10 Dec

Are remedial constructive trusts available on the basis of “good conscience”?

Nick Esterbauer Estate & Trust, Litigation, RRSPs/Insurance Policies Tags: , , , , , , , , , 0 Comments

The Supreme Court of Canada’s recent decision in Moore v Sweet provided meaningful clarification on the Canadian law of unjust enrichment and, in particular, the juristic reason analysis.

As it made a finding of unjust enrichment, it was not necessary for the Court to consider the second issue before it, being whether, in the absence of unjust enrichment, a constructive trust could nevertheless be imposed in the circumstances on the basis of “good conscience”.

In 1997, the Supreme Court released its decision in Soulos v Korkontzilas.  That case considered situations that may give rise to a constructive trust remedy.  In referring to the categories in which a constructive trust may be appropriate, which were noted to historically include where it was otherwise required by good conscience, Justice McLachlin (as she then was) stated as follows:

I conclude that in Canada, under the broad umbrella of good conscience,  constructive trusts are recognized both for wrongful acts like fraud and breach of duty of loyalty, as well as to remedy unjust enrichment and corresponding deprivation…Within these two broad categories, there is room for the law of constructive trust to develop and for greater precision to be attained, as time and experience may dictate.

Since 1997, Soulos and the above excerpt have been interpreted inconsistently by scholars and courts of appeal throughout Canada.  Some consider Soulos to restrict the availability of constructive trust remedies to only situations where there has been a finding of unjust enrichment or wrongful conduct, while others favour a more liberal interpretation.

The appellant in Moore v Sweet sought, in the alternative to a remedy on the basis of unjust enrichment, a remedial constructive trust with respect to the proceeds of the life insurance policy on the basis of good conscience.  In choosing not to address this issue, Justice Côté (writing for the Majority) stated as follows:

This disposition of the appeal renders it unnecessary to determine whether this Court’s decision in Soulos should be interpreted as precluding the availability of a remedial constructive trust beyond cases involving unjust enrichment or wrongful acts like breach of fiduciary duty. Similarly, the extent to which this Court’s decision in Soulos may have incorporated the “traditional English institutional trusts” into the remedial constructive trust framework is beyond the scope of this appeal. While recognizing that these remain open questions, I am of the view that they are best left for another day.

It will be interesting to see if and when the Supreme Court ultimately chooses to determine “the open questions” regarding the availability of the remedial constructive trust.  Until then, it appears that some debate regarding the circumstances in which it may be imposed will remain.

Thank you for reading.

Nick Esterbauer

07 Dec

Driving Prohibition Does Not Apply to Santa Driving a Team of Reindeer; Nasty Mistletoe

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

While noting up cases on reindeer and mistletoe (as one does this time of year), I came across the decision of R. v. Stewart (1972), 10 C.C.C. (2d) 83. There, the appellant was convicted of driving a motor vehicle while prohibited from doing so. The prohibition stated that the appellant was “prohibited from driving anywhere in the Dominion of Canada for a period of 30 days.” The Court held that this prohibition was overly broad, and should be restricted to driving on a “highway”. Further, the prohibition should have been limited to the object being driven. As written, the prohibition “is broad enough to embrace such diverse and innocent activities as, for example, driving a spike or a locomotive on railroad tracks, driving a herd of reindeer over the arctic plains or even a team of them over the house-tops at Christmas.” The conviction was set aside.

I hindsight, however, a broad prohibition on driving a herd of reindeer over the house-tops may have saved poor grandma from her unfortunate Christmas eve fate.

Turning to mistletoe, mistletoe is the common name for parasitic plants in the order “Santalales”.

in ATCO Electric Ltd. v. Serink, 2017 ABSRB 958 (CanLII), a landowner sought compensation for trees cut down on his land in connection with the construction and maintenance of power lines. The Alberta Surface Rights Board heard that the trees were infested with “Dwarf Mistletoe”, which is a condition that causes excessive branch growth thus reducing the value of the trees as timber due to an increased number of knots. The Board held that because of the Dwarf Mistletoe, the trees had no merchantable value, and compensation was denied.

 

 

Have a merry weekend.

Paul Trudelle

06 Dec

A Way to Honour Those No Longer With Us

Natalia R. Angelini General Interest, In the News, Uncategorized Tags: , 0 Comments

The Holiday season is full of merriment and celebration. But it may be difficult for those who have lost a loved one to partake in the festivities, as the sense of loss and loneliness is often deepened at this time of year.

A recent article tells us about holiday remembrance services that can offer relief to those coping without a person who meant a great deal to them. The author speaks of the death of his mother and of his attendance at a holiday remembrance service he learned of through his local Funeral Centre, which gave him great comfort. He touchingly notes:

“Sharing tales about my mother eased my sense of loss and helped me cope with the first Christmas without her. I felt no guilt about depressing others at Christmas. Instead I was instilled with the powerful sense of relief that comes from knowing others feel the same way. Being able to share my grief freely and without feeling like a burden is an emotional and powerful way to ease the pain and to comfort others too.”

I expect, as the author points out, that the most difficult time after our nearest and dearest pass away is not in the blur of the days immediately following the death and funeral, but when the hustle and bustle of that emotional time is over and everyone returns to living their lives.  So it is nice to learn that holiday remembrance services that can help us honour loved ones and lift spirits are run by many funeral homes across the Greater Toronto Area.

 

Thanks for reading,

Natalia Angelini

05 Dec

Fraud against seniors – can it happen in your family?

Suzana Popovic-Montag Elder Law, Estate & Trust, Estate Planning Tags: , , 0 Comments

By now, many of you have had a phone call from the “Canada Revenue Agency” informing you that you owe money, or that a lawsuit or collection process has begun. It’s a scam that’s obvious to most of us – and we hang up and don’t give it a second thought.

But in a small minority of cases, the scam works, and Canadians have lost thousands of dollars in the process. It’s not just seniors – many middle-aged adults have been victims as well.

Which brings me to a key point: if brazen scams can work on those in the prime of life, how vulnerable are seniors who may be suffering from both physical and mental frailties?

Know what’s out there

The Canadian government’s Anti-Fraud Centre has a website that outlines four common fraud schemes that target seniors, and steps to protect them. 

Here’s an overview of the four types:

  • Prize winner: Canadian seniors receive notice (mail, phone, or email) that they’re the winner of a large lottery or sweepstake. A request is made for money to cover costs in securing the winnings.
  • Family emergencies: Seniors receive a call from someone claiming to be a family member or a close friend. They describe an urgent situation that requires money.
  • Service scams: There are many types, but one of the most common involves a phone call from someone claiming to be from Microsoft or Windows who has detected a virus in the victim’s computer, with money needed to make repairs.
  • Friendship/romance: Scammers can spend months grooming a victim into a friend or romantic relationship, either online or in person. Eventually, a request for money is made.

The bottom line is that scams come in many forms. While seniors can most definitely learn to protect themselves, this becomes much harder if there’s been a decline in mental abilities. The best way to protect elderly parents or other seniors is to check in with them every few days to probe for any unusual actions. You can also ask the individual to follow one simple rule: check with me first (or with another son or daughter) before committing money to anything. It’s a great delay tactic that will often stop a scam in its tracks.

Savvy senior? Take the quiz

This short 10-question quiz is designed to test a senior’s ability to spot online scams, but it’s a great test for anyone to take. See how you do, then try it out with a senior in your life.

Thanks for reading … Enjoy your day,
Suzana Popovic-Montag

04 Dec

Do you Wish to Appoint a Foreign Executor? Three Things to First Consider

Natalia R. Angelini Estate Planning, Executors and Trustees Tags: , 0 Comments

A critical decision when making your estate plan is deciding who will administer your assets after your demise.  Given the importance of appointing someone you trust, some find it to be a painstaking decision, at times complicated for those having loved ones living outside of Canada.  The attached article speaks to three things to first consider before naming a foreign executor:

  1. Bond Requirement – If the executor is a non-resident he/she will generally need to post an administration bond equal to the value of the estate when applying for probate. The process to obtain a bond is time-consuming and costly. Bringing a motion asking the court to dispense with the bond requirement also adds expense.
  2. Tax Implications – An estate may be deemed to be non-resident for tax purposes as a result of a foreign executor in control. The ensuing added cost to the estate could include losing preferential capital gains and Canadian dividend tax treatments. An estate’s reporting and tax withholding obligations are also increased. Further, even if the estate is considered Canadian, there lies a risk that it will be subject to the tax laws of the executor’s country.
  3. Practical Challenges — Among an estate trustee’s duties are the obligations to gather the assets, inventory them, preserve them and distribute them. Such administrative tasks take time and are made more challenging when the executor is in another jurisdiction. If there is no trusted local individual, one work-around is to appoint a professional trust company, which has the added bonus of eliminating the bond requirement and tax risks noted above.

It may be prudent depending upon one’s individual circumstances to get the comfort of legal advice on the issue.

Thanks for reading and have a great day,

Natalia Angelini

03 Dec

“The Court of Missing Heirs”

James Jacuta Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills 0 Comments

The “Court of Missing Heirs” was a radio show on air from about 1937 to 1947 where they tried to “locate missing heirs” of unclaimed estates. Some of the cases solved by the program include:   Michael Cusack’s nephew  was located in regard to a $6,000 estate;  Myrtle Garvey Juranics, received $4,000 from the unclaimed estate of her husband; A son and daughter of Joseph J. Hoagland received $4,500 after his death. The above sums of money were substantial at the time and likely would have been sufficient to purchase a house in those days.

Locating “legal heirs” continues to be an issue on some estates and can occur today in a variety of situations, including when a deceased dies without having left a will, or leaving an imperfect or invalid will. The task of “identifying” and then “locating” missing heirs is often difficult and can land on a lawyer’s desk.  The task can become even more complicated when the potential “missing heirs” are outside of Canada. This frequently requires a lawyer with specific country experience to resolve the problem. As well, someone who has previously worked with trusted colleagues in other countries.

 


Thanks for reading!
James Jacuta

30 Nov

Marriages and the Revocation of Wills: Two Different Regimes

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

In Ontario, marriage has the effect of revoking a will, except in limited circumstances. These circumstances are:

  • where there is a declaration in the will that it is made in contemplation of marriage;
  • where the spouse elects to take under the will; or
  • where the will is made in the exercise of a power of appointment which would not, if the appointment was not made, pass to the heir, executor or administrator of the testator or the person entitled to the estate on an intestacy.

This is the effect of s. 16 of the Succession Law Reform Act.

The revocation upon marriage provisions are not found in all provinces. For example, in Alberta, the current Wills and Succession Act does not provide that a will is revoked upon marriage. Prior to the passage of the Wills and Succession Act, however, marriage had the effect of revoking a will under the previous Wills Act. British Columbia has similar legislation. For a discussion of the unique provisions of the law in Saskatchewan, see Suzana Popovic-Montag’s blog, here.

An interesting issue involving the interplay of the two regimes (ie, marriage revoking will vs. marriage NOT revoking will) was discussed in the Albert Court of Queen’s Bench decision of Re Goin, 2018 ABQB 643 (CanLII). There, the deceased made a will in 1999. He married in 2005, and died in 2012. At the time of the marriage, the Wills Act was in effect, which provided for revocation upon marriage. At the time of his death, the Wills and Succession Act was in effect.

At issue was whether the Wills Act applied, and therefore the will was revoked upon marriage, or whether the Wills and Succession Act applied, and therefore the will was not revoked.

The court held that the legislation in place at the time of the marriage (ie. the Wills Act) was applicable, and therefore the will was revoked. The court rejected the argument that because the Wills and Succession Act was in effect at the time of death it was the applicable law as being “an illogical and untenable argument”. Such an argument, the court said, would meant the the new Act somehow revived the revoked will.

The court also relied upon transitional language in the Wills and Succession Act which provided that it only applied to marriages on or after the proclamation of the Wills and Succession Act. Further, the wording of the legislation made it clear that the timing of the marriage, and not the death of the testator was key.

I will leave the debate of whether marriage should revoke a will to another day. However, in Ontario, the dramatic effect of marriage on a will must be kept in mind.

Thank you for reading.
Paul Trudelle

29 Nov

Resealing of Foreign Orders Appointing Guardians

David M Smith Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills Tags: , , , , 0 Comments

This blog was written in collaboration with, and with thanks to Yasmin Vinograd of Merovitz Potechin LLP .

In some cases, an incapable person residing outside of Canada has assets in Canada. Can a guardian appointed outside of Canada have access to the incapable’s Canadian assets? By extension, would a Guardianship Order made outside of Canada be recognized in Ontario?

In Ontario, this scenario is dealt with in the Substitute Decisions Act, 1992 (“SDA”). Section 86 of the SDA provides a mechanism by which orders made by a court outside of Ontario to appoint a guardian of property or of the person may be recognized or “resealed” in Ontario. Subsections of s. 86 specify that:

s.86(1): a foreign order is “an order made by a court outside Ontario that appoints, for a person who is sixteen years of age or older, a person having duties comparable to those of a guardian of property or guardian of the person.”

s.86(2): “Any person may apply to the court for an order resealing a foreign order that was made in a province or territory of Canada or in a prescribed jurisdiction.”

s.86(3): an applicant seeking to have the court reseal the foreign order is required to file a copy of the foreign order, along with a certificate signed by registrar, clerk or other officer of the foreign court stating that the order is unrevoked and is of full effect.

The effect of these provisions is that a guardianship order made by a foreign court will be recognized and enforceable in Ontario.

Sounds easy enough, doesn’t it? Unfortunately, it is not.

I had previously blogged about the possibility of resealing guardianship orders made in other provinces and territories. The issue arises when trying to reseal a guardianship order made outside of Canada. The problem is that Ontario has yet to prescribe any other country as a “prescribed jurisdiction” for the purpose of section 86(2). This begs the question: can the court reseal a foreign guardianship in the absence of the list of prescribed jurisdictions?

When faced with this exact issue in Cariello v Perrella, 2013 ONSC 7605, the court refused to apply section 86 to reseal a guardianship order made in Italy. Justice Mesbur stated:

It seems to me that unless and until Ontario creates a list of “prescribed jurisdictions” there is simply no legislative basis on which I can apply s. 86. This is not a case where the statute inadvertently fails to deal with an issue. Here, the province has simply failed to take the regulatory steps necessary to create a list of prescribed jurisdictions to which s.86 would apply. I have no idea of the province’s intentions in that regard. I fail to see how I can simply assume Ontario would designate Italy as a prescribed jurisdiction when it finally creates a list of prescribed jurisdictions under the SDA. I have no basis to conclude that Ontario has any intention of having s.86 apply to any jurisdiction other than another Canadian province or territory. Section 86 cannot apply.

In light of the Cariello decision, it appears that section 86 and the mechanism it provides cannot be used to reseal an order made by a jurisdiction outside of Canada. What, then, is a guardian to do if the incapable has assets in Canada that need to be accessed?

There are two ways in which this could be addressed.

The first is to bring an application to have the guardianship order recognized as a non-monetary order, pursuant to the Supreme Court of Canada’s decisions of Morguard Investments v De Savoye, [1990] 3 SCR 1077 (SCC), Beals v Saldanha, 2003 SCC 72, and Pro Swing Inc v ELTA Golf Inc, 2006 SCC 52. As of now, there is no decision that applied the SCC’s test of real and substantial connection in the context of a guardianship order. It remains to be seen whether an Ontario court would be open to recognizing a guardianship order on that basis and what the Public Guardian and Trustee’s position will be on such an application.

The second option is to commence a new guardianship application in Ontario. The evidence of incapacity in the foreign jurisdiction may be useful in such an application, but it would probably need to be updated to reflect the current status of the incapable and to demonstrate his or her incapacity. The “new” guardianship application will need to conform to Ontario’s requirements under the SDA, including the filing of a Management and/or Guardianship Plan(s), service on required persons, and naming of specific respondents in the notice of application.

Thanks for reading!
David M. Smith & Yasmin M. Vinograd

28 Nov

Do you have gems or junk in your house?

Ian Hull Uncategorized 0 Comments

How much are your non-financial assets worth? If you’re planning your estate, it’s an important consideration, especially if you plan to make specific bequests.

But here’s the issue: the value of non-financial assets, such as furniture, art, and other collectibles, can change dramatically in just a few short years. Antique furniture is a great example.

An example from the New York Times – in 2002, a New York City auction house sold a set of eight George III-style carved mahogany chairs for $8,000. In 2016, a similar set sold for $350. It wasn’t a fluke. Prices for 18th and 19th century furniture are down about 80% from their highs just a couple of decades ago. This article provides a great analysis of the changing times. 

That’s bad news if your house is full of antique furniture, but if you’re a contrarian looking for a buying opportunity? Times couldn’t be better.

What items hold their value?

Yes, collect what you love – that’s rule number one, but if you’re looking for an edge in terms of value retention, this article from online journalism site Next Avenue provides some tips.

Here are a few from the article to consider:

  • Quality, one-of-a-kind or limited quantity pieces handmade by a skilled artist or craftsperson. Even with high quality original art, no one can predict future values, so diversify by artist and buy what you love.
  • High-quality items made by notable firms. Designer items – think Hermès or Tiffany – have stood the test of time and are more likely to hold their value or increase their value if kept in good condition.
  • Collectibles that remind us of our youth.This includes comics, toys, books – just about anything. But timing your sale is everything, with the best prices usually 25 to 35 years after they became popular.
  • Items that are made from material of value: The value of precious metals like gold and silver change over time, but they always have a liquid market value. So, items made from precious metals will always hold value based on the material it’s made from alone.

And if you’re looking for a bit of fun, this article highlights 10 types of collectibles that may surprise you in terms of value. The list includes items from Disney and McDonald’s, hot wheels cars, boardgames and maps.

Thanks for reading!
Ian Hull

27 Nov

Hull on Estates #560 – Wall v. Shaw – Limitation Periods and Passing of Accounts

76admin Estate & Trust, Estate Planning, Hull on Estates, Litigation, Podcasts Tags: , , , , , 0 Comments

Today on Hull on Estates, Stuart Clark and Doreen So discuss the recent decision of Wall v. Shaw, 2018 ONCA 929, and its potential impact upon the availability of limitations defences in an Application to Pass Accounts.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Stuart Clark.

Click here for more information on Doreen So.

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