Author: Umair

26 Apr

Court of Appeal Reiterates the Test for Undue Influence

Umair Common Law Spouses, Estate & Trust, Estate Planning, Executors and Trustees, Litigation, Trustees, Wills 0 Comments

In the recent decision in Seguin v Pearson, 2018 ONCA 355, the Ontario Court of Appeal reiterated the different tests for undue influence that apply in the inter vivos and the testamentary context.

The Issue on Appeal

In Seguin, the Deceased made a Last Will and Testament that made specific bequests to his daughters and left the residue of his Estate to his common law spouse. Prior to his death, the Deceased also transferred his house into joint tenancy with his spouse.

The Appellant, one of the Deceased’s daughters, appealed from a lower court decision dismissing her action challenging the validity of the Deceased’s Will and the inter vivos transfer of the home into joint tenancy.

On appeal, the Appellant’s principal argument was that the relationship between the Deceased and his spouse gave rise to a presumption of undue influence, and that the spouse had failed to rebut the presumption.

The Tests for Testamentary Versus Inter Vivos Undue Influence

After canvassing the evidence that had been tendered at trial by the plaintiff and the defendant, the trial judge looked to the Supreme Court of Canada’s decision in Goodman Estate v Geffen and the Privy Council’s decision in Craig v Lamoureux for the factors to be considered when assessing an allegation of undue influence. In Goodman, the Supreme Court discussed what must be established in order to trigger a presumption of undue influence.

However, on appeal, the Court of Appeal held that the Appellant had mischaracterized the test for undue influence in the testamentary context. Further, the Court of Appeal concluded that the trial judge had erred in articulating the test that is applicable to testamentary gifts.

At paragraphs 10 and 11 of its judgment, the Court of Appeal stated as follows:

“…The rebuttable presumption of undue influence arises only in the context of inter vivos transactions that take place during the grantor’s lifetime. It arises from particular relationships when the validity of inter vivos dispositions or transactions is in issue; once the presumption is established, the onus shifts to the transferee to rebut the presumption: Banton v. Banton (1998), 164 D.L.R. (4th) 176 (Ont. Gen. Div.) , at p. 209. … In the case of wills, it is testamentary undue influence, amounting to outright and overpowering coercion of the testator, which must be considered. The party attacking the will bears the onus of proving undue influence on a balance of probabilities: Vout v. Hay, [1995] 2 S.C.R. 876 (S.C.C.) , at p. 887; see also Neuberger Estate v. York, 2016 ONCA 191, 129 O.R. (3d) 721 (Ont. C.A.), at paras. 77-78.”

Although the trial judge had erred in stating the applicable test in relation to the challenge to the validity of the Deceased’s Will, the Court of Appeal held that this did not affect the reasonableness of his conclusion that the Deceased’s spouse had not unduly influenced the Deceased.

Given that the trial judge imposed the more onerous inter vivos standard of requiring the Deceased’s spouse to rebut a presumption of undue influence, the Court of Appeal concluded that the trial judge’s finding “would necessarily be the same had the trial judge applied the correct standard applicable to testamentary dispositions.”

After addressing the Appellant’s additional submissions, including her request for leave to appeal the trial judge’s determination on the issue of costs, the appeal was dismissed.

Thank you for reading,

Umair Abdul Qadir

24 Apr

Re Wall Estate, Part 2: Passings of Account, Laches and Acquiescence

Umair Estate & Trust, Litigation, Passing of Accounts, Power of Attorney, Trustees, Wills 0 Comments

In my last blog post, I wrote about Justice Mulligan’s recent decision in Re Shaw Estate, 2018 ONSC 1735, and the question of whether a notice of objection filed in a passing of accounts by an Estate Trustee is a “claim” pursuant to the Limitations Act, 2002.

Upon concluding that the notice of objection was not a “claim” – and thus was not statute-barred – on the facts, Justice Mulligan went on to consider the application of the defences of laches and acquiescence.

The Defences of Laches and Acquiescence

The Court turned to the definition of “laches” in Black’s Law Dictionary, which defines it to be “[u]nreasonable delay in pursuing a right or claim – almost always an equitable one – in a way that prejudices the party against whom relief is sought.” The Court also looked to the decision of Lindsay Petroleum Co. v Hurd, [18740 JCJ No 2, which held that the length of the delay and the nature of the acts done during the interval are two important circumstances when considering the question of laches.

Justice Mulligan also cited to the Supreme Court of Canada’s decision in MK v HM, [1992] SCJ No 85, which considered the basic principles surrounding laches and acquiescence:

Acquiescence is a fluid term susceptible to various meanings depending upon the context in which it is used…the first being a synonym for estoppel, wherein the plaintiff stands by and watches the deprivation of her rights and yet does nothing.  This has been referred to as the primary meaning of acquiescence.  Its secondary sense is as an element of laches – after the deprivation of her rights and in the full knowledge of their existence, the plaintiff delays.  This leads to an inference that her rights have been waived.  This, of course, is the meaning of acquiescence relevant to this appeal.  The final stage is a confusing one, as it is sometimes associated with the second branch of the laches rule in the context of an alteration of the defendant’s position in reliance on the plaintiff’s inaction.

Application in Re Shaw Estate

Turning to the facts in Re Shaw Estate, there was evidence that there were meetings between the Estate Trustee and the testator’s children but a dispute about what happened at those meetings. The Estate Trustee asserted that copies of his accounts were presented to the testator’s daughter at the meetings, and that she (along with her brother before he passed away) approved the Estate Trustee’s accounts and claim for compensation. There was evidence that the beneficiaries had initialed the statements presented at these meetings.

In her affidavit evidence filed in response, the testator’s daughter denied the Estate Trustee’s characterization of these meetings. It was her evidence that the accounts were presented to her over lunch, and that she did not receive fulsome information regarding investments or bank account statements.

Although there were material facts in dispute as between the Estate Trustee and the objecting beneficiary, it was undisputed that the testator’s daughter had not signed a release and that the Estate Trustee had not passed his accounts. It was also undisputed that copies of the annual accounts were not sent to the testator’s daughter in advance of the meetings, and that no arrangements were made for her to obtain independent legal advice.

After reviewing the factual evidence, Justice Mulligan concluded that the doctrine of laches did not apply. Justice Mulligan also held that the annual meetings and the initialing of the statements did not lead to a finding of acquiescence in the present case.

Lessons to be Learned from Wall Estate

For estate trustees and fiduciaries seeking to have their accounts and their claim for compensation approved without the necessity of a formal passing of accounts, the Court’s decision in Re Wall Estate is an important reminder regarding the best practices to be followed.

Generally speaking, it is prudent for a fiduciary in such a situation to provide the beneficiaries with a copy of his or her accounts and carefully document any discussions with the beneficiaries regarding the accounts. It is also prudent for a fiduciary to recommend that the beneficiaries obtain independent legal advice regarding the accounts and obtain a form of release for the accounting period.

Thank you for reading,

Umair Abdul Qadir

 

23 Apr

Re Wall Estate: Can A Notice of Objection to Accounts Be Statute-Barred?

Umair Estate & Trust, Executors and Trustees, Litigation, Passing of Accounts, Power of Attorney, Public Policy, Trustees, Wills 0 Comments

Is a notice of objection to accounts, filed by a responding party in the context of an Application to pass accounts by an estate trustee, a “claim” within the meaning of the Limitations Act, 2002?

The answer to this question could have significant consequences for individuals with a financial interest: the general two-year limitation period under the Limitations Act, 2002 may apply to a “claim,” and objections that fall outside the period may be statute-barred.

The Honourable Justice Mulligan of the Ontario Superior Court of Justice addressed this issue in Re Wall Estate, 2018 ONSC 1735.

A Recent History of Limitation Periods and Passing of Accounts

In Armitage v The Salvation Army, 2016 ONCA 871, the Court of Appeal held that a passing of accounts by an attorney for property under the Substitute Decisions Act was not subject to the general two-year limitation period under the Limitations Act, 2002.

Writing for a unanimous court, Justice Hourigan noted that there was historically no statutory limitation period for the passing of accounts. Justice Hourigan concluded that the enactment of the Limitations Act, 2002 did not establish a two-year limitation period for passing of accounts, because a passing did not fit the definition of a “claim” as defined by the Act. Given the Court’s conclusion, the equitable doctrine of laches and acquiescence were the only defences available.

However, in a footnote to the judgment, Justice Hourigan specifically noted that the judgment did not mean that the Act categorically has no applicability to passings. In particular, Justice Hourgan left open the possibility that the filing of a notice of objection in a passing of accounts is a “claim” within the meaning of the Act.

Wall Estate: Is An Objection A Claim?

In Re Wall Estate, the testator died in 2005. The Estate Trustee had annual meetings with the testator’s two children, who were the beneficiaries of testamentary trusts. However, the beneficiaries did not sign releases and the Estate Trustee did not pass his accounts.

The testator’s daughter subsequently compelled a passing of accounts from the Estate Trustee in 2014, and the Estate Trustee was removed in 2016. The testator’s daughter filed an objection to the Estate Trustee’s accounts in June 2015.

The Estate Trustee brought a motion to strike the objections to his accounts, and argued that he was not required to address objections to his accounts for the period prior to December 31, 2012 due to the Limitations Act, 2002, laches or acquiescence.

After discussing Justice Hourigan’s decision in Armitage, Justice Mulligan concluded that the notice of objection filed by the testator’s daughter was not statute-barred:

In my view, if the passing of accounts does not constitute a claim, I am not satisfied that a Notice of Objection is a claim.  In filing a Notice of Objection, the beneficiary is seeking answers to questions about steps taken by the estate trustee during the currency of an administration of an estate.  Answers to those questions may assist the beneficiary in consenting to the passing of accounts without the necessity of a formal hearing.  An absence of consent will require a formal hearing.  A formal hearing will assist the court in determining if the fees sought and investment steps taken are appropriate under all the circumstances.

The objections taken at their highest may result in a reduction or loss of compensation for the estate trustee or other remedies.  In this case, if the objections are successful to any extent, no additional funds would be payable immediately to Elizabeth as beneficiary of the discretionary trust.  The corpus of the estate would be enlarged, increasing the funds available for the discretionary trust, and ultimately, could increase the amount available to be paid to Elizabeth, but only if she survives to age 60.  On the facts here, I am not satisfied that the Notice of Objection rises to the level of a “claim” as contemplated by the Limitations Act, 2002.

What’s On the Other Side of the Wall Decision?

Given that the question was left open in Armitage, it remains to be seen if Re Wall Estate or another case that raises this limitations defence will be appealed to a higher court.

In addition, Justice Mulligan noted that the objections did not rise to the level of a claim “on the facts here.” Thus, Re Wall Estate leaves open the possibility that the Court may reach the opposite conclusion after making a fact-specific enquiry.

In tomorrow’s blog post, I will discuss the issues of laches and acquiescence, which were also pleaded as defences in Re Wall Estate.

Thank you for reading,

Umair Abdul Qadir

08 Feb

Bennett v Bennett Estate: Estates and Contractual Rights

Umair Estate & Trust, Estate Planning, Litigation, Trustees 0 Comments

Upon the death of a testator, one of the tasks of the estate trustee is to ascertain what contracts the testator was party to during his or her lifetime.

A recent decision of the Court of Appeal of Ontario reaffirms the importance of ensuring that contractual rights that devolve to the testator’s estate are properly and effectively exercised.

The Facts

In Bennett v Bennett Estate, 2018 ONCA 45, four brothers divided a parcel of land into separate properties. The properties were encumbered with a right of first refusal in the event of a sale.

The agreement between the brothers granted a right of first refusal to the “other parties” to the agreement, with the right to be exercised within twenty-one business days of receiving written notice. The agreement also permitted the parties to transfer their share of the land to a “family member” without observing this requirement.

One of the brothers, Donald, died in 2006 and was survived by his wife, Darlene. When Darlene received notice of a proposed sale of one of the properties to Miron Topsoil Ltd. (“Miron”), she provided notice that she was exercising the right to purchase the property.

Neither sale closed, and Darlene brought a motion for summary judgment seeking an order granting her the right to purchase the property. Miron brought a cross-motion on the basis that Darlene was not entitled to exercise the right of first refusal.

At first instance, the motion judge concluded that Darlene did not have the right of first refusal. Although the parties agreed that Donald’s Estate had a right of first refusal, Darlene had brought her claim based on her status as Donald’s family member rather than on behalf of Donald’s Estate. Summary judgment was granted in Miron’s favour.

The Appeal

On appeal, Darlene asserted that she exercised the right of first refusal on behalf of the Estate. Her authority and ability to act on behalf of the Estate was not established on the evidence before the lower court. Notwithstanding this fact, Darlene argued that her inclusion amongst the parties with a right of first refusal who received notice of Miron’s offer established her right.

Miron asserted that Darlene’s entitlement to exercise the right was put in issue before the lower court, and that there was no evidentiary basis for her authority as Estate Trustee. Miron also noted that Darlene had refused to provide proof that she was acting in the capacity as the Estate Trustee of Donald’s Estate.

Writing on behalf of a unanimous Court, Justice Huscroft noted that Darlene had been provided with numerous opportunities to tender evidence of her right to act on behalf of the Estate. Instead, she asserted her claim on the basis that she was a “family member.”

The Court of Appeal concluded that the mere extension of the offer to Darlene did not establish her legal entitlement to act on behalf of the Estate, and held that the motion judge did not err in determining her entitlement on the basis that she was a “family member.” In the result, Darlene’s appeal was dismissed.

Key Takeaways for Estate Trustees

For estate trustees, the Court of Appeal’s decision in Bennett reiterates the importance of carefully reviewing contracts entered into by the testator to understand the rights conferred upon the estate.

The decision is also a reminder that estate trustees may be required to provide some proof of their authority, such as a copy of the Last Will and Testament or probate, when exercising contractual rights on behalf of the estate.

Thank you for reading,

Umair Abdul Qadir

06 Feb

Rehel v Methot: Life Income Funds and Testamentary Beneficiary Designations

Umair Beneficiary Designations, Estate & Trust, Estate Planning, Executors and Trustees, Litigation, RRSPs/Insurance Policies, Trustees, Wills 0 Comments

In yesterday’s blog post, I discussed Justice Gomery’s recent decision in Rehel v Methot, 2017 ONSC 7529, where the Court was asked to resolve the question of the beneficial entitlement to the Deceased’s life income fund account (the “Account”).

The Deceased named his ex-spouse, Sharon, as the beneficiary when the Account was first opened. However, in his later Will, the Deceased directed the Estate Trustee of his Estate to use the proceeds of the Account to service his debts.

Having concluded that the Sharon was not automatically entitled to the Account by operation of provincial pension benefits legislation, the residual question was whether the direction under the Will overrode the prior beneficiary designation in Sharon’s favour.

Designations Under Part III of the Succession Law Reform Act

Subsection 51(1) of the Succession Law Reform Act (the “SLRA”) states that a participant (i.e. the person entitled to designate another person to receive a benefit payable under a plan on the participant’s death) may designate a person to receive a benefit payable under a “plan” (as defined under the Act) by an instrument signed by him or her or by Will. Subsection 51(1) also states that the person may also revoke the designation by either of these methods.

However, pursuant to subsection 51(2) of the SLRA, a designation in a Will is only effective if it relates “expressly to a plan, either generally or specifically.” Similarly, under subsection 52(1), a revocation in a Will is effective to revoke a designation made by instrument “only if the revocation relates expressly to the designation, either generally or specifically.”

Subsection 52(2) goes on to state that a later designation revokes an earlier designation, to the extent of any inconsistency.

The Parties’ Positions

In Rehet, Sharon argued that the instructions under the Will were not an effective revocation under subsection 52(1), as they do not mention the earlier designation in Sharon’s favour.

Conversely, the Estate Trustee argued that the designation does not have to meet the formal requirements of subsection 52(1), so long as it complies with subsections 51(2) and 52(2). In other words, a designation should prevail if it is a later designation that relates expressly to a plan.

Both parties relied on the Court of Appeal’s decision in Laczova Estate v Madonna House (2001), 207 DLR (4th) 341, where the testator made a holograph will where she listed two RSPs as her assets and then made bequests to twenty two beneficiaries. The estate trustee in Laczova similarly argued that the reference to the RSPs under the testator’s will was a designation under subsection 51(2) and revoked the earlier designation in accordance with subsection 52(2).

In Laczova, the Court of Appeal rejected the estate trustee’s argument because the testator had not designated a specific person or persons as beneficiaries of her RSPs under her later Will.

Justice Gomery’s Decision

Although the Court of Appeal’s decision in Laczova had favoured the prior designated beneficiaries, Justice Gomery held that the Court’s conclusions supported the Estate Trustee’s position in Rehel.

Justice Gomery noted that the Court of Appeal had not rejected the logic of the Estate Trustee’s argument regarding the operation of subsections 51(2) and 52(2), despite finding in favour of the prior designated beneficiaries.

In addition, Justice Gomery held that the Court of Appeal’s reasoning in Laczova suggested that the rationale for subsection 51(2) is to give estate trustees and financial institutions sufficient information to act on the directions in a Will.

In the present circumstances, the Court concluded that there was no ambiguity as to the Deceased’s intentions. The Court concluded that the Will revoked the earlier designation, and that the designation under the Deceased’s Will prevailed.

Thank you for reading,

Umair Abdul Qadir

05 Feb

Rehel v Methot: Life Income Funds and Spousal Entitlements

Umair Beneficiary Designations, Estate Planning, Executors and Trustees, Litigation, Pension Benefits, Trustees, Wills Tags: , , , , 0 Comments

In the recent case of Rehel v Methot, 2017 ONSC 7529, the Honourable Justice Gomery was asked to provide directions regarding the entitlement to money held in a life income fund account owned by the deceased testator.

Background Facts

William (the “Deceased”) made a Last Will and Testament one day before he committed suicide. At the time of his death, the Deceased held a life income fund account (the “Account”) at Scotiabank. The Deceased’s spouse, Sharon (“Sharon”) was named as the beneficiary of the Account at the time that it was opened in 2013.

However, in his Will, the Deceased directed his Estate Trustee to use the funds in the Account to pay off any debts owing at the time of the Deceased’s death. The Estate Trustee took the position that the designation under the Will replaced the prior beneficiary designation.

Application of Provincial Pension Legislation

Before engaging in a discussion over which designation should prevail, the first question before the Court was whether Sharon was automatically entitled to the proceeds of the Account as the Deceased’s surviving spouse.

The Deceased and Sharon were married in Quebec in 2005, and moved to Ontario in 2008. However, the money in the Account was from a pension plan registered in Quebec. The Court was asked to consider if provincial pension legislation in Ontario or Quebec was applicable to the distribution of the Account.

Subsection 48(1) of the Ontario Pension Benefits Act states that if a member who is entitled to a deferred pension under a pension plan dies before payment of the first installment, the surviving spouse of the person is entitled to receive payment. However, under subsection 48(3) of the Act, a spouse is not automatically entitled to the proceeds of a deferred pension if the parties are “living separate and apart” at the time of death.

The Estate Trustee argued that subsection 48(3) applied, and adduced evidence that suggested that the parties were separated as of the time of the Deceased’s death. Sharon filed an affidavit disputing that she had separated from the Deceased, and asserted that she and the Deceased had only discussed the possibility of a separation at the time of his death.

The Estate Trustee filed additional affidavit evidence that led Justice Gomery to conclude “beyond a doubt” that the marriage had broken down and that the parties were negotiating their separation from each other. Justice Gomery thus concluded that the parties were separated under Ontario law, and that Sharon was not automatically entitled to the proceeds under the Pension Benefits Act.

Another question before the Court was whether Quebec law applied to the question of Sharon’s entitlement to the Account. Under Quebec pension legislation, the automatic right to spousal benefits is “terminated by separation from bed and board.” The Estate Trustee asserted that the application of Quebec law made no difference, whereas Sharon asserted that “separation from bed and board” meant something different than “living separate and apart.”

Justice Gomery noted that the law of another province is “foreign law,” and must be proved. Absent such proof, Justice Gomery held that the Court must assume that the foreign law is the same as Ontario law. Thus, Justice Gomery concluded that Sharon was not entitled to the death benefit under the Deceased’s pension plan by right.

Next Question: Which Beneficiary Designation Prevails?

Given Justice Gomery’s conclusion that Sharon was not entitled to the Account by operation of statute, the Court concluded that Sharon would only be entitled to the funds in the Account if she was the designated beneficiary as of the Deceased’s death.

In tomorrow’s blog, I will discuss Justice Gomery’s discussion of the terms of the Deceased’s Will, and whether the direction to the Estate Trustee overrode the earlier designation in Sharon’s favour.

Thank you for reading,

Umair Abdul Qadir

23 Nov

Lost and Destroyed Wills: Procedural Considerations

Umair Estate & Trust, Executors and Trustees, Litigation, Wills Tags: , , , 0 Comments

Earlier this week, I blogged about a recent decision of the Ontario Superior Court of Justice that highlighted the factors the Court will consider when a party seeks to rebut the presumption of revocation when a testator’s Will cannot be located upon death.

Today, I will be highlighting the litigation procedure in Ontario for an Application to prove a lost or destroyed Will.

Pursuant to Rule 75.02 of the Rules of Civil Procedure, the validity and contents of a Will that has been lost or destroyed  must be proved by way of an Application before the Court.

As noted in my previous blog post, the party who seeks to prove a lost Will bears the onus to:

  • prove due execution of the Will;
  • provide particulars tracing possession of the Will to the date of the testator’s death;
  • provide proof of the contents of the Will; and
  • rebut the presumption that the Will was destroyed by the testator with the intention to revoke it.

However, Rule 75.02(a) provides that a Will may be proven by way of affidavit evidence only if all persons with a financial interest in the testator’s estate consent to the proof. If the appropriate consents can be obtained, the validity and the contents of the Will can be proved without the need for Court appearances.

It is important to note that Rule 75.02(a) appears to require the agreement and consent of all persons with a financial interest. In addition, it is strongly recommended that a person contemplating an Application pursuant to Rule 75.02 obtain legal advice as to who may have a financial interest in the Estate.

For instance, if the result of the Will not being proved would be an intestacy, careful consideration should be given to the consents required from any intestate heirs. Legal advice should also be obtained if there are persons with a financial interest who are not sui juris, such as minors or persons under disability.

If all of the individuals with a financial interest do not consent to proof, Rule 75.02(b) states that the Application will proceed “in the manner provided by the court in an order giving directions made under rule 75.06.” Rule 75.06 provides the Court with the ability to direct the procedural conduct of the litigation.

Thank you for reading,

Umair Abdul Qadir

 

20 Nov

Lost Wills and Rebutting the Presumption of Revocation

Umair Estate & Trust, Estate Planning, Executors and Trustees, General Interest, Litigation, Trustees, Wills Tags: , , , , 0 Comments

When a testator’s Last Will and Testament cannot be located upon death, there is a presumption that the Will was destroyed by the testator with the intention to revoke it. The recent decision of Honourable Justice Robyn M. Ryan Bell in Levitz v Hillel Lodge Long Term Care Foundation, 2017 ONSC 6253, sets out the factors the Court will consider when a party seeks to rebut the presumption of revocation.

What is the Burden of Proof?

In Sorkos v Cowderoy, [2006] O.J. No. 3652, the Court of Appeal of Ontario held that a party who seeks to prove a lost Will bears the onus to:

  • prove due execution of the Will;
  • provide particulars tracing possession of the Will to the date of the testator’s death;
  • provide proof of the contents of the Will; and
  • rebut the presumption that the Will was destroyed by the testator with the intention to revoke it.

With respect to the final factor, Justice Bell considered the recent decision in Goold Estate. The decision of the Alberta Court of Queen’s Bench in Goold Estate v Ashton, 2016 ABQB 303, which was recently upheld by the Alberta Court of Appeal, identified the following factors as being relevant to the Court’s consideration of whether the presumption has been rebutted:

  • the reasonableness of the terms of the Will;
  • the relationship of the testator to the beneficiary;
  • whether the testator’s personal effects were destroyed prior to the search for the Will;
  • the nature and character of the testator in taking care of his or her personal effects;
  • any dispositions of property that support or contradict the terms of the lost Will;
  • statements made by the testator that confirmed or contradicted the terms of the lost Will;
  • whether the testator was of the character to store valuable papers, and whether the testator had a safe place to store them;
  • whether the testator understood the consequence of not having a Will; and
  • whether the testator made statements to the effect that she had a Will.

Application of the Factors in Levitz

In Levitz, the Deceased made a Will that made a specific bequest of a candelabra to Hillel Lodge Long Term Care Centre and left the residue of her Estate to Hill Lodge Long Term Care Foundation. Upon her death, the original Will was not located. The Deceased’s next-of-kin took the position that there was insufficient evidence to rebut the presumption of revocation on a balance of probabilities.

The Court cited the factors as set out in Goold Estate, and went on to apply them to the evidence before it. The Court held that there was sufficient evidence to establish, on a balance of probabilities, that the Deceased did not intend to revoke her Will.

There was no dispute that the terms of the Will were reasonable. The Deceased’s friend attested that the Deceased had referred to Hillel as the sole beneficiary of her Estate in the month prior to her death. There was evidence that the Deceased had considered administrative revisions to the terms of her Will prior to her death, but that she was not contemplating a substantive change to her Will.

Although the Court found that the Deceased was a highly organized person, the Court concluded that the Will may have been misplaced when the Deceased was considering making administrative changes to her Will.

The Deceased had made charitable donations consistent with the terms of her Will and had made statements to friends and advisors confirming the terms of the distribution of her Estate. It was also held that the Deceased understood the consequences of not leaving a Will.

As a result of the Court’s findings of fact, the Will was held to have been proven in solemn form and ordered to be admitted to probate.

Thank you for reading,

Umair Abdul Qadir

21 Sep

Validity of Beneficiary Declarations for Insurance Policies

Umair Beneficiary Designations, Estate Planning, Litigation, RRSPs/Insurance Policies Tags: , , , 0 Comments

Beneficiary designations for a life insurance policy can be an important estate planning tool. However, as with any testamentary document or disposition, questions can arise about the insured’s actual intentions after death.

In the recent decision of Sun Life v Nelson Estate et al., 2017 ONSC 4987, the Court was asked to resolve such an ambiguity by considering the validity of an insurance declaration under the deceased’s Will and the validity of a change of beneficiary designation on file with the insurer.

Juanita (the “Deceased”) died in December 2009. The Deceased was entitled to group life insurance coverage with Sun Life in the amount of $148,500.00. Following the Deceased’s death, Sun Life deposited the proceeds of the policy into Court. The Deceased’s two children (the “Respondents”) brought a Motion for a declaration that they were solely entitled to the proceeds.

The Deceased had been married to the respondent, Justin Nelson (“Justin”), since 2006. Following the Deceased’s death, Justin signed an acknowledgment that the Respondents were entitled to the proceeds of the policy. He had made no claim to the proceeds since the Deceased’s death, and his whereabouts were unknown as of the hearing of the Motion.

Beneficiary Declarations Under the Insurance Act

Pursuant to section 190 of the Ontario Insurance Act, an insurance may designate the insured, the insured’s personal representative or a specific beneficiary pursuant to the insurance contract or a declaration, including a declaration under the insured’s Will.

Section 171(1) of the Act sets out the criteria for a valid declaration. The declaration must be made by way of an instrument signed by the insured. The declaration must also be an instrument with respect to which an endorsement is made on the policy, that identifies the contract, or that describes the insurance or insurance fund (or a part thereof).

The Issue in Sun Life v Nelson Estate

In 2007, the Deceased’s employer’s group policy with Sun Life was terminated and transferred to Desjardins Financial Security (“Desjardins”). The Deceased completed an application for enrolment and an irrevocable beneficiary designation in favour of the Respondents. She also advised her financial advisor that she had changed the beneficiary for the policy from Justin to the Respondents.

However, after the Deceased’s death, it was discovered that her coverage had remained with Sun Life instead of being transferred to Desjardins because she was disabled at the time of the transfer. As a result, there were two beneficiary designations in the Deceased’s file.

The Deceased’s Last Will and Testament also included a beneficiary declaration that directed the “proceeds of the insurance policy” to be held in trust for the benefit of the Respondents. The term “insurance policy” was not defined in the Will, and the Deceased was insured under two policies at the time of her death.

Thus, the Court was asked to consider the validity of the declaration under the Will and the validity of the change of beneficiary designation in 2007.

Justice Brown’s Decision

After reviewing the facts, the Honourable Justice Carole Brown concluded that the declaration under the Will was ambiguous and did not refer to a specific insurance policy. Accordingly, the declaration under the Will failed.

However, with respect to the change of beneficiary designation form, the Court was satisfied that the Deceased clearly intended for the Respondents to be the beneficiaries of the policy. The evidence before the Court included the Deceased’s statements to the Respondents, the change of beneficiary designation form and the fact that Justin had signed an acknowledgment that the Respondents were the beneficiaries of the policy.

In the result, the Court held that the change of beneficiary designation form was valid within the meaning of section 171(1), and ordered that the proceeds be paid out to the Respondents equally.

Thank you for reading,

Umair Abdul Qadir

 

18 Sep

Estate Litigation and Summary Judgment Motions

Umair Beneficiary Designations, Common Law Spouses, Executors and Trustees, Litigation, RRSPs/Insurance Policies, Trustees Tags: , , , , , 0 Comments

Litigation surrounding the estate of a deceased person can be protracted and emotional for the parties involved. Unfortunately, given the high costs of litigation, it can also be incredibly costly and onerous for the parties to litigate their dispute all the way to a trial.

Rule 20 of the Rules of Civil Procedure offers one procedural mechanism by which a party can bring an expeditious end to a litigation matter. Pursuant to Rule 20.04, the Court shall grant summary judgment where it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence, or the parties have agreed to have all or part of the claim determined by a summary judgment and the Court is satisfied that it is appropriate to grant same.

Rule 20 was amended in 2010 in order to improve access to justice, providing the Court with broader evidentiary powers on a motion for summary judgment. However, as demonstrated by a recent decision, the Court may still conclude that it is not appropriate to grant summary judgment in view of the litigation as a whole.

The Facts in Bazinet v CompuCom Canada Co., e al.

In Bazinet v CompuCom Canada Co., et al., 2017 ONSC 5194, Robert (the “Deceased”) died without a Will. There was a dispute over life insurance proceeds that were available to the Deceased as part of an employee benefits package. The parties had not produced a designation form naming a beneficiary to the insurance proceeds.

The plaintiff, the Deceased’s common-law spouse, claimed that she was entitled to the life insurance proceeds. She asserted that she had witnessed the Deceased signing a beneficiary designation in her favour, and that the Deceased had confirmed that she was the beneficiary of the policy after their separation. The plaintiff’s claim sought declaratory relief against all of the defendants, punitive damages and general damages against the Deceased’s employer CompuCom Canada Co. (“CompuCom”).

The Deceased’s Estate Trustees denied the plaintiff’s claims and advanced a counterclaim on behalf of the Estate, seeking a declaration that there was no designated beneficiary and that the proceeds were thus payable to the Estate. As the plaintiff was the Deceased’s common-law spouse, she was not entitled to a share of the Deceased’s Estate on an intestacy.

The Estate Trustees moved for summary judgment, seeking an order dismissing the plaintiff’s claims against the Estate and granting the declaratory relief sought on their counterclaim. The plaintiff, in turn, requested that partial summary judgment be granted in her favour.

Justice Corthorn’s Decision

In response to the motion for summary judgment, CompuCom argued that the matter was not an appropriate case for summary judgment in the context of the litigation as a whole. CompuCom asserted that findings of credibility were necessary for the determination of the issues, that summary judgment would not be dispositive of the entire proceeding and that a trial was required for the fair and efficient determination of all of the issues.

Justice Corthorn agreed with CompuCom’s position, concluding that summary judgment would not dispose of the entire action, including the plaintiff’s claim for monetary damages. Justice Corthorn also held that there was a risk of duplicative proceedings and inconsistent findings.

Given the nature of the plaintiff’s claims, Justice Corthorn held that a majority of the claims would remain to be determined at trial even if summary judgment was granted in the Estate Trustees’ or the plaintiff’s favour. Justice Corthorn also noted that she was not confident that it would be possible to assess credibility and reliability without the benefit of a trial, with the risk that the trial judge would make different findings of credibility and fact or reach inconsistent conclusions upon hearing the oral evidence of the affiants.

Accordingly, the motion for summary judgment was dismissed. The Court also refused to grant the relief that the plaintiff was seeking in response to the motion.

Proceeding With Caution

Justice Corthorn’s recent decision reiterates the importance of carefully considering whether a motion for summary judgment is appropriate before proceeding. If unsuccessful, the parties incur the cost of an interim motion in addition to the costs of a trial.

In addition, motions for summary judgment can have significant cost consequences. Rule 20.06 of the Rules of Civil Procedure provides the Court with the ability to order payment of costs of motion for summary judgment on a substantial indemnity basis if a party acted unreasonably by making or responding to the motion or acted in bad faith for the purpose of delay.

Thank you for reading,

Umair Abdul Qadir

 

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