Listen to Piszczek v. Zurawska
This week on Hull on Estates, Christopher Graham and Paul Trudelle discuss the recent decision in the case of Piszczek v. Zurawska that demonstrates the application of a resulting trust of joint accounts.
Comments? Send us an email at email@example.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.
Piszczek v. Zurawska - Hull on Estates Podcast #131
Posted on October 7th, 2008 by Hull & Hull LLP
Paul Trudelle: Hi and welcome to Hull on Estates. You’re listening to Episode 131 on Tuesday, October 7th, 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.
Christopher Graham: Hi and welcome to another episode of Hull on Estates. I’m Chris Graham.
Paul Trudelle: And I’m Paul Trudelle.
Christopher Graham: If you want to be heard on Hull on Estates you can participate in our discussion by leaving a comment. Give us a call at 206-350-6636. The number is in the show notes along with our e-mail address, firstname.lastname@example.org, all lower case, or you can visit our blog at estatelaw.hullandhull.com, all lower case.
Paul Trudelle: Hi Chris, how are you today?
Christopher Graham: Fine thanks, Paul. How are you doing yourself?
Paul Trudelle: Very good, thanks. Today we thought we would talk about a recent decision out of the Ontario Superior Court of Justice, just as a reminder of the application of the resulting trust-type case that we see with joint accounts from time to time. I think it’s a useful discussion of the issues and a practical application of the case law, in particular the Picorry decision.
Christopher Graham: Yeah, this case is, it’s an illustrative case. I guess in a sense it’s timely, it’s been about a year since Picorry, plus a bit, but there aren’t very many decisions of this nature, I guess, because so many of these cases settle these days?
Paul Trudelle: That’s right. I think that’s fair to say. I think Picorry gave us quite a bit of guidance on this area of the law, but this case did go to Court. It went to Court and the judgment is the judgment of Langdon, Mr. Justice Langdon, on June 25, 2008. I think both of us are steering away from saying the name of the case, but it’s Piszczek and Zurawska. We’ll put a link to that in our show notes.
Christopher Graham: Yeah, I’ll take a wild guess here. Piszczek and Zurawska, and we’ll see if anybody actually knows the name of this one better than we do. Yeah, it’s an interesting case. It’s typical of a lot of estates litigation cases. There’s a long story, it’s a fascinating story. A World War II survivor came to Canada. He was married at the time. He came in 1950 from Poland. Worked hard as a custodian and he made friends with other Polish immigrants, took them into his house as boarders, they paid rent, he made really good friends with one of these boarders, and this boarder was apparently quite a good friend to him as well. He took care of the testator in the testator’s old age. The testator’s wife had died in 1972, so she wasn’t in the picture. And gradually took more and more of an active hand in the testator’s life as his mind went.
Paul Trudelle: Yeah, the deceased had two children from his marriage and he was a stepfather to his son’s wife from a prior marriage, so he did have three children, so to speak. However, it appears that two of those children weren’t very close; the third would see the deceased from time to time but wasn’t particularly close. This one friend was very close and very active in caring for the deceased prior to his death as the deceased’s health failed. And the Court paints a very nice picture of the gentleman in question, and it seems that he had this very close relationship, a very helpful relationship with this individual who was living with the deceased for a time, and later moved out but still was living close to the deceased and helped him with respect to taking care of his own property and maintenance around his house.
Christopher Graham: Yeah, that’s one of the interesting aspects of this case. The interloper, this man really did take care of the testator, by all accounts was a sincere and genuine friend, especially in the later stages of the testator’s life, and then the testator started to lose capacity. And when he lost capacity, this character got a Power of Attorney, or I guess he had it before capacity was lost.
Paul Trudelle: Yeah, he was the attorney under a Power of Attorney given while the deceased still had capacity. It wasn’t used until some point near the end of the deceased’s life when it appears that he did lose capacity. He was no longer able to take care of himself, he was put into a nursing home by his friend, using the Power of Attorney. The deceased at that point had a house and the house was sold by the attorney using the Power of Attorney. But I think it’s interesting to note, and the Court made extensive note of the fact that prior to selling the property, the deceased had a Will. The Will made a small bequest to this friend, left the balance of the estate essentially to the children of the deceased. However, after the deceased appeared to lose capacity, there was a request made by this individual that a lawyer come and see the deceased in order to make a new Will. And the Court made extensive findings, or noted at great length, the discussion between the deceased and this lawyer at the time when this new Will was being planned.
Christopher Graham: Yeah, essentially the deceased, at the time he was taken to the lawyer or the lawyer met with him, he was about as out of it as, well, he couldn’t answer any single question about his assets. He simply, apparently couldn’t respond, apparently had very little, if any, capacity at that point.
Paul Trudelle: And the lawyer noted that, and because of the lack of capacity, the lawyer wasn’t prepared to make a new Will. There was a suggestion that this new Will would have left the entire estate to the friend, however that never came to pass because the lawyer didn’t feel that the deceased had capacity. So following that, the deceased went into, or was in a nursing home at the time. The friend used the Power of Attorney to sell the house and then took the position that the deceased, prior to his death, wanted to give him a substantial gift, wanted to leave something to his family members. So $100,000 was put into a separate account in the deceased’s own name in order to satisfy the bequests under the Will. The balance, which was about $100,000 was left in the joint account. After the deceased died, the friend took the position that he received the balance of that account by right of survivorship and that was a gift made to him during the deceased’s lifetime.
Christopher Graham: Yeah, and here’s where the presumption of resulting trust comes in, because the joint account had been opened during the deceased’s lifetime, well it would have to have been opened during the deceased’s lifetime, but it was, and the funds were transferred in. The presumption arises, and it was up to that man to rebut the presumption of a resulting trust, and he was unable to bring forward sufficient evidence or any evidence to rebut the presumption.
Paul Trudelle: Right, and the matter came before the Court by way of a passing of accounts. The residual beneficiaries of the estate challenged the accounts prepared by the friend, took the position that the joint account proceeds should have fallen into the estate and should have been divided up as residue, so that’s how the matter came before the Court. The Court looked at the presumption and the evidence that existed, in order to see whether that presumption was rebutted. One of the interesting things that I like to note is that there were banking documents here, when the joint account was set up there was a banking document signed that would show that the accounts were being held as joint accounts with right of survivorship. The Court didn’t waste too much time in concluding that those would be for the protection of the bank and that either of the deceased or his friend could access the money during the deceased’s lifetime. But that wasn’t determinative of the question of whether there was a gift of those accounts and whether that rebutted the resulting trust presumption.
Christopher Graham: This is an excellent case to read and it’s one of those cases that doesn’t make law, but it ties together a few concepts that are already out there in a way to refresh, just refresh your memory of the core, but also other principles, like the principle of undue influence which also comes into play here.
Paul Trudelle: The Court didn’t find that there was any arm-twisting or anything like that, but it did find that the friend was taking care of or helping the deceased to such an extent that the presumption of undue influence arose, because the deceased was so reliant on the actions of the friend. So the Court says that there was a presumption of undue influence as well. On the presumption of resulting trust and evidence to rebut that, the Court refers to Section 13 of the Evidence Act which states that in order to rebut that presumption there needs to be some independent corroborative evidence; felt that there was simply no such corroborative evidence presented by the friend in order to rebut the application of the presumption of resulting trust.
Christopher Graham: And that’s another interesting factor about this case because it seems that the Courts have been trending towards, with respect to the application of Section 13 requiring corroborative evidence, the bar seems to have gotten extremely low there, to the point where telephone conversations are held to be corroborative evidence where, we only know the telephone call happened, we don’t actually know what was said other than the word of the claimant against the estate. But in this case, there wasn’t any of that sort of very narrow evidence that a Court is willing to hang its hat on and say, okay, yes you have corroborated your claim against the estate.
Paul Trudelle: Right, and another minor point on evidence that may help, or show why the Court arrived at the conclusion that it did. The friend took the position that the balance in the joint account was a gift to him, however there is some evidence that during the deceased’s lifetime, the friend had made, a gift was made to the daughter of the friend and that cheque was signed by the deceased. And the Court felt that if, in fact, a gift of that bank account was intended to the friend, then it would be odd to see the lengths that the friend went to in order to ensure that the cheque was signed by the deceased. And the Court felt that that didn’t help the friend’s case. It only seemed to support the conclusion that that account remained the property of the deceased throughout.
Christopher Graham: Paul, based on the fact that the deceased was, the meeting was arranged between the lawyer and the deceased, the lawyer who refused to do the Will, how important do you think that factor was, given the evidence? The interview was great, the discovery notes are very powerful, at least to me they seem compelling. Do you think that was the major factor or was there one major factor, or was it a combination, based on the decision?
Paul Trudelle: I think there’s a number of factors. I think that’s an important one, the fact that it was the friend who set up this meeting, called in the lawyer to make the new Will, was instrumental in getting that done. The lawyer was cross-examined or examined for discovery before trial and gave evidence that he had no real discussion with the deceased with respect to the terms of this new Will that was being suggested, and there was never any suggestion by the deceased that he wanted any gift to be made. The fact that all of this was pulled together, or the meeting was set up by the friend, I think, was influential.
So just to conclude, I think that it’s a very interesting case to look at, in that it reviews a very real fact situation. It applies the law from Picorry to that very real fact situation and the result being that the friend was required to turn over or disgorge the funds that he received in that joint account.
Christopher Graham: Now it is an excellent case, you know, and as we were saying earlier, because so many of these cases settle, and don’t go the full nine yards, there probably won’t be too many more like this. And this case really does apply Picorry; it discusses the principles. It’s one of those good all-round cases that’s really worth the time it takes to sit down and read it, give it a good thorough reading to see also how the laws of evidence are applied.
Paul Trudelle: Just before we leave the case, in the last line of the judgment, the Court awards costs to the children of the deceased on a substantial indemnity basis without any discussion. I think it’s important, though, to take that as a warning, that this type of case can result in costs on a substantial indemnity basis and that should be something that I think we consider when looking at the evidence that we have, whether we’re on one side of the case or the other, and in determining or deciding how far we’re going to go and what our approach is to resolving these types of cases.
Christopher Graham: Yeah, that’s a great point and that’s one more reason why so many of these cases are settling these days.
Paul Trudelle: Well thanks, Chris, for bringing that important decision to our attention and for discussing it with me today.
Christopher Graham: It was a pleasure, Paul, and I look forward to podcasting with you again soon.
Paul Trudelle: Yes, and we look forward to hearing from you, our listeners. You can send us an e-mail at email@example.com, or pick up the phone and leave us a message on our comment line at 206-350-6636. And be sure to visit our blog at estatelaw.hullandhull.com where you will find more information about the topics discussed today and other topics of interest to the estate bar and others interested in estate matters. We hope you enjoyed the show. I’m Paul Trudelle.
Christopher Graham: And I’m Chris Graham. Until next week, so long.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.
Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.