman M. Jaffery

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When you conjure up the image of what a "Will" is supposed to look like, you likely imagine an impressive formal document with large cursive script that proudly declares "This is the Last Will and Testament of" at the top. The kind of document that would not look out of place in a 16th century manuscript, or in an old Victorian library with dust on top. At the very least, you likely imagine a formal document created to comply with rigid rules about its execution and who must be there to witness it.
 

What you may not know however is that while this formal will still has an important place in our laws, it is not the only kind of will that the law will recognize. Holographic wills are one of the exceptions to the classic formal will, and offer an interesting insight into non-traditional testamentary documents.  In Ontario, section 6 of the Succession Law Reform Act states that "A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness." A will created pursuant to these provisions is known as a holographic will. Put simply, a holographic will is a will that is entirely in handwriting of the testator that does no have to meet the formal requirements regarding execution that a traditional will does. So long as the will is entirely in the handwriting of the testator, signed by the testator, and has a "donative intent", the holographic will can be held to be the Last Will and Testament of the deceased.
 

Perhaps the most famous example of a holographic will in Canada is that of Cecil George Harris, a Saskatchewan farmer who in 1948 carved his will into the bumper of the tractor that he was pinned under. Using a small knife, Cecil carved "In case I die in this mess, I leave all to the wife. Cecil Geo Harris." Unfortunately for Cecil, he did not survive the incident. When the carving was discovered several days later by one of Cecil's neighbours, the bumper was removed and brought to the court, where it was determined to be a valid holograph will. The bumper has now achieved a sort of celebrity status within the legal community, and is currently on display at the University of Saskatchewan Law Library.
 

Examples such as that of Cecil are not relegated to the history books. A local CBS affiliate in Houston, Texas recently reported on a man who, after being stuck in his car at the bottom of a ravine for three days, wrote his will on the console of his car. While thankfully the man was rescued, had he not been, it is likely that the will he wrote on his car's console would have been accepted as his Last Will and Testament. The document was wholly in his own handwriting, was signed at the end, and had a "donative intent".
 

Though these two examples are rather extreme (as a simple piece of paper will do), they do a good job at showing the lack of rigidity that the courts are willing to accept when it comes to non-traditional testamentary instruments and holograph wills. So long as the document is entirely in the handwriting of the testator and is signed at the bottom, the document will meet the formal requirements of a holograph will and may be admitted to probate.
 

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

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Inheriting the estate residence can mean inheriting problems as this article in the National Post points out.  An in specie gift of the estate residence that is encumbered by a mortgage is a wrinkle that runs counter to the usual practice of paying the debts of the estate before making a distribution.

Testators should ensure that, when leaving their home, they don’t also leave a financial burden for their beneficiary.  As quoted in the article: “The beneficiary doesn’t have to assume the mortgage-debt obligation. You can say ‘No, I don’t want the mortgage.’ But, you don’t have a choice of taking half of the gift...You either take the house with the mortgage or you don’t take the house.”

One option to avoid leaving mortgage debt is credit protection insurance.  The National Post quotes a director of mortgage advice: “A credit protection plan is part of your bigger financial plan, not just around your mortgage...“The credit protection allows you to have insurance on your mortgage. As you pay down your mortgage, in case you suffer critical illness or on your passing, the mortgage outstanding balance is paid off.”

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

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In D. Crupi & Sons Limited v. Travelers Guarantee Company of Canada et. al. the Ontario Superior Court of Justice referred to proportionality in discovery.  The Court considered that, while the former case law says that the Rules provide for questions "relating to any matter in issue",  the new Rule  29.2.03 amendment to "relevant to any matter in issue" suggests that the scope of examinations for discovery has been narrowed. 

The Court stated: "In determining the issues on this motion I have applied the relevance test set out in Rule 31.06. I am also mindful of the proportionality considerations set out in Rule 29.2.03. The general principles regarding the scope of discovery are set out in Ontario v. Rothmans Inc., [2011] O.J. No. 1896 (S.C.J.)..."   This case included among its principles: 

• The scope of the discovery is defined by the pleadings; discovery questions must be relevant to the issues as defined by the pleadings;
• The examining party may not go beyond the pleadings in an effort to find a claim or defence that has not been pleaded (i.e. "fishing expedition");
• The extent of discovery is not unlimited, and in controlling its process and to avoid discovery from being oppressive and uncontrollable, the court may keep discovery within reasonable and efficient bounds.

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

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In a very significant, just released decision (encompassing five appeals heard together this past summer), Combined Air Mechanical Services Inc. v. Flesch, a five judge panel of the Ontario Court of Appeal has interpreted the amended summary judgment rule. Prior to the amendment to Rule 20, summary judgment was available in two types of cases: (i) When the parties agree that summary judgment is appropriate and (ii) cases where the claims or defences have no merit.
 

This decision introduces a third category: (iii) where a trial is not required "in the interests of justice." This third category of cases introduces the "full appreciation test". Under the test, the motion judge decides whether, in the interests of justice, he or she can fully appreciate the evidence and issues by summary judgment or whether a full trial is required.  In other words, is a trial necessary to enable the court to fully appreciate the evidence and issues in the case?  If there are multiple witnesses, multiple facts in dispute, or voluminous documents, a summary judgment motion cannot substitute a trial.  If there are few witnesses or limited facts in dispute, a summary judgment motion may be successful.

The court found that "simply being knowledgeable about the entire content of the motion record is not the same as fully appreciating the evidence and issues in a way that permits a fair and just adjudication of the dispute."
 

Before deciding if the court will use its expanded powers under Rule 20.04(2.1) to weigh evidence, evaluate credibility and draw reasonable inferences, the motion judge must apply the full appreciation test. The motion judge will decide if the motion record (which can be supplemented by oral evidence under Rule 20.04(2.2)) fully satisfies him or her that the issues are dealt with appropriately by summary judgment.

Holly LeValliant - Click here for more information on Holly LeValliant. 
 

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The New York Times reported yesterday that 28-year old pre-eminent NHL enforcer Derek Boogaard did indeed have chronic traumatic encephalopathy (CTE) at the time of his accidental death in May of this year.  Boogaard is now the fourth of four former NHL players examined to show evidence of CTE. 

CTE is a form of progressive, degenerative damage to the brain caused by repetitive closed head injuries (i.e. ‘blows to the head’).  It is characterized by the buildup in the brain of an abnormal protein called tau which tends to form in clumps and disrupt brain function.  Part of Ann McKee's job is to solicit suitable brains for examination for the presence of CTE.  McKee is the co-director of the Boston University School of Medicine Center for the Study of Traumatic Encephalopathy, colloquially referred to as the Boston Brain Bank.  Within 24 hours of Boogaard's death, a phonecall had been placed from the Center to Joanne and Len Boogaard, requesting the brain of their son.  The Boogaard family readily agreed.  Sadly, in the span of time between the donation of the brain and the release of the results of the autopsy, NHL enforcers Rick Rypien and Wade Belak both lost their lives, reportedly due to suicide.  

While the presence of CTE in Boogaard is not unexpected, what did take researchers by surprise was the advanced degree of damage in someone so young.  “To see this amount? That’s a ‘wow’ moment,” McKee reportedly said when she viewed images of Boogaard’s brain tissue.  Had Boogaard lived, he likely would have developed middle-aged dementia as a result of the trauma to his brain. 

The last few years of Boogaard's life were tragic; blurred by post-concussion syndrome, a descent into alcohol abuse, a dependence on painkilling narcotics like Oxycontin and Percocet, self-neglect, repeated stints in rehab and ultimately, pervasive loneliness.   His legacy, however, will lie in the specter raised by the advanced CTE discovered in his young brain. As the Brain Bank's census of CTE-positive ex-NHL brains continues to grow, will the NHL change its tune about the link between hockey and CTE?  (According to NHL Commissioner Gary Bettman "it's way premature to be drawing any conclusions at this point.")  How will the NHL respond to this news?  How will it respond now to calls to rein in on-ice fighting? 

Let the debate continue.

Jennifer Hartman, guest blogger

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The decision to transfer wealth within a family before death is complicated by the inherently emotional nature of family dynamics. This issue was considered in a recent article in the Financial Post.

The article noted that a survey done by the Royal Bank of Canada found that 61% of Boomers planned to pass on money during their lifetime.

David Foot, author of Boom, Bust and Echo, is quoted: “Basically inheritances tend to go to one generation, they seldom skip a generation. But for the twenty somethings today if the inheritances skip a generation it will be their grandparents giving them money,” says Mr. Foot, noting the phenomenon is already taking root. “The people with a lot of the wealth are 75 plus or even 65 plus, ahead of the Baby Boomers.”

Commentators note that family wealth can be enhanced by early gifting.  One example is where parents assist children in accelerating the payment of their mortgage thereby enhancing family wealth by the reduction of non-deductible debt.  Another benefit of inter vivos gifts is the simple fact that the reduction in the size of an estate reduces the tax implications of deemed disposition of assets.

On the downside, parents may fear gifting money to a child and then losing the cash because the money is invested in a matrimonial home that may become the subject of family law proceedings.

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

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In Re Brooks Estate, 2011 BCSC 1606 (CanLII), a testator left a handwritten will in which he left his real property and two bank accounts to his “brother … Executor with Power of Attorney”. He goes on to list five other people and states “I would all the people named above to share equally in my estate [sic].”

The Estate Trustee applied for directions on the interpretation of the Will. Did the real property and accounts pass to the brother, or where they to be divided equally amongst the brother and the five other named beneficiaries?

Important to the decision was the fact that the real property and accounts made up the bulk of the estate.

What did the court do? The court found that the estate was to be divided amongst the five named beneficiaries and the Estate Trustee. The court noted that extrinsic evidence could be used to interpret the Will if there was ambiguity, and held that the only extrinsic evidence of relevance was the fact that there were no significant assets other than the real property and the accounts. The testator, the court held, must be presumed to know what his estate consisted of, and that there would be no significant residue beyond the specified assets. 

In any event, the court held that extrinsic evidence was not required, as there was no ambiguity. The testator referred to “my estate”. “In the absence of any further language limiting their application, the plain and ordinary meaning of those words is that all individuals named in the will share equally in the entire estate.”

Costs of all parties were ordered to be paid from the estate. The modest estate had a value of approximately $275,000. Presumably, the costs of the parties absorbed a significant part of the estate: costs which could have been avoided by a properly drafted will. Perhaps a better title for this blog would be “The Perils of a Handwritten Will.”

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle. 

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The onus of proving undue influence is on the challenger. By its nature, undue influence is often very hard to prove. However, the court may resort to a presumption of undue influence in certain circumstances.

In a thought-provoking article in the December 2011 issue of The Lawyers Weekly, Adam Parachin, an associate professor at the Faculty of Law, University of Western Ontario, discusses the high onus to be met in undue influence cases, the application of a presumption of undue influence in certain cases, and the perils of strengthening the presumption of undue influence.

Specifically, Parachin states that the court’s increasing willingness to accept circumstantial evidence of undue influence possibly means that the need for a presumption is less obvious. Further, identifying “triggers” to the imposition of a presumption leads to a circular argument: “instances best meeting this requirement [to trigger the presumption] are those where the need for the presumption is the least apparent.”

Further, the application of the presumption may detract from the testamentary freedom of the testator. As noted by Parachin, the application of the presumption could disproportionately jeopardize wills that depart from the usual pattern of estate distribution, or wills that are not prepared in accordance with the usual protocols. In addition, testamentary freedom should extend not only to how one’s estate is to be distributed, but to who is to be included in the will making process. 

Finally, Parachin states that a strong presumption might facilitate questionable claims. The costs of defending these claims, and of rebutting the presumption, would bolster these questionable claims, and lead to compromises that might, in many cases, be contrary to the testator’s intention.

Let the debate begin.

Paul E. Trudelle - Click here for more information on Paul Trudelle. 

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In an intriguing case out of the Prince Edward Island Court of Appeal, the question of whether a wife could claim damages for economic loss and loss of care and companionship against her husband’s estate arising from the husband’ own negligence which lead to his death was considered.

In Hubley v. Hubley Estate, 2011 PECA 19 (CanLII), the husband died in a car accident that was a result of the husband’s negligence. The wife claimed that as a result of her husband’s death, she lost the benefit of her husband’s earnings, and his retirement pension benefits. She also claimed the loss his care, guidance and companionship.

Those claims were dismissed on motion, and the wife appealed to the Court of Appeal.

On appeal, the Court of Appeal agreed with the motions judge. 

The Court of Appeal framed the issue as being whether the husband owed the wife a prima facie duty of care to protect himself from injury and/or death. 

The Court of Appeal noted that the court will proceed with caution in allowing for recovery of economic loss when the plaintiff has not suffered physical harm or property damage. (The fact that the wife was injured in the car accident was not seen as being the physical harm necessary to support a duty of care: her claim for damages related to her husband’s death, and not her injuries.)

The Court of Appeal noted that finding a duty of care in the circumstances would have far-reaching policy consequences. There could be indeterminate liability. Finding a duty of care not to harm oneself would also lead to “complex and unsettled questions as to how people lead their lives. … There could be a whole range of situations giving rise to law suits ranging from one’s failure to wear a seatbelt to risking one’s own health by lifestyle choices.” Finding a duty of care not to harm oneself “would impact on one’s right to self-determination and freedom of choice.”

Thanks for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle. 

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I saw “The Descendants” on the weekend. It is a great movie in its own right, but also a great movie from the perspective of an estates and trusts lawyer. The movie raises a number of estates and trusts issues: trusteeship, powers of attorney, living wills, and the threat of estate litigation.

Without wanting to give away the plot, one of the issues referred to in the movie is the “rule against perpetuities”. I don’t expect that “rule against perpetuities” movies will be a new film genre. However, it is an interesting concept and significantly moves the story in “The Descendants” forward.

Simply put, and as well explained in the movie, the rule provides that no interest in a trust will be valid if the trust vests more than twenty-one years after the termination of some life in being at the time of the creation of the trust. The effect of the rule is that a trust cannot continue on indefinitely, and must vest at some point: that is, the trust must vest twenty-one years after the death of a prescribed person. 

Much case law, legislation and commentary has evolved in relation to the rule against perpetuities. However, the general application of the rule in most cases remains, and property in a trust cannot be held in the  trust indefinitely.  We cannot freeze the past forever, and must move on.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle

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On countless occasions, and from countless angles our blog has dealt with issues surrounding dementia and related forms of illness. Unfortunately, I don’t think there is a reader out there who doesn’t have a story of someone they personally know who has been affected. While it may start with forgetting where you put your keys, when dementia begins to take over, it generally takes over the whole family. It’s not like pulling a quarter out from behind someone’s ear and then making it go away. This is no magic act. As dementia steals away the mind, the ones watching are not having a good time.

A neurologist with Baycrest Hospital, Dr. Tiffany Chow, has taken notice of this, and has begun an online resource called “When Dementia is in the House”. The resource is geared at providing support to those who deal with children who are confronted with persons coping with dementia. Adult caregivers have vast resources to turn to, the world is geared towards providing adults with the support they need. Yet if you are one of those adult caregivers, with your parent living with you, your kids may be dealing with issues they don’t really have the capacity to understand, or ability to articulate their concerns. 

As our population ages and diseases such as dementia continue to play a prominent role in the aging process, we will likely begin to rely more and more on support groups, such as many which are available online. It’s a comfort to know, that resources such as ‘When Dementia is in the House’, targeting a very specific market, are out there.

Have a nice weekend,

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