Tag: law

12 Jul

Intervention: Trying to Get In The Game

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , , 0 Comments

Sometimes, you are added as a party to a proceeding when you don’t really want to be. In other cases, a proceeding is started, and you are not a party, but want to be. What can be done about this? Intervention.

Under Rule 13.01(1) of the Rules of Civil Procedure, a person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims:

  1. an interest in the subject matter of the proceeding;
  2. that the person may be adversely affected by a judgment in the proceeding, or
  3. that there exists between the proposed intervenor and one or more of the parties a question of law or fact in common with one or more of the questions in issue in the proceeding.

Rule 13.01(2) adds another consideration. The court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding.

Intervention was considered in the decision of Arnold v. Arnold, 2019 ONSC 3679. There, the proceeding involved a Power of Attorney dispute between 3 of the incapable person’s children. The issue was whether a 2011 Power of Attorney, which appointed children 1, 2 and 3 as attorneys, governed or whether a 2019 Power of Attorney, which only appointed children 2 and 3 as attorneys governed.

The proposed intervenor was child 4. He was not named as attorney in any of the Powers of Attorney, and was not a party to the proceeding. Child 4 was diagnosed with schizophrenia and lived in his mother’s, the incapable person’s, house. He was receiving support from her. He sought to intervene to ensure that his needs were protected.

The court considered the criteria for intervening, and refused to allow child 4 to intervene.

As to the first criteria, the court found that essence of the application was who was to be responsible for the management of mother’s property, not how it was to be managed. While child 4 may have an interest in how the property was being managed, he had not genuine interest in who.

Regarding the second criteria, child 4 acknowledged that he was not adversely affected by the management of mother’s property, as long as the responsible person fulfills that role properly. The court added that child 4 would benefit from the determination of the question raised in the proceeding, as he would then know with whom he is dealing.

With respect to the third criteria, child 4 argued that he had potential claims as against his father’s estate and his mother for child support. The court found that the questions raised in those potential proceedings were not the same as the questions raised in the existing proceeding regarding who was to care for mother. Further, child 4’s lack of intervenor status would not prejudice his claims.

The court also found that allowing child 4 to intervene would result in undue delay and prejudice. The proceeding was already being expedited, and was scheduled to be heard two weeks after child 4’s motion to intervene. Allowing child 4 to intervene would likely delay the proceeding. Had child 4 moved to intervene sooner, this might not have been the case.

Costs were awarded against child 4. However, due to his being on ODSP, costs were awarded against child 4 in the amount of $4,000 to each of the other groups of litigants. Payment was deferred until child 4 received his share, if any, of his mother’s estate.

Thanks for reading.
Paul Trudelle

17 May

Lawyers at Borders

Paul Emile Trudelle Estate & Trust, Estate Litigation, Estate Planning, Uncategorized Tags: , , , , 0 Comments

On May 5, 2019, CBC reported on a story of a lawyer who had his cell phone and laptop seized by the Canada Border Services Agency when he refused to give them his passwords.

According to the report, Nick Wright was returning to Canada after a 4 month trip to Guatemala and Colombia. After his bags were searched, the Canada Border Services officer asked for the passwords to his phone and laptop, so that they could be searched as well. Wright refused, telling the officer that his devices contained confidential solicitor-client information. His devices were then confiscated, to be sent to a government lab which would try to determine the passwords and search the files.

According to Canada Border Services, digital devices are classified as “goods”, and Canada Border Services is allowed to examine the goods, including any electronic files on the device, for customs purposes. If a traveller refuses to reveal their password, Canada Border Services may seize the device. According to the policy manual, although an arrest would “appear to be legally supported, a restrained approach will be adopted until the matter is settled in ongoing court proceedings.”

U.S. customs and border protection officials have similar rights to search devices. Refusal to disclose passwords may result in confiscation or a denial of entry.

Such digital device searches do not occur frequent. In the 17 months between November 2017 and March 2019, 19,515 travellers entering Canada (0.015% of all travellers) had their digital devices examined by Canada Border Services.

The Canadian Bar Association warns about the risks of such searches to lawyers. Lawyers have a duty to keep client communications private. This applies to all information about a client or former client. The duty extends to staff, as well. “Your client has a right to privacy which requires you not to disclose to anyone, with exceptions, when any communications between you relate to legal advice sought or given.”

The Canadian Bar Association says that a breach could result in a loss of client trust, a client lawsuit for negligence, an E&O claim, disciplinary action and public criticism.

The Canadian Bar Association suggests that when crossing a border, lawyers should travel with a “clean device”. They should use cloud technology to store any solicitor-client information. Lawyers should erase all privileged information from their devices, including contact lists with clients’ names, addresses and contact information. The search by border services does not allow them to access information on the cloud. Once across the border, this information can easily be reinstalled from the cloud.

Happy travelling.

Paul Trudelle

01 Feb

New Rules Regarding a Motion For Removal as Lawyer of Record

Paul Emile Trudelle Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills Tags: , , 0 Comments

Effective January 1, 2019, new rules apply to a motion by a lawyer for removal as lawyer of record.

Under Rule 15.04 of the Rules of Civil Procedure, a lawyer may bring a motion to have him or herself removed as lawyer of record. The old Rule was silent on whether other parties to the litigation, other than the client, had to be served. Under the recent amendments, it is now clear that such a motion must be brought on notice to every other party. However, a motion record need not be served on every other party: just the notice of motion.

The new Rule goes on to provide that the lawyer making the motion shall ensure that any information in the notice of motion or motion record that is subject to solicitor-client privilege, or that may be prejudicial to the client, including the grounds for the motion, is redacted or omitted from the notice of motion that is served on the other parties, and from the motion record that is filed with the court. At the hearing, the lawyer is to provide the presiding judge with a complete and unredacted version of the notice of motion and motion record. This is to be returned to the lawyer after the hearing, and does not form part of the court file.

Under the new Rule, it is likely that the court will require greater detail as to the precise reason for the removal, rather than a general statement such as “breakdown in the solicitor-client relationship”. The new Rule allows the lawyer to set out the precise reason for the removal, without disclosing those reasons, at least to the other parties to the litigation.

A question, however, remains as to whether the lawyer can disclose solicitor-client communications, if only to the judge. Arguably, information subject to solicitor-client privilege should not be divulged to a judge, even in the context of a motion by a lawyer for removal

The amendment was the subject of comment in the decision of Solutions Construction Management v. 1971538 Ontario Inc., 2019 ONSC 503 (CanLII). There, the plaintiff brought a motion for summary judgment. The defendant’s lawyer had recently brought a motion to remove him or herself as lawyer of record, and the defendant therefore sought an adjournment. The adjournment was granted. The plaintiff had been served with the defendant’s lawyer’s motion. However, they did not attend at that motion or advise the court of the pending motion for summary judgment. The summary judgment judge, in adjourning the motion, stated that:

This matter is a cautionary tale as to the significance of the recent amendment to r. 15.04 of the Rules of Civil Procedure.  It may, in some circumstances, be necessary for litigants to respond to or, at a minimum, attend on the return of a motion by an opposing party’s lawyer for an order for removal from the record.  That step may be necessary to ensure that the court is (a) fully informed of the status of the litigation, and (b) given an opportunity to consider the potential prejudice to other parties if counsel for one party is removed as lawyer of record.

Thank you for reading.
Paul Trudelle

19 Oct

Cannabis and Estate Law

Paul Emile Trudelle Estate & Trust, Estate Planning, In the News Tags: , , 0 Comments

In case you haven’t read or heard enough about the legalization of cannabis in Canada this week, here’s more.

The legalization of cannabis in Canada may have a significant impact on estate planning. Specific issues include:

  1. Impact on Testamentary Capacity

Today’s marijuana is not the same as marijuana from “back in the day”. The average potency of marijuana has risen from 3.9% THC in 1983 to 15.1% in 2009. On the OCS website, the only legal retailer of recreational marijuana in Ontario, cannabis is available with a labelled THC content of 17 to 28%.

The long term effect of cannabis on cognitive functions has been documented.  The immediate and long term effects of cannabis use may have an impact on testamentary capacity, much like other intoxicants or mind-altering substances.

  1. Impact on Bequests Conditional on Non-Use of Illegal Drugs

The use of incentive trusts is not common, but they do exist. See our blog, here, and our podcast on the topic, here. These trusts can be used to limit or restrict distributions to a beneficiary based on prohibited behavior.

An issue arises if the trust is designed to disincentive use of “illegal drugs”. The effect of the legality of marijuana may undermine the testator’s intentions.

  1. Insurance Issues

Numerous issues arise in the context of health and life insurance. Issues include:

  • Disclosure of cannabis use and the effect on insurability and rates
  • The implications of being a medical user, as opposed to a recreational user
  • Whether the purchase of medical marijuana is covered by health insurance. (See our blog on this topic, here.)
  • Whether a loss arising from the use of marijuana would be covered.
  1. Administration Issues Related to Cannabis

Issues related to administration include:

  • What does the estate trustee do with cannabis possessed by the deceased?
  • How is the cannabis to be valued for Estate Administration Tax purposes? (However, in light of the possession limits, this might be de minimus.)

These matters may be of greater concern in the US, where some states have legalized marijuana, while it remains illegal under federal legislation.

For a more detailed discussion of these issues from an American point of view, see “Joint wills and pot trusts: Marijuana and the Estate Planner” by Gerry Beyer and Brooke Dacus.

Have a great weekend.

Paul Trudelle

10 Oct

The great estate – 5 ways to make it happen

Suzana Popovic-Montag Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Wills Tags: , , , , 0 Comments

As estate litigators, we’ve seen a lot of bad estates and bad estate situations. The good news is because we know the bad, we can advise clients on how to avoid it and make their estate a great one. No uncertainty, no delays, no conflicts, no nasty tax surprises.

If you want to make your estate a great one, here are five essential elements that can make it happen.

  1. You’ve provided a clear path to the documentation

Ideally, your executor needs the original copy of your will – as do courts to ensure a smooth probate process. So, don’t make your will (and any other estate documents) hard to locate. Whether it’s stored at your lawyer’s office, or registered with the court, or stored in a filing cabinet at home, make sure that you and your loved ones remember where your will is and know how to access it. We discuss this issue in more detail here.

  1. Your estate assets are easy to identify

Don’t assume your family and your executor know what you own. Many of us scatter our assets and accounts more than we realize. Make a list of all bank and investment accounts, insurance policies, major assets, and any virtual assets of value and keep this list with your will or ensure your named executor has a copy.

  1. Your executor is trustworthy and can access the help they need

When choosing an executor, trust is essential as the person selected must be capable of acting impartially on behalf of your estate – regardless of their personal feelings about your estate and the beneficiaries.

While your executor doesn’t need to be an accountant or lawyer or investment advisor, they do need to be able to hire the expertise that your estate might require. In other words, they need to know what they don’t know, and have the common sense to seek out the tax, accounting, and legal expertise that may be needed.

This article provides a great “quick list” of things to consider when choosing an executor.

  1. Everyone knows what’s in your will – in advance

It is dangerous to assume that your intended beneficiaries know what is in your will and have no questions or concerns. Talking today about your intentions and your family members’ expectations lets you address any contentious issues while you’re alive – and avoid potential conflicts after you’re gone.

Even the most well-intentioned gifts – a charitable bequest, the china cabinet to a niece, the vintage hockey cards to a grandson – can lead to questions, hurt feelings and potential conflicts.

Don’t let it happen. Make sure that everyone who might be touched by your will at death knows exactly what’s in it.

  1. Tax planning in place – if needed

You’re deemed to have disposed of your capital assets at their fair market value when you die. This means your estate is liable for capital gains taxes on assets that have increased in value during your lifetime. Your executors may be forced to sell estate assets to pay for the tax liability – and a forced sale may mean the assets are sold for less than their fair value.

There are many strategies available to help cover an estate’s tax liability, from the use of trusts to the purchase of life insurance. Make sure you’ve considered whether tax planning is needed for your estate, and put a strategy in place if needed.

Thanks for reading … Have a great day!
Suzana Popovic-Montag

05 Oct

The Blunt Force of Limitation Periods

Paul Emile Trudelle Beneficiary Designations, Estate & Trust, Estate Planning, Trustees, Uncategorized, Wills Tags: , , 0 Comments

“No one likes to see a limitation period applied to dismiss a claim. That said, there are good reasons for limitation periods. This case is an example of why they exist.”

So says Justice Nakatsuru in the opening line of his decision of Sinclair v. Harris, 2018 ONSC 5718 (CanLII).

There, the estate trustees of the estate of Virginia Rock (“Rock”) sued Merilyn and Frederick Harris (“the Harris’s”), claiming an equitable interest in lands purchased by the Harris’s, as part of the funds for the purchase of the lands were provided by Rock.

There, the relevant time line was as follows:

July 12, 2000:             Rock provides money to the Harris’s to buy a property

August 5, 2003:           The Harris’s sell the property. Rock was apparently aware of this.

November 17, 2015:   Rock dies

February 24, 2017:     Rock’s estate trustees commence the action

Justice Nakatsuru found that the 10 year limitation period under the Real Property Limitations Act applied. He disagreed with the estate trustees’ position that no limitation period applies to a claim for resulting trust. As the claim was a claim for the recovery of land (or “money to be laid out in the purchase of land”), the limitation period in the Real Property Limitations Act applied.

The court held that the limitation period would have commenced on the date the funds were advanced. Alternatively, it would have run from the time when the Harris’s sold the property. Under either interpretation, the limitation period had passed.

The action was dismissed.

Justice Nakatsuru said that “No one likes to see a limitation period applied to dismiss a claim.” No one other than a defendant.

Footnote: Justice Nakatsuru has been called the “poetic” judge and lauded in Macleans Magazine for his “heartfelt, easy-to-read rulings”. For an excellent example of this, see his decision on a bail application in R. v. Sledz, 2017 ONCJ 151 (CanLII).

Have a great weekend.

Paul Trudelle

24 Aug

Sometimes You Lose, Even When you Win: The Impact of Costs

Paul Emile Trudelle Estate & Trust, Estate Planning, Uncategorized Tags: , , , , 0 Comments

King Pyrrhus of Epirus defeated the Romans at the Battle of Heraclea in 280 BC and the Battle of Asculum in 279 BC. He went on to lose the Pyrric War. Of the battles won by Pyrrus, Plutarch has quoted Pyrrhus as saying “If we are victorious in one more battle with the Romans, we shall be utterly ruined.”

The same observation can be made of some civil litigation.

VB was injured while running on an indoor track at McMaster University. He sued the other runner, the running club, the running coach and the university. He and his family members claimed damages of $1.1m, plus interest and costs.

After a 13 day trial, the jury found that VB and his family suffered damages totalling $104,885. The runner and the university were not found liable. The coach and the running club were found 60% liable, and VB was found 40% contributorily negligent. Thus, VB and family were to recover approximately $60,000.

Then came the decision on costs.

Offers to settle were made before trial. Collectively from the defendants, the offer totalled $180,000. The plaintiffs’ offer was said to be for $1,216,550.

The judge in his costs reasons noted that as the trial was a jury trial, he could have “blithely sat back and let the costs clock tick away”. The judge didn’t do this. Rather, the judge twice suggested that the parties agree to a midtrial pretrial with another judge, to see if the matter could be settled. The plaintiff refused. “That kind of opportunity can be fruitful as counsel have seen how the case has evolved and with a lot of things in life, how its evolution was different from that which was expected. … The continuation of the trial did not make economic sense in terms of what could be gained by the plaintiff in the face of mounting costs for all parties. By continuing the trial, the likelihood, if any, amount being awarded being a ‘Pyrrhic’ victory loomed large.”

And Pyrrhic was the victory.

The plaintiffs received a judgment of $60,000. They were awarded costs against the running club and coach of $43,108. The plaintiffs were ordered to pay costs to the university of $95,000, and to the running club and coach of $69,156.

In addition, the plaintiffs may have had to pay their own lawyers.

Costs of a proceeding must always be front of mind. Further, the impact of reasonable offers to settle must be considered: both when making offers and when considering offers from the other side.

Thank you for reading.

Paul Trudelle

15 May

Alberta’s Approach to Digital Assets

Nick Esterbauer Estate Planning, Executors and Trustees, Power of Attorney, Trustees Tags: , , , , , , , , , , , , , , , , , , , 0 Comments

Our firm has previously blogged and podcasted at length about digital assets and estate planning, and the issue of fiduciary access to digital assets during incapacity and after death.

While digital assets constitute “property” in the sense appearing within provincial legislation, the rights of fiduciaries in respect of these assets are less clear than those relating to tangible assets.  For example, in Ontario, the Substitute Decisions Act, 1992, and Estates Administration Act provide that attorneys or guardians of property and estate trustees, respectively, are authorized to manage the property of an incapable person or estate, but these pieces of legislation do not explicitly refer to digital assets.

As we have previously reported, although the Uniform Law Conference of Canada introduced the Uniform Access to Digital Assets by Fiduciaries Act in August 2016, the uniform legislation has yet to be adopted by the provinces of Canada.  However, recent legislative amendment in one of Ontario’s neighbours to the west has recently enhanced the ability of estate trustees to access and administer digital assets.

In Alberta, legislation has been updated to clarify that the authority of an estate trustee extends to digital assets.  Alberta’s Estate Administration Act makes specific reference to “online accounts” within the context of an estate trustee’s duty to identify estate assets and liabilities, providing clarification that digital assets are intended to be included within the scope of estate assets that a trustee is authorized to administer.

In other Canadian provinces, fiduciaries continue to face barriers in attempting to access digital assets.  Until the law is updated to reflect the prevalence of technology and value, whether financial or sentimental, of information stored electronically, it may be prudent for drafting solicitors whose clients possess such assets to include specific provisions within Powers of Attorney for Property and Wills to clarify the authority of fiduciaries to deal with digital assets.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that may be of interest:

14 May

SCC to Revisit Standards of Review

Nick Esterbauer General Interest, Litigation Tags: , , , , , , , , 0 Comments

Last week, the Supreme Court of Canada granted leave to appeal the judgment of the Federal Court of Appeal in the Minister of Citizenship and Immigration v Alexander Vavilov, and announced that this appeal will be heard along with the appeals of two other judicial review matters.

The Vavilov appeal concerns the decision of the Registrar of citizenship to revoke the status of a Canadian on the basis that his parents were not lawful Canadian citizens or permanent residents at the time of his birth.  Though Canadian citizens, the man’s parents had been undercover spies and, under the provisions of the Citizenship Act, were considered to be “employees or representatives of a foreign government”, rather than lawful citizens of Canada whose son would be Canadian by virtue of their citizenship and the place of his birth alone.  The man’s application for judicial review of the decision of the Registrar to cancel his citizenship was initially dismissed by the Federal Court on the basis that the relevant section of the Citizenship Act did not limit the meaning of representatives or employees of foreign governments.  The Federal Court of Appeal reversed this decision, concluding that the decision of the Registrar was unreasonable and that the purpose of the section of the Citizenship Act in dispute was to apply only in respect of representatives of foreign governments who enjoy diplomatic immunities or other privileges.

While it is rare for the Supreme Court to release reasons granting or refusing leave to appeal beyond one sentence, the Court’s recent judgment granting leave to appeal elaborates as follows:

The Court is of the view that these appeals provide an opportunity to consider the nature and scope of judicial review of administrative action, as addressed in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190, 2008 SCC 9, and subsequent cases. To that end, the appellant and respondent are invited to devote a substantial part of their written and oral submissions on the appeal to the question of standard of review, and shall be allowed to file and serve a factum on appeal of at most 45 pages.

Matters of judicial review are generally unrelated to estates law.  However, members of our firm have assisted clients with applications for judicial review involving estate-related issues and we can appreciate the value of the clarification of the state of the law involving standards of review that may come from the Supreme Court’s reconsideration of these principles.

Thank you for reading.

Nick Esterbauer

 

Other blog entries that you might enjoy reading:

 

17 Apr

On the Law of Cadavers

Hull & Hull LLP Estate & Trust, Estate Planning, Guardianship, Uncategorized Tags: , 0 Comments

Receiving an unintentionally thought-provoking and somewhat oddly titled book recently led to some internet research on the topic of the book. The old book is entitled, ” The Law of Cadavers” second edition 1950 by Percival E. Jackson and published by Prentice Hall. The second edition was apparently required after the first edition of 1936 sold out. Over 700 pages on everything from the right to burial, disinterment, to actions and proceedings respecting dead bodies before and after burial.

It resulted in some thought on how the law evolves over time and how in our time most of the practice and procedures related to the various forms of ritualistic burial are now well established. These procedures are now governed by underlying laws that have evolved over time. But, a Global News internet article published last year drew attention to a new area of concern.

There is apparently a small but growing trend of bodies being unclaimed by anyone after death. The article suggests that 361 bodies went unclaimed in Ontario in one year (2015 statistics) and that this was more than double the number only eight years earlier. A similar number and trend was reported for Quebec.

The above-noted article focussed on a Mr. Michael Geyer who died on his own at 89 years of age with no family members to claim his body. Current procedures mandate the Office of the Public Guardian and Trustee to step in, as they did in this case. However, it raises the question as to whether this is the best way to deal with this unfortunate growing trend and the role of individuals, society, or government, in providing better procedures to deal with this going forward.

Thanks for reading.
James Jacuta

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