Author: Paul Emile Trudelle

15 Jun

Who Can Force The Sale of A Property?

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills 0 Comments

This question is addressed in the June 8, 2018 decision of Justice Nishikawa in Galsan Holdings Inc. v. Davalnat Holdings Inc., 2018 ONSC 3600 (CanLII).

There, a corporation, Seabrook Properties Inc. (“Seabrook”), owned a commercial property (actually, the application involved two different corporations owning two different properties, but each property was addressed on the same basis). For sake of simplicity, I will only discuss one of the properties). The corporation was owned by Galsan Holdings Inc. (“Galsan”), as to 50%, and Davalnat Holdings Inc. (“Davalnat”), as to the other 50%. Galsan was, in turn, wholly owned by a Mr. Gallo, and Davalnat was wholly owned by a Mr. Calvano. Gallo and Calvano were the officers and directors of Seabrook.

The business relationship between Gallo and Calvano broke down, and Gallo and his company Galan brought an application for partition and sale.

The application was dismissed. The court held that Gallo and Galsan did not have the requisite standing to bring the Application. Under s. 2 of the Partition Act,

All joint tenants, tenants in common, and coparceners, all doweresses, and parties entitled to dower, tenants by curtesy, mortgagees or other creditors having liens on, and all other parties interested in, to or out of, any land in Ontario may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.

In considering the section, the court applied an Ontario Court of Appeal decision, Greenbanktree Power Corp. v. Coinamatic Canada Inc., which held that a person with “an interest in the land” has a prima facie right to compel partition or sale. Only a person or corporation “entitled to the immediate possession of an estate in property” may bring an action or make an application for its partition or sale.

In the case before the court, the property was owned by Seabrook. The shareholders, Galsan and Davalnat, did not have a possessory interest in the property. The shareholder of Galsan, Mr. Gallo, was “a further step removed” from the property, and similarly had no prima facie right to partition.

There was no suggestion that Seabrook was holding the property as a bare trustee. If the property was owned by a corporation as a bare trustee, the beneficiaries may be considered to have an interest in the land, and may be entitled to compel a partition or sale.

Although the application was dismissed, it is not that the parties are without a remedy. Gallo and Galsan had also commenced an oppression remedy proceeding, seeking a winding up of Seabrook. This proceeding continued.

For another discussion of partition or sale proceedings see my blog, here.

Have a great weekend.

Paul Trudelle

08 Jun

A Gift With A Catch: Bequests of Real Property and Mortgages

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Planning, Trustees, Wills Tags: , , , 0 Comments

Assume that you are given real property in someone’s will, but the property is subject to a mortgage. Do you get the real property free and clear, or do you take it subject to the mortgage? Is the estate liable for paying off the mortgage?

The answer lies in s. 32 of the Succession Law Reform Act, and the terms of the will.

Pursuant to s. 32, the real property is primarily liable for satisfying the mortgage, unless there is a contrary or other intention in the will.

Section 32(1) provides:

Where a person dies possessed of, or entitled to, or under a general power of appointment by his or her will deposes of, an interest in freehold or leasehold property which, at the time of his or her death, is subject to a mortgage, and the deceased has not, by will, deed or other document, signified a contrary or other intention,

(a) the interest is, as between the different persons claiming through the deceased, primarily liable for the payment or satisfaction of the mortgage debt; and

(b) every part of the interest, according to its value, bears a proportionate part of the mortgage debt on the whole interest.

Thus, you take the property subject to the mortgage.

But, you may ask, what about the general direction to pay debts that is found in many wills? Isn’t that a “contrary intention”?

Section 32(2) states that a testator does NOT signify a contrary intention by a general direction for the payment of debts. Something more is needed.

While the property is subject to the mortgage, the mortgagee does not have to take action against the real property. Section 32(3) provides that nothing in s. 32 affects the right of a person entitled to the mortgage debt to obtain payment or satisfaction either out of the other assets of the deceased or otherwise.

When taking instructions for a will for a testator who owns property subject to a mortgage, the drafting lawyer should discuss the effect of s. 32 of the Succession Law Reform Act, and confirm whether this outcome is in keeping with the testator’s intentions. If it is not, and the testator wants the beneficiary to receive the property free of the mortgage, wording should be put into the will to set out this intention.

Have a great weekend.

Paul Trudelle

01 Jun

If You Plead It, You Have to Lead It

Paul Emile Trudelle Estate & Trust, Estate Planning, RRSPs/Insurance Policies, Trustees, Uncategorized, Wills 0 Comments

If a party refers to a document in a pleading, the party de facto waives any privilege attaching to the document, and the document has to be produced.

That is the lesson that we are reminded of in Master Short’s decision in TTC Insurance v. MVD Law, 2018 ONSC 2611 (CanLII).

There, TTC Insurance, the insurer for the TTC, alleged that the defendant engaged in an unlawful scheme to defraud the TTC by intentionally submitting forged invoices. In the Statement of Claim, the plaintiff referred to an audit and investigation that was carried out by the plaintiff. The defendant sought production of the details and results of the audit and investigation. TTC Insurance resisted, claiming privilege.

Master Short ordered the plaintiff provide the contents and results of the audit and investigation giving rise to the claim.

Master Short cited case law to the effect that a waiver of privilege does not occur simply because a party refers to the receipt of legal advice, or where a party states that they relied on legal advice. However, it is waived where the party uses the legal advice as a substantive element of the claim. “It is waived when the client relies on the receipt of advice to justify conduct in respect to an issue at trial.”

It should also be noted that once solicitor-client privilege is waived, the waiver applies to the entire subject-matter of the communications.

Master Short’s succinct conclusion was that a party is entitled to have produced for his inspection any document referred to in a pleading or affidavit delivered by another party whether or not that document would otherwise be privileged. Master Short  also relied on Rule 30.04(2) which provides that a request to inspect documents may be used to obtain the inspection of any document in another party’s possession, control or power that is referred to in the originating process, pleadings or an affidavit served by the other party.

Thus, be careful of what you plead: if you plead a document, you will have to produce it, privileged or not.

As Master Short set out in the preamble to his decision:

The Moving Finger writes; and, having writ,
Moves on: nor all they Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.

Omar Khayyam

Have a great weekend.

Paul Trudelle

27 Apr

Moving the Body

Paul Emile Trudelle Elder Law, Estate & Trust, Funerals, General Interest Tags: , , , , 0 Comments

Although rare, disputes over the final resting place of a deceased are not unheard of. Such a dispute was the subject matter of Mason v. Mason, a decision of the Court of Appeal of New Brunswick.

There, the deceased died at the age of 53. He was survived by his mother, and his wife of 13 months. At first, the relationship between the mother and the wife appeared to be harmonious. The mother wanted the son’s cremated remains buried next to his father, and the deceased’s wife agreed. Later, however, the wife had a change of heart, as she came to believe that her husband did not have a good relationship with his father. She asked the cemetery to agree to disinter the remains and have them buried in another cemetery. As the original plot was owned by the mother, the cemetery required the consent of the mother. The mother refused to consent.

The wife then applied for and obtained letters of administration. This would normally cloak her with the authority to dispose of the body. The wife then applied to court to exercise this right. The court refused to assist her.

The applications judge held that the administrator had the right to determine the proper burial or disposal of the remains. However, this right was limited to carrying out those actions. The applications judge concluded that the remains were properly dealt with, with the agreement of the mother and the wife. At the time, there was no administrator, and therefore the next of kin could determine the disposition of the body, which they did.

The wife argued that as administrator, she had an ongoing right to determine the burial place. Support for this proposition was found in the Saskatchewan case of Waldman v. Melville. There, the deceased’s sister wished to disinter the deceased, over the objection of the executor. The court held that “The rights of the executor continue after the burial of the body, otherwise it would be an empty right … and those who oppose the executor could disinter the body as soon as it was buried.”

The applications judge distinguished the Melville decision. The rights of an administrator appointed months after burial did not entitle the administrator to disrupt burial arrangements agreed to by the person in her capacity as spouse.

The Court of Appeal upheld the applications judge’s decision. They went on to hold that once the body was properly discharged, it could not be moved, under s. 15 of the Cemetery Corporations Act, without the written consent of the Medical Health Officer or the order of a judge. The Court of Appeal stated that the powers conferred on the court by s. 15 of the Cemetery Companies Act were discretionary in nature. A judge to whom an application is made under that section is required to consider and weigh all the circumstances and make the order he or she considers appropriate. In this case, the court found no valid reason for moving the body.

Thank you for reading.

Paul Trudelle

13 Apr

Achieving Medically Assisted Death

Paul Emile Trudelle Elder Law, Ethical Issues, Health / Medical, In the News, Public Policy, Uncategorized Tags: , , , 0 Comments

Section 241.1 of the Criminal Code sets out a detailed procedure for determining when medical assistance in dying can be provided. However, the medical and legal communities are still grappling with the application of the provisions.

In A.B. v. Canada (Attorney General), 2017 ONSC 3759 (CanLII), two physicians concluded that AB met the criteria for a medically assisted death. A third doctor, however, did not, as he felt that AB did not meet the Criminal Code requirement that a natural death was reasonably foreseeable. Although only two medical opinions are required, the opinion of the third doctor had a chilling effect on one of the other physicians, who declined to provide assistance to AB for fear of being charged with murder.

AB then applied to court for a determination that she met the requirements of the Criminal Code, and a declaration that she may receive medical assistance in dying.

Justice Perell, who had previously considered the issue of assisted death in another proceeding, heard the application.

Ontario and Canada took the position that a declaration should not issue, as the regime established by the Criminal Code does not require judicial pre-authorization. Further, the civil courts should not issue a declaration as such a declaration would interfere with the prosecutorial discretion of the Crown by predetermining criminal liability.

Justice Perell agreed with the position of Ontario and Canada. However, he felt that their position was “as unhelpful as it is technically correct.” The practical effect of such a position was that AB qualified for medically assisted death, but no physician was prepared to assist.

In his decision, Perell J. thoroughly reviews the legislative history of medical assistance in dying. He agrees that it is the medical practitioner and not the court that is to decide whether the Criminal Code criteria are satisfied. He agrees that the court cannot make the decision for them.

However, Perell J. expresses that some form of declaration would be “useful” and have “utility”.

Perell J. walks a fine line in his decision. He accepts that the court is not to make declarations that the Criminal Code criteria for assisted death are met: that must be done by the medical practitioner or nurse practitioner: s. 241.2(3)(a). What Perell J. does, however, is attempt to clarify what is meant by s. 241.(2)(d): the provision that requires the person to meet the criteria that “their natural death has become reasonably foreseeable”. As a matter of statutory interpretation, he declares that in AB’s case, AB’s natural death is reasonably foreseeable.

Perell J. cautions that in making a declaration, he is not conferring immunity on the physicians from prosecution. He also states that he is not finding that courts could or should grant pre-approvals for persons seeking medical assistance in dying. It is unclear as to whether this will provide much comfort to medical practitioners.

Thank you for reading.

Paul Trudelle

15 Dec

Santa Claus in the Courts

Paul Emile Trudelle General Interest, In the News, Litigation, News & Events Tags: , , , , 0 Comments

Aside from the seminal yet apparently unreported decision of The State of New York v. Kris Kringle, which was dramatized in Miracle on 34th Street, there have been numerous other mentions of Santa Claus in judicial decisions. In honour of the season, I take this opportunity to note the following:

  • In Frasko v. Saturn 121, Inc. et al, which the judge described as “a novel application”, the plaintiff sued 115 shell corporations. (The plaintiff was said to be in the business of buying and selling shelf companies.) The plaintiff noted the 115 defendants in default, and moved for default judgment.  In support of the noting in default, the plaintiff filed a 100 page affidavit of service.  In it, as stated by the judge, the plaintiff claimed to have served or attempted to personally serve the 115 corporate defendants at a wide variety of locations throughout Ontario in only three days, plus 10 other corporate defendants in another proceeding. The judge questioned the accuracy of the affidavit of service, stating: “While Santa Claus has perfected the art of visiting millions of homes in a single night, [the plaintiff’s] affidavit of service makes no claim to have enlisted such assistance in effecting such a miracle of personal service.”

 

  • In Royal Bank v. Edna Granite & Marble Inc, the defendants argued that they had not made payments on a loan for a number of years, and thus the claim was statute-barred. Payments were, however, made by the guarantors of the loan. The bank argued that it did not matter who made the payments: whether they were made “by the borrower, by the Guarantors, or by Santa Claus”. The court accepted this argument.

 

  • In v. Liu, referred to in R. v. Sipes at para. 718, the accused was charged with first-degree murder. Upon his arrest, scratches were observed on his neck and chest. Expert evidence established that the scratches were consistent with ancient Chinese medical treatment. For some reason, the accused sent one of the investigating officers a Christmas card depicting Santa Claus with scratches on his back, being looked at incredulously by Mrs. Claus. The front of the card read “I swear, Honey – I scratched it going down a chimney. Inside the card read “Sometimes, even Mrs. Claus has a hard time believing in Santa.” There, the Crown was unsuccessful in adducing the card as evidence at trial, as its probative value was “tenuous”, yet the potential prejudice was high.

 

  • In v. M.J.O., the judge had difficulty believing the accused’s evidence. “I have read the Mr. M.J.O.’s statement on several occasions. I cannot imaging circumstances that would lead me to believe it. To believe that version of events, in the face of the objective evidence, I would have to believe in Santa Claus and the tooth—fairy.”

There are many other reported reference to Santa Claus on CanLII. Many of them are in sad or disturbing contexts, and are not appropriate for a Friday, pre-Christmas blog.

Happy holidays.

Paul Trudelle

15 Sep

DUE EXECUTION OF A WILL – PART V

Paul Emile Trudelle Wills Tags: , 0 Comments

In parts I to IV of my notes on due execution, I discussed some issues relating to the execution of “formal” or non-holograph wills.

Today, I will touch briefly on the execution of other types of wills. Significantly, it should be noted that the requirement of two or more attesting witnesses does not apply in the case of the will of a member of forces on active service, or in the case of a holograph will.

A “member of forces on active service” is defined in the Succession Law Reform Act (“SLRA”) as any person who is:

(a) a member of the Canadian Forces placed on active service under the National Defence Act (Canada);

(b) a member of any other naval, land or air force while on active service; or

(c) a sailor when at sea or in the course of a voyage. Such a person may make a will by “a writing signed by him or her or by some other person in his or her presence and by his or her direction without any further formality or any requirement of the presence of or attestation or signature by a witness”.

In addition to a “soldier’s will”, special allowance is made in Ontario for holograph wills. To be a valid holograph will, the will needs to be wholly in the handwriting and signature of the testator. The requirement that the holograph will be “wholly” in the handwriting of the deceased means that a will that is typewritten by the deceased will not qualify as a holograph will. Similarly, the testator cannot simply sign a document handwritten by another.

 

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14 Sep

DUE EXECUTION OF A WILL – PART IV

Paul Emile Trudelle Uncategorized Tags: 0 Comments

A question that often arises where a will has not been properly executed is whether the will can be proved in any event.

For example, if two witnesses are present when the will is signed, but only one signs as witness. Recently, the Ontario court has affirmed that there is no provision in the Succession Law Reform Act (“SLRA”) which allows a court to admit a document to probate as a will where the required formalities have not been observed: there is no doctrine of “substantial compliance” with the law in Ontario. (In some other provinces, the legislation allows a court to admit the Will to probate if the court is satisfied that the will is the true expression of the wishes of the testator.)

In the relatively recent case of Sills v. Daley (2002), the Court rejected the doctrine of substantial compliance. There, only one witness signed the will. The judge reviewed the legal texts, and the caselaw, and found that he could not ignore the clear provisions of the SLRA and allow the will to be probated. To do so, the court held, would be to create a discretion in the court which is not found in the SLRA.

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13 Sep

DUE EXECUTION OF A WILL – PART III

Paul Emile Trudelle Wills Tags: , 0 Comments

The Succession Law Reform Act (“SLRA”) requires that the will be signed or acknowledged in the present of two or more witnesses present at the same time. If the will is not signed in the presence of the two witnesses, the signature can be acknowledged. This requires: a. that the signature be on the document at the time of the acknowledgement; b. that the witnesses see or have the opportunity to see the signature; and c. that the testator, by acts or words, indicate that he or shee has signed the document. The witnesses do not need to know that they are attesting to a will.

The SLRA requires that the witnesses each subscribe the will in the presence of the testator. They must also be present at the same time when the testator makes or acknowledges his signature. In a British Columbia case, Simkins Estate v. Simkins, the Court granted probate where the testator signed the will in the presence of only one of the witnesses, who then subscribed the will. The testator, moments later, acknowledged his signature in the presence of both of the witnesses, and the second witness signed the will. The court held that while, technically, the first witness should have re-signed the will, “To rule such a will invalid is an absurdity and, what is worse, a total defeat of the acknowledged intent of the testator by means of a document that complied with all the formalities, save and except the exact sequence, that have been held to be necessary.” (The outcome of this case may have been different if it was decided in Ontario.

Tomorrow, I will discuss the issue of “substantial compliance”, and whether it applies in Ontario.) The witnesses must sign after the testator and not before. They need not both be present when they sign as witnesses, although they both need to be present when the testator signs or acknowledges her signature. Therefore, a will can be valid where one witness leaves before the other witness signs. The testator must be able to see the witnesses attest, if he chooses. Thus, if a testator is unable to move, and is not facing the witnesses when they sign, the will may be invalidated(!). Similarly, witnesses must have the opportunity of seeing the testator’s signature, whether it be signed in their presence, or acknowledged. A will will not be valid where the testator’s signature is covered up.

Have a good day, Paul Trudelle

12 Sep

DUE EXECUTION OF A WILL – PART II

Paul Emile Trudelle Uncategorized Tags: , 0 Comments

Continuing with our discussion of the mechanics and technical aspects of execution of a will, I now turn to the signing and witnessing of the will.

Section 4(1) of the Succession Law Reform Act *(“SLRA”) provides that, except in the case of the will of a member of forces on active service, or in the case of a holograph will, a will is not valid unless,

(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;

(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and

(c) two or more of the attesting witnesses subscribe the will in the presence of the testator. The requirement that the will be “signed” has been loosely interpreted, with the intention of the deceased being determinative. Courts have accepted wills where:

  • the will bears the signature of the testator;
  • the will bears part of the signature of the testator;
  • the will bears the initials of the testator;
  • the will bears a mark made by the testator intended to represent the testator’s name (even in situations where the testator is able to write his name, or in situations where the mark of a physically handicapped testator is guided by someone else;
  • the will is impressed with the stamp of the testator;
  • the testator signs the will using an assumed name;
  • the testator signs the will using her title (eg. “Mother”);
  • the testator signs the will using her name from a previous marriage;
  • the will is signed by another person at the instance of the testator (signature by an amanuensis)

The onus of proving due execution is on those propounding the will. The burden is on the propounder on the balance of probabilities. The position of the signature is important. In addition to the reference in s. 4(1) that the will be signed “at its end”, s. 7 of the SLRA also impacts on the validity of the will and the position of the signature.

 

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