Author: Suzana Popovic-Montag
As the 21st century progresses, societies across the world have moved towards legalization and decriminalization of drugs and, in general, a narrower definition of what constitutes a “vice”. At the same time, there have been increasing efforts, both legally and culturally, to safeguard people from falling into dependence. The Canadian Radio-television and Telecommunications Commission prohibits alcohol advertising that depicts the consumption of alcohol. In contrast to decades wherein Santa Claus and doctors were advertised smoking, cigarette packaging is decidedly less festive – indeed, its gore is more characteristic of a horror film than a consumer product. So wary have some of us become that there have been studies published in Australia and Britain that have analyzed James Bond’s drinking habits and stated that he would be “at high risk of multiple alcohol-related diseases and an early death” (as though Bond blanches at risk!).
In previous centuries, there was far less legal regulation (except under Prohibition, a marked exception) of the aforementioned indulgences, but there was no less apprehension with respect to their widespread usage. In the 1887 case of Jordan v. Dunn,  W.L. 9876 (Ont. Q.B.), a testator devised his lands to his son on the condition, in part, that he abstain from intoxicants and card-playing. The Court decided that the gift did not vest until the beneficiary adhered to the testator’s rules:
“If a devise be only on the performance of some particular duty or upon some particular event; that is, if it be a condition precedent, there is no gift unless the condition is fulfilled; and it makes no difference that the event is impossible, impolitic or illegal.”
In Quay, Re,  CarswellOnt 706, a testator’s gift to his son came with the condition that he was not “engaged in malt or spirituous liquor traffic or in any form of gambling or games of chance”. The son, perhaps a little piqued at the testator’s implication, sought a determination of the condition’s validity. The Court upheld the condition, not construing it as an in terrorem clause but as a “competent direction in furtherance of public interests”. A distinction was also drawn between “playing games by way of diversion or amusement” and gambling as a daily occupation.
The testatrix in Kennedy Estate, Re,  CarswellMan 72, was yet more prohibitive, giving her daughter farmland rental proceeds only as long as her daughter did not “smoke or drink intoxicating liquor”. The Court approved of this provision:
“Conditions that a person must not drink intoxicating liquor, or play cards, or must ‘continue steady’ are valid conditions and although there is no specific authority I hold that a condition against smoking comes within the same category and is a valid condition.”
Ostensibly, these “continue steady” conditions are still legally valid, but we cannot say with great certainty, for it seems that these days testators are less inclined to make such conditions for their testamentary gifts. This is unfortunate for students of the law eager for test cases, although it is fortunate for fun loving beneficiaries, whose smiles might otherwise dampen from the constant accompaniment of a sober-faced condition precedent.
Thank you for reading … Have a great day,
Suzana Popovic-Montag & Devin McMurtry.
An oft-repeated maxim of equity is that “equity regards substance rather than form”. Just outcomes, it is thought, should not be frustrated by mere technical shortcomings or other superficial flaws. However, in applying this principle, courts are mindful not to neglect form in every case or to too great an extent, lest legal drafting becomes slipshod and legal results unpredictable.
A recent British Columbia decision dealt with, in part, the dichotomy of form and substance in the context of will drafting errors. In Conner Estate v. Worthing, there were three patent errors on the face of the deceased’s will: (1) the will provided for 150% of the sale proceeds of the deceased’s house, owing to, seemingly, a mathematical error (50% given to the husband, 20% to five others); (2) the residue was gifted twice, once to the husband and once to the children; and (3) several lines appeared to have been missing. While the court acknowledged that it was generally barred from adding words to erroneous wills (though it had the power to delete words), it found that this case was an exception to the rule, for the deceased’s intentions could be clearly ascertained from the extrinsic evidence – the solicitor’s notes and the deceased’s letter of instructions – and the solicitor was responsible for the errors:
“While the exception to the prohibition against adding words on an application to rectify a will at the court of probate stage in Moiny Estate is extremely narrow, I conclude that the facts in this case fit within that narrow exception. Ms. Conner’s stated intentions should not fail simply because her solicitor failed to draft her will in a manner that gave effect to her wishes.”
A similar result likely would have been reached in Ontario, where it has long been held that in matters of “equivocation” – when the words in a will apply to two or more persons – courts can look to extrinsic evidence to infer a testator’s actual intention. If a will is not equivocal, and the testamentary intention can be discerned in the will, the courts cannot examine extrinsic evidence – and whatever the substance, the form will prevail.
As we have previously written, the courts may be hindered from rectifying drafting errors in scenarios where the errors are subtle and there is little extrinsic evidence of true testamentary intention. It is important, therefore, for both drafting solicitors and testators to carefully review their wills before executing them, and to watch out, in particular, for those minor errors which may burn while emitting no smoke.
Thank you for reading!
Suzana Popovic-Montag and Devin McMurtry.
Amidst this terrible COVID-19 pandemic, as with past crises and other contentious affairs, we see the steady emergence of dichotomies in the policy debate – public health versus the economy, liberty versus protection, individual versus group interests … In some cases, however, we see disputes arise wherein two sides share the same source of inspiration but disagree upon how best to do justice to their ostensibly common cause. Many of history’s religious wars demonstrate this phenomenon – two factions purportedly fighting for the same god, but interpreting the god rather differently. In the context of estates law, this phenomenon is discernible in the commentary surrounding statutory wills in Canada: proponents of statutory wills want to incorporate them in our law out of concern for incapable people’s equality rights, while critics of statutory wills oppose their introduction out of concern for incapable people’s equality rights.
A statutory will, in essence, allows for a judge to execute, revoke or amend a testamentary instrument on behalf of an incapable person. They are often praised for their tax advantages, as they may include testamentary trusts and other tax-avoiding instruments (avoid not evade, an important distinction for the C.R.A.) that are not available to incapable people if their estates devolve under intestacies. The drafter of a statutory will may also arrange a statutory will in a manner that will tend to preserve the affection of an incapable person’s relatives – no spurned children or blindsided spouses, in other words.
There is more controversy with respect to whether statutory wills should be used to “protect”. In one prominent English case, Re Davey,  3 AII E.R. 342, a 92-year-old incapable woman, who was residing in a nursing home, married one the nursing home’s employees, a man 45 years her junior. The woman’s relatives, alarmed at the prospect of the man gaining everything on an intestacy, applied to the court for a statutory will, and won.
Critics of statutory wills observe that since courts cannot interfere with the testamentary freedom of the capable, they should not have the power to commandeer and transform the estate plans of the incapable. Perhaps, as well, skeptics are wary of variable outcomes (i.e. how judges will devise statutory wills), which may flow from what they may perceive as an excess of judicial discretion – unlike an intestacy, the terms of which are definite and predictable; a similar debate is often had with respect to minimum sentences in criminal law, which boils down to, as with statutory wills, how one balances trust for legislators with trust for judicial discretion, to achieve the best results.
In Canada, only New Brunswick has a statutory will. Section 11.1 of the New Brunswick Infirm Persons Act emphasises that courts must act in concert with what incapable people would want, if competent to make a will themselves. In somewhat of a legal bombshell, however, the Manitoba Law Reform Commission has favoured the adoption of a statutory will in Manitoba’s Wills Act.
Thank you for reading … have a wonderful Wednesday!
Suzana Popovic-Montag & Devin McMurtry
We have previously written about the Estate Arbitration and Litigation Management (“EALM”) initiative, which has been spearheaded in an effort to keep estate litigation matters moving forward during the COVID-19 pandemic. Our previous blogs on the EALM initiative can be found here and here.
In its Notice to the Profession dated May 5, 2020, the Ontario Superior Court of Justice announced that it will not resume in-person hearings until July 6, 2020, at the earliest. The notice further states that the scope of matters being heard by courts virtually will be expanded in the near future, but the particulars regarding such an expansion have not yet been released.
While access to the courts remains limited, EALM is available as a means of obtaining assistance in the determination of procedural and/or interim (and certain substantive) matters that are not necessarily urgent in nature and not currently eligible for a virtual court hearing. The matters set out in an EALM agreement can be arbitrated by senior estates practitioners in a timely and cost-efficient manner. EALM arbitrations can take place via teleconference or video conference, depending on the preferences of the parties and the arbitrator.
As previously indicated, EALM is not intended to in any way circumvent the role of the Office of the Public Guardian and Trustee (the “PGT”) or the Office of the Children’s Lawyer (the “OCL”) where the estate matter involves unprotected charitable interests or the rights of persons under legal disability. Since our last blog post regarding EALM was posted, the initiative has received the support of the PGT and the OCL and our precedent EALM agreement has been further updated to recognize the potential role that the PGT and/or the OCL may have in EALM process. Best EALM practices include ensuring that the PGT and/or the OCL are provided with the opportunity to participate, and further include the following:
- Where any substantive issue to be submitted to arbitration affects the rights of persons under legal disability, or an unprotected charitable interest, the parties must provide notice of their intention to enter into an EALM agreement to the PGT and/or the OCL;
- The PGT and/or the OCL should be served at the early stages of a matter, particularly when the issues will have a significant effect upon the interests that they represent;
- Where the PGT and/or the OCL are participating in a proceeding, their consent to proceed to EALM is required;
- Where it is necessary for a court to appoint the PGT or the OCL as litigation guardian, each office may consider requests to engage in the EALM process after they have been appointed as litigation guardian (rather than prior to their formal appointment); and
- An arbitrator’s decision to resolve substantive issues involving the rights of persons under legal disability will be considered to be a final settlement, which requires court approval under Rule 7.08 of the Rules of Civil Procedure.
A revised copy of our precedent EALM agreement, which has been updated in consultation with the PGT and the OCL in consideration of the comments set out above, can be found here. An updated list of senior estates practitioners who are prepared to assist as EALM arbitrators is available here. I again thank all of those who have demonstrated an interest in assisting other members of the Estates Bar as arbitrators.
EALM is a cost-effective measure to move matters forward and provides the parties to litigation with more control than the traditional court process. Once the courts resume full operations, we can only anticipate that they will be at full capacity and hearing dates will be in high demand. In light of this, we are hopeful that EALM will continue to assist parties to estate litigation and their counsel as a suitable and efficient alternative to in-court hearings.
If you are interested in introducing EALM into your own practice, or if you are interested in being added to our roster of EALM arbitrators, please contact me at email@example.com.
Thank you for reading and stay safe.
“The Adventure of the Norwood Builder” begins when Holmes and his companion, Watson, are visited by a Mr. MacFarlane, a “wild-eyed and frantic” young man who has been pursued by the police and charged with the murder of Mr. Oldacre, an eccentric and reclusive bachelor. Mr. MacFarlane swears upon his innocence, but his situation is forlorn, as Mr. Oldacre, on the day he was allegedly murdered, prepared a holograph Will in which he gave everything to Mr. MacFarlane.
Upon inspection of the holograph Will, Holmes deduces that it was written on a train, since there are some sentences that are clear and discernible, and others which are illegible – “the good writing represents stations, the bad writing movement”. According to Holmes, this corroborates Mr. MacFarlane’s credibility:
“It is curious – is it not? – that a man should draw up so important a document in so haphazard a fashion. It suggests that he did not think it was going to be of much practical importance.”
Holmes becomes more suspicious of the official narrative when he discovers, amongst other things, that prior to his death, Mr. Oldacre transferred his assets to a mysterious unknown, Mr. Cornelius.
In estate litigation in Ontario, it is common practice for litigants to employ handwriting experts to investigate the authenticity of documents and signatures, but they, likely cautious and mindful of their professional reputations, may be less inclined to make such momentous and bold inferences. In cracking the case (spoiler alert!), Holmes certainly employs measures that go far beyond those available to present-day estate litigators, experts, investigators, and the authorities.
Working with some suggestive facts – such as that Mr. Oldacre executed his Will sloppily and that he transferred his wealth to one party while designating another party as his estate beneficiary – Sherlock Holmes deduces that Mr. Oldacre has faked his own death, framed Mr. MacFarlane, and transferred his wealth to the fictitious Mr. Cornelius, who is in fact himself, in order to defraud his creditors. In an effort to vindicate his theory and save Mr. MacFarlane, Holmes invites the police into Mr. Oldacre’s home, instructs Watson to put a match to some straw, and then, when there is a blaze and smoke billowing within the house, Holmes has the police yell “fire”:
“A door suddenly flew open out of what appeared to be solid wall at the end of the corridor, and a little, wizened man darted out of it, like a rabbit out of its burrow. ‘Capital!’ said Holmes, calmly. ‘Watson, a bucket of water over the straw … allow me to present you with your principal missing witness, Mr. Jonas Oldacre.’”
These types of truth-finding artifices, though extreme and unorthodox, are within the purview of the unofficial detective. Estate litigators, on the other hand, operate under the stricter ambit of the Law Society of Ontario, which would likely frown upon such irregular practices.
Thank you for reading – have a great day,
Suzana Popovic-Montag & Devin McMurtry
One of the reasons people pursue wealth is to render themselves, and their loved ones, less vulnerable. Wealth can protect against unhappy contingencies and mitigate ill fortune, such as loss of employment, sickness, or the death of a provider. With COVID-19, some of the most adversely-affected Canadians are those without any economic cushion to fall back upon. Wealth, however, can also make people more vulnerable, for it can draw the jealous attention of unscrupulous have-nots, as evidenced by the abundance of greed-fuelled elder abuse and power of attorney predation. Our legal system, therefore, has developed safeguards against the improper use of an incapable person’s funds – and as a recent New Brunswick decision demonstrates, as well as checking bad actors, these safeguards also apply to the more innocent missteps of parties with apparently good intentions.
In Public Trustee v. Morley,  N.B.Q.B. 18, the Public Trustee in charge of an infirm person, Norma Morley, sought the Court’s authorization to transfer Norma’s house to her adult daughter, Patricia Morley, on the pretexts that Patricia “suffer[ed] from mental issues that prevent[ed] her from leaving [Norma’s] home” and that Norma, who resided in a nursing home, “ha[d] assets that [could] provide for her maintenance other than the house”. Ostensibly, the Public Trustee’s request was reasonable, for the statute – subsection 13(1) of the Infirm Persons Act – allows for an infirm person’s representative to provide for the infirm person’s dependants, and at first glance, Patricia qualified as a dependant.
The Court denied the request, however, finding that the proposed gift was not in the best interests of Norma. In coming to this decision, the Court was guided by several considerations: (1) it was uncertain whether there were enough assets to provide for Norma following the gift; (2) the proposed gift was at odds with Norma’s Will; (3) Norma had not made similar gifts in the past, when she was capable; (4) there was no evidence tendered as to Patricia’s needs and means; and (5) Patricia’s needs are secondary to Norma’s. On this last point, other than the house, Norma had approximately $70,000 in assets – a thin and precarious economic cushion.
If this case had been adjudicated in Ontario, we could expect a similar result. Subsections 37(1) and 37(2) of Ontario’s Substitute Decisions Act, 1992 dictate that an incapable person’s property can be used to support dependants, but expenditures on behalf of dependants are conditional upon sufficient property remaining to provide for the incapable person. Subsections 37(3) and 37(4) allow for a guardian of property to make gifts to the incapable person’s relatives if, again, enough property remains and there is reason to believe the incapable person, if capable, would make such gifts. In this case, insufficient property remained to justify a gift and there was no reason to believe Norma would have gifted her house to Patricia, for her prior conduct and Will suggested otherwise.
The Public Trustee’s position was unenviable – trying to stretch limited means to cover two vulnerable people – but the cure proposed ran counter to Norma’s previously expressed wishes as well as leaving her exposed to mischance.
Thank you for reading – Have a great day!
Suzana Popovic-Montag and Devin McMurtry
We recently wrote about the Estates Arbitration Litigation Management (“EALM”) initiative, which I have spearheaded in an effort to keep estate litigation matters moving forward during the COVID-19 pandemic. As our readers will know, at this time, access to courts is currently limited and EALM is available as a means of obtaining assistance in the determination of procedural and/or interim (and certain substantive) matters that are not urgent in nature.
Since announcing the EALM initiative, I have heard from many members of the Estates Bar, and many others as well across the province, who look forward to implementing EALM in their own practices. I have now also had an opportunity to consult with the Office of the Public Guardian and Trustee and the Office of the Children’s Lawyer to ensure that EALM is structured in a manner such that its use does not in any way restrict their roles in matters where the rights of persons under legal disability may be affected.
A copy of our draft EALM agreement, which is the product of consultations with senior practitioners, is available here.The draft EALM agreement is intended to serve as a template, to be updated by counsel prior to its execution as may be agreed upon by the parties and the proposed arbitrator based on the circumstances of the case, the issues to be submitted to arbitration, and the terms of the engagement of the arbitrator.
A list of senior estates practitioners who are prepared to assist as EALM arbitrators is available here. I thank all of those who have demonstrated an interest in assisting other members of the Estates Bar as arbitrators and would ask that you please contact me at firstname.lastname@example.org if you wish to be added to our list of EALM arbitrators.
We look forward to hearing from our peers regarding their experiences with EALM and how this tool is assisting us all in continuing to advance matters in the best interests of our clients during this period of uncertainty.
Thank you for reading and stay safe.
The COVID-19 pandemic has forced the legal community to re-evaluate the way in which negotiations and hearings are typically conducted. Instead of doing things primarily in person, alternatives which do not require people to be in the same physical space are now being pursued.
As the courts are currently only hearing urgent matters, we launched an Estates Arbitration and Litigation Management (“EALM“) initiative last week in an effort to move estate matters forward during the COVID-19 pandemic. Through arbitration, the EALM initiative addresses procedural (and certain substantial) issues for which the court’s direction would normally be sought. The arbitrations are conducted by senior members of the Estates Bar and take place via teleconference or video conference. These measures have already been successfully employed by the Family Law Bar.
In their own efforts to move matters forward, an entire trial was conducted over Skype in the United Kingdom. The trial revolved around whether a stroke victim in his 70s should continue to receive tube feeding and hydration. The platform allowed participants to see and hear each other and for the trial to be recorded. The trial occurred over three days and consisted of multiple participants, including a judge, lawyers, 11 witnesses, three experts and two journalists.
While virtual trials may not happen anytime soon in Canada, after the success of the Skype trial in the United Kingdom, perhaps virtual trials are something we can expect in the near future. Virtual mediations and arbitrations are a welcomed first step.
Thanks for reading and be safe.
Suzana Popovic-Montag and Celine Dookie
The COVID-19 pandemic has resulted in temporary changes to the way that lawyers are able to practice law. For the time being, many of us and our staff are working remotely, avoiding in-person meetings whenever possible, and access to assistance through the courts is limited.
Processes such as examinations for discovery and mediations may not necessarily be postponed with the availability of online platforms through which they can be hosted, such as Zoom. However, an issue remains in how best to address procedural issues for which we would normally seek directions from the court.
For the time being, court dates are available only to provide assistance in respect of truly urgent matters. While some clients may consider the appointment of an estate trustee during litigation or timetabling issues to be urgent, it is unlikely that a judge will share this viewpoint absent compelling circumstances. While the scope of matters that can be heard by teleconference may expand after April 6, 2020, the ability of the courts to keep up with demand can be expected to be limited. Furthermore, once the courts resume operations, one can only expect schedules to fill up quickly as lawyers and clients try to make up for lost time.
Lawyers and our clients have a common interest in moving matters forward during this period of instability. To assist in this regard, I am spearheading an initiative that I have called Estates Arbitration Litigation Management (“EALM“).
What I see as being the key features of EALM can be summarized as follows:
- parties will enter into an EALM agreement that sets out the matters to be arbitrated, primarily being procedural and interim relief;
- senior members of the Bar will assist the parties as arbitrators in determining those issues agreed upon at a reduced hourly rate;
- if the decision of the arbitrator requires a court order to be effective (for example, the appointment of an estate trustee during litigation), the parties agree to file a consent motion in writing to obtain the necessary order; and
- the parties may return to court to address substantive issues once normal operations are restored or may elect to proceed to arbitration or mediation.
These measures have already been successfully employed by the Family Law Bar and we are grateful to Aaron Franks, Judith Nicoll, Martha McCarthy, and Gary Joseph for sharing their experiences in that regard. A link to a precedent draft agreement specific to EALM, as well as an information sheet that lawyers will be able to share with clients, will be added to the resources section of our website within the next couple of days, which will be the result of continued consultations with senior members of the Estates Bar.
Despite the unique challenges posed by COVID-19, it is important that we employ new measures to continue to move matters forward for the benefit of our clients and colleagues throughout the Estates Bar, and I am hopeful that EALM will become a timely and cost-effective tool in limiting the disruption to our practices in the coming weeks. If you have any comments regarding EALM, or are interested in introducing this into your own practice, please contact me at email@example.com.
Thank you for reading and be safe.
The Victorians consigned themselves to more subtlety in their works of entertainment than we at present do. To all appearances, theirs was decidedly not an age capable of enjoying rap music and HBO comedies. The spiciest themes in their art, therefore, would include marriage intrigues, duels, financial scandals – or, as we see in George Eliot’s Middlemarch – controversial wills and eccentric testators.
The wills and estates subplot in Middlemarch is comprised of all the ingredients that you may see in a modern legal drama: a rich and erratic miser (Mr. Featherstone) manipulating his relatives with implied promises of future bequests; the idle protégée (Fred Vincy) who accumulates debts with the idea that the testator will bail him out; concern over the testator’s attachment to his young caregiver (Mary Garth); a train of impoverished relatives ill-concealing their greedy expectations; and much discussion on why “blood” was deserving and why “strangers” were not.
It is remarkable how little has changed in a century or so with respect to wills and estates. Then, as now, a Mr. Featherstone who promises a bequest, receives consideration, and then goes back on his word, may be found to have broken a binding contract – as occurred in Legeas v. Trusts & Guarantee Co. Likewise, a ruling of unjust enrichment (Moore v. Sweet) or specific performance (Folsetter v. Yorkshire & Canadian Trust Co.) could be made against him/his estate.
Still relevant today are the challenges of undue influence and incapacity. In the story, the scheming relatives are alarmed at Mr. Featherstone’s connection to Ms. Garth. She, all too aware of an undue influence allegation, refuses her patron’s money and ignores him when he orders her, while on his deathbed, to destroy his wills. In return, he throws his cane at her, which is perhaps evidence of incapacity.
Much as we may laugh at the relatives in Middlemarch who repeatedly visit Mr. Featherstone to remind him of his obligations to his “own flesh and blood”, our own law continues to ascribe significance to bloodlines. The Succession Law Reform Act defines “child” based upon conception, and the statute’s intestacy provisions speak of “issue” and the “nearest degree” of kindred. As many an adopted child and step-child knows, with respect to estates law, blood still matters.
There are some marked differences between Eliot’s England and modern Canada. Whereas Fred Vincy was loaned money in part because the creditors knew he was favoured by Mr. Featherstone, we now have businesses openly and explicitly offering advances to those who “have an inheritance coming”. Although we still use the Banks v. Goodfellow test for evaluating capacity, there have been some innovations, such as capacity assessments done after death and more nuanced, neuroscientific understandings of capacity. Lastly, if Mr. Featherstone had died in Ontario in 2020, he could not take as much comfort in tantalizing relatives and then crushing their hopes, for we have dependency support laws whereby testators must provide “adequate provision” for their “dependents”. Perhaps the creation of such laws was influenced, in part, by the ghoulish conduct of such Victorian literary characters.
Thank you for reading. Enjoy the rest of your day!
Suzana Popovic-Montag and Devin McMurtry.