Author: James Jacuta
In Lipiec v. Lipiec, 2021 ONSC 6292 (CanLII) the court ordered on September 22, 2021, that the original will be produced by the deceased’s second wife to the son of the deceased.
In Szabo Estate v. Adelson, 2007 CanLII 4588 (ON SC) the former solicitor for an estate was allowed to assert a solicitor’s lien over the original of a deceased’s will for payment of legal fees.
In Polten & Associates v Resch, 2015 ONSC 3930 (CanLII) the court ruled on the claim for a solicitor’s lien after the original will had been released, and found against the claim by the lawyer as follows:
“It is the position of Mr. Polten that his law firm has a solicitor’s lien over the Estate assets, “including those assets which appear to have been deliberately excluded from Resch’s calculation of the undistributed Estate proceeds.” And further that, the Polten law firm “did not withhold the Will through the exertion of a solicitor’s lien” and it should now be paid its outstanding fees “for reasons including the lien it could have then claimed, and has now in fact claimed as part of the process leading to this motion….” .
Mr. Justice J.B. Shaughnessy ruled, “I reject Mr. Polten’s argument that he has a solicitor’s lien and that this constitutes a financial interest in the estate.”
In summary, it appears that a lawyer can assert a solicitor’s lien on an original will for unpaid legal fees and can do so by retaining possession of the original will until the matter is dealt with by the court or the claim is otherwise resolved.
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Section 9 of the Estates Act provides a broad discretion for the Court to order production of a testamentary instrument. On September 22, 2021, in Lipiec v. Lipiec, 2021 ONSC 6292, the court ordered that the original will be produced by the deceased’s second wife to the son of the deceased, even if the will was not going to be probated and even if there was no action commenced.
But, can the former solicitor for an estate assert a solicitor’s lien for payment of legal fees over the original of a deceased’s will, or is the will exempt from lien?
In Szabo Estate v. Adelson, 2007 CanLII 4588 (ON SC) the application dealt with this very narrow issue and Justice D. Brown, as he then was, decided:
“I think it is appropriate to exercise my discretion under section 9(1) of the Estates Act to require Mr. Kligerman to deliver up the will to Ms. Hegedus so that the administration of the estate may proceed.
Mr. Kligerman need not do so until Ms. Hegedus consents to a charge against the estate of Gizella Szabo in the amount of Mr. Kligerman’s account dated January 8, 2004, together with accrued interest.
Until Ms. Hegedus gives such consent, Mr. Kligerman may maintain his lien over the original will.”
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On September 22, 2021, in Lipiec v. Lipiec, 2021 ONSC 6292, the court ordered that the original will of the deceased be produced – as indicated in the edited reasons that follow below:
This is a motion for the disclosure of the complete will of the deceased. The Plaintiff in this action is the son of the deceased by his first marriage. The Defendant is the deceased’s second wife.
Under the deceased’s will, the son was to have received a legacy of $20,000.00. However, he may dispute both the will and the legacy that he has received, as he believes he was promised more by the deceased. He seeks production of the will.
Counsel for the Defendant argues that the will should not be produced as it is not going to be probated. There are no assets in the estate because everything passed by way of joint right of survivorship.
Section 9 of the Estates Act provides a broad discretion for the Court to order production of a testamentary instrument. This discretion is not dependent on a lawsuit being pending before the Court.
In this case, the Plaintiff is mentioned in the will. The Defendant’s argument that the document should not be produced because it does not matter is without merit. The Plaintiff is entitled to satisfy himself as to what the will contains, and he is clearly a party with a potential interest in the estate. It may also be open to the Plaintiff to argue that the will should be set aside, depending on the contents of the will.
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Thousands of individuals have unclaimed funds waiting for them in inactive credit union accounts, as well as unpaid wages, overpayments to debt collectors, proceeds from courts, pension funds, estates and real estate deposits in British Columbia. The British Columbia Unclaimed Property Society (BCUPS), whose mission is to put unclaimed money back in the hands of rightful owners, returned $1,035,932 last year in forgotten funds.
BCUPS holds unclaimed property as the custodian for rightful owners. The Society maintains a free online database where people can search to see if they have any unclaimed money waiting for them. Individuals can claim the funds by completing a verification process. There is no limitation period to claim funds and no cost for BCUPS’s services. BCUPS also works with companies and organizations to help get dormant assets off their books. In 2020, BCUPS received $4,858,925 in unclaimed funds from the courts, the Public Guardian and Trustee of British Columbia, credit unions, insurance companies, various levels of government, companies in liquidation, among other organizations.
Technically, an account is deemed dormant when a prescribed period of time has transpired with no activity, from a year to 10 years, depending on the type of account involved. Under BC law, credit unions, debt collection agencies, real estate agencies, companies in liquidation, municipal and provincial courts and municipalities, which are classified as mandatory holders, are required to make a “reasonable effort” to identify forgotten account holders before transferring these funds to BCUPS. Other organizations holding trust funds, insurance policies, brokerage accounts and closed pension plans are encouraged to voluntarily transfer their unclaimed property accounts to BCUPS if the rightful owners cannot be located.
British Columbia is the only jurisdiction in North America that has set up a not-for-profit society to administer its unclaimed property program where a portion of funds are transferred to charity.
Unclaimed Property in British Columbia by the Numbers:
$148,933,709 – Total amount of money sitting in dormant accounts waiting to be claimed.
$4,858,925 – Amount of unclaimed funds BCUPS received from financial institutions, companies and organizations in 2020.
$1,035,932 – Amount of money returned to verified claimants in 2020.
$106,789,525 – Total amount of money from dormant accounts BCUPS has received since its inception on April 1, 2003.
$18,514,588 – Amount of money from dormant accounts BCUPS has returned to rightful owners since its inception.
$48.4 Million – Funds BCUPS has transferred to Vancouver Foundation for charitable purposes since its inception.
$1.01 Million – Largest amount claimed. An outstanding estate claimed in July 2019.
$1.9 Million – Largest dormant account in BC waiting to be claimed.
The above information was taken from the British Columbia Unclaimed Property Society (BCUPS) website.
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The use of technology is permeating the practice of law at a faster pace as a result of the pandemic, as with every other aspect of our lives. However, some areas of law remain unchanged.
Other than in British Columbia, there is still no system that provides the public with easily accessible information about unclaimed property in Canada. For example, it is difficult to locate accounts in provincially regulated financial institutions like credit unions left by a deceased individual if you do not know where the deceased left the account. This is in contrast with the federally regulated Bank of Canada searchable website for banks.
In England and Wales, the list of unclaimed estates with missing heirs is now posted daily on a searchable website. Probate genealogists and individuals can search the list on the bona vacantia page of gove.uk.
In Scotland, the list provides additional information like the value of the estate, or the status of the administration of the estate, which can be found on the website: Queen’s & Lord Treasurer’s Remembrancer.
Beneficiaries and heirs in the United Kingdom have the ability to search online for inheritance assets that they are legally entitled to receive and which are being held in trust for them.
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For more information on this topic please see some of our other blogs:
Ask anyone and they will say, among other things, that lawyers are known for following precedent. Well-established rules and procedures, written and unwritten ways of doing things, and decorum often guide conduct. However, the last year has seen a veritable revolution in some areas of the law, like the virtual signing of wills and affidavits. But, for the most part, the area of probate genealogy in Canada still follows traditional methods.
Probate genealogy involves finding missing heirs in cases where there is a will with a named beneficiary who cannot be located. Also, in those cases where someone has died without a will and without known heirs.
Over the last decade, genealogical research has been assisted by online databases making digital copies of documents available for viewing and research. But, in Canada, hardcopy original or certified copy vital statistic documents like birth and death certificates are still required in almost all cases when dealing with courts, financial institutions, or the Office of Public Guardian and Trustee. This is in contrast with some countries in the European Union where they have moved to entirely digital vital statistic records.
The pandemic has resulted in permanent changes in the court system like video trials and digital filing of documents with the clerk of the court. Law firms now use teleconferencing services for meetings regularly. Real estate agents now hold virtual showings of properties for sale. Doctors now do online medical consultations. Banking is now done on a mobile phone app. The acceptance of digital copies of vital statistic documents will accelerate the locating of missing heirs and assist in proving that they are indeed related to the family being researched without delays associated with obtaining hardcopy documents or physically having to research in archives. This would be beneficial as often hundreds and even thousands of historical records have to be analyzed. In time, it may be that digital practices will also be responsibly adopted in the area of probate genealogy, as in other areas of the law recently.
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In the Estate of Oliver (Re Oliver Estate, 2021 ONSC 2751) decision on April 12, 2021, the applicant, who was treated as a stepdaughter by the deceased, had her motion seeking appointment as Estate Trustee dismissed. William Oliver died intestate on July 14, 2020, and had no spouse, children, parents, siblings, nieces or nephews survive him. The applicant was the daughter of the person with whom the deceased cohabited in a common-law relationship in the 1980s and she had remained close to him, even being appointed attorney for him on a TD bank account in 2017.
Justice Macleod found that the daughter of a partner with whom the deceased co-habited, does not fall within any class of person recognized as an heir on an intestacy pursuant to the Succession Law Reform Act, RSO 1990 and Letters of Administration could not be issued under the Act. It was possible to make an order appointing the applicant as administrator of the property of the deceased under s. 29 (3) of the Estates Act, RSO 1990. Instead however, the court referred the matter to the Public Guardian and Trustee to investigate. Such investigative authority can be found in the Crown Administration of Estates Act, RSO 1990 where the “Public Guardian and Trustee is authorized to, (a) identify and locate, (i) persons who may have an interest in the estate, and (ii) other persons, but only for the purpose of locating persons who may have an interest in the estate; and (b) identify the estate’s assets.”
The court can refer a matter to, but cannot order the Public Guardian and Trustee to be appointed as a result of the provisions of Public Guardian and Trustee Act RSO 1990, where, “The Public Guardian and Trustee shall not be appointed as a trustee, by a court or otherwise, without his or her consent in writing”. Given staffing issues and limited resources as well as pandemic restrictions it is perhaps not entirely moot to ask what happens to the estate if the Public Guardian and Trustee does not consent to be appointed Trustee in a case like this.
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In the world of wills and estates law, matters are often commenced by way of an Application. Justice Marc Smith released a decision on March 21, 2021, in Larmon v Munro, 2021 ONSC 1921 that deals with a number of matters and also decides whether the Motion for Directions was appropriate for the relief being sought in that case. The purpose of a Motion for Directions under r. 75.06 of the Rules is procedural in nature. Rule 75.06(3) sets out the type of orders for directions that can be given by the Court. Some of the proper matters in an order for directions include; issues to be decided, who are the parties, who shall be served, the appointment of an estate trustee during litigation, security for costs, and such other procedures as are just.
In this case, the motion sought a declaration for, a sum owing from the estate, with regard to debts being satisfied, for delivery of hunting equipment and tools, as well as an order in regard to vehicle ownership and sale of a house.
Justice Smith found that the relief sought had “… nothing to do with procedural matters. Rather, it pertains to the payment of expenses, fulfillment of duties and delivery of assets. In my opinion, r. 75.06 of the Rules was not intended to be used to secure these types of declarations and orders.”
For the reasons outlined above, the Motion was dismissed.
For more on this topic please see Stuart Clarks’s blog entitled “Procedural Differences Between Applications and Actions”.
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It was 35 years ago today that the Chernobyl nuclear disaster occurred and since then “Chernobyl” has become a metaphor for catastrophic disaster. Similar consequences can also result after family battles involving divorce proceedings or inheritance. Some useful considerations for lawyers involved in acrimonious litigation are found in Alsawwah v. Afifi, 2020 ONSC 2883. The comments of Justice Kurz have been edited below for brevity:
“Having been required by the exigencies of this motion to closely and frequently review the materials filed in this motion, I feel constrained to offer a few words of caution to the parties, their counsel and to the profession as a whole.”
“Litigants feel that they can leave no pejorative stone of personal attack untilled when it comes to their once loved one. Many lawyers, feeling dutybound to fearlessly advocate for their clients, end up abetting them in raising their discord to Chernobyl levels of conflict.”
“In the hopes of lowering the rhetorical temperature of the future materials of these parties and perhaps those of others who will come before the court, I repeat these essential facts, often stated by my colleagues at all levels of court, but which bear constant repetition:
- Evidence regarding ….moral failings is rarely relevant to the issues before the court.
- Nor are we swayed by rhetoric against the other party that verges on agitprop.
- Exaggeration is the enemy of credibility.
- Affidavits that read as argument rather than a recitation of facts are not persuasive.
- Hearsay allegations ….are generally ignored, whether judges feel it necessary to explicitly say so or not.
- A lawyer’s letter, whatever it says, unless it contains an admission, is not evidence of anything except the fact that it was sent.
- Facts win cases. A pebble of proof is worth a mountain of innuendo or bald allegation.
- One key to success in family law as in other areas of law is the race to the moral high ground. Courts appreciate those parties and counsel who demonstrate their commitment to that high ground in both the framing and presentation of their case.”
Justice Kurz offers a great deal of useful advice which reaffirms that the use of “Chernobyl” excess in litigation should be avoided at all times.
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The Ontario Superior Court of Justice decision released on December 8, 2020, in the Estate of Klaczkowski, deals with a number of issues including when the court should remove an Estate Trustee and appoint a litigation Trustee. Two brothers disagreed on matters related to their mother’s estate, including division of proceeds of a TD Trading Account, a commercial property, and a safety deposit box (with $32,000 in $1,000 dollar bills). They were named in the will as Estate Trustees and beneficiaries. Justice Leiper reviewed the following points in regard to the court appointment of an Estate Trustee During Litigation:
- Ordering the removal of an estate trustee is a decision not to be taken lightly and only where it is clearly necessary: Re Weil, 1961 CanLII 157 (ON CA),  O.R. 888 at 889 (C.A.)
- Friction between co-estate trustees may be a basis for a removal of both estate trustees where it impacts the decision-making process: Radford v. Wilkins (2008), 43 ETR (3d) 74, 2008 CanLII 45548 (S.C.J.) at paras 111-113;
- A failure to properly keep records resulting in the need to make corrective disclosure is an aggravating factor in considering whether a trustee ought to be removed. Similarly, failure to consult with co-trustees is significant. Graham v. Benton, 2020 ONSC 6985 at paras. 156-157;
- A testator’s choice of estate trustee should not be lightly interfered with, but the appointment of an ETDL is a “much less intrusive” remedy that exists where “parties’ duties as fiduciaries can be inconsistent with their ongoing litigation interests.” A court should consider the balance of convenience and, since the appointment of an ETDL is not an extraordinary remedy, “the court will favour appointment in the vast majority of cases unless the administration of the estate involved is particularly straightforward or simple”: Mayer v. Rubin, 2017 ONSC 3498 at paras. 24-36.
The Court ordered that –
- An Estate Trustee During Litigation will be appointed for the estate, and
- If the parties are unable to agree to the naming of the Estate Trustee During Litigation by February 1, 2021, they are to appear before March 1, 2021, to make submissions on an appropriate Estate Trustee During Litigation.
For more on Estate Trustees During Litigation please see the blog by Sydney Osmar: Appointing an Estate Trustee During Litigation.
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