Author: Garrett Horrocks
My last blog discussed recent steps taken by the legislature to modernize the administrative side of the practice of law in Ontario. The practical side has also seen a number of developments that have emerged as a direct result of the ongoing pandemic. Some of these efforts have been spearheaded by the courts directly, while others, such as the Estate Arbitration and Litigation Management initiative, have been developed by members of the Bar an in effort to continue moving matters towards a resolution despite limited court access.
A recent decision of the Superior Court of Justice provides some important commentary on the judiciary’s expectations of parties and counsel to adapt to the current reality using these tools and others so that files can continue to progress.
In Arconti v Smith, Justice Myers grappled with the competing views of the parties as to whether an examination for discovery ought to proceed by way of a videoconference. The defendant, who was to submit to examination, proposed that the examination proceed by way of videoconference given the social distancing guidelines in place.
The plaintiff objected on several grounds. Among other objections, the plaintiff argued that the defendant and their counsel ought to be in each other’s presence to ensure the process proceeded smoothly. Alternatively, the plaintiff argued that the fact of conducting an examination remotely would “[deprive] the occasion of solemnity” and would otherwise make it more difficult to assess the defendant’s demeanour as a witness. The plaintiff argued that the examination ought to be deferred until social distancing guidelines were lifted.
Justice Myers’ initial response to the plaintiff’s position was simple, yet persuasive: “It’s 2020.” He held that the parties have technological tools at their disposal to conduct examinations and other litigation steps remotely, and that the use of such tools was especially salient in the context of the social distancing guidelines. Although Justice Myers advised that the concerns raised by the plaintiff might be relevant in different circumstances, they were not at issue there.
Ultimately, Justice Myers held that the use of readily available technology should be part of the skillset required both of litigators and the courts, and that the need to use such tools was merely amplified, not created, by the pandemic. The plaintiff was ordered either to conduct the examination of the defendant by videoconference, or to waive their entitlement to conduct the examination altogether.
This decision provides a glimpse into the court’s expectations of litigants and counsel to move matters forward in spite of the social distancing guidelines and court closures. While the current directives and legislation cannot be used to compel a party to perform a particular litigation step by audiovisual means, one may read Arconti as suggesting that the courts will nonetheless expect the parties to consider the entirety of their skillset to move matters along so that they do not languish in litigation purgatory as a result of social distancing guidelines.
Once social distancing guidelines have been lifted, it will likely be some time before the courts have dealt with the matters that were adjourned between March and June and are in a position to hear new matters. Parties who are willing to use the tools at their disposal to move matters forward and avoid contributing to this delay may find themselves commended by the judiciary. Those who are resistant to adapt, on the other hand, may expose themselves to commentary from a judge, or possibly cost consequences for their client, depending on the circumstances.
If you are interested in learning more about litigation procedure and estate planning best practices in the time of COVID-19, please consult our information guide.
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As Ontario begins to witness a glimmer of relief from the ongoing COVID-19 pandemic, one cannot help but notice how the outbreak has forced the hand of many industries towards modernization, and law is no exception. Our firm has blogged extensively over the past two months on the multitude of changes to estate planning practices, litigation, and the practice of law in the province, more generally, the implementation of which is directly attributable to the new business reality. Wills may be executed in identical counterparts, rather than as a single a document, by way of audiovisual communication. Motions and other court hearings are being conducted virtually, and materials to be filed in respect of those hearings can be filed with the court registrar electronically.
Most recently, Bill 190, the COVID-19 Response and Reforms to Modernize Ontario Act, 2020, received royal assent on May 12, 2020 and implements modest, but impactful, changes to numerous statutes. These changes continue the trend of modernizing the practice of law to match the business realities of the circumstances by, for example, specifically authorizing or validating the electronic signature of certain documents, providing mechanisms for the filing of such documents, if need be, by electronic means, or generally allowing for certain practice components to proceed in a virtual capacity. The legislative goals of Bill 190 fit with the province’s broader mandate, in the words of the attorney general, to have “modernize[d] the justice system 25 years in 25 days.”
The Bill also includes a formal amendment to the Commissioners for Taking Affidavits Act to authorize a commissioner of oaths to administer an oath or declaration, generally in the form of an affidavit, without being in the physical presence of the deponent, provided the commissioner can “satisfy himself or herself of the genuineness of the signature.” In other words, this amendment authorizes a commissioner to administer an oath or commission an affidavit by audiovisual means provided the signature, and the act of signing, are made visible to the commissioner.
This amendment reflects an interpretive directive issued by the Law Society of Ontario in March. The prior version of this statute required both commissioner and deponent to be in the presence of one another for the oath to be validly administered. Though physical presence was not a strict requirement under the prior version, it was considered to be an element of best practice. In light of the recent restrictions in having a commissioner and a deponent meet together for the purposes of commissioning an oath, the Law Society issued this directive to ensure that the requirement could be satisfied in the absence of physical presence, thus authorizing the commissioning of oaths to proceed virtually. The amendments to this act set out in Bill 190 simply serve as a more permanent statutory codification of the directive issued by the Law Society.
Please feel free to review our other blogs dealing with the practice of law in a post COVID-19 reality:
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This blog is the second and final blog in my series discussing estates-related topics in the film The Grand Budapest Hotel. While the first part focused on the application of forfeiture rules in the context of a testator’s murder, this blog specifically discusses the policy considerations that arise as a result of the further Last Will and Testament executed by one of the film’s characters, Madame D.
As a brief refresher, late in the film, a further Last Will and Testament executed by Madame D is discovered, the operation of which is only to be given effect in the event of Madame D’s death by murder. While the concept makes for an interesting twist in the film, in reality the purported condition precedent that the Will takes effect only upon death by murder likely means nothing in the context of Madame D’s estate planning.
Part I of Ontario’s Succession Law Reform Act specifically contemplates that a Will is revoked by, among other actions, the execution of a subsequent Will made in accordance with the provisions of that section. It is not made clear in the film which of Madame D’s two Wills were executed last. If the further Will was executed most recently and complied with all of the requirements of due execution, the prior Will would have been revoked and the second Will would likely prevail irrespective of the condition precedent.
Alternatively, a Will may also be revoked by a written direction of the testator to do so. Failure to expressly revoke a prior Will can potentially create problematic administration scenarios in which a testator may have believed, albeit mistakenly, that a prior Will had been revoked when in fact it had not.
While executing a Will in accordance with the provisions at Part I of the Succession Law Reform Act is sufficient in and of itself to revoke prior Wills, it is nonetheless prudent from an estate planning perspective to include a written intention to revoke prior Wills (provided, of course, the testator intends to do so).
Separately, even if we were to disregard the provisions of the Succession Law Reform Act, there would be a number of practical policy concerns if a Will whose effects were subject to a condition precedent. Notably, a reasonable debate could arise between beneficiaries in scenarios in which the cause of death is ultimately unclear.
The film suggests Madame D’s reason for executing a further Will to take effect on her murder is to ensure her nephew could not benefit from her demise at his hand. However, as discussed in Tuesday’s blog, that goal is accomplished by the operation of the slayer rule. Alternatively, Madame D could have relied on a common estate planning technique by making her nephew’s interest in her estate, rather than the Will in its entirety, subject to a condition precedent.
While Ontario prohibits conditions precedent that are deemed to be contrary to public policy, such as restraining marriage or promoting discriminatory behaviour, other conditions precedent are recognized at law. For example, Madame D could have simply made Dmitri’s interest contingent on his reaching a certain age, or reaching a certain milestone in his life, such as graduating from university. Instead, the purported condition precedent that the further Will was to take effect on her murder likely has no effect at all, provided the evidence shows it was executed after the initial Will and in compliance with the provisions of Part I of the Succession Law Reform Act.
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Recently, I experienced a series of coincidences involving American filmmaker Wes Anderson. In the span of a handful of days, I came across the newly-released trailer of his upcoming film, The French Dispatch, and had the opportunity to revisit his 2014 hit, The Grand Budapest Hotel.
Not having seen the latter in several years, I had entirely forgotten a key plot point involving a handful of curious estate planning decisions. Although the film was released six years ago, I nonetheless attach a mild spoiler warning.
The plot of the film revolves around a specific bequest of a work of art made by one of the characters in the film, Madame D. The painting, Boy with Apple, is left to Ralph Fiennes’ character, Gustave H, the proprietor of the film’s namesake hotel, per Madame D’s (purported) Last Will and Testament.
Her decision to leave the painting to Gustave, rather than her nephew, Dmitri, creates a firestorm of controversy, not least of all because Dmitri accuses Gustave of murdering his aunt in order to secure
his entitlement to Boy with Apple. In reality, it is strongly hinted in the film that Dmitri is responsible for her murder. As an additional twist, a further Last Will and Testament executed by Madame D is discovered later, which appears to leave the entire residue of her estate, rather than just Boy with Apple, to Gustave. However, it is stated in the film that this further Last Will is only to be given effect in the event that Madame D is murdered.
This single plot point raises a number of points of discussion and policy concerns as to what would transpire if the film were set in Ontario. This blog will explore the nature of Dmitri’s and Gustave’s potential entitlements in the Estate.
Prior blogs have explored the concept of common law forfeiture rules in Canada, which preclude an individual from deriving a benefit from their own morally culpable conduct. Colloquially known as the “slayer rule” in the context of a testator-beneficiary relationship, a beneficiary who is found to have caused the unlawful death of a testator will be deemed at common law to have predeceased the testator, thereby extinguishing any interest in the testator’s estate.
In the film, Dmitri accuses Gustave of the murder of Madame D. In the ordinary course, a conviction proper is not a necessary precondition to the applicability of the slayer rule. Rather, common law suggests that the rule applies strictly in the event that the beneficiary’s deliberate act caused the death of the testator. In theory, Gustave’s interest in the estate of Madame D could be in jeopardy despite the lack of culpability. In practice, despite his efforts to frame Gustave, the evidence would likely show that Dmitri was the culprit, thereby extinguishing any interest in Madame D’s estate.
Of course, the further Last Will purportedly being given effect only in the event a murder adds a further layer of discussion, and will be explored in greater detail in part 2 of this blog.
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Occasionally in litigation, an innocent party will get caught in the crossfire between two litigants that have made competing claims to property held by the innocent party. The classic case is that of an insurance company in possession of the proceeds of an insurance policy, the benefit of which is claimed by two parties.
The insurer may not necessarily be a party to the litigation between the two claimants, but they are nonetheless implicated given that they hold the coveted payout. What is the insurer to do? Enter the interpleader motion.
The interpleader motion is a powerful yet rarely utilized tool that can be used by an innocent party to essentially extricate itself from a proceeding in which competing claims have been made against property held by that party. Rule 43.02 of the Rules of Civil Procedure provide that a party may seek an interpleader order in respect of personal property if,
(a) two or more other persons have made adverse claims in respect of the property; and
(b) the first-named person (being the “innocent” party),
(i) claims no beneficial interest in the property, other than a lien for costs, fees, or expenses; and
(ii) is willing to deposit the property with the court or dispose of it as the court directs.
In other words, the interpleader motion permits a party to seek an order from the court allowing that party to deposit, with the Accountant of the Superior Court of Justice, the property against which the adverse claims are being made. However, that party must not have any beneficial interest in the property being deposited, although they are entitled to have any legal fees in bringing the motion, and other reasonable expenses, paid out of that property.
Some cases have opined on whether the court hearing the interpleader motion has an obligation to assess the likelihood of success of one or both of the claims to the property at issue. In Porter v Scotia Life Insurance Co, for example, the court considered whether, notwithstanding that one of the competing claims was “without strong foundation and built upon hearsay and suspicion”, it nonetheless held that the claim was “not frivolous” and granted the interpleader order.
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The issue of the payment of costs in an estate litigation matter has seen somewhat of a reshaping recently. Historically, courts generally took the position that the costs incurred by all parties in an estate litigation matter ought to be paid out of the assets of the estate at issue, regardless of the outcome. Whether or not a party was successful in the litigation, that party would not likely be responsible for its own legal costs. More recently, the courts have adopted a modified approach with a view to disincentivizing frivolous claims and to bring the costs principles in estate matters more in line with those in other civil litigation matters. In particular, the principle that the “loser pays”, as opposed to the estate, gained traction.
The recent decision of the Court of Appeal for Ontario in Birtzu v McCron, 2019 ONCA 777, reaffirmed the court’s approach to the “loser pays” principle consistent with other civil matters. The parties to this appeal had endured a 21-day trial in 2016, following which the defendant McCron was held to be entirely successful. However, contrary to the “loser pays” principle, Justice Bloom, in his decision on costs released in 2017, decided instead that the parties would each bear their own costs.
Justice Bloom’s reasons were based on two findings in particular:
- Notwithstanding that the plaintiffs were entirely unsuccessful at trial, they had “reasonable grounds” on which to commence the action; and
- That McCron had lacked credibility with respect to one issue resolved at trial.
McCron successfully appealed the decision, and the Court of Appeal for Ontario awarded her costs of the trial on a partial indemnity basis, consistent in part with the “loser pays” principle.
At the outset, the Court of Appeal noted that costs awards are discretionary. Rarely will litigants be granted leave to appeal except in cases where the lower court is found to have made a “legal error” or, more generally, where the costs award is “plainly wrong.”
The Court of Appeal acknowledged, in respect of the second criteria above, that a litigant’s conduct at trial and her credibility are relevant factors with respect to the issue of costs. However, unless that litigant’s conduct bears on the length or the substance of the trial, it is not appropriate for a court to punish that litigant by denying them their costs. The issue of McCron’s credibility was, in effect, moot given that she was successful “on all fronts” and, in any event, it did not impact the judge’s findings.
The Court held that McCron’s costs “should have followed the result”, but they did not. The costs decision of the trial judge was held to be “plainly wrong” and accordingly overturned.
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A recent decision of the Supreme Court of British Columbia examined the tension between a testator’s moral obligation, if any, to provide for a child under a will, and that testator’s freedom to dispose of his or her estate as that testator sees fit.
The facts in Grewal v Litt are relatively simple and were generally not in dispute between the parties. The applicants were the four daughters of the two testators whose wills were under scrutiny. The respondents were the testators’ two sons. The testators had died leaving mirror wills, each benefitting one another. Upon the death of the survivor, the wills left modest bequests of cash to each of the daughters, while the two brothers shared the residue.
The combined values of the estates exceeded $9 million. Pursuant to the terms of the wills, each daughter was to receive a bequest of $150,000, or about 1.5% of the total value of the two estates. The two brothers were the sole residuary beneficiaries and stood to split the remaining 94%.
The daughters brought an application to vary the wills under section 60 of British Columbia’s Wills, Estates and Succession Act (the “WESA”) to provide an equal distribution of the residue between all six children. The application was brought on the basis that the testators had purportedly discriminated against the applicant daughters based on their adherence to traditional cultural values. The respondent brothers agreed that the terms of the wills did not fulfill the testators’ moral obligations to the daughters, but did not agree that the solution was an equal distribution of the residue.
The court grappled with the tension between the need to make proper provision for the daughters versus recognizing the testators’ broad testamentary freedom to dispose of their estate as they see fit. Ultimately, the court found substantially in favour of the daughters and held that each daughter would be entitled to a 15% share in the residue, with the respondent brothers each receiving a 20% share.
In reaching that decision, the court first looked at section 60 of the WESA and noted that the value of the estates was large enough that the court could both consider the parents’ testamentary autonomy in favouring the respondent brothers while nonetheless making adequate provision for the applicant daughters.
The application judge then referred to numerous prior decisions in which the court had ordered variations of wills when unequal testamentary distributions were made by testators who believed themselves to be bound by cultural norms. Finally, the judge noted that the significant contributions by the daughters to the testators during the last few years of their lives, which were not replicated by the brothers, enhanced the testators’ moral obligation to provide for the daughters.
This case’s potential impact in Ontario remains to be seen, although it is important to the note that Ontario lacks a statute with as broad a mandate for varying testamentary documents as the WESA. Part V Ontario’s Succession Law Reform Act is a comparable parallel that allows a court to make adequate provision for a testator’s dependants, but that language is less broad than the language of the WESA. In any event, the Court of Appeal for Ontario held in Spence v BMO Trust Company that absent any requirement by a testator to adequately provide for a dependant, the testator has broad testamentary freedom.
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In Drummond v Cadillac Fairview, the Court of Appeal for Ontario considered the issue of the admissibility of hearsay evidence on a motion for summary judgment. The facts in Drummond are quite simple. The plaintiff tripped on a skateboard while shopping at the Fairview Mall in Toronto, owned by the defendant. The plaintiff brought an action for occupier’s liability, supported by an affidavit sworn by him. The defendant, Cadillac Fairview, responded by bringing a motion for summary judgment.
At the hearing of the motion, not only did the judge dismiss Cadillac Fairview’s motion for summary judgment, but it granted summary judgment in favour of the plaintiff (a remedy that the plaintiff was not seeking). Cadillac Fairview appealed and was successful at the Court of Appeal.
In granting the appeal, the Court identified serious concerns regarding the hearsay evidence relied on by the plaintiff in responding to Cadillac Fairview’s summary judgment motion. The plaintiff’s responding affidavit relied heavily on statements purportedly made by his fiancée and his daughter, and two unidentified staff members working at the mall. The trial judge agreed that these statements were hearsay but admitted them nonetheless under the business records exception to the hearsay rule and under Rule 20.02 of the Rules of Civil Procedure.
The Court of Appeal rejected the admission of the hearsay statements. While the Court agreed that Rule 20.02 permitted the admission of affidavit evidence “made on information and belief”, the Court also noted that the Rule permits a trier of fact to draw an adverse inference if a party with personal knowledge of contested facts does not give evidence.
The Court of Appeal found that the information relayed by the plaintiff from his fiancée and his daughter “went to the heart” of his claim. The plaintiff’s failure to have his fiancée or daughter swear their own affidavits with respect to the key facts at issue caused the Court to have considerable reservations about admitting their evidence. The Court of Appeal ultimately held that the finding of liability against Cadillac Fairview was based on an “erroneous admission of hearsay evidence on key, contested issues” and reversed the decision.
On motions for summary judgment, courts will expect the parties to put their best foot forward, including the nature and source of relevant evidence. As can be seen in this case, a party’s failure to do so can have serious consequences.
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In March of last year, I blogged on the decision in Hunt v Worrod which dealt with predatory marriages and an individual’s capacity to marry. There have been several developments in that case since then, most recently in a Court of Appeal decision released in June, concerning the issue of costs.
The facts of the case are set out in greater detail in my earlier blog, but a quick refresher may nonetheless be helpful. The application was commenced by the applicant, by his two litigation guardians, largely for the purposes of challenging the validity of his marriage to the respondent and its effect on her property rights as a spouse of the applicant. The respondent had been granted a legal aid certificate by Legal Aid Ontario (“LAO”), which funded her legal fees through trial. Importantly, LAO was not retained as counsel by the respondent. Rather, the respondent retained private counsel whose fees were funded by LAO.
The applicant was ultimately successful at trial and sought an order for costs against the respondent personally, the respondent’s counsel personally, and LAO. In his decision on costs, Justice Koke ordered the respondent was to pay the applicant’s costs on a full indemnity basis. However, he equally noted that, as a result of her limited means and tenuous financial position, it was unlikely that the respondent would be able to pay any amount of that costs award.
The trial judge then turned his mind to the request for costs payable by LAO. In reviewing the circumstances of LAO’s involvement in the case, the trial judge held that it had failed to carry out its mandate by continuing to fund the respondent’s fees notwithstanding the lack of merit. The trial judge ordered LAO to pay one-half of the amount of the costs award made against the respondent.
LAO appealed the costs award and was successful. In its reasons, the Court of Appeal plainly stated that the decision to award costs against LAO could not stand, as it had been made on a misapprehension of LAO’s role in the matter. While the trial judge had held that LAO purportedly failed to monitor the litigation that it had continued to fund, resulting in an abuse of process, the Court of Appeal took a markedly different view.
Notably, the Court of Appeal identified that LAO’s role was strictly limited to providing funding for the respondent to retain separate counsel in accordance with its statutory mandate. LAO itself did not act for the respondent, nor was it a party to the initial application.
Had LAO been a party to the litigation, the Court of Appeal held that they would properly have been exposed to a potential costs award, subject to the discretion of the trial judge. However, in the absence of evidence of any bad faith on the part of LAO in continuing to fund the litigation, the Court of Appeal held that a costs award against LAO was not appropriate in the circumstances.
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I recently had the good fortune of attending a dinner hosted by the Ontario Bar Association along with several members of the Toronto estates list Bench. The judges were kind enough to share a few pearls of wisdom with respect to practice tips and elicit some of the dos and don’ts of appearing before them. A few of the most salient points are highlighted in this blog.
The Rules of Civil Procedure provide that parties to a proceeding are to file a confirmation form with the court no later than 2:00pm three days prior to the hearing in order to ensure that a particular matter is properly scheduled. The form allows sets out several options to be selected by counsel regarding the purpose or anticipated outcome of the attendance.
However, in order to improve judicial efficiency, the Bench has asked that if counsel will be seeking the court’s assistance in resolving certain minor contested issues, a short description of these issues should be attached with the confirmation form. Particularly in the case of short scheduling appointments, which only typically last ten minutes, advising the court of relevant issues ahead of time will ensure a productive use of the attendance.
The Bench has also professed the benefits of scheduling case conferences before a judge with a view to resolving or otherwise narrowing the issues to be tried in a given matter. Case conferences typically follow the format of short scheduling appointments, though with significantly more time allotted to these attendances on the understanding that they are to be used to resolve substantive rather than procedural issues.
Ideally, the bench would like to see counsel attend such conferences prior to scheduling motions or hearings that would be dispositive of a proceeding or of certain issues, such as motions for summary judgment. In most cases, the opportunity for counsel to obtain the advice and direction of a judge while avoiding the significant costs of preparing for a motion can be a helpful step towards resolution.
On the administrative side, the Bench was kind enough to release a list of the most common errors in applications for certificates of appointment as raised by court staff. In no particular order, the court strongly encourages the following practical tips:
- Ensure parties are correctly and consistently identified throughout the application, especially if a party identifies under a different name or a pseudonym.
- Ensure the names of parties and entities are spelled correctly.
- If a particular section of the application does not apply on the facts, do not leave that section blank. Instead, expressly indicate that the section is not applicable.
- Ensure all exhibits included as part of the application, especially the Last Will and Testament that is the subject of the application, are stamped with an exhibit stamp and commissioned.
- Ensure the commissioner includes their full name below their signature.
These are only a few of the many tips shared by the judiciary, but they are as much to the benefit of the court as they are to counsel. Great advocacy is equal parts assisting your client and assisting the court.
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