Category: Estate & Trust

26 Aug

Judicial discretion to order passings of accounts

Nick Esterbauer Capacity, Estate & Trust, Passing of Accounts Tags: , , , , , , , , , , , , , 0 Comments

We often encounter situations where the administration of an estate is complicated by the fact that the deceased was married multiple times, and there is a clash between children from a prior relationship and a subsequent spouse (and/or his or her children).  Sometimes, a couple will be closer with one set of children, which may lead to disputes following both of their deaths.  Estate of Ronald Alfred Craymer v Hayward et al, 2019 ONSC 4600, was one such case, in which Joan and Ronald had been closer for much of their 32-year marriage with Joan’s children from a prior marriage.  After Joan and Ronald died in 2016 and 2017, respectively, a dispute arose between their adult children.

While Ronald’s will named his own children as beneficiaries of his estate, his Continuing Power of Attorney or Property (like Joan’s), named Joan’s daughter as alternate attorney for property, should his spouse be unable to act.   Joan had acted as Ronald’s attorney for property from 2006, during which he had suffered a stroke, until her death.  In 2011, Joan had transferred the couple’s matrimonial home, previously held jointly, to herself alone.  During this period, however, there had been no request by Ronald’s children for an accounting.  Joan’s daughter had subsequently acted as Ronald’s attorney for property and as estate trustee for Joan’s estate over the period of approximately eight months between the deaths of Joan and Ronald.

Ronald’s children sought a passing of accounts with respect to the management of their father’s property by Jane and her daughter and, specifically, challenged the change in title to the matrimonial home.  The Court referred to Wall v Shaw, 2018 ONCA 929, in stating that there is no limitation period to compel an accounting.  Accordingly, it considered the only bar to this relief to be laches and acquiescence.  Justice C.F. de Sa commented that the there was nothing improper in the manner in which the plaintiff had sought the accounting and, furthermore, that the delay was not unreasonable in the circumstances.  The Court permitted the claim regarding the matrimonial home to continue, but nevertheless declined to order a passing of  accounts:

…[O]rdering the passing of accounts is discretionary. And in my view, to require an accounting at this point would result in a clear injustice as between the parties.

[Joan’s daughter,] Linda, as Estate Trustee, is hardly in a position to account for Joan’s spending while she was alive. Yet, to require a passing of accounts at this point would subject every line of Joan’s spending (as Attorney for Property) to the court’s scrutiny.  Moreover, as the Estate Trustee, the Defendant would be liable to account for any unexplained expenditures.

Indeed, it is unclear that the spending was spurious given the nature of the relationship between Joan and Ronald. Joan would have been spending the money as his wife as much as his Attorney for Property.  The failure to keep detailed accounts is hardly suspicious given the circumstances here.

…In the circumstances, I will not order a passing of accounts.

This decision is interesting in that it clearly considers the practicality of a passing of accounts and the inability of the deceased attorney’s estate trustee to properly account in the absence of relevant records in determining that it would be unjust to order a passing of accounts, despite there being no other apparent legal reason not to do so.

Thank you for reading.

Nick Esterbauer

 

Other blog entries that may be of interest:

23 Aug

Ipse Dixit: Saying It Doesn’t Make It So

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

I recently came across a case out  of the Court of Appeals of Texas (Royce  Homes, L.P. v. Neel, 2005 Tex.App.LEXIS 1514) where the Court of Appeal overturned a jury’s determination of damages that was based on weak evidence from a construction defect expert. Although apparently well qualified, the expert simply estimated the costs of repairs based on his experience: he did not take any notes or measurements.

The court rejected the evidence as “ipse dixit” (sometimes spelled “ipse dexit”). The term is latin for “he said it himself”. The fallacy of logic is that by baldly asserting a state of affairs without evidence to support it sidesteps the argument. It is an assertion without proof. The fallacy is similar to an argument from authority.

My kids used to call me out on the use of ipse dixit all the time. When I made an assertion, they would ask “Why?” My usual, lazy, response was “Because I said so.”

Ipse dixit has been recognized as a problem in litigation, particularly in the area of expert evidence. In General Electric Co. et al. v. Joiner et ux, the U.S. Supreme Court recognized the problem of “opinion evidence which is connected to existing data only by the ipse dixit of an expert.”

The term has been used in several Canadian cases. For example, in Young v. Insurance Corp. of British Columbia, 2017 BCSC 2306 (CanLII), an expert gave evidence that damages in a motor vehicle accident were not caused by a sideswipe-type collision. At trial, the plaintiff objected to the evidence, with counsel asking “where is the science”. The court agreed, and rejected the evidence. The expert did not refer to his own assessment of sideswipe-type collisions. He did not refer to any studies or tests involving sideswipe-type collisions. As stated by the trial judge, “Instead, what we are left with is an exercise in ipse dixitism: it is so because I say it is so.”

In Lord’s Day Alliance fo Canada v. Regional Municipality of Peel et al., the issue was whether an exemption from Sunday closing by-laws was “essential for the maintenance or development of a tourist industry”. Town council said the exemption was essential, without citing any evidence. The Court of Appeal disagreed, holding that something more was required beyond council merely saying so. The legislation required proof that the exemption was essential, not just council deeming it to be essential.

In Lewis v. The King, 1949 CanLII 376 (QC CA), the Quebec Court of Appeal overturned a conviction for keeping a common betting house. In a concurring judgment, the appeal judge states that “there is no evidence, except the ipse dixit of the police officer, that the accused was the keeper of the place in which the search was made”.

In Ontario, Rule 53.03 of the Rules of Civil Procedure require that an expert report shall contain, inter alia, “The expert’s reasons for his or her opinion”.

As we head into elections, both here and in the US, keep your eyes open for ipse dixit.

Further, in litigation, be wary of ipse dixit evidence. Simply saying something is so does not make it so.

 

Make it a great weekend ahead. No ipse dixit. Provide proof.
Paul Trudelle

22 Aug

Never Really Lost but Recently Discovered

Doreen So Estate & Trust, General Interest, In the News, Wills Tags: , , , 0 Comments

Thanks to the New York Times, I found out about where most of Bob Ross’s paintings have been kept all these years.  Bob Ross was the iconic host of the television show, The Joy of Painting.  The PBS show ran from 1983 to 1994 and these old episodes continue to be watched on television, YouTube, and Netflix today.

In each episode, Bob taught his audience how to paint landscapes from his own imagination and memories.  According to this NYT video, Bob would paint three versions of the same painting for each episode.  Given the amount of episodes, Bob is estimated to have painted over a thousand paintings for the show alone.

Bob’s paintings are owned by a company known as Bob Ross, Inc.  Bob Ross, Inc. was originally owned by Bob, his wife, Jane, and Annette and Walt Kowalski.  The Kowalskis are credited with discovering Bob and financing his early career.  When Bob died in 1995, predeceased by his wife Jane, the Ross’s shares of the company were left to the Kowalskis.

To date, Bob Ross, Inc. does not sell Bob’s paintings.  It is a company that sells painting supplies, books and dvds, and other fun items like t-shirts and coffee mugs.

As a privately held corporation, Bob Ross Inc. can continue to hold onto Bob’s paintings for the foreseeable future.  Only time will tell if the shareholders of Bob Ross Inc. might change their minds about Bob’s paintings.  For now, the company has donated a collection of Bob’s paintings to the Smithsonian and the rest of us will just have to paint our own paintings by learning from Bob.

Just for fun, and to finish off my theme for the week, here is a video for happy little Bob Ross waffles.

Doreen So

Golden Fall Foliage Autumn Yellow Maple Tree Season

21 Aug

It’s easier than ever to get small

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

Comedian Steve Martin’s 1977 “Let’s Get Small” album foreshadows a lot of what’s been happening in our world recently.

While Martin used the phrase “let’s get small” literally (you take a drug and shrink, rather than “get high”), our world is getting smaller in other ways, only with technology, not drugs.

Our shrinking footprint

Think of the ways that technology has shrunk our world. How many paper files do we need today? How many books? A friend toured the “new look” U of T law school recently and couldn’t believe how small and sparse the offices were for professors. The reason? You don’t need space for shelves full of books and papers anymore.

Look at the trend in condominiums – smaller, smarter, more efficient. We simply don’t need (or value) as much “stuff” – china plates, workrooms, desk space, huge freezers. I cleaned out a small office in our home recently, and took to recycling a satellite receiver, a printer, an old laptop, a DVD player and more cords than you could imagine. I hadn’t used most of it in years, and seeing the clean empty space in the office was extremely satisfying. Less is more sometimes.

A timely trend

With all of the concerns about environment footprints, the fact that we can “get small” much easier today than in the past is a huge positive. We can build laneway housing, take Ubers or use auto shares instead of owning a car – and we don’t need to print mountains of paper when electronic files are faster, simpler and far more desirable. Much of our life truly “lives” on the phone in our front or back pocket. And that doesn’t take up much space.

I’m not recommending a “get small” theme for environmental reasons though (that’s an added bonus). I’m recommending it because it can lead to a simpler and more satisfying life. Instead of thinking “what can I get”, the focus becomes “what can I get rid of.” It doesn’t have to be extreme. Every so often, you eliminate one thing you plug in, or gas up, or store away. Bigger steps might include downsizing a home or going from two cars to one.

This article in Forbes.com – Ten Hacks for Simplifying Your Life – suggests going beyond the downsizing of possessions to include downsizing toxic people in your life, onerous debt, and personal grudges, amongst other things.

Give the article a read – and consider what getting small could mean for your life.

Have a great day, and thanks for reading.
Suzana Popovic-Montag 

16 Aug

One Expensive Tree!

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

“What could be more Canadian than Toronto neighbours arguing about building an addition on a house? Home owners arguing about a maple tree, of course.”

And so begins the saga of Allen v. MacDougall, 2019 ONSC 1939, a decision of Justice Morgan.

There, the Allens wanted to build an extension to their Moore Park home. To do so, they wanted to remove a tree that was on the property line between their property and their neighbours, the MacDougalls.

The Allens had obtained municipal permits to cut down the tree. However, as the court noted, the permits were necessary as a matter of regulatory compliance: they did not reflect any adjudication of property rights.

The MacDougalls argued that as the tree was on the boundary line between the properties, it was the common property of both adjoining owners. This was confirmed by The Forestry Act.

The Allens countered with an assertion that the tree constituted a “nuisance”, and therefore should be removed. “The law of nuisance seeks to balance the competing rights of owners – one neighbour to do what he wants and the right of the other neighbour not to be interfered with”.

The court held that although the tree was interfering with the proposed addition, it was not interfering with the Allens’ current use and enjoyment of the property. Further, the court found that no reasonable alternative to destroying the tree was explored. The application for an order authorizing the destruction of the tree was dismissed.

On the issue of costs, reported here, the Allens were ordered to pay the MacDougalls $77,000 in costs. This was based on partial indemnity costs up to the time of an offer to settle by the MacDougalls, and substantial indemnity costs from the time of the offer.

So, it appears, the tree still stands. However, I expect that the neighbourly relations between the parties have been clear-cut.

To read about one expensive dock, see my blog, here.

Have a great weekend.
Paul Trudelle

15 Aug

Electronic Devices at Borders – Some Progress?

Natalia R. Angelini Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , 0 Comments

When we last blogged here on the issue of electronic devices at borders, a Toronto lawyer, Nick Wright, had had his phone and laptop seized by custom officials after he refused to provide password access because solicitor-client privileged information was on the devices.

The authority under which such searches are taking place is the Customs Act, by which courts have previously interpreted “goods” as including cellphones. However, the case law is dated, and there has yet to be a constitutional ruling on the issue.

This may soon change, as Mr. Wright has, together with another lawyer, taken the matter further by applying to the Federal Court seeking a result that would reportedly include declarations that (i) searches on electronic devices without probable cause or search warrant are a breach of the Canadian Charter of Rights and Freedoms, and (ii) searching lawyer-client privileged material similarly constitutes a Charter breach.

The significance of the issue is stressed in the following reported statement of Mr. Wright:

“Solicitor-client privilege is . . . of the utmost importance in the free and democratic society and a fundamental principle of justice, and it’s for the benefit of clients, so individuals,” he says. “In an adversarial system like we have, it’s important that the public be able to consult with their lawyers, in order to participate in the legal process and to have the federal government thieving solicitor-client privilege information undermines our legal system and undermines the adversarial process.”

Until the case is determined, lawyers should assume that information covered by solicitor-client privilege is not protected from search at a border. Accordingly, further to the suggestion of the Canadian Bar Association, using cloud technology and erasing all privileged information from devices is the safest course of action.

We will be keeping an eye on this litigation, and hope to see an updated and meaningful pronouncement on the issue of a reasonable expectation of privacy for lawyers at the border.

Thanks for reading,
Natalia Angelini

13 Aug

Severing a Joint Tenancy – A Loosening of the “Course of Dealing” Rule?

Natalia R. Angelini Estate & Trust, Estate Litigation, Estate Planning, Support After Death, Trustees, Uncategorized, Wills Tags: 0 Comments

There are three ways in which a joint tenancy may be severed (Hansen Estate v. Hansen):

  1. Unilaterally acting on one’s own share (e.g. selling or encumbering it).
  2. A mutual agreement between the co-owners.
  3. Any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.

In Marley v. Salga, the Court addressed the third manner in which to sever joint title – by course of dealing. In this case, there were competing applications brought by Ms. Marley, the deceased’s widow, on the one hand, seeking sole legal and beneficial ownership of the matrimonial home, and by the deceased’s children from a prior marriage, on the other hand, seeking an order that the estate is entitled to a half interest in the property as a tenant-in-common.

The Court declared that the estate was entitled to a half-interest in the property as a tenant in common. The evidence considered to determine the issue included a deathbed conversation between deceased and Ms. Marley, in which Ms. Marley acknowledged the deceased’s wish to divide the property 50:50 between his children and Ms. Marley. The Court seemed to place great weight on this evidence, finding that the deceased and Ms. Marley “were in agreement as to how the property should be handled on his death.” One commentator criticizes the Court for accepting that Ms. Marley was prepared to compromise her property rights “…on the basis of soothing words spoken to her husband on his deathbed without fully understanding her rights, without the benefit of any advice as to the consequences that would result to her and without any compensation or consideration for the loss of those rights.”

Another consideration for the Court was the language of the deceased’s Will, which allows Ms. Marley to occupy the deceased’s half of the property on certain terms, purports to terminate her rights in certain circumstances, and provides for the sale of the property. The Will’s language assisted in swaying the Court, as the Court treated it as a piece of evidence used to discern if there was a common intention, and it inferred that the provision in the Will was known to Ms. Marley. This rationale has been the subject of debate as (i) a testamentary disposition cannot sever a  joint tenancy and should not be relied upon as evidence of a mutual intent, and (ii) there does not seem to have been evidence of both spouses taking steps showing a mutual treatment of their co-ownership as a tenancy in common.

If appealed, we may get some helpful clarification on this important issue.

Thanks for reading,

Natalia Angelini

09 Aug

A Special Needs Child Requires Special Planning

David M Smith Estate & Trust, Estate Litigation, Estate Planning, Health / Medical, Uncategorized Tags: , , 0 Comments

Oakland Rose is no ordinary child. He is special in more ways than one.

Oakland was diagnosed with Autism at the age of 2 years old and had no verbal communication until the age of 5.

Oakland is currently 20 years old. Although his verbal communication has drastically improved, he is not able to engage in abstract thinking. Oakland’s responses are often rehearsed and premeditated. He is not able to take public transportation alone. Although Oakland will graduate from a specialized high school program, he will never attend university. Oakland has the capacity of a young child.

Oakland will be dependent on his parents for the rest of his life.

Approximately 1 in 66 Canadian children were diagnosed with Autism Spectrum Disorder in 2018. Autism is just one of many developmental disorders that children are diagnosed with each year.

Families with children with special needs are in a unique position when it comes to estate planning. Planning for one’s death and ensuring that your loved ones are supported is an overwhelming task for the average person. For parents with special needs children, the task becomes even more burdensome.

According to one author, a child with special needs includes any child who, at birth or as a result of an illness or injury, is physically, mentally or emotionally disabled. While some people with special needs have successful careers, many will be dependent on their parents for the rest of their lives. Not only will the person be physically and emotionally dependent on their parent, but they will also be financially dependent. As a result, parents of a special needs child face exceptional estate planning challenges.

The higher functioning a special needs person is, the more likely he/she will require assistance from a parent’s estate. This is because government funding typically only provides for basic necessities.

Estate planners must determine whether their clients have children or other immediate family members with special needs. They must also ascertain that individual’s level of functioning. Specialized planning will be required for these families.

A parent of a special needs child might wish to consider:

i) Providing financial compensation for future caregivers in their will
ii) Setting up a special needs trust to ensure their child is not disqualified from government benefits – this trust will supplement but not replace the government benefits
iii) Creating a life care plan for their child which includes educational, living and career planning
iv) Writing a letter of intent summarizing the child’s habits, likes and dislikes
v) Naming a guardian if your child is under the age of 18

It is important to remember that children with disabilities have evolving needs. Thus, parents should create an estate plan that allows for flexibility. The plan should be reassessed and updated regularly to ensure it is in line with the child’s current needs.

Although creating a will and considering your own mortality is a daunting experience, it is far better than the alternative of leaving your child without adequate support!

Thanks for reading!
David Morgan Smith and Tori Joseph

08 Aug

Testamentary Freedom From a Distance 

James Jacuta Estate & Trust, Estate Litigation, Estate Planning, Trustees, Uncategorized, Wills Tags: 1 Comment

We live in a big and beautiful country that is great for summer vacation travel from sea to sea. The vast distance from British Columbia to Nova Scotia is not just geographic, as shown by court decisions involving the review of wills. There is also a great deal of public policy distance between these provinces.

In the recent British Columbia decision on July 17, 2019 of  Grewal v Litt, 2019 BCSC 1154 the  four daughters of the deceased sought a court-ordered variation of the mirror wills of their parents using the Wills, Estates and Succession Act, S.B.C. 2009, c. 13. In their wills, the parents left 95% of their nine million dollar estate to their two sons and the remainder to their four daughters. The daughters sought and obtained a variation based on the facts and legislation with the court ordering 15% to each of the four daughters and 20% to each of the two sons.

In the Nova Scotia decision in Lawen Estate v Nova Scotia Attorney General, 2019 NSSC 162, the court ruled that the deceased had a great deal of testamentary freedom and that this freedom was constitutionally protected. The Estate of Jack Lawen was subject to a claim by some of his adult and competent children under the Nova Scotia Testator’s Family Maintenance Act for a change in the distribution of assets from what was specified in his will. In this case, the daughters applied, but they were not successful. It is interesting to note that the Judge agreed with the argument that the Canadian Charter of Rights and Freedoms could be used to strike down those provisions of the legislation that allowed the adult competent children to even bring their application to the court. The Charter, it was argued, protects the right to decide where the property would go and to disinherit his children. Presiding Justice John Bodurtha wrote in his decision dated May 24, 2019, “A testamentary decision is a fundamental personal decision that is protected under section 7” of the Charter.

Legislation that infringes and limits a testator’s freedom, however, can be justified in some instances, and to certain degrees, depending on the province and the case facts. If you try to disinherit your dependant spouse then the courts would step in and limit your testamentary freedom. This also applies to not providing for dependants who are minor children, non-competent adult children, and even competent adult children in some provinces. One could ask, however, if it is fair and just that the daughters in British Columbia could achieve an equitable distribution of the family estate, but in Nova Scotia, they would have failed.

Canadian limitations on testamentary freedom are small and balanced in comparison to the forced heirship provisions of many European civil law jurisdictions. In those countries, a testator is forced by law to leave a portion of the estate to family members. The percentage of the estate to be distributed and those who are eligible varies by jurisdiction.  It is an interesting public policy approach to make the family unit legally paramount in forced heirship jurisdictions, and not the individual testator.

Thanks for reading!
James Jacuta

07 Aug

The future of cars – hello hydrogen fuel cell

Suzana Popovic-Montag Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , 0 Comments

Cars have never been a huge focus for me (more of a necessity than a passion) but, at my husband’s insistence, we do go to the Canadian Auto Show in Toronto every four or five years to look at the new models and think through possible future purchases.

When we went several years ago, every manufacturer seemed to have a display centred on electric cars. This was the way of the future, clearly. You couldn’t miss it.

But something seems to have happened. When we went this year, while there were lots of electric cars on display, there was little of the hype from just a few years earlier. And the word we saw more of was something I don’t even remember seeing last time: hydrogen.

Are we almost post-electric?

Did I just wake up and miss the news about electric cars NOT being the next big automotive technology? It seems I might have. I stumbled across this Jim Kenzie review in the Toronto Star comparing a Hyundai electric car versus one of its hydrogen fuel cell cars. Check out what he had to say about the future.

Hyundai … knows as any thinking person does that gasoline will continue to be by far the dominant player for at least another half-century …

Hyundai also understands that battery-powered vehicles will never be more than bit players — again, where are we supposed to get enough electricity to replace all the gasoline we burn?

Simply, we never will.

Battery-powered electrics will mainly be a bridge to the obvious medium-to-long-term solution, which of course is hydrogen-fuel-cell electrics.

You can read the full review here.

Hydrogen may lead

It seems that many in the automotive industry agree with Jim Kenzie. Despite Elon Musk’s view that hydrogen fuel cells are “mind-bogglingly stupid”, a 2017 survey of 1,000 global auto executives concluded hydrogen fuel cell technology will ultimately outperform battery-powered electric vehicles.

A key reason? You can fill up a hydrogen-powered car in five minutes (the same as today’s gas), but electric cars can take hours.

Future plans

In today’s society, new technologies are constantly being developed and trends are forever changing. It’s  important to keep this in mind when contemplating estate plans and future financial investments – what appears to be the “next big thing” one year may be forgotten the next.

My conclusions from all of this are simple. My electric car guilt is now gone. I’m not going to line up for a Tesla or stress about the fact that I haven’t gone electric. Instead, I’ll look for other ways to reduce my automotive carbon footprint – and keep my eye on how hydrogen fuel cells are evolving.

Thanks for reading!
Suzana Popovic-Montag

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET