The Court of Appeal dismissed the appeal. The general power of appointment given to Mr. Carson was deemed to be equivalent to property.  Unlike a trustee, Carson could have appointed himself as donee. The Court of Appeal approved of the lower court's distinction between the case at bar and the prohibition against an estate trustee selecting beneficiaries that would have been void for uncertainty.  The testator in Re Nicholls chose to create a Will where the trustee was subject to the exercise of the power of appointment by Carson. This the testator was free to do. 

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

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

·         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.

Mary’s distinguished and esteemed career has included her unwavering commitment to, as well as the achievement of, excellence in these areas.   

In addition to the Award for Excellence, the Widdifield Award and the Hoffstein Book Prize will be presented.

For more information, please contact Blossom Pangowish, OBA Sections Co-ordinator, at (416) 869-1047, ext 399, or by email at blossom@oba.org.

Enjoy.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee. 

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.

Nominations must be filed by 5:00 p.m. on Friday, January 14, 2011 to:

Blossom Pangowish, 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 Blossom Pangowish at (416) 869-0513, ext 399, or email at blossom@oba.org or by visiting on line at http://www.oba.org/en/admin/awards_en/tru_award.aspx.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

60. (1) A trustee, guardian or personal representative may, without the institution of an action, apply to the Superior Court of Justice for the opinion, advice or direction of the court on any question respecting the management or administration of the trust property or the assets of a ward or a testator or intestate.

Justice Cullity describes the applicable principles in Merry Estate v. Plaxton, 2002 CanLII 32496 (ON S.C.) at paragraph 35:

"[35]  On the question of costs, I am satisfied that no criticism can properly be directed at Mr. Meredith for bringing this application. Section 60 of the Act entitles trustees to seek the opinion, advice and direction of the court with respect to the administration of a trust and, in cases where significant doubt exists as to the scope of their powers and responsibilities, they may not be protected under section 35 if they fail to do this. Although such applications must not be made frivolously – and not merely to relieve applicants from making decisions that are part of their responsibilities under the terms of the trust - they are entitled to have their costs paid out of the trust property if, in the opinion of the court, the application was properly brought. I believe this is such a case."

Merry Estate v. Plaxton also contains a discussion of a trustee's right of indemnity with respect to costs properly incurred, and the relationship between this right of indemnity and litigation cost awards for trustees from trusts.  In that application for the court's advice, the trustee Mr. Meredith was awarded full indemnity for his legal expenses in bringing the application.  

Have a great day,

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

In Re Estate of Daniel O’Donnell, the date of Mr. O’Donnell’s death was mistakenly listed as May 1, 2009 (not May 2) on the application for a certificate of appointment and resulting certificate. This mistake did not stop the administration of the estate. Mr. O’Donnell’s Will named Mr. Wilson as the sole estate trustee and sole beneficiary, and Mr. Wilson distributed virtually all of the estate assets to himself. He died a short time later, in July 2009. The administration of Mr. O’Donnell’s estate was yet to be completed, but the alternate estate trustee in Mr. O’Donnell’s Will had renounced her right to act. 

Accordingly, the named estate trustee for Mr. Wilson’s estate, Ms. Thomas, applied for a certificate of appointment as succeeding estate trustee with a will for Mr. O’Donnell’s estate. The application materials filed by Mr. Wilson’s estate trustee listed May 2, 2009 as Mr. O’Donnell’s date of death. The original error in the date of death went unnoticed for some time.

When the mistake in the date of Mr. O’Donnell’s death was finally identified, the Toronto Estates Office took the position that the applicant should bring an ex parte motion to correct the error made in the original certificate before the second certificate could be issued. Ms. Thomas argued, among other things, that she should not have to bear the cost of correcting a mistake she had not made and that the cost of preparing such a motion was out of proportion to what was at stake in the succeeding application (the succeeding application was only needed to complete tax filings and distribute the remaining assets valued at only $1,000.00.) 

Justice Brown’s solution was as follows. If the Estates Office identifies a discrepancy in the date of death between the original certificate and the application for a succeeding certificate, it should request an affidavit from the applicant that confirms that a mistake was made on the original certificate and attests to the correct date of death. Upon receiving such an affidavit, the Estates Registrar can then process the application for a succeeding certificate using the corrected date of death, and make any required changes to the original certificate and Ontario’s central registry which records information regarding estates. 

Thanks for reading,

Bianca V. La Neve - Click here to learn more about Bianca La Neve.

The evidence of revocation was overwhelming: The testator wrote such phrases as “void”, "bastards" and "get nothing" over each paragraph, applied Liquid Paper over the names of the beneficiaries, and later shredded the document in front of his insurance agent.  The Court held that ”the evidence clearly showed that [the testator] was an irascible, angry, suspicious, controlling, profane, and difficult man for most of his adult life; however, we cannot say that the trial court erred in refusing to find that he labored under insane delusions.”

The remarkable aspect of this case is the fact that there was a credible and disinterested witness to the shredding of the original Will.  This fact certainly bolsters the presumption of destruction that exists in Ontario when the original Will can not be located on the death of a testator. 

David M. Smith

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

The Crown Administration of Estates Act is amended by adding a new section 5.1, dealing with the enforceability of compensation agreements. A “compensation agreement” is defined to mean an agreement with an heir of an estate that provides for compensation, directly or indirectly, to one or more persons or entities on the location, recovery or distribution of any interest in the estate to which the heir may be entitled. In cases of estates administered by the Public Guardian and Trustee, there must be fair disclosure before a possible heir is asked to sign a compensation agreement. In addition, there is a cap on compensation of 10 per cent of the value of the possible heir’s interest in the estate. Click here for the complete text of the Act.

The Health Care Consent Act, 1996 is amended to increase the time allowed, from two days to four days, for the Consent and Capacity Board to issue written reasons for decisions. In addition, the Act is amended to allow the Board to direct Legal Aid Ontario (instead of the Public Guardian and Trustee or the Office of the Children’s Lawyer) to arrange for legal representation for a person who may be incapable with respect to a treatment, managing property, admission to a care facility or a personal assistance service. Click here for the complete text of this Act.

Bianca La Neve

Bianca V. La Neve - Click here for more information on Bianca La Neve.

With the numbers pointing upward as the population grays, a recent report by the Alzheimer Society, entitled Rising Tide: The Impact of Dementia on Canadian Society suggests the following steps to help reduce the impact of dementia:

1.                  Prevention programs based on healthy diet and physical activity that can delay the onset of dementia by two years, with a potential cost saving of $219 billion over the 30-year period.

2.                  Enhanced skill-building and support programs for family caregivers, many of whom suffer financial hardship because they must leave jobs to look after a relative with dementia.

3.                  Assigning a case manager to each newly diagnosed dementia patient and their caregivers, which could help the person remain at home longer and lessen the strain on the long-term-care system.

Today, annual funding for Alzheimer’s is approximately $24 million. The Toronto Star reports that if “nothing changes, this sharp increase in the number of people living with dementia will mean that by 2038, the total costs associated with dementia will reach $153 billion a year”. 

We have already seen a substantial influx with respect to Will challenges, particularly because there has been a big question mark about the testator’s capacity. The grim realty is that this will be a continuing problem that Estate Solicitors are going to have to tackle.

Thank you for reading.

Rick Bickhram

Rick Bickhram - Click here for more information on Rick Bickhram.

Dishonourable duty to “gazump” 

I found the whole passage so fascinating that I shall reproduce it for your enjoyment and potential enlightenment:

“Where trustees who have entered into negotiations for the sale of trust property receive a subsequent higher offer from another party they should at least probe the subsequent offer irrespective of questions of commercial morality which might have led a vendor who was not a trustee to close the deal with the original purchaser. Nevertheless, the trustees retain such a discretion as will allow them to act with proper prudence, and may pray in aid the commonsense rule underlying the old proverb “A bird in the hand is worth two in the bush”; so that there may be cases in which they could properly refuse a higher offer and proceed with a lower one.”

Underhill & Hayton, “The Law of Trusts and Trustees” (London: LexisNexis Butterworths, 2007) at page 716

Click here for the Wikipedia definition of gazumping and its opposite, gazundering (just for fun). Here is a link to a gazumping reference in a 2006 judgment, just in case you don’t believe me  - see paragraph 45. 

There are a couple of lessons to be learned here. The first is that not all legal terms need be Latin or pretentious-sounding. The second is that while the law may apparently foist a dishonourable duty upon (poor unsuspecting) trustees, if they happen to be holding a bird in one hand they will probably be okay. 

I’ll bet every Who in Whoville already knew that.

 Sharon Davis

Sharon Davis - Click here for more information on Sharon Davis.

A recent example of Rule 48.04(1) barring a motion for interim preservation occured in Trapukowitcz Estate v. Royal Bank of Canada.  In this case, an estate trustee was seeking an order that the proceeds of a GIC and a bank account be paid into court pending determination of ownership.  Justice Harris refused to grant leave to bring the motion because, on the basis of the admissible evidence, the estate trustee had not shown a substantial or unexpected change in circumstances. 

Justice Harris followed Machado v. Pratt & Whitney Canada Inc. (1993), 16 O.R. (3d) 250, which requires strong affidavit evidence to demonstrate a "substantial and unexpected change in circumstances to the extent that to refuse the order would be manifestly unjust".  The grounds in the moving estate trustee's affidavit were unconvincing. 

As importantly, viva voce evidence given in submissions was not considered.  To do so would be unfair to the respondent, particularly since the evidence had been available since June 4, 2009 and the hearing took place in August 6, 2009.  Therefore, Justice Harris cited Rule 37.06(b), which stipulates that every notice of motion must state the grounds to be argued, and refused to consider the viva voce evidence. 

There is no requirement under Rule 45 to prove the assets are actually at risk, so a R. 45 freezing order is easier to get before the close of pleadings.

Enjoy your day,

Chris Graham

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

 Fiacco v. Lombardi, 2009 CanLII 46170 (ON S.C.) involves four siblings who disputed the management of their mother’s property. She executed a continuing power of attorney for property appointing all four of her children as her attorneys to act jointly. That didn’t go so well.

The mother suffers from dementia. In 2008, the four children entered into contested guardianship litigation over their mother; two were appointed guardians by on January 23, 2009 by Order of Cameron J. That round of litigation cost the mother $30,022.22.

The two children who were not appointed were ordered to provide information about their mother’s assets and the original will of their mother to the guardians, and to transfer assets to the guardians. They did not act quickly.

Justice Brown states, at paragraph 14, that “The view…that the Order did not require compliance forthwith was dead wrong: when a court appoints guardians of the property of an incapable person, any other person with notice of the order is required to deliver up immediately to the guardians all property of the incapable person that he or she might possess.”

At paragraph 10, His Honour states that the “respondents acted contrary to their obligations under the SDA [Substitute Decisions Act] and they obstructed their mother’s guardians in discharging their statutory duties.”

The SDA at sections 33.1 requires guardians to make reasonable efforts to determine if an incapable person has a will; and sections 33.2(1) and (2) require a person who has the incapable person’s will to deliver it to the guardian “when required by the guardian.”

The Court did not approve of the children seeking further funds ($29,154.14) from their mother’s estate to “fund their continuing sibling rivalry.”

Justice Brown emphasized that “capacity litigation should reflect the basic purpose of the SDA – to protect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream of income to support the needs of the incapable person: SDA, sections 32(1) and 37.”

His Honour states that members of the Bar should not presume that all parties to contested capacity litigation will have their costs paid by the estate of the incapable person.

This endorsement emphasizes that family fights cost everyone involved. 

Enjoy the weekend. 

Jonathan

Jonathan Morse - Click here for more information on Jonathan Morse.

In Canada, about one in every 11 people over the age of 65 is living with Alzheimer's or a related dementia. Worldwide, the figure is about 35.6 million and it will grow to 115 million in 40 years. The report focuses on the impact on caregivers, healthcare infrastructure and the economy.

Of course the impacts will be felt in the legal field as capacity issues occur more frequently: a spouse caring for his or her partner; children caring for parents and the state stepping in when no one else is available to assist. Each scenario will require that guardianship issues be addressed; personal property and personal care decisions will ideally have been addressed in advance.

A story that unfolded over the last few years is a case in point. A Nova Scotia couple was separated as a woman with dementia was brought back to Britain against the wishes of her husband. The siblings who took her back to the U.K. claimed they were following her wishes. The husband said otherwise. The saga ended this week as the woman’s ashes were returned to her husband. 

Advances in medicine may halt the advance of this disease. In any event, it is advisable to consider continuing powers for property and continuing powers for personal care.

Enjoy your day. 

Jonathan

Jonathan Morse - Click here for more information on Jonathan Morse. 

A recent article in the National Post raises an interesting question regarding when death actually occurs and how it is defined.  There is a medical difference between "cardiac death" and "brain death."  As the article notes, the issue is of most concern in the context or organ donation. Simply put, the cardiac death protocol provides that declaration of death may be made 5 minutes after cardiac death.  However, in extremely rare instances, case have been reported of a "Lazarus syndrome" and "auto-resuscitation" as long as ten minutes after cardiac death.  In any event, a person may still have brain activity for a period of time after cardiac death.

As Jocelyn Downie, an ethicist at Dalhousie University notes: "It is only after the declaration of death that certain things can happen:  we can take your organs, we can bury you, we can do an autopsy...we can trigger all sorts of things around your property."  Downie advocates a more rigid definition. 

Legislation in most provinces suggests that death is to be determined by physicians according to "current medical practice." PEI's law is more specific (death can "include brain death").  In Quebec, there is no legal definition at all:  the matter is left completely to the physician.

Ontario's Trillium Gift of Life Network endorsed the new donation-after-cardiac-death (DCD) protocol only after extensive research and consultation that ensured it is a moral and medically appropriate practice.

David M. Smith

A trial binder typically 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, success may hinge on the preparedness of the parties.

Thanks for reading this week. 

Have a great weekend.

Craig

In Re Henry, the deceased died on May 28, 2005.  Two weeks earlier, on May 12, 2005, he had made a Will designating his second wife as his sole beneficiary.  The deceased's son from a prior marriage challenged the will on the grounds of undue influence, lack of testamentary capacity and lack of knowledge and approval of the contents of the will.   

The trial judge found in favour of the second wife on all issues: due execution was shown, the deceased had testamentary capacity along with full knowledge and approval of the contents of the will.  The challenger's evidence, which consisted largely of his and his sister's testimony, did not bear scrutiny: some of it was inadmissible, testimony appeared reconstructed as opposed to remembered, testimony contained factual inconsistencies, legal submissions contained errors of law and so on.  By contrast, the evidence brought by the second wife was accepted in whole.

No new law is generated in Re Henry, at least not per se.  But there is a concise consideration of the applicable standard of proof which will be helpful for any lawyer making submissions regarding evidence in a will challenge.  Newbould J. points out that the principle in Vout v. Hay, [1995] S.C.R. 6 that evidence of suspicious circumstances must "be scrutinized in accordance with the gravity of the suspicion" may no longer be good law as a result of F.H. v. McDougall, 2008 S.C.C. 53.  F.H. v. McDougall states "[t]here is only one legal rule and that is in all cases, evidence must be scrutinized with care by the trial judge."  So which is it: Vout v. Hay or F.H. v McDougall? 

Having laid out the jurisprudence, Justice Newbould states:

"I need not decide in this case whether the passage from Vout v. Hay that I have referred to is still good law because in my view the evidence is the same regardless of whether the evidence is scrutinized with greater care in accordance with the gravity of the suspicious circumstances.  I have taken care to scrutinize all of the evidence".

Have a great day,

Chris Graham

Recently, I read an article labeled “Putting the Brakes on POA Fraud.” This article can be found in Briefly Speaking which is the official magazine of the Ontario Bar Association. The article is authored by David Freedman, who is an associate professor at Queen’s University faculty of Law.  In his article, Professor Freedman looks at the common situation in which elder abuse is likely to occur wherein he states: “The prototypical example is the situation in which the elderly parent resides with one child who is to take principal responsibility for the parent’s care and who has been given a POA by the parent over his or her assets. Perhaps it is the siblings or a third-party care-giver who complains about the exercise or non-exercise of the POA, but there are many cases in which the assets are misappropriated.” Of course there is a strong public interest in protecting our elderly against financial exploitation, but what can we do?

For those of us who practice in this area of the law, how often have we heard of a family member approaching the police  to make a complaint about an elderly person who has been taken advantage of and being told “it’s a civil matter”? False. Section 331 of the Criminal Code of Canada addresses the issue of “Theft by a Person Holding a Power of Attorney.” In addition to the Criminal Code, there are civil remedies that are founded on the principles of restitution. Professor Freedman states that regardless of the type of case (criminal or civil) “the interest is the same, stripping the wrong-doer of any illicit gain and restoring the victim as much as it is possible to do in the circumstances.”

Thank you for reading,

Rick Bickhram

In the May 11/18, 2009 issue of the Law Times, in a comment titled “The duty of an attorney to account”, John O’Sullivan and Lori M. Duffy comment further on the McAllister decision. They note other cases where an attorney for property has been compelled to account to the beneficiaries of an estate after the death of the grantor.

The authors suggest that in light of the duty to account, “the wisest course for a person exercising a power of attorney for property following these decisions is to assume that he or she will be required at some point in the future to account to persons opposed in interest, and to conduct themselves accordingly throughout their tenure as power of attorney.”

The authors go on to suggest that attorneys should, if they can, ensure that the power of attorney document provides protection for the costs that they may be forced to incur in preparing the accounts and passing them before the court.

Thank you for reading,

Paul Trudelle

The following are a few amendments that caught my eye:

1.    Rule 1.04 (1.1) provides that the court shall make orders and give directions that are proportionate to the importance and complexity of issues, and the amount involved, in the proceeding.  

2.    Rule 1.08 will permit the court, on its own initiative, to hear matters by telephone or video conference.  

3.    Pursuant to Rule 20 (summary judgment), the general test to obtain judgment is the moving parties ability to show that there is "no genuine issue for trial".  Rule 20 has now been amended which imposes the burden on the moving party to show that there is "no genuine issue requiring a trial".   

4.    In actions commenced in Toronto, Ottawa and Essex County, mandatory mediations are to take place within 180 days, rather than from 90 days of filing the first defence unless the court orders otherwise.  

5.    Where the discovery tools are likely to be implemented in a litigious matter, Rule 29.1 now requires the parties to agree to a discovery plan before the earlier of 60 days after the close of pleadings or such longer period as agreed.  The discovery plan must be in writing and it must include the intended scope of documentary discovery, taking into account relevance, costs and the importance and complexity of the issues.

6.    With respect to examinations for discovery, regardless of the number of parties or other persons to be examined, no party is allowed to examine for more than seven hours unless the party has obtained the consent of the parties or has obtained a court order.

7.    The monetary jurisdiction of the Small Claims Court will be increased to $25,000.00.

Again, these amendments were made with a view that it would make our civil justice system more accessible and affordable.  For instance, permitting courts to hear matters via telephone or video conference will free up judicial resources, and reduce Lawyers fees.   Increasing the monetary jurisdiction of Small Claims Court to $25,000.00 will provide access to justice for many in need and at the same time eliminate the demanding obligations that are imposed upon parties under the Rules of Civil Procedure.   I will be looking on with interest as these amendments take effect in the new year.

Thank you for reading and have a great day.  

Rick



 

Mr. Mortimer had an active professional life, and by many accounts, an active private life as well. He was first married in 1949: apparently he noticed his first wife while he rode a horse and peered over a hedge.  After divorcing around 1970, he married again in 1972.  Both wives were named Penelope, although he called his second wife Penny.

While the deceased lawyer may have organized his affairs with the requisite estate planning in place, the experience in Canada might suggest that Mr. Mortimer’s Estate will encounter some challenges not least of which may relate to copyright issues.

I refer to Lucy Maud Montgomery who died on April 24, 1942. The creator of Anne of Green Gables left a legacy of work and maybe just a few headaches for her heirs. 

After all the copyright kinks were ironed out, it seems that Anne of Green Gables has a bright future ahead of her.  With luck, and the combined efforts of lawyers and artists, Rumpole will experience similar success and longevity.

Thank you for reading.

Jonathan Morse

To exercise such Power of Appointment, the donee has to, first of all, survive the testator and, secondly, make a Will which successfully exercises the Power of Appointment. If the donee dies before the testator whose Will grants the Power of Appointment, the power clearly lapses and the Will will presumably provide a gift over to address such eventuality.

Such a decision to effectively delegate testamentary authority is not without its perils and counsel should probably carefully review with the testator the ramifications of granting a Power of Appointment respecting the distribution of residue.  For instance, if the testator has a good relationship with her grandchildren (i.e. the donee's children) the testator ought not to presume how the donee will in fact exercise the Power of Appointment.  In addition, the donee's Will may be vulnerable to a challenge which could conceivably defeat the testator's intention in granting the Power of Appointment

David M. Smith