Author: Paul Emile Trudelle

03 Aug

O Brother, Where Art Thou? Benjamin Orders

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

A testator provided in her will that a share of the residue of her estate was to go to three of the testator’s brothers. If any one of them predeceased the testator, their share would go to two nieces of the deceased.

The testator was predeceased by two of her brothers. A third could not be located. What was the estate trustee to do?

This question was addressed in the July 27, 2018 decision of Steele v. Smith, 2018 ONSC 4601 (CanLII). There, the Public Guardian and Trustee suggested that the share payable to the missing brother be paid into court, and that further efforts be taken to locate him. The estate trustee, on the other hand, asked the court for a “Benjamin Order”, allowing him to distribute the estate as if the missing brother had predeceased the testator.

The court reviewed the history of the Benjamin Order. The Order derives from the case of Neville v. Benjamin, [1902] 1 Ch. 723. There, the deceased was survived by twelve children. A thirteenth disappeared while on vacation, and after it was suspected that he had stolen money from his employer. The court held that the burden was on the missing person’s administrator (or those claiming through him) to prove that the missing person had survived the deceased. In Benjamin, the burden was not met, and the estate was allowed to be distributed as if the missing person had predeceased.

Benjamin Orders are rare, and not easy to obtain. The court will consider the “sufficiency” of the inquiries made by the estate trustee. In considering this, the court will look for information about:

  1. How much time has elapsed since the death of the testator?
  2. What specific steps have been taken to locate the missing person, and over what period of time?
  3. Who has made the inquiries? Are they appropriately qualified?
  4. Do the inquiries take into account consideration of the possible location of the missing person?
  5. Are further inquiries likely to produce any more information?
  6. What is the amount at state?

In Steele v. Smith, the estate trustee is said to have gone to “extensive lengths” to determine the missing brother’s location in the eighteen months since the testator’s death. The court held that the estate trustee had exhausted all available avenues of inquiry, and that there was no evidence that further efforts would yield positive results. Further, there was no reason why the missing brother would choose not to be found. Unfortunately, the value of the share of the residue in issue is not disclosed in the decision.

The court ordered that the estate trustee was at liberty to distribute the estate as if the missing brother did not survive the testator.

One of the benefits of a Benjamin Order is that it gives protection to the estate trustee. If the missing brother later appeared, he would have no claim as against the estate trustee. However, he may have a claim as against the beneficiaries who benefitted from the Order.

Thank you for reading.
Paul Trudelle

13 Jul

The Dog Days of Summer

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

Hot enough for you? Enjoying the dog days of summer?

The “dog days of summer” are the hottest, sultriest, most unsettled days of summer. The name comes from the timing of the heat, which follows the rising of the “dog star” Sirius, the brightest star in our sky (next to the Sun), and one of the stars forming the constellation Canis Major.

Ancients believed that the combined heat of Sirius and the Sun was responsible for the stifling heat and unsettled weather. This lead to a corresponding period of lethargy

The term dates back as far as the ancient Greeks. Homer’s Iliad makes reference to them. There is also reference to dog days and the effect of Sirius in ancient Egyptian and Roman cultures. In Egypt, Sirius appeared just before the flooding of the Nile.

The term is also sometimes used to refer to the lethargic summer stock markets, as trading is quietest in July.

According to The Old Farmer’s Almanac, the dog days of summer are traditionally the 40 days beginning on July 3 and ending August 11.

The “dog days” factor in the familiar phrase “make hay while the Sun shines”. As published in the 1817 The Old Farmer’s Almanac, “Dog Days are approaching; you must, therefore, make both hay and haste while the Sun shines, for when old Sirius takes command of the weather, he is such an unsteady, crazy dog, there is no dependence upon him.”

Stay cool.

Thank you for reading.

Paul Trudelle

22 Jun

Commorientes

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

“People whose deaths are so close to each other (being caused by the same calamity) that it is not possible to determine who died first.” In other words, simultaneous deaths. In its adjectival form, the word is “commorient”, as in “commorient death”.

In Ontario, commorientes are addressed by Part IV of the Succession Law Reform Act. The impact of Part IV was addressed by Natalia Angelini in her blog, here.

Essentially, in Ontario, where two or more persons die at the same time or in circumstances rendering it uncertain which of them survived the other or others, the property of each person shall be disposed of as if he or she had survived the other or others.

This rule does not apply in all jurisdictions. In P.E.I., for example, pursuant to the Commorientes Act, where two or more persons die in circumstances rendering it uncertain which of them survived the other or others, the presumption is that the deaths occurred in the order of seniority, and accordingly, the younger shall be deemed to have survived the older.  This would also apply to policies of insurance and jointly held property. There is an exception in the P.E.I. legislation, however, where a testator and a beneficiary under a will die at the same time or in circumstances rendering it uncertain as to which of them survived the other, and the will provides for a gift over if the beneficiary does not survive the testator. In those cases, the will is to be given effect as if the beneficiary had not survived the testator.

In Alberta, the legislation regarding the exception goes one step further: the presumed survivorship regardless of age applies where there is a will or statute that makes provision for a distribution operative if a person dies or before or at the same time as another person: ie, on an intestacy.

As an illustration of the effect of the different survivorship regimes, consider the case of Re Mandin (Estate), 1998 ABCA 165 (CanLII). There, a son killed his mother, stepfather and two sisters. The mother left a will leaving her estate to her children. In light of the murder, the son was precluded from inheriting. The court had to consider whether the estate passed on an intestacy to the children’s father (the deceased’s first husband), or to the deceased’s mother. The court held that the intestate legislation of Alberta contained gift-over provisions where the children predeceased the mother or died at the same time. The estate therefore passed to the deceased’s mother. The same result would occur in Ontario under Ontario’s survivorship legislation. In P.E.I., the likely outcome would be that the mother was deemed to predecease the children (being older than them), and therefore her estate would pass to the children upon her death, and then to their father upon their deaths, which are deemed to be immediately after their mother’s death.

In the U.S., many states have adopted the Uniform Simultaneous Death Act, which provides that persons who are each other’s heirs under a will or on an intestacy will be deemed to have predeceased the other if they die within 120 hours of one another, unless there is a specific clause in the will that deals with this eventuality. This avoids the issue trying to determine an order of death where deaths happened contemporaneously, and also the issue of having property pass through two estates, and the costs, taxes and delays associated with this result

Have a great weekend.

Paul 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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