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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I attended a seminar about e-discovery last month where we discussed the importance of disclosing all documents that are relevant to the issues pled in litigation.   The failure to disclose relevant documents can lead to devastating cost consequences. 

The Ontario Superior Court recently awarded $10 million against the Government of Canada for its “outrageous,” “reprehensible,” and “shocking” misconduct for rigging a procurement contract and then trying to deceive the court. 

Full indemnity costs are awarded only in extraordinary circumstances.  The Supreme Court has described the circumstances when elevated costs are warranted as “only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties.” 

The defendants’ concealment of relevant documents and resistance to allow the documents to be entered into evidence warranted the chastisement of the court, according to Justice Annis.  By marking the documents as “not relevant,” the defendants mislead the court which constituted “grave misconduct.”  The court would have ordered punitive damages as well, but for its finding that an award would not have served the purpose of denunciation and deterrence. 

Holly LeValliant

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In motions respecting will challenges or other estates matters, the lawyer who drafted the will may be one of the most important witnesses.  His or her evidence may be critical to determining issues of mental capacity, undue influence, the intentions of the testator, and more. 

A recent case, Marton v. Wood Gundy Inc., 2013 ONSC 1246, examines the issue of when a lawyer can be compelled to attend examinations as a witness on a motion under the Rules of Civil Procedure.

In this case, the lawyer/witness was not a drafting solicitor, but was former counsel for the plaintiff.  The litigation, concerning investment losses suffered in 1991, had been ongoing since September, 1992.  After twenty years of litigation, the plaintiffs were on their fifth set of counsel.  The defendants brought a motion under rule 24.01(1)(c) of the Rules of Civil Procedure to have the action dismissed for delay.  On this motion, they sought to examine the plaintiff's former lawyers regarding the delay.  One of the former lawyers brought a cross-motion to strike the summons that was served on him.  The defendants brought a motion to compel the previous lawyers to attend examinations as witnesses under rule 39.03 in aid of the motion to dismiss the action for delay. 

Rule 39.03(1) provides that "a person may be examined as a witness before the hearing of a pending motion or application for the purpose of having a transcript of his or her evidence available for use at the hearing". 

Master Dash considered the test under rule 39.03(1) in coming to a decision.  Initially, the party seeking to conduct the examination has the onus of showing "on a reasonable evidentiary basis that the examination would be conducted on issues relevant to the pending application and that the proposed witness was in a position to offer relevant evidence".  The Master further commented that the onus is not to show that the examination would yield helpful evidence, but it is enough to demonstrate that it will be conducted on relevant issues to the motion and that the witness is in a position to offer relevant evidence.  Meeting this standard will give the party a prima facie right to conduct the examination.  The onus then shifts to the objecting party to demonstrate that the examination would be an abuse of process. 

Applying the test, the Master held that the lawyers' evidence regarding the delay would clearly be relevant to the motion to dismiss for delay.  The Master then considered that there might be an abuse of process if the examinations were used to conduct a general discovery or as a fishing expedition, but held that if properly conducted, there would not necessarily be an abuse. 

The Master then turned his mind to the issue of solicitor-client privilege.  Actions taken or not taken by lawyers are facts, rather than communications that are subject to privilege.  Further, privilege is deemed to be waived where the subject of the privileged communications is legitimately brought into issue.

Considering the circumstances carefully, and leaving open the possibility that a subsequent motion could be brought regarding the propriety of any questions that may come up on examinations, the Master allowed four of the five counsel to be examined.

When seeking the evidence of a lawyer on a motion in an estate matter, this case provides some invaluable help. 

Thank you for reading!

Suzana Popovic-Montag

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Sometimes, timing is everything.

In Re Barbeau, the deceased died on September 17, 2011 at 5:40 am. He died leaving a Will that left the residue of his estate to his spouse if she survived him for a period of thirty days. If she did not survive him for thirty days, his estate would pass to one of his spouse’s daughters. Under the spouse’s Will, her estate passed to her five children.

As fate would have it, the deceased’s spouse died on October 17, 2011 at 4:45 pm.

The question the court had to grapple with was whether the deceased’s estate passed to his spouse, and therefore her five children under her Will, or to the one daugther, under his Will.

In the decision, the court set out the two possible interpretations: either the thirty days are calculated as thirty 24-hour periods commencing on September 17, 2011 at 5:40 am, or applying the analogy of the Rules of Civil Procedure, the thirty day period commenced on the day after the date of death. If the second interpretation prevailed, what was the effect of the spouse not being alive for the entire thirtieth day?

The court noted the purpose of such survivorship clauses: to prevent the application of s. 55 of the Succession Law Reform Act (survivorship), and to avoid the imposition of two sets of administration taxes and costs in the event that both spouses died at the same time or within a short period of one another.

The court also noted that the selection of a thirty day period was likely arbitrary. Further, the court noted that interpreting the Will, the court was to strive to determine the intention of the testator.

The court found that there was an inconsistency in the Will, in that it provided different outcomes if the first interpretation was applied. That is, the spouse would have survived for thirty days, but also have died within the thirtieth day. This, the court found, was not intended.

Thus, the court concluded that if the first day was excluded, applying the Rules of Civil Procedure, then the inconsistency was avoided. The spouse would have to survive for thiry full days: that is, survive until some time on the thirty-first day. As the spouse did not survive for thirty full days, and died within the thirty day period, the residue of the estate passed to the one daughter.

Until tomorrow,

Paul Trudelle

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The Ontario Superior Court of Justice has released its new practice direction on the use of the latest gadgets and gizmos in the courtroom.  The Protocol on the Use of Electronic Devices in the Courtroom (or POTUOEDITCR, for short) provides guidelines for how electronic devices may be used in court.

The practice direction on the use of electronics counter-intuitively bans members of the public from using them at all, unless the presiding judge orders otherwise.  They may, however, be used by counsel, paralegals, law clerks and students providing assistance to counsel, and self-represented parties.  Represented clients may not use electronic devices.  However, media or journalists are allowed to use electronic devices.  In the era of social media, it may be interesting to see how the rules will distinguish between members of the public and members of the media.

Any use of electronic devices must accord with a number of restrictions.  In all circumstances, the devices may only be used if they are on silent mode, and their use must be otherwise "discreet and unobtrusive".  Talking on a device is banned.  No pictures or videos may be taken without the permission of the judge in a process governed by s. 136 of the Courts of Justice Act.  Audio recordings may be taken, but only by self-represented parties, counsel, or journalists, and they may only be taken for the purpose of keeping notes.  Even then, the recordings cannot be sent from the device. 

A further restriction is that "publicly accessible live communications" may not be sent where they would breach restrictions on publication.  The examples of publicly accessible live communications given by the Protocol include Twitter and live blogs, although presumably the definition could extend to other forms of electronic media. 

A global exception is made for individuals who depend on electronic devices to accommodate a disability, to whom the Protocol does not apply.

The penalty for failure to abide by the Protocol can range from an order to turn off the device or to leave it outside the courtroom, to an order to leave the courtroom, or even prosecution for contempt.  So the next time the court staff asks you to make sure your phones are off before the judge enters, make sure that you listen. 

The POTUOEDITCR comes into effect on February 1, 2013. 

Suzana Popovic-Montag

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“You never call”: a common lament of elderly parents aimed at their adult children. Now, it appears that failing to call, or more specifically, to visit your parents in China may result in legal action.

According to a recent Toronto Star article, China has recently amended its law on the elderly to require that adult children visit their parents “often”, or risk being sued by them. 

China, perhaps more than any other country, is facing a significant issue with its aging population. In just fifty years, the average life expectancy soared from 41 to 73. Coupled with family planning policies that limit most families to a single child, and a lack of affordable options for the care of the elderly, such as retirement or nursing homes, this has led to an elder care crisis. The legislation is aimed at assisting the elderly in seeking care.

While the legislation may seem extreme, there is already legislation on the books in Ontario to a similar effect. While it does not require visits, section 32 of the Family Law Act provides that an adult child has “an obligation to provide support, in accordance with need, for his or her parent who has cared for or provided support for the child, to the extent that the child is capable of doing so.”

The Ontario provision was applied in a few reported decisions. It was discussed in an adoption decision, Re Proposed Adoption of Q.(A.L.K.). There, the court noted that “dependencies shift” from parent to child, and an adult child has a “clear responsibility … to shore up the parent’s own financial resources, if the parent has need of that.”

Note to my children: Govern yourselves accordingly, Christopher and Marc.

Have a great weekend.

Paul Trudelle

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Yesterday, I read in the Toronto Star about a couple that resolved last year to make the year a year of “firsts”. They resolved to learn, make or experience 365 new things in 365 days. They blogged about their progress in knocking items off of their bucket list at http://www.365thingsin365days.com/. 

Inspired by their story, yesterday I went indoor rock climbing with my two teenaged sons at True North Climbing at Downsview Park. We had a blast, and were very proud of our achievements. We tried a new adventure that took us out of our comfort zone. We had a great time, got a little exercise, and bonded over what is a combination of a personal challenge, and a trust exercise. (Sort of like that exercise where you fall backwards, hoping to be caught by the group.    Only in this case, the fall is from 10 metres, with your young son at the bottom, controlling (or not) your fall.)

In our Hull and Hull blogs this year, we hope to do something like the couple reported on in the Star did. We want to expose our readers (and ourselves) to new things every day: new lessons to learn, new ways of looking at old issues, new cases, new approaches to difficult estates and trusts issues.

We value you feedback. Please comment on what you read, or what you would like to read. 

Please stay tuned. It is going to be a great year.

Until tomorrow,

Paul Trudelle

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If you need more time to examine a witness than Rule 31.05.01(1) permits (7 hours), you may bring a motion pursuant to Rule 31.05.1 seeking leave from the Court.

The Ontario Superior Court considered such a motion in Edwards v. McCarthy, 2012 ONSC 6833. In this case, the defendant had already been examined for three days: in 2009, 2011, and 2012.

The Court considered the following issues:

1. The amount in issue;
2. The complexity of the issues;
3. The amount of time that ought reasonably be required; and
4. The financial position of each party.

The Court found that an additional 2.5 hours was required for the examination, in the interest of justice. The Court awarded partial costs to the plaintiff in the amount of $3,000.00.

Holly LeValliant

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Things in life don't always go the way you expect them to go on the first try. As the old adage goes, "If at first you don't succeed, appeal, appeal again." But where and how should an appeal be brought?

The rules and procedures when appealing a decision are somewhat complicated. The procedure will vary depending on whether the Order being appealed is final or interlocutory in nature. The forum where the Order was made is also a critical factor. Costs Orders have different rules as well. A prudent lawyer looking to bring an appeal needs to pay careful attention to the Courts of Justice Act (the "CJA"), the Rules of Civil Procedure, and, when dealing with a specific statutory right of appeal, the appropriate governing statute. 

In estate matters, appeals will generally be from a decision of the Superior Court of Justice of Ontario. Most often, Orders in the Toronto Estates Court are made by a Judge, although some motions are heard by Masters. 

If appealing from an interlocutory Order of a Master, then s. 17(a) of the CJA provides that the appeal lies to the Superior Court of Justice. A Notice of Appeal must be served with 7 days after the making of the Order. Rules for service and the required documentation can be found in Rule 62.01. 

An appeal from an interlocutory Order of a Superior Court Judge may only be made with leave under s. 19(1)(b) of the CJA. These are appealed to the Divisional Court. A motion for leave must be brought within 7 days, and the motion will only be granted if there are conflicting decisions, or the Judge hearing the motion feels that there is reason to doubt the correctness of the Order and the appeal is of sufficient importance. 

An appeal from a final Order of a Superior Court Judge is heard by either the Divisional Court or by the Court of Appeal, depending on the amount of money involved. If the amount in issue is under $50,000.00, then the appeal will be heard by the Divisional Court pursuant to section 19(1)(a) of the CJA. If the amount is greater than $50,000.00, the appeal will go to the Ontario Court of Appeal. 

If the Court of Appeal's decision isn't very appealing to you, the Supreme Court of Canada is the final stop. The process is governed by the federal Supreme Court Act. Generally, leave is required to appeal to the Supreme Court of Canada, and it is granted in only very rare circumstances. For most civil matters, there must be a question that "by reason of its public importance or the importance of any issue of law or any issue of mixed law and fact involved in that question, one that ought to be decided by the Supreme Court or is, for any other reason, of such a nature or significance as to warrant decision by it", according to s. 40(1) of the Supreme Court Act. The Supreme Court of Canada does not need to provide reasons for refusing to hear an appeal. 

Appealing a matter to a higher court can often be a complicated and costly step to take in litigation, and the decision to appeal should not be made lightly. Sometimes, however, good advocacy requires that a lawyer try and try again in order to seek a just resolution.

Suzana Popovic-Montag

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A representative of William Faulkner’s estate is suing representatives of Woody Allen’s movie project, “Midnight in Paris” over its use of a quote from Mr. Faulkner.

The line, “The past is never dead. It’s not even past”, is taken from Faulkner’s 1950 novel “Requiem for a Nun”. In the movie “Midnight in Paris”, time-travelling Owen Wilson says “The past is not dead. Actually, it’s not even past.”

Faulkner’s estate is suing for copyright infringement, and is seeking damages, disgorgement of profits, costs and attorney fees. The defendants are defending the claim, relying on the “fair use” defence. Consistent with the “fair use” claim, it is noted in the article that President Obama paraphrased the quote in a speech during his 2008 campaign.

Faulkner’s executor, Lee Caplin, is quoted as saying that the suit is being brought in order to look out for the fiduciary responsibilities of the Faulkner estate.

We have blogged before on various estates involving literary works. In most cases, the estate trustee(s) will go to great lengths in order to ensure that there is an appropriate financial return on the literary works, while also ensuring that the works are not devalued or cheapened. 

(Paranthetically, I note that Woody Allen did not chose to quote Faulkner’s Guiness Book of World Records record-setting 1,288 word “Longest Sentence in Literature” found in “Absalom, Absalom”, published in 1936.)

“Thank you for reading.”*

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

*may be subject to copyright

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In Thiemer Estate, a decision of the B.C. Supreme Court, 2012 BCSC 629 (CanLII), the deceased left an estate having a value of $20m. He left a will that provided for various specific legacies. The will also included a clause that directed the payment of “the balance of any money which I may have at the time of my death” to a common-law spouse. The will went on to define “money” as including “the balance of any money which I may have in any savings and current accounts in my name, any savings certificates, shares and bonds but excluding” insurance proceeds and RRSPs.

At the time of his death, the deceased had bank accounts, GICs, a mortgage receivable, and most relevant to the proceeding, shares in private companies having a value of $14m.

At issue in the interpretation application was whether the definition of “money” in the will, which referred to “shares”, meant that the value of the private companies was to be paid to the common-law spouse.

The decision sets out the relevant guiding principles, and case law on the definition of “money”.

The court decided that the reference to “shares” in the definition of “money” was not intended to include the shares in the private corporations. Essentially, the items included in the meaning of “money” were items that were in the form of cash, or which could be readily converted into cash. This might, then, include shares in publicly traded corporations. It was held, however, that the definition did not extend to shares in a private corporation, which by their very nature could not be readily liquidated.

This conclusion was fortified by other terms of the will. For example, the will established a spousal trust. If the spouse’s position on the definition of “money” was accepted, there would be very little left in the spousal trust. Further, the will provided extensive administrative powers to the trustees with respect to the ongoing operation of the companies. The spouse’s interpretation of “money” would render these powers “superfluous”.

The case is very instructive in the interpretation of wills, generally, and the application of those principles of interpretation in a specific context. 

Thank you for reading,

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

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This past Sunday was Remembrance Day: a day when we pause to remember those who made tremendous sacrifices for our freedom.

Of particular note are the sacrifices made by Corporal Leo Clarke, Sergeant-Major Frederick William Hall and Lieutenant Robert Shankland. All three men fought and gave their lives during World War I. All three men received the Victoria Cross for acts of bravery. All three men lived on one block of Pine Street in Winnipeg, Manitoba.

On September 9, 1916, Corporal Clarke was involved in a battle that wiped out his entire section. 20 enemy soldiers counter-attacked, and Clarke defended the position. He single-handedly killed 19 enemy soldiers, and captured one. Corporal Clarke was later seriously injured in battle on October 11, 1916, and died on October 19,1916 at the age of 23.

Sergeant-Major Frederick William Hall died in battle on April 24, 1915 at the age of 30. During a battle in Belgium, Hall left his position of shelter and ventured onto the battle field to recover wounded soldiers. He brought two wounded soldiers back to safety, but lost his life will trying to save a third.

Lieutenant Robert Shankland fought in both World War I and II. He was awarded the Victoria Cross for his acts of bravery while a Sergeant in World War I. On October 26, 1917, Shankland led a platoon and captured a position at Passchendaele, Belgium. The position was exposed and under heavy attack, and was at risk of being lost.   Shankland turned over command to another officer, and fended his way through mud and enemy shelling to return to battalion headquarters, where he was able to report on the situation, obtain reinforcements, and plan a counterattack. He returned to the front to lead the counterattack. Shankland rejoined the military for World War II. Lieutenant Shankland died in 1968,

What united the three men, apart from their extraordinary valour, was the fact that they all lived, and one point, on Pine Street, Winnipeg. In 1925, Pine Street was renamed Valour Road. in honour of these wonderful gentlemen.

Shankland’s medal was purchased by the Canadian War Museum in 2009 for $240,000 from, it is believed, Shankland’s family. Shankland’s Victoria Cross, along with those of Hall and Clarke are now displayed at the Canadian War Museum in Ottawa.

Thank you for reading,

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

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Conventional wisdom in Ontario has long been that limitation periods do not run for minors while they are under the age of 18 and they are not represented by a litigation guardian. However, the recent Court of Appeal decision of Duschesne v. St-Denis, 2012 ONCA 699 raises some questions about this proposition.

Section 4 of the Limitations Act, 2002sets out Ontario's basic limitation period of 2 years from the date on which a claim was discovered. Section 5 modifies the basic rule to state that a claim is deemed to have been discovered when the claim became "discoverable" by the person with the claim.

With respect to minors, section 6 states that the limitation period established by section 4 does not run during any time in which the person with the claim is a minor and is not represented by a litigation guardian in respect of that claim.

In Duschesne, the plaintiff injured himself while playing catch with a football around the pool in June of 2002 with his friends Garneau and Bedard. He turned 18 in September, 2004. In 2006, he issued a claim against the St. Denis defendants. It was not until June, 2009 that the plaintiff attempted to add his friends, Garneau and Bedard, as defendants.

The transitional provisions located in section 24 provide that if the old limitation period would not have expired by January 1, 2004 in respect of a claim based on events prior to that date, and the claim was discovered before that date, then the old limitation period applies. Relying on the expanded definition of "discovered" in section 5, the Court found that the claim was discovered prior to January 1, 2004, and therefore the old, longer limitation period applies.

Presumably, this would apply in Estates matters too.  Where a minor's claim against an Estate could have been discoverable prior to January 1, 2004, the expanded definition of "discovered" can apply (albeit somewhat counterintuitively) to extend the limitation period to the period in effect before the new Act came into force. 

The decision in Duschesne should give Estate litigators some pause when considering whether or not a minor's claim has expired. It proves the old adage that kids (and their lawyers) should know their limits. 

Ian M. Hull

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I’ve recently started watching ‘Suits’.  I feel a kinship with the characters on the show.  Not because any of my professional experiences are similar to theirs, but because for the first time in a long time, I feel like a TV show about lawyers is delving into the world of civil litigation and giving it bite.  In every episode there seems to be some meshing of legal worlds, collaboration between lawyers from different fields to get a job done.  In this way, it feels more realistic than other legal dramas.  Perhaps it’s the first season’s use of the 361 University Avenue courtrooms that gives it that feeling, or perhaps it’s knowing that that legal fields are symbiotic, as much as we try to specialize, you can’t escape working together. 

A recent case from the Court of Appeal, in a split decision 2-1, may be showing the estate world just how close legal fields are related.  In Carrigan v. Carrigan Estate, the Court of Appeal of Ontario considered the claims of both a common law spouse and a legal spouse on the same pension death benefit.  The Court of Appeal was asked to consider a question of law, and the decision was ultimately rendered after careful consideration of the Pension Benefits Act.  It is not uncommon in the estates world to deal with two people who qualify as a spouse.  In this matter, while a common law spouse was awarded the pension benefits in the lower Court, upon appeal, the Court awarded the pension to the legal spouse, who had been separated from the deceased for 12 years at the time of his death.  For those interested in the full Decision, please see here, or for a brief report in the Globe and Mail see here.  

Although this case holds its own in terms of attracting the interest of the legal world on the merits, what strikes me is that once again we see legal worlds collide.  Try as we might, in Estates, you can’t limit yourself.  The nature of what we do, and the fact that people die with assets and family means that we are constantly forced to consider legislation that applies to a variety of different legal streams.  Be it interpretation of a contract, running a business, the continuation of a family law claim, defending a tort claim on behalf of an estate, maintaining/selling real property, selling assets in the proper stream, or addressing taxes and making sure they are properly paid, among other possibilities– any of these things could come up in its own right, without the existence of an Estate.  I consider myself fortunate as an Estate litigator to see how the various legal fields can interact.  Certainly, the Carrigan case will have implications for Estates in the future, but it will likely also impact family law matters and will be considered in the negotiation of future separation agreements, it may also impact contract and union negotiations.  

At the end of the day, what I’ve learned is that trying to keep abreast of a what’s happening in the civil litigation world in general is probably a good bet.  Sadly, ‘Suits’ doesn’t count as research.  

Thanks for reading, 

Nadia M. Harasymowycz

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Litigation privilege, or work product privilege, is the lesser-known little brother of solicitor-client privilege. Solicitor-client privilege exists to support a sphere of privacy around the work of lawyers to allow honest, frank disclosure between clients and the lawyers that represent their interests. Litigation privilege has the aim of ensuring that each party can conduct investigation and prepare for trial without concern that their hard work will be scooped by opposing parties.  It specifically protects the adversarial process rather than the relationship between lawyer and client.

In practice, while solicitor-client privilege protects communications between the parties to a lawsuit and their lawyers, litigation privilege protects communications with third parties. 

The Supreme Court of Canada addressed this issue in Minister of Justice v. Blank. In Blank, the Supreme Court discussed the different rationales underlying solicitor-client privilege and litigation privilege. The Court then interpreted the limits of each class of privilege in light of the differing rationales.

In the context of estate litigation, letters written to third parties to obtain medical records or financial information, and expert reports as to testamentary capacity or the state of mind of the testator may be protected by litigation privilege.   In circumstances where the privilege attaches, they may not need to be produced. However, their existence will need to be disclosed if they are relevant, pursuant to Rule 30.02 of the Rules of Civil Procedure.

Litigation privilege ends where privileged documents are tendered as evidence or relied on in court.

For more information, Wendy Matheson and Sandra Perri of Torys LLP have written a detailed article on litigation privilege post-Blank, available here. 

Happy Halloween to everyone from Hull and Hull!

Ian M. Hull

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Fine wines get better with age.  The longer they are left in the bottle, the more they improve.

Claims, however, have a definite expiry date. 

This fact was unfortunately discovered by the Plaintiff in a recent US case. The Plaintiff had sued an auction house claiming that it had sold him a counterfeit bottle of wine. The wine was purportedly owned by Thomas Jefferson and was labeled "Th.J.". However, a District court judge had found that the limitation period had run out – the Plaintiff had waited too long to bring his claim. On appeal, U.S. District Judge John Koeltl wrote, "For wine, timing is critical. The same is true for causes of action." 

In Ontario, the Limitations Act governs how long one has to commence a claim. Section 4 provides that there is a basic limitation period of two years from the date the claim was "discovered". "Discovered", however, has a more technical definition - the limitation period starts to run from the day on which a claim should have been discoverable by a reasonable person. In most matters, there is an ultimate fifteen year limit, regardless of when the claim became discoverable. 

With respect to estates matters, this typically means that a will challenge can't be brought more than two years after the death of the testator. Similarly, a claim against a lawyer who improperly drafted a will can't be brought beyond the second anniversary of the death of the deceased.

Section 7 provides that the limitation period does not run for a person who is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition and is not represented by a litigation guardian. In some claims for dependants' support or other circumstances, this may extend the period available to bring a claim.

Claims for equalization of net family property under the Family Law Act must be made sooner. There is a six month window from the date of death within which a married spouse must elect to bring an equalization claim or to take what he or she gets under the Will or on intestacy. 

Litigators must be very careful about paying attention to limitation periods. As the Plaintiff in the above-referenced case learned the hard way, if you leave a claim to ferment for too long, it will go sour.

Suzana Popovic-Montag

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A client (or friend, or my mother: I can’t quite remember who) once referred to her children as “waiters”, as in “They’re waiting for me to die”.

To this point, a recent article on the Globe and Mail online by Rob Carrick warns against children relying on an inheritance to bail them out.

The article refers to an oft-quoted report from 2006 that suggested that $1-trillion ($1,000,000,000,000) will be inherited in the next twenty years. The article suggests that this number might be less today, due to increased debt-load, falling property values, weak investment returns and longer lifespans. However, whatever the number may be today, it is still a significant one.

The article cautions children from relying on these numbers and a potential inheritance to bail them out of trouble. Carrick says “As for people counting on an inheritance, that’s only one step away, in financial planning terms, from waiting for a lottery win.”

As ill-advised as it may be, 53 per cent of Canadians are expecting an inheritance, and 57% of those who think they know what they are getting expect it to be in the six-figure range.

However, those expecting a big inheritance may be disappointed. Second (or third, or fourth…) relationships may eat into their inheritance. Further, seniors are living longer, and the costs of senior care can take up a large portion of a senior’s savings. Coupled with this is the fact that government pensions may not be able to provide significant assistance.

The message seems to be to live within your means, and plan for your own future needs and well-being. Don’t spend your inheritance before it comes in.

Have a great long weekend.

Paul Trudelle

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On Tuesday, I blogged on the recent Ontario Court of Appeal decision of Aragona v. Aragona, 2012 ONCA 639.

There, the application judge denied the guardian compensation. In so doing, the application judge noted the guardian’s failure to keep proper accounts. The Court of Appeal stated that a guardian has, by statute, a fiduciary obligation to carry out his or her obligations with honesty and due care and attention. “The core of these obligations includes the duty to be in a position at all times to prove the legitimacy of disbursements made on behalf of the estate.” 

Further, the application judge went on to find that “the conduct [of the guardian] has been shocking. He has literally helped himself to many thousands of dollars from his mother’s estate, at a time when his mother had Alzheimer’s and was unable to look after her own affairs.”

Together, these two factors led to a denial of compensation: a conclusion that was said to be clearly in the discretion of the application judge.

In denying compensation, both the Court of Appeal and the court below relied on the decision of Zimmerman v. McMichael Estate, 2010 ONSC 2947. This decision clearly sets out the obligations of a trustee, including the obligation to account. The application judge found that because significant funds disappeared from the estate without adequate explanation, it was appropriate to award no compensation. The application judge contrasted this with the situation in Re Assaf Estate, 2009 CanLII 11210.  There, there was wrongdoing found, but no harm was said to have resulted to the estate. In that situation, compensation was reduced by 50%, but not disallowed completely.

Thanks for reading,

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

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Yesterday, Ian Hull tweeted on the recent Ontario Court of Appeal decision of Aragona v. Aragona, 2012 ONCA 639.

There, the Court of Appeal dismissed, for the most part, an appeal by a guardian from a decision dismissing his application to pass accounts. The motions judge ordered that the guardian repay a significant amount to the estate; dismissed his claim for reimbursement for certain legal fees, and deprived the guardian of compensation.

The guardian appealed the finding that he had to repay funds to the estate on the basis that the application judge did not provide adequate reasons. The Court of Appeal noted that the appellate court’s focus is on whether the reasons explain what was decided and why the decision was made. “Ultimately, the test is whether the reasons permit reasonable appellate review.” The Court of Appeal found that, “Shortcomings notwithstanding”, the application judge’s reasons were adequate. The findings of the applications judge were supported by the record; the applications judge’s assessment of credibility was entitled to deference; and the application of the facts to the controlling legal principles leading to the conclusions reached was explained.

Tomorrow, I will look at the discussion of the application judge’s denial of compensation.

Thanks for reading,

Paul Trudelle

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A recent article from The Canadian Press considers the idea of removing names from family law court documents that can and do eventually become public. It is argued that replacing full names with initials in the documents would protect the privacy of the parties involved in contentious, personal and often embarrassing disputes. On the other hand, openness and transparency are important tenets of the Canadian judicial system and continue to be upheld through the availability and accuracy of court records.

The practice of replacing full names with initials is the status quo in youth criminal justice proceedings. It is used as a method for protecting the identities of young offenders who, by the nature of their age, are treated with more leniency by the courts and therefore deserve a higher degree of privacy than their adult counterparts.

Some argue that parties to family law proceedings deserve the same level of protection from public scrutiny due to the personal nature of a divorce or custody dispute. Furthermore, the children involved in such proceedings don’t deserve to feel the effects of their parents’ lives becoming public fodder.

As I read these arguments, I couldn’t help but think that they apply to estate litigation proceedings as well. Just as in family law, estate litigation is often deeply personal and contentious and involves fighting between family members. Hurtful allegations, which can vary in truthfulness, are frequently made and can have a large effect on how a person is perceived by others who read their court documents.

Children are also affected by the publicity of an estate proceeding in the same way they are in family law disputes. It is embarrassing and unfair for a child to carry the burden of their family’s high-profile estate dispute, just as it is in a well-publicized matrimonial conflict.

Despite these arguments gaining support from lawyers and their clients, judges don’t seem to be on the same page. The article’s author states that there is not much judicial appetite for reducing full names to initials in family law proceedings, referencing several judicial research papers and decisions that continue to stress the importance of an open court system.

Although it doesn’t appear to be changing any time soon, if the courts eventually do adopt the practice of removing names from family law pleadings and orders, they might consider doing the same for estate litigation documents as well.

Ian Hull 

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In Ontario, pursuant to their powers under s. 131 of the Courts of Justice Act,  the courts tend to follow the ‘loser pays’ principle, such that costs of a proceeding are normally borne by the losing party.  These costs are usually awarded on a partial indemnity scale, being approximately 60% of the reasonable fees charged to the client.  However, this is not always the case. 

In certain instances, the courts have awarded costs on a substantial indemnity scale, being approximately 90% of the reasonable fees charged to the client, or on a full indemnity scale, being complete reimbursement.  Today’s blog will discuss instances where the courts have awarded elevated costs. 

Read together with the factors mentioned in Rule 57.01(1) of the Rules of Civil Procedure (the “Rules”), there tend to be two instances that warrant increased costs. 

Firstly, the courts will consider any offers to settle made pursuant to Rule 49.10 of the Rules, which was introduced in part to create a framework allowing offers and counter-offers in order to encourage litigants to settle their disputes. 

Secondly, in the case of Clarington (Municipality) v. Blue Circle Canada Inc., the Court of Appeal for Ontario provides that elevated costs are warranted:

“… on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made.”

In understanding what exactly amounts to conduct being “reprehensible”, reference can be made to the case of Leung v. Leung, which defines the term as follows:

“… ‘reprehensible’ is a word of wide meaning.  It can include conduct which is scandalous, outrageous or constitutes misbehaviour; but it also includes milder forms of misconduct.  It means simply ‘deserving of reproof or rebuke’”.

In the case of Bricies Wigle v. Vanderkruk, the plaintiff made three attempts at settlement, in addition to two Rule 49 offers.  All of these attempts were ignored by the defendant, who refused to make any attempt to settle.  Harris J., stated:

“The plaintiff is an innocent party in this litigation who, at 85 years of age, had no stomach for litigation and particularly so against her neighbour.  She was the one wronged yet made several attempts for a rapprochement with the defendant.  The circumstances, from the first day in 2001 right up to trial, were ripe for settlement and one that would likely have favoured the defendant had he become involved”.

As a result of this behaviour, and further acknowledging that the defendant substantially and unnecessarily lengthened the trial, Harris J. awarded the plaintiff with complete indemnification.

Thank you for reading … Have a great day!

Suzana Popovic-Montag