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,
It is the start of a new year and a new decade. Many of us recently enjoyed some holidays and had much to eat and drink. Many of us are also feeling the lingering effects of this merriment. I figured that an uplifting, feel good read would be a nice way to start 2020. I was thus delighted to learn about Eva Gordon, and her estate.
Ms. Gordon passed away at the age of 105. She grew up on an orchard in Oregon, never graduated from college, and worked as a trading assistant at an investment firm in Seattle. In 1964, she married her husband, who was a stockbroker. They did not have any children together. Neither Ms. Gordon or her husband came from money, and they lived a modest life. Ms. Gordon’s godson, who was the Estate Trustee, joked that if Ms. Gordon and her husband went out for lunch or dinner, then they would make sure to bring their Applebee’s coupon.
From the salary that Ms. Gordon received from her employer, she purchased partial shares in numerous stocks, including oil and utility companies, and was an early investor in Nordstrom, Microsoft, and Starbucks. Unlike many at that time, Ms. Gordon held onto these valuable stocks. As a result of this shrewd investing, Ms. Gordon’s wealth increased considerably over the latter years of her life.
Instead of wasting away her money, in her Will, Ms. Gordon decided to bequeath $10 million to various community colleges, with about 17 colleges each receiving cheques for $550,000. Interestingly, no stipulations were put into place as to how the money was to be spent by the colleges. The colleges could do with the money as they wished. For many of them, it was one of the largest donations they had ever received.
For an interesting perspective on the impact of donations to modest, as opposed to elite, institutions, you should listen to Malcolm Gladwell’s Revisionist History podcast (episode 6).
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The recent decision of Muth Estate, 2019 ABQB 922, a decision of the Court of Queen’s Bench of Alberta, is a cautionary tale (and a scary one, at that) for estate trustees when distributing an estate.
There, the estate trustee distributed the estate to herself and other beneficiaries of an estate, subject to a holdback. The holdback was insufficient to satisfy amounts owing to CRA. The estate trustee then brought an application for an order requiring that the beneficiaries indemnify her for the amounts owing to CRA.
The estate trustee moved for summary judgment. Summary judgment was denied. The court found that the respondent beneficiaries had no obligation to indemnify the estate trustee.
As background, the estate trustee retained an accountant to prepare estate tax returns. The accountant advised that a holdback of $25,000 was sufficient. The estate trustee therefore held back $25,000, and distributed the balance of the estate. Unfortunately, that accountant did not file the required returns. A second accountant then completed the returns. The tax owing and the second accountant’s invoice totalled $60,772.19. The estate trustee paid this amount, and sought indemnification from the beneficiaries for their share of this amount.
(Query: Whether the estate trustee would have a claim against the first accountant?)
Of note, when making the distributions, the estate trustee could have but did not ask the beneficiaries to provide an indemnity.
The court held that the Income Tax Act imposed personal liability on the estate trustee for unpaid taxes where a clearance certificate is not obtained.
The court went on to find that one of the duties of an estate trustee is to file tax returns and pay taxes owing. As the estate trustee breached her duties, she was not entitled to an indemnity. Relief may have been available if it was the beneficiaries who instigated or requested the breach. However, this was not the case.
The natural corollary of that principle [breach of trust at instigation of beneficiaries] is that if the beneficiaries did not instigate or request the breach, they cannot be obligated to indemnify the trustee. In a fiduciary relationship such as that between a trustee and a beneficiary, the logic of that corollary is that as between the two parties, one who had the obligation to perform the duty and failed and one who had neither the obligation nor the means to satisfy it, it is the former who should bear the consequences of the action or inaction.
Interestingly, the judge dismissed the estate trustee’s motion for summary judgment, but, notwithstanding the finding that the beneficiaries were under no obligation to indemnify the estate trustee, did not dismiss the proceeding. The beneficiaries did not ask for this relief. The matter was therefore allowed to proceed. However, the estate trustee was warned that “if she continues with the lawsuit, she may face a significant costs award if another judge comes to the same conclusion at the end of the suit.”
Thank you for reading.
In today’s podcast, Stuart Clark and Garrett Horrocks review some of the main procedural differences between the two primary types of legal proceeding in Ontario: the application, and the action.
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
Recently, the Advance Care Planning in Canada initiative, led by the Canadian Hospice Palliative Care Association, released a new resource to assist with advance care planning and choosing a substitute decision maker.
The “Speak Up” initiative includes two complementary resources.
One resource is the “Living Well, Planning Well” legal toolkit. The development of this toolkit was funded by Health Canada. The legal toolkit was designed to be used by lawyers and their clients, to encourage conversations and reflections about clients’ wishes for advance care planning, and putting appropriate arrangements in place.
The other resource is a public toolkit. It provides plain language information regarding the laws and processes with respect to advance care planning and substitute decision-making throughout Canada. This is helpful as the laws can vary between the provinces and territories.
It is very important to consider advance care planning, and to implement plans as early as possible. In particular, everyone should consider executing a power of attorney, to ensure that they are able to select the person responsible for making decisions on their behalf when they are no longer capable. Without a power of attorney, in Ontario, the ultimate decision as to who will make decisions on an incapable person’s behalf (other than those captured by the Health Care Consent Act, 1996), is left to the court. The court takes such matters very seriously, but most people prefer that the choice of substitute decision maker be their own.
Something else to contemplate is speaking with your family and friends, especially with your named attorney, regarding your wishes. As we enter the holiday season, and plan gatherings with our friends and family, consider taking this opportunity to have a conversation in this regard.
You can review Speak Up’s post about the release of their toolkit here.
Thanks for reading,
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My father used to have a saying: “Whatever drags gets dirty.” He would trot it out whenever one of us waited too long to do something and as a result, doing that thing became messy, complicated or impossible. For example: I was supposed to mail a letter. I didn’t mail the letter. Now I can’t find the letter. “Whatever drags gets dirty!”. Thanks, Dad.
Growing up, I thought that this was a widespread adage. Apparently, it isn’t. I searched it up on the internet and most of the results referred to Rupaul’s “Drag Race”.
The adage may fittingly sum up the lesson contained in the decision of the Nova Scotia Court of Probate in Kelly Estate, 2019 NSPB 1 (CanLII).
There, the deceased’s daughter and estate trustee, Carrie, brought an application for the possession of an urn containing the cremated remains of the deceased. The deceased died 13½ years before the application. Probate was granted 8 years before the application.
In the deceased’s will, cremation was requested, and Carrie was expressly given “the powers to decide what will happen with the said ashes.” This was consistent with the court’s observation that “Disposition of the deceased is one of the most fundamental tasks an executor/rix can undertake on behalf of the deceased.”
However, after the deceased’s death, the ashes were taken by Carrie’s sister, Cheryl. They remained at Cheryl’s home, apparently with the acquiescence of Carrie. The court noted that there was no evidence to suggest that there were prior attempts by Carrie to regain custody and control of the ashes over the 13½ years since death.
The court cited the BC decision of Re Popp Estate, 2001 BCSC 183 (CanLII) where the deceased’s husband, as estate trustee, was said to be entitled to control the disposition of the deceased’s remains, provided he did not act capriciously. As the husband was acting capriciously, he lost the right to deal with his spouse’s remains.
The court went on to find that by allowing the urn to remain in Cheryl’s possession for 13½ years, Carrie as estate trustee had in fact determined the disposition and final resting place of the urn: with Cheryl. A change of Carrie’s decision this late in the game “seems capricious at best or malicious at worst”, and the court was not prepared to order a transfer of the urn from Cheryl to Carrie.
When administering an estate, as in life in general, don’t let things drag.
Thanks for reading.
According to this CNN article, a scientific breakthrough has occurred thanks to research from the Arizona State University and Texas A&M University. These scientists have, for the very first time, identified the structure of telomerase in plants.
Telomerase is an enzyme that creates the DNA of telomeres.
>>Telomeres protects our cells from aging as our cells multiply.
>>>If our cells are protected from aging, then so will our bodies…
This breakthrough will allow scientists to study how telomerase in plants compare to the ones in animals, including humans! For example, there is a pine tree, named Methuselah, that is 4,845 years old in California. It is so inimitable that the location of this particular pine tree is kept secret for protection.
On the flip side, certain cells that have too much telomerase can be deleterious to our health, like cancer cells. The ability to stop a cancer cell from multiplying by shortening its telomeres could be revolutionary!
Fun fact: these components of life are so important that the 2009 Nobel Prize in Physiology or Medicine was awarded to Elizabeth H. Blackburn, Carol W. Greider, and Jack W. Szostak for their research on how chromosomes are protected by telomeres and telomerase.
Thanks for Reading!
Last month, in the case of McKitty v Hayani, 2019 ONCA 805, the Ontario Court of Appeal had to consider a challenge to the medical and common law definition of death on the grounds of freedom of religion. The Court also considered whether someone’s religious beliefs should be a factor when deciding whether they are legally deceased. In the end, the Court unanimously declined to rule on whether religious beliefs should be taken into account, but there were some key takeaways from the decision, and a framework was made that invites future challenges. This issue could have an important application in estates law, as it examines the standard for when someone is considered legally deceased.
Taquisha McKitty was declared dead in September 2017 following a drug overdose. The medical staff attending to her declared her dead due to “neurological criteria”; however her relatives were granted an injunction to keep her on life support, arguing their Christian faith only considers someone deceased upon cessation of cardiovascular, instead of neurological, activity. They made the argument that according to the freedom of religion in section 2 of the Canadian Charter of Rights and Freedoms, they have the right to have their religious views taken into account when it comes to determination of death and removal of life support. The point is now somewhat moot because McKitty has since died from both neurological and cardiovascular criteria; however important groundwork was laid for a potential future challenge.
The Court of Appeal unanimously concluded that it did not have enough information to rule on the matter. To be able to appropriately rule on the Charter issues, the Court held it would need more evidence on the duties and legal obligations of doctors, McKitty’s religious beliefs, and the religious beliefs of her community. The Court did accept the common law definition of death as being cessation of neurological activity, but left this definition open to future challenges based on freedom of religion. While not providing a definitive answer, the Court did craft a legal framework for how this issue should be addressed in future. This framework includes acknowledging that death is not just a medical determination but also an “evaluative” legal concept. The Court also ruled that the Charter still applied to McKitty as a legal “person” even though she was clinically dead, and a lack of neurological activity does not remove her right to challenge the criteria used to declare her death. With this framework in place, it remains very possible that we might see a further challenge within this framework in the near future.
In this case, the current definition of death as cessation of neurological activity was confirmed, but it remains very possible that this could be challenged on freedom of religion grounds. This has very interesting implications for estates law. For example, in families of mixed faiths, some members of the family might consider a relative to be deceased, while other members might consider them to be alive. This would cause a tricky situation when it comes to dividing up the estate. Watch this space!
Thanks for reading,
Ian Hull and Sean Hess
This week on Hull on Estates, Natalia R. Angelini and Kira Domratchev discuss a recent decision on the retroactive effect of proof of death in Threlfall v Carleton University, 2019 SCC 50 that dealt with a pension case from Quebec.
A helpful Canadian Lawyer magazine article by Elizabeth Raymer summarizing this decision can be found here.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
Competing applications about the ownership of a home were before the Court in Marley v. Salga, 2019 ONSC 3527. On the death, the home was jointly owned between the deceased (Salga) and his wife (Marley). Notwithstanding the registered, legal ownership of the property, Salga’s Will gave Marley a lifetime right to occupy and use Salga’s one-half interest in the property and thereafter directed that the house be sold for the benefit of the residuary beneficiaries.
This led the residuary beneficiaries to commence an Application for a declaration that the Estate is entitled to an undivided one-half interest in the home and for an order requiring the Estate Trustee (Klassen) to sell the home right away (the “Salga Application“). Thereafter, Marley commenced her own Application for a declaration that she was the sole legal and beneficial owner of the property, or, alternatively, that her interest in the property is greater than 50% (the “Marley Application“).
Ultimately, Justice Reid found that ownership of the property was severed by the deceased in the course of his dealings but denied the Salga Applicants’ request that the property be sold before the termination of Marley’s interest under the Will. The Marley Application was also denied. Our blog on this decision can be found here.
The parties were unable to agree to the issue of costs. Justice Reid, 2019 ONSC 6050, followed the traditional approach to costs in estate matters and the costs of both applications, on a partial indemnity scale, were ordered from the Estate. In reaching this conclusion, Justice Reid considered and found the following:
- The Marley Application was in essence a response to the Salga Application and the costs of both proceedings were treated as one;
- Both parties were found to be partially successful: the Salga Applicants were successful in obtaining a declaration that 50% of the home belongs to the Estate and the Marley Applicant was successful in preventing an immediate sale of the home;
- Consideration was given to the fact that an award of costs from the Estate meant that the Salga Applicants (as the residuary beneficiaries) would be effectively bearing their own costs as well as Marley’s costs. However, that was not enough to outweigh the deceased’s responsibility to act unambiguously by severing his interest on title during his lifetime.
- Costs against the Estate in this case “places the responsibility for the litigation squarely on [the deceased] where it belongs“.
This costs decision is also an informative read for the costs of an estate trustee as a respondent in both proceedings and how costs should be paid from an estate where there is no liquidity.
Thanks for reading!