Category: Uncategorized

16 Feb

The GameStop Saga, Part I – Summarizing the Chaos

Garrett Horrocks In the News, New Media Observations, Uncategorized Tags: , , 0 Comments

Late last month, I and many of my colleagues of the Millennial age were treated to a flurry of headlines that many of us in that age bracket were able to piece together, but which might have left those of a more senior generation scratching their collective heads.  The battle between Wall Street and an army of social media users over stock trading perhaps led to some new terminology entering the lexicon of those beyond the Millennial age group.  No doubt the words ‘Reddit’, ‘subreddit’, and ‘GameStop’ caused a few crossed eyes.  Allow me to explain.

GameStop Corporation is a publicly traded company that, for much of the 1990s and early 2000s, operated a slew of brick-and-mortar retail stores selling video games, consoles, and other associated merchandise worldwide.  As a bright-eyed middle-schooler during the height of GameStop’s market control, many a Friday night was spent wandering the aisles with friends eagerly looking to spend my allowance on the next craze.

As a result of a shift in the direction of the video game industry towards digital and online fare, as well decreased engagement as a result of the pandemic, GameStop’s brick-and-mortar sales model, and retail models more generally, saw a historic decline in sales and revenue.  As the demand for GameStop’s business model declined, so did its share price.

This decline did not go unnoticed by certain savvy Wall Street hedge funds and other institutional investors.  Shares in GameStop were a popular purchase among “short sellers” looking to turn a profit as a result of the company’s misfortunes.  Briefly summarized, short-selling occurs when an investor borrows a particular stock from a stockholder, then sells that stock to a third-party investor willing to pay current market price for the security, on the short-seller’s expectation that the share price will have decreased by the time the loan from the original stockholder is called.  The short-seller would then repurchase the borrowed stock from the third-party investor at the now-lower share price before returning ownership to the original stockholder and earning a profit on the difference.

In the case of the GameStop saga, the short-selling attempts by some large hedge funds and institutional investors did not proceed as planned.  Members of a specific community under the Reddit platform – individually, a ‘subreddit’ – discovered in late 2020 that GameStop stock had been ‘shorted’ to an unprecedented degree.  In essence, hedge funds and investors had bet significant sums on the continued decline of GameStop, intending to turn a profit as the share price was expected to continue dropping.

Members of the ‘WallStreetBets’ subreddit saw an opportunity to ‘squeeze’ the investors by collectively purchasing a significant portion of the available stock in GameStop, driving up the price-per-share to historic highs and decimating the intended ‘short’.  The price-per-share ballooned from around $20 in early 2021 to a staggering $350 per share by the end of January. Many of the investors and hedge funds who had bet on the price decreasing from $20 were now compelled by their loan obligations to repurchase shares at a price many times higher than their initial capital investment, incurring significant losses in the process.

Although the frenzy around GameStop and other publicly-traded companies such as AMC has died down in recent weeks, as of today’s date GameStop is still trading at around $51 per share, more than double the share price at the beginning of the year.  The incident has also drawn the ire of securities regulators as well as the US Congress.  Game over?

The next blog in this series will tie in the concepts of short-selling and the fundamentals at play in the GameStop incident to the obligations of fiduciaries to act as prudent investors.

Thanks for reading.

Garrett Horrocks

21 Jan

Nova Scotia: North America’s First “Opt-Out” Organ Donation Program

Doreen So Elder Law, Ethical Issues, General Interest, Health / Medical, In the News, News & Events, Uncategorized Tags: , , , 0 Comments

 

 

 

 

Who is ready for some good news?  Our firm has been interested in the issue of organ donation for some time now.  In 2012, we blogged about whether P.E.I. may be the first province in Canada to automatically enroll all of its people as organ donors until you chose to actively “opt-out”.  In 2014 and 2019, we blogged about Nova Scotia’s efforts in this regard.

Today, we are happy to report that this is now the new reality in Nova Scotia as of January 18, 2021.

The Human Organ Tissue and Donation Act was passed in April, 2019.  The Act, when it came into effect this Monday, meant that everyone in Nova Scotia are now considered to a potential organ donor until they “opt-out”.  This new “opt-out” system is the first of its kind in North America according to the Huffington Post. Ontario, like everywhere else, has an “opt-in” program where you have to actively sign up in order to be considered as a potential organ donor whereas the “opt-out” system is the opposite of that.  Nova Scotia is hoping that this will dramatically increase the rate of organ donation in the province like the 35% increase that has been noted in certain European countries.

In order to balance and respect the wishes of each individual, the director of the organ donation program has indicated that the known wishes of an individual will be respected even if he/she has not formally opted out.

This is an issue that is personally meaningful to me because of the statistics surrounding organ donors and organ recipients of colour.  People of colour tend to be underrepresented within “opt-in” systems of organ donation.  According to the Gift of Life, while race and ethnicity is not determinative of a match, a match is more likely to be found within one’s own ethnic community because of compatible blood types and tissue markers.  60% of patients waiting for a transplant are from communities of colour.  I, myself, am registered with the Gift of Life and I can attest to how easy and painless it was to sign up.

Thanks for reading!

Doreen So

 

18 Jan

PGT vs. Cherneyko, Part 1: Context and Timing is Everything

Doreen So Capacity, Elder Law, General Interest, Guardianship, Power of Attorney, Uncategorized Tags: , , , , , 0 Comments

Right from the start, 2021 is starting to look like it will be another extraordinary year of historic significance.  In the world of estates, trusts, and capacity litigation, there was a decision released on January 5th where serious breaches of fiduciary duty by an attorney for property were found and the PGT was ordered to take over.  The facts in Public Guardian and Trustee v. Cherneyko et al, 2021 ONSC 107, read like a law school case study and the reasons are worth noting.

Jean Cherneyko is a 90 year old woman.  Jean did not have any children of her own.  Her closest known relative was a niece in the US.  By the time of the PGT application, Jean was in a long term care home.  Prior to that, Jean lived alone in the same home that she had lived in since 1969.  Jean had a friend named Tina who she had known for about five years.  On August 15, 2019, Jean and Tina went to a lawyer’s office.  Jean named Tina as her attorney for property and personal care.  Jean also made a new Will which named Tina as the estate trustee and sole beneficiary of her estate.  A week or so later on August 27th, Jean and Tina went to Jean’s bank where $250,000.00 was transferred to Tina, and $195,329.50 was transferred to Jean’s niece.  Days later on August 31st, Jean was hospitalized for acute delirium and progressive cognitive decline.  During Jean’s admission, Tina noted that Jean had become increasingly confused over the prior few months and that Jean exhibited lethargic behaviour and complained of bodily soreness.  On September 1, 2019, Jean was diagnosed as being cognitively impaired.  Thereafter, Jean was transferred to long term care on October 1st based on Tina’s authorization as Jean’s attorney for property.  Short time after that, Tina’s son moved into Jean’s home and the PGT started to investigate in March, 2020 when the bank froze Jean’s accounts.

As a result of their investigation, the PGT brought an application to remove and replace Tina as Jean’s attorney for property.  The PGT also sought to set aside the $250,000.00 transfer to Tina and the return of various other sums that were received by Tina, which totalled approximately $350,000.00.

First, the Court found that the transfer of $250,000.00 to Tina was not a gift.  Tina failed to rebut the presumption of resulting trust for the gratuitous transfer.  Tina put forth evidence that there was a bank manager who spoke to Jean at the time of the transfer, and that the banker told Jean that she would have still have enough money to live after the transfers to Tina and the her niece.  This evidence was tendered through Tina’s affidavit without any direct evidence from the banker.  The Court disregarded Tina’s reliance on the banker’s involvement because Tina herself had deposed that Jean was having “moments of delirium and irrationality, her condition fluctuated between lucidity and confusion” in late August, 2019 (para. 31) and there was no evidence that the banker was informed.

The Court also seriously questioned whether any of the payments to Tina were truly what “Jean wanted” because Jean’s power of attorney for property clearly stated that there was to be no compensation.  The Court agreed with the PGT’s contention that Tina should not have paid herself $2,000.00 per month in compensation and on how that sum was unreasonably high given that Jean’s long term care costs were only $2,701.61 per month.

The value of the transfers, which was about a quarter of Jean’s net worth at the time, when considered in the context of Jean’s September 1st diagnosis also led the Court to find that Jean lacked capacity to gift Tina such a substantial sum.

The Court’s focus on context, timing, and proportionality as benchmarks in its analysis are very important for litigators and advisors to keep in mind.

Stayed tuned this week for Part 2 on Cherneyko: the breaches of fiduciary duty.

Thanks for reading,

Doreen So

 

14 Jan

More Streamlined Court Processes?

Natalia R. Angelini Litigation, Uncategorized Tags: , , 0 Comments

It has not always been easy to keep up with the rapid technological changes to court processes and court hearings that have been happening over the last several months. We have all needed to adapt, and adapt we have! Although, to me, in person hearings remain the ideal way in which to interact with counsel, clients and judges, I admit the Zoom court hearings have been a welcome respite from the added time and stress of the early morning drive to far-away court houses in different cities to argue one case or another. Clients may also appreciate the cost-savings that result from less paper and less travel and waiting times.

Streamlining of court processes has recently been solidified by way of several changes to the Rules of Civil Procedure, and a couple of my colleagues have podcasted about it here. This trend has now also expanded to the Supreme Court of Canada, where the leave application process is reported to be changing effective January 27, 2021. The changes can be found here, and facilitate the electronic filing of material.

Should there be more changes to come, we will keep you posted.

Thanks for reading and have a great day,

Natalia R. Angelini

12 Jan

What’s the Update on the Calmusky Case?

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

I previously blogged about the Calmusky v. Calmusky decision here, in which decision the court concluded that resulting trust presumptions apply to the beneficiary designation under a Registered Income Fund (RIF). As such, the onus was put on the named beneficiary of the RIF to rebut the presumption that he was holding the RIF in trust for his late father’s estate. The decision was not appealed.

The Ontario Bar Association (OBA), and primarily the OBA’s Trusts and Estates section, has considered the impacts of the case and has delivered a Submission to the Attorney General of Ontario and Minister of Finance with proposed remedies.

The potential effects cited by the OBA are worrying, and include that (i) it may compel financial advisors to provide what amounts to legal advice when such designations are being made, (ii) it may increase litigation where the named beneficiaries of plans, funds and policies are not the same residuary beneficiaries of an estate, (iii) it may create uncertainty in contracts (e.g. cohabitation and/or separation agreements) that use beneficiary designations as a way to secure support payments, and (iv) it may defeat the testamentary intentions of Ontarians who previously made their beneficiary designations and cannot make new ones.

The OBA Submission proposes legislative amendments with retroactive effect to remedy the issue. Such proposed amendments are to add a subsection to each of the Succession Law Reform Act (s. 51) and Insurance Act (s. 190) clarifying that when a designation is made, no presumption of resulting trust in favour of the estate is created.

We will provide an update once we know more.

Thanks for reading and have a great day,

Natalia R. Angelini

11 Jan

How Can We Accommodate Older Witnesses at Trial?

Natalia R. Angelini Uncategorized Tags: , , 0 Comments

An aging population brings with it more older Canadians involved in the court system.  Some challenges with having older witnesses testify at trial may include:

  • memory impairments (almost 40% of people over age 65),
  • a decline in hearing (47% of people age 60-79),
  • irreversible vision loss (25% of people by age 75),
  • mobility issues (more than 25% of people by age 75), and
  • dementia (at least 90% of people with dementia are over age 65).[1]

Add to this the method in which evidence at trial is elicited – through the adversarial process of examination and cross-examination, with the witness sitting alone, apart and elevated in the courtroom, which conditions make witnesses feel uncomfortable and intimidated – and the result is less accurate testimony.

Some solutions for our older witnesses include various ways to minimize court appearances, including examining witnesses for discovery at their homes, allowing them to attend pre-trial or trial by telephone or videoconference, and allowing hearsay statements made out of court to be admitted at trial. Another very helpful option for the elderly and/or infirm is to avoid delay by taking trial testimony in advance of the trial. In Ontario, Rule 36 of the Rules of Civil Procedure allows the parties to examine a witness before trial (often video-taped), which examination can be used at trial in the place of in-person oral testimony. If the parties don’t agree on the issue, the party that wants to proceed with the Rule 36 examination would need to bring a motion seeking a court order to this effect. When deciding whether or not to allow a Rule 36 examination, the court must take into account various considerations, including:

  • the convenience of the person whom the party seeks to examine;
  • the possibility that the person will be unavailable to testify at the trial by reason of death, infirmity or sickness;
  • the possibility that the person will be beyond the jurisdiction of the court at the time of the trial;
  • the expense of bringing the person to the trial; and
  • whether the witness ought to give evidence in person at the trial.

Rule 36 examinations certainly seem to be in keeping with the times. With the long-overdue technological strides made in our court system as a result of the COVID-19 pandemic, virtually every litigation step is now being conducted virtually (including examinations, mediations, pre-trials and trials). With this trend expected to continue after the pandemic has ended, I would imagine that we will see fewer disputes over the issue of whether or not a Rule 36 examination should proceed.

For a more comprehensive commentary on the issue of accommodating older witnesses, I refer you to the paper in the footnote below, from which I have taken just a sampling of high points in this blog.

Thanks for reading and have a great day,

Natalia Angelini

[1] Obtained from Helene Love’s paper, Seniors on the stand: accommodating older witnesses in adversarial trials, The Canadian Bar Review (Vol. 97, 2019, No. 2)

29 Dec

A Holiday Gift from the Bench to the Bar

Hull & Hull LLP Estate Litigation, Uncategorized Tags: , , , , , , 0 Comments

‘tis the holiday season – a time to drink egg nog (my favourite) and give and receive gifts.  What better time than to highlight a recent gift given by the Superior Court of Justice to all those barristers out there!  The gift, as you may be wondering, comes in the way of advice and assistance given to counsel by F.L. Myers J. in his Triage Endorsement in Paul v Veta.

Without going into the facts of the case, the applicant sought to bring an unopposed application for an order deleting a mortgage from title.  Having difficulty in getting the application heard, counsel advised the court that, “I have exhausted all of my efforts but have not been able to file this online. I am humbly asking for some direction on how to have my materials filed in the most expedient fashion so I can get this order approved”.  Justice Myers acknowledged that although it is not generally the role of the court to give advice to counsel, he nonetheless provided some assistance.

Taking into consideration the numerous Notices to the Profession resulting from the pandemic, Justice Myers had the following to say about the issuance of an application:

  • register for a One-key account
  • under Rule 4.05.2(6), submit the civil document to the portal, using your One-key account, wait 5 days to get an email, to tell you if your document was accepted
  • once the application is issued, Rules 38.06 and 39.01 require that the notice of application and all affidavits to be relied upon be served on all parties

As it relates to motions in writing, Justice Myers states, “Judges receive numerous motions in writing (or “basket motions” as they are commonly called). It does not take very long to read a properly prepared basket motion. It is far more difficult and time consuming for a judge to deal with a poorly prepared basket motion. Struggling to find proof of service, or proof that it truly is on consent of all parties, or proof of the facts required for the relief sought, takes time and effort. So, the tacit deal is that if counsel provide us with motions in writing that contain the necessary proof of facts and law, we are all too glad to sign them. It’s quicker, easier, and a happier outcome for all concerned. I know of no judge waiting around to incur the extra time, effort, and frustration to reject well-prepared basket motions”.

There are other great nuggets of wisdom contained in the Endorsement including the permissibility of hearsay evidence and the filing of draft orders.

I hope you like your gift – I am sure the court won’t mind if you decide to re-gift it 🙂

Noah Weisberg

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15 Dec

What Happens When Substitute Decision Makers Cannot Agree?

Arielle Di Iulio Uncategorized Tags: , , , , , , 0 Comments

The highly anticipated COVID-19 vaccine is being rolled out in Ontario, with some of the first shots having already been administered yesterday. The University Health Network in Toronto and The Ottawa Hospital will be the first to administer the vaccine. Frontline healthcare workers in hospitals, long-term care homes, and other high-risk settings will be given priority. Vaccinations are expected to expand to residents in long-term care homes, home care patients with chronic conditions, and First Nation communities and urban Indigenous populations later in the winter of 2021. The province has not said when vaccines will become available for every Ontarian who wishes to be immunized. However, once available, the province confirms that vaccines will not be mandated but strongly encouraged.

The mass administration of the COVID-19 vaccine could be a real game changer in the battle against coronavirus. However, a recent public opinion poll conducted by Maru Blue shows that only one-third of Canadians would take the vaccine immediately, about half of Canadians would bide their time to assess its safety or use, and the rest have no intention of getting the shot at all. So it appears that Canadians are somewhat divided on the question of whether and when to get vaccinated.

Given the difference of opinion regarding this new vaccine, it is not inconceivable that multiple substitute-decision makers (SDMs) could disagree on whether to give or refuse consent to the shot on behalf of an incapable person. How would such a disagreement be resolved?

First, it is important to note that Ontario’s capacity legislation sets out a hierarchy of SDMs.  Pursuant to section 20 of the Health Care Consent Act (HCCA), the guardian of the person is at the top of this hierarchy, followed by an attorney for personal care, representative appointed by the Consent and Capacity Board (CCB), spouse or partner, parent or children, siblings, any other relatives, and lastly the Public Guardian and Trustee (PGT). The decision of the highest ranking SDM will prevail over dissenting opinions from those who are lower on the hierarchy.

If there are multiple equally ranked SDMs acting with respect to a particular decision, they all have to be in agreement – the majority does not rule. If the SDMs fail to reach a consensus, any of the SDMs could apply to the CCB to try and be appointed the sole representative to make the decision.  However, this option is not available where the incapable person already has a guardian of person or attorney for personal care. Another option is for the SDMs to attend mediation to try to come to an agreement. If mediation is not successful, the health practitioner must turn to the PGT for a decision. Section 20(6) of the HCCA states that the PGT is required to act and cannot decline to act in this situation.

Thanks for reading!

Arielle Di Iulio

22 Oct

Art Reunited: A Tale of an Indefinite Administration

Doreen So Disappointed Beneficiaries, General Interest, In the News, Uncategorized Tags: , , , , , 0 Comments

I’ve always loved a good story.  I found this story from CNN particularly intriguing as it has to do with art that was stolen by the Nazis, and how this stolen piece of art eventually made its way to the U.S. just like its family had done after the Nazis came to power.

According to the Mosse Art Restitution Project, Rudolf Mosse was a successful Jewish entrepreneur in the late 19th and early 20th century.  He had a large publishing and advertising business that included the publication of 130 newspapers and journals.  In 1900, Mosse purchased “Winter” directly from the artist, Gari Melchers, at the Great Berlin Art Exhibit.  Mosse later died in 1920.  The sole heir of his estate was his daughter, Felicia Lachmann-Mosse.  Thus, Felicia came to own Mosse’s extensive art collection.  Felicia and her husband also took over and ran one of Mosse’s most prominent publications, Berliner Tageblatt, and the newspaper was renowned for its criticism of Adolf Hilter.  When Hilter came to power in 1933, Felicia and her husband were forced to leave Germany.  According to CNN, “Winter” was amongst the art that was seized by the Nazis when the Mosse family fled their home but “Winter” was only one painting out of the hundreds of pieces of artwork that were stolen at the time.

Some of this art was auctioned off by the Nazis; some have simply disappeared.  “Winter” left the Nazis’ possession and changed hands a number of times before Barlett Arkell bought it, as an innocent purchaser who was none the wiser, from a prominent gallery in 1934.  Since 1934, “Winter” has been displayed in the Arkell Museum in Canajoharie, New York.  When the Museum discovered that “Winter” was taken illegally from its original owner, the painting was surrendered to the FBI in 2019.

“Winter” has since been reunited with the Mosse family by way of the Mosse Foundation which represents the remaining heirs of Felicia Lachmann-Mosse.  To date, the Mosse Art Restitution Project remains actively engaged in their work to recover all of the artwork that was stolen by the Nazis.

The Mosse Foundation and the Project have plans to auction “Winter” in the near future and it is estimated to be worth hundreds of thousands of dollars.

Talk about a never-ending estate administration.

Thanks for reading!

Doreen So

15 Oct

Holding the Reins on Dependant Support?

Natalia R. Angelini Uncategorized Tags: , , , 0 Comments

The Succession Law Reform Act permits dependant support claims to be brought by a spouse, sibling, child and parent of a deceased. In order to qualify as a “dependant”, the person must be someone that the deceased (i) was providing support to immediately before death, or (ii) was under a legal obligation to support immediately before death.

Interestingly, the definition of “child” is not limited to minor children or financially dependant children. It is thus open to an independent adult child to whom no financial support was being paid immediately prior to death to apply for dependant support, premised on the argument that the deceased parent has a moral obligation to provide support. While we have seen the development and application of the moral obligation principle in Tataryn v. Tataryn Estate and Cummings v. Cummings, and although some decisions of the bench in British Columbia indicate that it is willing to apply the moral obligation principle in favour of independent adult children, in Ontario moral obligation appears to continue to be treated as but one factor to consider in the context of support claims. The fact remains that there is no legal obligation to provide support to an adult child.

A similar view may persist in the British court, which was recently reported to have 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. While in this instance the parents were alive and able to successfully respond to the court proceeding, had they died prior to or during the time when financial support was in the process of being reduced, would the adult son have had more success with such a claim? If his parents died subsequent to support being reduced or eliminated, would their estates still be vulnerable to a dependant support claim on moral grounds?

Although each case is fact-specific, I would not be surprised to see that in circumstances where there is a large estate and no other competing support claims, the court may work harder to striking a balance between fairness and testamentary intention, particularly where the parents are shown to have enabled a lifestyle and arguably created a dependency that they withdrew during adulthood.

Thanks for reading and have a great day,

Natalia Angelini

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