Part V of Ontario’s Succession Law Reform Act ("SLRA") establishes a mechanism whereby qualifying dependants can claim support from the estate of a deceased. Section 72 of the SLRA is a deeming provision that includes certain non-estate assets as part of the estate for the purposes of calculating the value of the estate, and allows such assets to be charged ("clawed back") by a support Order made under section 63 of the SLRA.
The recent case of Simson v. De Bartolo 2009 CanLII 38493 (ON S.C.) interprets section 72(1) and applies Cummings v. Cummings 2004 CanLII 9339 (ON C.A.), the Court of Appeals decision holding that support awards are subject to moral considerations. One issue following Cummings has been whether moral considerations justify a support award in and of themselves, or whether moral considerations are merely relevant to quantum of support following a determination that a support award is appropriate.
The applicant in Simson v. De Bartolo was litigation guardian for her child, born out of wedlock to the deceased and the actual support claimant. When the applicant told the deceased’s wife about their relationship and the child, the deceased transferred these properties to his wife (from joint ownership) and made a will disinheriting the child. Later, the deceased died virtually penniless. At issue in a motion was whether properties transferred by the deceased to his wife 10 years prior to his death could be deemed part of the deceased’s estate under any enumerated grounds in section 72(1).
Justice Lemon held that these assets could not be "clawed back" under s. 72(1). Most particularly, a transfer of land to another party in the absence of an express written trust instrument does not fall within section 72(1)(e). Of course, the transfer may still be impressed with a trust, as Justice Lemon pointed out, and if such trust pulls the asset into the estate, the SLRA provides for protection of the dependant pursuant to section 67. Moral considerations were relevant in determining quantum of support, but not whether an asset forms part of the estate.
The facts in Simson v. De Bartolo appear to have precluded the court from addressing the Cummings question, at least in the motion being heard. However, section 72 has been clarified.
Enjoy your day,
Chris M.B. Graham – Click here for more information on Chris Graham.
As it is the Friday before a long weekend, I thought a more light-hearted blog would be in order.
What is the origin of Canadian Thanksgiving? Like so much in Canada, we borrowed the tradition from our American cousins in the mid 1800s. However, at the time, Protestant church leaders in Ontario wanted to set the right moralistic tone when it came giving thanks for the harvest. As such, Thanksgiving started off as a decidedly religious, white Anglo-Saxon Protestant, pro-British and anti-American affair. Catholics were certainly not welcome nor were visible or religious minorities. The first national Thanksgiving was held in 1859 on a Thursday. Over time, the Protestant churches lost control of the holiday and it became more secular and less exclusive. Parliament eventually declared that Thanksgiving should fall on the second Monday of October partly due to pressure from transport companies who hoped that a holiday on a Monday would increase holiday traffic.
Canadian Thanksgiving therefore had nothing to do with harvesting of crops or the arrival of fall colours. But Canadian Thanksgiving is nevertheless typically Canadian: it sprang from a parochial and prejudiced mindset heavily influenced by the politics and values of the day not to mention the colossus to the south. The world of commerce also had a say and got its way when it came to a fixed date. However, as Canada grew and matured as a country, Thanksgiving become more widespread and inclusive. Today, Thanksgiving is a time for all Canadians to give thanks for the bounty of the land and the freedoms we enjoy. Vive le Canada and Happy Thanksgiving!!
Thanks for reading my blogs this week.
Pursuant to Section 3 of the Substitute Decision Act, the court may direct the PGT to arrange for legal representation for a person whose capacity is in issue in a proceeding under the SDA. The SDA further states that the person so represented shall be deemed to have capacity to retain and instruct counsel. However, section 3 counsel’s position and role remains somewhat murky. In Banton v. Banton, the court considered the import of an incapable person being deemed capable to retain and instruct counsel.
The court recognized that the position of section 3 counsel is “potentially one of considerable difficulty”. However, the court did not believe that section 3 counsel was in the position of a litigation guardian with authority to make decisions in the incapable person’s interest. According to the court, counsel must take instructions from his/her client and “must not act if satisfied that capacity to give instructions is lacking”. A very high degree of professionalism may be required in borderline cases where it is possible the incapable person’s wishes may be in conflict with his/her best interests and counsel’s duty to the court. The phrase offers precious little guidance to section 3 counsel, but does sound a cautionary note. In the circumstances, perhaps the best advice is for section 3 counsel to fully explain the situation to the court and ask the court’s advice and direction.
Finally, as an aside, the Ontario Government has now introduced legislation that would allow people to apologize with impunity. In other words, an apology will not be held against you in court. The hope is that “The Apology Act” will go a long way to defusing a contentious situation before litigation results. Sorry may, in fact, go a long way.
As always, thanks for reading.
Pursuant to section 79 of the Substitute Decisions Act, the court has discretion to order a capacity assessment of an individual if the person’s capacity is an issue in a proceeding under the SDA. The court must also be satisfied that there are reasonable grounds to believe that the person is incapable.
Where a capacity assessment has already been obtained, the court will be reluctant to order a further capacity assessment of an individual, unless the court has, for example, concerns about the lack of detail or objectivity within the assessment that has already been obtained.
In Forgione v. Forgione, the court was concerned about the adequacy of the assessment carried out by a medical doctor. The court did not know what background information the doctor had or what, if any, influence anyone other than one family member may have had on the process. The report was very brief and consisted largely of conclusions without analysis. There were a number of facts and conflicting versions of facts which, in the court’s view, warranted further examination because they raised questions about the capacity and vulnerability of the incapable. A second assessment was ordered.
The superrich likely have the market cornered when it comes to epic estate battles – Howard Hughes, J. Howard Marshall (i.e. Anna Nicole Smith), and E. Howard Hunt (of silver fame) – quickly come to mind.
However, even the mildly famous or sainted can have their moment in the estate spotlight. Recently, Luciano Pavarotti’s family was in the news when a dispute arose among his offspring in respect of his considerable fortune. They have apparently reached a settlement.
I also read with interest a recent US newspaper article indicating that two of Martin Luther King’s children had filed a lawsuit against a third regarding a dispute over the civil rights leader’s estate (J. Edger Hoover would have loved it). Bernice King and Martin Luther King III filed a lawsuit in Atlanta in order to force their brother, Dexter King, to open the books of their famous father’s estate.
From what I understand, the lawsuit claims that Dexter King, who is the executor of his father’s estate, has refused to provide his brother and sister with documents concerning the estate’s administration. The lawsuit claims that Dexter King and the estate "converted substantial funds from the estate’s financial accounts…for their own use". The siblings were never told beforehand and are now seeking financial records and other documents in order to investigate the administration of the estate.
Martin Luther King’s "dream" seems to have stalled when it comes to sibling rivalry and the fortunes of his estate. However, on a more serious note, the dispute once again reminds us of the importance of transparency in the administration of an estate and open communication between executor and beneficiary.
Thanks for reading. Auf Wiedersehen
Listen to Accounting Under the Powers of Attorney
This week on Hull on Estates, Diane and Paul discuss accounting under the powers or attorney, the duty to account after the guarantor has passed away and the De Zorzi Estate v. Read case (2008, O.J. No. 944).
Mr. Justice Brown presented a paper at the recent OBA CLE Seminar Emerging Trends in Estates and Trusts: What Does the Future Hold? Mr. Justice Brown’s paper was adeptly titled One Judge’s “Wish List”: Best Practices on the Estates List. Mr. Justice Brown sits in Toronto and is a member of the Estates List. In one section of his paper, Mr. Justice Brown wrote as follows under the heading “Who is your audience?”
“In Toronto the Superior Court of Justice operates an Estates List. Each week one judge is assigned to sit exclusively on the Estates List and another judge is available for the last three days of the week if the need arises. Estates List judges are drawn from one of the two Toronto civil teams or, occasionally, from the civil long trials team. Usually newly appointed judges are assigned to a civil team for their first year on the bench. As a result the judges who hear matters on the Estates List more likely than not will come from a civil or commercial litigation background, but will not necessarily possess specialist training in estates or trusts.