It is not uncommon for the lawyer who drafted a testator’s will or codicil to subsequently be retained by the Estate Trustees after the testator’s death to assist with the administration of the estate. The rationale behind the drafting lawyer being retained to assist with the administration of the estate appears fairly self-evident, for as the drafting lawyer likely has an intimate knowledge of the testator’s estate plan and assets they may be in a better position than most to assist with the administration of the estate.
While retaining the drafting lawyer to assist with the administration of the estate is fairly uncontroversial in most situations, circumstances could become more complicated if there has been a challenge to the validity of the testamentary document prepared by the drafting lawyer. If a proceeding has been commenced challenging the validity of the testamentary document, there is an extremely high likelihood that the drafting lawyer’s notes and records will be produced as evidence, and that the drafting lawyer will be called as a non-party witness as part of the discovery process. If the matter should proceed all the way to trial, there is also an extremely high likelihood that the drafting lawyer would be called as a witness at trial. As the drafting lawyer would personally have a role to play in any court process challenging the validity of the will, questions emerge regarding whether it would be proper for the drafting lawyer to continue to represent any party in the will challenge, or would doing so place the drafting lawyer in a conflict of interest?
Rule 3.4-1 of the Law Society of Ontario’s Rules of Professional Conduct provides that a lawyer shall not act or continue to act where there is a conflict of interest. In the case of a drafting lawyer representing a party in a will challenge for a will that they prepared, an argument could be raised that the drafting lawyer is in an inherent position of conflict, as the drafting lawyer may be unable to look out for the best interests of their client while at the same time looking out for their own interests when being called as a witness or producing their file. There is also the potentially awkward situation of the drafting lawyer having to call themselves as a witness, and the associated logistical quagmire of how the lawyer would put questions to themselves.
The issue of whether a drafting lawyer would be in a conflict of interest in representing a party in a will challenge was dealt with in Dale v. Prentice, 2015 ONSC 1611. In such a decision, the party challenging the validity of the will brought a motion to remove the drafting lawyer as the lawyer of record for the propounder of the will, alleging they were in a conflict of interest. The court ultimately agreed that the drafting lawyer was in a conflict of interest, and ordered that the drafting lawyer be removed as the lawyer of record. In coming to such a conclusion, the court states:
“There is a significant likelihood of a real conflict arising. Counsel for the estate is propounding a Will prepared by his office. The preparation and execution of Wills are legal services, reserved to those who are properly licensed to practise law. Counsel’s ability to objectively and independently assess the evidence will necessarily be affected by his interest in having his firm’s legal services found to have been properly provided.” [emphasis added]
Decisions such as Dale v. Prentice suggest that a lawyer may be unable to represent any party in a will challenge for a will that was prepared by their office as they may be in a conflict of interest. Should the circumstance arise where the drafting lawyer is retained to assist with the administration of the estate, and subsequent to being retained someone challenges the validity of the Will, it may be in the best interest of all parties for the drafting lawyer to indicate that they are no longer able to act in the matter due to the potential conflict, and suggest to their clients that they retain a new lawyer to represent them in the will challenge.
Thank you for reading.
Is an Estate Trustee allowed to withhold an inheritance? What if the inheritance is a specific bequest and the Estate has claims against the beneficiary? These questions were considered in June Brayford v Brayford.
I will do my best to simplify the facts. The testator named his two sons as Estate Trustees. His Last Will left a specific bequest, the proceeds of a CIBC account, to his wife (from a second marriage). The residue passed to the Estate Trustees. While the testator was still alive, a joint account was set up with his wife (an investment account with Desjardins Financial and Edward Jones).
After the testator‘s passing, the Estate Trustees took issue when the wife withdrew funds from the joint account, believing that the funds should have fallen into the residue. They alleged that the testator lacked the capacity to set up a joint account, and that the wife (who was also the testator’s guardian for property and personal care) breached her fiduciary duty by the setting up of the joint account. In response, the Estate Trustees refused to pay the specific bequest.
Two claims arose – the wife demanded payment of the specific bequest and the Estate Trustees claimed an equitable set off of the specific bequest pending the resolution of the joint account assets.
The Court first considered the right of retainer as set out in Cherry v. Boultbee (41 ER 171), which sets out the right that an estate trustee has of keeping out of the share of an inheritance, a debt owing to the estate by the beneficiary. The court noted an exception to this right though – when the inheritance is a specific bequest. It is this exception that the wife relied on to compel the payment of the specific bequest.
The Estate Trustees claimed an equitable set-off. They wanted to withhold the payment of the specific bequest until the claim against the wife regarding the joint account was heard.
The Court looked to Olympia for the procedure to be followed when considering a claim for both right of retainer and set-off. It was held that given that the two claims were so closely connected, that it would be unjust to allow the wife to enforce the payment of the specific bequest without taking into account the claim by the Estate Trustees regarding the joint account. So, the Estate Trustees were allowed to hold off on paying the specific bequest, pending the outcome of their claim regarding the joint account.
Find this blog interesting, please consider these other related blogs:
Listen to Passing of Accounts and a Joint Retainer
This week on Hull on Estates, Craig Vander Zee and David Smith discuss conflicts of interest during Passing of Accounts trials and rules of professional conduct.
Recently, the Ontario Superior Court of Justice struck down an arbitration clause in a retainer agreement.
In Jean Estate v. Wires Jolley LLP 2008 CanLII 14538, an estate trustee and sole beneficiary of an estate entered into a retainer agreement with counsel that provided for a “success fee” of 10% of the value of the estate. The retainer agreement also provided that any dispute relating to the success fee was to be determined by an arbitrator.
A dispute arose, and the solicitors sought to have the dispute resolved through arbitration. The client applied to the court to have the notice of arbitration struck out, and to have the dispute resolved by the court.
Madam Justice Low granted the application. She held that the provisions of the Solicitors Act applied prima facie. She went on to conclude that even though the parties had previously agreed to an arbitration provision, and could agree to keep private commercial disputes private, the relationship between lawyers and clients is “one which transcends a mere commercial transaction. The profession has a monopoly over the provision of legal services and the occasions upon which lawyers interact with members of the public occur often when the latter are in the most vulnerable of circumstances. There is therefore an overarching public interest to be served in the court’s supervision of the profession’s monopoly.”
As the arbitration provision was a derogation of the client’s statutory right to have the court scrutinize the propriety of the fees, it was not upheld.
Thank you for reading.