Plan Well Guide’s Toolkit for Legal Practitioners: Helping You Help Your Clients Plan for Incapacity
Last year, my colleague Nick Esterbauer blogged about the Plan Well Guide – a free online tool to assist individuals with their advance care planning. An advance care plan sets out how a person wishes to be treated during a serious illness or health crisis. The Plan Well Guide helps users to create a ‘Dear Doctor’ Letter explaining their values and preferences with respect to their future medical care, which can then be given to their physician and substitute decision-makers to ensure that their wishes are known. For a more in-depth look at the Plan Well Guide and the process of creating a Dear Doctor letter, you can read Nick’s blog here.
Recently, the Plan Well Guide launched a new toolkit designed for legal practitioners. This free online toolkit is intended to help lawyers help their clients become better prepared for future serious illness and incapacitation. In addition to various educational resources for both lawyers and their clients, the toolkit includes:
- a sample power of attorney for personal care;
- a sample advanced health care directive;
- a sample personal directive;
- a sample ‘Dear Doctor’ letter; and
- a step-by-step guide on how lawyers can incorporate the Plan Well Guide into their practice.
Of course, the sample legal documents contained in the toolkit should be amended to reflect the client’s specific set of circumstances and the laws of the applicable jurisdiction.
What I like most about the Plan Well Guide’s new toolkit is that it highlights the importance of a multidisciplinary approach to advance care planning. An effective advance care plan – that is, a plan which facilitates medical substitute decision-making that is consistent with the incapable person’s actual values and preferences – depends on the collaborative efforts of a person’s lawyers, doctors, and substitute decision-makers. The Plan Well Guide and its new toolkit offer accessible ways for legal professionals, health care professionals, and their clients/patients to coordinate their efforts to make serious illness planning more effective. If a lawyer is interested in improving the quality of future medical decision-making and patient outcomes for their clients, the Plan Well Guide’s toolkit for legal practitioners is certainly worth looking into.
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Sometimes when parties arrive at a settlement, notwithstanding that the settlement may objectively be in their interests, they may not necessarily be pleased with the outcome. If the settlement has been concluded and fully documented, however, a party who has had second thoughts will likely be out of luck if they want to avoid complying with the agreement. This is important because parties should usually be held to the bargains that they make in a settlement.
A settlement does not necessarily have to be in writing to be valid, but like any contract, there must be a “meeting of the minds” on the essential terms of the agreement.
In a recent decision, Daehn v Lalonde, 2021 ONSC 301, the court considered a motion to enforce a settlement where draft minutes of settlement had been exchanged, but not signed. The dispute between the parties underlying the settlement concerned the validity of competing Wills. The parties were engaged in negotiations between January and July 2019, during which time several offers and versions of draft minutes of settlement were exchanged. In mid-July, counsel for the responding parties to the motion advised the moving party that he would no longer be acting for the responding parties, and retracted all offers to settle made by the responding parties.
The moving party took the position that certain conduct by counsel for the responding parties should be taken as akin to acceptance of terms in the minutes of settlement. Such conduct included providing bank statements that had been requested as a condition of settlement, and proposing changes to some terms of the draft minutes without complaint about others. The court did not accept this argument, and did not find acceptance of the agreement by words or conduct of the responding parties.
The court briefly reviewed the law regarding validity and enforcement of settlements. Like a contract, a concluded settlement requires both a mutual intention to create a legally binding contract, and agreement on all essential terms of the settlement.
The court found that the responding parties never agreed to the terms of settlement. Despite the moving party’s argument that the responding parties had agreed to the sole “essential” term, the court found that it cannot be the case that the moving party alone can dictate what terms of the settlement are essential. The court concluded that a settlement cannot be imposed where no agreement was reached.
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Earlier this year, our colleague Doreen So, blogged in two parts (here and here) on the matter of PGT v Cherneyko. It is a blog that discusses a litany of failures by an attorney for property. While Doreen covered the facts in full, they are worth repeating here in part:
“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 […]”
The PGT applied to take over as guardian for property and, among other things, to set aside the gift to Tina. The court agreed and ordered the $250,000 returned to Jean on the basis of resulting trust.
In a novel approach to the law of gifts, the court in Cherneyko relied on Pecore to establish that the gift ought to be returned, saying: “The leading Canadian case on the law of gifts, the Supreme Court of Canada in Pecore v Pecore, 2007 SCC 17 (CanLII) at paras. 24-26 established that where a gratuitous transfer of property is found, there is a presumption of a resulting trust. The onus falls to the recipient to rebut the presumption.” In the court’s view, Tina failed to rebut the presumption.
But this represents a new application of the Supreme Court’s analysis and it’s worth revisiting Pecore.
In 2007, Justice Rothstein, writing for a unanimous court (Justice Abella concurring) looked closely at gratuitous gifts of joint bank accounts, between parents and children, and whether the presumption of resulting trust and advancement applied in modern times:
“The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended: see Waters’ Law of Trusts, at p. 375, and E. E. Gillese and M. Milczynski, The Law of Trusts (2nd ed. 2005), at p. 110. This is so because equity presumes bargains, not gifts.”
The decision in Cherneyko represents a significant expansion of the principles of Pecore by applying them to inter vivos gifts between unrelated adults. Traditionally, if the courts determine that a transferor lacked the requisite capacity, the gift is void as the transferor lacked the capacity to form the proper intention to gift. Ball v. Mannin, an almost 200-year-old UK case established the original test for granting a gift and held that a person had capacity if the person was “capable of understanding what he did by executing the deed in question, when its general purport was fully explained to him.” The Supreme Court has previously outlined a separate test in Geffen v Goodman Estate in 1991, examining the nature of the relationship itself, and applying a presumption of undue influence where there is the presence of a dominant relationship. While the failed gift in Cherneyko was ultimately returned under a resulting trust, it will be fascinating to see if other courts also continue this expansion of Pecore. We’ll keep you posted.
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Ian Hull and Daniel Enright
Something that surely no testator or beneficiary wants to see is the failure of a gift made in a Will. Unfortunately, circumstances can arise where the language of a Will may be ambiguous, or where events occurring during the estate administration expose uncertainty in a term of the Will that wasn’t necessarily apparent at the time of drafting or execution.
In Barsoski v Wesley, 2020 ONSC 7407, the estate trustee sought directions from the court regarding a clause in the deceased’s Will that allowed the deceased’s friend (the “Respondent”) to live in the deceased’s home during his lifetime, or such shorter period as the Respondent desires. Upon the earlier of the Respondent advising that he no longer wished to live in the home, or the Respondent “no longer living” in the home, the house and its contents are to be sold, and the proceeds added to a gift to another beneficiary of the Deceased’s Will, a charity, St. Stephens House of London (“St. Stephens”).
The deceased died in June 2017. Confusion arose when it became apparent that the Respondent was not actually living in the home on a full-time basis. This first came up around December 2017 and continued for a couple of years. The home was in London, but the Respondent continued living and working full-time in Toronto following the deceased’s death, and seemingly up until 2019. He then started a full-time job in Sault Ste. Marie in 2019.
The Respondent’s evidence was that he was using the home as his primary residence in that he spent time at the home on weekends 1-2 times per month, and used it as his address for his driver’s license and for CRA purposes. He stated that he planned to live in the home full-time after he retired around July 2021.
St. Stephens, as the gift-over beneficiary of the home, took the position that the Respondent had not been living in the home, and therefore it should be sold pursuant to the terms of the Will.
The court first considered whether the Will gave the Respondent a life estate or a licence to use the home subject to a condition subsequent, concluding that the proper interpretation was that it was a licence with a condition subsequent. The condition subsequent in question was when the Respondent was “no longer living” in the home. The court outlined that a “condition subsequent is void for uncertainty if the condition is ‘far too indefinite and uncertain to enable the Court to say what it was that the testator meant should be the event on which the estate was to determine’”. Accordingly, the court concluded that it was impossible to define, on the terms of the deceased’s Will, what it meant to “live” in the home.
The question of whether, on the facts, the Respondent’s use of the home constituted him “living” there is an interesting one. However, due to the court’s conclusion that the terms granting the Respondent an interest in the home were void for uncertainty, it was unnecessary for the court to make any findings of fact on this particular question.
The estate trustee, who was also the drafting lawyer, gave evidence (that was ultimately inadmissible) that the deceased had been considering some changes to her Will prior to her death. The changes would put time restrictions on the Respondent’s use of the home, including that he would be required to move into the home within 90 days of her death, and not be absent from it for more than 120 days. These additional terms may have provided sufficient certainty for the beneficiary to know what he had to do in order to maintain his interest in the home, and for the estate trustee to administer the estate. Although this evidence had no impact on the court’s decision, it can serve as an important reminder that if one wants to change their Will, one should do so as soon as possible to ensure the Will reflects their wishes at the time of their death.
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As my colleague, Nick Esterbauer, blogged about last week (here and here), the COVID-19 pandemic has pushed all of us, including the courts and the legal profession, towards the increasing use of technology. This has included the use of video-conferencing for examinations of witnesses in the litigation context. As we adapt to this new world, there are inevitably going to be ‘hiccups’. It is crucial to maintain the integrity of the process and to ensure that virtual examinations are not abused.
A recent decision of the Ontario Superior Court of Justice dealt with just such a situation. In Kaushal v Vasudeva et al., 2021 ONSC 440, the cross-examination of the respondent to an application was held over Zoom. The respondent required an interpreter for his cross-examination, and the respondent, his lawyer, and the interpreter all attended at the lawyer’s boardroom for the examination. They were all in the same room together, but on separate devices. The respondent’s wife and son came to the lawyer’s office with him, but according to the respondent they remained in the reception area at all times. It was confirmed on the record by the respondent’s lawyer that the only people present with the respondent during the examination were the lawyer and the interpreter.
Following the examination, the applicant noticed that a microphone and camera in the respondent’s lawyer’s boardroom had been left on, and he could hear the respondent’s wife and son speaking. It appeared to the applicant that the wife and son had listened in on the examination.
The respondent denied that his wife and son were present in the boardroom during his cross-examination. His lawyer’s legal assistant also provided affidavit evidence that the wife and son were not in the boardroom during the examinations.
The interpreter, however, ultimately swore two affidavits that the wife and son were present in the boardroom throughout the respondent’s examination, and were prompting the respondent’s answers by hand and facial gestures. The court accepted the interpreter’s evidence in its entirety.
The court concluded that there was misconduct during the respondent’s cross-examination on the basis that his wife and son were present and made hand and facial gestures to assist him with his answers. The court further concluded that the respondent’s misconduct amounted to abuse of process and that his affidavit responding to the application must be struck. It was the court’s view that it “must send a strong message that interference in the fact-finding process by abusing or taking advantage of a virtual examination will not be tolerated. In a broader sense, this type of misconduct strikes at the very heard of the integrity of the fact-finding process such that general deterrence is also a factor.”
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It is generally understood that, in order to execute a valid Last Will and Testament, a testator must meet the legal test for capacity. Drafting solicitors must remain especially vigilant when preparing a Will for an elderly client.
On October 16, 2013, we blogged on the correlation found between oversleeping and mental incapacity. Though the cause for the correlation was unknown, studies conducted by Columbia University and Hospital University of Madrid concluded that those who regularly oversleep might be more likely to develop Dementia. “Oversleeping” was classified as sleeping for nine or more hours every night.
Researchers funded by the National Institute of Health have found evidence that the reverse is also true when it comes to sleep: those already suffering from progressive neurodegenerative disorders, such as Alzheimer’s Disease, may experience more severe symptoms and a quicker decline as a result of chronic lack of sleep. Sleep patterns can affect cognitive ability and, in turn, the ability to execute a Will. These findings negate some cultural beliefs that “sleep is for the weak” and instead suggest that sleep is more important than we might want to believe.
Just as we cleanse our physical bodies at the end of each day, the brain also undergoes a process to cleanse itself of its “waste,” otherwise known as amyloid plaques. This detoxification process occurs while we are sleeping. Amyloid plaques are produced throughout the day and, like any other plaque that is built up, they can cause harm to our bodies when not properly removed. Amyloid plaques, specifically, have been linked to brain functioning and associated with Alzheimer’s disease. Without a proper night’s sleep, our brains are unable to eliminate these damaging toxins and thus cannot maintain optimal functioning.
Given the compelling evidence linking sleep patterns to possible cognitive decline, if you wish to remain capable of executing a Will, the importance of a good night’s rest cannot be overstated.
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Suzana Popovic-Montag and Tori Joseph
In a will challenge proceeding, the propounder has the onus of proving due execution, knowledge and approval, and testamentary capacity. The propounder is assisted by a presumption that if the will was duly executed, after having been read over or read to the testator who appeared to understand it, the testator had knowledge and approval, and the necessary testamentary capacity. This presumption can be rebutted by evidence of suspicious circumstances, based on evidence led by the challenger. The challenger must introduce evidence that, if accepted, refutes knowledge and approval or testamentary capacity. If this is done, the onus reverts to the propounder. Where a challenge is based on undue influence, the onus of proving undue influence is on the challenger.
The difficulties that arise for a challenger in refuting the presumption of capacity or of proving undue influence are discussed in the Alberta Court of Queen’s Bench decision of Logan Estate (Re), 2019 ABQB 860 (CanLII).
There, the deceased had 2 prior wills that provided that her estate was to be divided amongst her 6 children. If a child was to predecease, that child’s share would go to his or her issue. Subsequently, one of the children died. The deceased made a new will, leaving her estate to the 5 surviving children. A child of the predeceased child challenged this will.
The evidence of the drafting solicitor was that the deceased directed the changes. According to the lawyer’s notes, the husband of the predeceased child (the challenger’s father) told the deceased that he had lots of money, and that his children would be well taken care of financially under his estate.
The husband later denied this. However, by this time, the husband was suffering from dementia. He was not able to provide an affidavit or be examined on his evidence.
The court referred to the onuses, and the “epic hurdle” on the challenger. Section 11 of the Alberta Evidence Act (similar to s. 13 of the Ontario Evidence Act) requires that in an action by or against heirs, next of kin, executors, administrators or assigns, an opposed or interested party may not obtain a judgment on that person’s own evidence in respect of any matter occurring before the death of the deceased person unless the evidence is corroborated by other material evidence.
On the issue of corroboration, the court quoted from Ian Hull and Suzana Popovic-Montag’s Probate Practice:
“The issue of meaningful corroboration with respect to claims against an estate is a fundamental starting point in any estate litigation evidentiary analysis. One of the unique challenges of estate litigation is that the star witness and primary source of information is, almost always, dead. Section 13 of the Evidence Act specifically addresses this dilemma, and aims to prevent claims against estates that are based on mere allegations. The provision requires that there be independent corroboration of allegations [claims] against estates.”
As the evidence of the challenger could not be corroborated, due to her father’s incapacity, her challenge to the will was dismissed.
In dismissing the challenge, the court offered this cold comfort to the challenger:
I appreciate that [the challenger] is disappointed that she is not receiving what she believes is her proper share of Velma’s estate. However, a family member (even a lineal descendant) does not have an automatic right to a share in the estate of a deceased relative who leaves a will. The testator, through her will, has the sole power to determine the distribution of her assets. A testator may change her mind from a previous will, whether for good reason or not. These harsh realities apply even where the ultimate distribution is contrary to that family member’s sense of fairness or rationality.
The decision was upheld on appeal by the Court of Appeal of Alberta at Logan Estate (Re), 2021 ABCA 6 (CanLII).
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In a recent decision from the British Columbia Court of Appeal, Mayer v Mayer Estate, 2020 BCCA 282, the court considered an application to reopen a trial to admit new evidence or to have a mistrial declared (the “post-trial application”). The post-trial application arose as a result of an email between the respondent’s daughter-in-law (who had been assisting the respondent with the litigation) and the respondent’s counsel. The appellant had obtained the email from the deceased’s computer. The deceased and the respondent had shared an email address, and when the appellant connected the computer to the internet some emails were downloaded from the shared account, including the email in question. The appellant took the position that the email that she had obtained impugned the respondent’s credibility by contradicting evidence she had given in the previous proceedings. The post-trial application was dismissed, and the appellant appealed the decision.
The Court of Appeal dealt with the question of the email fairly briefly. The post-trial application judge had concluded that the email was a communication that was subject to solicitor-client privilege. The Court of Appeal appears to have accepted that finding.
The content of the email is not specifically set out in the decision, but appears to have related to the purpose for which the respondent had made certain transfers to the deceased. It appears that, notwithstanding the finding that the email was privileged, the court still considered whether the contents of the email did impact the respondent’s credibility.
The respondent swore affidavit evidence in the original proceedings that she had made two transfers to the deceased to assist him in paying some tax debts. The email apparently indicated that at the time the respondent swore her affidavit, she knew that the deceased did not, in fact, have any tax debt. The post-trial application judge’s analysis stated that it appeared the deceased may have been untruthful with the respondent at the time the transfers were made, and probably used the funds for something other than tax debts, which he did not have. However, the respondent’s evidence in this regard was not a lie, because at the time of the transfer, all she knew was what the deceased had told her, namely that he intended to use the funds to pay his tax debts.
Additionally, the post-trial application judge had already addressed minor inconsistencies of this nature in the respondent’s evidence in his reasons from the original proceeding, noting that they were not consequential and fully explained by the respondent.
The Court of Appeal dismissed the appeal. In making this decision, the Court of Appeal notes that “it is apparent that the appellant is seeking largely to re-argue the case as originally tried before Justice Crossin, particularly as to credibility, which is not open to her.”
The Court of Appeal also awarded the respondent special costs (on a higher scale), based on its conclusion that the very serious allegations made and maintained by the appellant against the respondent constituted “sufficiently reprehensible conduct to merit rebuke in the form of an award of special costs”.
Although scenarios may exist where new evidence could have such an impact on credibility that it would warrant reopening a trial, one should be careful to fully assess the nature and strength of such evidence. The award of special costs also serves as further caution that serious allegations such as fraud and perjury should be made very selectively, when they are appropriate and fully supported by the evidence.
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When a party is incapable of instructing counsel, or his or her capacity is in question in a proceeding, there are safeguards in place in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), and the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”) to ensure that the incapable party’s interests are protected. The Rules provide for the appointment of a litigation guardian for a party under disability, while the SDA provides for the appointment of “section 3 counsel” when the capacity of a person is in issue in a proceeding under the SDA and they do not have legal representation. While a litigation guardian and section 3 counsel may have a similar purpose, their roles are quite different. Situations may arise where one or the other is required, but there are also times when it may be difficult to determine which one is necessary in the circumstances. The recent decision of Dawson v Dawson, 2020 ONSC 6001 is one such instance.
In Dawson, one of the parties, Michael, was incapable of managing property or instructing counsel, and was the subject of a proceeding under the SDA. Michael’s wife, Josephine, sought to be appointed as his litigation guardian in that proceeding. The Office of the Public Guardian and Trustee (the “PGT”) opposed the appointment of a litigation guardian, and took the position that the appointment of section 3 counsel would be appropriate in the circumstances.
Ultimately, the court appointed Josephine as litigation guardian for Michael, notwithstanding that section 3 counsel would typically be appointed in such a situation. Part of the court’s reasoning was that “[b]oth a litigation guardian and s. 3 counsel are responsible for protecting the interests of a vulnerable litigant, but they do so in significantly different ways.”
The court highlighted the limitations on section 3 counsel, being that they are counsel, not a party. If a lawyer is acting for a client with capacity issues, as may be the case with section 3 counsel, it may be difficult or impossible for the lawyer to ascertain the client’s wishes and instructions. Without instructions from his or her client, a lawyer cannot take a position in a proceeding, even if one assumes that the client would have agreed with that position, or that it is in the client’s best interests. Section 3 counsel cannot make decisions on behalf of his or her client.
A litigation guardian on the other hand, stands in the shoes of the party under disability, and is able to make decisions on behalf of the party. As stated by the court: “[a] litigation guardian therefore does precisely what s. 3 counsel cannot do, that is, make decisions on behalf of a vulnerable person.”
The role of section 3 counsel is very important in the context of proceedings under the SDA, given the significant impact that, for instance, a finding of incapacity, and the appointment of a guardian can have on an individual’s liberty. However, where section 3 counsel is unable to get instructions, the appointment of a litigation guardian may be necessary in order to protect the individual.
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Broadly speaking, a trustee cannot personally profit from his or her role as a trustee. “Profit” can mean a variety of things. One way in which a trustee could potentially profit from a trust is through the purchase of trust property.
A trustee may not purchase trust assets unless there is an express power in the Will or trust instrument allowing a trustee to do so, or if the purchase is approved by the court. Even where a trustee has the express power to purchase trust assets, he or she must still act in accordance with his or her fiduciary obligations to the beneficiaries of the trust or estate. Additionally, a trustee who has been authorized to purchase trust assets would be well-advised to obtain consents and releases from the beneficiaries, or to consider seeking court approval in any event, given that such a situation is ripe for claims that the trustee breached his or her fiduciary duty.
The court should only approve the sale of trust property to a trustee where the sale is clearly to the advantage of the beneficiaries. Demonstrating that a sale is clearly advantageous to the beneficiaries can be difficult, as it is not enough to just show that the purchase price is fair. For instance, even if a trustee has offered a fair price, if there is another purchaser who is willing to purchase the asset for a greater price, the trustee’s purchase will not be to the advantage of the beneficiaries.
The problem with a trustee purchasing trust assets is that in doing so, he or she is practically putting him or herself in an irreconcilable conflict of interest: the trustee has a duty to maximize the value of the trust assets for the beneficiaries, but in his or her personal capacity, will want to minimize the price paid for an asset. A trustee seeking to purchase trust property will need to ensure that he or she has taken sufficient steps to satisfy the court that he or she has maximized the value of the asset.
In Re Ballard Estate, (1993) 20 O.R. (3d) 189, a trustee, S, obtained certain option rights to purchase trust property. The trustees obtained two valuations of the property in question, and S and the other trustees negotiated a purchase price for the property in question at the upper end of the range of values pursuant to the valuations. However, the property was not offered for sale on the open market, and the trustees did not take steps to identify other potential purchasers. The court found that the trustees could have done more to ensure the maximum value was obtained for the asset, stating that the trustees should have taken “all reasonable positive steps to ferret out the best price”. Trustees cannot avoid their obligation to maximize the value of the assets by taking a passive stance and hoping that other potential purchasers will find them.
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