Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

• Print
• Comments
• Trackbacks

There are several interesting OBA continuing legal education (CLE) events in the Trusts & Estates Section in the next two weeks.

One is a luncheon program on March 25, 2008 commencing at noon addressing the topic of Power of Attorney Fraud. This program promises to discuss this escalating problem, some recent developments in criminal fraud proceedings, and how careful and creative planning with respect to Power of Attorney documents can help avoid family conflicts as well as costly and senseless litigation.

The speakers and panel slated include several lawyers, a forensic accountant and a detective from the Hamilton Police Service, Crimes Against Seniors Unit.

The other event is a half day program on April 2, 2008 commencing at 9:00 a.m. This program looks at the latest trends which counsel are seeing in the areas of estate planning, administration, litigation, and passing of accounts as well as trust and charity law.

Topics include: The Future of Mediation: Thinking Outside the Box, The Liability of the Passive Estate Trustee – The Hidden Danger, The Limits and Limitations to a Beneficiary’s Recourse Before and After a Judgment Passing Accounts, Developments in Estate Planning, Guardianships and Settlements of Personal Injury Litigation, View from the Bench and Emerging Trends Outside Toronto.

The Chairs of this program are Justin de Vries and Eric Hoffstein.

Both programs are being held at the OBA Conference Centre, 20 Toronto Street, 2nd Floor, Toronto. Information on each program can be found on the OBA’s website www.oba.org/.

Have a great day.

Craig.

• Print
• Comments
• Trackbacks

Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Brian Schnurr as the recipient.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

The criteria for the award is demonstrated leadership in the trusts and estates bar through knowledge, experience, skill, commitment, passion and strength of character, plus all or some of the following:

• academic excellence through teaching at the Bar Admission Course, lecturing at a law school,    participating in Continuing Legal Education and/or academic writing;

• participation in the OBA Trusts and Estates Section Executive or the Law Society of Upper Canada on wills, trusts and estate matters; and

• contribution to the development of wills, trusts and estate law.

Any member of the Trusts and Estates Section of the OBA in good standing is eligible to nominate a candidate by submission in writing, together with a curriculum vitae outlining the nominee's qualifications. The nominator must indicate that the candidate has been advised of the nomination prior to the nomination deadline and has consented thereto. The Award is typically presented at the Section’s Annual Awards dinner in late Spring.

Nominations must be filed by 4:00 p.m. on Friday, January 25, 2007 to:

Peter Guennel, Sections Coordinator
Ontario Bar Association,
20 Toronto Street,
Suite 300,
Toronto, Ontario
M5C 2B8
Fax: 416-869-1390

For more information, and/or to obtain a Nomination Form, please contact Peter Guennel at (416) 869-1047, ext 340, or email at pguennel@oba.org or by visiting on line at http://www.oba.org/en/admin/awards_en/tru_award.aspx.

Thanks for reading.

Craig

• Print
• Comments
• Trackbacks

I hope everyone had a great holiday.

With the close of 2007, we turn and look to the promise of 2008. In looking ahead to 2008
many may wonder if they have properly protected and provided for those they intend to protect should something unexpected happen to them. Questions may also arise regarding whether a spouse or parent has taken steps to provide for themselves and/or those they intend to provide for.

While there are no doubt many things to consider for the new year from a family perspective, perhaps this is the year to resolve to consider, or reconsider, whether your family’s legal affairs have been properly planned.

I wish everyone a healthy, happy and prosperous 2008.

Craig

• Print
• Comments
• Trackbacks

Yesterday, I set out a fact situation giving rise to a certain interpretation issue.

The fact situation is based on the decision of Moore J. in Rudling Estate v. Rudling, 2007 CanLII 51794 (Ont. S.C.).

There, the court held that the word "debt" in relation to Property B could not include within its meaning all of the taxes, expenses and other charges that the estate trustee is directed by the will to satisfy in addition to "debts" of the estate. The court found that all reasonable charges against the estate arising from the death of the deceased were, by the terms of the will, intended to be paid from the estate before the specific bequests of the two properties are made. That is, both A and B are to share the burden of the testamentary expenses.

The court found that the will could be fairly construed upon the language contained within its four corners, and without the need to resort to extrinsic evidence in order to interpret the meaning.

However, in light of the Orders Giving Directions made in the case, and the issues is raised in the pleadings, and “because I am aware of the recent tendency of Canadian courts to apply the ‘armchair rule’”, the court also addressed the interpretation of the will in light of the surrounding circumstances. The court examined the surrounding circumstances, hearing from ten witnesses over the course of seven days. After considering this evidence, the court concluded that the evidence did not support a conclusion that the testamentary expenses be borne by A alone.

Did you make the right call?

Paul Trudelle

• Print
• Comments
• Trackbacks

Consider the following interpretation issue, which was recently considered by the Ontario Superior Court of Justice:

The deceased left a will kit-type will directing that all “just debts, funeral and testamentary expenses, all succession duties, inheritance and death taxes, and all expenses necessarily incidental thereto, to be paid and satisfied by” my executor as soon as convenient after her death. 

The will went on to provide that the following distributions were to be made:

To son A, Property A "with all loans, leins [sic], mortgages attached”.

To son B, Property B, “free and clear of all debt". 

The residue was to be divided between A and B. For the purposes of the trial, the only assets of significance were the real estate: Properties A and B.

At the time of her death, the deceased had no debt other than certain mortgages registered on title against Property A.

The issue in dispute was what assets were to be chargeable for paying the deceased's taxes, including estate administration tax and income taxes, and funeral and testamentary expenses.

A took the position that these expenses were paid out of the residue, and in the absence of any residue, were to be chargeable equally as against Property A and B. (Properties A and B were of equal value.)

B took the position that Property B was conveyed to him "free and clear of all debt", and thus, those expenses were payable out of Property A only.

What did the court do? Tune in tomorrow.

Until then, thank you for reading.

Paul Trudelle

• Print
• Comments
• Trackbacks

Today’s blog is the last in my series addressing preparation for trial in a contested passing. The items discussed this week were certainly not meant to be, nor were they, exhaustive. Preparation necessary for a trial with narrow issues, few documents, few evidentiary concerns and an uncomplicated Estate will obviously be different than a case with numerous issues, voluminous documents, evidentiary issues and a complicated administration. The critical aspect of trial preparation is that it begins at the beginning of a case; not literally, but certainly in the sense of being mindful at pre-trial stages of the evidentiary considerations and how the evidence is to be marshalled and presented.

Aside from ensuring that you have appropriate resource materials at the trial (such as texts dealing with the rules of evidence, the Rules of Civil Procedure, Probate Practice etc.), it is important to have prepared your opening and closing statements (to the extent possible), have prepared the necessary law regarding the substantive issues in dispute (casebook, factum), have addressed costs submissions (organizing offers to settle, preparing a Bill of Costs etc.), and have a trial binder with you at trial for your own use.

A trial binder usually contains the pertinent materials that you would like to have at your fingertips during the trial (ie. pleadings, orders, witness lists, witness summaries, answers to undertakings, listing of the types of evidence objections, offers to settle etc.). The trial binder will allow you to have quick access to information that you might only have a few minutes or less to locate and quickly review.

While most contested passings settle at a pre-trial stage, if a trial is necessary, it might well be won because one party was more prepared than the other.

Thanks for reading this week. Have a great weekend.

Craig

• Print
• Comments
• Trackbacks

Today’s blog is a continuation of my blogs this week addressing preparation for trial in a contested passing.

It is important in preparing for trial to prepare summaries of the transcripts of the examinations conducted to assist counsel with locating evidence in the transcripts during trial, including admissions and/or inconsistent statements made by a witness at trial. Having said that counsel should personally review the transcripts as part of trial preparation. By reviewing the transcripts, counsel can address issues involving: (i) the completeness and answers to undertakings/refusals, (ii) admissions made by the respective parties, (iii) incomplete answers provided by the respective parties to questions on the examinations, and (iv) whether additional discovery is needed before trial.

Ensure all of your client’s undertakings have been answered. Opposing counsel may not be pressing for the answers to your client’s undertakings, but the answers should be obtained so that (i) you are not surprised by the answer of your client to an unanswered undertaking at trial, (ii) delay cannot be alleged as against your client at a pre-trial stage should the issue arise, (iii) no adverse inferences can be drawn at trial as to why your client has not provided an answer, and (iv) a request for further discovery on the answers will not be entertained just prior to trial, or perhaps even as an issue during the trial. Ensure all of the opposing party’s undertakings have been answered and any follow up discovery has been conducted. If a damages brief is to be provided by the opposing party as a result of an undertaking at examinations or otherwise, ensure that it has been provided.

A party may also, further to Rule 51.02 of the Rules of Civil Procedure, at any time, by serving a Request to Admit, request any other party to admit, for the purposes of the proceeding only, the truth of a fact or the authenticity of a document. A copy of any document mentioned in the Request to Admit shall, where practicable be served with the request (unless a copy is already in the possession of the other party).

The opposing party must respond to the Request to Admit within 20 days, failing which the opposing party will be deemed to admit the truth of the facts asserted in the Request to Admit or the authenticity of the documents referred to in the Request to Admit. As such, the Request to Admit should be served at least 20 days before the commencement of the trial, and quite some time before that, if possible, so that counsel will know what facts need not be proved or the authenticity of documents that will not need to be proved.

There may be cost consequences if a party refuses to admit the truth of a fact or authenticate documents which are proven or authenticated during the trial.

Requests to Admit may be effective to: (i) reduce the facts in dispute, (ii) reduce the number of witnesses to be called and/or the examination of a witness, (iii) minimize the costs and length of the trial, and (iv) avoid having to authenticate documents.

Thanks for reading.

Craig

• Print
• Comments
• Trackbacks

In yesterday’s blog I noted that my blogs this week would, at least in part, address preparation for trial in a contested passing. Today’s blog comments on certain aspects of trial preparation (the parties, setting the matter down for trial and documents/productions).

The issue of whether all of the parties who ought to be involved in the passing are involved, and, if so, whether any of the parties who do not have representation need representation, must be considered. In considering who the appropriate parties are, or should be, the following questions might be asked: Are there self-represented parties? Have they been notified of all matters related to the proceeding? Has any party filed a Notice of No Objection to the accounts? Has anyone filed a Statement of Submission of Rights (if so, have they been served by the plaintiff with written notice of the time and place of the trial)? Is a minor involved (Rule 7.03(2), The Office of the Children’s Lawyer)? Is there an adult party who is disabled (Rule 7, The Office of the Public Guardian and Trustee)? Is a representation Order necessary (Rule 10).

Regarding the scheduling of the trial, an order of the Court for directions, or otherwise, at any pre-trial stage, or at the pre-trial conference might address same. It may be that the date of the trial, fixed in its length, is to be fixed by the Registrar on a date mutually convenient to the parties. If, on the other hand, the proceeding is to be set down for trial, Rule 48.01 of the Rules of Civil Procedure allows for the proceeding to be set down for trial after the close of pleadings and when a party is ready for trial. In any case, inquiries should be made with the Court office where the trial is to take place to determine what, if any, forms need to be filed with the Court to confirm that the trial is to proceed.

Regarding the preparation of documents/productions for trial, it is critical that the documents in respect of the proceeding be organized prior to trial. If the documents necessary for the trial are not in counsel’s possession when preparing for trial, for whatever reason, they should be obtained prior to trial. Such documents include, but are not limited to, all pleadings, the estate accounts, certificate of appointment, prior Judgments for passing of accounts, all Orders regarding the passing of accounts, all Notices of Objections (and withdrawals), Statements of Submission of Rights, Consents/Releases of any party, Affidavits of Service and the documents exchanged between the parties as a result of the Rules of Civil Procedure, any agreement of the parties and/or Court Order. 

Also ensure that all issues of privilege regarding the documents are dealt with prior to trial.

Lastly, ensure that you have the originals of your client’s documents unless they are not available. If originals are not available, know why they are not available.  

Thanks for reading.

Craig

• Print
• Comments
• Trackbacks

While contentious passings of accounts are regularly resolved at a pre-trial stage such as mediation, and without the necessity for a hearing, in certain circumstances a contested passing of accounts may only be resolved by way of a trial. In many cases, a successful result at trial is the direct result of the trial preparation.

It is perhaps trite to say, but trial preparation does not begin between the pre-trial conference and the commencement of trial; rather, it begins with the formulation of a strategy for the case, the identification of the issues in dispute, the determination of the evidence required to prove the case and the marshalling of that evidence. As such, while the ultimate strategy for a trial cannot be finalized until the pre-trial stages of the passing have been completed, and counsel have the benefit of a thorough review of the case (before the pre-trial conference), parties ought to be mindful of the matters to be dealt with at trial throughout the litigation and how such matters can be dealt with or addressed during the pre-trial stages, including through documentary disclosure, examinations and by way of orders of the Court (such as an Order Giving Directions or otherwise).

Having said that, my blogs this week will include a series that considers preparation for a trial of a contested passing.

Have a great day.

Craig

• Print
• Comments
• Trackbacks

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

• Print
• Comments
• Trackbacks

In the October 22, 2007 edition of the "Law Times", Bev Cline writes about the importance of family dynamics when considering an estate plan, and when dealing with estate disputes. 

The article quotes Hull and Hull's own Jordan Atin: "A will is usually the last thing that a parent says to his or her children...". As such, the document "creates a definitive, lasting record of the relationship between parent and child and among a child and his or her siblings. That reason alone explains why estate disputes are so hotly contested".

Jordan Atin states that in addition to addressing the mechanics of the estate plan, solicitors also need to address their client’s family dynamics. Lawyers should consider with their clients the emotional effects of the will may that arise after the testator passes away. 

In the article, Sender Tator, a solicitor with Schnurr Kirsh Stephens, notes that in the context of litigation, “emotion often gets in the way of legal or practical realities; your client is often looking for a certain result, which legally may not be feasible".

The interplay of family dynamics and human emotion is one factor that makes estate litigation so interesting. (It is also a factor that often makes the practice so frustrating!)

One of the functions of a solicitor in estate litigation is to consider the role of family dynamics, and to see that it is identified and addressed. In addition, the solicitor should strive to ensure that the legal or practical realities are not overlooked, and that passion alone does not drive the litigation.

Thanks for reading, and happy Halloween.

Paul Trudelle

• Print
• Comments
• Trackbacks

Yesterday, I blogged on the case of Gubo Estate v. Cotroneo. There, the estate was granted judgment against the Defendant for the recovery of an alleged “gift” that the court determined was unsubstantiated, and therefore repayable.

Interestingly, the judgment was not for the full amount of the gift. The Defendant alleged that he had paid out approximately $22,500 on behalf of the deceased, and that this amounted to a debt in his favour. The Court accepted this, without much discussion, and reduced the amount repayable to the Estate by $22,500.

The Court heard from the Defendant that the deceased had made a gift of the funds to him, and that the Defendant had made various expenditures on behalf of the deceased. The Court did not accept that the transfer from the deceased to the Defendant was a gift. However, the flip side of this was that the expenditures by the Defendant for the deceased were not gifts, either: hence, the reduction of the judgment in favour of the Estate.

In dealing with the case of an alleged gift, counsel should always consider the bigger picture: if the gift fails, is there a basis for a counterclaim by the defendant for advances from the defendant to the deceased, or on the basis of quantum meruit?

Thank you for reading,

Paul Trudelle

• Print
• Comments
• Trackbacks

In the recent case of Gubo Estate v. Cotroneo, the Court considered a claim on behalf of an estate for the recovery of funds advanced by the deceased to her boyfriend.

The deceased had sold her home and had given the proceeds of sale, being $65,000, to her boyfriend, and then moved into his home.

The Court found that there was insufficient evidence to establish that the advance was a gift. 

As to a remedy, the Court heard evidence that the advance was likely for the purpose of defeating creditors of the deceased. As such, the Court declined to apply the doctrine of resulting trusts, applying a Court of Appeal statement to the effect that "evidence of an illegal scheme will not be received to support a resulting trust."

However, the Court found that it was not necessary to rely on the doctrine of resulting trusts. The Court found that it was able to make a monetary award, and granted judgment in favour of the deceased’s estate.

In advancing a claim on behalf of an estate, the imposition of a trust is not always necessary, and a monetary award will often be the most appropriate remedy.

Have a great day,

Paul Trudelle

• Print
• Comments
• Trackbacks

With the end of the week comes my final blog in my series this week on considerations to take into account when changing trustees.

Negotiated structures dealing with the retirement, removal and replacement of a trustee may include, or be a combination of, a deed, court order, preparation of accounts, a passing of accounts application, a release, indemnification, Judgment on the passing and Minutes of Settlement (Agreement) dealing with the resolution of the disputes arising therefrom.

A situation where a trustee wishes to retire and the administration of the trust has been simple, straightforward and has been substantially completed by the trustees to the satisfaction of all beneficiaries, who are sui juris, and there are no outstanding liabilities of the trust, will be completely different than one where beneficiaries are seeking to remove and replace a trustee for misconduct and/or in the context of a very complex administration.
The structure of the former situation might be a deed with an appropriate release (if an accounting by the trustees has been provided to the beneficiaries who, with the benefit of counsel, all consent and approve of same in writing, and the trustee’s compensation has been agreed to and taken).

The structure of the latter might include an Application to the Court to remove and replace the trustee on notice to all co-trustees and those with a financial interest. As part of the Application, an order would most likely be sought requiring that the outgoing trustee pass his accounts within a certain time period of the date of the order.

An order removing the trustee should address, amongst other things, the following: (i) the individual(s) being removed and the capacity being removed from; (ii) the appointed substitute trustee or, alternatively, confirmation that the remaining trustees will continue; (iii) the vesting of the trust property in the new trustee and/or the continuing trustees; (iv) that the outgoing trustee shall prepare formal accounts in accordance with the Rules of Civil Procedure and file those accounts and an Application to pass accounts within a certain period of the date of the order as to the date of removal; (v) the manner of compensating the new trustee; (vi) directions required, if necessary, to facilitate any of the above; and (vii) how the costs of the Application are to be dealt with.

In the end, the circumstances of each particular case will dictate which structure is most appropriate and prudent.

Have a nice weekend. Craig

• Print
• Comments
• Trackbacks

Today’s blog is the third in my series this week dealing with considerations to take into account when changing trustees.

Whether a trustee or co-trustees have properly administered a trust is obviously a crucial factor in negotiating the removal and replacement of a trustee, and will effect the manner in which a new trustee may be appointed.
In considering a trustee’s potential liability in respect of his or her administration of the trust, the trustees and beneficiaries ought to consider the trustee’s conduct, whether that conduct met the standard of care required, and if not, whether the conduct is exonerated by statute or the terms of the trust.

When a trustee breaches his duty, he may be liable to the beneficiaries for any losses that occur as a result of the breach. When such a breach occurs, the Court, further to s. 35 of the Trustee Act, has the discretion to relieve the trustee of liability in cases where it believes that the trustee acted “honestly and reasonably, and ought fairly to be excused.”

Trustees, outgoing and incoming alike, ought also to carefully review the terms of the trust as the trust may contain provisions that limit the liability of the trustee.

Exculpatory clauses may limit the extent of the trustee’s personal liability to the value of the assets of the trust instrument and/or may protect the trustee by raising the level of culpability required to be found personally liable.

A trustee should be cautious, however, if he or she is relying on an exculpatory clause in a trust to exonerate him or her from liability as such clauses may be held to be invalid, especially where they are broad, or attempt to completely exonerate any and all conduct of the trustee, including liability for acts of gross negligence, intentional wrongdoing, fraud or dishonesty.

The best way, however, for an outgoing trustee (and new trustee) to limit any liability that may be visited upon him or her as a result of the administration of the trust to the date of the retirement, removal and replacement is for the outgoing trustee and his or her co-trustees, if any, to pass their accounts. Assuming the accounts are passed, not only will the new trustee know the “starting numbers” and the assets/liabilities for the future administration of the trust (that is start with a clean slate), but the outgoing trustee will have been afforded the proper protection of the Court order.

Thanks for reading. Craig

• Print
• Comments
• Trackbacks

In yesterday’s blog regarding considerations to take into account when considering the change of a trustee of a trust, I noted that today’s blog would deal with who (or what parties) should be involved in that decision.

Whether the trustee is to be removed (and replaced) by way of deed or by way of Court order, any co-trustee and anyone having a financial interest in the trust should be notified of the change and provided with the deed (if the removal can be done by way of deed: see sections 2-6 of the Trustee Act) and any other materials that may be necessary to remove the trustee by way of deed, or served with the application materials if the removal (and replacement) is to proceed by way of Court order. As such, the make-up of these parties should be considered prior to proceeding with the change, as one or more of these parties may, amongst other things, object to or challenge the removal (and replacement) of the trustee, have claims in respect of the administration of the trust and/or dispute the trustee’s compensation.

It may be that a litigation guardian may need to be appointed for a minor(s) and/or for an incapable party. In such a case, the Office of the Children’s Lawyer or the Office of the Public Guardian and Trustee may need to be served with the application materials so that they may have the opportunity to respond or become involved, as appropriate.

Rule 9 of the Rules of Civil Procedure addresses proceedings by or against a trustee while Rule 7 regulates the bringing of proceedings by or against parties under disability. It may also be that a representation order, pursuant to Rule 10, is required as the proceeding impacts on persons who are not before the Court and who cannot be brought into the litigation because they are unborn or unascertained, or because they cannot be readily found or served.

Thanks for reading. Craig

• Print
• Comments
• Trackbacks

There are a variety of reasons for the removal and replacement of a trustee, some voluntary on the part of the departing trustee, others involuntary. A trustee might decide to retire or resign from his or her position. On the other hand, a trustee may need to be changed as a result of, amongst other reasons, the trustee’s death, incapacity, bankruptcy, the conduct of the trustee or the relationship of the trustee and the beneficiaries of the trust. Depending on the circumstances, the removal and replacement of the trustee may be done by way of deed or by way of court order.

The transition of the outgoing trustee and of an incoming trustee may be critical to each trustee as well as the beneficiaries of the trust, perhaps for very different reasons. The requirement (or not) to apply to Court to change trustee(s), the satisfaction of the administration of the trust to date, the outgoing trustee’s accounts, a passing of accounts, the vesting of the trust’s assets in the new trustee and/or any co-trustees, the trustee’s compensation, who is an appropriate replacement and the provision of releases and the indemnification of the trustees involved are all considerations, amongst others, for those involved.

It is noteworthy to distinguish between the removal and replacement of a trustee and the removal and replacement of a personal representative of a deceased person’s estate because of the different ways that they are treated. A trust instrument may provide for the retirement, removal and/or replacement of a trustee. If there are specific provisions in the trust instrument for the retirement, removal and/or replacement of a trustee they will govern. To the extent the trust instrument does not govern the issue, generally, sections 2 to 8 of the Trustee Act R.S.O., 1990, c. T. 23. (the “Act”) apply to the removal and replacement of trustees, while section 37 of the Act relates to the removal and replacement of personal representatives.

The balance of this week’s blogs will focus on certain considerations to be taken into account when negotiating the retirement, removal and/or replacement of a trustee. More specifically, I will touch on considerations involving the parties who should be involved with the negotiation, liability considerations and structures of the removal and/or replacement.

Thanks for reading.

Craig 

• Print
• Comments
• Trackbacks

Today’s blog is a reminder that Hull and Hull LLP has another of its Breakfast Series on October 5, 2007. The Breakfast Series provides members of the bar with presentations on topics of importance to estate practitioners.

At the October 5th meeting, the following presentations will be made: “Settlements When Dealing with Minors and Incapable Beneficiaries” by Ian M. Hull, “Secret Trusts and Powers of Appointment” by David M. Smith and “Mutual Wills – A Review” by Paul E. Trudelle.

The meeting is being held at the Ontario Bar Association, 2nd Floor, 20 Toronto Street, Salon 2 & 3, Toronto, Ontario. Breakfast begins at 8:15 a.m. with the Presentations starting at 8:30 a.m. A fee of $30.00 ($28.30 + $1.70 GST) is payable to Hull & Hull LLP upon registration by cheque, VISA or MasterCard. Materials are included. As with the two other Breakfast Series meetings that were offered earlier in 2007, this seminar will be offered via Webcast.

A CD or Cassette Tape recording of the Breakfast Seminar will be available at a fee of $20.00 ($18.96 + $1.14 GST)

To register, please contact Diane Labao at (416) 369-1140 (press 0) or by email to dlabao@hullandhull.com.

See you there.

Craig

• Print
• Comments
• Trackbacks

A forgotten cousin of litigation is the enforcement of judgments and orders (including cost orders). Here’s a general overview.

To enforce the payment or recovery of money, a party has the following options: a writ of seizure and sale, garnishment, a writ of sequestration, appointing a receiver (Rule 60.02/Forms 60A and 60B).

A party can enforce an order for the recovery or possession of land by a writ of possession (Rule 60.03/Form 60C).

An order for the recovery of possession of personal property, other than money, may be enforced by a writ of delivery (Form 60D).

An order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be enforced against the person refusing or neglecting to obey the order by a contempt order (Rule 60.05). A motion before a judge is required (Rule 60.11).
I recently issued a writ of seizure and sale in respect of land. As with all of the enforcement provisions referred to above, a writ of seizure and sale in respect of land has its own unique sub-rules (counsel should read the applicable sub-rules carefully). For example, once a writ of seizure and sale of land has been issued by the local registrar, a creditor may not take any step to sell land under the writ until four months after the writ was filed with the sheriff (Rule 60.07(17)). No sale of land may be held until six months after the writ was filed with the sheriff (Rule 60.07(18)). The sale of land cannot be held under a writ of seizure and sale unless notice of the time and place of sale has been mailed to the creditor and to the debtor at least 30 days before the sale (Rule 60.07(19)).

Before a creditor decides how best to enforce a monetary judgment or order, a creditor can chose to examine a debtor. Rule 60.18 states that a creditor may examine the debtor in relation to: the reason for non-payment of the order; the debtor’s income and property; debts owed to and by the debtor; whether the debtor has disposed of any property either before or after the order; and the debtor’s present, past and future means to satisfy the order.

Rule 60.19 deals with the cost of enforcement generally. Finally, it is important to note that, pursuant to Rule 60.12, where a party fails to comply with an interlocutory order, the court may stay the party’s proceeding, dismiss the party’s proceeding or strike the party’s defence, or make such order as is just.

Thanks for reading. Enjoy the weekend.

Justin

• Print
• Comments
• Trackbacks

We are all too aware of the technology that surrounds us. Blackberries, pagers, cell phones, and fax machines cloak us in a patina of technology. We cannot escape from technology and, in fact, we are now “on” 24/7. It is somewhat ironic, and perhaps tragic, that the promise of technology was to free us from the drudgery of work. However, any professional or businessperson will tell you that technology has only made work life more demanding and deadlines more immediate. There is no escaping the office.

However, heading into the weekend, it is worth considering that there is a rising tide, some might even call it a revolution, that the proletariat (yes, that now includes professional and businesspeople thanks to technology) need to down their tools. In other words, Blackberries need to be turned off, cell phones muted, and faxes left waiting in the in-tray until Monday morning or after a well-deserved holiday. Psychiatrists and psychologists will tell us that leisure and recreation is an important way to recharge our batteries. The truism “all work and no play make Jack [or Jill] a dull boy [or girl]” seems even more relevant today. Perhaps we need to look to our European counterparts, who take longer holidays and seem more willing to stop and smell the espresso.
In my view, a well-rounded and high functioning lawyer should take the time to recharge his/her batteries as well as broaden his/her experience by travelling. A lawyer should also take the time to read the newspaper or the latest magazine, or, in fact, a good book. Living, and not merely working, provides perspective, context, and helps develop judgment – traits that any good lawyer needs. As the calls for technology to be “turned off” or, at least, muted grow, it will be interesting to see how society ultimately responds.

Have a good weekend and relax...

Justin

• Print
• Comments
• Trackbacks

I am currently embroiled in several guardianship fights where the grantor’s capacity to grant a power of attorney is very much at issue. I therefore read with interest an article, co-authored by our own Ian Hull, regarding the legal and medical methodology in assessing testamentary capacity and evaluating undue influence. The article was published in the American Journal of Psychiatry in May 2007. 

The article addresses a variety of issues. However, the one that I want to consider today is the common cognitive screening tests used by the medical profession to assess testamentary capacity. 

By way of introduction, the article states:

Clinicians and legal experts must understand that cognitive tests are not diagnostic of dementia and cannot be used as a measure of capacity. Their value lies in the ability to screen for cognitive impairment and to reflect changes in cognition over time. The Mini Mental Examination (MMSE) and the clock-drawing test are the two most common used cognitive screening tests.

The MMSE is widely used and is generally regarded as a test of cognitive function, albeit with limitations. The MMSE canvasses seven cognitive functions with a possible total score of 30. Scores below 26 suggest that a person is impaired. However, there are a variety of outside biases that may affect the MMSE score, including education and language.  The MMSE is therefore not necessarily determinative or diagnostic of incapacity, but simply instructive as to whether the person being assessed is cognitively impaired. It is a test that can be repeated over time with good results.  

The clock-drawing test simply shows a circle. The person being assessed is then instructed to place numbers on the circle so that the circle looks like a clock. The patient is then asked to set the time to ten past eleven. 

It is widely accepted that the clock-drawing test covers a wide range of intellectual and perceptual skills. According to the article, the clock-drawing test measures: comprehension; planning; visual memory and reconstruction of a graphic; motor programming and execution; numerical knowledge; abstract thinking; etc. While no specific score is given, the actual test provide a universal global assessment of cognitive function. For anyone with small children, they will know that telling time on a conventional clock is not necessary an easily acquired skill and takes some degree of cognitive proficiency on the part of a child. The value of the clock-drawing test in assessing cognitive function therefore becomes apparent when dealing with adults. 

Justin

• Print
• Comments (1)
• Trackbacks

In the context of estate litigation, mediation, as well as pre-trial conferences, often lead to settlements. The importance of carefully documenting a settlement should not be overlooked. Where required, a Rule 7 motion (court approval of a settlement where a party is under a disability) will have the effect of forcing the parties to document their settlement by way of a supporting affidavit, proposed minutes of settlement, and/or a draft order. As a result, the parties know exactly where they stand and what they can expect in the future.  While a successful pre-trial conference may result in a court order on the spot, such an order, if granted, usually indicates that the parties have simply settled without canvassing the terms.

Too often a settlement is not properly documented and subsequent problems inevitably arise. It has been my experience that parties attending mediation or a pre-trial conference are anxious to leave. They may be emotionally exhausted both from the day and from the litigation generally and suffering from financial fatigue. In fact, the parties may have a hard time just being in the same room. Counsel too becomes frustrated by a long and arduous day and when a settlement is finally reached are anxious to leave. Counsel mistakenly believe that the matter can be “written up” at a later time. 

In my view, failing to sign rudimentary minutes of settlement, or an outline of settlement, with comprehensive minutes to follow is a mistake. Predictably later disagreements arise as to the exact terms that were agreed to. It is my experience that drafting minutes of settlement, even rudimentary ones, inevitably raise issues that the parties did not initially contemplate or think to address.  It is therefore worth taking the time to draft minutes of settlement, or an outline of key terms, to be signed by all parties at the conclusion of a successful mediation or pre-trial conference.  

Once drafted, it is my practice to have the client sign minutes of settlement rather than counsel. This helps ensures that if a client tries to resile from the settlement at a later date, the client’s signature is clearly staring up at them (clients should read the minutes before signing).  

Finally, once a settlement is reached and minutes of settlement signed, the parties should seriously consider bringing a motion to approve the settlement even if such a motion is not technically required. The cost is well worth it. There is nothing like the protection and blessing of a court order to ensure a harmonious future.  

Justin

• Print
• Comments
• Trackbacks

It is widely assumed, and accepted for that matter, that a formal passing of accounts affords full protection to an estate trustee. The familiar mantra is that those with a financial interest in an estate are not only required to object to the accounts proffered, but must concurrently raise any other issue regarding the overall competency of the estate trustee (succinctly summed by the phrase “you snooze you lose”). However, I recently came across an Ontario Court of Appeal (“C.A.”) case that challenges that proposition.

By way of background, section 49(2) of the Estates Act states: “The judge, on passing the accounts of an executor… has jurisdiction to enter into and make full inquiry and accounting of … the whole property that the deceased was possessed of… [including] its administration and disbursement”. Section 49(3) authorizes a judge to order the estate trustee to pay damages if the estate trustee occasioned financial loss to the estate through misconduct, neglect, or default. It is worth noting that the language is permissive, not mandatory, seemingly providing a beneficiary with the opportunity to make a later complaint.

In Simone Estate v. Cheifetz, www.canlii.org/en/on/onca/doc/2005/2005canlii36155/2005canlii36155.html,Stephen Cheifetz was a Windsor lawyer who was named as one of three executors of the respective estates of a husband and wife (his clients) who died tragically in a plane crash. Mr. Cheifetz eventually resigned as estate trustee and was ordered to pass his accounts. His compensation was challenged and Mr. Cheifetz was ultimately ordered to repay monies taken as compensation. The successor estate trustee then brought an action against Mr. Cheifetz for damages for breach of fiduciary duty/breach of trust.

Somewhat complicating the matter was the fact that the decision arose out of a rule 20 and rule 21 motion. However, to cut to the chase, the C.A. held that on the earlier passing of accounts the court was concerned with the proper compensation to be paid to Mr. Cheifetz as estate trustee. Conversely, in the action for damages for breach of trust, the court would be concerned with issues of a very different nature. While aspects of Mr. Cheifetz’s conduct considered on the passing of accounts might be considered in the action for damages, it would be for a different purpose and different legal considerations would apply. 

The C.A. went on to point out the undesirability of litigating the issue of breach of fiduciary duty/breach of trust on a passing of accounts (apparently disregarding the fact that a section 49 claim could be carved out as a trial of an issue). In the end, the action for damages stood and Mr. Cheifetz was permitted to litigate issues pertaining to his alleged breach even if such issues had been raised on the passing of accounts.

For a more fulsome discussion of this case, please see this week’s Podcast. Enjoy and keep reading.

Justin

• Print
• Comments
• Trackbacks

In Forest v. Lacroix Estate (2000), 187 D.L.R. (4^th) 280, the Ontario Court of Appeal (“C.A.”) affirmed that Rule 60.11 contempt orders cannot be used to enforce orders for payment of money. 

In Forest, a testator had named his son trustee and sole beneficiary of his estate having no provisions for his common-law wife of 19 years. Despite there being an order specifically prohibiting the dissipation of the estate, the son dissipated a significant amount of the estate assets. The Trial Judge having made a finding of contempt, ordered the son committed to jail for 9 months unless he purged contempt within 28 days by paying the common-law wife. The Court of Appeal noted, following a review of the law, that there are other means by which support orders can be enforced.    

In 2002, the C.A. in Murano v. Murano, [2002] O.J. No. 3632 relied on the reasoning in Forest and held that there was no exception for family law matters. 

In today’s and tomorrow’s blog I will touch upon the case of Dickie v. Dickie, [2007] S.C.J. No. 8, [2006] 78 O.R. (3d)1 (Ont. C.A.), in which the C.A. and Supreme Court of Canada (“S.C.C”) deal with the availability of a contempt motion in respect of the failure of a party to comply with alleged orders requiring the payment of money.

Today’s blog will set out the background to Dickie; tomorrow’s blog will deal with the decisions of the C.A. and the S.C.C.

The case involves a dispute between husband and wife. Before the C.A. was the appeal by the husband from an order finding him in contempt of Court for failing to comply with orders requiring him to secure support obligations by providing an irrevocable letter of credit and to post security for costs. The motion Judge imposed a sentence of 45 days in jail for that contempt, which the husband served immediately. The husband pursued his appeal arguing that the motion’s Judge had no jurisdiction under Rule 60.11 of the Rules of Civil Procedure to make a contempt order because the underlying orders were orders requiring him to make a payment of money.  The wife brought a preliminary motion before the C.A. submitting that the Court should refuse to entertain the appeal because of the husband’s wilful disregard for orders of the Court.

Thanks for reading. Part II tomorrow.

Craig

• Print
• Comments
• Trackbacks

Given the events of last week, it is hard not to blog on the Conrad Black verdict.  Much has been written with more to come.  In one of my spring blogs, I commented, with some admiration, on Black’s perseverance in the face of overwhelming odds and noted the importance of steadfastness in litigation.  Of course, the danger for Black, as with all other litigants, is that perseverance becomes intransigence.  According to a variety of talking heads, Black had ample opportunity to settle with the shareholders and avoid the entire mess, but refused. 

I will leave it to others to comment on the justness of the Black verdict.  However, building on yesterday’s blog, which addressed the importance of gathering and putting forward the right evidence, the Black verdict is instructive.  Black’s right-hand man, David Radler, was ultimately not believed by the jury.  Black’s defence team went to great lengths to paint the prosecution’s star witness as a blagger and a liar; they obviously had some success.

What was interesting is the fact that three “small town” newspapermen were, in fact, beli