By section 10(2), any person beneficially interested in the estate may appeal, even if the personal representative does not.  This provision resolves potential technical complications associated with standing.  It is also required from a practical perspective since in many cases, the personal representative is also a litigant personally, and is largely and acceptably silent in his or her capacity as personal representative.

Note that this provision does not preclude appealing to the Court of Appeal, which by section 6(2) of the Courts of Justice Act has jurisdiction to hear and determine an appeal that lies to the Divisional Court, if an appeal in the same proceeding lies to and is taken to the Court of Appeal.   

Have a great day,

Christopher M.B. Graham - Click here for more information on Chris Graham.

The relevance to capacity litigation is that the language doctors use to talk about patients and record their observations may change, perhaps significantly.  According to Dr. Frances, revisions to the definitions of attention-deficit hyperactivity disorder, autism and childhood bipolar disorder (i.e., manic depression) resulted in an unintended 40-fold increase in rates of diagnosed bipolar disorder.  A patient's diagnosis is a major variable in his or her treatment.  There was a dramatic increase in prescriptions of anti-depressants over this period.

Revised definitions would not necessitate corresponding changes in legal capacity, of course.  The tests for the various levels capacity are functional in nature; they evaluate an individual's observed ability to make decisions and do things.  Good capacity assessments tell a story, and the elements of the story must support the conclusions reached.  If not, the assessment will be rejected.  Re Koch is instructive on this point.  It is hard to read the judgment and imagine that including medical terms would have made any difference at all. 

On the other hand, changes to the DSM-IV may be very relevant for expert opinions on capacity given after an individual's death, where the opinion relies heavily on medical reports and observations of treating physicians to assess an individual's capacity at a specific time during that individual's life. 

Have a great day,

Christopher M.B. Graham - Click here to learn more about Chris Graham.

This illustrates an important point in estate and trust litigation.  Ontario's Rules of Civil Procedure similarly requires pleadings that contain allegations of fraud or breach of trust to contain full particulars:

"Rule 25.06(8)  Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred."

This could theoretically present beneficiaries challenging the actions of a trustee, since the trustee frequently has the particulars and the beneficiaries do not.  In practice, this problem rarely arises because most litigation occurs in the context of a passing of accounts, where it is unnecessary to make allegations against the estate trustee.  Instead, under the procedure in Rule 74, the beneficiaries can simply file and serve a Notice of Objection to Accounts challenging transactions or omissions in the trustee's accounts.

After filing their Notice of Objection to Accounts, the beneficiaries can then bring a motion for an order giving directions (or an order for assistance) that will provide for the disclosure of the particulars they think exist.  After receiving full disclosure, the beneficiaries should in a position to make a better-informed decision on whether to add such allegations to their pleadings. 

Where this process is anticipated, the order should specifically authorize the parties to return to court for further directions.  Of course, it would rarely even be necessary to allege fraud at all, since the facts that support the allegation of fraud can form the basis of an objection to the accounts without using the words "fraud" or "breach of trust", and this can achieve the same practical result without the risks associated with alleging fraud.  Beneficiaries can also avoid the risk of having their pleadings struck at an early stage.  

Have a great day,

Christopher M.B. Graham - Click here to learn more about Chris Graham.

40.  (1)  A guardian of property or attorney under a continuing power of attorney may take annual compensation from the property in accordance with the prescribed fee scale.

(2)  The compensation may be taken monthly, quarterly or annually.

Amounts taken monthly or quarterly could be divisions of a calculated "annual" amount, but this provision contains no element requiring equal divisions.  Regardless of how the property guardian takes compensation, any payment is subject to court approval.  Clients applying for guardianship should always be advised specifically of this point: if the court later disagrees with the compensation taken, the guardian may have to repay such amounts.  This holds true even where the Management Plan pursuant to which the guardian is managing the incapable person's property authorizes the compensation the guardian has taken.

This raises another important consideration for lawyers in the application for guardianship stage.  Any compensation taken, or claimed later on a passing of accounts, should not be inconsistent with the provisions of the Management Plan.  Because the right to compensation is statutory, as are the prescribed percentages (though subject to discretionary reduction by the court), there is no need to declare an intention to take compensation in the Management Plan.  But if the Management Plan contains a provision disclaiming compensation, for instance, no compensation should be taken during the guardianship.

Have a great day,

Christopher M.B. Graham - Click here for more information on Chris Graham.

The term "digital assets" (wikipedia entry) generally refers to email, social media, and other online accounts, protected by a password and right to use a specific account.  People are now commonly storing huge amounts of unique data such as photographs, emails and any form of document.  The Michigan case where a court ordered Yahoo to allow executors to access a deceased's email account notwithstanding that Yahoo's terms of use and privacy policy did not allow for a transfer of access, is already five years old.

This may already be a professional liability issue.  The information stored in relation to the "digital assets" is arguably no less important than their predecessor "physical assets".  I say "predecessor" because for many people, physical forms of these assets are already quaint.  Other digital assets could have objective financial value; for instance, a PayPal account with a substantial balance, as Michael Panchieri points out.

Without addressing the swamp of legal issues associated with digital assets (even scratching the surface in a meaningful way would require many blogs), I recommend you peruse the following list of sources from Ontario and other jurisdictions to get a sense of how digital assets might fit into an estates plan:

-> mybangalore article expanding on how digital assets fit into estates

-> Dennis Kennedy's article in the American Bar Association's online e-zine Law Practice Today (attribution) 

-> Florida lawyer David Goldman has a must-read blog on what may be a fundamental planning challenge inherent to the nature of the digital asset (hint: it is a license that expires on death...)  

-> a general FT.com (UK) article on companies that offer services to store and pass on passwords and login credentials, link to this example of one such service provider, Entruset.

Thanks for reading,

Christopher M.B. Graham - Click here for more information on Chris Graham.

The main issue in Viau was whether legal fees associated with administration of the estate after a judgment approving the settlement had been granted.  The judgment incorporating the settlement stated as follows:

"THIS COURT ORDERS AND ADJUDGES that [the estate trustee], be at liberty to pay all of the debts of the [Estate], which include:

(xiv)  Any legitimate debts of the [Estate], upon notification to [named Respondent], or approval of the court."

The court found that the wording of the order was not restrictive and did not establish caps on legal fees.  Further solicitor's work to complete the estate would have been anticipated.  Of course, the legitimacy of the work or amount claimed would be subject to approval by the named Respondent or the court.  In coming to this conclusion, the court did not look beyond the terms of the judgment.  The judgment was clear and unambiguous and there was no need to review pre-settlement correspondence.

The decision illustrates a second principle: litigants should avoid unnecessary (or less efficient) proceedings.  Specifically, when the named respondent challenged the legitimacy of the additional legal fees, the estate trustee commenced a passing of accounts proceeding.  The court found that the issue concerning the legal fees could have been addressed by motion to the court without a passing of accounts and therefore the costs associated with the passing of accounts were not payable from the estate. 

Thanks for reading,

Chris Graham

Attorneys for property who receive gifts from grantors tomorrow will have to give them back, unless they have good evidence supporting the fact of the gift.  The rule that fiduciaries (including attorneys for property) must prove purported gifts is stated in Cooke v. Lamotte(1851), 15 Beav. 234 at page 239.

Justice Sheard applied this rule in Kee v. Yip [1995] O.J. No. 2879, disallowing a series of transfers by an attorney to himself, stating with respect to one such transfer, “The burden on Tom Kee to show that his mother gave him the $20,000 is a heavy one. His evidence, simply the assertion that this transaction, one of many that he did under power of attorney, was intended by her as a gift to him falls well short of discharging that burden of proof. Under the principle stated in Cooke v. Lamotte, supra, the $20,000 cannot be allowed as a gift and must be refunded." 

Even more recently, in Volchuk v. Kotsis, 2007 CanLII 28527 (ON S.C.) Justice Langdon disallowed a series of purported gifts (cheques and money transfers) effected by an attorney, noting in addition that attorneys were precluded from relying solely on their own evidence by section 13 of the Ontario Evidence Act, which provides that the claimant “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 estates litigation, this rule is very useful in passings of accounts initiated pursuant to section 42 of the Sustitute Decisions Act by disappointed beneficiaries of an estate against the deceased's former attorney for property.  Of course, this rule forms part of the Common Law and is not confined to passing of accounts proceedings.

Merry Christmas to fiduciaries including attorneys, and enjoy your presents.

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

Ultimately finding the witness capable of taking an oath and giving evidence, Price J. reviewed the authorities.  The leading case of McGowan et al v. Haslehurst et al. (1977), 17 O.R. (2d) 440 (H.C.J.) states that parties should be able to avoid attendance at examinations for discovery on the basis of unsoundness of mind only in the clearest of cases.  The onus of proof of unsoundness is on the party seeking to avoid the examination (Barnes v. Kirk, [1968] 2 O.R. 213 (ON C.A.).

Price J. also applied the principles applicable to testing the competency of witnesses giving evidence at trial.  Under section 18 of Ontario's Evidence Act, any person is presumed competent to give evidence, and therefore the onus is on the person to establish incapacity.  The presiding judge must examine the proposed witness. Section 16(1) of the Canada Evidence Act prescribes questions for such an inquiry, namely: whether the witness understands the nature of an oath or solemn affirmation, and whether the witness is able to communicate evidence.

As a sidenote to this decision, Price J. reviewed and rejected a capacity assessment that found the potential witness incapable of giving evidence.   

A review of this decision will be helpful to any practitioner dealing with questions of a potential witness's capacity to give evidence.

Have a great week,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

Mr. Chen, owner of Chinatown store Lucky Moose Mart, had spotted the thief and with the assistance of his employees, tackled the thief, bound him in twine and detained him in a delivery truck until the police arrived four minutes later.  The thief had allegedly victimized local stores, and has a criminal record going back 32 years, all according to this news report.  Incredibly, this record includes - according to the news report - stealing from Mr. Chen's own store and a neighbouring store, including on that same day.  Truth being stranger than fiction, the thief was granted a plea-bargain sentence of 30 days in relation to his theft from Mr. Chen's store in part because he agreed to testify against Mr. Chen and the two employees. 

The Crown's theory seems to be that because the arrest was not contemporaneous with the crime, the thief having returned to the store about an hour after committing the theft, the arrest is not protected by citizen's arrest provisions.  Mr. Chen has apparently rejected a plea bargain - he had videotape evidence of the theft. 

Mr. Chen is married with 2 children, aged 2 and 6, and has become a bit of a folk hero.  How hot is this story?  The Globe and Mail reported at 12:13pm yesterday, the National Post at 4:03 pm, CBC at 2:54pm, the Toronto Star right away too. 

Have a good day,

Chris Graham

Christopher M.B. Graham - Click here for more information on Chris Graham.

This week on Hull on Estate and Succession Planning Jonathan Morse and Chris Graham discuss aspects of mutual wills and the doctrine of mutual wills. They look into some interesting cases related to this topic as well advantages and disadvantages of mutual wills.

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

The states of the Great Republic to the South maintain their composure like Cool Hand Luke, calmly assessing the great issues of the day (for trust lawyers) and knocking them down like ducks at a carnival. To wit: Connecticut is set to become the forty-first state to pass a statute for pet trusts (my colleague Megan Connolly blogged on Maryland's pet trust law here).  California made time to pass its own highly evolved Pet Trust Statute last year.  Here’s a link to Pet Trust Law Blog, which has a broad range of resources on Pet Trust Law.

Ontario has yet to divert its attention to such measures.  Estates lawyers would like very much to see legislation making it possible for lawyers to meet their clients' wishes to provide for their beloved Rovers, but it appears that we may have to wait with baited breath.

Have a great day,

Chris Graham

In Church v. Gerlach, the ETDL was appealing the trial judge's fixing of compensation at $13,000 inclusive of GST.  The ETDL asked for $23,203,54 plus costs.  The ETDL had originally claimed $35,805.30 plus $2,973.30 for the costs of the application. 

The general provision authorizing compensation to ETDLs is s. 28 of the Estates Act: the ETDL "shall receive out of the property of the deceased such reasonable compensation as the court considers proper".  Section 61 of the Trustees Act authorizes "such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice." 

According to Ontario's Court of Appeal in Liang Estate v. Hines (1998) CanLII 6867 (ON C.A.), 41 O.R. (3d) 571, the proper approach is to start by applying percentages to the estate (customarily 2.5% of capital receipts and disbursements, 2.5% of income receipts and disbursements, and an annual care and management fee of 0.4% of gross value of the estate).  Then, each percentage is considered against five factors enumerated in Re Toronto General Trusts Corporation and Central Ontario Railway (1905), 6 O.W.N. 350 (H.C.):   

1.  the magnitude of the trust;

2.  the care and responsibility springing therefrom;

3.  the time occupied in performing its duties;

4.  the skill and ability diplayed; and

5.  the success which has attended its administration.

Applying this approach, the ETDL was awarded half of the usual percentages: he ought not to be fully compensated as if he was required to perform all of the functions of an Estate Trustee, and the reduction also took into account the complexity of the estate. 

As a general practice note on costs of appeals, while the ETDL had paid his lawyer more than $15,000 to prepare the appeal, given the amount in dispute, the relatively simple issues on appeal and the reasonable expectation of the appellant ETDL, costs were fixed at $5,000 all-inclusive.  

The Divisional Court also noted that the standard of review for appeals under s. 10 of the Estates Act on a question of law is correctness.

Have a great day,

Chris Graham

Listen to The Distinction Between Bringing Motions and Commencing Proceedings

This week on Hull on Estates Rick Bickhram and Chris Graham discuss some important distinctions between bringing motions and commencing proceedings in the estates context as opposed to general civil litigation. They look at this in the context of applications, motions and statements of claim.  

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

The Distinction Between Bringing Motions and Commencing Proceedings - Hull on Estates- Episode #162

Posted on May 12, 2009 by Hull & Hull LLP

Chris Graham:  Hello and welcome to Hull on Estates. You’re listening to episode 162 on Tuesday, May 12, 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.

Rick Bickhram:  Hi and welcome to another episode of Hull on Estates.  I’m Rick Bickhram.

Chris Graham:   And I’m Chris Graham.

Rick Bickhram:  If you want to be heard on Hull on Estates you can participate by leaving us a comment.  Please e-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.  Good morning Chris.  How are you doing today?

Chris Graham:   Morning Rick.  I’m doing just fine.  How are you?

Rick Bickhram:  I’m not doing bad.  I had a great weekend.  How about yours?

Chris Graham:   Well as I was preparing for this podcast all weekend, I’d have to say it was the best weekend I’ve had in life.  Now today we’re going to talk about some important distinctions between bringing motions and commencing proceedings in the estates context as opposed to general civil litigation.

Rick Bickhram:  Well I’m going to dive into it and I’m going to look at applications.  After looking at the Rules I’m impressed about some of the similarities with the estates, with applications being commenced in the estates context and applications being commenced in the civil context.    Rule 38.06(3) dictates the service requirements for commencing an application.  So after an application is issued at the appropriate Court, Rule, as I said, 38.06(3) states that the application is to be served at least 10 days before the hearing date returns to Court.

Chris Graham:   Yeah, so you have 10 days to serve.  And that’s the same as, I guess, the general rule so to speak in estates litigation.  If you bring an application for an Order for Directions which is a prototypical step in almost every contentious matter, you have 10 days to serve.  That’s Rule 75.06(2), requires 10 days to serve before the return date.

Rick Bickhram:  Moving ahead, I’m looking at motions now and I’m looking at the general requirements again for service of motions.  37.07 again is specific to civil matters and the general requirement for service of a Notice of Motion is 4 days prior to the return of a hearing date.

Chris Graham:   Which Rule number is that Rick?

Rick Bickhram:  That’s Rule 37.07(6) Chris.

Chris Graham:   Yeah, okay.  So let’s recap.  You commence properly by bringing your application and serving 10 days before the hearing date.  You thought everything was great.  You thought your lawsuit was on track.  And then you brought a motion.  You thought it was 4 days.  Oops.  Actually most motions are 10 days, the same way an application for directions is 10 days.  Well a motion for directions is also 10 days.  And since that’s the most common step, odds are the motion that you bring has to be served 10 days before the return date.

Rick Bickhram:  And that’s within the estates context, right Chris?

Chris Graham:   That’s right.  And that’s Rule 75.06(2) again.  Now if you jump over to so-called non-contentious matters under Rule 74, if you bring an application for assistance, that’s another very common step in most matters.  Under Rule 74.15, well a lot of those can be brought in theory without notice, but some of those require notice. And where notice is required, what do you know?  It’s 10 days.

Rick Bickhram:  I’m going to presume that the more substantive orders are going to require notice, whereas the more procedural orders generally will be allowed to be brought if it’s a motion, the motion will be allowed to be brought without notice, is that correct?

Chris Graham:   Exactly.  If you read the types of orders you can get, well with the exception of 74.15(1)(i) which is an order for other matters, that’s a huge catch-all subparagraph that everybody dealing with estates litigation should read 5 or 6 times a day, all of the rest of them with the exception of subparagraph (e) are necessary steps in a lot of matters that could probably be cleared up among counsel without requiring an order.  For instance, an order to accept or refuse an appointment as estate trustee with a Will.  Well, you know, you either accept it or you refuse it.  And if it’s not something that an opposing party is just willing to do to keep costs down, then you write your letters and you go ahead and you bring your application for an order.  But you’re probably not going to have to do this ex parte.  And why would you?  You just write a letter first.

Rick Bickhram:  Just to wrap that point up that Chris left off with.  It seems to me that you’re permitted under the Rules to bring these sort of motions without notice but it appears that it would be likely that counsel would provide some sort of notice by way of sending an informal letter to counsel seeking their consent on the matter.

Chris Graham:   Yeah, exactly.  I mean, you don’t need to bring an application for an order for somebody to refuse an appointment as estate trustee when you can just write a letter asking them to accept or refuse.  And you would only really bring the application if they didn’t respond or if their response was vague.  Because you don’t want to draft materials and prepare Affidavits and all that stuff if a simple letter will suffice.  And maybe you can get it on consent.

Rick Bickhram:  Absolutely.  And you would be pretty much adhering to the spirit of the new practice direction, which is to be more cost-effective, more efficient in our practices.

Chris Graham:   Yeah.  It’s really just common sense.  And it does adhere to that practice direction for sure.  Why don’t we move over to Statement of Claims.

Rick Bickhram:  Okay, well I’m going to look at actions which are commenced by having a Statement of Claim issued and served.  The time requirements for service of a Statement of Claim is basically a Statement of Claim has to be served within 6 months after it’s issued.

Chris Graham:   Yeah we mostly do applications in estates.  But, yeah, we also do actions.  And it’s a completely different world from the 10 days, 10 days, 10 days in the application world.

Rick Bickhram:  Absolutely.  And it differs procedurally with respect to the hearing date because after a motion for directions or an application for directions, there’s a hearing date that’s set for the actual hearing for directions.  Whereas in a Statement of Claim, normally an Affidavit of Documents.  Sorry, let me take a step back.  After the Statement of Claim, a Statement of Defence is normally served and filed.  A Reply is permitted.  And then we look at Affidavit of Documents.

Chris Graham:   Yeah.  So I mean most civil litigators are all over this stuff.  I guess the closest analogy in pure estates analogy is bringing an application to pass your accounts as an estate trustee under Rule 74.18 where you file it with the Court and then you issue it on the beneficiaries.  You serve them and then it goes from there.

Rick Bickhram:  To summarize the major distinctions here.  A Statement of Claim is a Statement of Claim.

Chris Graham:   Yeah.  You just follow the process in the rest of the Rules of Civil Procedure, which of course we read religiously.  But I should note that if you bring an order for assistance or if you bring a motion for an order for directions within a claim proceeding, you still have to wait your 10 days.  You’re not pushed over into the civil 4 days.

Rick Bickhram:  And an application is an application.

Chris Graham:   Yeah, that’s how it works.

Rick Bickhram:  10 days.

Chris Graham:   10 days.  But any motion within that application is probably going to be 10 days as well.

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

Rick Bickhram:  It was a pleasure Chris.  I look forward to podcasting with you again soon.

Chris Graham:   And we look forward to hearing from our listeners.  So send us an e-mail at hull.lawyers@gmail.com and visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law.  It evolves everyday.  We hope that you enjoyed the show.  I’m Chris Graham.

Rick Bickhram:  And I’m Rick Bickhram.  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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

In Hughes v. Kennedy Automation Limited, 2008 ONCA 770, the plaintiffs were suing the defendant for non-payment under a purchase and sale agreement for shares.  The purchase and sale agreement had been drafted by the defendant corporation's solicitor; the plaintiffs had not retained their own lawyer to act for them in the share sale transaction.   The plaintiffs became aware of the original non-payment on July 31, 2005.  However, the plaintiffs waited until November 2006 to retain their own lawyer to sue the defendant. 

In November 2007, the plaintiffs brought a motion to add the defendant's solicitor and his law firm, for breach of fiduciary duty and negligence.  The plaintiffs were alleging that the solicitor acted in a conflict of interest and failed to recommend they seek independant legal advice.  The motions judge ruled that the claim against the solicitor and his law firm were barred by the two-year limitation in section 4 of the Limitations Act, 2002.  On the evidence before him, Glithero J. was satisfied that the identity of the solicitor and his law firm, the facts surrounding his involvement and the fact of non-payment were all known to the plaintiffs by July 31, 2005.  Therefore the presumption in section 5(2) of the Limitations Act, 2002 applied to make the claim discoverable by that time, more than two years before the November 2007 motion to add the solicitor and his law firm.   The Ontario Court of Appeals affirmed this decision.

Enjoy your vacation,

Chris Graham

In Hughes v. Kennedy Automation Limited, 2008 ONCA 770, the plaintiffs were suing the defendant for non-payment under a purchase and sale agreement for shares.  The purchase and sale agreement had been drafted by the defendant corporation's solicitor; the plaintiffs had not retained their own lawyer to act for them in the share sale transaction.   The plaintiffs became aware of the original non-payment on July 31, 2005.  However, the plaintiffs waited until November 2006 to retain their own lawyer to sue the defendant. 

In November 2007, the plaintiffs brought a motion to add the defendant's solicitor and his law firm, for breach of fiduciary duty and negligence.  The plaintiffs were alleging that the solicitor acted in a conflict of interest and failed to recommend they seek independent legal advice.  The motions judge ruled that the claim against the solicitor and his law firm were barred by the two-year limitation in section 4 of the Limitations Act, 2002.  On the evidence before him, Glithero J. was satisfied that the identity of the solicitor and his law firm, the facts surrounding his involvement and the fact of non-payment were all known to the plaintiffs by July 31, 2005.  Therefore the presumption in section 5(2) of the Limitations Act, 2002 applied to make the claim discoverable by that time, more than two years before the November 2007 motion to add the solicitor and his law firm.   The Ontario Court of Appeals affirmed this decision.

Enjoy your vacation,

Chris Graham

This week on Hull and Estates, Christopher Graham and Bianca La Neve review the formal requirements to make a valid Will in Ontario and the consequences of failing to adhere to the formal requirement. The relatively recent English decision of Esterhuizen v. Allied Dubar Plc [1998] 2 FLR 668 is discussed.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

On the bright side, there will be a great deal of work relating to the restructuring (re-converting? de-converting? re-incorporating?) from income trusts back to business corporations.  This seems to be a trend, since the tax exemption that makes operating as an income trust more tax-efficient than a traditional corporation disappears in 2011.  A contemporary example is CI Financial Income Fund, which announced plans last month to return to a tradional corporate business structure (it converted to an income trust in 2006).  Other recent examples of de-conversions are Newalta Income Fund, which converted to a trust in 2003 and BFI Canada Ltd., listed on the TSX on Oct. 2, 2008, formerly BFI Canada Income Fund.

CI Financial also says that operating as a trust constrained its ability to make acquisitions, and it has just announced an ambitious plan to raise funds to that end.  It will not surprise any lawyer with experience in both corporate law and trust law that operating as a trust is more constraining than as a corporation.  According to a newspaper article, CI incurred $11 million in costs relating to its plan as well as restructuring costs. 

Keep your eyes off the stock ticker and enjoy the day,

Chris Graham