Tag: estate law blog
With the loser-pays costs model firmly entrenched in civil litigation, and, for some time now, also consistently applied in most estate litigation cases, it behooves counsel to give early and ongoing consideration to putting forward an offer to settle under Rule 49 of the Rules of Civil Procedure with the objective of obtaining a more favourable costs outcome.
In order to get the benefit of the cost consequences under the Rule, such an offer (i) must be made at least seven days before the hearing, (ii) cannot be withdrawn and cannot expire before the commencement of the hearing, (iii) must not be accepted by the opposing side, and (iv) the offeror must meet or beat the offer at the hearing. However, even if this criteria is met, the court has the discretion to depart from the cost presumptions under the Rule.
Taking into account the court’s discretion, and given what feels like the release of more and more decisions where cost awards seem to bear little reflection to the costs incurred or the Rule 49 offers made, I wonder whether making a Rule 49 offer actually provides the expected benefit of a better costs outcome for the offeror.
In reading a recent article on the issue, I am reminded that there is some predictability in place. The authors review some relevant authorities, including Niagara Structural Steel (St. Catharines) Ltd. v. W.D. LaFlamme Ltd. and Barresi v. Jones Lang Lasalle Real Estate Services Inc., two Court of Appeal cases where it was held that the courts of first instance erred in resorting to the exception in Rule 49, and where the Court of Appeal reasoned as follows:
- the purpose of the Rule is to be an incentive to encourage settlement;
- a judge’s discretion to depart from the costs presumption under the Rule is not unfettered, and should not be exercised in such a widespread manner so as to render the general rule ineffectual; and
- a judge should only depart from the Rule “where the interests of justice require a departure”, after giving weight to the policy of the Rule, the importance of predictability and the even application of the Rule.
Thanks for reading and have a great day,
In our estate litigation practice, we commonly seek orders permitting registration of a Certificate of Pending Litigation (CPL) against title to property that is, for instance, an estate asset that a client is seeking to preserve until the litigation is concluded.
In order to obtain a CPL, one needs to demonstrate that an interest in land is in question, and in determining whether to order the issuance of a CPL, the following legal principles ought to be considered, as highlighted in Perruzza v Spatone:
- the threshold in respect of the “interest in land” is “whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed”;
- the onus is on the party opposing the order for a CPL to demonstrate that there is no triable issue with respect to whether the party seeking the CPL has “a reasonable claim to the interest in the land claimed”; and
- the governing test is that the Court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL ought to be granted.
We can see from the above that the threshold to obtain a CPL is not high; presumably the rationale being that it is more favourable to have a property in dispute secured during litigation than risk it being dissipated to the prejudice of a litigant.
Once a CPL is obtained it is prudent to assess the circumstances throughout the life of the litigation so that it is discharged at the appropriate time. As noted in Perruzza, factors the court can consider to discharge a CPL include whether the land is unique, whether there is an alternative claim for damages, whether there is or is not a willing purchaser and the harm if the CPL is or is not removed.
If the litigation stagnates, without reminders in place it is possible for the registered CPL to be left unaddressed. These were the circumstances in Novia v. Saccoia Estate (Trustee of). The CPL had remained on title for more than 20 years and even after the defendant’s death, ultimately forcing the defendant’s executor to obtain an order dismissing the action and discharging the CPL.
Thanks for reading and have a great day,
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,
No doubt our youth must navigate an increasingly complex world, and so it isn’t any surprise to see a growing focus on mental health issues and novel ways to address them. This is a very serious issue, yet I couldn’t help but chuckle when reading an article discussing a Dutch university’s new and original stress-management tool. Wait for it…lying in a grave!
Just when life’s challenges are getting you down, you ditch your electronic devices (for 30 minutes to 3 hours), lie in a grave, contemplate the alternative and put your problems into perspective. One student is reported to have said the following after her experience:
“When you think about death, you automatically also think about life. That is because you realize that life isn’t endless and that we are all going to die at one point. It makes you think about what do I want to do in life, and what do I think is the most important, what does my heart feel, what does my mind want to do.”
Maybe it’s the yogi in me, but this feels like a new form of mediation, as one author put it “an invitation to listen to yourself”. I would love to see this service available to students, and adults, locally. Getting into nature is cathartic in its own right, and the option of literally getting into the ground (with the added comfort of a pillow and mat) to reflect seems like a very peaceful and relaxing experience. There are lots of other ways we can let nature give us a boost. I dare you – when summer returns, channel your inner child and roll down a grassy hill!
Have a great day,
In Kirst Estate (Re), the Court of Queen’s Bench of Alberta had before it an interpretation case involving a holograph will of William Kirst (“K”). The will was a short handwritten document that divided the estate equally amongst K’s surviving children, with some qualifying language allowing Whitehorn (“W”), one of K’s children, to live in the family home. W had almost always lived in the home, which was the primary estate asset.
The phrase the Court was tasked with interpreting reads: “Whitehorn can live in the house for awhile, to be determined by Him and his brothers + sisters.”
The sole issue was the interpretation of the words “for awhile”.
The testimony of four of K’s children was considered (although ultimately of little assistance), with two of them believing K’s intention was that W remain in the house indefinitely, and the other two viewing their father’s intention as simply to permit W to stay in the home until he could get his affairs in order. As K discussed his estate with his children separately, each of them had his/her own understanding of K’s intentions. Notably, although K made the will in 1995, none of the kids had previously known about it or discussed its terms with K.
The Court cited and reviewed the following four general principles of interpretation recently set out by the Alberta Court of Appeal to assist in ascertaining K’s intention:
“First, a will must be interpreted to give effect to the intention of the testator. No other principle is more important than this one.
Second, a court must read the entire will, just the same way an adjudicator interpreting a contract or a statute must read the whole contract or statute.
Third, a court must assume that the testator intended the words in the will to have their ordinary meaning in the absence of a compelling reason not to do so.
Fourth, a court may canvas extrinsic evidence to ascertain the testator’s intention.”
The Court concluded that it could determine K’s intention by giving the words in his will their natural and ordinary meaning, and, in so doing, it was satisfied that the intention was to allow W to stay in the home subject to an enforceable condition that he and his siblings agree on how long he can continue to live there. The Court further found that as the siblings could not agree, the condition had not been fulfilled, such that W’s entitlement has ended.
The circumstances in this case are unfortunate, as the siblings had apparently been involved in protracted litigation since K’s death in 2010, including a dispute over the validity of the will. Although holograph wills can be helpful estate planning tools, I wonder if these same contentious circumstances would have developed if K had made his will with effective legal advice.
Thanks for reading,
In Threlfall v. Carleton University, the Supreme Court of Canada held that a deceased’s estate must repay pension payments received post-death. Although paying back a windfall seems like a common-sense outcome that would not require the analysis of the highest court in Canada, the 50-page 6/3 split-decision tells us it is not as simple as one would think.
In this case, Mr. George Roseme (“R”), a retired Carleton University professor who was suffering from Alzheimer’s disease, disappeared from his home in Quebec in 2007 after going for a walk. R’s remains were not found until almost six years later. During that passage of time, pension payments he had been receiving from the University at the time of his disappearance continued to be paid. Notably, the University did attempt to cease payments within a year or two after R disappeared, but R’s surviving spouse objected, since under the Quebec Civil Code one is presumed to be alive for seven years unless proof of death is obtained. The University reluctantly continued the payments.
After discovery of R’s death in 2013, and a determination that he died just one day after his disappearance in 2007, the University sought to recover the overpayment from R’s estate and surviving spouse. It was successful throughout. The Supreme Court of Canada decision, although lengthy and multifaceted, seemed to largely turn on the following findings:
- On the plain language of the pension plan, benefits were to end upon R’s actual death, not the date that it was discovered or officially recognized;
- The rebuttal of the presumption of life must be assessed retroactively, meaning that payments should only continue during lifetime. Given R’s date of death, this extinguished the entitlement to the pension payments made while R was an absentee. A prospective approach to the rebuttal of the presumption of life would generate a windfall not intended by the absence regime; and
- The payments were treated, with a retrospective view, as having been made in error, which obliges the recipient to make restitution.
The impact of the decision is weighty, with R’s surviving spouse being required to reimburse the University almost $500,000 in pension payments.
Considering this from the Ontario perspective, I look to the Declarations of Death Act. In this statute, once the seven-year absentee period expires, an application seeking a declaration of death can be brought. I note, though, that the Act contains provisions permitting the court to amend or revoke the order, as well as to make orders regarding the preservation or return of property. So if you find yourself in the unique circumstance of receiving assets post-absenteeism, perhaps setting them aside would be a good idea, because when things seem too good to be true, they usually are.
Thanks for reading,
P.S. A good summary article can be found here. Our blogs below also touch on some intriguing declaration of death cases:
In dependant support cases, the court shall consider many factors and circumstances in determining the amount and duration of support, pursuant to a non-exhaustive list detailed in section 62 of the Succession Law Reform Act. If the dependant is a spouse, the considerations also include a course of conduct by the spouse during the deceased’s lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship. In Webb v. Belway, we see this consideration taking center stage.
The deceased, Mr. Belway, suffered a stroke. He died approximately six months later at age 82. In the months prior to his passing, Mr. Belway was in the hospital and in long-term care. Ms. Webb assisted in in his care, and was acting as Mr. Belway’s attorney for property and personal care.
Mr. Belway died intestate. He was survived by his daughter, who stood to inherit the entire estate of almost $3.0 million. He was also survived by his long-time common-law spouse, Ms. Webb, age 73. Ms. Webb brought a dependant support claim seeking half of the estate.
Mr. Belway’s daughter opposed the application, arguing that due to Ms. Webb’s abhorrent behaviour she should not be entitled to any assets from the estate. Such behaviour included:
- Webb, acting as attorney for property, transferring more than $570,000 from Mr. Belway’s accounts for her own benefit, when Mr. Belway was hospitalized and incapable;
- Webb did not call Mr. Belway’s daughter to advise of her father’s stroke, of his hospitalization or of his having undergone surgery. She further refused to provide a phone number to reach Mr. Belway; and
- Webb took active steps to isolate Mr. Belway during his final months of life, including instructing caregivers to call the police should his daughter and family members attempt to visit.
The court ultimately found that Ms. Webb’s actions were “improper” but that all things considered she should still receive support, stating:
“Ultimately, I am not persuaded that Ms. Webb’s actions were egregious or malicious, nor do I find her actions to have been so unconscionable as to constitute an obvious and gross repudiation of the relationship.
Moreover, after being a common law couple for at least 18 years, though Ms. Webb’s actions are problematic, I do not find they negate her moral and economic claims against the estate.”
This decision suggests that one may need a greater strength and breadth of evidence to establish a course of conduct sufficient to repudiate the relationship, particularly in a long-term spousal relationship that substantially appears to be fairly typical (at least, in this case, until the pivotal health crisis late in life).
Thanks for reading,
The facts are saddening. The applicant and other class members, after losing loved ones, discovered that their loved ones’ obituaries (often with a photo) had been duplicated and posted on Afterlife’s website without permission. Many class members had written the obituaries in a personal way, adding to the emotional blow. The class members were also outraged at Afterlife’s conduct in seeking to profit from their bereavement through sales of candles and other advertising, and in conveying to the public that the families were benefiting from such sales.
The Court granted much of the relief sought, including $10 million in aggravated damages, given its agreement with the applicant that “…Afterlife’s conduct, aptly characterized as “obituary piracy”, is high-handed, reprehensible and represents a marked departure from standards of decency.”
It is heartening to know that justice was done in this case, with the award including injunctive relief preventing the website to operate, as well as a total damage award of $20 million. However, this optimistic feeling is tempered by the fact that Afterlife did not defend the lawsuit and shut down its website shortly after the class proceeding was commenced. It may thus be that enforcement of the Judgment will present a challenge, which would be an unfortunate outcome in an otherwise encouraging decision.
Thanks for reading,
An estate trustee has several responsibilities, including paying tax liabilities arising from the deceased’s death. There are multiple deadlines to remember, including:
- Prior Year’s T1 Return – If the death is between January and April, the return for the prior year must be filed within six months after the date of death.
- Terminal T1 Return – If the death is between January and October, the return for the year of death is due April 30th of the next year. If the death is in November or December, the return must be filed within six months.
- T3 Tax Return – If there is income received by the estate after the date of death, the T3 tax return must be filed within 90 days after the end of the calendar year or the estate year (365 days post-death), whichever period the estate trustee elects.
In addition to the above income tax-related deadlines, should the executor apply for a Certificate of Appointment (probate), Estate Administration Tax (“EAT”) will be owed upon filing the application. EAT is calculated on the value of the assets of an estate:
- $5 per $1,000.00, or part thereof, is owed on the first $50,000.00; and
- $15 per $1,000.00, or part thereof, is owed on the value of the estate over $50,000.00.
Once probate is granted, an Estate Information Return (“EIR”) must be filed with the Ministry of Finance. An EIR requires the executor to provide an inventory and particulars of each type of asset of the estate, including fair market values at the date of death. The deadline to file the initial EIR is within 90 days after probate is granted. If the executor discovers incorrect or incomplete information, an amended EIR must be filed within 30 days of the discovery.
The 2019 Budget of Ford’s Ontario government proposes certain changes that would impact both the EAT and EIR.
EAT – The 2019 Budget proposes to eliminate the payment of EAT on the first $50,000.00 of the estate value. This change would spare modest estates from having to pay EAT, which may be particularly impactful in circumstances with limited available monies. It will also result in a savings of $250.00 for larger estates, as no EAT will be payable on the first $50,000.00.
EIR – The 2019 Budget proposes to extend the EIR initial filing deadline from 90 days to 180 days, and the amended filing deadline from 30 days to 60 days. The change to the initial filing deadline may be especially helpful for executors, as it can be a challenge to obtain particulars and date of death valuations of all estate assets within just three months of death.
Thanks for reading and have a great day,
Whether art, history, science, or fashion is your thing, a trip to the museum is a sure-fire way to marvel at the ingenuity of humankind, spark new inspiration, or escape to a different time and place. It’s no wonder one of the world’s most popular museums, the Louvre, welcomed 10.2 million visitors in 2018 from all over the world.
Whether motivated by the desire to preserve heritage and culture, or a passion for education, according to this New York Times article, philanthropists have been instrumental in the exponential growth in museums that we have observed, particularly in the last 50 years.
Some donors gift their collectibles to an institution while alive, with conditional terms to the acceptance of their donation. Take, for example, philanthropist Wendy Reves who donated more than 1,400 works from the collection of her late husband to the Dallas Museum of Art, with the stipulation that they recreate five rooms from the couple’s villa in the South of France, including furnishings from the villa’s original owner, Coco Chanel.
Other donors gift their collections from beyond the grave. In other words, they include specific provisions in their will donating their works to a particular institution, also known as a bequest. In 1967, the late Adelaide Milton de Groot, bequeathed her entire art collection (which contained more than 200 paintings) to the Metropolitan Museum of Art in New York City.
While American museums are beholden to important donors, they are also running out of space to properly store and preserve items not on display. In fact, many American museums only showcase approximately 4% of their inventory, with the balance held in climate-controlled storage spaces. To address this issue, many American museums have taken to formally disposing of part of their inventory, a term also known as deaccessioning.
Conversely, Canadian museums are facing challenges on the acquisition side. For the last 30 or so years, the Cultural Property Export and Import Act (CPEIA) earned Canadian donors tax credits for the market value of their donated art as long as it fell within the scope of “national importance”. This incentivized Canadian donors to bequeath their art to Canadian museums, which ensured that important cultural property remained in Canada for the benefit of Canadians.
Recently, the federal court decision in Heffel Gallery Limited v Canada (AG) narrowed the definition of national importance in the CPEIA, meaning millions of dollars in artwork donations to museums and art galleries were halted. As explained in this article, the newly proposed Budget 2019, “proposes to amend the Income Tax Act and the Cultural Property Export and Import Act to remove the requirement that property be of ‘national importance’ in order to qualify for the enhanced tax incentives for donations of cultural property.” This is good news for both donors and museums.
It is still too early to know how these changes will manifest in practice, given that Heffel Gallery Limited v Canada (AG) is still under appeal, and Budget 2019 has not yet passed. Institutions such as the Canadian Museums Association are hopeful that the new changes will mean more tax incentives for donors and more artwork being donated.
All this to say, if you have a Basquiat or Degas yearning to be seen by the masses, it may just have its chance to shine, with significant tax breaks to your estate!
Thanks for reading!