Tag: order

09 Apr

Can you bind non-signatories to a settlement?

Stuart Clark Estate Litigation Tags: , , , , , , , , , , , , , , , , , , 0 Comments

Estate litigation can be costly both financially and emotionally. As a result, there is often a strong incentive for parties to try to reach a negotiated settlement. Although entering into a settlement which resolves the estate litigation may appear straightforward from the outside, it may become more complicated if all potential financially interested parties are not signatories to the settlement. It is not uncommon in estate litigation for all beneficiaries of the estate to not actively participate in the litigation, leaving it to people such as the Estate Trustee or the other beneficiaries to defend a claim. As a settlement is in effect a contract between parties, if a settlement is reached which affects the interests of a non-signatory to the settlement can such a settlement bind the interests of the non-signatory?

I have previously blogged about section 48(2) of the Trustee Act, and an Estate Trustee’s ability to settle claims on behalf of the estate which can bind the interests of the beneficiaries. While section 48(2) would allow the Estate Trustee to bind the interests of all beneficiaries to the settlement, the Estate Trustee does so at their own potential liability, as it is possible that one or more of the beneficiaries may later challenge the decision of the Estate Trustee to enter into the settlement, potentially seeking damages against the Estate Trustee if they are of the position that the settlement was not reasonable or in the best interest of the estate. As a result of such a risk, it is not uncommon for an Estate Trustee to be hesitant to enter into a settlement on behalf of the estate in contentious situations, not wanting to potentially expose themselves to personal liability if one or more of the beneficiaries should later object to the terms of the settlement. If an Estate Trustee is hesitant to enter into a settlement on behalf of all beneficiaries, but all actively participating parties are otherwise in agreement with the settlement, is there a way to bind the interests of non-participating parties to the settlement?

The Rules of Civil Procedure provide the court with the ability to “approve” a settlement on behalf of parties who are not signatories under certain limited circumstances. This is done in accordance with rule 7.08 of the Rules of Civil Procedure, which allows the court to approve a settlement on behalf of a party who themselves cannot consent to the settlement on account of being under a legal disability (i.e. a minor). Perhaps importantly however, the court only has the authority under rule 7.08 to “approve” a settlement on behalf of a party under a legal disability, and rule 7.08 is not available in circumstances where the non-signatory is fully capable.

The Rules of Civil Procedure do not otherwise appear to provide any mechanism by which a settlement can be approved on behalf of a party who is not under a legal disability. As a result, if the non-signatory who you are you attempting to bind to the settlement is not under a legal disability, the court likely does not have the authority to “approve” the settlement on their behalf under the Rules of Civil Procedure.

Although the court likely does not have the ability to “approve” a settlement on behalf of an individual who is not under a legal disability in accordance with the Rules of Civil Procedure, this does not necessarily mean that there are no other ways to potentially bind the individual to a settlement. One potential solution may be to seek an Order “in accordance” with the terms of the settlement on notice to all interested parties. Should the court issue such an Order, which in effect repeats the terms of the settlement but as an Order of the court, the non-signatories would arguably then be bound to the terms of the settlement as it would now be in the form of an Order of the court.

Thank you for reading.

Stuart Clark

15 Mar

Time is of the Essence: Usually

Hull & Hull LLP Litigation Tags: , , , , , , , 0 Comments

In Macaulay v. McKee 2011 ONSC 6710 (CanLII), the court considered the effect of an order requiring payment of costs by a certain date and non-compliance (substantial compliance?) with that order.

By court order, the plaintiffs in a motor vehicle action (the accident happened in 1999) were to pay costs by noon on November 24, 2010. If the plaintiffs defaulted, the plaintiffs’ action was to be dismissed. 

Payment was rendered late in the day on November 24, 2010. 

Notwithstanding, the plaintiffs’ claim was dismissed.

The plaintiffs retained new counsel, and moved to extend the time limits set out in the earlier court order. The plaintiffs were successful.

The court noted that there was no prejudice to the defendants that could not be compensated for in costs. 

The court further noted that the fact that the plaintiffs may have a cause of action against their prior lawyer if the dismissal was upheld should not be a factor considered by the court in determining whether the dismissal should be set aside. The primary concern should be the rights of the litigants, and not the conduct of their counsel.

The court ordered that the plaintiffs were liable to the defendants for the costs of the motion to set the dismissal aside.

Thanks for reading.

Paul Trudelle – Click here for more information on Paul Trudelle

14 Oct

Motion to Secure Assets Denied

Hull & Hull LLP Estate & Trust Tags: , , , , , , , , , , 0 Comments

Rule 45 of Ontario’s Rules of Civil Procedure contains mechanisms by which a party can freeze assets that are in issue or relevant to the proceeding.  However, this should be done prior to the close of pleadings because once the matter is set down for trial, Rule 48.04(1) applies.  Rule 48.04(1) requires that any motion brought after the close of pleadings have leave of the court.  Leave will only be available where there has been a substantial or unexpected change in circumstances.

A recent example of Rule 48.04(1) barring a motion for interim preservation occured in Trapukowitcz Estate v. Royal Bank of Canada.  In this case, an estate trustee was seeking an order that the proceeds of a GIC and a bank account be paid into court pending determination of ownership.  Justice Harris refused to grant leave to bring the motion because, on the basis of the admissible evidence, the estate trustee had not shown a substantial or unexpected change in circumstances. 

Justice Harris followed Machado v. Pratt & Whitney Canada Inc. (1993), 16 O.R. (3d) 250, which requires strong affidavit evidence to demonstrate a "substantial and unexpected change in circumstances to the extent that to refuse the order would be manifestly unjust".  The grounds in the moving estate trustee’s affidavit were unconvincing. 

As importantly, viva voce evidence given in submissions was not considered.  To do so would be unfair to the respondent, particularly since the evidence had been available since June 4, 2009 and the hearing took place in August 6, 2009.  Therefore, Justice Harris cited Rule 37.06(b), which stipulates that every notice of motion must state the grounds to be argued, and refused to consider the viva voce evidence. 

There is no requirement under Rule 45 to prove the assets are actually at risk, so a R. 45 freezing order is easier to get before the close of pleadings.

Enjoy your day,

Chris Graham

Christopher M.B. Graham – Click here for more information on Chris Graham.

 

 

23 Sep

COMING SOON TO AN ORDER GIVING DIRECTIONS NEAR YOU

Hull & Hull LLP Estate & Trust, Litigation Tags: , , , , , , , 0 Comments

While I was in Court in Toronto on Friday, Mr. Justice Brown advised the court room in general that with respect to most Orders Giving Directions granted by him (and possibly other judges on the Estates List), the Order Giving Directions will include a Schedule that provides that the Applicant is to file with the Estates Office a tabbed, three ring, red 1” binder labelled “Endorsements/Orders Brief”, which is to be maintained as part of the record of the proceeding. Within five days after the making of any endorsement or Order in the proceeding, the Applicant is to file a copy of such endorsement or Order in the next available tab in the Brief.

Mr. Justice Brown observed that the purpose of such a Brief is to allow the presiding Judge on any subsequent hearing date to quickly determine the history of the proceeding, and all judicial determinations made to date.

The Schedule also provides that Factums are to be filed on all subsequent motions.

The utility of such a Brief and the requirement to file a Factum appears obvious. The requirements to create the Brief and to file a Factum will clearly assist the Court in determining the history of the proceeding, and allowing for the prompt and efficient determination of the matter before it.

Thank you for reading.

Paul Trudelle

12 Sep

The All-Powerful Constructive Trust

Hull & Hull LLP Estate & Trust Tags: , , , , , , 0 Comments

In Langston v. Landen, a recent decision of the Ontario Court of Appeal, one of three co-executors of an estate having a value of some $24 million (in the words of the Court) "managed to shunt the other two executors to the sidelines.  He started to loot the estate."  Among Landen’s transgressions was his use of estate assets to purchase a home in Forest Hill which he had put in his wife’s name.  On a motion for summary judgment, Justice Greer had imposed a constructive trust on the house for the benefit of the estate.

Landen’s wife appealed.  However, the Court easily concluded that the fact that legal title was in her name was irrelevant in circumstances in which the entire purchase proceeds came from the estate.  Adopting a quote from the Reasons for Decision of Justice Greer, the Court stated: "Since the money came from Landen in his capacity as a fiduciary, the constructive trust or express trust flows from him and the money can be traced from him to the house purchase and renovation." 

So too, for the same reasons, the wife’s entitlement to any share of the property as the "matrimonial home" was negated.  Of passing interest to the profession was the Court’s additional conclusion that Justice Greer was well within her jurisdiction by imposing a vesting order on the house for the benefit of the estate in the absence of a motion seeking such relief. 

David M. Smith

 

 

30 Oct

Appointing, Changing or Removing Trustees – Hull on Estates #83

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Hull on Estates, Hull on Estates, Passing of Accounts, Podcasts, PODCASTS / TRANSCRIBED, Trustees Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , 0 Comments

Listen to Appointing, Changing or Removing Trustees.

This week on Hull on Estates, Craig Vander Zee and Paul Trudelle discuss the issues surrounding trustee appointments and changes.

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23 Oct

Court Order Compliance – Hull on Estates #82

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Hull on Estates, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED Tags: , , , , , , , , , 0 Comments

Listen to Court Order Compliance

This week on Hull on Estates, Sean Graham and Justin deVries talk about court order compliance, contempt and enforcement of court orders in general.

READ MORE

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