To most, it may seem obvious that an order from the court is not merely a recommendation. The terms of a court order must be followed. Disobeying the terms of an order may result in a finding that a litigant is in contempt. This was a lesson the defendant in Jensen v. Jensen had to learn the hard way.
In Jensen v. Jensen, Sterling Jensen was married to Betty Jensen. It was a second marriage for both of them and they both had children from prior marriages. Sterling passed away in 2014. Prior to his passing, Sterling appointed his son, Randall, as his Attorney for financial and personal care decisions and his other son, Murchie, as his Executor. Following Sterling’s death, Betty commenced an action against Sterling’s estate and his sons, claiming various forms of relief, including ownership of the matrimonial home.
Betty passed away and the trial was adjourned following her death. Betty’s heirs obtained an order to continue the action on behalf of her estate. A motion requesting an order to continue was heard on November 23, 2017. Following the hearing, Justice Petrie issued an order which provided the following, among other terms:
Until judgement is rendered in this action no further assets of the Defendant Estate shall be transferred or disposed of except as necessary to pay the property taxes and other such expenses or as required by law or further order from this Court.
Despite Justice Petrie’s order, in February 2018, Murchie wrote cheques to the beneficiaries of Sterling’s estate amounting to $7,000. In May 2018, land was transferred from Sterling’s estate to one of Sterling’s other sons who was also a beneficiary in the estate. In July 2019, the plaintiffs filed a motion seeking an order to declare the defendant in contempt of court due to his disobedience in following Justice Petrie’s order. The plaintiffs also wanted the defendant to pay back to the estate the amounts that he hastily distributed.
The defendant stated that although Justice Petrie’s order was not respected, he did not believe that he was violating the “spirit of the order”.
In her Judgment, Justice DeWare noted that it was clear that the defendant did not follow Justice Petrie’s order and in not doing so, he was in contempt of court. Justice DeWare went on to state that if the executor felt it was necessary to issue partial payments to the beneficiaries, he should have obtained a further court order which allowed him to do so. Justice DeWare emphasized that court orders are not suggestions and that they must be followed. Pursuant to Rule 76.06 of the New Brunswick Rules of Court, Justice DeWare ordered the defendant to return $35,000 to the estate and pay $1,000 in costs to the plaintiffs.
In summary, Jensen v Jensen provides one simple, yet clear, instruction: always follow court orders. The failure to do so can carry a host of potential detriments. Although Jensen v. Jensen is a New Brunswick case, it can be applied in Ontario as per Rule 60.11(5) of the Rules of Civil Procedure. It states that if the court finds a party in contempt, the judge may order that the litigant be imprisoned, pay a fine, refrain from doing an act, pay costs or comply with any other order that the judge considers necessary. As this provision is similar to the provision in New Brunswick’s Rules of Court, it is likely that had the case been heard in Ontario, the outcome would have been comparable.
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Ian Hull and Celine Dookie
The testators died in 2008. The family realized there was a disagreement about the validity of their parents’ codicils that year but everything seemed to be on hold until Helen brought an application in 2015 to determine the validity of the codicil. In response, Krystyna brought a motion for summary judgment to dismiss Helen’s application on the basis it is statute barred pursuant to the Limitations Act, 2002. This motion was brought by Krystyna because she was interested in maintaining the force and effect of the codicils that gave her certain properties. Thereafter, Helen cross-motioned for summary judgment on her application.
Rule 20.04 of the Rules of Civil Procedure sets out the basis for summary judgment. Summary judgment shall be granted if: (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) if the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. The Supreme Court of Canada in Hryniak v. Maudlin, 2014 SCC 7, determined that “a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.”
With that in mind, Justice Dietrich found that Krystyna’s motion for summary judgment was appropriate for the following reasons (see para. 35):
- There were no material facts in dispute;
- No additional facts would emerge at trial;
- The application of an absolute limitation period was generally a fairly straightforward factual analysis;
- That based on the evidence before her, this matter can be resolved without a trial and that a trial of this narrow issue would be a more expensive and lengthy means of achieving a just result.
The Ontario Court of Appeal agreed with Justice Dietrich’s finding on this point. The panel emphasized how both parties brought summary judgment motions and filed affidavits with exhibits of their own.
In contrast, a similar summary judgment motion was unsuccessful in Birtzu v. McCron, 2017 ONSC 1420, 2019 ONCA 777 (on the issue of costs, only). The Court in Birtzu found that summary judgment was not appropriate and ordered costs against the defendant in any event of the cause (with reasons that were unreported). That said, the defendant was ultimately successful in proving that the plaintiffs were statute barred after a full trial on all issues.
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Doreen So and Celine Dookie
In wills, trusts, and estates litigation, much hinges upon expert evidence. In a will challenge that is based upon alleged testamentary incapacity, both the objector and propounder of the will would be prudent to enlist a capacity assessor. A party suspicious of undue influence may wish to consult a physician, a police officer, or some other party who could be privy to abuse. In a contested passing of accounts, an expert investor can speak to the soundness of a trustee’s investments.
Though in theory expert evidence should clarify the points of contention, in practice it can sometimes render matters murkier and more uncertain. For instance, what happens if two equally distinguished handwriting experts draw opposite conclusions? What if a coroner’s findings contradict the preponderance of other evidence?
Another concern is experts’ impartiality, as evidenced by Wilton v. Koestlmaier, wherein one party unsuccessfully charged an expert witness with advocating for the other side. Courts have long been apprehensive that some experts may (perhaps unwittingly) be kinder with the parties with whom they interact and from whom they collect their bills. In 1873, Sir George Jessel, M.R., wrote:
“There is a natural bias to do something serviceable for those who employ you and adequately remunerate you. It is very natural, and it is so effectual, that we constantly see persons, instead of considering themselves witnesses, rather consider themselves as the paid agents of the person who employs them.”
One possible fix for this source of apprehension is to have both parties deal with the same expert. At the very least, litigators should not employ the same expert to too great an extent, which might appear as a “red flag”.
Courts have also looked into the timing for delivery of expert reports. The Rules of Civil Procedure prescribe that expert reports are served no less than 90 days before the pre-trial conference (or 60 days for responding parties’ reports). Oftentimes, however, parties should exchange their reports well before these deadlines, for once parties receive these reports, they have a much better idea of the relative strength of their positions, which may steer them towards settlement. In Ismail v. Ismail, Grace J. spoke to this:
“How can the parties’ lawyers advise their clients concerning settlement without knowing their case and the one they must meet? How can the parties make informed decisions?”
Too many experts can increase costs exponentially (especially if the experts are famous or from faraway places), but too few experts could lead to a scantiness of evidence. As a nice medium, the Australians have come up with the practice of “hot tubbing” experts—which, despite its fun name, does not involve splashing, shouting, or the unusual combination of horn-rimmed spectacles with bathing suits. Rather, “hot tubbing” refers to having a panel of experts questioned together, which can allow for an identification of the points of agreement and disagreement and more lively discussion.
Thank you for reading. Enjoy your day!
Suzana Popovic-Montag and Devin McMurtry
Today’s blog is a continuation of yesterday’s discussion regarding the limitations analysis in Piekiut v. Romoli, 2019 ONSC 1190, 2020 ONCA 26. No limitation period was found to apply where an estate trustee was simply seeking a determination and declaration as to whether certain codicils were valid or not valid.
The testators in this case died in 2008. They had 3 children, Helen, Victor, and Krystyna. A meeting took place in 2008 between all 3 children and a lawyer to discuss the administration of the Estate. During this meeting, Krystyna revealed, for the first time, the existence of codicils and declarations of gift that provide her with an interest in certain properties. Helen refused to acknowledge the validity of these new documents.
In 2015, Helen brings a court application. Her application was later amended, on the consent of parties, in 2018 to reflect that Helen was only seeking a declaration in respect of the validity of the codicils. Thus in 2019, Justice Dietrich’s decision was made in the context of Krystyna’s motion for summary judgment to dismiss Helen’s application on the basis that it was statute barred and Helen’s cross-motion for summary judgment on her application. Justice Dietrich found that, since Helen did not ask the court to determine the ultimate beneficiaries of the properties that were subject to the Codicil or to vest such properties in any particular beneficiary or beneficiaries, her application was not barred by the Limitations Act, 2002.
The Court of Appeal agreed with Justice Dietrich. The panel was also of the view that this case is distinguishable from Leibel v. Leibel, 2014 ONSC 4516 and Birtzu v. McCron, 2017 ONSC 1420 because of the consequential relief that was pleaded in those cases. Since the Court of Appeal decision did not go into the details of the relief sought in Birtzu (unlike its description of Leibel), it is helpful to understand the breadth of the Statement of Claim in Birtzu, which sought the following:
- an Order setting aside the Will;
- an Order setting aside the Deceased’s Powers of Attorney;
- an accounting of the entire Estate, as well as all financial transactions undertaken by the Deceased, or on his behalf, or on behalf of his Estate, from the date that the Deceased’s matrimonial home was sold in 2003 to the date of trial;
- Orders for the production and release of financial and medical information;
- an Order reversing all transactions undertaken by the Defendant, either directly or indirectly, without authority or in breach of her authority, or in breach of her fiduciary duties to the Deceased and to his beneficiaries, including the Plaintiffs;
- an Order tracing the property of the Deceased into the property owned by the Defendant, including her home;
- Orders for injunctive relief, including the issuance of a certificate of pending litigation;
- a Declaration that all property held in the name of the Defendant, or part thereof, is held by her for the benefit of the Plaintiffs;
- damages against the Defendant in the amount of at least $400,000.00, for conversion of property, breach of statutory duty, and/or breach of fiduciary duty;
- pre- and post- judgment interest; and
- costs fixed on a substantial indemnity basis, plus H.S.T.
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The main issue on appeal was whether Justice Dietrich was right in finding that the applicant could still ask the court to determine whether certain codicils were valid (or invalid) seven years after death. Justice Dietrich based her limitations analysis on whether this proceeding would fall under section 16(1)(a) of the Limitations Act, 2002 where there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought”.
In her reasons, Justice Dietrich distinguished the case before her from the other limitations cases that have applied the two-year, basic limitation period to will challenges: Leibel v. Leibel, 2014 ONSC 4516, Birtzu v. McCron, 2017 ONSC 1420, and Shannon v. Hrabovsky, 2018 ONSC 6593. The case before her was different from Liebel, Birtzu, and Shannon because nothing had been done by the respondent beneficiary to propound the codicils that she had an interest in. If the proceeding was started differently in 2015, by the very beneficiary who has an interest in the codicils, then the estate trustee would have a limitations defence against the beneficiary. Since the beneficiary had done nothing, it remained opened to the estate trustee to commence an application for declaratory relief. Such declaratory relief is “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs.’ It is restricted to a pronunciation on the parties’ rights” (see para. 46, 2019 ONSC 1190).
The Court of Appeal agreed that there was no limitation period in this case because the applicant did not seek consequential relief in addition to a determination of the validity or invalidity of the codicils. The Will had not been probated and nothing had been done for seven years to resolve the issue.
“In these circumstances, Helen was entitled to seek declaratory relief, simply to establish the validity, or lack of validity, of the codicils – to define the rights of the parties in order to avoid future disputes.”, Strathy C.J.O., MacPherson J.A., and Jamal J.A.
Thanks for reading and more on these limitation cases to follow later this week!
With the loser-pays costs model firmly entrenched in civil litigation, and, for some time now, also consistently applied in most estate litigation cases, it behooves counsel to give early and ongoing consideration to putting forward an offer to settle under Rule 49 of the Rules of Civil Procedure with the objective of obtaining a more favourable costs outcome.
In order to get the benefit of the cost consequences under the Rule, such an offer (i) must be made at least seven days before the hearing, (ii) cannot be withdrawn and cannot expire before the commencement of the hearing, (iii) must not be accepted by the opposing side, and (iv) the offeror must meet or beat the offer at the hearing. However, even if this criteria is met, the court has the discretion to depart from the cost presumptions under the Rule.
Taking into account the court’s discretion, and given what feels like the release of more and more decisions where cost awards seem to bear little reflection to the costs incurred or the Rule 49 offers made, I wonder whether making a Rule 49 offer actually provides the expected benefit of a better costs outcome for the offeror.
In reading a recent article on the issue, I am reminded that there is some predictability in place. The authors review some relevant authorities, including Niagara Structural Steel (St. Catharines) Ltd. v. W.D. LaFlamme Ltd. and Barresi v. Jones Lang Lasalle Real Estate Services Inc., two Court of Appeal cases where it was held that the courts of first instance erred in resorting to the exception in Rule 49, and where the Court of Appeal reasoned as follows:
- the purpose of the Rule is to be an incentive to encourage settlement;
- a judge’s discretion to depart from the costs presumption under the Rule is not unfettered, and should not be exercised in such a widespread manner so as to render the general rule ineffectual; and
- a judge should only depart from the Rule “where the interests of justice require a departure”, after giving weight to the policy of the Rule, the importance of predictability and the even application of the Rule.
Thanks for reading and have a great day,
In our estate litigation practice, we commonly seek orders permitting registration of a Certificate of Pending Litigation (CPL) against title to property that is, for instance, an estate asset that a client is seeking to preserve until the litigation is concluded.
In order to obtain a CPL, one needs to demonstrate that an interest in land is in question, and in determining whether to order the issuance of a CPL, the following legal principles ought to be considered, as highlighted in Perruzza v Spatone:
- the threshold in respect of the “interest in land” is “whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed”;
- the onus is on the party opposing the order for a CPL to demonstrate that there is no triable issue with respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed”; and
- the governing test is that the Court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL ought to be granted.
We can see from the above that the threshold to obtain a CPL is not high; presumably the rationale being that it is more favourable to have a property in dispute secured during litigation than risk it being dissipated to the prejudice of a litigant.
Once a CPL is obtained it is prudent to assess the circumstances throughout the life of the litigation so that it is discharged at the appropriate time. As noted in Perruzza, factors the court can consider to discharge a CPL include whether the land is unique, whether there is an alternative claim for damages, whether there is or is not a willing purchaser and the harm if the CPL is or is not removed.
If the litigation stagnates, without reminders in place it is possible for the registered CPL to be left unaddressed. These were the circumstances in Novia v. Saccoia Estate (Trustee of). The CPL had remained on title for more than 20 years and even after the defendant’s death, ultimately forcing the defendant’s executor to obtain an order dismissing the action and discharging the CPL.
Thanks for reading and have a great day,
Five seemingly simple yet essential litigation lessons are so cleverly set out in a recent Advocates Journal article by Gord McGuire that I reproduce them below, with some accompanying insights:
- The law is the cart. The facts are the horse.
The take-away: It is suggested that it is better to apply case law after you have persuaded a judge to lean in your client’s favour, as judges are often moved more by their sense of achieving an outcome that is fair and just than by application of the law.
- A picture is worth a thousand authorities.
The take-away: I can’t count the number of times I’ve heard a lawyer complain about losing a winning case or beam about winning a losing one. The author reminds us that having a convincing legal argument or supportive case-law on your side may not carry the day if the opposing side creates an image that registers with the judge. To avoid getting bested by your opponent, use physical photos if you can, and, if you can’t, create mental ones.
- Thinking on your feet is good. Having already done the thinking in advance is better.
The take-away: Better preparedness equals less chance of being caught off-guard by a judge’s questions. This lesson resonates with me as a great practice tip as well as a great mental health tip, since I gather from this article that I’m not alone in having tortured myself post-hearing by repeatedly running the court scene through my head with the perfectly crafted answer that I had meant to give to the judge.
- You and your case are in love. For the judge, it is a first date.
The take-away: Conviction in your case can be persuasive, and it may lead you to expect that a judge will take a similar view. Don’t forget that your perspective is uniquely formed by the level of intimacy you have with the case, and that a judge will give equal consideration to the opposing-side’s position. To temper your expectations, the author suggests that you can try testing the waters by dispassionately discussing your case with colleagues to gauge their reaction, without giving away which side you are on.
- Advocacy matters only so much, and that’s a good thing.
The take-away: Take comfort in knowing that even with the most superb lawyering, there is only so much you can do to secure victory for your client. The facts, the law and the judge’s reaction and perspective are what they are. So when a mediocre advocate defeats a superior one, take it as a mark of a justice system that is functioning as it should.
Thanks for reading and have a great day,
Recently, Stuart Clark blogged on the procedural differences between Applications and Actions in the context of civil litigation. In his blog, he aptly describes key differences between the two proceedings, which rests largely on the manner in which evidence is heard. Applications are determined on a written record, meaning that evidence before the court is contained in affidavits sworn by the parties in advance of the hearing date. In contrast, actions are heard by way of viva voce evidence (i.e. parties are examined, and cross-examined in open court).
As parties inch towards their final hearing date, the benefits and disadvantages of proceeding by way of application versus action may sharpen into focus. As Stuart noted, parties may decide that there are strategic benefits to converting their application into an action, such as having a sympathetic witness. Parties are free to take steps necessary to effect that change.
However, if parties don’t convert their proceedings in advance of their hearing, Judges have the discretion to convert applications to actions, and can order a conversion at the hearing of an application. In other words, if a Judge decides that justice would best be served by hearing a matter by way of trial, they can order the conversion of a proceeding at the hearing of an application.
Such was the case in Halar v Bacic, wherein the court determined that there were significant and material facts in dispute relating to capacity, and that a trial was necessary to assess the credibility of the witnesses.
In that case, a mother appointed her son and daughter to act as her attorneys for property and personal care in 2017. Following execution of the POAs, she was diagnosed with moderate Alzheimer’s disease and dementia. Shortly thereafter, the mother and her husband sold their home and moved back to Croatia. The proceeds of sale of their home were deposited in their Canadian bank account, with the understanding that the son and daughter would send money from the Canadian bank account when funds were requested by the mother.
The daughter and son ran into some conflict with respect to how the Canadian bank account was managed, resulting in the mother executing a new Power of Attorney in 2018, which raised questions regarding whether the mother had capacity to execute the new Power of Attorney.
The Judge was not satisfied that the medical evidence before him supported the position of the applicants and was not satisfied that he was in a position to make the findings and orders requested of him on the evidentiary record before him.
Ultimately, the Judge converted the application to an action and ordered that a trial be directed pursuant to Rule 38.10(6).
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In the past, we have written about whether an Estate must first obtain a Certificate of Appointment before issuing a statement of claim.
But what about an Estate that may be entitled to claim a portion of a court-approved settlement?
Over the past year, a number of court-approved class action settlement agreements involving deceased class members appear to have taken into account the cost and complexity of appointing an Estate Trustee.
The settlement agreement approved by the Federal Court in McLean v. Canada is the culmination of litigation concerning tragic, historic events in the lives of those who attended Indian Day Schools. These events include allegations of systemic abuse and mistreatment of children. The “class period” runs from January 1, 1920 until the date of closure or relinquishment of control by Canada of any particular day school or, that date on which the written offer of transfer by Canada was not accepted by the respective First Nation or Indigenous government.
The settlement approval noted that if a class member dies on or after July 31, 2007, their “Estate Executor” is still eligible to be paid the compensation to which the class member would have been entitled.
Similarly, the more recent settlement agreement approved by the Federal Court in Toth v. Canada addresses the claims of veterans who were in receipt of various benefits, including disability pension benefits, and had the disability pension amounts deducted from the other benefits which they received or were entitled to receive. The decision reads:
“Under the proposed settlement, which totals $100 million, every Class Member and the estates of Class Members who have passed away since the Certification Notice was published will receive a payment. Payments will be calculated and made promptly as the majority of Class Members are known and every effort will be made to ensure that all Class Members, or their estates, receive their payment, which will not be subject to income tax.”
If a proceeding has been commenced by an estate before probate has been issued, Rule 9.03 of the Ontario Rules of Civil Procedure offers some relief in stating that the proceeding shall be deemed to have been properly constituted from its commencement.
It is not always necessary for an estate trustee to obtain a Certificate of Appointment in order to administer an estate; however, in certain matters, an estate trustee may be required to obtain probate before being able to represent the estate, whether or not there is a valid Will. The Ontario Superior Court in Carmichael et al. v. Sharpley et al. has set out three circumstances in which probate is required:
- Third parties dealing with the executor may refuse to accept the authority of the Will and demand production of letters probate as authentication of that power…
- Proceedings involving the executor representing the estate as plaintiff or as defendant. It would seem that in such circumstances the court requires probate as an evidentiary matter…
- Where a foreign executor wishes to establish title to estate assets in Ontario he must have his letters probate resealed in Ontario or obtain ancillary grant letters probate. This requires that he first obtain probate in the primary jurisdiction.
Moreover, the Estates Act ensures that estate trustees named in a Certificate of Appointment of Estate Trustee have sole authority in respect of the estate:
“30. After a grant of administration, no person, other than the administrator or executor, has power to sue or prosecute any action or otherwise act as executor of the deceased as to the property comprised in or affected by such grant of administration until such administration has been recalled or revoked”
It will be interesting to see if the Courts will continue to take into consideration the necessity and of appointing an Estate Trustee in light of historic claims, and how third parties making efforts to award a portion of the settlement to the Estate will deal with the requirement for probate.
Thanks for reading!