Category: Continuing Legal Education
Written reasons from a mid-trial motion was recently released in Barker v. Barker, 2019 ONSC 2906. The only issue in this motion was whether a particular video of a deceased plaintiff was admissible at trial. The larger claim at issue surrounds the Oak Ridge division of the Penetanguishene mental health centre and its treatment of maximum security mental health patients between the 60’s and the 80’s. One of the plaintiffs, James Motherall, died after the action was brought and his claims were continued by the estate trustees of Mr. Motherall’s estate under Rule 9 of the Rules of Civil Procedure.
Prior to Mr. Motherall’s death, Mr. Motherall was examined for discovery in the ordinary course but he was not examined under Rule 36 for the purpose of having his video testimony tendered as evidence at trial. Since a de bene esse examination did not occur, the trial judge was literally unable to assess Mr. Motherall’s credibility with his own eyes. In an effort to address this issue, counsel for the plaintiffs sought to introduce video footage of Mr. Motherall from a CBC documentary that featured Mr. Motherall and his experiences at Oak Ridge. The footage was taken a month before Mr. Motherall’s death and counsel for the Plaintiffs proposed to call the filmmaker as a witness to introduce the unedited footage of the filmmaker’s interview with Mr. Motherall.
Without criticizing the filmmaker’s work, the trial judge found that the video interview was not conducted under reliable circumstances for the purposes of a trial because Mr. Motherall was not sworn, he was not cross-examined, and he was simply asked to tell his story without more. The video was presumptively hearsay and it was up to the plaintiffs to meet, on a balance of probabilities, the criteria of necessity and reliability under the principled approach for the admissibility of hearsay evidence (R v. Khelawon, 2006 SCC 57, R. v. Chretien, 2014 ONCA 403).
In addition to the issues of reliability, the trial judge also found that the video was not necessary since there was a transcript of evidence from Mr. Motherall’s examination for discovery and an affidavit from Mr. Motherall in the course of a prior summary judgment motion.
Both the filmmaker’s proposed testimony and the video footage of Mr. Motherall was found to be inadmissible.
Even though Barker v. Barker is at its core a civil matter, the reasoning from this motion is instructive for estate litigators who are also bound by the additional hurdle for material corroboration pursuant to section 13 of the Evidence Act.
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The Ontario Court of Appeal recently considered the issue of whether the litigation files of the Office of the Children’s Lawyer are subject to a freedom of information access request in Ontario (Children’s Lawyer) v. Ontario (Information and Privacy Commissioner), 2018 ONCA 599. This appeal arose from a father’s request for the production of the Children’s Lawyers’ records. The Children’s Lawyer acted for the father’s children in the course of a custody and access dispute. Accordingly, a portion of the Children’s Lawyer’s records were privileged.
Justice Bennotto, in writing for a unanimous panel, found that the issue turned on whether the records are “in the custody or under the control” of the Ministry of the Attorney General for Ontario (“MAG“) for the purposes of the Freedom of Information and Protection of Privacy Act, R.S.O. 1990, c. F. 31.
The answer was no.
The Children’s Lawyer’s records are not in the custody or under the control of MAG because she operates separately and distinctly from MAG and,
“ [she] is an independent statutory office holder appointed by Cabinet through the Lieutenant Governor. She derives her independent powers, duties and responsibilities through statute, common law and orders of the court.
 To allow a disgruntled parent to obtain confidential records belonging to the child would undermine the Children’s Lawyer’s promise of confidentiality, inhibit the information she could obtain and sabotage her in the exercise of her duties. This would, in turn, impact proceedings before the court by depriving it of the child’s voice and cause damage to the child who would no longer be meaningfully represented. Finally, disclosure to a parent could cause further trauma and stress to the child, who may have divided loyalties, exposing the child to retribution and making the child the problem in the litigation.”
For those practising in the estates and trusts context, it is important to note that the role of the Children’s Lawyer is different in family law.
In civil matters that implicate a minor’s financial interest in property, the Children’s Lawyer acts as the minor’s litigation guardian and she is represented by the lawyers of her choice. In custody and access disputes, the Children’s Lawyer acts, at the request of the court, as the minor’s lawyer.
Bonus answer: the current Children’s Lawyer is Marian Jacko.
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In Michael v. Thomas, 2018 ONSC 3125, Justice Ramsay awarded a dependant support claimant the entirety of the Estate net of all debts and liabilities. The dependant support claimant in this case was a common law spouse of approximately 20 years. Ms. Michael was in her late-fifties/early sixties when Mr. Chambers died suddenly from cancer without a will.
Mr. Chambers and Ms. Michael were not married at the time of Mr. Chambers’ death. Accordingly, Ms. Michael was not a beneficiary of Mr. Chambers’ Estate pursuant to the rules of intestacy. Mr. Chambers did not have any children either so the beneficiaries of his Estate were his surviving siblings and two nephews who were the sons of his predeceased sister.
Justice Ramsay found that Mr. Chambers and Ms. Michael lived modestly during Mr. Chambers’ life. They were joint owners of their home, which Ms. Michael received by right of survivorship. The home was subject to a mortgage of about half its market value in the amount of $150,000.00. Ms. Michael was also the beneficiary of a modest $80,000.00 life insurance policy and her income became supplemented by an additional $3,325 per month through the deceased’s CPP and pension benefits. Ms. Michael worked part-time and has two adult children of her own. Interestingly, Justice Ramsay commented that Ms. Michael should not have to seek support from her adult children under the Family Law Act (even though she could, theoretically) before seeking support from Mr. Chambers’ Estate.
In considering the Respondent’s case, Justice Ramsay found that Mr. Chambers did not have any other dependants and that he was estranged from the only party who responded to Ms. Michael’s claims in Court. Mr. Chambers’ sister argued that Ms. Michael already received $203,965 out of the assets of the Estate, which, including section 72 assets, were worth a total $285,000. She further argued that Ms. Michael would be able to maintain the same standard of living that she used to enjoy if Ms. Michael supplements the pension income by working full-time at minimum wage. In his analysis, Justice Ramsay squarely stated as follows:
 I do not agree. It is not reasonable to expect the Applicant to take an entry level job at the age of 62 when she is already past the point of being able to sustain full time physical labour, even light physical labour. Even if it were possible, it would only raise her earnings to the low $40,000 range, which would still not be enough to continue the modest standard to which she was accustomed. I do not think that the intestate made adequate provision for the proper support of the Applicant.
 The estate is not big enough to make periodic payments. In fact it is not big enough to provide the proper support the Applicant needs. I think that a judicious spouse would have left her the entire estate, such as it is. The Applicant is the only dependant and the only person with any moral claim on the estate. Accordingly I order the trustee to convey to the Applicant the entire residue of the estate after payment of taxes, debts of the estate and his own fees and I declare that the amounts already received or already in the Applicant’s possession are hers to keep.
Ms. Michael was also awarded partial indemnity costs from Mr. Chambers’ sister. Mr. Chambers’ sister was found to have no need for “more found money” from Mr. Chambers’ Estate because of the inheritance that she received from their mother, and that costs from the Estate would have the same effect as awarding costs against Ms. Michael.
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It is not uncommon for Canadian estate trustees to make distributions to beneficiaries living in the U.S. In doing so, the U.S. Customs and Border Patrol (the “US CBP“) could be involved in a myriad of ways.
A recent story from CBC News is an example of what can go wrong if estate trustees are not aware of their US reporting obligations. An estate trustee in Ottawa mailed a bank draft worth $500,000.00 to a beneficiary in the U.S. U.S. border officials seized the bank draft because it was mailed without filing the appropriate customs declaration form. Almost a year later, the bank draft is still held at the border while the unfortunate beneficiary is sick and in need of money for his medical bills.
According to the U.S. Customs and Border Protection website, any time money exceeding $10,000.00 is sent to the U.S. from a foreign country, the sender is required to file a “Report of International Transportation of Currency or Monetary Instructions” (FinCEN Form 105) with the CBP before the money is sent. This applies regardless of whether the sender is acting personally or on behalf of another legal entity. This applies to money in the form of coins, currency notes, travellers checks, money orders, etc. This also applies to money sent by mail, courier, personal delivery, etc.
However, this particular US reporting requirement does not apply where the method of transfer does not involve physically transporting money over the border, such as wire transfers through banking institutions. If a wire transfer is used, the bank is responsible for satisfying the necessary reporting requirements.
In course of sending money worth $10,000.00 or more from Canada, there are corresponding Canadian customs requirements as well. If money is sent by mail, be sure to visit a Canada Post location and inquire about the necessary requirements. The applicable reporting form must be filled out and enclosed within the envelope or package and a copy of the same form must be submitted to the Canada Border Services Agency. If money is sent by courier, the courier is responsible for filing another reporting form while the individual sender is still responsible for providing the courier with the general reporting form.
Like the US CBP, Canada Border Services Agency has the authority to seize the funds and charge penalties if the Canadian reporting obligations are not satisfied.
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Previously on our blog and podcast, we discussed Tarantino v. Galvano, 2017 ONSC 3535 (S.C.J.) in the context of the counterclaim for quantum meruit and the costs decision of the Hon. Justice Kristjanson.
Tarantino v. Galvano arose from a lawsuit that was commenced by two out of three Estate Trustees against the third Estate Trustee, Nellie, with respect to her actions as attorney for property for the Deceased, Rosa (i.e. Nellie’s actions while the Deceased was still alive but incapable of managing her own property).
Rosa had two daughters, Nellie and Giuseppina. Giuseppina died before Rosa. Guiseppina’s daughters were the other two Estate Trustees and they are beneficiaries of the Rosa’s Estate along with Nellie. For the better part of her life, Nellie lived with Rosa. She took care of her mother after her father’s death. Nellie and her son were also Rosa’s caregivers as Rosa’s health declined until Rosa’s death in 2012.
Rosa and Nellie owned the home that they lived in together. Rosa held an 80.3% interest and Nellie held an 19.62% interest. Pursuant to Rosa’s 2005 Will, Nellie had a right of first refusal to purchase the home from Rosa’s Estate. In 2008, on the advice of counsel while Rosa was incapable, Nellie entered into an agreement between herself and Rosa. The agreement provided for a transfer of Rosa’s interest in the home and 75% of Rosa’s pension income to Nellie in exchange for Nellie’s caregiving services. The agreement was in writing and it was signed by Nellie. Nellie signed for herself and for Rosa, in her capacity as Rosa’s attorney for property.
Even though the Court found that Nellie was a good daughter who held up her end of the bargain by caring for Rosa, the agreement was set aside because it was a self-dealing transaction that did not meet the requirements of the Substitute Decisions Act, 1992:
“ Under the Substitute Decisions Act, Nellie could only enter into the agreement to transfer the house and pension income if it was “reasonably necessary” to provide for Rosa’s care, which I find it was not. As a fiduciary, an attorney for property is “obliged to act only for the benefit of [the donor], putting her own interests aside”: Richardson Estate v. Mew, 2009 ONCA 403 (CanLII), 96 O.R. (3d) 65, at para. 49. An attorney is prohibited from using the power for their own benefit unless “it is done with the full knowledge and consent of the donor”: Richardson Estate, at paras. 49-50. Rosa lacked capacity at the time of the Agreement, and the transfer of the house and pension income therefore were not done with Rosa’s full knowledge and consent.”
The “reasonably necessary” test was assessed, as of the time of the transfer, rather than from hindsight and it was determined that the decision to transfer 80.3% of a home and 80% of Rosa’s pension income at the outset of care was “an imprudent agreement which benefitted Nellie beyond that ‘reasonably necessary’ to provide adequately for Rosa’s care” (see paragraphs 34-49 for the Court’s analysis of this issue).
As a set off, Nellie’s quantum meruit claim was successful and you can click here for Ian Hull and Noah Weisberg’s podcast on this particular issue. While there was blended success to all parties involved, none of the three Estate Trustees were entitled to indemnification. Our discussion of the denial of costs can be found here and the Endorsement can be found here.
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A motion to transfer an estate matter that was commenced in the Brantford Superior Court of Justice to the Toronto Estates List was recently considered in the Estate of Byung Sun Im, 2018 ONSC 2223.
The procedure to be followed in a Rule 13.1.02 motion to transfer is set out in the Consolidated Provincial Practice Direction (at Part III, B) when the request to transfer pertains to a proceeding in the Central East, Central West, Central South and Toronto Regions. Motions to transfer should be brought, in writing, to the court location which the moving party is seeking to transfer the matter. Therefore, if you are seeking to transfer a matter to the Toronto Estates List, then the written motion should be filed with the Toronto Estates List.
Given that the plaintiff (or applicant) has a prima facie right to select the venue of a proceeding (subject to any applicable statutory requirements), the onus is on the party that seeks a transfer to satisfy the test set out in Rule 13.1.02(2).
In this particular case, the action was predominately based on an estate trustee’s dealings with estate assets. The deceased, the estate trustee, the majority of the beneficiaries, and the main estate assets were located in Toronto. The one person in Brantford was the plaintiff.
However, various interim orders and smaller issues were dealt with in Brantford. Prior proceedings related to this Estate were also decided and disposed of in Brantford. Justice Firestone agreed that the location of the assets had little bearing on how the assets ought to be divided. He also noted that there was an absence of evidence related to the convenience of the witnesses in addition to the convenience and location of the parties themselves. The convenience of counsel is not a basis to order the transfer of a proceeding.
Ultimately, the moving party failed to satisfy the test set out in Rule 13.1.02(2):
“… the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,
(a) that it is likely that a fair hearing cannot be held in the county where the proceeding was commenced; or
(b) that a transfer is desirable in the interest of justice, having regard to,
(i) where a substantial part of the events or omissions that gave rise to the claim occurred,
(ii) where a substantial part of the damages were sustained,
(iii) where the subject-matter of the proceeding is or was located,
(iv) any local community’s interest in the subject-matter of the proceeding,
(v) the convenience of the parties, the witnesses and the court,
(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,
(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,
(viii) whether judges and court facilities are available at the other county, and
(ix) any other relevant matter. O. Reg. 14/04, s. 10.”
Thanks for reading! For those of you who are also interested in the Practice Directions for the Toronto Estates List, you may access them here.
It is with great pleasure to announce that myself, Ian Hull, and Lionel Tupman will be co-chairing a professional development program on Essential Evidence for Estate Litigators through the OBA.
The program has been created specifically for estate litigators and will run over three evenings on April 5, May 17, and June 6, 2018.
Details of the program can be found by clicking here.
This program is a must for anyone who litigates in the area of estates, wills, and trusts!
The Supreme Court of Canada released a decision last Thursday that is a must read for estates and trusts practitioners. Interestingly enough, Valard Construction Ltd. v. Bird Construction Co., 2018 SCC 8, arose from a commercial matter.
Bird was a general contractor for a construction project. When Bird subcontracted with Langford, Langford was required to obtain a labour and material payment bond which named Bird as trustee of the bond. If Langford was delinquent in paying its contractors, the bond would permit the contractor to sue and recover from Langford’s surety on the condition that notice of the claim must be made within 120 days of the last date in which work was provided to Langford. Langford became insolvent and some of Valard’s invoices went unpaid. Unfortunately, Valard was not notified of the existence of the bond and did not inquire about whether there was a bond in place until after the 120 day notice period. The surety denied Valard’s claim and Valard sued Bird for breach of trust. This matter was dismissed at first instance by the Alberta Queen’s Bench, dismissed again by the Alberta Court of Appeal, and finally reversed by the Supreme Court of Canada (with a dissent from Justice Karakatsanis).
Justice Brown for the majority (per McLachlin C.J., as she then was, Abella, Moldaver and Rowe J.J.) found that Bird had a fiduciary duty to disclose the terms of the trust, i.e. the bond, to Valard notwithstanding the fact that the express terms of the bond did not stipulate this requirement. Justice Brown was clear that “While the ‘main source’ of a trustee’s duties is the trust instrument, the ‘general law’ which sets out a trustee’s duties, rights and obligations continues to govern where the trust instrument is silent” (para.15). Justice Brown then went on to say that a beneficiary’s right to enforce the terms of the trust is precisely what keeps the trustee from holding the “beneficial as well as legal ownership of the trust property” (para. 18). Otherwise, no one would have an interest in giving effect to the trust.
With this logic in mind, Justice Brown developed the following framework at paragraph 19,
“In general, wherever “it could be said to be to the unreasonable disadvantage of the beneficiary not to be informed” of the trust’s existence, the trustee’s fiduciary duty includes an obligation to disclose the existence of the trust. Whether a particular disadvantage is unreasonable must be considered in light of the nature and terms of the trust and the social or business environment in which it operates, and in light of the beneficiary’s entitlement thereunder. For example, where the enforcement of the trust requires that the beneficiary receive notice of the trust’s existence, and the beneficiary would not otherwise have such knowledge, a duty to disclose will arise. On the other hand, “where the interest of the beneficiary is remote in the sense that vesting is most unlikely, or the opportunity for the power or discretion to be exercised is equally unlikely”, it would be rare to find that the beneficiary could be said to suffer unreasonable disadvantage if uninformed of the trust’s existence.”
Thanks for reading and more to follow later this week on Valard Construction Ltd. v. Bird Construction Co.
As a part two of blog from Monday, November 27, 2017, Justice Mew was also asked to consider the question of whether the owner of the retirement home was vicariously liable for the actions of Ms. Gibson-Heath. To recap, Hoyle (Estate) v. Gibson-Heath, 2017 ONSC 4481, is about a personal support worker who was criminally convicted of stealing $229,000.00 from Clifford Hoyle, an elderly resident of a retirement home. Ms. Gibson-Heath was an employee of the retirement home when she stole from Mr. Hoyle.
Justice Mew was asked to determine this issue in the context of a motion for summary judgment. The motion record contained affidavits from Robert Regular, the sole director, officer, and shareholder of the retirement home, and Margaret Hoyle, one of Mr. Hoyle’s daughters. Ms. Hoyle’s affidavit spoke to how her father was placed in the retirement home on a permanent basis after breaking his hip and his dementia had worsened. Ms. Hoyle also spoke to how she had no input with respect to the personnel who will be taking care of her father while he is a resident of the retirement home. On the other hand, the affidavit from Mr. Regular spoke to how he was not involved with selecting Ms. Gibson-Heath as Mr. Hoyle’s person service worker. Mr. Regular also spoke to how the retirement home does not purport to offer or provide assistance with the management of a resident’s property or assets.
Justice Mew considered the leading case on vicarious liability for intentional torts, Bazley v. Curry, 1999 CanLII 692 (SCC),  2 SCR 534, which was a case that dealt with the liability of a non-profit organization in the context of the sexual abuse that one of its employees had perpetrated against a resident of one of its facilities. The Supreme Court of Canada test was restated in paragraph 41 of Justice Mew’s reasons and in applying this test, he commented as follows,
“an important consideration when determining whether [the retirement home] should be vicariously liable for Ms. Gibson-Heath’s actions will be whether the additional care services she provided to Mr. Hoyle were an extension of, or associated with, her employment by [the owner of the retirement home] or whether what she was providing was, to use the language of the rental agreement, “extra nursing care” which would have been the responsibility of Mr. Hoyle or his family to obtain, organise and pay for. Such evidence would assist the court in determining the extent to which the employer created or enhanced the risk of the wrong complained of and, hence, the application of the subsidiary factors described by McLachlin J. in Bazley v. Curry.“
Ultimately, Justice Mew could not determine this question summarily based on the record before him and a case conference was ordered to discuss the appropriate next steps regarding the issues against the retirement home. Costs of the motion, as it relates to the summary judgment motion against the retirement home, were reserved to the trial judge after considering the Parties’ costs submissions.
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I was able to attend a recent CPD program by the Advocate’s Society titled “Supreme Court of Canada Advocacy.”
A powerful keynote address was presented by the Honourable Madam Justice Suzanne Côté of the Supreme Court of Canada. Justice Côté’s remarks included an inside look at what lies behind the Supreme Court of Canada’s “big mahogany doors,” as she so eloquently phrased it. The Honourable Marshall Rothstein, Q.C., then spoke about the unwritten rules to getting leave to appeal.
Debate was had over the need for a script. Most panelists supported coming prepared with a script but cautioned against being married to it. When it comes to answering questions, advocates should see this as an opportunity to get off their script and engage in a dialogue with the bench. As Justice Côté points out, an oral argument is not supposed to be a monolog.
After discussion on the power of oral advocacy, the discussion shifted to the importance of the written argument. Although the factum is a critical component of any appeal, parties are under no obligation to reach the maximum page length. It was suggested that some of the most successful arguments can be made in 25 pages or less.
In addition to the factum, the Condensed Book can be a vital tool for advocates appearing before the Supreme Court. Under the Supreme Court rules, the Condensed Book may contain a two page outline of the oral argument. Preparing the this two page outlines forces advocates to truly narrow down their key points.
The panelists also spoke about the important role interveners can have in a case. Within the confines of a 10 page factum, and 5 minutes of oral argument, an intervenor can illustrate why a matter is of public interest, and provide supplemental answers to questions posed to the parties by the Justices. Interveners can play a critical role, and should not be overlooked.
Finally, the panel highlighted the power of a moot. Practice moots are one of the most valuable tools an advocate can use to prepare their case. The Supreme Court Advocacy Institute offers moot sessions where participants have the opportunity to moot their case before a panel of experienced litigators and retired justices.
Thanks for reading,