Category: Estate Litigation
Earlier this year, Ian M. Hull, Suzana Popovic-Montag, and I were pleased to co-author the Canada Chapter of the 2019 Chambers & Partners Global Private Wealth Guide for the third consecutive year.
The guide provides an overview of the law as it relates to a number of issues relevant to financial planning and estate planning in jurisdictions throughout the world. Specifically, the following topics are covered (among others):
- tax regimes;
- succession laws;
- laws relating to the transfer of digital assets and other assets;
- family business planning;
- wealth disputes;
- elder law; and
- obligations of fiduciaries.
With chapters summarizing the state of the law and related trends in 34 countries, including the United Kingdom, United States, Switzerland, France, and Israel, the guide can be a great resource to be used as a starting point when assisting clients who have assets (or are beneficiaries of assets) in other jurisdictions.
A complete electronic copy of the 2019 Chambers & Partners Global Private Wealth Guide is available here: https://practiceguides.chambers.com/practice-guides/private-wealth-2019. The online version includes a “compare locations” feature, which allows readers to quickly review differences between two or more jurisdictions.
Thank you for reading.
Last month, in the case of McKitty v Hayani, 2019 ONCA 805, the Ontario Court of Appeal had to consider a challenge to the medical and common law definition of death on the grounds of freedom of religion. The Court also considered whether someone’s religious beliefs should be a factor when deciding whether they are legally deceased. In the end, the Court unanimously declined to rule on whether religious beliefs should be taken into account, but there were some key takeaways from the decision, and a framework was made that invites future challenges. This issue could have an important application in estates law, as it examines the standard for when someone is considered legally deceased.
Taquisha McKitty was declared dead in September 2017 following a drug overdose. The medical staff attending to her declared her dead due to “neurological criteria”; however her relatives were granted an injunction to keep her on life support, arguing their Christian faith only considers someone deceased upon cessation of cardiovascular, instead of neurological, activity. They made the argument that according to the freedom of religion in section 2 of the Canadian Charter of Rights and Freedoms, they have the right to have their religious views taken into account when it comes to determination of death and removal of life support. The point is now somewhat moot because McKitty has since died from both neurological and cardiovascular criteria; however important groundwork was laid for a potential future challenge.
The Court of Appeal unanimously concluded that it did not have enough information to rule on the matter. To be able to appropriately rule on the Charter issues, the Court held it would need more evidence on the duties and legal obligations of doctors, McKitty’s religious beliefs, and the religious beliefs of her community. The Court did accept the common law definition of death as being cessation of neurological activity, but left this definition open to future challenges based on freedom of religion. While not providing a definitive answer, the Court did craft a legal framework for how this issue should be addressed in future. This framework includes acknowledging that death is not just a medical determination but also an “evaluative” legal concept. The Court also ruled that the Charter still applied to McKitty as a legal “person” even though she was clinically dead, and a lack of neurological activity does not remove her right to challenge the criteria used to declare her death. With this framework in place, it remains very possible that we might see a further challenge within this framework in the near future.
In this case, the current definition of death as cessation of neurological activity was confirmed, but it remains very possible that this could be challenged on freedom of religion grounds. This has very interesting implications for estates law. For example, in families of mixed faiths, some members of the family might consider a relative to be deceased, while other members might consider them to be alive. This would cause a tricky situation when it comes to dividing up the estate. Watch this space!
Thanks for reading,
Ian Hull and Sean Hess
Competing applications about the ownership of a home were before the Court in Marley v. Salga, 2019 ONSC 3527. On the death, the home was jointly owned between the deceased (Salga) and his wife (Marley). Notwithstanding the registered, legal ownership of the property, Salga’s Will gave Marley a lifetime right to occupy and use Salga’s one-half interest in the property and thereafter directed that the house be sold for the benefit of the residuary beneficiaries.
This led the residuary beneficiaries to commence an Application for a declaration that the Estate is entitled to an undivided one-half interest in the home and for an order requiring the Estate Trustee (Klassen) to sell the home right away (the “Salga Application“). Thereafter, Marley commenced her own Application for a declaration that she was the sole legal and beneficial owner of the property, or, alternatively, that her interest in the property is greater than 50% (the “Marley Application“).
Ultimately, Justice Reid found that ownership of the property was severed by the deceased in the course of his dealings but denied the Salga Applicants’ request that the property be sold before the termination of Marley’s interest under the Will. The Marley Application was also denied. Our blog on this decision can be found here.
The parties were unable to agree to the issue of costs. Justice Reid, 2019 ONSC 6050, followed the traditional approach to costs in estate matters and the costs of both applications, on a partial indemnity scale, were ordered from the Estate. In reaching this conclusion, Justice Reid considered and found the following:
- The Marley Application was in essence a response to the Salga Application and the costs of both proceedings were treated as one;
- Both parties were found to be partially successful: the Salga Applicants were successful in obtaining a declaration that 50% of the home belongs to the Estate and the Marley Applicant was successful in preventing an immediate sale of the home;
- Consideration was given to the fact that an award of costs from the Estate meant that the Salga Applicants (as the residuary beneficiaries) would be effectively bearing their own costs as well as Marley’s costs. However, that was not enough to outweigh the deceased’s responsibility to act unambiguously by severing his interest on title during his lifetime.
- Costs against the Estate in this case “places the responsibility for the litigation squarely on [the deceased] where it belongs“.
This costs decision is also an informative read for the costs of an estate trustee as a respondent in both proceedings and how costs should be paid from an estate where there is no liquidity.
Thanks for reading!
A recent master motions in the Estate of Robert William Drury Sr., 2019 ONSC 6071, considered the issue of an extension of time to serve a statement of claim.
Robert Sr. owned a property where the defendant Shirley lived with her spouse Hugh Drury. When Hugh Drury died, Robert Sr. sought vacant possession of his home. Robert Sr. died on September 8, 2016. Days later there was a fire on the property on September 24th and Shirley was criminally charged with arson.
Almost two years later, the estate trustee for Robert Sr.’s Estate issued a statement of claim for malicious and intentional arson damage, or gross negligence causing loss of enjoyment of life, or damages for loss of property. That claim was issued on September 19, 2018 while Shirley’s criminal proceedings were underway. Pursuant to Rule 14.08(1), Robert Jr. had 6 months to serve the civil claim on Shirley which expired on March 19, 2019. Shirley was not served until June 14, 2019 when Robert Jr. brought a motion for an extension of time.
In applying the test that was set out by the Court of Appeal in Chiarelli v Wiens, 2000 CanLii 3904, the extension of time was ultimately allowed by Master Sugunasiri.
The delay was only three months and the prejudice to Shirley was minor. Robert Jr. explained that he acted on the advice of counsel when the decision was made to serve Shirley after the conclusion of the criminal proceeding. This decision was not personal or contemptuous. As for Shirley, while memories fade over time, the criminal proceeding was found to be an ameliorating factor that preserved her evidence for the civil proceeding.
In reaching this decision, Master Sugunasiri also considered an instance where an extension of time was denied because the delay was caused by the Plaintiff’s decision not to serve the claim until he had enough money to fund the proceeding. In that case, the Court found that the Plaintiff ought to bear the consequences of the risk that he took under the Rules.
Thanks for reading!
Lewis v. Lewis is a recent Ontario Court of Appeal decision in which the Appellants challenged the dismissal of their Application from the Superior Court of Justice. At issue was whether the Appellants’ mother, Marie Lewis, had the requisite capacity to execute new powers of attorney for property and personal care. The Appellants sought to invalidate the new powers of attorney and bring back into effect prior powers of attorney which Mrs. Lewis executed in 1995.
The Appellants raised several issues on appeal. In essence, they took issue with the application judge’s assessment of the evidence and exercise of his case management discretion.
In dismissing the appeal, the Ontario Court of Appeal emphasized the following principles regarding capacity:
- Since capacity is presumed, those objecting to the document(s) have the onus to rebut that presumption, with clear evidence, on a balance of probabilities.
- Similarly, those raising the issue of suspicious circumstances and undue influence bear the onus of establishing it, on a balance of probabilities.
- The fact that someone had various chronic medical conditions throughout their life does not automatically mean that they lacked capacity. It is open to the application judge to consider the evidence. In doing so, the application judge may reject any evidence that they find to be unreliable.
- Without evidence to the contrary, it is reasonable for an application judge to take “solace” from the fact that the individual executed their new powers of attorney before their solicitor of many years.
- It is reasonable for an application judge to refer to the statements of section 3 counsel, appointed by the Office of the Public Guardian and Trustee, concerning an individual’s expressed wishes.
Good things to keep in mind when dealing with capacity issues.
Thanks for reading … Have a great day!
Suzana Popovic-Montag and Celine Dookie
In Kirst Estate (Re), the Court of Queen’s Bench of Alberta had before it an interpretation case involving a holograph will of William Kirst (“K”). The will was a short handwritten document that divided the estate equally amongst K’s surviving children, with some qualifying language allowing Whitehorn (“W”), one of K’s children, to live in the family home. W had almost always lived in the home, which was the primary estate asset.
The phrase the Court was tasked with interpreting reads: “Whitehorn can live in the house for awhile, to be determined by Him and his brothers + sisters.”
The sole issue was the interpretation of the words “for awhile”.
The testimony of four of K’s children was considered (although ultimately of little assistance), with two of them believing K’s intention was that W remain in the house indefinitely, and the other two viewing their father’s intention as simply to permit W to stay in the home until he could get his affairs in order. As K discussed his estate with his children separately, each of them had his/her own understanding of K’s intentions. Notably, although K made the will in 1995, none of the kids had previously known about it or discussed its terms with K.
The Court cited and reviewed the following four general principles of interpretation recently set out by the Alberta Court of Appeal to assist in ascertaining K’s intention:
“First, a will must be interpreted to give effect to the intention of the testator. No other principle is more important than this one.
Second, a court must read the entire will, just the same way an adjudicator interpreting a contract or a statute must read the whole contract or statute.
Third, a court must assume that the testator intended the words in the will to have their ordinary meaning in the absence of a compelling reason not to do so.
Fourth, a court may canvas extrinsic evidence to ascertain the testator’s intention.”
The Court concluded that it could determine K’s intention by giving the words in his will their natural and ordinary meaning, and, in so doing, it was satisfied that the intention was to allow W to stay in the home subject to an enforceable condition that he and his siblings agree on how long he can continue to live there. The Court further found that as the siblings could not agree, the condition had not been fulfilled, such that W’s entitlement has ended.
The circumstances in this case are unfortunate, as the siblings had apparently been involved in protracted litigation since K’s death in 2010, including a dispute over the validity of the will. Although holograph wills can be helpful estate planning tools, I wonder if these same contentious circumstances would have developed if K had made his will with effective legal advice.
Thanks for reading,
In Threlfall v. Carleton University, the Supreme Court of Canada held that a deceased’s estate must repay pension payments received post-death. Although paying back a windfall seems like a common-sense outcome that would not require the analysis of the highest court in Canada, the 50-page 6/3 split-decision tells us it is not as simple as one would think.
In this case, Mr. George Roseme (“R”), a retired Carleton University professor who was suffering from Alzheimer’s disease, disappeared from his home in Quebec in 2007 after going for a walk. R’s remains were not found until almost six years later. During that passage of time, pension payments he had been receiving from the University at the time of his disappearance continued to be paid. Notably, the University did attempt to cease payments within a year or two after R disappeared, but R’s surviving spouse objected, since under the Quebec Civil Code one is presumed to be alive for seven years unless proof of death is obtained. The University reluctantly continued the payments.
After discovery of R’s death in 2013, and a determination that he died just one day after his disappearance in 2007, the University sought to recover the overpayment from R’s estate and surviving spouse. It was successful throughout. The Supreme Court of Canada decision, although lengthy and multifaceted, seemed to largely turn on the following findings:
- On the plain language of the pension plan, benefits were to end upon R’s actual death, not the date that it was discovered or officially recognized;
- The rebuttal of the presumption of life must be assessed retroactively, meaning that payments should only continue during lifetime. Given R’s date of death, this extinguished the entitlement to the pension payments made while R was an absentee. A prospective approach to the rebuttal of the presumption of life would generate a windfall not intended by the absence regime; and
- The payments were treated, with a retrospective view, as having been made in error, which obliges the recipient to make restitution.
The impact of the decision is weighty, with R’s surviving spouse being required to reimburse the University almost $500,000 in pension payments.
Considering this from the Ontario perspective, I look to the Declarations of Death Act. In this statute, once the seven-year absentee period expires, an application seeking a declaration of death can be brought. I note, though, that the Act contains provisions permitting the court to amend or revoke the order, as well as to make orders regarding the preservation or return of property. So if you find yourself in the unique circumstance of receiving assets post-absenteeism, perhaps setting them aside would be a good idea, because when things seem too good to be true, they usually are.
Thanks for reading,
P.S. A good summary article can be found here. Our blogs below also touch on some intriguing declaration of death cases:
Some basic questions to get you thinking about starting a will with a surviving spouse scenario:
- Everything to spouse Absolute (no strings attached)?
- Some or all assets held in a Spousal Trust (some conditions will apply) ?
- An amount immediately to children with the balance to the spouse Absolute?
For lawyers – the Hull e-State Planner is a tool for making wills and has been called “the future of will planning”. To book your free demo today email to firstname.lastname@example.org
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If this blog is interesting, please consider these other related resources:
For those who are about to enter, or are in the very midst of, a long and arduous legal dispute, beware the ineffaceable nature of social media activity. The sands of time might erode Rome and the Pyramids, but they will bounce off the public record of your impassioned posts and hyperbolic tweets. Keeping in mind that such evidence lasts forever, and is also readily accessible, devoid of context, and cheap to procure, litigants may be wise to keep their online communication to a minimum – lest they spoon-feed their opponents material that could later prove hamstringing and self-defeating.
In recent years there have been stories about criminals sharing their crimes with the world via Facebook Live. In family law, we have seen a support claimant attain more support by citing a payor’s lavish life on Instagram, and a father’s custody compromised by his errant Youtube video. In estates law, where there is often mystery and ambiguity involved with testamentary intention, and much of the evidence is “he-said-she-said” – in other words, uncorroborated parole evidence tainted by self-interest – parties scramble for whatever concrete material they can find, such as a screenshot of a social media tirade.
In one recent Ontario decision (Lyons v. Todd,  O.N.S.C. 2269), a man not only dragged out litigation against his sister, who was the estate trustee, but engaged in a campaign of harassment, menaces, and defamation – all of which the court was able to scrutinize with ease:
“The transcription of voice messages, copies of emails and other social media posts, establish that Bob threatened to make what he described as Victoria’s ‘perverted’ sex life public. He threatened to expose her to the clients of the Park and bankrupt her with the costs of litigation if she did not settle. With some of the Facebook posts, he posted the location of the Park.”
The court did not accept the man’s argument that the posts were unrelated to the proceedings, finding instead that the “gratuitous humiliation and embarrassment” the estate trustee suffered was a further reason for which she should receive the $60,000 in costs that she requested.
In Nova Scotia (Public Safety) v. Lee,  N.S.S.C. 71, a man came under the fire of CyberSCAN and the Director of Public Safety, which are government bodies mandated with the policing, punishment and prevention of cyberbullying. The man was purportedly vexed with his sister, who was the sole beneficiary of the mother’s will. The rambling posts were addressed to “anybody out there in Facebook land” and the “cowards in my family”, but in fact the speech was tantamount to a naked admission before a stern court.
The frustrated litigant or potential litigant who needs to vent would be safer, and likely more satisfied, by confiding his or her troubles to a friend in a private setting rather than airing from a veritable rooftop grievances which will echo for the end of time.
Thank you for reading,
Ian Hull and Devin McMurtry
The book “The Beautiful Ones” was released last week in Canada. Part memoir (until his teenage years) and part biography, the book provides some insights into the life of one of the most influential musicians of our time. “Prince” Rogers Nelson, a multi-talented singer-songwriter died on April 21, 2016 at the age of 57 from an accidental fentanyl overdose at his estate outside Minneapolis. He died without a will.
The Minnesota Star Tribune reported about two weeks later, on May 8, 2016 that: “Suddenly, wills and estates are a topic everyone wants to learn about.” And “They are talking about it at the family barbecue, the Rotary Club, and the Anoka Area Chamber of Commerce”.
According to several surveys, approximately 65% of Canadians do not have an “up to date” will. “Make a Will Month” encourages Canadians to make or update their wills. Doing so can save a lot of expense, delay, and conflict in the future. A proper will and estate plan means reducing or eliminating problems that arise when a person dies intestate (without a valid will). It has been reported that three years after his death Prince’s estate is still not distributed. Lawyers for his sister and half-siblings are squabbling. Claims by some alleged descendants have been dismissed. According to some estimates the estate is worth more than $300 million USD.
All kinds of people, including famous musicians, die without having made a valid will. Some who did not get around to making a will include: Jimi Hendrix, Bob Marley, Kurt Cobain, Salvatore “Sonny” Bono, Duke Ellington, Barry White, George Gershwin, and Amy Winehouse.
Why wait? It is Make a Will Month! Please consider making a will. Thanks!