Listen to Will Challenge Litigation - Part 10

This week on Hull on Estates, Ian and Suzana discuss extraneous claims that can arise during a will challenge. In particular, they talk about propriety estoppel and other situations where someone worked to their detriment in the context of an estate dispute. For these kinds of claims, you require solid corroboration. Next week, Ian and Suzana will address the differences between quantum meruit and proprietary estoppel.

If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.

Will Challenge Litigation Part 10 - Hull on Estate and Succession Planning - Podcast #135

Posted on October 21, 2008 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada. From the offices of Hull Estate Mediation in Toronto, here are Ian and Suzana.

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening, and some of you may be watching, Episode 135 of our podcast on Tuesday, October 21^st, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hi there, Ian. How are you today?

Ian Hull: Just great.

Suzana Popovic-Montag: That’s good.

Ian Hull: So, working through our Will challenge process and thinking about some of the other issues you want to consider when you’re doing a Will challenge, I thought it would be a good idea to talk a little bit about some of these extraneous claims which can actually turn out to be the elephant in the room, so to speak. So, why don’t we start with just a brief discussion on the concept of proprietary estoppel and how that gets dove-tailed into a Will challenge. So, first of all, why would we be putting this on the table even as an issue?

Suzana Popovic-Montag: And one of the reasons we’d be doing this, of course, is because of the fact that, when we’re doing a Will challenge we’re not necessarily sure, at the very beginning, just how successful our challenge is going to be. And so in an attempt to sort of hedge our bets as much as we can, we try to think of any other possible claims that we might be able to bring in conjunction with the Will challenge in the event that, for some reason, the challenge is unsuccessful. And we talked during our last podcast a little bit about the concept of quantum meruit, and I think that’s a nice segway for the whole discussion of proprietary estoppel, as well.

Ian Hull: Well, for sure, and let’s talk about what proprietary estoppel is. And we typically will bring these kinds of claims, only if it makes sense, because it doesn’t always pay to simply add to the costs and the burdens of running a Will challenge. But the concept of proprietary estoppel does stem from the whole thinking that if you are aggrieved, and you haven’t received under the estate as you thought you might. A typical Will challenge is obviously when a child gets written out of a Will and that is, of course, a situation where the child would think that they have been aggrieved. In this case of proprietary estoppel is one where promises are made by, say, an easy example of a proprietary estoppel claim might be some of the classic British cases where someone comes to assist an elderly individual, and one of the leading cases was an elderly woman who had a fairly vast property and needed care, not for herself, but looking after the property, and a gentleman and a neighbour in the town assisted her. She was assisted on the basis that he would come fairly regularly, two or three days a week. He’d cut the grass, fixed things, and so on. It was an old property and needed lots of work. And throughout this time period, she would constantly say to him, look, I can’t pay you now, I’m land rich and cash poor, but don’t worry, because when I die, you’ll be looked after. And she went so far as to say, one day, this will all be yours. Now this story is not entirely uncommon and lots of cases we see, that one day this will all be yours statement made.  And in the proprietary estoppel world and the quantum meruit world, as you say, that case can be very seriously pursued in the Courts. And the Courts will embrace the fact that this poor gentleman has worked to his detriment.

Suzana Popovic-Montag: And the claim, Ian, really is an equitable one. So a Court is going to look at the factual situation and they’re going to, perhaps if there is a Will, they will say well, notwithstanding the terms of the Will, this was a set of egregious circumstances where someone has provided a service for someone, to his or her detriment, on the expectation that they be compensated and yet, at the end of the day, they’re not. And so how do we rectify that situation? And by virtue of this claim, and it is, in fact, a cause of action, the claim for proprietary estoppel, you can make this allegation. And I think what you said originally about the fact that we want to be very careful in the extra claims that we pursue during a Will challenge. It’s important to recognize the fact that strategically, we want to make sure that we don’t look like we’re just sort of all over the place.  So if we’ve got what we think to be a strong Will challenge, coupled with a strong claim for proprietary estoppel, I think strategically there’s a lot to be said about that kind of focused pursuit.

Ian Hull: And you know, as you say, it really just comes down to the Court looking at this and saying, has someone been unjustly enriched? And that is pretty well the threshold question that happens, practically speaking, in every Will challenge. Has one side of the family or one individual been unjustly enriched to the detriment of the other? And the key with the proprietary estoppel cases, is as you say, that we want to pursue them when it makes sense. We’re not, in our firm, big proponents of throwing everything at the wall and seeing what sticks. We find it deludes our claim, because we can say to the people, well look, with vim and vigor, this kind of claim will or may well succeed. 

So, the fundamental point of law that we need to keep in mind, though, when we pursue these claims, are two-fold. One is the question of corroboration which I want to talk about, and the second is that you act to your detriment. You have to show that you did indeed come and cut the grass and come and look after the premises on a what would be seen as more than just a friendly, one-off basis. And the other aspect of it is, of course, this idea that you’re not going to succeed with this claim without good, solid corroboration, and that’s meaning supportive evidence from a third-party source that isn’t just your mother saying, that’s what happened. It’s sourced from an independent party, for example, the minister in town may have overheard this nice gentleman while he was talking to this nice elderly lady who, at that point, said, gee, thank you again for coming, this is the third time you’ve come this week, boy you’re spending a lot of time, don’t worry, I know you’re going to be looked after, one day this will all be yours.

Suzana Popovic-Montag: And that really is very important in these kinds of claims, because otherwise, they are quite self-serving. And I know we’ve talked on previous podcasts about the need for corroboration, and this one, I think, particularly calls out for that kind of evidence because the other side is simply going to say, prove it, and you’ve got to do so.

Ian Hull: And the concept of corroboration, and my final thought on that is, it’s so strongly entrenched in the laws in any civil jurisdiction in Canada and in the United States, and it is set out in most of the statutes, most of the evidence statutes, it’s set out in that as well.  So there is such an importance placed by the Courts on this outside evidence to support it, so that you don’t just have people standing up in Court saying, these things were said, and not having the one person, who is the one who said it, around, and taking advantage of the death, so to speak. The Courts won’t tolerate it and legislatures have said that they won’t tolerate it and that’s why they put the statutes in. 

So our next aspect of this whole idea of proprietary estoppel is quantum meruit.  And the distinction, I think, is very important to make, because of the difference of the result. And I think in our next podcast we’ll talk a little bit about the quantum meruit concept and talk a lot about why there is such an important distinction between the two and why you may want to pursue proprietary estoppel or both, but keeping your eye on the ball, so to speak, because of the result, not as much as because of the case. So we remind everyone please, feel free to call in at 206-457-1985. Give us your comments and your feedback. The social media world, we embrace it, and we’d really love to hear from you.

Suzana Popovic-Montag: And of course, we invite you to visit our blog at estatelaw.hullandhull.com or, if you prefer to e-mail us at hullandhull@gmail.com. Thanks very much, Ian.

Ian Hull: Thanks, Suzana.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. 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 Hull On podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.

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Listen to Will Challenge Litigation - Part 9

This week on Hull on Estates, Ian and Suzana discuss other claims that can be made concurrent to a classic will challenge. In particular, they talk about quantum meruit claims and how these can be interpreted differently depending on the situation.

If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.

Will Challenge Litigation Part 9 - Hull on Estate and Succession Planning - Podcast #134

Posted on October 14, 2008 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada. From the offices of Hull Estate Mediation in Toronto, here are Ian and Suzana.

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode 134 of our podcast on Tuesday, October 14^th, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hi there, Ian. How are you?

Ian Hull: Great.

Suzana Popovic-Montag: That’s good.

Ian Hull: So, we were developing some of the, what we seem to be at now, is the sophisticated issues, some of the, which aren’t all that complicated, but they’re sophisticated issues that are tied into a classic Will challenge and what our clients can expect on either side, defending or propounding or upholding the Will. And we promised that we’d talk about today a development that kind of stems from the corporate issues that we talked about in our last podcast, and that is some of the other claims that can be made that are equally important, that aren’t falling directly in the whole closet of a Will challenge proceeding, but are often pursued concurrent, or at the same time literally, as the Will challenge proceedings. 

So let’s start with the classic, the one that was developed in Canada and throughout the U.K. in the mid-1900s, and that is the concept of quantum meruit.

Suzana Popovic-Montag: And that, of course Ian, I think you’re referring to the fact that a claim can be made against an estate on behalf of someone who says that during the lifetime of the deceased, I provided him or her with services for which, now that they’ve passed away, I should be compensated for.

Ian Hull: And that came out of a case in Canada, the Degelmena case, and that case, it’s a great story because what happened there, and the Courts saw this story unfold.  This nice gentleman acted, helped a woman out and performed day-to-day services for that woman, cutting the grass, looking after her affairs and so forth, almost handymanish kind of work, but a lot. And the Court said, and throughout his lifetime he appeared to be under the impression that he was going to be looked after, because the comments from this nice widow were, you will be looked after, don’t worry. He was never paid during it, so he worked away at this. And quite frankly, ultimately, he wasn’t looked after. And the Court looked at this problem and struggled with it and it’s an interesting development, because we’re going to go from the concept to quantum meruit, all the way through to the concepts of proprietary estoppel, all of which sort of tie in together. But staying with the quantum meruit claim, the Court said this isn’t right, we’re not going to let this happen, you can’t do this to people. They can’t be expected to have worked for free. And so the Court imposed what they call quantum meruit; that is, paid for work and services provided.

Suzana Popovic-Montag: That’s right. And you know, we’ve looked at the cases and we know that these are very difficult cases to predict the result of and that’s because there’s such a subjective component to the evidence that a judge is going to hear, and to the evidence, of course, that’s going to be led, and to what ultimately, I think, in fairness, a judge says, yeah that is what would be fair in the circumstances. 

Ian Hull: And in coming through that analysis in the quantum meruit context, the Courts we find, are typically looking at an hourly wage analysis. They say, well, how long did you work, how many hours a day did you work? Taking it outside of the case that we’ve just talked about, taking it into a situation where a daughter and a mother are alive, and the daughter is the dutiful daughter and works hours on end, does healthcare help, does financial care help, all of those things that we talk about in Power of Attorney fights and how we get compensated, but more importantly, gets into the same scenario and doesn’t get paid. Well that angle, in the context of quantum meruit, the daughter would naturally want to say listen, I want to make a claim and they’d come to see us and say, I want to make a claim. There’s a big difference here. We talked about our first case and that was the work of a handyman, a third party, maybe friend, but not a family member, not a close family member. Now in the second illustration I’m talking about is a daughter and mother. How do the Courts react to that scenario as opposed to the handyman scenario?

Suzana Popovic-Montag: Well as you can imagine, I think a judge will be more reluctant to recognize the services rendered by someone who’s a family member than someone who’s a third party. And the reason for that is simply because of all of our expectations in society that children do take care of parents or that parents will take care of children in reciprocity. And so, in that situation, it really becomes, I would suggest, a question of the evidence. What kind of evidence can you demonstrate or lead to show the judge that yes, this was dutiful work that would have had to have been provided to mom but someone, if it wasn’t dutiful daughter, would have had to provide for and mom would have had to pay for. This brings you back to the question of what kind of records do you have? How can you demonstrate that there was X number of hours that ought to be paid on a certain basis? These are not easy claims really to pursue, but I think they are important ones in a lot of circumstances.

Ian Hull: And they really are and I mean, I’ll say it once and I’ll say it again, people don’t remember this, but sometimes, is that judges are people too.

Suzana Popovic-Montag: That’s right.

Ian Hull: And they sit there and they say, they see a case like this, and we’re talking about the daughter-mother scenario, and they say, they struggle, because they say, you know what, that’s what kids are supposed to do. Now naturally, that’s the natural order of life sort of thing.  And then they balance it against, like you say, well if the child hadn’t done it, she would have had to have had an independent third party do it, and they’ll go out and they’ll test the market. They’ll expect counsel at these trials to have put to them details of what’s the market rate, what would that have been, what is a duty care nurse or what is a person to cut the lawn scenario. And so, it’s really as you say, it’s a tough case. When you’re doing it, you almost never remember to keep good records, because you’re doing it for your mom, because you’re also doing it, or the handyman scenario, you’re doing it because you were promised that it was going to be okay and that you would be looked after. And when the day of reckoning comes and the Will doesn’t look after you, obviously disappointment comes, and you have to scrounge around and collect your evidence at a time that it may be too late.

Suzana Popovic-Montag: Another thing that’s particularly difficult I find in these situations is that they can tend to be very emotional pieces of litigation, and the reason for that is because typically it’s another family member that’s saying, you shouldn’t have done that. It’s the brother saying, you know what, you were living with mom, you were living off her back anyways, you should have been providing these services, and that’s just not always the case. And so when you add that emotional element to the difficulty, of course, in finding the evidence to support these kinds of claims, they really can be difficult.

Ian Hull: Absolutely. And so having said that, as difficult as they are, it’s an element of the process. And when someone comes to see us about a Will challenge, there’s a bit of a checklist that we like to go through, whether it’s defending or propounding, and the first one is how good is your case in the Will challenge. And we go through that, and we’ve already talked about that in previous contexts and previous podcasts. Then we say, okay, can we supplement your case with a claim like this, to add on, to layer on the pressure to the other side, and then, or vice versa, are we going to be faced with that kind of claim. If you’re going to say, and a classic scenario that the child has been written out of the Will and gets nothing, well it’s not always a full stop there. And a quantum meruit claim might be the kind of claim you would consider layering on, to help bolster your position, and it’s a strategic position on either side. 

So, I think that’s a really good illustration of where these tangential claims get made in the context of the overall Will challenge proceeding. There are many other ones worth considering, and there are some creative ones as well. But from our standpoint anyway, that’s the starting point. And that’s the quantum meruit claim. There’s probably three or four other ones that are worth considering that are appropriate layering on. And that one, the next one that we could consider is, of course, the concept of proprietary estoppel, because it’s an extension of quantum meruit. And the proprietary estoppel claims, I think, are, well they’re very, very much used in the U.K. and I think are an interesting tool that we want to talk about. And I think what we’ll do is, we’ll spend some time in our next podcast talking about the expanded claim essentially of the quantum meruit , and that is, proprietary estoppel. So we’ll look forward to that podcast.

Suzana Popovic-Montag: Absolutely. Thanks very much, Ian. Just a reminder to our listeners, to feel free to provide us with any feedback you might have on our podcasts at hullandhull@gmail.com.

Ian Hull: And please feel free to call in at 206-457-1985. Thanks, Suzana.

Suzana Popovic-Montag: Thanks, Ian.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. 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 Hull On podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.

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This week on Hull on Estates, David Smith and Rick Bickhram discuss proprietary estoppel.

Posted on January 8^th, 2008 by Hull & Hull LLP

David Smith:  Hello and welcome to Hull on Estates.  You’re listening to Episode #92 of our continuing podcast series on Tuesday, January 8^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.

David Smith:  Good morning Rick.

Rick Bickhram:  Good morning Dave.

David Smith:  My name is David Smith.  I’m one of the partners at Hull & Hull.  And I’m here today with my associate, Rick Bickhram.  And today, Rick, we thought we’d talk about an interesting equitable concept which is gaining considerable traction in a lot of the cases that we look at, and certainly is an established concept in the British estates Bar.  And that, of course, is this whole issue of proprietary estoppel and when it can be used.  Rick, just generally speaking, what is proprietary estoppel?

Rick Bickhram:  Good question, Dave.  The doctrine of proprietary estoppel is primarily used by a claimant who has been promised all or part of an estate and has acted to his or her detriment in reliance on that promise.

David Smith:  So that’s really a classic equitable concept, isn’t it?  It’s where the Court is looking to fashion a remedy based on principles of fairness, when you boil it down, and principles of equity, to correct a situation which it would be unjust to leave as is.  And, of course, in the estate context, we’re always looking initially at the Will.  And I assume, Rick, that the situation where this arises is where someone’s been promised an inheritance in an estate by a testator and then subsequently discovers that they’re not receiving that inheritance?

Rick Bickhram:  That is correct, Dave.

David Smith:  Now Rick, this…I want to flesh this whole concept out a little bit more.  How does it differ from promissory estoppel, which is a term that we encounter in other areas of civil litigation?

Rick Bickhram:  Great question, Dave.  A promissory estoppel is pretty similar to the definition of proprietary estoppel.  If we look at the textbook definition of promissory estoppel, a claimant can rely on promissory estoppel where there is a clear promise by the deceased, and that promise affected their legal relationship and the promisee or representee acted to his or her detriment.  The difference between proprietary estoppel and promissory estoppel is that proprietary estoppel can be used as a sword and shield.  Proprietary estoppel can give rise to a cause of action.  Whereas promissory estoppel cannot give rise to a cause of action.

David Smith:  Okay.  And that’s really critical, isn’t it, for us, as litigation lawyers, isn’t it, Rick?  I mean, we’re always looking for opportunities to advance claims and defend or advance our clients’ interests.  And I think in a situation where…the classic example is someone’s cut out of a Will.  Well, were they relatives?  Were they…did they have an expectation of receiving a benefit?  The first thing we always tend to look at is, is there a Will challenge here, and is there a benefit to challenging a Will?  But in a lot of these cases where proprietary estoppel is useful, there’s a couple of points.  One is, the Will may not be one that can be challenged in any event because it may be a perfectly valid Will.  And the other problem may be that the person who rendered services to the deceased may not be a beneficiary under a prior Will, in which case, there’s no benefit to advancing a Will challenge in any event.  And so when we go through the flow chart of decisions or possible remedies available to any client, and we come to the conclusion that a Will challenge is not a viable option, in these circumstances we then look to other options.  And certainly, you know, proprietary estoppel is related to the concepts of quantum meruit, constructive trust, all of those other kinds of remedies that are a little better known in the Ontario Court system.  Proprietary estoppel is simply another means by which we can rely on the Court of equity to correct an injustice.  And that’s it at its highest.  But if we boil it down to its various components, Rick, what’s the first and most pivotal element of a proprietary estoppel claim?

Rick Bickhram:  Well, the first element of a proprietary estoppel claim is that the claimant must have incurred an expenditure or otherwise have prejudiced himself or herself or has acted to his or her detriment.

David Smith:  What’s an example of that, Rick?

Rick Bickhram:  Well, for instance, if the deceased represented to the claimant that if the claimant had built a road, she would leave them one third of her estate.  The claimant then built the road in reliance on that representation and the claimant is able to verify or back that up with corroborating evidence, then I think that satisfies the first element that he acted to his detriment by building that road and prejudiced himself as a result of the deceased’s representations.

David Smith:  And let’s pick up on this acting to your detriment or prejudicing yourself concept.  I mean, to my mind, any time you act to your detriment or prejudice yourself, you’re basically saying look, I spent time doing something for you, mister testator, that ate into time that I could otherwise spend doing something else.  So instead of investing in the stock market in my spare time as a day trader, I spent my time working for you because I understood that you were going to give me an entitlement.  I relied upon that to my detriment.  And my reliance was reasonable, right Rick?  Isn’t that a pretty key component of this?

Rick Bickhram:  Oh, that’s very important, and a good point, Dave.  And I guess as a general rule of thumb, your expectation should always have some type of benchmark where it can be considered reasonable from an objective point of view.

David Smith:  And so, of course, that brings us to the question of proof which we’ll talk about in a minute.  But if we think about, again, the equitable concept here.  On the one hand, you’ve got the innocent, naïve if you will, worker bee doing all of this work for the benefit of the testator.  And on the other hand, there’s a bit of a value judgment about the testator in the sense that if the person doing the services relies…reasonably relies…on representations made, and if the testator breaches the arrangement, then really it’s a bit of a damning indictment, isn’t it, of the testator who leads the promisee to expect an entitlement which he or she doesn’t receive.

Rick Bickhram:  And I guess that’s why it’s sort of an equitable remedy.  There is no formal contract.  It sounds like a contract, but there is no actual written document.  And that’s why we ask that the Court of equity step in here and correct the injustice that has been done by the testator’s breach.

David Smith:  As I understand it, too, Rick, the third component that we think about is that we have to obviously deal with proving this.  We have to prove that the testator encouraged the promisee to do the work which was done, and the testator must have known of the work incurred or the expenditure incurred, and consciously made a decision not to honour the equitable obligation to provide a benefit.

Rick Bickhram:  Absolutely, Dave.  And it’s interesting that you say that, because there is a case, a 2006 decision by the Nova Scotia Supreme Court, wherein the claimant here had built a causeway across an island that was owned by the deceased.  The deceased had promised the claimant here, the son, that he would receive an interest in that island if he had built the causeway. Now, during the deceased’s lifetime, she attended her solicitor’s office.  While at her solicitor’s office, she put the deed, or put an interest of the island into her two other children’s.  So not the claimant.  She put it into her daughter’s name and to her other son’s name.  The Courts, in the situation…well the claimant brought an action on the grounds of proprietary estoppel.  And the Courts here dismissed Ronald’s claim.  And the reason for dismissing Ronald’s claim was because there was insufficient evidence.  Ronald, who was the deceased’s son, the claimant here, he was unable to demonstrate that the deceased had promised him the island and he had built the causeway because of that promise.  Primarily what he was…or the evidence that the Court was looking for…was some form of corroboration of the alleged promise.  And the only evidence that the claimant, Ronald, had in this situation, was his own evidence.

David Smith:  And let’s finish up the podcast, Rick, by talking about evidence.  You know, Section 13 of the Evidence Act, requires corroboration in claims made against estates, for the very good reason that unless there is corroboration, it’s open to unscrupulous plaintiffs to advance claims which may be completely without merit.  Of course, there’s lots of good claims where regrettably there is no corroborating evidence.  And it would seem, given the rigidity of Section 13 of the Evidence Act, that those are unfortunately situations where the Court quite likely will be compelled to reject the claim if there’s no corroborative evidence.

In terms of the kind of corroboration we look for, obviously paper is the best thing we can have.  If there’s any kind of paper which evidences the nature of the arrangement between the plaintiff and the defendant, it’s really good to have something of that nature.  I might point out also that there’s other cases that you can have where you might be able to argue proprietary estoppel.  A case that comes to mind is one in which a deceased, during his lifetime, befriends a woman late in life.  She’s younger in age, she comes in and agrees to live with him as husband and wife.  He buys her an engagement ring, although he never actually marries her.  And when he dies, leaves her out of the Will.  Now, of course, other remedies would be available to someone in that case.  She’d be able to advance, presumably, a support claim under Part V of the Succession Law Reform Act.  Although consider a case where she lived in a relationship with him as a common-law spouse for less than 3 years.  In that case, she couldn’t make a claim as a spouse, she wouldn’t get a benefit under the Will or on an intestacy rather, because she’s not married to him.  And so this would be an interesting instance where proprietary estoppel would be an attractive remedy because the argument would be that she acted to her detriment in reliance upon a promise, the promise being that he would marry her.  And by not marrying her, she lost any entitlement that she would otherwise have on an intestacy.  And so there, from an evidentiary point of view, you can see that the engagement ring, evidence of friends as to how he treated her and whether he introduced her as his wife to others.  Those witnesses would obviously be relevant and would corroborate the intention to provide her with some benefit.

Rick Bickhram:  That’s a great point, Dave.

David Smith:  One other point from an evidentiary point of view, just to wrap it up, Rick, is an issue where there may be a prior Will that’s unsigned, which benefits the person who then renders the services.  That Will is of no value on a Will challenge, but it’s very valuable evidence to corroborate the later intention to benefit the person who renders the services.

Rick, do you have any other thoughts before we wrap up in terms of the kind of evidence we’d want to look for?

Rick Bickhram:  As you said earlier on, paper evidence is absolutely great.  We could always use that, or lawyers in general could use that, in demonstrating the testator’s intent at one point.  Also it would be helpful if there was some type of witness, if there were witnesses that were unbiased, who could give or account for a promise or an assurance that the testator once…or that the testator had put out for the person who was using proprietary estoppel.

David Smith:  All good points, Rick.  And certainly I think we’ve touched on this topic.  It’s an interesting topic.  There’s lots more we can say about it obviously but it’s been a lot of fun and we’ll look forward to podcasting again, Rick.

Rick Bickhram:  Thank you, David.

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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Posted on November 6^th, 2007 by Hull & Hull LLP

David Smith:  Hi.  Welcome to Hull on Estates.  You’re listening to Episode #84 on November 6^th, 2007.

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.

David Smith: Hi, my name is David Smith.  I’m one of the partners at Hull & Hull LLP.  And with me is Megan Connolly, one of our associates.  Hi Megan.

Megan Connolly:  Hi David.

David Smith:  Megan, I thought today we would talk about constructive trust claims made against an estate by a non-married spouse.  And this was an issue that I recently wrote a blog on and noted that there is a fairly interesting case called Belvedere and Brittain Estate of the Ontario Superior Court of Justice.  Now before we get talking about the case, I just wanted to point out at the beginning the case is under appeal apparently, more as to the quantum of damages than anything else.  But it does provide a very interesting fact situation to discuss.

Megan Connolly:  The case involves an unmarried couple who had met in 2000 and had apparently moved in together in June, 2000 although that was under dispute in the case.  Now, on the deceased’s death, he didn’t provide for Laura, his common-law spouse, at all in his Will and made no other provision for her on his death.

David Smith:  That’s right, Megan.  And the claim made against the estate by Laura was based on several arguments.  She argued proprietary estoppel, basically saying that she entered into the relationship in reliance upon receiving certain gifts from the deceased’s estate.  But the primary basis upon which the Court ordered a constructive…awarded damages, was on the basis that there was found to exist a constructive trust in the estate for her benefit.

Megan Connolly:  Right.  Now she said that it was always her partner’s intention that on his death, she receive his RRSPs, the use of his house or alternatively, funds to purchase a new house, as well as a new car.  And in support of that, I guess she pointed out that in moving in with him, she had sold her home for I think less than its market value.  She had given up her car.  She hadn’t kept any of her possessions and she’d also I guess reduced her…she reduced the amount of time she spent working.

David Smith:  That’s right.  And so what the Court did, in terms of analyzing her claim, was looked at the various components of constructive trust and there is a three-fold test, which is an enrichment of the estate to the detriment of the claimant in the absence of any juristic reason.  Megan, what was it about the fact situation that made the Court think that she was enriched?  Or sorry, rather that the deceased was enriched?

Megan Connolly:  Well, as I said, when she moved in with him, she first of all had given everything up.  But she’d also spent a lot of time looking after his home.  He had a young child which she cared for.  She provided clerical support in his office.  She’d worked for Air Canada and she, I think, received heavily discounted flights for her friends and family as well as herself.  And both the deceased and his son, I guess, benefited from this.  Her family also had a condo in Florida that they would visit frequently and that they’d stay at.

David Smith:  When we talked about such an enrichment of the deceased, Megan, is it an enrichment of the estate, or is it, what do we mean exactly by enrichment?

Megan Connolly:  Well I guess basically it’s sort of the idea of getting something for nothing.  Here, the Court was saying that she’d provided, I guess, different services for him, whether it was through childcare, through maintenance to his property, to assistance with his business, etc., that she’d also been deprived as a result in that she’d given up income from her job, she’d sold her home and her car and I guess a Court’s interest is making sure that he didn’t receive anything without her also receiving a corresponding benefit.

David Smith:  It strikes me that the Court’s always interested to look at the relationship between her deprivation and his enrichment in the sense that there’s a trade-off there, isn’t there, between her loss and his gain.  And I guess that’s really what they’re talking about when they say that it’s got to be corresponding.  One thing I didn’t understand about the decision, quite frankly, was the fact that the Court considered the fact that apparently his death was unexpected and that she reacted very badly to this and caused her great emotional upset.  And the Court considered that as a factor to consider when looking at the phrase corresponding deprivation.  I mean, what do you think of that?  Because, to my mind, it’s not corresponding to any of the enrichment he gained…what do you think about that?

Megan Connolly:  No, it seemed like the Court was saying that, well he died, and it was really, really upsetting to her.  She’d apparently also been bipolar for a long time and I think this just worsened it.  She wasn’t working after his death.  And I think it seemed if not doubtful, at least questionable, whether she’d ever be able to work again.  And part of may be just, I guess, equity in a way, that the Court saw that, because of the situation, she was going to be severely I guess harmed in a sense, and wanted to correct that.  I’m not sure how solidly that’s grounded in legal principles.  I think it’s also worth mentioning that his estate was worth about $6,000,000.  So there seemed to be a lot of money to be spread around here.  And I think that was probably also a consideration.

David Smith:  And of course the third branch of the test is absence of juristic reason.  And again, this is a concept I wrestle with in the sense that I don’t think it’s always clear what a juristic reason could possibly be and what is an example of a juristic reason.  Do you have any thoughts on that?

Megan Connolly:  Well here, the defendants, the trust company, argued that her lifestyle had improved as a result of being with him.  So even if she was deprived and he was enriched, she too was also enriched by the fact that she went from, if not a low-paying job, a financial situation that wasn’t as comfortable as what she had when she was with the deceased.  And they sort of argued that that was a reason for his enrichment and her deprivation.  Now the Court didn’t accept that.  They said that, first of all, the improvement in her lifestyle was arguable, although I’m not sure if it is or not.  And that in any event, it didn’t constitute a juristic reason.  The Court also found that a lot of what she was doing was stuff she would have done even without him.  For example, the travel that they did a lot, was a result of her job at Air Canada.  And the Court found that well, she would have done that anyway.

David Smith:  That’s an interesting point, isn’t it?  So I guess really the Court’s got to look at all the circumstances.  And what struck me about this case to a large extent was, and maybe I’m being a bit cynical, but it seemed to me that the Court saw that she could not fit within the parameters of a support claim and under the SLRA, and looked for…well maybe looked for a way or looking at the facts, decided that there must be a way to benefit this woman, who had clearly given a great deal of herself to the benefit of this gentleman before he died.  And I guess, really, that’s what Courts of equity are there to do.

Megan Connolly:  And I think it’s also interesting that there was a lot of discussion in the decision about his intent.  The fact that even though he never made a Will, there was a lot of evidence that he’d intended to make one and that he’d intended to name her as the beneficiary of his RRSPs, which I think were worth about $2,500,000 at his death.  And there was also surrounding evidence from his friends and financial advisors that he’d always intended to do this.  And I think, just going back to the idea that he died in an accidental way, I think the Court was convinced that, well had he not died all of a sudden, he would have gone ahead and made these changes and that she would have become a beneficiary of the RRSPs and probably received some other money on his death.  So I think that was another, I guess, motivating reason for the Court to make the decision that it did.

David Smith:  Well that’s right.  I mean, as I understood the facts, the Court found that or considered evidence that he intended to marry her.  I think they’d even fixed a date.  And, of course, had he married her, that marriage would have revoked the Will, in which case she would have had all of the entitlements of a wife on an intestacy or under any Will that he would have made after that marriage, because of course the marriage would have revoked the pre-existing Will.

I guess to wrap it up, Megan, what I’d like to just touch on, or discuss, is the whole issue of damages here.  As I understand the nature of the appeal of this case, is primarily concerned with the quantum of damages.  The argument being that the value of the RRSP on a rollover was what she was entitled to receive. And I should point out the RRSP, as I understand it, no longer was in existence at the time of the judgment.  And so we’ve got a cash judgment payable by the estate in an amount equal to the RRSP on a rollover, even though the RRSP no longer exists.

Megan Connolly:  And I think that in this decision, the Court had also said that she wasn’t going to have to pay taxes on any of this, that to the extent taxes were payable, they’d be paid by the estate.

David Smith:  Which again is certainly a better result than would be the case had she made a support claim, in which case her support and entitlement, were it to be an income stream, would be taxable in her hands.

Megan Connolly:  And so I think this is another situation where, I mean, in the discussion of the case about constructive trusts, it was very interesting.  But I think it’s a situation where the Court sort of looked at a situation that seemed patently unfair and wanted to, I guess, manoeuvre the law in such a way as that she would get what she otherwise would have received from him.

David Smith:  Well that’s right and I mean, equitable principles are such that the law is always a flexible enough instrument and especially equity, which is again, we have to remember that estate courts historically were surrogate courts and courts of equity, rather than courts of law.  And so in that sense, the Court would be looking to make a fair decision all around.  And so in that sense, I think, you know, subject to any reversal on appeal, this is another interesting decision to consider any time as counsel we may be retained by a common-law spouse to consider a claim against an estate.

Megan Connolly:  Um, hmm, it is, so we’ll have to see what the Court of Appeal says.

David Smith:  Right.  Okay, well thanks Megan.

Megan Connolly:  Thank you, David.

David Smith:  Bye-bye.

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.

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