Author: Sanaya Mistry
In the recent decision of Bishop Estate v. Sheardown, 2021 BCSC 1571, pursuant to the court’s curative powers under section 58 of the Wills, Estates and Succession Act, SBC 2009, c 13, (the “WESA”) the court found an unexecuted Will to be fully effective.
In this case, Marilyn Bishop (the “Deceased” or “Ms. Bishop“) had given instructions, reviewed the draft and made a few minor clarifications in respect of her new will (the “2020 Will”). The Deceased had scheduled an appointment with her lawyer to sign the Will in March 2020 but subsequently cancelled the appointment. The Deceased died four months later, at the age of 76.
James Thrower was the executor of the Deceased’s previous will (the “2014 Will”), which named her husband (now deceased) as the sole beneficiary and the respondent Kelowna General Hospital Foundation (the “Foundation”) as the beneficiary in the event that her husband predeceased her. The respondents Robert Sheardown and Deborah Sheardown (the “Sheardowns”) are Ms. Bishop’s nephew and niece-in-law, who she named as executors and beneficiaries of her unexecuted 2020 Will. It should be noted that the Deceased and her husband had prepared mirror wills in 2014.
Mr. Thrower was seeking clarification from the court as to “whether Ms. Bishop’s unexecuted 2020 Will represents her testamentary intention and should be ordered to be effective under s. 58 of the Wills, Estates and Succession Act.”
The Foundation submitted that section 58 of the WESA ““cannot be used to validate a will that is substantially invalid” [emphasis added], citing Hadley Estate(Re), 2017 BCCA 311”. The court noted that in fact, Hadley Estate states that “[a]lthough s. 58 cannot be used to uphold a will that is substantively invalid, it permits the court to cure issues of formal invalidity…” [emphasis added].” Moreover, the court clarified that section 58 of the WESA “does not specify a minimal level of execution or other formal requirement for a testamentary document to be found fully effective” and therefore, ““substantial invalidity” is not a bar to an order under s. 58.”
In order to determine if the unexecuted 2020 Will is valid, the court considered whether (i) the 2020 Will was authentic, and (ii) it represented the Deceased’s fixed and final intentions testamentary intentions.
The authenticity of the 2020 Will was not in question. The Deceased made an appointment with her lawyer (“Mr. Livingston“) and specifically instructed him to prepare a new will naming the new executor and alternate executor, removing the gift to the Foundation, including a possibility of a gift to local charities and to the Sheardowns’ daughter, and giving the remainder of the residue of her estate to the Sheardowns equally with a gift over to their children.
Mr. Livingston prepared a draft pursuant to these instructions. The draft was reviewed by Ms. Bishop and she provided clarifications via a note. Mr. Livingston prepared the final draft on the basis of these instructions and the appointment to sign the 2020 Will was scheduled for March 20, 2020.
Fixed and Final Testamentary Intention
The court inferred “that Ms. Bishop could not attend the appointment because she was not able to leave the care home” as there was evidence to prove that at that time in March 2020 (during the COVID-19 pandemic), “Ms. Bishop’s care home prohibited residents to leave other than for medical appointments”.
In order to determine whether the unexecuted 2020 Will represents the Deceased’s “fixed and final intention”, the court analyzed “whether its departure from the formal testamentary requirements considering the context and contents of the alleged substantial invalidity make it impossible to establish testamentary intention” and also “whether the failure to execute the unexecuted 2020 will from when it was ready for execution until Ms. Bishop’s death nullifies any intention Ms. Bishop may have had when she made her appointment to execute it in March 2020.”
Among other things, the court considered the following:
- The 2020 Will departs from testamentary requirements in that it is not signed by the will-maker and that the will-maker’s signature was not witnessed.
- After the death of the Deceased’s husband, the Sheardowns moved to Kamloops, BC and became a regular part of her life.
- The Deceased’s health had declined and so she had sold her home and mobile home and recently moved into a care home.
- The Deceased went to the same law firm that prepared her 2014 Will and met with Mr. Livingston to specifically discuss her plans for her estate.
- Mr. Livingston’s evidence was that the Deceased gave him specific instructions regarding the 2020 Will, including the fact that she did not want to include the Foundation as a beneficiary because she did not have a connection to the Foundation and that it was her husband’s idea to include them in their previous wills because he was either from Kelowna or spent a considerable amount of time there.
- Mr. Livingston was satisfied that the Deceased had the capacity to make a new will and was not under any undue influence.
- After reviewing the draft, the Deceased did not suggest any new changes but rather answered the questions of Mr. Livingston in her note to him.
- Although the Foundation argued the Deceased’s note to Mr. Livingston which stated “No charities at this time” [emphasis added] indicated that the Deceased’s “intentions lacked finality”, the court referenced Estate of Young, 2015 BCSC 182 noting that “a fixed and final intention cannot mean that the intention is irrevocable, since wills are, by their nature, revocable until the testator’s death” and “the intention need only “be fixed and final at the material time”.”
The court concluded that the Deceased’s fixed and final intention as of March 17, 2020 was to execute the 2020 Will. The court then considered “whether the failure to execute the unexecuted 2020 will over the following four months indicates a change in Ms. Bishop’s intentions.”
The Foundation noted that the Deceased did not execute the 2020 Will despite the remote execution procedures coming into effect on May 19, 2020. However, the court found that there was no evidence that the Deceased was aware of this option and as a result, “her failure to execute the will either remotely pursuant to the May 19, 2020 order or on her own [did] not undermine her testamentary intentions.”
The Foundation further noted that the Deceased did not order the destruction of her 2014 Will. The court was not persuaded that the Deceased’s lack of instruction to destroy her 2014 Will was evidence that she intended for it to be valid “in the absence of any evidence that she was advised to destroy her 2014 will and informed of the consequences of not doing so”.
The court was “satisfied that the unexecuted 2020 will represents Ms. Bishop’s fixed and final intentions for the disposal of her assets” and concluded as follows:
“Ms. Bishop provided simple, clear instructions as to what she wanted in her will and then responded with minor clarifications after reviewing the draft. It was clear that Ms. Bishop wanted to remove Kelowna General Hospital Foundation as a beneficiary of her will. The four-month period between her appointment to execute the unexecuted 2020 will and her death does not undermine her fixed and final intention to distribute her assets according to the unexecuted 2020 will.”
Accordingly, the court ordered the unexecuted 2020 Will to be fully effective, pursuant to the court’s curative power under s 58 of the WESA.
Thank you for reading.
Considerations for Determining the Validity of Powers of Attorney and Appointing Guardians for Property and Personal Care
In yesterday’s blog, I discussed the recent decision in Rudin-Brown et al v. Brown, 2021 ONSC 3366, focusing on the court’s decision in respect of the admissibility and weight given to the audio recordings of Carolyn Brown’s telephone conversations.
In today’s blog, I discuss the factors considered by the court in (i) determining that the 2016 powers of attorney were invalid, and (ii) declaring Carolyn’s 2009 power of attorney for property to be operative, and (iii) appointing Jeanne and Missy as Carolyn’s co-guardians of the person.
The court applied the factors outlined in Royal Trust Corporation of Canada v. Saunders,  OJ No 2291, to determine whether or not Carolyn’s 2016 powers of attorney were executed under suspicious circumstances. Particularly, the court considered the following:
- The extent of physical and mental impairment of the grantor around the time the powers of attorney were signed;
- Whether the powers of attorney in question constitutes a significant change from the former powers of attorney;
- The factual circumstances surrounding the execution of the powers of attorney; and
- Whether any grantee was instrumental in the preparation of the powers of attorney.
Note, the consideration of “whether the will in question generally seems to make testamentary sense” does not apply to powers of attorney.
The court noted that, among other things, (i) there was evidence that Carolyn was having memory issues at the time the powers of attorney were signed, (ii) after visiting two law firms without success, Gordon downloaded forms for powers of attorney and some will templates from the internet, and (iii) one of the witnesses to the powers of attorney testified that Carolyn seemed “vaguely puzzled” the day she witnessed Carolyn’s signature and also stated that Carolyn said that Gordon had told her to sign the powers of attorney.
The court concluded that the powers of attorney were executed under suspicious circumstances in respect of capacity and undue influence. The court also concluded that Gordon failed to prove that Carolyn had capacity to execute the powers of attorney and declared the powers of attorney to be invalid. In addition, the court found that Gordon “failed to show that Carolyn signed the powers of attorney as a result of her own “full, free and informed thought” and has failed to rebut the presumption of undue influence arising from his and Carolyn’s relationship” and therefore concluded that “even if Carolyn had the capacity to sign one or both powers of attorney, they are not valid due to undue influence.”
In respect of appointing guardians of property and personal care for Carolyn, the court did not solely rely on Carolyn’s 2009 powers of attorney, but rather entered into a detailed analysis to determine who would be appointed as Carolyn’s guardians. As noted by Justice H. J. Williams,
“In appointing a guardian for property, the court shall consider whether the proposed guardian is the attorney under a continuing power of attorney, the incapable person’s current wishes and the closeness of the applicant’s relationship to the incapable person. Where there is an ongoing valid power of attorney, cases in Ontario and elsewhere have held that the court must first determine whether there is strong evidence of misconduct or neglect on the part of the attorney before the court should ignore the wishes of the donor.”
The court did “not hesitate to find that, in accordance with Carolyn’s 2009 power of attorney for property, Jeanne should be Carolyn’s guardian for property and that Carter should be the alternative attorney.” The court noted that in Carolyn’s 2009 power of attorney for personal care, Carolyn had named Gordon and Missy as her attorneys for personal care. While the court was satisfied that Missy would be able to fulfill the duties of guardian of the person, the court was not satisfied that Gordon would be able to do so for several reasons, some of which are outlined below:
- “A guardian must make decisions that are in the incapable person’s best interests”, which Gordon had failed to do consistently for Carolyn.
- “A guardian must seek to foster regular personal contact between the incapable person and supportive family members and friends” and Gordon failed to foster Carolyn’s relationships with Missy or Jeanne.
- “Gordon did not consult anyone other than Carolyn in preparing his guardianship plan.”
- Gordon intended to “discontinue a companion service for Carolyn that had been recommended for her and that she had been receiving and apparently enjoying.” Although Gordon said that “Carolyn does not remember the visits and is unhappy with how much they cost”, the court found that “it is more likely that Gordon was unhappy about the cost.”
- The court was also concerned by the fact that Gordon had failed to follow court orders. He failed to comply with Justice Kershman’s “order to stop recording Carolyn’s conversations.” It is important to note that the court found that “it was evident from Gordon’s evidence that he felt justified in ignoring a court order if he did not agree with it.”
In summary, the court concluded that “it is in Carolyn’s best interests for Missy and Jeanne to be jointly appointed as Carolyn’s full guardians of the person.”
Thank you for reading.
In the recent decision of Rudin-Brown et al v. Brown, 2021 ONSC 3366, Justice H. J. Williams discusses the admissibility of audio recordings.
This case involves Carolyn Brown, who is 91 years old, Gordon Brown (Carolyn’s son who lives with her), Christina (“Missy”) Rudin-Brown (Carolyn’s daughter) and Jeanne Brown (Carolyn’s sister-in-law). Around 2008, Missy noticed Carolyn was having some memory problems which became more obvious around 2012. Gordon maintains that other than occasional memory lapses, Carolyn was fine until June 2017 when her memory declined suddenly and noticeably.
In September 2016, Carolyn signed powers of attorney appointing Gordon as her attorney for property and personal care. The 2016 powers of attorney replaced her 2009 powers of attorney which appointed Jeanne as her attorney for property, and Missy and Gordon as her attorneys for personal care. Carolyn also signed a new will in September 2016 appointing Gordon as the executor and the beneficiary of the residue of her estate, replacing her 2009 Will which appointed Jeanne as the executor and divided the residue of her estate equally among Gordon, Missy and Zachary Brown (the son of Carolyn’s late daughter, Sandra).
There were two competing applications before the court for the guardianship of Carolyn – one was brought by Missy and Jeanne and the other by Gordon. These applications were consolidated by Justice Kershman and a trial was ordered.
Although there were a few issues dealt with in this trial, for the purposes of this blog, I will focus on the court’s decision on the issue of whether the recordings of Carolyn’s conversations made by Gordon were admissible and if so, how they may be used as evidence.
Gordon sought to introduce into evidence 15 recordings of Carolyn’s telephone conversations he made in 2017. Also, Missy and Jeanne tendered one of Gordon’s recordings and an excerpt from another. In deciding whether these recordings were admissible, the court considered many factors including the origin of the recordings, whether Carolyn knew and fully approved of these recordings, as well as the probative value and prejudicial effect of admitting these recordings into evidence.
Among other things, Justice H. J. Williams clearly noted that “the manner in which evidence is obtained, no matter how improper or illegal, is not an impediment to its admission at common law”. It was important for the court to consider and weigh the prejudicial effect of the evidence against the probative value. Specially, the court noted that:
“The court nonetheless maintains a general exclusionary discretion to exclude otherwise admissible evidence if the prejudicial effect outweighs the probative value. Evidence may be excluded under this cost-benefit analysis if its probative value is overborne by its prejudicial effect, if it involves an inordinate amount of time to present the evidence that is not commensurate with its value, or if it is misleading in that its effect on the trier of fact is out of proportion to its reliability as probative material.”
The court found Missy’s side of the recorded conversations to be more probative than prejudicial and the conversations between Gordon and Carolyn to be highly probative and therefore admitted. The court had concerns regarding Carolyn’s side of the recorded conversations, particularly because Carolyn was not able to testify. The court discussed the fact that Gordon only produced the recordings he thought were relevant as well as considered whether Carolyn’s side of the conversations truly represented Carolyn’s views and state of mind.
Importantly, the court did not accept Gordon’s evidence that Carolyn knew he was recording her and that she had authorized him to do so. The court noted that during a conversation, Carolyn did not want to speak about something with “you know who around”, referring to Gordon. If she had known that all her conversations were being recorded, Gordon being around would have been irrelevant. As a result, the court found that “Carolyn did not agree to have her conversations recorded, or, if she did, she did not appreciate what she was agreeing to.”
Interestingly, the court noted that although “surreptitious audio and video recordings should be strongly discouraged by the courts” because they foster distrust and have a toxic effect on future relationships, if the recordings and the evidence that flowed from them were excluded in this case, the court would be “left to decide the case based on a record [the court knows] to be incomplete.”
On the issue of the audio recordings, Justice H. J. Williams “with some reluctance, concluded that the recordings are admissible” and the court “will place little weight on Carolyn’s side of the conversations.”
For a more in-depth discussion on this case and admissibility of audio recordings, please listen to last week’s podcast on Hull on Estates.
Thank you for reading.
Dependants and Their Entitlement to a Deceased’s Estate – A summary of Earl v. McAllister, 2021 ONSC 4050
In the recent decision of Earl v. McAllister, 2021 ONSC 4050, the Divisional Court ordered 100% of the net estate of the Deceased to be used for the benefit of the minor dependants, to the exclusion of the Deceased’s wife.
Leo McAllister (the “Deceased”) died on May 3, 2017. He is survived by his wife (Barbara McAllister) and his two minor sons (the “Sons”) from a previous relationship with Tammy Earl. When the Deceased learned he was dying, he started to put his affairs in order, including executing a Will and leaving his estate (the “Estate”) to his wife and signing consents required to transfer the designed beneficiaries on one of his pensions from Ms. McAllister to his Sons.
Ms. Earl brought an application on behalf of her Sons, for their support, pursuant to Part V of the Succession Law Reform Act. The Applicant argued that for the purposes of this application, the value of two pensions and a life insurance policy should be included in the value of the Estate of the Deceased, failing which, the Estate would have a shortfall of $12,926.82 due to the Estate’s liabilities. She also argued that the entirety of the Estate should be used for the benefit of her Sons, as they are both dependants of the Deceased.
The Application Judge agreed that one of the pensions and the life insurance proceeds should be included in the value of the Estate, valuing it at $167,062.52. The Application Judge ordered the net value of the Estate to be split in two halves, one to be used for the benefit of the Sons and one to be distributed to Ms. McAllister. The Application Judge also ordered $30,000 of the Sons’ half to be paid into Court, to be paid to the Sons when they turn 18.
Ms. Earl appealed this decision, arguing that both pensions should be included in the value of the Estate, the entirety of the Estate should be used for the benefit of her Sons and that the $30,000 which the Application Judge ordered to be paid into court should now be paid out to the Appellant, for the benefit of the Sons.
For the purposes of this article, we will focus on the Divisional Court’s decision in respect of the whether to include both pensions in the value of the Estate and the manner in which the Estate is to be distributed.
The Deceased had two pension plans. The first was from the Union’s Province of Ontario Pension Plan, the value of which was included in the Estate by the Application Judge. The second was the Union’s “Canada” Pension Plan (administered in the US), which provided for a pre-retirement surviving spouse benefit under which the Respondent, as a surviving spouse, was entitled to a lump sum payment of $88,117.40.
The Divisional Court found that it was not open to the Deceased to designate someone other than his spouse to receive the pre-retirement benefit under the second pension and while the Respondent could have waived her entitlement to the receipt of that benefit, she could not be deprived of that benefit without her agreement.
As a result, the second pension was not included in the value of the Estate.
Distribution of the Net Value of The Estate
The Divisional Court found that in determining the issues between the parties, the needs of the Sons in the balancing exercise should be paramount. The court weighed the financial circumstances of the Sons against the financial circumstances of the Respondent.
Particularly, the court noted that the Sons live in precarious financial circumstances and there is very little income to support them apart from public finances and loans. The Sons live in the home of their mother’s parents. The appellant’s affidavit contained information concerning monthly expenses and the loss of the Deceased’s group health benefits. The Applicant’s evidence was that her yearly expenses exceed her income. Further, the Deceased was active in his Sons’ lives and paid the Appellant $300 per week to support his Sons until his death.
In contrast, the Respondent was not financially dependant on the Deceased, had good income of approximately $100,000 annually, had no extraordinary expenses, owned a home (although with a mortgage) and had made some provisions for her own pension. The Respondent and the Deceased had been married for just over two years at the time of death. The Respondent was also to continue to receive the benefits from the second pension.
The Divisional Court cited Madore-Ogilvie v Ogilvie Estate (2008), 88 O.R. (3d) 481 (C.A.), noting the following:
“Where there are insufficient assets to adequately provide for any or all of a deceased’s dependants, the circumstances of the case may warrant the exercise of an application judge’s discretion to use the limited assets for the benefit only of the minor dependants, to the exclusion of his wife.”
The Divisional Court concluded that in the present case, the circumstances warranted the use of the limited assets for the benefit of the Sons only, to the exclusion of the Respondent.
Thank you for reading.
Further to our article “Small Estate” in Ontario now $150,000, as of April 1, 2021, for an estate valued at $150,000 or less, probate can be applied for through the small estate court process.
Applying for probate can be a complicating and overwhelming process, especially considering the fact that the steps that need to be taken or forms that need to be filled out can vary depending on the specific circumstances of the estate.
The Probate of a Small Estate webpage provides helpful information on some of the steps included in applying for probate of a “Small Estate”.
Please see below a brief overview of some of the important things to consider when applying for probate of a “Small Estate”.
Depending on the specific circumstances of the estate, different court forms may need to be completed and filed with the court.
As noted in Rule 74.1.03(1) of the Rules of Civil Procedure, “A person may seek a small estate certificate by filing an application for a small estate certificate (Form 74.1A) together with,
(a) a request to file an application for a small estate certificate or an amended small estate certificate (Form 74.1B);
(b) proof of death;
(c) a draft small estate certificate (Form 74.1C);
(d) if there is a will, the original of the will and of any codicils, together with the following evidence of due execution of the will and each codicil:
(i) if the will or codicil is not in holograph form,
(A) an affidavit of execution (Form 74.8) of the will or codicil,
(B) if the will or codicil contains an alteration, erasure, obliteration or interlineation that has not been attested, an affidavit as to the condition of the will or codicil at the time of execution (Form 74.10), or
(C) if each of the witnesses to the will or codicil has died or cannot be found, such other evidence of due execution as the court may require, or
(ii) if the will or codicil is in holograph form, an affidavit attesting that the handwriting and signature in the will or codicil are those of the deceased (Form 74.9);
(e) any security required by the Estates Act; and
(f) such additional or other material as the court directs.”
Estate Administration Tax
It is important to determine the value of the estate.
Estate Administration Tax is payable on the value of the estate of a deceased person as of the date of their death, for estates valued over $50,000.
For estates valued over $50,000, the Estate Administration Tax will be calculated as $15 for every $1,000 (or part thereof) of the value of the estate. Estate Administration Tax can be calculated using the calculator provided on this Ministry of the Attorney General webpage.
Service of Documents
Pursuant to Rule 74.1.03(3) of the Rules of Civil Procedure, “the applicant shall send or give the following documents to each person entitled to share in the distribution of the estate, including charities and contingent beneficiaries:
- A copy of the application for a small estate certificate (Form 74.1A) and of any attachments.
- If there is a will, a copy of the will and of any codicils.”
It’s important to note that pursuant to Rule 74.1.03(4) of the Rules of Civil Procedure, “if a person who is entitled to share in the distribution of the estate is less than 18 years of age, the documents listed in subrule (3) shall not be sent to the person but shall instead be sent or given to a parent or guardian and to the Children’s Lawyer.”
Further, a copy of the application and a copy of the will and codicil (if applicable) may need to be provided to Office of the Public Guardian and Trustee.
Detailed information in respect of “Small Estates” and the process of applying for probate of a “Small Estate” can be found in Rule 74 of the Rules of Civil Procedure.
Please note, the above-noted information has been provided for informational purposes only and is not legal advice. For more information, please reach out to one of our team members who will be happy to assist you.
Thank you for reading.
The practice of law has evolved greatly over the last few months, especially in the area of Estates.
One of the more recent changes comes with the revocation of O.Reg. 129/20: Signatures in Wills and Powers of Attorney and the amendments to the Substitute Decisions Act and the Succession Law Reform Act.
As of May 20, 2021, there is a requirement for the signatures and subscriptions on Wills or Powers of Attorney, executed using audio-visual communication technology, to be made contemporaneously. An acceptable manner of meeting this requirement is for the signatures and subscriptions to be made by signing or subscribing complete, identical copies of the Will or Power of Attorney in counterpart, which together constitute the entire document.
“Audio-visual communication technology” means any electronic method of communication in which participants are able to see, hear and communicate with one another in real time.
Under section 3.1(2) of the Substitute Decisions Act,
(2) A requirement under this Act that a power of attorney be executed in the presence of witnesses may be satisfied through the use of audio-visual communication technology, if,
(a) at least one person who is acting as a witness is a licensee within the meaning of the Law Society Act at the time;
(b) the signatures required by this Act are contemporaneously made; and
(c) the prescribed requirements, if any, are met.
Section 3.1(3) clarifies that SDA “for the purposes of clause (2)(b), the signatures required by this Act may, subject to any prescribed requirements, be made by signing complete, identical copies of the power of attorney in counterpart, which shall together constitute the power of attorney.”
Similarly, under section 4(2) of the Succession Law Reform Act,
(2) Subject to subsection (3) and to sections 5 and 6, 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.
Section 4(3) clarifies that while the use of audio-visual communication technology is permitted to satisfy the requirement in section 4(2)(b) or (c), the following requirements must be met:
(a) at least one person who acts as a witness is a licensee within the meaning of the Law Society Act at the time;
(b) the making or acknowledgment of the signature and the subscribing of the will are contemporaneous; and
(c) the requirements specified by the regulations made under subsection (7), if any, are met.
Further, section 4(4) notes that “for the purposes of clause (3) (b), signatures and subscriptions required to be made under clause (2) (b) or (c) may, subject to any requirements specified by the regulations made under subsection (7), be made by signing or subscribing complete, identical copies of the will in counterpart, which shall together constitute the will.”
Thank you for reading.
In the recent decision of Carroll v Toronto-Dominion Bank, 2021 ONCA 38, the Ontario Court of Appeal dismissed the appeal of an applicant for lack of standing to bring the application, notwithstanding that the application related to an alleged breach of trust. Standing is required to sue for breaches of trust.
In this matter, the applicant, Marion Carroll, was formerly employed by Toronto-Dominion Bank (“TD Bank”), as a manager who was responsible for the compliance of a group of TD Bank’s subsidiaries relating to the management of mutual funds. Among other things, Ms. Carroll claimed to have exposed regulatory non-compliance and breaches of mutual funds trusts by TD Bank’s subsidiaries. In 2019, Ms. Carroll issued an application against TD Bank with respect to its role as Trustee of designated mutual funds.
The motion’s judge dismissed the application pursuant to Rule 21.01 of the Rules of Civil Procedure, finding that Ms. Carroll lacked standing to bring the application. Ms. Carroll appealed that ruling to the Ontario Court of Appeal.
While the Ontario Court of Appeal addressed other issues within this appeal, the focus of this article will be to highlight the Court’s finding that standing is required to sue for breaches of trust.
Ms. Carroll’s position was that once a court is informed of allegations of a potential breach of trust, the inherent jurisdiction of courts to administer trusts makes standing “subordinate, and largely irrelevant, where allegations of fraudulent or improper misconduct are made against a trustee,” thereby obliging the courts to resolve the litigation. Ms. Carroll also furthered the position that the courts of equity have removed the requirement of standing to protect the interests of incapacitated beneficiaries who cannot effectively sue to enforce trust obligations.
The Court rejected Ms. Carroll’s position stating that the claim that standing is subordinate or irrelevant “misconceives the true nature of the inherent jurisdiction of courts to supervise or administer trusts and is contrary to basic trust principles.” Although, the courts have previously extended access to the court’s inherent jurisdiction to creditors or contingent beneficiaries, the Court noted that the implications of Ms. Carroll’s position would result in strangers being able to enforce trust benefits that beneficiaries are entitled to, even if the beneficiaries choose not to enforce them, and that this would be contrary to the essential character of a trust.
The Courts are able to assist those with an interest in trusts by enforcing and compelling the performance of those trusts. Specifically, the Court noted that:
“the inherent jurisdiction to supervise and administer trusts exists to assist the parties to the trust relationship or those who are interested in the trusts. As such, the inherent jurisdiction of courts to supervise and administer trusts is not inconsistent with the imposition of standing requirements. To the contrary, it is entirely in keeping with the role inherent jurisdiction performs to ensure that those who seek to invoke the inherent jurisdiction to supervise or administer trusts have an interest in the trusts they seek to enforce.”
The Court of Appeal also discussed the following issues within this decision:
- Did the motion judge err by applying the wrong standing test?
- Did the motion judge err by finding that Ms. Carroll had not pleaded facts establishing a prima facie case of standing?
- Did the motion judge err by failing to consider all aspects of the relief sought when determining Ms. Carroll’s standing?
The Court concluded that the motion judge made none of the above-noted errors and dismissed the appeal.
Thank you for reading.
What is CaseLines?
As noted in the Supplementary Notice to the Profession and Litigants in Civil and Family Matters Regarding the Caselines Pilot, E-Filing, and Fee Payment, CaseLines is a user-friendly cloud-based document sharing e-hearing platform for remote and in-person court proceedings. It is being used to provide a platform for parties to upload electronic copies of their documents for review by all participants before and during a court hearing. It is important to note that parties are still required to file materials in accordance with the applicable rules of Court and Notices to the Profession.
Parties have new responsibilities when using CaseLines, including, among other things, adding their email addresses to all court documents, using a specific document naming method, and uploading each document to be marked as an exhibit during the hearing separately.
In addition, while there are many benefits to using CaseLines, some that are particularly helpful are that users can make private notes and highlight documents, terms can be searched in all uploaded documents, and parties can navigate documents and direct opposing counsel and the court to view specific sections. These features can increase efficiency and make it easier for all parties and the court to quickly navigate through specific documents during a hearing.
The pilot project began in August 2020 for select civil motions and pre-trial conferences in Toronto. The goal was to gradually expand to other practice areas and court locations.
In Toronto, CaseLines was expanded to select family matters in December 2020 and select criminal matters as of February 8, 2021. Effective March 1, 2021, CaseLines started being used for select civil, family and criminal proceedings in the East and Northwest Regions. It is anticipated that province-wide expansion of the CaseLines pilot will continue throughout the summer and that all judicial regions will be using CaseLines by the end of summer 2021.
Since the CaseLines pilot was launched in August 2020, there have been many helpful resources that have been published to assist parties in learning how to use this new process, some of which have been included below:
- A demonstration of CaseLines;
- An 18 Minute Tutorial on how to access, update, invite people and review evidence for cases;
- Frequently Asked Questions About Thomson Reuters CaseLines;
- CaseLine Hearings – Tips for Counsel and Self-Represented Parties; and
- Sydney Osmar’s article on MAG’s Pilot Project with CaseLines.
Thank you for reading!
The Consolidated Practice Direction Concerning the Estates List in the Toronto Region was established for the hearing of certain proceedings involving estate, trust and capacity law, applying to matters on the Estates List in the Toronto Region.
As of March 9, 2021, Part VII (Contested Matters – Estates) of this practice direction was amended to make reference to model orders prepared by the Estate List Users’ Committee.
Generally, parties are expected to take the time and care to prepare proposed orders giving directions for consideration by the court. If the parties are unable to agree upon an order giving directions and a contested motion for directions is required, each party must file a copy of the draft order giving directions it is seeking with its motion materials.
In addition to providing requirements for what orders giving directions should address, where applicable, this practice direction now includes the following model orders:
- Order Giving Directions – Appointment of Section 3 Counsel
- Order Giving Directions – Power of Attorney/Guardianship Disputes
- Order Giving Directions – Will Challenge
- Order Giving Directions – Dependant’s Support
- Order Giving Directions – Passing of Accounts
As noted in the practice direction, the preparation of draft orders for consideration by the court will greatly expedite the issuance of orders. Where the relevant model orders have been approved by the Estate List Users’ Committee, a copy of the draft order showing all variations sought from the model order must be filed.
The addition of model orders can greatly benefit the Estates List in the Toronto Region. Among other things, these model orders provide a baseline for all parties, such that it can significantly reduce drafting time and potential disagreements on wording among parties, which in turn can increase efficiency and reduce costs.
Many thanks to the Estate List Users’ Committee for their time and efforts in preparing these model orders!
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Consider the fact that a resulting trust will not apply just because you later change your mind.
In the recent decision of Hertendy v Gault, 2020 ONSC 7555, the Superior Court of Justice confirmed that in a situation where a parent transfers property to an adult child, the principles of a resulting trust do not apply in cases where the transfer is a true gift.
In this case, the mother, Ms. Hertendy, was seeking summary judgement against the daughter, Ms. Gault, to recover legal ownership of land in Smiths Falls (the “Property”). The Court found that the mother had agreed to and did transfer the Property as a gift to the daughter in April 2012, with the stipulation that the mother would retain a life interest in the Property and that the daughter and her husband would help pay for the on-going household expenses of the Property.
While the mother argued that there was no payment or consideration for this transfer (among other things), the daughter argued that the transfer was done for consideration, namely, the promise to help pay for the on-going expenses when requested to do so by the mother.
Among other things, the Court considered the fact that in the mother’s Will, dated 2011, the Property was to be transferred to the daughter after her death. In 2017, the mother removed her daughter from the Will and stated to Mr. Greenall (her other daughter) that she “changed her mind about transferring the home”.
The Court confirmed that the presumption of a resulting trust will apply to gratuitous transfers and where a transfer is made for no consideration, the onus is on the transferee to demonstrate that the gift was intended. Quoting Pecore v Pecore, 2007 SCC 17, the Court noted that “the focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer…The presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.”
As such, the issue in this case was whether, at the material time the mother intended the transfer. The Court considered whether any person would gift their home to someone (even family) in return for a vague pledge of assistance for payment of expenses. The Court found that in this case, the fact that the mother signed the transfer document, she intended to sign the document, she received a benefit from signing the document (even though the benefit was modest compared to the value of the Property), and she paid the lawyer for the transfer, was sufficient to uphold the gift. The court also pointed out that the mother made no complaints about the transfer until at least three years later and her explanation for doing so was that “in hindsight [she] should have asked more questions.”
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