With ongoing changes being made this year and adjustments taking place due to the continuing COVID-19 pandemic, below are some legal decisions that provided some much needed clarity in these uncertain times:

Sherman Estate v. Donovan, 2021 SCC 25

The topic of debate in this decision dealing with sealing orders was balancing the protection of public interest and individual dignity against the open-court principle. Ultimately, the Supreme Court of Canada affirmed the decision of the Court of Appeal to lift the sealing orders. In doing so, the Supreme Court affirmed the open-court principle and stated three core prerequisites that need to be established to obtain a sealing order:

1. that court openness poses a serious risk to an important public interest;

1. that the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and

1. as a matter of proportionality, the benefits of the order outweigh its negative effects.

 Grant Thornton LLP v. New Brunswick, 2021 SCC 31

The Supreme Court of Canada also enforced a new standard for when a plaintiff has the requisite degree of knowledge to discover a claim under subsection 5(2) of New Brunswick’s Limitation of Actions Act. In turn, this affects the two-year limitation period under subsection 5(1)(a) of that Act. Going forward, the standard to be enforced is whether “the plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn”.

Lacroix Estate, 2021 ONSC 2919x

As a result of COVID-19, counsel was unable to visit the testator in the hospital to execute a Last Will and Testament. The court in this case considered a holograph Will (a handwritten note) and the doctrine of incorporation by reference to determine the validity of an unsigned draft of the testator’s Last Will and Testament. Ultimately, the court found that, since the holograph Will did not itself make a disposition of any property, it could not be considered a valid testamentary document. Consequently, there was no duly executed Will. The court highlighted the following points in reaching its conclusion:

• section 6 of the Succession Law Reform Act provides that a testator may make a valid Will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness;
• the jurisprudence has established that to be valid, a holograph Will must be prepared with testamentary intent regarding the final disposal of the testator’s property upon death (Bennett v Toronto General Trusts Corp. [1958] SCR 392); and
• the doctrine of incorporation by reference allows a document entirely separate and apart from a Will to be considered part of a duly executed Will. However, this doctrine is only applicable where there is a valid Will into which the document may be incorporated.

Mak Estate v Mak, 2021 ONSC 4415

Contrasting the controversial 2020 decision of Calmusky v. Calmusky (which found a presumption of resulting trust despite a named beneficiary for a RRIF), the court in Mak Estate v Mak reaffirmed the supremacy of beneficiary designations for RIFs. Justice McKelvey stated “The whole point of a beneficiary designation … is to specifically state what is to happen to an asset upon death.” His reasoning followed that the presumption of resulting trust applies to inter vivos gifts, not testamentary dispositions and, therefore, should not apply to assets for which a beneficiary is designated.

Fitzgerald Estate v. Fitzgerald, 2021 NSSC

Following the Mak decision, there was uncertainty in Ontario about the application of the presumption of resulting trust to beneficiary designations. But the recent decision of Fitzgerald Estate v. Fitzgerald followed the court’s conclusion in the Mak decision. Justice Murray found that, with respect to a TFSA, a beneficiary designation was not subject to the presumption of resulting trust.

2021 brought many important legal decisions in the estates world. We hope that 2022 will bring more certainty, both in the law, as well as with the everchanging COVID-19 pandemic.

We take this opportunity to wish you and your families a very Happy New Year!

Suzana Popovic-Montag & Ekroop Sekhon