Tag: Estate Litigation
Having addressed yesterday the treatment of contingency fees under Ontario’s Solicitors Act, we now turn to Regulation 195/04 to that Act, which addresses contingency fee requirements in greater detail. (Section number references are to those Regulations.)
Contingency Fee agreements must be in writing, must be entitled “Contingency Fee Retainer Agreement”, must be dated and must be signed by both lawyer and client with both signatures being verified by a witness. The lawyer must provide a signed copy of the contingency fee agreement to the client and must retain a copy as well. (Section 1)
Section 2 mandates certain inclusions in the written contingency fee agreements:
1. The name, address and telephone number of both solicitor and client;
2. A statement of the basic type and nature of the matter with respect to which the solicitor is providing services;
3. A statement that indicates that the client and solicitor have discussed options for retaining the solicitor other than by contingency fee, including hourly rate retainer, that the client has been advised that hourly rates may vary among lawyers, that the client is free to speak with other solicitors to compare rates, that the client has chosen to retain the lawyer by way of contingency fee agreement, and that the client understands all usual protections and controls on retainers between lawyer and client apply to the contingency fee agreement. This last protection ensures that clients know that if there is a breakdown in the relationship or a disagreement as to the contingency fee agreement and the value of services and the amount of payment to be made, the client can apply to the Court for an assessment of the contingency fee agreement;
During Hull on Estates Episode 34, we discussed Security for Costs Motions in the context of Estate Litigation including the cases of:
- Re Bisyk (1979), 23 O.R. (2d) 600;
- Moses Estate, Re (2001), 38 E.T.R. (2d) 231 (Manitoba Master);
- Boutzios Estate, Re (2004), 5 E.T.R. (3d) 51 (Ont. S.C.J.); and
- the changing landscape of the law in respect of Security for Costs Motions.
Burden of Proof
Although the procedure for a contempt motion is civil in nature, the actual determination is criminal in nature. Thus, the burden of proof in civil contempt proceedings is proof beyond a reasonable doubt, as apposed to the balance of probabilities. Any doubt must be exercised in favour of the person alleged to be in breach of the order. The burden of proof is the same for both civil or criminal contempt motions, as the sanctions which flow from both forms are criminal/quasi-criminal in nature.
Under Rule 60.11(5) of the Rules of Civil Procedure, a judge, in disposing of a contempt motion, may make such order as is just, and where a finding of contempt is made, the judge may order that the person in contempt:
a) be imprisoned for such period and on such terms as are just;
b) be imprisoned if the person fails to comply with the term of the Order;
c) pay a fine;
d) do or refrain from doing an act;
e) pay such costs as are just; and
f) comply with any other order that the judge considers necessary,
and may grant leave to issue a writ of sequestration under Rule 60.09 against a person’s property.
The imposition of a sanction, however, is permissive not obligatory. The actual sanction will be dependent on the circumstances of the case and the mitigating/aggravating factors involved. It is clear, however, that judges have a broad discretion to fashion their sanctions.
Although Orders for contempt may be procedurally encumbering, courts will not shy away from the appropriate sanction. For example, in Sussex v. Sylvester, (2002), 62 O.R. (3d) 123 (Ont. S.C.J.), the Court noted that imprisonment was deemed to be an appropriate sanction because in the particular circumstances of the case, paying a fine would have been ineffectual.
Estate litigation is often expensive. However, some relief may be found in Rule 76 (simplified procedure) and, in particular, its provisions for a summary trial. Rule 76 is an attempt to keep costs down by providing less procedure for modest claims of $50,000 or less, exclusive of interest and costs. Interestingly, the plaintiff can opt to proceed by way of the simplified procedures for a claim exceeding $50,000, as long as the defendant does not object. If the defendant does object, the claim proceeds by the ordinary procedure.
Under Rule 76, examinations for discovery, or cross-examinations of a deponent on an affidavit filed on a motion, are not allowed. However, parties are required to include in their affidavit of documents a list of the names and addresses of persons who might reasonably be expected to have knowledge of transactions or occurrences at issue in the action. This added requirement is designed to disclose information that the parties might have otherwise discovered during an examination for discovery.
Under the simplified procedures, the parties may agree that the trial shall be an ordinary trial or a summary trial. If the parties cannot agree, the pre-trial conference judge or master can decide what mode of trial is appropriate. The procedure for a summary trial is as follows (Rule 76.12):
1. Evidence-in-chief is to be adduced by affidavit, not orally.
2. The opposing party may cross-examine the deponent orally, which can be followed by oral re-examination. Oral re-examination is limited to 10 minutes.
3. All of a party’s cross-examinations can take no more than 50 minutes.
4. Each party is entitled to make oral closing arguments of not more than 45 minutes.
5. The trial judge may extend the time limits set out above.
In the estate context, the parties should consider utilizing the simplified procedure if they are looking for a relatively quick resolution or want to contain their legal costs. By reducing the overall costs of the litigation, a party can also reduce the amount that they may have to pay to the winning party should they ultimately lose at trial. The parties opted to proceed by way of summary trial in McDougald Estate v. Gooderham  O.J. No. 3106 (S.C.J), affirmed at  O.J. No. 2432 (C.A.). During the lifetime of Headley Maude McDougald (the testator), her attorneys for property sold 640 South Ocean Boulevard, Palm Beach, Florida (the "Property") pursuant to a Power of Attorney. The Property was subject to a specific bequest in Mrs. McDougald’s Will. The parties sought direction from the court as to whether the proceeds of that sale adeemed and became part of the residue at the date of death or whether section 36 (the anti-ademption section) of the Substitute Decisions Act, 1992 applied to prevent ademption. The doctrine of ademption is a common law rule dating back to the 18th century. Ademption occurs whenever a testator makes a bequest of a specific piece of property that is not found among the testator’s assets at the time of his or her death. In such a case, the bequest is said to have adeemed and the bequest simply fails on the basis that "the thing meant to be given is gone". Any proceeds from a disposition of the property fall into the residue of the estate, unless the testator has indicated in his or her Will that the bequest includes any such proceeds. In 1996, Mrs. McDougald had three attorneys managing her estate pursuant to a Power of Attorney.
Hello. My name is Paul Trudelle, and I am an associate with Hull and Hull LLP. I am the guest “blogger” this week. I plan to use my time and space to address some of the issues surrounding the due execution of a will.
Execution of a will is often seen as a simple task, but the process can sometimes pose serious challenges to the practitioner retained to prepare an effective will. Challenges to the validity of a will on the basis of due execution are common, as are solicitor negligence actions where the will fails as a result of improper execution.
The requirements for due execution of a will are set out in Part I of the Succession Law Reform Act, R.S.O. 1990, c. S.26 as amended (“SLRA”). The SLRA provides the framework for the valid execution of a will. These sections merit a review. Section 3 provides that a will is valid only when it is in writing. “Writing” is defined in s. 29 of the Interpretation Act, R.S.O. 1990, c. I.11 as including words printed, painted, engraved, lithographed, photographed, or represented or reproduced by any other mode in a visible form.
There is no provision for videotaped wills in Ontario. A will may be written in a foreign language. However, when applying for a Certificate of Appointment, the Court must be furnished with an authenticated translation. Alternatively, a non-English speaking testator can have the English will read to him by a translator. The translator should swear an affidavit averring that the will was read over to the testator and that he or she appeared to understand it. Section 4(1) of the SLRA sets out the requirements for due execution.
Tomorrow, I will look closely at the requirements of this section.
Have a great day. Paul Trudelle
Orders Giving Directions in Estate Litigation are the focus of this week’s blogs. While estate litigation is similar in many respects to civil litigation, the approach to litigating estate claims can be quite different given the estate litigator’s ability to, among other things, seek and obtain an Order Giving Directions to manage the litigation.
Typically, in civil litigation, if the claim proceeds by way of statement of claim, the pleadings stage will be followed by documentary (affidavit of documents) and oral discovery, mediation and/or a pre-trial conference and thereafter, a trial. One’s approach to estate litigation may be different, however, based on counsel’s opportunity, at first instance, to, or attempt to, design and craft the manner in which the litigation may proceed and/or to seek the assistance of the Court with obtaining interim and/or ancillary procedural relief. How one chooses to manage a claim, which will lead to one’s choice of proposed provisions for the Order Giving Directions, will in turn depend on, among other things, the nature of the issues, who the parties are and/or ought to be, the evidence one thinks one will need to prove and/or defend such issues, how one can best marshal such evidence and utilize that evidence towards the pursuit of a settlement and/or the prosecution of the claim; all of the above being considered in the context of the value of the estate and the costs that will accompany the prosecution and/or defence of the claim.
Negotiating an Order Giving Directions Rule 75 of the Rules of Civil Procedure deals with contentious estate proceedings. Under Rule 75.06(1), any person who appears to have a financial interest in an estate may apply for directions, or move for directions in another proceeding under this rule, as to the procedure for bringing any matter before the court. An application for directions or motion for directions shall be served on all persons appearing to have a financial interest in the estate or as the Court directs, at least 10 days before the hearing of the application or motion. Parties can, however, seek such an application or motion on short notice if permitted by the Court.
A Separation Agreement may purport to release the spouses from all claims including any claims to a share in company pension plans, RRSPs, etc. As such, A Separation Agreement can be an "instrument" as that term is referenced in s. 51(1) of the Act although the term itself is not described in the statute (see Burgess v. Burgess Estate  O.J. No. 4846 (Ont. C.A.).
In Burgess v. Burgess Estate, the deceased had designated his first wife as beneficiary of his deferred pension sharing plan (DPSP), which he held with his employer, during the course of his marriage. He subsequently entered into a Separation Agreement in which he reduced her entitlement to one half of the DPSP. He subsequently remarried and made a new Will leaving his entire estate to his second wife and the children of his first marriage.
On an application before Madam Justice Haley, the first wife sought a declaration that she was entitled to the whole of the DPSP. The first wife essentially made the same argument which was accepted by the courts in the line of cases in which Wills which were inconsistent with Separation Agreements were found to prevail: in her submission, she did not, by the Separation Agreement, "waive the right to claim if the deceased spouse chose not to alter his or her beneficiary designation so as to eliminate her as a beneficiary." Madam Justice Haley accepted the reasoning: the contract between the employer and its employee was separate from the marriage. Not being a party to the Separation Agreement, the employer, with whom the deceased filed his beneficiary designation, could not be said to have been bound by the Agreement. If the deceased truly intended to eliminate or reduce the entitlement of his spouse, he would have changed the beneficiary designation at the source.
If a Will is made, or if there is an intestacy, a husband or wife receives the benefit provided under the deceased spouse’s Will or the intestacy provisions of the Successioin Law Reform Act, respectively, or is entitled to elect to instead receive his or her benefit under the Family Law Act.
Such election will be made if the husband or wife will receive a more favourable benefit by receiving one half of the difference between the net family properties of the deceased spouse and the survivor respectively.
Note that the right to elect is restricted to married spouses.
If an election under the Family Law Act will not benefit the surviving spouse, the option remains for the surviving spouse to claim against the estate under the provisions of Part V of the Succession Law Reform Act. The position asserted by the surviving spouse on such a claim is that the deceased spouse, by the provisions of his or her Will or on a distribution on an intestacy, did not satisfactorily provide for the needs of his or her spouse.
Spousal relationships (and their breakdown) and their interaction with estate litigation are the focus of this week’s blogs. In the practice of estate litigation, there is an immense body of applicable case law and statutory authority.
For the purpose of these blogs, the term "married spouse" is used to consider those entitlements which are only granted to those spouses who fall within the definition of marriage in Ontario. The term "unmarried spouse" is used to consider the entitlements of spouses who are not married but who are conferred benefits under the provisions of certain statutes.
(i) Rights of a married spouse on an intestacy
The entitlement of a married spouse on an intestacy is statutory: Succession Law Reform Act, Part II. A surviving husband or wife, on an intestacy, receives the entire estate of his spouse if there are no children. If there are children, the surviving husband or wife still receives the first $200,000.00 of the estate and either 1/2 of the remainder if there is one child or 1/3 of the remainder if there are two of more children of the marriage.
(ii) Rights of an unmarried spouse on an intestacy A surviving unmarried spouse, on an intestacy, receives no entitlement. A spouse is defined for the purposes of Part II of the Succession Law Reform Act as either a man or a woman who is married.
Although there are some cases in other provinces which suggest that this statutory provision offends the equality provisions of the Charter, the only available statutory remedy for an unmarried spouse on an intestacy in Ontario is to bring an application for support under the provisions of Part V of the Succession Law Reform Act.
Tomorrow, we will consider the entitlements of married and unmarried spouses under a Will and their entitlements when the benefit under the Will is less than adequate.
Have a great day, David. ——–
READ THE TRANSCRIBED PODCAST HERE
During Hull on Estates Episode 20, we discussed costs awards and estate litigation. We also analyzed:
- the case of Ali v. Fruci,  O.J. No. 1093 (S.C.J.);  O.J. No. 1425 (S.C.J.); and
- the case of Andersen v. St. Jude Medical, Inc.  O.J. No. 508 (Div. Ct.).