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Listen to evidence issues in estates when a main party is deceased.

This week on Hull on Estates, Rick and Sean discuss evidence issues in estate matters when a main party is deceased. They reference "Burns Estate and Mellon"; a 2000 Court of Appeal Case cited in 34 Estates and Trusts Reports, 2nd Edition, p.175.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Evidence issues in estates when a main party is deceased - Hull on Estates Podcast #111

Posted on May 20^th, 2008 by Hull & Hull LLP

Sean Graham: Hello and welcome to Hull on Estates. You’re listening to Episode #111 on Tuesday, May 20^th, 2008.

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.

Sean Graham: And I’m Sean Graham.

Rick Bickhram: And today, we’re going to be touching on one of the statutes, specifically the Evidence Act and we’re going to be looking at Section 13 of the Evidence Act.

Sean Graham: Yeah, and in a more general sense, we’re going to be discussing how evidence issues or at least some of the concepts dealing with evidence issues and estates, given that one of the main parties that would normally be a party is deceased.  And so some of the direct evidence that might normally be available is not available to the Court and how the Court struggles with that problem. So, Rick, maybe you can frame the problem with respect to claims by or against an estate.

Rick Bickhram: Well, Sean, I’m looking at Section 13 of the Evidence Act and under Section 13 it states, “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”.

Sean Graham: And the way I read that Section is basically that it’s not enough for someone claiming against an estate to show up after the death of the deceased and say, “I had a contract with the deceased. I was going to provide services and the deceased was going to pay me $100,000, and I provided those services.  I mowed the lawn of the deceased and I kept the house clean and so forth, and I fulfilled my side of the bargain, and now I want my $100,000”. If you want to bring a claim like that, you need to have some sort of corroborative evidence because otherwise it’s your word against the deceased’s, and of course, the deceased is not able to speak for him or herself.

Rick Bickhram: Before we touch on what type of evidence, I guess, we can use to corroborate such a claim, Sean, I’d just like to get what you think about the public policy reasons behind the Evidence Act. I’m guessing that the reason why this statute exists pretty much is because any evidence that is not corroborated by some type of external evidence other than testimony or viva voce evidence, is probably because it would constitute hearsay evidence.

Sean Graham: Well I’m not sure about, I mean a lot of the evidence that would be relied on would be purportedly direct evidence because the claimant would say, “No, the deceased told me this, I heard the deceased say this”, so that’s direct evidence. The issue I would have is that you can’t test that evidence, you can’t weigh the credibility of that evidence against what the deceased might say because, of course, you don’t know what the deceased might say. And so it’s an added hurdle to someone who shows up after the death and says, “Well I have all these entitlements because of this arrangement with the deceased or that arrangement with the deceased, and you can trust me because I’m telling the truth”. Well the Court, you know, holds people to a higher standard than that. 

And another comment I would make is that in many cases where somebody brings a suit against the estate, the facts that might give rise to that suit might have been present while the deceased was still alive and so there might be…another public policy aspect to this is, “Hey, if you didn’t start the lawsuit while they were alive and could defend themselves, you’d better have some pretty good evidence after that”, or not pretty good evidence but you’d better have some evidence to corroborate what you’re saying because otherwise, we’re going to assume that you might not be telling the truth and we’re not going to give your evidence any weight and you can’t bring your claim. So you need some corroboration to be able to bring it.

Rick Bickhram: Now, touching on the evidence, the corroborating evidence that would necessarily be used to prove such a claim, there’s a vast amount of case law out there which touches on this, such as, corroborating evidence can be the course of conduct of the parties, it can be an existing contract in place, it possibly could be witnesses who’ve heard the deceased mentioned or some form of verbal contract. And I’ll let Sean, I guess, discuss more specifically any case laws that may come to mind.

Sean Graham: Oh sure, and I think that when you talk about sort of broad categories of evidence that might be applicable and helpful to corroborate and meet the standard under Section 13, when you have broad categories like that then almost inevitably it seems to me the Court is bound to treat these matters on a case-by-case basis. So I don’t think there is likely to be any hard and fast rules where, you know, if you can check off box 1, 2 and 3 on a checklist well then you meet the standard under Section 13 and you’re good to go ahead with the litigation. I think that in each case, you know, you’re never going to be really sure because the Court is going to look at whatever evidence is purported to be pursuant to Section 13, and look at it in the circumstances of that particular case before deciding whether you meet the standard. But maybe, I think it’s worth mentioning at least one case, and if we’re going to mention one case, I guess it should be the Burns Estate and Mellon case.  That’s Burns is B-U-R-N-S and Mellon is M-E-L-L-O-N. This is a Court of Appeal case from the year 2000 and you can find it at 34 Estates and Trusts Reports, 2^nd. ed., page 175. 

In this case the personal representative of an estate was the one bringing the claim.  So you can either sue the estate or the estate can sue you, but in either case, you need Section 13 evidence. In this case it was the estate doing the suing and the estate brought an action against a person who received a large transfer from the deceased about two years before death.  And so the issues dealt with by the Court of Appeal were how exactly do you corroborate the claim and what standard did the estate have to meet and was the standard met in this case? Now the Court of Appeal held that if you are assessing Section 13 evidence, of course, it’s the civil standard, meaning the balance of probabilities. So if the Court feels that on a 51% basis you’ve proven that you have corroborative evidence, that’s good enough and on you go with the lawsuit. But if you’re at the 48%, in theory anyway, then its full-stop and you don’t meet the standard.

In this case, there were several pieces of evidence and each piece of evidence on its own was not necessarily strong evidence.  But again, in all the facts of the case, and I think this is the exercise we have to do, in all the facts of that particular case it was good enough, when you add it altogether to provide the necessary corroboration.  And I think it’s important to note that the Court of Appeal did, in fact, state that if each separate piece of purported corroborative evidence wasn’t particularly strong and it was only when you cumulatively looked at them in a cumulative sense that they were enough to get the estate over the standard threshold.

Rick Bickhram: And looking at the facts and the reasonings of the Court, it makes complete sense.  What the Court came out here pretty much, I’m guessing it did, and said here was that based on each individual piece of evidence, it wouldn’t probably be enough to sway a Court to say on the balance of probabilities, there’s enough corroborating evidence to verify the claim.  However, the Courts addressed that issue by saying they’ve looked at the totality of the circumstances here and in light of that, it was enough to validate the claim.

Sean Graham: Yeah, and I think that’s a pretty good example of just to what extent these matters are going to be treated with on a case-by-case basis by the Court.  And just a comment on clients and advising on this point. I find very often clients are very surprised when they come in and want to discuss a claim against an estate and you ask them, “well, okay, but what evidence do you have supporting that claim?” and they say, ”well, what do you mean? The deceased told me X, Y and Z, and that’s all the evidence I need, that’s the claim”. Well, no.  And that can be an uncomfortable discussion because, you know, parties, when someone is often elderly and often in ill health, the last thing most of them want to do is start collecting evidence to be able to sue their estate down the road and often the deceased is in the exact same position. The last thing they want to worry about if they’re maybe in ill health and declining is setting up a bunch of lawsuits for their personal representatives to bring on their estate’s behalf after their death. So, very often there may have well been a very good claim, except that nobody, the priority during life was not to create a bunch of evidence or to collect a bunch of evidence to be able to sue someone after the fact. And clients often, you know, they’re sort of kicking themselves in the foot because they weren’t thinking about this.  But, of course, to me it seems perfectly natural not to be thinking about that.

Rick Bickhram: I agree, Sean, and that definitely can lead to some uncomfortable discussions.

Sean Graham: I think that brings us to the end of this week’s discussion. Thanks to everyone for listening and thanks for joining us today.  And Rick, thanks so much.

Rick Bickhram: It was a pleasure to podcast with you today, Sean, and I look forward to podcasting with you again soon.

Sean Graham: And we always look forward to hearing from our listeners.  If you care to comment, you can send us an e-mail at hull.lawyers@gmail.com or you can just pick up the phone and leave us a message on our comment line, that’s 206-350-6636. We love to get constructive criticism and comments whenever anyone is kind enough to provide it. Be sure to visit our blog at estatelaw.hullandhull.com. You’ll find lots of information, lots of discussion on estate litigation and capacity litigation. We hope you enjoyed today’s show.  Again, I’m Sean 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.

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Listen to Karkus v. Cotroneo 2007

This week on Hull on Estates, Paul Trudelle and Diane Vieira discuss the case of Karkus v. Cotroneo 2007. The case addresses many of the issues that estate lawyers face on a daily basis, such as: proving or disproving gifts, slander of title and the importance of corroborative evidence.

Karkus v. Cotroneo 2007 - Hull on Estates Podcast #93

Posted on January 15^th, 2008 by Hull & Hull LLP

Paul Trudelle: Hi and welcome to Hull on Estates.  You’re listening to Episode 93 on Tuesday, January 15^th, 2008.

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.

Paul Trudelle: I’m Paul Trudelle.

Diane Vieira:  I’m Diana Vieira.

Paul Trudelle:  Hi Diane.  How are you?

Diane Vieira:  I’m good.  How are you?

Paul Trudelle:  Very good.  This is our first podcast together and our first podcast of 2008, so I wish everyone a Happy New Year.  And why don’t we get into what we thought we would talk about today.

Diane Vieira:  Sure.  This is an interesting case that deals with a lot of things that we deal with in our practice.

Paul Trudelle:  Yeah, the case is Karkus and Cotroneo.  It’s a 2007 case, April 19, 2007, out of the Ontario Superior Court of Justice.  It’s a decision of the Honourable Mr. Justice Sheppard.  And I thought that it would be great to talk about this case because it deals with a number of issues that we deal with day in and day out.  It deals with issues such as gifts, proving a gift or disproving a gift, corroborative evidence required, remedies where there is a finding that there was no gift.  It talks about resulting trusts, set-offs, slander of title, costs regarding Certificates of Pending Litigation when those are resorted to early in the litigation, and also costs of the litigation.  So there’s a lot in this relatively short case…11 pages…but I thought we would spend a little time going through some of those issues.   Perhaps we can talk a bit about the background or the facts of the case.

Diane Vieira:  Oh, sure.  This is a case where the deceased died without a Will and her daughter was appointed the estate trustee.  The deceased was a business woman and near the end of her life, her business had been failing so there was a number of creditors.  And her daughter, the estate trustee, who is the plaintiff in this action, was looking through her mother’s financial records and an entry in her bank book showed a $65,000 transfer from her mother to her mother’s boyfriend, who’s the defendant in this case.

Paul Trudelle:  Right.  And I think just before we go on, I think the fact that the deceased was in some financial difficulty in her business, is an important factor that the Court relies on later on, so that’s important to note.

Diane Vieira:  Later on, the defendant admits that he received the $65,000.  His position is that this was a gift.  The daughter’s position is that this represents money that the defendant was holding on behalf of his mother.  A little more explanation to that was that the $65,000 the defendant used to purchase a property.  And then on that property, the defendant’s name is listed alone, but the property is listed as registered as being in trust.

Paul Trudelle:  That’s right.  And I think that’s important as well.  The Court deals with the resulting trust claim and looks at that factor, and we’ll talk about that briefly in a second.  So in essence the claim was by the estate for the return of the $65,000 and for a claim that the defendant held a property on a resulting trust and the estate had an interest in that property.  The Court looked at the evidence with respect to the gift and before doing that, set out the test that is required and what the estate must argue or try to establish in order to show that there was a debt or resulting trust and what the defendant needs to show in order to prove that there was in fact a gift.

Diane Vieira:  I just wanted to…another point of fact is where the $65,000 came from and when it was transferred.  The deceased had sold her house and she was moving in…she moved in with her boyfriend, who is the defendant.  And the $65,000 represents the proceeds of the estate…the proceeds of the sale of the house, excuse me.  And the money wasn’t gifted or transferred to the defendant until six or seven months later on, which is something that the Court reflected on.

Paul Trudelle:  That’s right. They looked at the fact that the parties had moved in together, the $65,000 was used to, in part, to purchase this house and make renovations that the plaintiff wanted.  The Court considered the fact that the onus is on the defendant to prove, or the recipient to prove that this was a gift, there was no presumption that would work in his favour.  And in fact, the presumptions which aren’t really referred to, would be the opposite, that there was a resulting trust or the money was owed back to the estate.  And the Court found ultimately that the defendant wasn’t successful in proving that this was a gift.  His evidence was that the money was used…was given to him to help with the purchase of the house and to pay for expenses and that was contrary to a finding of a gift.  Just another point on that - the Court refers to the evidence required in order to establish a claim by or against an estate and dealt with the issue of corroborative evidence.  Perhaps we can talk a bit about what corroborative evidence is required and what the rule is there.

Diana Vieira:  With respect to corroborative evidence, Section 13 of the Evidence Act requires that there be some corroboration of the material evidence.  And the onus is the civil litigation onus, but with corroboration.  And in this case, the judge and the Court had problems with the defendant and the plaintiff’s evidence.  He called that evidence unreliable.

Paul Trudelle:  Right.  He felt that the evidence of the parties was of questionable credibility and in the absence of any corroborative evidence, he wasn’t able to find that there was in fact a gift.  And as you mentioned, the Court referred to the burden on the defendant to prove it but said that there was also what he said was a healthy scepticism in addition to that.  Now there’s other cases that talk about whether there’s a higher burden on a party.  The burden is still the civil burden but the Courts will look at these claims with some scepticism.

So the result of the defendant’s failure to prove that it was a gift meant that money was owing to the estate.  The Court went on to deal with the issue of whether the estate had a trust claim against the defendant.  And the Court dismissed the trust claim for a number of reasons.  The first reason, or one of the reasons was that in establishing a trust, there is case law to the effect that evidence of an illegal scheme will not be received to support a resulting trust.  And the illegal scheme that the Court referred to here was the fact that the monies were transferred by the deceased to the plaintiff probably for the purpose of avoiding creditors.  And as a result, they had…the Court had a difficult time in finding that the estate could rely on the doctrine of resulting trust in these circumstances.   So how did the Court deal with the money owing to the estate then?

Diane Vieira:  The Court goes on to find that the defendant does owe money to the estate.  It’s a debt to the estate.  And he then goes on to discuss the concept of unjust enrichment.

Paul Trudelle:  Yeah, and the Court found that the money was owing to the estate and I guess the defendant had assets here.  The Court felt that it wasn’t necessary, in fact, to rely on the concept of trust or impose a trust over the property owned by the defendant.  A judgment, a monetary judgment, was sufficient.  You mentioned the unjust enrichment part of it and the Court talked a bit there about when they will find unjust enrichment in order to bring in the equitable remedy.

Diane Vieira:  Yes, the Court refers to the Supreme Court of Canada case, Peter vs. Bellow and the three steps that are needed for a finding of unjust enrichment.  And all three were here in this case.  There was an enrichment on behalf of the defendant receiving the $65,000 and a corresponding deprivation to the deceased, now the estate of the deceased, and then an absence for the reason of this enrichment.

Paul Trudelle:  Yeah, but having found all of those circumstances present, the Court still goes on to say that they won’t impose the equitable remedy of a constructive trust.  The Court refers to that Supreme Court of Canada decision and extracts a point to the effect that a monetary award would be the appropriate remedy in many cases, and that was the case here.  And the Court concludes that a monetary award is appropriate and makes an Order that the defendant pay back the $65,000 to the estate.  However, he doesn’t end there.

Diane Vieira:  No, it’s…the Court goes on to find that the estate is not entitled to that full $65,000 because the defendant did provide something in the excess of $20,000 in renovations to the house.  And if the deceased’s $65,000 was in a gift to the defendant, then the money that he contributed to the relationship was also not a gift. 

Paul Trudelle:  That’s right.  So in effect, they awarded the defendant…they made an award in favour of the defendant with respect to his Counterclaim for money that he said he spent on behalf of the plaintiff, and that reduced the recovery by the estate.  There is also the issue of a claim by the defendant for slander of title.  The defendant alleged that a Certificate of Pending Litigation put on his property was slander of title, and the Court dealt with that in very short order.

Diane Vieira:  Yes, the Court found that the plaintiffs did not…didn’t have a credible position to have had that Certificate of Pending Litigation registered.  And consequently they awarded the money that the defendant had spent on removing that Certificate, credited back to the defendant.

Paul Trudelle:  That’s right.  And finally, on the issue of costs of the action itself, the Court considered the fact that the plaintiff had some success, made recovery for the estate.  However, it didn’t establish its claim for resulting trust.  The Court also felt that the evidence of the witnesses was unreliable to a certain extent and in fact in some parts the judge said that in some parts, the evidence was fabricated.  And as a consequence of that he ordered that there be no order as to costs, and each party had to bear its own costs.

Well, I think that’s an interesting case on a number of grounds.  We’ve touched on a few of the points that the case deals with.  I recommend the case highly to anyone dealing with those types of situations where there are gifts, where you’re considering a claim for a resulting trust, an interesting counterclaim where you’re faced with a claim for the return of a gift or money advanced on the basis of benefits provided to the deceased, and also considerations for dealing with Certificates of Pending Litigation and the costs that may be involved in that.

Well thank you very much, Diane.

Diane Vieira:  Thanks Paul.

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.

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Last week, I presented a paper at the 10th Annual Estates and Trusts Summit on Dependant Support Claims. Afterwards, my colleague, Jordan Atin, brought an interesting case to my attention regarding the definition of "dependant" under Part V of the Succession Law Reform Act ("SLRA").

In Re Cooper *, the trial judge held that the applicant, Mrs. Hampton, had failed to fit herself within the definition of a "dependant" as defined in the Act. Mrs. Hampton appealed to the Divisional Court, which ultimately allowed the appeal.

Mr. Cooper died intestate such that his insurance and pension monies would go to Mrs. Cooper (his first wife) and the Cooper children would inherit the balance of the estate.

Mrs. Hampton and Mr. Cooper had been living together in a common-law relationship for over 7 years right up until Mr. Cooper's death. The evidence made it clear that Mr. Cooper and Mrs. Hampton acted like a normal married couple.

The most interesting aspect of the case to me is that the Divisional Court held that the issue of support was not contingent on one person making a greater financial contribution than another. In sharing common expenses, a couple, married or not, were supporting each other.

According to the Divisional Court, Mrs. Hampton was a dependant of the deceased within the meaning of the SLRA. Mr. Cooper was also providing support, or was under a legal obligation to provide support, immediately before his death. The court determined that the obligation to provide support to the other spouse remained as long as the relationship of the two parties as spouses continued notwithstanding that Mrs. Hampton was not receiving actual support from Mr. Cooper before his death and regardless of whether Mrs. Hampton could have successfully made a claim for support while Mr. Cooper was alive.

Re Cooper stands for the proposition that a spouse (married, common-law, or same sex) automatically qualifies as a dependant. The issue then becomes whether the spouse is entitled to a dependant support order in the circumstances.

Thanks for reading.

Justin
* Link not available - see 7 E.T.R. 118, 30 O.R. (2d) 113