Author: Hull & Hull LLP
Judges are sworn to decipher, apply, and uphold the law, an exercise that takes great care and sense considering the ambiguity of statute, the discordant doctrines of interpretation, and the prevalence of emotional tinderboxes in litigation. Perhaps more challenging, however, is the judge’s task of navigating through brambles of facts.
In the Newfoundland and Labrador Supreme Court decision of O’Dea Estate (Re),  N.L.S.C. 178, Orsborn J. was imposed with the burden of sorting out a conflict between Michael and Shannon, who were named co-executors and whose acrimonious sibling relations are reminiscent of a previous blog. Contrary to the testator father’s wishes, in the two-and-a-half years since his death, neither sibling was appointed executor; instead, litigation between the two raged, with each accusing the other of fraudulent behaviour. In competing applications, Michael sought the appointment of the Public Trustee, whereas Shannon applied to have herself appointed sole executrix.
Justice Orsborn decided as follows: “By asking to have the Public Trustee appointed, Michael has effectively renounced his appointment pursuant to the will.”
A mere proposed solution was construed as a renunciation. Michael’s position was undermined by his willingness to see the estate depleted (by hiring the Public Trustee, a pricy endeavour) combined with his disinclination to assume the role of co-executor.
Other factors were present in this decision. Orsborn J. was reluctant to accede to Michael’s request for financial reasons, for the estate was not large and the Public Trustee could be expected to take a significant chunk out of what remained. It also mattered to him that the testator’s intention to have Michael and Shannon administer the estate be at least half-honoured. Additionally, the judge ascribed significance to the fact that the other estate beneficiaries, who were also children of the deceased testator, preferred Shannon’s claim.
O’Dea Estate is another case in which the court has emphasized its commitment to limiting costs with small estates, but more importantly, it suggests the court will draw an adverse inference when litigants seek to hand off their responsibilities to third parties.
Thanks for reading!
David Morgan Smith and Devin McMurtry
Communications between a client and their lawyer are protected by solicitor-client privilege. Except in limited circumstances, only the client can waive the privilege.
Upon death, the right to waive privilege passes to the estate trustee named in the will, or appointed by the court if there is no will.
Is the right to waive privilege absolute, applying to all solicitor-client communications? According to a decision of the Supreme Court of Nova Scotia, the answer is No.
In Dumke v. Conrad, 2019 NSSC 310 (CanLII), the deceased died without a will. Her son applied for and was appointed as administrator of the deceased’s estate. He was the sole beneficiary.
Prior to the deceased’s death, the son was attorney for property for the deceased. The deceased regained capacity and brought a proceeding to declare the power of attorney in favour of the son invalid, and to compel the son to pass his accounts. That litigation was resolved.
Following the death of his mother, the son sought to obtain the lawyer’s file relating to the power of attorney litigation. The lawyer then brought an application for directions, with the question being whether the son was entitled to the litigation file.
The court held that the right to waive privilege is not absolute. The files sought must be relevant to an issue being decided or to the ability of the personal representative to administer the estate. Confidentiality “should not be interfered with except to the extent necessary and the right of the respondent to waive privilege must be interpreted restrictively.”
A deceased person could have criminal files, child protection files, divorce files, etc. If a person seeking advice from a lawyer knew that, after their death, their children would have access to those files, the free, confident, candid communication necessary between a lawyer and client would not occur. The basis of solicitor/client privilege would be eroded. As stated above in Descôteaux, the right to counsel would be imperfect if the privilege is eroded or frittered away.
The court could not find any reason why the files being sought would be relevant to the administration of the estate. Rather, it found that the files being sought were for “personal reasons not relevant to the administration of the estate”.
The court ordered that the file in relation to the power of attorney litigation not be disclosed.
Thank you for reading.
There have been a number of recent decisions discussing the threshold to be met before a court will allow a will challenge to proceed. These decisions flow from the Ontario Court of Appeal decision of Neuberger Estate v. York, 2016 ONCA 191 (CanLII). We have discussed this case in a number of our blogs. See here, for example.
Today, Rebecca Rauws and I recorded a podcast on the decision of Naismith v. Clarke, 2019 ONSC 5280. In that decision, the court held that the threshold for challenging a will on the basis of testamentary capacity was not met, while it was with respect to the issue of undue influence. The podcast should be posted soon.
More recently, the decision of Maloney v. Maloney, 2019 ONSC 5632 (CanLII) was released. There, the estate trustees brought a motion to remove a Notice of Objection filed by a child of the deceased.
The court ordered the removal of the Notice of Objection. The court noted that there was no basis for setting aside the will. An affidavit from the lawyer who prepared the will set out the circumstances under which the will was prepared. The lawyer had no concerns about the deceased’s capacity. Although the challenger suggested that there were suspicious circumstances surrounding the creation of the will, there was no evidence to support the suspicions. Further, there was no evidence of undue influence. The challenger “has not provided any evidentiary basis to support a further investigation into the validity off this will.” At best, the challenger’s position was that her father would not have drafted his will in such a way. This was not enough to support a challenge.
Of note is the fact that the court had the evidence of the drafting solicitor. In many will challenges, the challenger or the propounder is not able to put this evidence before the court at this early stage due to issues of privilege. Often, the first step in a will challenge proceeding is to obtain an order to allow the evidence of the drafting solicitor to be obtained, along with medical notes and records.
Another important factor noted by the judge was the effect of the will challenge. The challenge stalled the administration of the estate. The court noted that even if the will challenge was successful, it would have no real effect on the distribution of the estate. The will provided that the estate was to be distributed to the three children of the deceased. On an intestacy, the distribution scheme would be the same, except for the specific disposition of an oak china cabinet.
In such cases, the court’s gatekeeping role is a tough one. The court must ensure that frivolous challenges do not proceed, while ensuring that it is able to ascertain and pronounce what documents constitute the testator’s valid will. The threshold should not be too high. As stated succinctly by Justice Myers in Seepa v. Seepa, 2017 ONSC 5368 (CanLII), “At this preliminary stage, the issue is not whether the applicant has proven his or her case but whether he or she ought to be given the tools, such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits.”
Have a great weekend.
What is a solicitor’s duty when preparing a Will?
Those seeking to answer this question should start their journey with the BC Court of Appeal decision of Chalmers v Uzelac. Here, Madam Justice Southin noted that, “every solicitor who, as part of his or her practice, draws wills should read, mark and inwardly digest at least once each year the judgment of Sir John Alexander Boyd, C. in Murphy v. Lamphier (1914), 31 O.L.R. 287, the Canadian locus classicus on a solicitor’s duty in taking instructions”.
Murphy is a seminal case. The Court found that it was wrong to assume that because a person can understand a question put to them, and give a rational answer, that they are of sound mind and capable of making a Will. Instead, the Court emphasized that capacity must be judged in light of the nature of the act and all of the circumstances:
“A solicitor is usually called in to prepare a will because he is a skilled professional man. He has duties to perform which vary with the situation and condition of the testator. In the case of a person greatly enfeebled by old age or with faculties impaired by disease, and particularly in the case of one labouring under both disabilities, the solicitor does not discharge his duty by simply taking down and giving legal expression to the words of the client, without being satisfied by all available means that testable capacity exists and is being freely and intelligently exercised in the disposition of the property. The solicitor is brought in for the very purpose of ascertaining the mind and will of the testator touching his worldly substance and his comprehension of its extent and character and of those who may be considered proper and natural objects of his bounty. The Court reprobates the conduct of a solicitor who needlessly draws a will without getting personal instructions from the testator, and, for one reason, that the business of the solicitor is to see that the will represents the intelligent act of a free and competent person.”
Expanding on this, the Ontario Court of Appeal in Hall v Bennett Estate references an article by M.M. Litman & G.B. Robertson which identifies common errors that have been either the subject of criticism by the courts or the basis of liability for professional negligence in the preparation of a Will, including failing to: obtain a mental status examination; interview the testator in sufficient depth; properly record/maintain notes; test for capacity; and, provide proper interview conditions.
Read, mark, and inwardly digest this blog at least once a year accordingly.
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I try to seize every opportunity I can to learn about art. In preparing today’s blog, I was intrigued to read about the UK’s Cultural Gifts Scheme and its relationship to estates.
The Cultural Gifts Scheme & Acceptance in Lieu allows UK taxpayers to donate important works of art and other heritage objects in return for a tax reduction, which includes inheritance tax. The donated work is then held for the benefit of the public or the nation at an eligible museum or gallery. According to this article from the Guardian, the Scheme was first introduced in 1910 as a way of allowing individuals to offset inheritance tax bills, and later, in 2013, to allow individuals to be able to make donations during their lifetime in order to offset future tax liabilities.
Any art admirer should have a look at the 2018-2019 Annual Report which provides a list of items that were received, along with some pretty pictures of the items :). It is a feast for the eyes and the senses. Some of the highlights include:
- a Portrait of the Emperor Charles V by Peter Rubens, which has gone to the Royal Armouries in Leeds
- a platinum and diamond necklace with black velvet ribbons, convertible to a brooch, made by Cartier in Paris c. 1908-1910, which has been allocated to the Victoria and Albert Museum
- 361 botanical drawings by the illustrator Florence Helen Woolward
- Bernardo Bellotto’s painting of Venice on Ascension Day, which settled £7 million of tax
- Damien Hirst’s Wretched War sculpture, given by the artist’s former business manager Frank Dunphy settling £90,000 in tax
In Canada, although art can be subject to capital gains, and possibly other taxes, it is possible for a donor to limit, or avoid the tax altogether, including by way of claiming a charitable tax credit. Individuals thinking about estate planning and/or donating art should seek the advice of a professional advisor to maximize the amount of savings.
Thanks for reading,
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I am not sure why, but whenever I talk to my friends about the benefits of having a Will, they seem to dismiss the advice, thinking that Wills are only meant for old people. I was thus delighted to come across this article which highlights millennial-centric reasons for having a Will, some of which are as follows:
Digital Assets – while many millennials attest to not being flush with cash, many are flush with digital assets. I have previously written about my digital presence, admitting that I have two personal e-mail addresses, four social media accounts, and so many points through reward programs such as Aeroplan, Indigo, Greenhouse Juice – the list goes on and on. These assets carry both a financial and personal value. Millennials preparing a Will should think about how they wish to transfer these assets.
Young Children – if a child is a minor, under the Children’s Law Reform Act, it is possible for a testator to appoint one or more persons to have custody of that child in a Will. It is also possible to set up a trust in the Will to ensure that the child’s inheritance is spent responsibly. I often tell people that in making a Will, do not think of it as being done to benefit oneself (i.e. the testator), but to benefit and help your loved ones. Being able to take care of minor children is a great example of this.
Pets Pets Pets – without engaging in the dog vs cat debate, it is suffice to say that many millennials have pets. In fact, millennials these days are opting for pets over parenthood – just walk through Trinity Belwoods Park on a Saturday afternoon. In Ontario, pets are considered property, and thus require specific estate planning. Some options include leaving a cash legacy to a pet guardian or setting up a trust for a pet guardian, both of which can be accomplished in a Will.
Hoping that my millennial friends now agree that Wills aren’t just for old people!
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Previously, Hull and Hull LLP blogged on the decision of Tarantino v. Galvano, 2017 ONSC 3535 (CanLII). After a ten day trial, the court set aside a transaction whereby the deceased’s daughter, acting as attorney under a Power of Attorney, transferred the deceased’s interest in her home to the daughter. The court also allowed a claim by the daughter for services provided to the deceased. The court disallowed a claim for occupation rent against the daughter.
We also blogged on the costs decision, reported at Tarantino v. Galvano, 2017 ONSC 6635 (CanLII). The collective legal fees of the parties on a substantial indemnity basis (ie., the actual legal fees were higher) were $621,660. The main asset of the estate was 80% of a house valued at $680,000 in 2012. Neither party was awarded costs, other than a reimbursement for the cost of an expert report.
The matter was before the courts once again. On September 6, 2019, the Ontario Court of Appeal dismissed the appeal brought by the grandchildren of the deceased (the daughter’s nieces): Tarantino v. Galvano, 2019 ONCA 699 (CanLII).
The Court of Appeal held that with respect to the dismissal of the claim for occupation rent, the trial judge did not err. The daughter remained in the house (of which she owned 20%) after death. However, the granddaughters had sought and obtained an undertaking from the daughter not to sell the house while the litigation was pending. Of note is the fact that the daughter, under the deceased’s will, had a first option to purchase the house. As the daughter was prevented from selling the house by reason of the undertaking sought by the granddaughters, it would be “unfair” to charge the daughter rent when she was unable to deal with the house.
With respect to a second ground of appeal, the Court agreed with the trial judge that the costs of maintaining the home during the deceased’s lifetime, and while she was in poor health, should fall on the deceased. As the trial judge concluded, “Having accepted that [the deceased’s] wish was to be looked after at home, and having accepted that in her capacity as attorney for personal care it was appropriate for [the daughter] to make arrangements for [the deceased] to be looked after in the home, those expenses are properly attributable to the care of [the deceased].”
The appeal was dismissed, with costs of $15,000 payable by the granddaughters to the daughter.
I expect that this is the last chapter in this unfortunate, expensive saga.
Thank you for reading.
In Marsden Estate (Re),  N.B.J. No. 295, upheld on appeal at  N.B.J. No. 304, the deceased was seen by a solicitor and gave instructions for the preparation of a will on September 19, 2016. She died the next day, before the will could be signed.
The estate trustee under the impugned will brought an application to prove the will. She relied on s. 35.1 of New Brunswick’s Wills Act. This section provides:
35.1 Where a court of competent jurisdiction is satisfied that a document or any writing on a document embodies
(a) the testamentary intentions of the deceased, or
(b) the intention of the deceased to revoke, alter or revive a will of the deceased or the testamentary intentions of the deceased embodied in a document other than a will,
the court may, notwithstanding that the document or writing was not executed in compliance with the formal requirements imposed by this Act, order that the document or writing is valid and fully effective as if it had been executed in compliance with the formal requirements imposed by this Act.
The matter was contentious, as two of the testator’s children were essentially excluded from the will. The testator told the solicitor that she had been estranged from them for some time.
The court relied on affidavit evidence, including the affidavit of the drafting solicitor. The court concluded that the unsigned will reflected the testator’s “deliberate, fixed and final expression as to the disposal of her property upon her death”. Further, the court was satisfied that the testator had testamentary capacity, and was not being unduly influenced.
In earlier blogs, we reported on similar applications under similar “substantial compliance” legislation. An Alberta court considered the legislation but declined to apply it where there was an absence of clear and convincing evidence that the deceased failed to execute the will by inadvertence or mistake. An Australian court went as far as admitting an unsent text message to probate.
In Ontario, the doctrine of strict compliance continues to apply. As stated by Nick Esterbauer in his blog of December 11, 2017, it will be interesting to see if Ontario legislation opens the door to substantial compliance in the future. To date, it has not.
Thanks for reading.
The recent Ontario Court of Appeal decision in Dzelme v Dzelme acts as a helpful reminder that even if an attorney has standing to seek a passing of accounts, the Court may still refuse to grant the passing.
John was named as the attorney for personal care for his father, Ritvers, and sought an accounting of Ritver’s financial affairs from his brother Arnis (Ritvers’ other son) who was the attorney for property. Both John and Arnis agreed that John, given that he was an attorney for personal care, could apply under section 42(4)(1) of the Substitute Decisions Act for a passing of accounts without leave. Nonetheless, the Court of Appeal identified that even if a person has standing to apply for an accounting, it remains the discretion of the Court to order a passing of accounts.
In deciding whether to order the passing, the superior court judge made the following findings of fact: (i) both the father and mother were capable when they executed written instructions to Arnis not to produce any financial information about his affairs to John; (ii) the mother maintained this position in response to John’s motion; (iii) a capacity assessment found that the mother was capable of making her own decisions; (iv) a third brother corroborated Arnis’ evidence that he was abiding by his parent’s wishes; (v) the application judge did not doubt that Arnis was following his mother’s wishes; and, (vi) there was no reason to suspect that Arnis was acting improperly with respect to certain transactions.
On this basis, the Court of Appeal upheld the application judge’s dismissal of John’s request for an order that Arnis pass his accounts of Ritver’s property.
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The recent Ontario Superior Court of Justice decision in F.K. v. E.A. addresses limitation periods and discoverability in the context of setting aside a marriage contract.
By way of background, husband and wife began their relationship in 2000, cohabitating in June of 2004, and marrying on July 20, 2005. Shortly before marriage, on July 14, 2005, the (soon to be) husband and wife entered into a marriage contract. The marriage contract was prepared by the wife who obtained a template off the internet. The husband and wife eventually separated on August 13, 2012. A dispute arose over certain terms of the marriage contract. The husband thereafter brought a claim on August 24, 2017 for spousal support, equalization, as well as setting aside the marriage contract. Two of the issues that the Court addressed included whether (i) the relief sought to set aside the marriage contract is subject to the two year limitation period and, if so, (2) whether the husband brought his claim in time.
Regarding the first issue, the Court found that the husband’s claim to set aside the marriage contract is a claim as defined in section 1 of the Limitations Act and therefore subject to the two year limitation period.
As it relates to the second issue of discoverability, evidence was adduced that the husband met with a lawyer in October 2012 to discuss the dispute with his wife and certain legal issues arising with respect to the marriage contract. Based on this evidence, the Court established that by that date at the latest, he first knew: that the injury, loss or damage had occurred; that the injury, loss or damage was caused by or contributed to by an act or omission; and, that the act or omission was that of the person against whom the claim is made. The Court dismissed the husband’s claim finding that the two years began running the date he met with his lawyer.
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