We sometimes hear reports in the news of people going missing. In such circumstances, what happens to their property? One option is for someone to apply to be a committee so that they may have the authority manage the missing person’s property in their absence.
Pursuant to section 1 of the Absentees Act, R.S.O. 1990, c. A.3, an absentee is a person who, having had his or her usual place of residence or domicile in Ontario, has disappeared, whose whereabouts are unknown and as to whom there is no knowledge as to whether he or she is alive or dead.
An application may be made by pretty much anyone pursuant to section 2(2):
a) the Attorney General;
b) any one or more of the next of kin of the alleged absentee;
c) the person to whom the alleged absentee is married;
d) the person with whom the alleged absentee was living in a conjugal relationship outside marriage immediately before the absentee’s disappearance;
e) a creditor; or
f) any other person.
Pursuant to section 2(1), the Ontario Superior Court of Justice may declare a person to be an absentee if it is shown that “due and satisfactory inquiry” has been made into their disappearance.
In the case of Kamboj v. Kamboj, 207 CanLII 14932 (ON S.C.) Justice Quinn provides an informative and instructive discussion of what is required to find a person an absentee under the Act. Here are some of the factors to be considered with respect to whether satisfactory inquiry has been made:
a) Are the applicants the only close relatives of the alleged absentee?
b) Does the alleged absentee have other relatives or friends in Ontario or elsewhere and, if so, do they have relevant information?
c) Have inquiries been made at establishments that the alleged absentee frequented?
d) Have inquiries been made at any clubs, religious, community or social organizations to which the alleged absentee belonged?
e) Have inquiries been made with the alleged absentee’s family doctor?
f) Has a notice been published in a local newspaper, containing the alleged absentee’s picture and soliciting information in respect of their whereabouts? Did the disappearance attract media attention?
g) Did the alleged absentee have a will?
h) Did the alleged absentee have any creditors? If so, do they have relevant information?
If satisfactory inquiry has been made and the missing person is declared to be an absentee, a committee will be appointed. The committee will have to submit a management plan setting out how they propose to manage the absentee’s property.
If the Court is later satisfied that the person has ceased to be an absentee, it may make a declaration to that effect and set aside the order declaring the person an absentee for all purposes, except for things done in respect of the absentee’s estate while such order was in force.
Sharon Davis – Click here for more information on Sharon Davis.
In blogs published on our site in March 2008 and January 2010, the fascinating story of the estate of Franz Kafka was considered. As we have discussed in other blogs (see this blog on Nabakov), an executor of the estate of a literary giant may face temptation to publish unfinished works even in the face of an expressed intention of the testator to the contrary. Such was the case with Kafka: his named executor and trusted friend chose to edit and posthumously publish certain works (to great acclaim it may be added).
In the second blog, Nadia Harasymowycz noted that certain letters and drawings gifted by Kafka to his mother and sisters prior to his death remained in a safety deposit box. As reported yesterday online by the National Post, a bank in Zurich "opened up four safety deposit boxes containing some of the unpublished work, and will allow Kafka scholars to look at the work." This decision follows on the heels of a ruling by the Israeli courts last week, wherein Tel Aviv banks were ordered to produce other similar documents.
Once the process of documentation is complete at the three banks, a judge will rule about the future of the papers: “whether they are the private property of the Hoffe sisters, who can then do with them whatever they want, or whether they constitute a literary treasure that must be transferred to a public archive.”
David M. Smith – Click here fore more information on David Smith.
As I was recently researching the duty of trustees, I stumbled upon a term that I might fully have expected to have found in a Dr. Seuss book rather than a legal text. I shall use it in the context in which it appears, as a subject title, although I doubt this will help you figure out what it means:
Dishonourable duty to “gazump”
I found the whole passage so fascinating that I shall reproduce it for your enjoyment and potential enlightenment:
“Where trustees who have entered into negotiations for the sale of trust property receive a subsequent higher offer from another party they should at least probe the subsequent offer irrespective of questions of commercial morality which might have led a vendor who was not a trustee to close the deal with the original purchaser. Nevertheless, the trustees retain such a discretion as will allow them to act with proper prudence, and may pray in aid the commonsense rule underlying the old proverb “A bird in the hand is worth two in the bush”; so that there may be cases in which they could properly refuse a higher offer and proceed with a lower one.”
Underhill & Hayton, “The Law of Trusts and Trustees” (London: LexisNexis Butterworths, 2007) at page 716
Click here for the Wikipedia definition of gazumping and its opposite, gazundering (just for fun). Here is a link to a gazumping reference in a 2006 judgment, just in case you don’t believe me – see paragraph 45.
There are a couple of lessons to be learned here. The first is that not all legal terms need be Latin or pretentious-sounding. The second is that while the law may apparently foist a dishonourable duty upon (poor unsuspecting) trustees, if they happen to be holding a bird in one hand they will probably be okay.
I’ll bet every Who in Whoville already knew that.
Sharon Davis – Click here for more information on Sharon Davis.
Attorneys for property who receive gifts from grantors tomorrow will have to give them back, unless they have good evidence supporting the fact of the gift. The rule that fiduciaries (including attorneys for property) must prove purported gifts is stated in Cooke v. Lamotte(1851), 15 Beav. 234 at page 239.
Justice Sheard applied this rule in Kee v. Yip  O.J. No. 2879, disallowing a series of transfers by an attorney to himself, stating with respect to one such transfer, “The burden on Tom Kee to show that his mother gave him the $20,000 is a heavy one. His evidence, simply the assertion that this transaction, one of many that he did under power of attorney, was intended by her as a gift to him falls well short of discharging that burden of proof. Under the principle stated in Cooke v. Lamotte, supra, the $20,000 cannot be allowed as a gift and must be refunded."
Even more recently, in Volchuk v. Kotsis, 2007 CanLII 28527 (ON S.C.) Justice Langdon disallowed a series of purported gifts (cheques and money transfers) effected by an attorney, noting in addition that attorneys were precluded from relying solely on their own evidence by section 13 of the Ontario Evidence Act, which provides that the claimant “shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.”
In estates litigation, this rule is very useful in passings of accounts initiated pursuant to section 42 of the Sustitute Decisions Act by disappointed beneficiaries of an estate against the deceased’s former attorney for property. Of course, this rule forms part of the Common Law and is not confined to passing of accounts proceedings.
Merry Christmas to fiduciaries including attorneys, and enjoy your presents.
Christopher M.B. Graham – Click here for more information on Chris Graham.
A September 8, 2009 endorsement of Justice D.M. Brown helps to clarify the costs of capacity litigation.
Fiacco v. Lombardi, 2009 CanLII 46170 (ON S.C.) involves four siblings who disputed the management of their mother’s property. She executed a continuing power of attorney for property appointing all four of her children as her attorneys to act jointly. That didn’t go so well.
The mother suffers from dementia. In 2008, the four children entered into contested guardianship litigation over their mother; two were appointed guardians by on January 23, 2009 by Order of Cameron J. That round of litigation cost the mother $30,022.22.
The two children who were not appointed were ordered to provide information about their mother’s assets and the original will of their mother to the guardians, and to transfer assets to the guardians. They did not act quickly.
Justice Brown states, at paragraph 14, that “The view…that the Order did not require compliance forthwith was dead wrong: when a court appoints guardians of the property of an incapable person, any other person with notice of the order is required to deliver up immediately to the guardians all property of the incapable person that he or she might possess.”
At paragraph 10, His Honour states that the “respondents acted contrary to their obligations under the SDA [Substitute Decisions Act] and they obstructed their mother’s guardians in discharging their statutory duties.”
The SDA at sections 33.1 requires guardians to make reasonable efforts to determine if an incapable person has a will; and sections 33.2(1) and (2) require a person who has the incapable person’s will to deliver it to the guardian “when required by the guardian.”
The Court did not approve of the children seeking further funds ($29,154.14) from their mother’s estate to “fund their continuing sibling rivalry.”
Justice Brown emphasized that “capacity litigation should reflect the basic purpose of the SDA – to protect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream of income to support the needs of the incapable person: SDA, sections 32(1) and 37.”
His Honour states that members of the Bar should not presume that all parties to contested capacity litigation will have their costs paid by the estate of the incapable person.
This endorsement emphasizes that family fights cost everyone involved.
Enjoy the weekend.
Jonathan Morse – Click here for more information on Jonathan Morse.
Listen to Delegation in Investment Accounts
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss delegation issues that arise when dealing with Investment Accounts and address a listeners question about the family cottage.
Listen to The Surviving Spouse
This week on Hull on Estate and Succession Planning, Ian talks about an interview he did this week for a new website called Law is Cool and why he podcasts.
Ian and Suzana discuss the importance of preparing for the death of a spouse or for the welfare of your spouse upon your death. This preparation includes having a good idea of the assets you share and the importance of appointing a guardian for your children.
Listen to "Drafting a Co-ownership Agreement"
Read the transcribed version of "Drafting a Co-Ownership Agreement"
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss things to remember when drafting a co-ownership agreement of a recreational property with family or friends.
Click "Continue Reading" to read the transcribed version of this podcast.
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss litigation involving vacation and recreational properties. This is an emotional as well as a legal issue. They talk about the realities of passing properties on to younger generations.
Click "Continue Reading" for the transcribed version of this podcast.
Separation Agreements in the Context of Estate Planning – Hull on Estate and Succession Planning Podcast #59
Listen to "Separation Agreements in the Context of Estate Planning"
Read the transcribed version "Separation Agreements in the Context of Estate Planning"
During Hull on Estate and Succession Planning Podcast #59, Ian and Suzana discuss Separation Agreements and the general elements of estate planning upon separation from a spouse.
They cover many important aspects of a separation agreement that should be considered when turning your mind to estate planning, including joint assets, joint debts, property, and disability planning.