Author: Paul Emile Trudelle
A recent decision of the Federal Court provides detailed instructions for proceeding with a virtual trial.
- the technology to be used;
- document management;
- counsel preparation to ensure they have the required hardware and software;
- witness preparation with respect to hardware, software;
- testimony protocols, including camera positioning, access to documents, and who can be present;
- how documents are to be put to a witness;
- what is to happen if there is a loss of internet connection;
- how objections are to be raised and dealt with;
- how the principle of “open courts” is to be addressed;
- testing of the systems before trial;
- access to Zoom “chat” functions.
The Direction also includes a schedule entitled “Information for Witnesses” which summarizes part of the Direction, and is to be provided to witnesses in advance of their testimony.
The decision is not a “Practice Direction” applicable to all virtual trials. However, it is comprehensive and should be considered by the parties and the trial judge in a case conference prior to the commencement of any other trial.
Justice Lafreniere begins the Direction by setting out the balancing act that the courts must engage in when dealing with trials during these COVID times. “The Court recognizes the importance of reducing the spread of COVID-19 and prioritizes the health and safety of all court participants, including members of the Court, registry staff, counsel, witnesses, stenographers and interpreters. At the same time, the Court must balance the need to maintain judicial operations. Bearing in mind these important factors, it has been ordered that the hearing of this trial continue remotely via videoconference.”
The show must go on. Albeit with a very different script.
Thank you for reading.
A recent decision of the Court of Appeal illustrates the importance of documenting intentions with respect to inter-familial loans. It also addresses the importance of solicitors’ evidence in establishing the wishes and intentions of a testator.
The case, ), involves a promissory note given by the deceased’s daughter to the deceased. The daughter was borrowing $142,000 to buy an interest in a cottage. A promissory note was signed by the daughter on July 16, 2014. Prior to signing, the note was reviewed by the deceased’s lawyer. The daughter discussed the note with the deceased and added a clause stating that the loan was to be forgiven upon the deceased’s death. The deceased’s lawyer reviewed this revision and advised against it. The deceased took the forgiveness term out of the promissory note, and the daughter signed it.
Following the deceased’s death, the daughter produced a second promissory note dated July 22, 2014. This promissory note provided that the loan was to be forgiven upon the deceased’s death. The daughter gave evidence that she discussed the loan with the deceased and the deceased had originally wanted to put a forgiveness clause in her will, but after having second thoughts, decided to have the forgiveness clause put into the second promissory note.
In rejecting the validity of the second promissory note, the lower court found that the deceased relied on the first promissory note only when advancing the funds. The second note was never discussed with her lawyer after the first note was signed. The deceased then went to another lawyer to discuss her estate plan. This second lawyer was given a copy of the first promissory note by the deceased, and there was no mention of the second promissory note.
Thus, while the second promissory note was signed by the daughter, there was insufficient evidence to convince the court that the deceased had accepted those terms.
Thank you for reading.
Monday, September 7 is Labour Day (or Labor Day, as they call it in the U.S.).
Labour Day is a great time to reflect on the summer that was, and plan for the fall and winter ahead.
Last Labour Day, . After making it this far through the COVID pandemic, I thought that now would be a good time to repeat the advice from last year’s blog and emphasize the benefits of adopting reasonable resolutions.
Have a great long weekend.
Under the Limitations Act, 2002, most actions are subject to a two-year limitation period. However, the limitation period does not run during any time in which the person with the claim is incapable of commencing a proceeding AND not represented by a litigation guardian in relation to the claim. A person is presumed to be capable unless the contrary is proved.
What happens when a claim is commenced, but not all defendants are named? This issue arose in the recent decision of Wood v. David Mitchell et al., 2020 ONSC 4903 (CanLII). There, the plaintiff suffered a stroke. He sued a number of defendants in relation to his medical care. One doctor was referred to in the Statement of Claim, but not named as a party. Three years after the claim was started, the Public Guardian and Trustee was appointed as the plaintiff’s litigation guardian. The PGT moved to add the doctor as a defendant. The doctor moved to strike the claim on the basis of the passage of the limitation period. The plaintiff resisted, taking the position that the plaintiff did not have capacity when the claim was commenced, and did not have a litigation guardian.
The doctor raised two main points. Firstly, the doctor sought information about communications between the plaintiff and his initial lawyers going to his capacity at the time. Secondly, the doctor argued that the plaintiff was represented initially by a “de facto” litigation guardian, a Mr. McQueen.
The decision addressed these issues from the perspective of a motion to compel answers to questions and further production. The plaintiff had refused to answer questions about his and Mr. McQueen’s communications with his initial lawyers and to produce the lawyers’ file on the basis of relevance and privilege.
At first instance, the Master disallowed the questions. On appeal, the court ordered that the lawyers’ files as they relate to the plaintiff’s capacity and to Mr. McQueen’s dealings with the lawyers must be produced, even if privileged.
The court held that on the first issue, as the plaintiff put his capacity in issue, information that his lawyers had about his capacity was to be produced. The court stated that the “elephant in the room” was “what were the plaintiff’s initial lawyers thinking” when they commenced the claim? Did they believe that the plaintiff had capacity? If so, what was that belief based on?
On the second issue, the court referred to the Court of Appeal decision of Azzeh (Litigation Guardian of) v. Legendre, 2017 ONCA 385 for the proposition that a de facto litigation guardian could recommence the running of the limitation period. In Azzeh, the court held that a person could be considered litigation guardian, even if not formally appointed, if they held themselves out as litigation guardian. In Wood, the court held that the definition of “litigation guardian” might even by broader.
As can be seen, the issues that arise in litigation where the capacity of a party may be in issue can be complex. The courts must walk a fine line of ensuring that the right to sue is not taken away from an incapable person, while ensuring that the rights of third parties, including the right to the protection of limitation periods, are safeguarded.
Thank you for reading.
Needless to say, this has been an unprecedented summer. COVID-19 has wreaked havoc on just about everything and everyone. Now, as summer winds down, we face an equally unprecedented and indefinite fall and winter.
This week would have been the opening of the Canadian National Exhibition: the true harbinger of the end of summer.
Before summer ends, be sure to enjoy whatever summer experiences you can, before it is too late.
For example, earlier this week, I learned that the corpse flower was in bloom at the Metro Zoo. Nicknamed “Pablo ‘Pe-ew’caso”, the Zoo’s specimens of the corpse flower, or amorphophallus titanium, also known as the titan arum, blooms for only a short time (8 to 36 hours) every year. The plant usually doesn’t bloom for the first 7 to 10 years of its life, and thereafter may only bloom every few years. The plant can reach a height of over 3 m. The plant attracts bugs for pollination by giving off the smell of rotting meat or a rotting corpse, hence the common name. The red colour of the flower contributes to the illusion of meat.
A time-lapse video of the plant blooming can be found here.
Alas, I was too late, and missed it.
Make the most of the rest of your summer. Enjoy an Ontario peach. It is going to be a long, long fall and winter.
Thanks for reading.
Last week, I blogged on the Supreme Court of Canada decision of Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 (CanLII) and “three-card monte”. This week, I would like to discuss the bigger take-away from the decision: the rejection of the existence of the cause of action of “waiver of tort” in Canada.
In Atlantic, the claimants in a class action proceeding alleged that certain video lottery terminal games (“VLTs”) were inherently dangerous and deceptive, and contravened the Criminal Code. The defendants failed to warn the claimants. As a result, the claimants sought an order that the defendants disgorge any profits made by them. They did not allege any specific damages on the part of each claimant. The defendants moved to dismiss the claim.
The claimants pled “waiver of tort”. The term itself was criticized in the SCC decision as being a misnomer. Rather than “waiving” the tort or wrongdoing, the claimant is simply electing to pursue a different remedy: disgorgement of profits earned by the defendants without proof of any damages suffered by the claimants.
Brown J., speaking for the majority, held that disgorgement is a remedy, not a cause of action. Before disgorgement can be ordered, a recognized tort or breach of contract or claim in equity must be established.
In order to establish negligence, causation must be established. It must be shown that the defendant’s wrongful actions caused damages to the claimant. “…the conduct of a defendant in negligence is wrongful to the extent that it causes damage.” “In other words, negligence ‘in the air’ – the mere creation of risk – is not wrongful conduct.”
Citing certain scholarly articles on the topic, Brown J. went on to reject waiver of tort as an independent cause of action. “Granting disgorgement for negligence without proof of damages would result in a remedy ‘arising out of legal nothingness’ (Weber, at p. 424). It would be a radical and uncharted development, ‘[giving] birth to a new tort over night’ (Barton, Hines and Therien, at p. 147).
From an estates and trusts point of view, Brown J. acknowledged that disgorgement may be available without proof of damages for certain forms of wrongdoing, such as breach of trust. “However, it is a far leap to find that disgorgement without proof of damages is available as a general proposition in response to a defendant’s negligent conduct.”
R.I.P Waiver of Tort.
Thank you for reading.
The Supreme Court of Canada recently rejected a class proceeding seeking damages arising from “inherently deceptive” video lottery terminal games. The claimants sought the disgorgement of profits made from the operation of these devices on the basis of “waiver of tort”, breach of contract and unjust enrichment.
The decision, Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19 (CanLII) was released on July 24, 2020.
One of the claims advanced was that the video terminals were akin to the game of “three-card monte”, and thus unlawful.
Three-card monte is also known as “Find the Lady”. Three cards (usually two jacks and the queen of hearts) are placed face down by the dealer. The queen of hearts is shown to the player, and then placed face down again. The dealer then slides the cards around quickly. The player must then select the queen of hearts. If the player is correct, he or she wins. Betting is usually involved. The player puts up a bet. If the player wins, the player gets the bet back plus an equal amount from the dealer. If the player is incorrect, the dealer gets the player’s bet.
The game is often used as a con: a player is lured into playing, believing that the game is easy. The player often watches another player, a shill who is, unknown to the payer, working with the dealer, win lots of money. Sometimes the corner of the queen of hearts is bent, leading the player to believe that he or she has an unfair advantage. Through sleight of hand, the player usually loses.
Three-card monte and games similar to it are illegal under s. 206 of the Criminal Code. The Criminal Code defines “three-card monte”, as meaning “the game commonly known as three-card monte and includes any other game that is similar to it, whether or not the game is played with cards and notwithstanding the number of cards or other things that are used for the purpose of playing.
The Newfoundland and Labrador Court of Appeal held that expert evidence was required in order to determine the essence of three-card monte. The Supreme Court of Canada disagreed, holding that it was for the court to determine Parliament’s intention in prohibiting games similar to three-card monte. Referring to transcripts of the debate leading to the introduction of the law in 1921, they found that video lottery terminals were not similar to three-card monte. The law was directed at the “concrete attributes” of the game, and not “the abstract feature of deception”.
[Note to my kids: our weekly game of three-card monte is postponed indefinitely. You can keep your money, for now.]
Next week, I will discuss the Supreme Court of Canada’s comments on “waiver of tort” as a cause of action.
Thank you for reading.
In response to issues arising in the execution of Wills during the COVID-19 pandemic, the Ontario government introduced an Order in Council specifically dealing with the execution of Wills and Powers of Attorney. Ontario Regulation 129/20. made under the Emergency Management and Civil Protection Act provided that the requirement that a testator or witness be present in each other’s presence for the making of a Will or Power of Attorney may be satisfied by means of audio-visual communication technology, with certain restrictions. See our blog on the virtual witnessing of Wills and Powers of Attorney, here.
Under the Reopening Ontario (A Flexible Response to COVID-19) Act (“the Reopening Ontario Act”), Orders made under the Emergency Management and Civil Protection Act that have not been previously revoked are extended and continued under the Reopening Ontario Act. The extension is for a period of 30 days after the Order is continued, subject to further extension.
The new Order, Ontario Regulation 129/20 formerly made under the Emergency Management and Civil Protection Act, but now continued under the Reopening Ontario Act can be found here.
The Reopening Ontario Act received Royal assent on July 21, 2020 and came into effect on July 24, 2020.
The power to extend or amend an Order ceases on the first anniversary of the day orders are continued (ie. July 24, 2021).
This would mean that the virtual witnessing of Wills and Powers of Attorney is extended until August 23, 2020, with the government having the power to further extend the provisions.
We will keep you posted.
Thanks for reading.
When a claim is being brought by or against an estate or a trust, who are the proper parties?
Rule 9.01 of the Rules of Civil Procedure provides that a proceeding may be brought by or against an executor, administrator or trustee as representing an estate or trust and its beneficiaries without joining the beneficiaries as parties.
There are exceptions to this Rule. Beneficiaries must be included as parties where the claim is:
- to establish or contest the validity of a will
- for the interpretation of a will;
- the removal or replacement of an executor, administrator or trustee;
- against an executor, administrator or trustee for fraud or misconduct; or
- for the administration of an estate or the execution of a trust by the court (ie, under Rule 65).
Where beneficiaries must be named as parties, the failure to do so may be “fatal” to the proceeding. In Blum v. The Queen, 1998 CanLii 425 (TCC), the applicant challenged the validity of a trust. The beneficiaries were not named. Applying similar rules under Alberta’s Queen’s Bench Rules, the court stated “The failure to do so [to name the beneficiaries] is fatal to the wife’s attach on the trust.” It should be noted that under the Alberta rules, beneficiaries to a trust must be named as parties to a proceeding to establish or contest the validity of “a will or trust”. Ontario Rules do not require that the beneficiaries of a trust be named as parties (as opposed to beneficiaries under a Will). However, applying the logic in Blum, it may be advisable to do so. In Blum, the court stated that it would be reluctant to rule on the validity of a trust without the beneficiaries being represented in the proceeding.
Thus, the executor, administrator or trustee is a necessary party to a proceeding by or against an estate or trust. Under Rule 9.01(3), if any executor, administrator or trustee does not consent to be joined as a plaintiff or applicant, they are to be made a defendant or respondent.
The beneficiaries, however, except in the limited exceptions noted, are not necessary parties. However, while certain proceedings may be brought without naming the beneficiaries as parties, there is nothing that prevents them from being named. In Milner Investors Inc. v. Eisen, 2019 ONSC 5911 (CanLII), the court held that while they do not need to be named as parties, “There is nothing that precludes the pleading from naming the beneficiaries as plaintiffs.”
Thanks for reading. Enjoy your weekend.
Estate litigation can be complex at the best of times. An Order Giving Directions, obtained at the early stages of the litigation, can set out not only the substantive issues to be tried, but may also provide for a number of procedural issues that need to be addressed in order to assist in the advancement of the litigation and also the administration of the estate.
These matters can be made much more complex during the current pandemic.
Such complications are illustrated in the recent decision of Lima v. Ventura (Estate of), 2020 ONSC 3278 (CanLII). There, an Order was made on February 6, 2020 which provided for a number of procedural matters, including the sale of the deceased’s home. The deceased’s home was occupied by one of her children and his family. The Order provided that that son had the option of purchasing the property at a price to be agreed to by the parties, with the sale to be completed by April 14, 2020.
After the February 6, 2020 Order was made, things hit the fan. The son, who was out of the country at the time of the Order, returned on February 26, and was forced to self-quarantine for 14 days. He tried to get a real estate person to do a Comparative Market Evaluation of the property, but the person would not make a site visit due to COVID-19. The son was not able to get other information needed to be disclosed under the Order due to bank and municipality closings.
The son moved for an Order extending the time to exercise the option to purchase. The motion was denied.
The court recited cases addressing the need to obey a court Order. Court Orders are not “suggestions” or “frameworks” but are mandatory in nature and must be obeyed. This continues to be true during the COVID-19 emergency. As stated by Chief Justice Morawetz in the Consolidated Notice to the Profession and others, effective May 19, 2020, “During this temporary suspension of in-court operations, counsel and parties are expected to comply with existing orders and rules of procedure, as well as procedures in this and other Regional Notices, to bring cases closer to resolution, to the extent that they can safely do so through virtual means. This guidance also applies to self-represented parties.”
In refusing the request to vary the prior Order, the court listed some of the factors to be considered. These include:
- a) The steps not taken were necessary to carry out the terms of any order, and no other alternative to taking those steps would have served that purpose;
- b) The steps were not taken because of the moving party’s inability to access business, professional or institutional offices physically or electronically because of COVID-19 protocols;
- c) An extension of time would not be contrary to any law, or the rights of other person under an order of any court;
- d) A reasonable explanation is provided for not taking the required steps, or why it was difficult or impossible to comply with the order for COVID-19 related reasons;
- e) The moving party has made best efforts to otherwise comply with the order, and all other terms of the order that were not impeded by the COVID-19 protocols have been met; and
- f) The moving party has acted in good faith.
The onus of providing necessary and persuasive evidence with respect to these factors is on the party seeking to have the order varied. In the case before the court, the son did not provide sufficient persuasive evidence to justify his inability to comply with the order. His request for an extension of the time within which to exercise his option to purchase was denied. Carriage of the sale was granted to the other estate trustees.
The decision also addresses the issue of occupation rent and the circumstances where it might be ordered to be payable. I will leave that for another day.
Have a great weekend. Stay safe and healthy.