Author: Paul Emile Trudelle

03 Apr

Virtual Mediation

Paul Emile Trudelle Estate & Trust, In the News, Litigation Tags: , , , , , 0 Comments

Mediation, with plenary sessions, small break-out rooms for parties and their counsel, and a mediator shuttling between the rooms seem like a distant, archaic memory. The former format of mediation is the antithesis of social distancing.

(I find it hard to now watch a tv show or movie without thinking to myself, “That’s not very good social distancing.”)

However, the show, litigation and mediations, must go on.  Welcome to the age of virtual mediation.

Programs such as Zoom allow for parties to meet and discuss ideas and resolve differences without being physically in the same room. While the virtual alternative is not perfect, it is workable.

With Zoom, there are a few ways for mediations to be accommodated. One option is for the organizer to set up several online meetings: one to be used as a plenary session where everyone has access, and one for each of the parties to the litigation. In the plenary room, all of the parties and their counsel can join. In the parties’ separate room, only the party and their counsel can participate, with the mediator joining and leaving as necessary.

Another option is for the organizer to set up one meeting. The organizer would be able to admit participants into the meeting room, or put them into a virtual “waiting room” while others remain in the meeting room.

Another consideration when organizing a Zoom mediation is to ensure that the organizer has a Pro account or better. While the Basic account is free, it only allows for meetings of 40 minutes or less. The Pro account, at $20 per month per host, allows for meetings of up to 24 hours, which should probably enough for most mediations. (Some mediators are slow mediators: you know who you are.)

Some reporting services are offering virtual mediation assistance. Neesons, for example, can offer extensive technical support for mediations, examinations and arbitrations. They have also hosted a number of presentations on virtual examinations, arbitrations and mediations. Contact them if you want more information.

(Fun fact: Zoom Video was trading at $68.04 on December 31, 2019. On March 23, 2020, it was trading at $159.56. As of the time of writing this (April 2, 2020), share prices had relaxed to $118.10.)

Thank you for reading. Stay healthy. Practice safe litigation.

Paul Trudelle

27 Mar

CRA Filing Deadlines and COVID-19

Paul Emile Trudelle Estate & Trust, In the News Tags: , , , , 0 Comments

Recently, the Government announced changes to Canada Revenue Agency tax filing and payment deadlines in light of the COVID-19 crisis.

Notably, individual returns, normally due on or before April 30, 2020 are now due on or before June 1, 2020. Payments due April 30, 2020 are due on or before September 1, 2020, with no penalty or interest being payable if payments are made on or before September 1, 2020. Installment payments due on a date before September 1, 2020 can be paid up to September 1, 2020.

Things are not so clear with respect to terminal tax returns for deceased taxpayers. Normally, these are due on April 30, 2020 if the deceased died between January 1, 2019 and October 31, 2019, and six months after death if the deceased died between November 1, 2019 and December 31, 2019. What is not entirely clear is whether these deadlines are also extended. Some accountants are advising to file and remit payment in accordance with the old deadlines until further clarification is given. Hopefully, this issue will be clarified shortly.

Please note that things change daily, and further clarification may be coming soon. If these deadlines may apply to you, or an estate that you are responsible for, please consult a knowledgeable accountant and/or monitor the CRA website.

Thank you for reading. Stay safe and healthy.

Paul Trudelle

20 Mar

Courts Closed? Try a Motion in Writing

Paul Emile Trudelle In the News, Litigation Tags: , , , , 0 Comments

Yesterday, Arielle Di Iulio blogged on COVID-19 and the response by the Ontario Superior Court of Justice.

In a Notice dated March 15, 2020, the Chief Justice of Ontario advised that the Superior Court of Justice is suspending all regular operations until further notice. All criminal, family and civil matters scheduled to be heard after March 17, 2020 are adjourned.

There is an exception for “urgent matters”. as defined in the Notice, and a procedure is set out for dealing with such urgent matters.

For the most part, the court is still accepting filings. Where an application is to be issued, it is issued without a fixed return date.

How can parties obtain relief if a matter is not urgent? Consider a motion in writing.

Rule 37.12.1(1) of Ontario’s Rules of Civil Procedure allows a motion to be brought in writing without the attendance of the parties (unless the court orders otherwise), where the motion is on consent, unopposed or without notice.

Further, under Rule 37.12.1(4), a party may propose that the motion be “heard in writing” without the attendance of the parties where the “issues of fact and law are not complex”. In response, the responding party may agree to have the motion “heard and determined in writing”, or serve a notice that the responding party intends to make oral argument.

As serving a notice of intention to make oral argument will essentially, for now, prevent the motion from proceeding, now more than ever parties and their counsel must practice the “three C’s” of the commercial court: co-operation, communication and common sense.

Stay safe. Have a great, but isolated weekend.

Paul Trudelle

13 Mar

Common Interest Privilege

Paul Emile Trudelle Litigation Tags: , , 0 Comments

Communications between a client and litigation counsel may be considered privileged, and therefore may not be producible in the litigation.

This privilege can be extended to communications between parties and counsel to litigation who have a “common interest”.

“Common interest privilege” has been described as arising “where one party (party A) voluntarily discloses a document which is privileged in its hands to another party (party B) who has a common interest in the subject matter of the communication or in litigation in connection with which the document was brought into being.” The result is that the document is privileged in the hands of party B.

To put it another way, in the leading case of Iggillis Holdings Inc. v. Canada (National Revenue), 2018 FCA 51 (CanLII), (leave to the Supreme Court of Canada dismissed) the Federal Court of Appeal stated:

[S]olicitor-client privilege is not waived when an opinion provided by a lawyer to one party is disclosed, on a confidential basis, to other parties with sufficient common interest in the same transactions. This principle applies whether the opinion is first disclosed to the client of the particular lawyer and then to the other parties or simultaneously to the client and the other parties. In each case, the solicitor-client privilege that applies to the communication by the lawyer to his or her client of a legal opinion is not waived when that opinion is disclosed, on a confidential basis, to other parties with sufficient common interest in the same transactions.

Common interest privilege is not a “stand-alone privilege”: it extends an existing privilege to the receiving party. The communication must be otherwise privileged for common interest privilege to apply. For example, a document that is subject to privilege in the hands of party A may also remain privileged in the hand of party B, if there is a common interest at the time the document is disclosed.

The onus of establishing that a document is privileged from production rests on the party asserting the privilege. That party must provide evidence that supports the claim of privilege. If necessary, the court can review the documents in order to decide the validity of the claim: Rule 30.04(6) of the Rules of Civil Procedure.

The determination of whether the privilege exists depends upon objective evidence of the purpose and content of the communications and not the mere belief of the parties.

The concept is discussed at length in the matter of Ross v. Bragg, 2020 BCSC 337 (CanLII). There, the plaintiff made a claim against a number of defendants for damages relating to a lost business opportunity.

Correspondence between one of the defendants and their lawyer was shared with another defendant. If these documents contained legal advice, they would remain privileged in the hands of all of the defendants. The court reviewed the documents to determine whether they contained legal advice as not all documents from a lawyer are subject to privilege.

As an example of the application of the claim of privilege, the court ordered the production of minutes of a meeting between the defendants relating to discussions of the business opportunity, as these were not privileged, but refused to order production of the minutes relating to discussions of the defence to the litigation.

Thank you for reading.

Paul Trudelle

06 Mar

Plene Administravit: Fully Administered

Paul Emile Trudelle Estate & Trust, Litigation Tags: , , , 0 Comments

Are you an estate trustee? Is the estate being sued? Are there no, or insufficient, assets left in the estate to satisfy any judgment that may be obtained?  Then plene administravit (or plene administravit praeter) is the doctrine for you!

Plene administravit is Latin for “fully administered”. It is pleaded where there are no assets remaining in the estate to satisfy any judgment and costs award that may be obtained. Plene administravit praetor means “fully administered except”, and is pleaded when there are some but insufficient assets in the estate to satisfy any judgment and costs.

Failure to plead plene administravit could lead to personal liability on the part of the estate trustee for the claim. As stated in Commander Leasing Corp. Ltd. v. Aiyede (1983) CanLII 1649 (ON CA):

It has long been established that if an executor or administrator has no assets to satisfy the debt upon which an action is brought, in the absence of a plea of no assets or plene administravit, he will be taken to have conclusively admitted that he has assets to satisfy the judgment and will be personally liable for the debt and costs if they cannot be levied on the assets of the deceased. If the executor has some, but insufficient, assets to satisfy the judgment and costs, a plea of plene administravit praetor will render him liable only to the amount of assets proved to be in his hands as executor”.

Where the doctrine is pleaded, the burden of proof falls on the plaintiff to show that assets existed or ought to have existed in the hands of the estate trustee at the time the action was commenced.

In Commander Leasing, the estate trustee distributed the proceeds of the estate to the beneficiary (herself), with knowledge of the claim. The Court had no difficulty in finding that as the doctrine was not pleaded, the estate trustee was personally liable for the judgment.

In Commander Leasing, the Court of Appeal also discussed the companion doctrine of devistavit. Devistavit, or a wasting of assets, is defined to be “mismanagement of the estate and effects of the deceased, in squandering or misapplying the assets contrary to the duty imposed on them, for which the executors or administrators must answer out of their own pockets, as far as they had, or might have had, assets of the deceased.” In Commander Leasing, the court found that in distributing the estate the estate trustee breached her duty as estate trustee, rendering her personally liable.

However, all is not lost if the estate trustee fails to plead plene administravit. In Brummund v. Baumeister Estate, 2000 CanLii 16988 (ON CA), the Court of Appeal upheld a trial judge’s decision to allow the defendant to amend the defence at trial to plead the doctrine. The Court of Appeal held that the plaintiff was not prejudiced by the amendment, as the facts underlying the application of the doctrine were fully canvassed at trial.

Have a great, plenus weekend.

Paul Trudelle

28 Feb

Why Do Fools Fall In Love? Frankie Lymon

Paul Emile Trudelle Estate Planning Tags: , , , , 0 Comments

The song “Why Do Fools Fall in Love”, recorded in 1956, became a number 1 hit, and established the career of Frankie Lymon and the Teenagers. The song has been covered by many, including the Beach Boys and, most notably, Diana Ross.

Frankie Lymon died on February 27, 1968 at the age of 25, as a result of a heroin overdose. In his wake, he left a series of relationships. Years after his death, litigation ensued.

After Diana Ross’s cover version of the song reached the charts in 1981, three women, each claiming to be Lymon’s spouse and lawful heir, sought payment of royalties arising from the song.

The first, Elizabeth Waters, married Lymon in 1964. Together, they had a child who died shortly after birth. Waters, however, was not divorced from her first husband at the time of her marriage to Lymon.

The second woman, Zola Taylor, a singer with the Platters, claimed to have married Lymon in Mexico, 1965. However, no documentation of the marriage could be found.

The third, Emira Eagle, married Lymon in June 1967.

The question of who was Lymon’s proper heir went to trial. According to a Washington Post article, at first instance, the court held that first wife Waters was the proper heir. Although Waters was not yet divorced when she married Lymon, their relationship “satisfied the requirements of a common law marriage in the State of Pennsylvania.” Although Waters was not yet divorced when she married Lymon, the marriage became valid when the divorce from her first husband became final.

On appeal, the court held that the marriage between Waters and Lymon was not valid. The marriage to Eagle was valid and therefore she was entitled to the estate.

The story does not end there. Issues arose as to what royalties Lymon’s estate was entitled to. This involved litigation with Lymon’s former manager. In an article in Ebony Magazine, it is reported that Lymon’s estate was worth more than $1m.

In the Ebony interview, Eagle says that she knows why fools fall in love: “Love doesn’t hurt. Love is supposed to be tender, beautiful and caring. Frankie treated me like his queen.” When asked, Eagle said she would do it all again, “but I would insist on a will.”

Frankie’s life and posthumous issues are portrayed in the movie “Why Do Fools Fall in Love”, starring Vivica Fox as wife #1, Halle Berry as wife #2, Lela Rochon as wife #3 and Little Richard as himself.

Thanks for reading.

Paul Trudelle

21 Feb

Perpetual Cases on Perpetuities

Paul Emile Trudelle Estate Planning, Wills Tags: , , , 0 Comments

Goss Estate (Re), 2020 ABQB 121 (CanLII) is the most recent case to discuss the applicability of the Rule Against Perpetuities.

As stated in the case, “Cases involving the Rules Against Perpetuities are rare, however the Rule is alive and well in Alberta…”.

The case notes, dramatically, that the common law doctrine limits “the grasp of the dead hand … on the hand of the living.”

Simply put, the Rule provides that “No interest is good unless it must vest; if at all, not later than 21 years after some life in being at the creation of the interest.”

In Goss Estate, the Rule was applied and the trust created by the testator was found to be invalid. There, the deceased left a will that provided that the residue of the estate was to “be retained in trust for future generations of children and grandchildren”, with only the interest on the capital to be paid out. There was no ultimate residual beneficiary named.

Although Alberta has a “wait and see” rule that provides that if an interest may vest during the period, the trust is not necessarily invalid, such a provision did not apply in Goss as the court found that the interest was incapable of vesting within the perpetuity period.

In conclusion, the court found that the trust was invalid. As there were no named residual beneficiary, the estate passed on an intestacy, to the testator’s two children. With respect to the trust that was intended, “While [the testator] had somewhat noble ideas about how to deal with his estate, perpetual trusts have been unenforceable since 1682”.

For other blogs on the Rule Against Perpetuities, see Stuart Clark’s blog, Rule Against Perpetuities – It’s not so scary, and my blogs, Property Rights and the Rule Against Perpetuities and Hollywood, and the Rule Against Perpetuities.

As always, thank you for reading.

Paul Trudelle

14 Feb

Natural Love and Affection

Paul Emile Trudelle Estate Planning Tags: , , , , , , 0 Comments

As it is Valentine’s Day, our discussion today will consider, naturally, love and affection.

Real property can be gifted to loved ones. If there is no consideration of monetary value, then there will be no Land Transfer Tax payable on the transaction. In the Land Transfer Tax Affidavit, which must be filed when any transfer is registered in Ontario, the transfer is said to be for “natural love and affection”.

Although not specifically exempt from taxes, a transfer for “natural love and affection” is considered to be a transfer for nil value, and therefore, no Land Transfer Tax is payable.

“Love”, as most poets know, is hard to define. There is no definition in the tax legislation. Further, it is not clear what “unnatural” love or affection is.

In certain cases, gifts to non-arms’ length parties may also not attract Land Transfer Tax. For example, a gift to a charity may not be subject to Land Transfer Tax.

If the gift includes the assumption of a mortgage or other liabilities by the receiver, then the value of the mortgage or liability assumed by the receiver is of value to the donor, and must, in most cases, be included in the Land Transfer Tax Affidavit. Land Transfer Tax will be payable on the value of the mortgage or liability assumed. I say “in most cases” because there is an exemption where the transfer is between spouses or former spouses: see R.R.O. 1990, Regulation 696.

Further, if the receiver is not a spouse and the land was subject to a mortgage that was paid off by the receiver, Land Transfer Tax will be payable on the value of the mortgage paid off.

When gifting real property, keep in mind that while Land Transfer Tax may not be payable, this does not mean that income taxes are not payable. In many cases, the gift will trigger a deemed capital gain on the part of the donor.

For more information, see the Ontario Ministry of Finance bulletin, here, and the Government of Ontario publication, “A Guide for Real Estate Practitioners: Land Transfer Tax and the Registration of Conveyances of Land in Ontario”, here.

Thanks for reading.

Paul Trudelle

07 Feb

Ten-Year Limitation Period for Real Property Claims

Paul Emile Trudelle Estate & Trust Tags: , , , 0 Comments

In the recent case of Wilkinson v. The Estate of Linda Robinson, 2020 ONSC 91, the court rejected an argument that the 2-year limitation period set out in the Trustee Act applied to a claim against an estate for an interest in a real property on the basis of constructive trust. The court held that the 10-year limitation period set out in the Real Property Limitations Act applied.

In the case, the deceased died on July 2, 2015. The deceased died owning a real property that she and her common-law spouse lived in. In her will, the deceased allowed her spouse to live in the house for 2 years. The surviving spouse brought a claim that he was entitled to an equal interest in the house.

However, the claim was not commenced until September 25, 2017. The estate seized upon this delay and brought a motion to have the application dismissed on the basis of the passage of the 2-year limitation period set out in the Trustee Act.

The court dismissed this argument. It held that the appropriate limitation period was not the one set out in the Trustee Act, but the one set out in the Real Property Limitations Act.

The court quoted extensively from the Court of Appeal decision of McConnell v. Huxtable, 2014 ONCA 86. There, the court determined that a claim for a constructive trust in a common law relationship based on unjust enrichment was an action for recovery of land and therefore was governed by the Real Property Limitations Act. The applicable limitation period was therefore 10 years.

In a similar case, Rolston v. Rolston, 2016 ONSC 2937, the court refused to apply the 2-year limitation period to a claim for a remedial constructive trust brought 7 years after the date of death of the deceased. Again, the action was allowed to continue under the 10-year limitation period set out in the Real Property Limitations Act.

Ideally, any claim involving an estate should be brought within 2 years of the date of death of the deceased so as to avoid any limitation period issue. However, where this has not been done, it may still be possible to maintain a claim under certain circumstances.

Thanks for reading.

Paul Trudelle

31 Jan

St. Mark Preaching In Alexandria: Working for Your Bequest

Paul Emile Trudelle Estate Planning, General Interest, Wills Tags: , , , , 0 Comments

St. Mark Preaching in Alexandria is an impressive, substantial work: it measures 3.47 m by 7.70 m.

Gentille Bellini[1] started the canvas in July 1504. However, he died in February, 1507, before the work was completed. The painting was eventually completed in March, 1507, by Gentille’s brother, Giovanni.

It is believed that Gentille asked Giovanni to complete the painting before Gentille died. Giovanni refused. Gentille then prepared a will in which Giovanni was to be given a collection of drawings from their father and one of the founders of the Renaissance style of painting, Jacopo Bellini, but only on the condition that Giovanni complete the painting.

Conditions precedent, although rare, are not unheard of. Consider a will that provides that the beneficiary can inherit a $300m estate if he can spend $30m in 30 days (Brewster’s Millions), a will that provides for the residue of an estate to pass to “the mother who has since my death given birth in Toronto to the greatest number of children” (Millar Estate), or a will that provides that the beneficiary can inherit a substantial gift, but only if he or she spends the night in a (haunted) house (just about every Scooby-Doo episode).

However, wills with conditions can be fraught with difficulty. There are issues of uncertainty or even impossibility of the condition. They can be contrary to public policy. The condition may also be considered to be “repugnant” to the nature of the gift. An issue arises as to whether the condition is a condition precedent, in which the gift may fail in its entirety, or a condition subsequent, in which the gift may stand but the condition may fail. Great care in drafting such clauses is required.

Thank you for reading.

Paul Trudelle

[1]           Fun fact: Yes, the Bellini cocktail is named after Giovanni Bellini. Apparently, the pink colour of the peach puree and prosecco drink reminded its inventor, Giuseppe Cipriani of Harry’s Bar, Venice, of the colour of a toga of a saint in one of Giovanni’s paintings.

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