Category: Estate Litigation
A testator appointed you as Estate Trustee of an Estate and a beneficiary filed a Notice of Objection to your appointment. What to do?
Typically, a Notice of Objection to an appointment of an Estate Trustee means that their authority is challenged such that before the administration of the Estate can be addressed, the Notice of Objection must be resolved, first and foremost.
Whereas in the case of a Notice of Objection, the party having filed it, is likely to commence a court proceeding to substantiate his or her claims, that is not always the case. As such, there are a couple of things that an Estate Trustee can do to force the Objector to move forward, in order to ultimately address the resolution of the objection.
- File a Notice to Objector
In accordance with Rule 75.03(4), an Estate Trustee can serve a Notice to Objector and file it with proof of service with the Court.
If the Objector does not serve and file a Notice of Appearance within 20 days of being served with a Notice to Objector, the Estate Trustee’s Application for a Certificate of Appointment is to proceed as if the Notice of Objection had not been filed.
If a Notice of Appearance is served on the Estate Trustee, they have 30 days to bring a motion for directions before the Court and if they do not do so, the Objector may seek directions, as well.
Essentially, the effect of a Notice to Objector is forcing the Objector to commence a claim or else abandon his or her objections.
- Commence an Application or Motion to propound the testator’s Will
Another option that exists for an Estate Trustee is simply skipping the steps that would follow the service of a Notice to Objector and seeking the directions of the Court, in accordance with Rules 14.05 and 75.06 of the Rules of Civil Procedure.
In this case, the Estate Trustee becomes the party commencing a court proceeding such that the costs associated with such a step ought to be considered, before proceeding. It is important to note, however, that proceeding with the first option will not necessarily save on legal costs to be incurred, if the Objector ultimately proceeds with a claim.
The option that is selected by an Estate Trustee will depend on the circumstances of each individual case such that it is important to consult with a lawyer as to which option is best.
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Motions for security for costs are means of ensuring that there is a sum in place to pay the defendant’s costs, should the defendant be entitled to costs. It is not a motion that is often brought, but it is typically considered when the plaintiff is not a resident of Ontario and there is concern that his or her case may not have merit.
Rules 56 and 61.06 of the Rules of Civil Procedure govern motions for security for costs. The test for obtaining security for costs is two-fold:
- The defendant must show that the plaintiff’s action or application fits into one of the categories specified in subrule 56.01(1) which include the following:
(a) the plaintiff or applicant is ordinarily resident outside Ontario;
(b) the plaintiff or applicant has another proceeding for the same relief pending in Ontario or elsewhere;
(c) the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remain unpaid in whole or in part;
(d) the plaintiff or applicant is a corporation or a nominal plaintiff or applicant, and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent;
(e) there is good reason to believe that the action or application is frivolous and vexatious and that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent; or
(f) a statute entitles the defendant or respondent to security for costs.
- If the plaintiff’s action or application does fit into one of the above-noted categories, the plaintiff has the option of attempting to prove that it would be unjust to order security, because they are impecunious, and the claim has merit.
An interesting consideration in the context of estate litigation that needs to be addressed is the fact that the party commencing a proceeding is not always the “plaintiff” or “applicant”, as defined by Rule 56. For example, a party may be propounding a Will in response to a Notice of Objection in which case although the propounder is technically the Applicant, the claim is made by the Objector. This issue has been considered by the Courts:
- In Vout v Hay  2 SCR 876, Justice Sopinka commented on this issue allowing the Court, on a motion for security for costs, to cast the challenger as the real “plaintiff” such that the propounder could indeed move for security for costs.
- In Boutzios Estate, Re (2004), 5 ETR (3d) 51 (Ont SCJ), Justice Greer, exercised her discretion under section 131 of the Courts of Justice Act, to order for security for costs and did not address the question of who had the burden of proof and rebuttable presumptions, as section 131 allows the Court to award the costs of and incidental to a proceeding or a step in a proceeding against any party at any time.
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A recent decision of the Superior Court of Justice, Cormpilas v Ioannidis, reaffirmed the importance of clarity of language in asserting legal or equitable claims particularly when such claims are asserted outside of formal litigation proceedings.
The decision concerned the remedies available to co-owners of a property arising as a result of the laissez-faire conduct of the other co-owner. The property in question had been owned by two separated spouses as tenants in common, each of whom devised their respective interests in the property to different parties. The wife, who died in 2012, left her interest in the property to the Applicants, being four of her grandchildren. The husband, who died in November 2017, left his interest to one of his sons, being the Respondent. The Respondent was the uncle of each of the Applicants.
The Respondent had moved into the property with his spouse and family to care for his father several years prior to his father’s passing, although he continued to reside there, rent-free, for a number of years thereafter. The Applicants had made overtures shortly after their grandfather’s passing about wishing to sell the property and threatening to move for partition and sale, but the Respondent remained. The Applicants commenced an application in February 2019 in which they asserted a claim of unjust enrichment against the Respondent arising from his continued sole occupation of the property despite the Applicants’ interest in it. The Applicants sought orders for retroactive payment of occupation rent, or damages in the alternative.
The Court agreed that the Respondent had been unjustly enriched to the detriment of the Applicants and held that an award for payment of occupation rent was an appropriate remedy. However, the Court’s opinion of the period for which such rent would be payable differed from that of the Applicants, primarily owing to the Applicants’ failure to clearly particularize their claim.
The Applicants asserted that they were entitled to payment of occupation rent from November 2017 until the date the Respondent vacated the property, which eventually came in April 2020. The Applicants’ position was based in part on the fact that they had purportedly conveyed to the Respondent, shortly after their grandfather died, that the property should be vacated and sold, or otherwise that the Respondent should buy out the Applicants’ interest. The Respondent did neither. As such, the Applicants claimed they were entitled to occupation rent from date of death onward.
The Court disagreed with the Applicants’ position and awarded occupation rent payable only from the date the Application was issued to the date the property was vacated. The Court declined to go further on the basis that the Applicants had not clearly conveyed their intention to assert a claim for occupation rent against the Respondent as a result of his possession of the property. Although the Applicants referred to a demand letter in which they specifically characterized the Respondent as a tenant, that letter also authorized the Respondent to continue residing there without making reference to an intention to seek payment of occupation rent. In the absence of specific evidence to the contrary, the Court held the notice of application to be the earliest claim by Applicants for payment of occupation rent. The Court was clear that it was not prepared to infer that the Applicants had asserted claim for payment of occupation rent.
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The court’s authority to approve settlements of claims that impact the interests of persons under a legal disability, including minors and incapable persons, is well-known. Rule 7.08 of the Rules of Civil Procedure provides that any settlement of claims made by or against a person under disability is not binding unless approved by a judge. Implicit in this Rule is that the court is to ensure that a settlement impacting the rights of individuals who cannot legally consent to such a settlement is, in fact, in the best interests of those individuals.
Rule 7.08(4) lists the court material that must be delivered as part of any such motion for court approval and includes, among other items, an affidavit of the lawyer acting for the litigation guardian of the incapable person “setting out the lawyer’s position” vis-à-vis the proposed settlement. In the recent decision of the Superior Court of Justice in Grier v Grier, the Court grappled with the extent of the lawyer’s obligations in preparing such an affidavit, particularly when questions of privilege are invoked.
In the Grier decision, the parties to the litigation had agreed on terms of settlement. However, as they were both under a legal disability, the parties brought a motion seeking court approval of the settlement not only on their behalf, but also on behalf of two non-parties whose interests were impacted by the settlement. One of the non-parties, S, brought a subsequent motion seeking copies of the materials exchanged by the parties in the litigation generally, as well as on the motion for court approval.
The court denied the former on the basis that the non-party was not entitled to service of any court material exchanged by the parties unless otherwise ordered by the court, as she had not filed a Notice of Appearance. As to the latter, the parties had previously agreed to an order that the two non-parties would be entitled to service of materials relating to settlement. As such, the court found that S was entitled to service of the materials for the motion for court approval.
However, the main issue before the court related to the adequacy of the materials produced. The parties had each served the non-parties with incomplete motion materials, including affidavits of counsel for the litigation guardians which had select sections omitted on the basis of privilege. S, as moving party, sought disclosure of the complete motion materials inclusive of the omissions.
The Court considered the authorities, including the Rivera and Boone decisions, and held that lawyers delivering affidavits pursuant to Rule 7.08(4) ought to be more than capable of doing so without breaching privilege. The lawyer’s obligation in that respect is to simply provide assurance to the court that they advised their client as competent counsel would and that the settlement is in their client’s best interests.
Should counsel go further than is required under the Rule, then as the judge in Boone pithily held, “that is counsel’s problem.” If necessary, alternative relief, such as sealing orders, may be considered, but at first instance, it is clear that the court will expect counsel to be able to draft materials in such a way so as to discharge their obligation without butting up against questions of privilege.
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My colleague, Sydney Osmar, blogged in June on a summary of actions taken by the Ontario Legislature to issue, and later extend, the terms of certain orders issued in the days following the provincial state of emergency declared on March 17, 2020. These orders were intended to provide direction in light of the procedural and administrative concerns arising as a result of the immediate suspension of courthouse operations that followed the declaration of the state of emergency and, in particular, the effect of the declaration on litigation time periods provided under the Rules of Civil Procedure.
The Legislature introduced two key regulations in an effort to provide guidance to the litigation bar. O.Reg 73/20, made on March 20, 2020, provided for an indefinite suspension of any limitation periods or period of time within which litigation steps were to be taken, as established by statute, by-law, or order of the Ontario government, for the duration of the state of emergency.
O.Reg 259/20, made on June 5, 2020, amended O.Reg 73/20 primarily in decoupling the suspension from the “duration of the emergency” to a fixed date of September 11, 2020, in order to provide certainty and predictability to members of the litigation bar. The Emergency Management and Civil Protection Act provides that temporary suspensions by emergency order shall not exceed 90 days, hence the choice of a fixed date of September 11. However, the Legislature remains empowered to issue further orders extending the suspension beyond the chosen date should such deferrals be required in light of the pandemic.
As of the posting date of this blog, no further guidance or direction has been delivered by the Legislature with respect to a suggested extension of the suspension period. Although the circumstances are such that direction in that respect may be received on minimal notice, this blog is intended to serve as a mere reminder of the upcoming expiration of the suspension period or, in other words, the resumption of applicable litigation timings.
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A recent decision of the Alberta Court of Queen’s Bench highlights the importance of carefully reviewing settlement agreements prior to their execution.
In Anderson Estate (Re), 2020 ABQB 428, the Alberta Court of Queen’s Bench revisited a settlement that had been negotiated during a judicial mediation.
Mr. Anderson had left a Last Will and Testament executed roughly one month prior to his death that directed that the residue of his estate be distributed to his three children, who were the parties to the litigation. The Will addressed certain advances made to his children during his lifetime, the disposition of real property, and declared the testator’s intent that the parties be treated equally.
One son, who later brought the motion with respect to the interpretation of the agreement, had previously disclaimed real property gifted to him under the Will because the value assigned to the property in the Will itself was significantly higher than the appraised value of the property (with a discrepancy of $2 million), such that he would take a correspondingly lower distribution from the residue of the estate to reflect his acceptance of the gifted property. The judicial mediation process had been initiated with the intention of resolving interpretation issues in respect of the Will arising from the son’s disclaimer of the property. The terms of the Will and the settlement agreement were not straightforward, but the settlement provided in part that the son would receive at a value of $4 million a different property than that bequeathed to him under the Will that he had disclaimed.
Pursuant to the terms of the settlement agreement, the matter returned to the case management judge for the determination of its proper interpretation. The son sought an interpretation of the agreement that provided that he had substituted his receipt of one property for the other at a notional cost corresponding to advances tied to the first property.
Justice Jones reviewed the law in general relating to ambiguities appearing in contracts, such as the settlement agreement that the parties had executed (at paragraphs 35 through 40, briefly summarized below):
- true legal ambiguity arises where a phrase is reasonably susceptible on its face to more than one meaning;
- courts can consider surrounding circumstances that include everything that affected the language of the document from the perspective of a reasonable person;
- extrinsic evidence, however, is intended to serve “as an objective interpretative aid to determine the meaning of the words the parties used”, with limitations set out by the Alberta Court of Appeal in Hole v Hole, 2016 ABCA 34;
- the goal of the courts is to give effect to the objective intentions of the parties, rather than to “second-guess the contract”;
- even in the absence of ambiguity, a judge is to consider relevant surrounding circumstances in interpreting the contract.
The judge found that the settlement agreement was not susceptible to more than one meaning, stating as follows (at para 84):
A retrospective determination that one entered into an agreement on terms less commercially favourable that one now thinks should have prevailed does not evidence ambiguity.
This decision may serve as a reminder to take care in ensuring that the meaning of a settlement agreement is properly understood by all parties and clearly set out without room for ambiguity. Remaining silent on certain points that should properly be addressed during the dispute resolution process may limit the rights of the parties to pursue them, even where the settlement agreement will otherwise lead to the distribution of an estate that may be perceived as unfair.
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Estate litigation exists in a somewhat unique corner of the litigation world for as a Will can potentially have numerous beneficiaries, each of whom could receive differing amounts from the estate, the potential individuals who could be impacted by any court decision can often extend beyond the parties actively participating in the litigation. As estate litigation can be both emotionally and financially expensive, if you are a beneficiary who only was to receive a relatively modest bequest of say $5,000, you may question whether it can be financially justified for you to retain a lawyer to actively participate in the litigation or whether you should just throw your hands up and not participate. Although the final decision of whether to participate will be case specific to the beneficiary in question, there may be a third option other than actively participating or simply not responding, being that you can formally “submit” your rights to the court.
The concept of “submitting” your rights to the court is in effect a formal declaration to the court that you will not be actively participating in the litigation but that you would still like to be provided with notice of certain steps. By formally submitting your rights to the court the plaintiff is required to provide you with written notice of the time and place of the trial, as well as a copy of the eventual Judgment. You are also personally insulated from any costs award that may be made in the proceeding (other than incidentally as a beneficiary of the estate should costs be awarded out of the estate).
The potentially most attractive incentive to formally submitting your rights to the court however may be that in the event any settlement is reached amongst the other parties that no Judgment may be issued implementing the settlement unless the court is provided with your consent to the settlement or an affidavit confirming that you had been provided with a copy of settlement and had not served and filed a “Rejection of Settlement“. Such a requirement could provide you with the opportunity to object to any settlement before it is implemented, potentially sidelining any settlement that you believe unfairly impacted your interest in the estate.
The process by which an individual can “submit” their rights to the court is governed by rule 75.07.1 of the Rules of Civil Procedure, with the individual submitting their rights to the court being required to serve and file a “Statement of Submission of Rights to the Court“.
Thank you for reading and stay safe and healthy.
This week on Hull on Estates, Stuart Clark and Kira Domratchev discuss a finding of support for an adult dependant child in Deleon v Estate of Raymon DeRanney, 2020 ONSC 19.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
In Ontario the courts have been rapidly adapting their practice and procedures in response to the COVID-19 pandemic. Beginning on July 6, 2020, the Superior and Ontario Court of Justice will now be further expanding its operations. The date is dependent on approval from the Chief Medical Officer of Ontario.
The Ministry of the Attorney General (“MAG“) has established an incremental plan to prepare courthouses to facilitate the return of full court operations in Ontario. MAG has announced that Phase One will be implemented on July 6, 2020 in a limited number of courthouses and courtrooms. Court operations will continue to expand with a targeted completion date of November 1, 2020.
I will briefly highlight some of the takeaways from MAG’s strategy for re-opening:
- Reopening of 74 courthouses and 149 courtrooms across Ontario;
- Workplace safety considerations are being implemented throughout courthouse and courtrooms including the installation of plexiglass barriers, hand sanitizer stations, and distance markers. There will also be increased screening procedures for those entering any courthouse and caps on the number of occupants in each room;
- Each courthouse will have risk assessment conducted so that the proper preventative measures can be put into place;
- Virtual hearings will continue as we gradually phase back to in-person appearances.
MAG has yet to clarify on the types of in-person court appearances that will be heard during Phase One. Since the declaration of the emergency, the Superior Court of Justice has heard many “urgent” matters, being motions, case conferences, and pre-trials. It is hoped that the types of matters that are to be heard will be expanded as a part of Phase One.
In the meantime, counsel should continue to utilize and embrace the new technologies offered by the Courts to schedule virtual hearings and integrate them into their regular practice. Rather than waiting for a complete re-opening of the Courts, lawyers should be prepared to “attend” virtual hearings in order to best serve clients and provide them with access to justice.
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The COVID-19 pandemic has changed the way the legal profession works at least on a temporary basis. In Ontario, lawyers are required to embrace technology to facilitate dispute resolution and to move files along. Mediations, discoveries, and Court hearings are being conducted virtually via videoconference. Today I will consider some of the benefits of remote mediation and then tips on how to master it.
- Cost – cost will inevitably be lower as it will be organized on an online platform.
- Convenience – The mediation can be arranged on short notice, as all parties can participate from their location of choice. Travel and the associated costs are no longer an issue. Participation of parties that might not have otherwise be available to participate in mediation may now be accessible.
Tips for Successful Remote Mediation:
- Ensure your client is set up with the proper technology: a computer equipped with webcam, microphone, and speakers. Lawyers cannot assume that every client has access to a computer and quick internet connection.
- Consider using a 3rd party provider such as Neesons Court Reporting & Mediation, to host the mediation. This provider can facilitate the movement of parties in and out of plenary and breakout rooms, summon the mediator, arrange a counsel-to-counsel meeting, and assist with technical issues. This will ultimately save the parties time and expense.
- Ensure your clients are aware of privacy and confidentiality within meeting rooms. Client comfort is essential for a successful mediation.
- A lack of personal interaction means that your client may not be able to warm up to a mediator, which often times is necessary for a successful mediation. An effective mediator will structure a meditation in a way to facilitate adequate confidential one-on-one communication with the parties to assist with resolving the limitations of working with a
mediator through a video link rather than in person.
- Take lots of breaks as attending virtual mediation is more tiring than in person.
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