Author: Natalia R. Angelini
Calmusky v. Calmusky is a recent decision that determines the issue of entitlement to certain joint assets. The dispute appears to be a fairly typical one, in that we have an adult child, Gary, who was a joint bank account holder together with his father. Gary claims that after his father’s death the joint account funds passed to him by right of survivorship. Gary’s brother, Randy, argues that the joint account funds revert to the estate.
The Court reviewed the evidence surrounding the opening of the joint account, as well as the making of the father’s Will that happened around the same time. In applying the principles elicited from Pecore, the Court concluded that Gary had not satisfied the burden of proving that his father intended to gift Gary with the remaining funds in the joint account. In so doing, the Court noted the insufficiency of the corroborative evidence relied upon by Gary. It described the bank documentation as “bare bones”, and found the evidence of the bank personnel insufficient to support the conclusion that Gary’s father wanted him to have the beneficial entitlement to the funds.
Nothing new here…so far. But what makes this case noteworthy is the disagreement over the father’s RIF funds. The father designated Gary as the beneficiary of his RIF. Gary claims that these funds belong to him as the designated beneficiary, whereas Randy asserts that the funds belong to the estate. Randy’s argument was that the law relating to the presumptions applicable to annuities and/or life insurance contracts applies by analogy to RIFs, whereas Gary argued that there is no binding authority in Ontario that extends the principles in Pecore to RIF designations.
The Court agreed with Randy, reasoning that the principles set out in Pecore apply more generally to other gratuitous transfers of property interests. The Court also saw it as sensible from a policy perspective that the evidentiary obligation be on the transferee or designated RIF beneficiary. In coming to these conclusions, the Court agreed with the obiter comments in McConomy, another lower court decision, that the principles in Pecore should apply to the RIF designation. The Court also agreed with the reasoning of the Manitoba Court in Dreger, viewing that case as providing additional support for the conclusion that resulting trust presumptions apply to the beneficiary designation under a RIF.
After deciding that the resulting trust principles applied, the Court turned to assessing the father’s intention, again finding that the evidence of the bank personnel and bank documentation was insufficient to corroborate Gary’s position. Thus, the RIF funds were held to form part of the estate.
It does not appear that the Court considered the legislation that uniquely applies to beneficiary designations (e.g. Income Tax Act, Succession Law Reform Act or Insurance Act), which could support the argument that a RIF should be differentiated from a joint account.
Although I expect that this decision may be met with some criticism, until the issue is addressed by a higher court, the case raises several concerning questions – What does it mean for banks, investment advisors and financial planners? Are they now obliged to recommend that their clients seek legal advice to ensure that their intention is documented? Can banks no longer rest assured that they are free to pay out designated funds after the account-holder’s death? Hopefully, the answers to these questions and more will become clear to us in due time.
Thanks for reading and have a great day,
Natalia R. Angelini
Working from home in recent weeks has meant that virtual meetings are becoming the norm for many, both socially and professionally. With that comes a view of us in our homes that others did not previously have. While it is acceptable to dress casually while sitting on the sofa with a drink in hand during a social on-camera get together, a business meeting often means adhering to a more formal dress code and sitting in a more neutral location in your home. Elevate that meeting to a virtual court attendance, and the requirement to preserve decorum is all the more essential.
Unfortunately, it seems that not everyone appreciates the importance of these common-sense expectations. This led to a Broward County judge reprimanding attorneys for attire infractions, reported here, which included appearing shirtless and appearing in bed under the covers!
Although I had a good chuckle over this, it does remind us of the importance of maintaining appearances in a professional setting, which can also positively impact our performance. So the next time you are tempted to attend a work meeting or court hearing in your bedroom with a casual shirt on, consider wearing a blazer and sitting in your home office instead. But please stay seated, and we won’t tell anyone about the sweat pants!
Have a great day,
Although the temporary emergency Order has only been in place for a few days, there is no question that lawyers have already begun to virtually witness the execution of wills and powers of attorney. A complimentary CPD program on the issue was put on by the Law Society of Ontario (LSO) last week, chaired by Ian Hull. A link to it is here. LawPRO has also provided a helpful commentary on the subject matter from the perspective of risk-avoidance here, and below I draw upon the points made that may help lawyers lessen their risk of a malpractice claim.
As much as lawyers may be focused on adhering to the requirements under the emergency Order, LawPRO reminds us that the most common cause of malpractice claims in the estates area is inadequate investigation – a failure to inquire about assets, prior wills and details about past and present marital and familial relationships. The second most common error is a communication failure – not ensuring consistency between the draft will and the instruction notes, and not ensuring that the solicitor and client each understand the other. So it is important to keep risk management tips here top of mind, particularly given that it may be more difficult to effectively communicate or ensure that clients understand documentation when conducting virtual client meetings.
As related specifically to virtual witnessing of wills and powers of attorney, LawPRO has various suggested steps to lessen the risk of a claim, which I comment on below.
- Comfort – Some clients may not be as ease with video technology and/or discussing personal matters through this medium. Take the time to establish that all participants are comfortable.
- Identification – As a result of Covid-19, the LSO is not requiring face-to-face meetings to identify or verify a client’s identity. Here you can find the LSO’s guidance on the issue, and LawPRO’s video conference checklist (accessible through the LawPRO link above) will help lawyers consider the steps needed before, during and after a video conference meeting.
- Capacity and undue influence – These known risks may be more difficult to assess through virtual communication, making it all the more important that certain precautions be taken, such as: (i) asking open questions, and follow up questions, (ii) asking questions to establish that the client is acting independently (e.g. explore relationships and reasoning in detail when marked changes are being made), (iii) when acting for one client, make sure the client is alone in the room (consider asking for a video pan of the room if you can’t clearly see it), and (iv) take notes reflecting consideration of capacity and undue influence, especially if there are any concerns. Here you can find a checklist WEL Partners has created for indicators of undue influence during video meetings, and the LSO has released a special comment on the issue here.
- No counterparts – You will need multiple virtual meetings so each witness can sign the original will or power of attorney. Video conference wills will also likely require a different affidavit of execution, and here you can find our recent blog that provides sample affidavits of execution.
- Document your work – Particular scrutiny may be given to documents executed during this health crisis. Taking detailed notes or recording the meeting (with client consent) will document what occurred, and reporting to the client thereafter will serve to confirm your instructions.
- After the emergency – Although not required, once it is safe to do so consider recommending that your clients re-execute their testamentary documents in the physical presence of witnesses.
To help mitigate the risk of a claim, Hull eState Planner has created checklists for executing wills and powers of attorney by video. The will execution by video checklist can be found here and the powers of attorney execution by video checklist can be found here.
The Covid-19 situation is creating rapid change, and at Hull & Hull LLP we are monitoring things on a daily basis. I encourage you to continue to access our website for further updates. Our resource page can be found here.
Thanks for reading and have a great day,
I was heartened last week to see Ontario’s Premier pushing for personal protection equipment (PPE), and to read here that he has joined forces with Hayley Wickenheiser and many volunteers to obtain, organize and distribute PPE to front-line workers. This equipment is desperately needed in hospitals and health care facilities, and especially for residents and workers in Long-Term Care Homes (LTCH) who have been vulnerable to the COVID-19 pandemic. Sadly, half of our country’s deaths are noted as connected to LTCH.
More needs to be done to protect those in LTCH, as many of the elderly and their families are suffering greatly as a result of the rapid spread of the disease. It is heartbreaking to regularly see media reports of yet another outbreak and more deaths. Pinecrest Nursing Home is Bobcaygeon, Ontario has sustained tremendous loss, with nearly half of its residents reportedly succumbing to the disease. Another tragic loss of life has taken place in a Montreal LTCH, where 31 residents have died in the last month. Some deaths are from the virus, and staff not reporting to work may also have contributed to the devastation. Police and public health investigations are ongoing in that case, as reported here.
Increased staff absences in an already strained system are surely aggravating the suffering, in addition to staff mobility between facilities. Many staff are part-time workers, and also work in other homes or hospitals to supplement their income. Ontario has not yet clamped down on the issue, but here it is reported that British Columbia has learned a hard lesson after an outbreak at one of its LTCH and upon obtaining evidence that care staff were potentially carrying the virus from home to home. As a result, an Order of the Provincial Health Officer was issued to restrict the movement of staff by ensuring that they work in only one facility.
In Ontario, the Chief Medical Officer of Health has released a Directive for LTCH. However, we have yet to see a firm commitment to mandate working at a single facility. This is particularly worrisome when coupled with the relaxed screening measures recently implemented by way of O. Reg. 95/20: Order Under Subsection 7.0.2 (4) of the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9 – Streamlining Requirements for Long-Term Care Homes. I support the government taking urgent measures intended to help our most vulnerable elderly Ontarians, but hope that soon we can receive assurance that immediate action is being taken to support the new measures, including adequate testing, tracking, tracing, isolation, quarantine, PPE and training.
Thanks for reading and stay safe,
With the loser-pays costs model firmly entrenched in civil litigation, and, for some time now, also consistently applied in most estate litigation cases, it behooves counsel to give early and ongoing consideration to putting forward an offer to settle under Rule 49 of the Rules of Civil Procedure with the objective of obtaining a more favourable costs outcome.
In order to get the benefit of the cost consequences under the Rule, such an offer (i) must be made at least seven days before the hearing, (ii) cannot be withdrawn and cannot expire before the commencement of the hearing, (iii) must not be accepted by the opposing side, and (iv) the offeror must meet or beat the offer at the hearing. However, even if this criteria is met, the court has the discretion to depart from the cost presumptions under the Rule.
Taking into account the court’s discretion, and given what feels like the release of more and more decisions where cost awards seem to bear little reflection to the costs incurred or the Rule 49 offers made, I wonder whether making a Rule 49 offer actually provides the expected benefit of a better costs outcome for the offeror.
In reading a recent article on the issue, I am reminded that there is some predictability in place. The authors review some relevant authorities, including Niagara Structural Steel (St. Catharines) Ltd. v. W.D. LaFlamme Ltd. and Barresi v. Jones Lang Lasalle Real Estate Services Inc., two Court of Appeal cases where it was held that the courts of first instance erred in resorting to the exception in Rule 49, and where the Court of Appeal reasoned as follows:
- the purpose of the Rule is to be an incentive to encourage settlement;
- a judge’s discretion to depart from the costs presumption under the Rule is not unfettered, and should not be exercised in such a widespread manner so as to render the general rule ineffectual; and
- a judge should only depart from the Rule “where the interests of justice require a departure”, after giving weight to the policy of the Rule, the importance of predictability and the even application of the Rule.
Thanks for reading and have a great day,
In our estate litigation practice, we commonly seek orders permitting registration of a Certificate of Pending Litigation (CPL) against title to property that is, for instance, an estate asset that a client is seeking to preserve until the litigation is concluded.
In order to obtain a CPL, one needs to demonstrate that an interest in land is in question, and in determining whether to order the issuance of a CPL, the following legal principles ought to be considered, as highlighted in Perruzza v Spatone:
- the threshold in respect of the “interest in land” is “whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed”;
- the onus is on the party opposing the order for a CPL to demonstrate that there is no triable issue with respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed”; and
- the governing test is that the Court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL ought to be granted.
We can see from the above that the threshold to obtain a CPL is not high; presumably the rationale being that it is more favourable to have a property in dispute secured during litigation than risk it being dissipated to the prejudice of a litigant.
Once a CPL is obtained it is prudent to assess the circumstances throughout the life of the litigation so that it is discharged at the appropriate time. As noted in Perruzza, factors the court can consider to discharge a CPL include whether the land is unique, whether there is an alternative claim for damages, whether there is or is not a willing purchaser and the harm if the CPL is or is not removed.
If the litigation stagnates, without reminders in place it is possible for the registered CPL to be left unaddressed. These were the circumstances in Novia v. Saccoia Estate (Trustee of). The CPL had remained on title for more than 20 years and even after the defendant’s death, ultimately forcing the defendant’s executor to obtain an order dismissing the action and discharging the CPL.
Thanks for reading and have a great day,
Five seemingly simple yet essential litigation lessons are so cleverly set out in a recent Advocates Journal article by Gord McGuire that I reproduce them below, with some accompanying insights:
- The law is the cart. The facts are the horse.
The take-away: It is suggested that it is better to apply case law after you have persuaded a judge to lean in your client’s favour, as judges are often moved more by their sense of achieving an outcome that is fair and just than by application of the law.
- A picture is worth a thousand authorities.
The take-away: I can’t count the number of times I’ve heard a lawyer complain about losing a winning case or beam about winning a losing one. The author reminds us that having a convincing legal argument or supportive case-law on your side may not carry the day if the opposing side creates an image that registers with the judge. To avoid getting bested by your opponent, use physical photos if you can, and, if you can’t, create mental ones.
- Thinking on your feet is good. Having already done the thinking in advance is better.
The take-away: Better preparedness equals less chance of being caught off-guard by a judge’s questions. This lesson resonates with me as a great practice tip as well as a great mental health tip, since I gather from this article that I’m not alone in having tortured myself post-hearing by repeatedly running the court scene through my head with the perfectly crafted answer that I had meant to give to the judge.
- You and your case are in love. For the judge, it is a first date.
The take-away: Conviction in your case can be persuasive, and it may lead you to expect that a judge will take a similar view. Don’t forget that your perspective is uniquely formed by the level of intimacy you have with the case, and that a judge will give equal consideration to the opposing-side’s position. To temper your expectations, the author suggests that you can try testing the waters by dispassionately discussing your case with colleagues to gauge their reaction, without giving away which side you are on.
- Advocacy matters only so much, and that’s a good thing.
The take-away: Take comfort in knowing that even with the most superb lawyering, there is only so much you can do to secure victory for your client. The facts, the law and the judge’s reaction and perspective are what they are. So when a mediocre advocate defeats a superior one, take it as a mark of a justice system that is functioning as it should.
Thanks for reading and have a great day,
No doubt our youth must navigate an increasingly complex world, and so it isn’t any surprise to see a growing focus on mental health issues and novel ways to address them. This is a very serious issue, yet I couldn’t help but chuckle when reading an article discussing a Dutch university’s new and original stress-management tool. Wait for it…lying in a grave!
Just when life’s challenges are getting you down, you ditch your electronic devices (for 30 minutes to 3 hours), lie in a grave, contemplate the alternative and put your problems into perspective. One student is reported to have said the following after her experience:
“When you think about death, you automatically also think about life. That is because you realize that life isn’t endless and that we are all going to die at one point. It makes you think about what do I want to do in life, and what do I think is the most important, what does my heart feel, what does my mind want to do.”
Maybe it’s the yogi in me, but this feels like a new form of mediation, as one author put it “an invitation to listen to yourself”. I would love to see this service available to students, and adults, locally. Getting into nature is cathartic in its own right, and the option of literally getting into the ground (with the added comfort of a pillow and mat) to reflect seems like a very peaceful and relaxing experience. There are lots of other ways we can let nature give us a boost. I dare you – when summer returns, channel your inner child and roll down a grassy hill!
Have a great day,
In Kirst Estate (Re), the Court of Queen’s Bench of Alberta had before it an interpretation case involving a holograph will of William Kirst (“K”). The will was a short handwritten document that divided the estate equally amongst K’s surviving children, with some qualifying language allowing Whitehorn (“W”), one of K’s children, to live in the family home. W had almost always lived in the home, which was the primary estate asset.
The phrase the Court was tasked with interpreting reads: “Whitehorn can live in the house for awhile, to be determined by Him and his brothers + sisters.”
The sole issue was the interpretation of the words “for awhile”.
The testimony of four of K’s children was considered (although ultimately of little assistance), with two of them believing K’s intention was that W remain in the house indefinitely, and the other two viewing their father’s intention as simply to permit W to stay in the home until he could get his affairs in order. As K discussed his estate with his children separately, each of them had his/her own understanding of K’s intentions. Notably, although K made the will in 1995, none of the kids had previously known about it or discussed its terms with K.
The Court cited and reviewed the following four general principles of interpretation recently set out by the Alberta Court of Appeal to assist in ascertaining K’s intention:
“First, a will must be interpreted to give effect to the intention of the testator. No other principle is more important than this one.
Second, a court must read the entire will, just the same way an adjudicator interpreting a contract or a statute must read the whole contract or statute.
Third, a court must assume that the testator intended the words in the will to have their ordinary meaning in the absence of a compelling reason not to do so.
Fourth, a court may canvas extrinsic evidence to ascertain the testator’s intention.”
The Court concluded that it could determine K’s intention by giving the words in his will their natural and ordinary meaning, and, in so doing, it was satisfied that the intention was to allow W to stay in the home subject to an enforceable condition that he and his siblings agree on how long he can continue to live there. The Court further found that as the siblings could not agree, the condition had not been fulfilled, such that W’s entitlement has ended.
The circumstances in this case are unfortunate, as the siblings had apparently been involved in protracted litigation since K’s death in 2010, including a dispute over the validity of the will. Although holograph wills can be helpful estate planning tools, I wonder if these same contentious circumstances would have developed if K had made his will with effective legal advice.
Thanks for reading,
When we last blogged here on the issue of electronic devices at borders, a Toronto lawyer, Nick Wright, had had his phone and laptop seized by custom officials after he refused to provide password access because solicitor-client privileged information was on the devices.
The authority under which such searches are taking place is the Customs Act, by which courts have previously interpreted “goods” as including cellphones. However, the case law is dated, and there has yet to be a constitutional ruling on the issue.
This may soon change, as Mr. Wright has, together with another lawyer, taken the matter further by applying to the Federal Court seeking a result that would reportedly include declarations that (i) searches on electronic devices without probable cause or search warrant are a breach of the Canadian Charter of Rights and Freedoms, and (ii) searching lawyer-client privileged material similarly constitutes a Charter breach.
The significance of the issue is stressed in the following reported statement of Mr. Wright:
“Solicitor-client privilege is . . . of the utmost importance in the free and democratic society and a fundamental principle of justice, and it’s for the benefit of clients, so individuals,” he says. “In an adversarial system like we have, it’s important that the public be able to consult with their lawyers, in order to participate in the legal process and to have the federal government thieving solicitor-client privilege information undermines our legal system and undermines the adversarial process.”
Until the case is determined, lawyers should assume that information covered by solicitor-client privilege is not protected from search at a border. Accordingly, further to the suggestion of the Canadian Bar Association, using cloud technology and erasing all privileged information from devices is the safest course of action.
We will be keeping an eye on this litigation, and hope to see an updated and meaningful pronouncement on the issue of a reasonable expectation of privacy for lawyers at the border.
Thanks for reading,