Category: Litigation

16 Apr

Suicide Note Not Admitted Into Probate as Holograph Will

Paul Emile Trudelle Litigation Tags: , , , , 0 Comments

We have blogged previously on whether a suicide note could be found to be a valid holograph will. See Suzana Popovic-Montag’s blog “Testamentary Capacity and Suicide”.  Also see my paper on the subject, “Suicide, Suicide Notes and Testamentary Capacity”.

The courts have held that a suicide note can be considered to be a valid holograph will. However, the usual tests of establishing that the note demonstrates sufficient testamentary intent, and the requirement that the propounder establishes capacity remain. The fact that there was a suicide is a consideration but is not conclusive evidence of incapacity.

The court recently considered whether a suicide note was a will in McGrath v. Joy, 2020 ONSC 7454 (CanLII). There, the deceased took his own life after writing a note that purported to void any bequests to his spouse as contained in a prior will.

In considering whether the note was a valid holograph will, the court noted that a suicide note is a “special circumstance” that requires close scrutiny. In light of evidence relating to the deceased’s alcohol and drug use on the day in question, the court found that there were “suspicious circumstances” that “spent” the presumption of capacity and reshifted the legal burden of establishing testamentary back onto the propounder.

The court considered extensive evidence from the deceased’s family and friends about the deceased’s alcohol and drug use, including evidence about his condition on the day of his suicide. The propounder relied on an expert opinion. However, the opinion was inconclusive. The court also looked at the content of the note itself. It was sloppily written. It was a significant departure from formal wills previously made by the deceased.

The court concluded that the propounder had not met the burden of establishing on a balance of probabilities that the deceased had testamentary capacity.

In the costs decision, the judge cited the “modern costs rules with respect to estates” and the general proposition that the “loser pays” that applies to estate litigation. The court held that the propounder “acted unreasonably in attempting to have this suicide note admitted into probate as a holograph will” for a number of reasons, including the fact that he was not acting as an estate trustee seeking the guidance of the court but, rather, was pursuing his self-interest in an attempt to oust the legacies to others, and the fact that his own expert was not able to opine on the deceased’s testamentary capacity. However, the estate also bore some responsibility for costs due to the deceased’s own actions in preparing the note. A blended costs award was made whereby the propounder bore some of the costs and the estate bore the rest.

Thank you for reading.

Paul Trudelle

15 Apr

Family Business Valuation Considerations

Nick Esterbauer Continuing Legal Education, Litigation Tags: , , , 0 Comments

Earlier this week, I had the pleasure of hosting the Family Dispute Resolution Institute of Ontario’s webinar on “Special Considerations When Valuing a Family-Owned Business” featuring Tom Strezos, Adam Guyatt, and Claudio Martellacci of Grewal Guyatt LLP.  A link to their article on this topic is available here.

In the estates context, we often encounter situations where a family business needs to be valued after death.  While we will often defer to experts for assistance in this regard, it can be helpful to keep in mind some considerations unique to family businesses that might affect valuation.  These may include the following:

  • Payroll considerations: including whether any family members are on the business payroll and paid compensation greater or less than standard market rates;
  • Related party transactions: for example, whether a family member owns a supply company and that relationship may increase or decrease business expenses and impact its value upon any change in that relationship;
  • Non-operating assets or liabilities: whether there are investments in assets that do not impact cash flow directly or liabilities payable to family members;
  • Internal controls and governance: such as whether additional staffing costs would need to be considered as part of the valuation to reflect the situation if certain family members were no longer involved in the operations of the business;
  • Transferability of goodwill and discounts for reliance on certain individuals: some family businesses may have limited assets beyond goodwill and it can be worthwhile to consider how a departing family members (such as a divorced spouse or incapable or deceased family member) may impact value going forward.

These considerations may be relevant to probate applications, estate administration, and certainly where there are claims against an estate or specifically against a family business.

Also discussed during yesterday’s webinar was the idea of business valuation expert hot-tubbing, whether formally at trial or otherwise working together in a similar manner to try and determine a reasonable value of a company for the purposes of settlement discussions.  This is an Interesting concept that may work well for some estate matters where valuation issues are at play.

A recording of this week’s FDRIO webinar is available to FDRIO members free of charge and will be replayed at a fee for non-members later this month.  More information is available at fdrio.ca.

Thank you for reading.

Nick Esterbauer

09 Apr

Refusing to Answer: Questions About Duty of Lawyer

Paul Emile Trudelle Litigation Tags: , , 0 Comments

A lawyer was sued for negligence in allegedly failing to ensure that a will was not procured by undue influence or as a result of the testator’s lack of testamentary capacity. On examination for discovery, the lawyer was asked to advise as to texts or other secondary sources that the lawyer regarded as authoritative regarding the drafting of wills, and to advise as to whether the lawyer was aware of any cases (primary sources) that indicated that the lawyer was not required to document evidence of testamentary capacity.

The lawyer refused to answer those questions. The plaintiff brought a motion to compel the lawyer to answer. Must the lawyer answer those questions?

In Marshall v. Jackson, the motions master ordered the lawyer to answer the questions. On appeal, reported at  2021 ONSC 2361, the court held that the questions need not be answered.

The appeal judge held that it was trite law that a party cannot function as his or her own expert. By ordering the questions to be answered, the master in effect required a fact witness to research and deliver a legal opinion, which was contrary to a first principle of the law of evidence. Citing the Supreme Court of Canada, the appeal judge stated that “it is for the [trier of fact] to form opinions, and draw inferences and conclusions, and not for the witness”. The questions, it was held, went beyond asking the defendant for his or her general understanding of the steps he or she should have taken to ascertain testamentary capacity, but required that the lawyer research primary and secondary sources of law in an effort to provide support for legal reasoning going to the standard of care.

A third question was also refused: whether the defendant “understood that he was obliged to ensure that all available means were utilized to ascertain testamentary capacity”.  The defendant submitted that the question was too broad to be answerable. Would “all available means” include hiring a team of psychiatrists to evaluate the testator’s capacity? The appeal judge held that while the defendant’s counsel may have a point, the fact that the question was excessively broad did not make it unanswerable. “Indeed, the very absurdity of the literal meaning of the question makes it an easy one to answer.” Presumably, the answer will be “No”.

Next question, counsel?

Thank you for reading.

Paul Trudelle

06 Apr

Hull on Estates #610 – Inherent Jurisdiction and Standing in Trust Litigation

76admin Estate & Trust, Hull on Estate and Succession Planning, Hull on Estate and Succession Planning, Hull on Estates, Litigation, Podcasts Tags: , , 0 Comments

 This week on Hull on Estates, Natalia Angelini and Garrett Horrocks discuss the recent Ontario Court of Appeal decision in Carroll v Toronto Dominion Bank, 2021 ONCA 38, pertaining to the issue of standing in trust litigation.

 

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Natalia Angelini

Click here for more information on Garrett Horrocks

06 Apr

How to Deal with the Two-Year Limitation Period under Section 38(3) of the Trustee Act

Doreen So Estate Litigation, Executors and Trustees, Litigation, Uncategorized Tags: , , 0 Comments

Section 38 of the Trustee Act, except in cases of libel and slander, permits estate trustees to commence actions, on the deceased’s behalf, for all torts or injuries to the person or to the property of the deceased, and vice versa for those seeking to commence actions with respect to a wrong committed by a deceased person, so long as those claims are brought within two years of the deceased’s death.

The discoverability principles under the Limitations Act, 2002 are not applicable to toll the two-year limitation period under section 38(3) of the Trustee Act.  The application of this strict two-year limitation period is only mitigated by common law principles such as the doctrine of fraudulent concealment: Giroux Estate v. Trillium Health Centre, 2005 CanLII 1488 (ONCA), Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196, and  Levesque v. Crampton Estate, 2017 ONCA 455.

Turning off an alarm clock

Recently, the Court of Appeal has considered limitations defences in three of its estates decisions so far in 2021.  One of them was the case of Zachariadis Estate v. Giannopoulos, 2021 ONCA 158, which I blogged about the other day.  The other two cases were Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, and Hayward v. Hayward, 2021 ONCA 175.

The Beaudoin Estate is a medical malpractice claim by the Beaudoin Estate and the deceased’s wife, daughter, grandchildren as claimants under the Family Law Act.  The claimants alleged that the deceased was negligently diagnosed and treated when he was brought to the hospital’s emergency department which led to a delay in surgery that could have saved his life.  Mr. Beaudoin died on January 9, 2015 and the action as commenced on April 27, 2017 by way of a statement of claim.  The defendants asserted amongst other things in their statement of defence that the plaintiffs were statue barred pursuant to section 38(3) of the Trustee Act.  The plaintiffs then alleged that the hospital had fraudulently concealed their cause of action by failing to provide them with the deceased’s complete medical records when they were requested from the hospital, particularly certain CT imaging that was not provided to them until May, 2017.

The hospital then brought a rule 21.01(1)(a) motion to determine an issue of law raised by the pleadings so as to dispose of the action without trial.  It is important to note that, unlike a motion for summary judgment under Rule 20, no evidence is admissible on a motion under r. 21.01(1)(a), except with leave of a judge or on consent of the parties: r. 21.01(2)(a).

The Court of Appeal found that the motion judge erred in deciding the question of fraudulent concealment as a question of law under r. 21.01(2)(a).  Motions under r. 21.01(1)(a) are not the proper procedural vehicle for weighing evidence or making findings of fact (para. 30).  Similar to limitations issues under the Limitations Act, 2002 and the factual dispute surrounding the discovery of a claim, factual disputes surrounding the fraudulent concealment of a cause of action are more properly determined under a motion for summary judgment under Rule 20.  To do so would be unfair to a plaintiff when no evidence is admissible on such a motion except with leave of the court or on consent (para. 34).

In Hayward v. Hayward, the appellants raised as a ground of appeal that the trial judge erred by failing to find that the applicants were statute bared.  The Court of Appeal dismissed this ground of appeal on the basis that the defence was not raised by counsel regardless of the fact that the application did not have full pleadings like an action would.  The trial judge cannot be criticized for failing to respond to a defence that was not raised by counsel (para. 7).

Thanks for reading!

Doreen So

05 Apr

A Tale of Substantial Indemnity: Zachariadis Estate v. Giannopoulos

Doreen So Continuing Legal Education, Estate & Trust, Estate Litigation, Executors and Trustees, Litigation, Uncategorized Tags: , , 0 Comments

Dr. Zachariadis was divorced and estranged from his two daughters.  After his divorce, he began a romantic relationship with Ms. Giannopoulos.  They were together for almost twenty years as common law spouses until Dr. Zachariadis’ passing.  A year before his death, Dr. Zachariadis moved in with Ms. Giannopoulos and they had plans to marry.  Dr. Zachariadis transferred his medical practice to Ms. Giannopoulos’ son Aris, and he gave Ms. Giannopoulos a bank draft for $700,000.00 which she deposited into her own bank account.  He died within six months of that bank draft.

Dr. Zachariadis did not have a relationship with his daughters from his first marriage.  He was not invited to their weddings and he has never met his grandchildren.  Dr. Zachariadis died without a Will and his daughters became the estate trustees and beneficiaries of this Estate.  More than two years after Dr. Zachariadis’ passing, the daughters commenced an action against Ms. Giannopoulos to recover the payment of $700,000.00 to her on the basis of breach of trust, fraud at equity, conversion and unjust enrichment.  The action was dismissed on a motion of summary judgment by Justice Koehnen.  The appeal of Justice Koehnen’s decision, 2019 ONSC 6505, and his Honour’s costs order, 2020 ONSC 588, were also dismissed by the Court of Appeal, 2021 ONCA 158.

 

On the motion for summary judgment, Justice Koehnen found that the daughters were statute barred by section 38(3) of the Trustee Act in failing to commence their claims within two years of Dr. Zachariadis’ death.  The daughters failed to make out any fraudulent concealment on Ms. Giannopoulos’ part that would toll the operation of section 38(3).  Rather, Justice Koehnen found that there was no positive obligation on Ms. Giannopoulos’ part to tell the daughters about the payment, and he found that the payment was a gift in any event.  All of which were upheld by the Court of Appeal.

The Court of Appeal also found that there was no basis to interfere with Justice Koehnen’s costs order.  The Estate and the daughters, in their personal capacities, were ordered to pay Giannopoulos costs of $199,602.46 on a substantial indemnity scale.   The allegations of fraud in the underlying claim were unsupported and pursued to the end.  Justice Koehnen noted that the daughters could have pursued their claims on the basis of constructive trust and resulting trust without going so far as alleging fraud.  The daughters were also found to have taken unnecessarily aggressive steps and to have lengthened the proceeding due to their lack of cooperation with Ms. Giannopoulos’ counsel while Ms. Giannopoulos’ offers to settle were weighed against them.  Issue was also taken with the length of the daughters’ materials which were noted to be in violation of the page limits and other formatting requirements for facta.    Lastly, Justice Koehnen rejected the daughters’ argument that they were only pursuing the claim to ensure the due administration of the Estate and out of their concern that the Estate would have sufficient funds to pay its CRA liability. Interestingly enough, Justice Koehnen commented that, if that were the case, the daughters could have simply turned over the claim for CRA to pursue.

Thanks for reading!

Doreen So 

01 Apr

Support for “Dependants”?

Natalia R. Angelini Litigation Tags: , 0 Comments

I recently blogged on a case where the British court disallowed an adult son’s plea for his wealthy parents to continue to financially support him, which litigation was brought after his parents significantly reduced their financial involvement.

A different outcome was achieved in Dove v. MacIntyre, a recent decision before the Supreme Court of Nova Scotia, Family Division, where divorced parents were dueling over the issue of support for their adult daughter. In this case, the mother applied to the court seeking an order that the father pay child support for their 25-year old daughter during her attendance at a dental hygiene program.

Amongst other issues the Court addressed was whether or not the child was a dependant for the purposes of child support, with the definition in the applicable statute including the situation where a child is over the age of majority but unable, by reason of illness, disability or other cause, to withdraw from the charge of the parents or obtain the necessaries of life. Particular attention was paid to the situation, such as in this case, where post-secondary education was being pursued, which can qualify as an “other cause” for purposes of the definition.

Various factors established by the cases were enumerated by the Court to determine whether the  child was eligible for support, including that she tried to finance her education through loans, her income was insufficient to allow her to afford to pay for all of the program costs, her education plan was reasonable and she has secured employment as a result, the mother had taken on extra work in order to help finance her daughter’s studies, her father was remarried and in a two-income household, etc.

The Court was satisfied that the daughter was a dependant child for the period in question, and compelled the father to share in a portion of the education costs equally as the mother.

Had the father been deceased and had the dependant support case been levelled against his estate, I am not certain that the daughter would have fared as well as she did in this case. Under the Succession Law Reform Act, the definition of a dependant is different than in the family law statute under consideration in the Dove case, such that to qualify as a dependant the person must be someone the deceased (i) was providing support to immediately before death, or (ii) was under a legal obligation to support immediately before death. An analysis of the latter of these qualifications would be needed to resolve the issue, and without a laundry list of clearly delineated factors to consider (unlike those applied in the family law context in Dove), the outcome seems less clear to me. Although it also remains open to an independent adult child to apply for dependant support on the moral obligation ground, in Ontario this ground appears to continue to be treated as but one factor to consider in the context of support claims.

Thanks for reading and have a great day,

Natalia Angelini

30 Mar

How Can I Avoid Passing Accounts?

Natalia R. Angelini Litigation Tags: , 0 Comments

Some of the most challenging and expensive estate litigation I’ve dealt with involves accounting disputes. As such, it comes as no surprise to see that in some instances fiduciaries resist agreeing to requests to apply to the court to pass their accounts.**

In Ontario, although a fiduciary may be asked to pass accounts by a beneficiary or someone else the court determines has a financial interest, there is no statutory obligation to pass accounts. If the fiduciary does not agree to do so, the issue can be addressed before the court. Although obtaining such an order is often not difficult, the court has the discretion to deny the request.

Obvious grounds of denial may include the lack of a financial interest. For instance, an alleged creditor who had not yet proven the debt was denied the ability to compel a passing of accounts (see Workman v Colson, [1997] OJ No 1577). Further, in Klatt v Klatt Estate, a case where the beneficiary’s interest was contingent, a passing was not forced upon the trustee (although notably there were additional facts that lent to that conclusion).

With no absolute right to compel a passing, the court may also refuse to order a passing where there is no default on the part of the trustee. This was the outcome in Gastle v Gastle, where the fiduciary responded to the concerns raised and agreed to submit to cross-examination. The court did, however, leave open the ability to revisit the issue after the cross-examination.

Other circumstances where a request to pass accounts may be denied include when the ask is made before the executor has a reasonable opportunity to attend to the administration within a year after death (see McEwen v. Little), and when the associated costs are disproportionate to the value of the estate (see Painter v. Painter Estate).

Although the above instances may provide some comfort to fiduciaries, it is better to avoid disagreement on the issue if possible, which may be achievable with active steps to progress the administration in a timely way and with periodic informal accountings being provided to the beneficiaries.

Thanks for reading and have a great day,

Natalia R. Angelini

**For a more thorough review of the issue, I suggest reading Melissa Saunders’s OBA paper entitled When Will Courts Decline to Exercise Discretion to Order a Passing of Accounts?, which aided me in writing this blog.

26 Mar

Dealing with Life Interests in Property

Paul Emile Trudelle Estate Planning, Litigation Tags: , , 0 Comments

Goldie and Kevin inherited a life interest in real property in Nova Scotia. Under the will, the survivor will get the property in fee simple.

Goldie wanted to have the property divided up. In the alternative, she wanted it sold and the proceeds split. Kevin opposed.

Could Goldie force the partition or sale of the lands? The Nova Scotia Court of Appeal said no.

In its decision of Fownes v. Ernst, 2021 NSCA 8 (CanLII), the Court of Appeal considered the nature of each of the party’s interests in the land. The Court considered that neither party had a “vested” fee simple interest, and only a contingent interest. At best, the parties had an “expectancy”, and an expectancy is not a property right. The right of survivorship granted in the will did not create an interest in the land until one of the life tenants died.

The Court of Appeal concluded that the Partitions Act “permits actions by those holding estates in possession, not in remainder or reversion.” Goldie could not force the sale of the land.

The Court of Appeal noted that the language of the Ontario legislation is broader, and permits life interest holders to bring partition proceedings. However, even with the broader language, Ontario courts do not permit holders of a contingent remainder interest to bring partition proceedings, as their interests were not “possessory”.

The issue is put another way in the Ontario decision of S. B. v. W. B., 2020 ONSC 5023 (CanLII). There, the court noted that partition or sale may occur where the life interest “runs concurrently” with the other interests, by not where the life interest runs “consecutively” with the other interests. Presumably, where the interests of the remainders are not immediate, but only arises after the life interest is determined, the remainders cannot seek partition or sale and oust the life tenant.

Thank you for reading. Have a great weekend.

Paul Trudelle

19 Mar

Zoom Court: Best Practices

Paul Emile Trudelle Litigation Tags: , , , 0 Comments

A recent video presentation by the Federal Court of Canada gives a number of tips for a successful Zoom hearing. A recording of the presentation can be found here.

The Federal Court of Canada has heard over 2,000 hearings over Zoom since the beginning of the pandemic. Justice Pentney of the Federal Court of Canada reports that the system is working. However, the key to making it work is, as in most things legal, preparation.

In the seminar, Justice Pentney provides tips for effective Zoom hearings. These include:

  1. Understand the software.

Do not learn on the fly. Practice with the software. Learn the features available and know how to use them.

  1. Preplan with opposing counsel.

Discuss software issues, documents to be referred to, procedural matters, witness order, etc.

  1. Frame your shot.

Be seen clearly. Be well-lit.

  1. Avoid distracting background.

No beaches.

  1. Rename yourself.

Change your screen name in Zoom to reflect your role. Eg. “Paul Trudelle: Plaintiff’s counsel”, etc.

  1. Filing.

Ensure all documents are available. Be familiar with the filing system used by the court.

  1. Document sharing.

Ensure text size is big enough. Highlight text if appropriate.

  1. Close other apps.

Make sure unused apps are closed, to avoid notifications from popping up, and to avoid accidental sharing of unintended information.

  1. Be wary of muting/unmuting.

Make sure that the mic doesn’t pick up unintended discussions.

  1. Have backups.

Make sure that a cell phone hotspot is available in case of Wi-Fi failure. Limit other network users to avoid system slowdowns. Have backup headphones with a mic.

For an excellent summary of the presentation, see Dan Rosman’s video summary, here.

Have a great weekend.

Paul Trudelle

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