You would be forgiven for thinking that the entire process for an Application to Pass Accounts is set out in rule 74.18 of the Rules of Civil Procedure as the rule appears to provide a comprehensive step by step guide to how an Application to Pass Accounts is to proceed before the court. Although rule 74.18 likely contains the most cited to and fundamental steps and principles for how an Application to Pass Accounts is to proceed, you would be wise to remember and consider the applicable provisions of section 49 of the Estates Act as they may offer additional insights and tools for a passing of accounts beyond those found in the Rules of Civil Procedure.
Yesterday I blogged in part about section 49(4) of the Estates Act, and the general availability to convert more complex objections that are raised in the Notice of Objection into a separate triable issue thereby potentially opening up more typical litigation processes such as discovery and the calling of witnesses at the eventual hearing of the matter. Although the ability to direct certain complex objections to a separate trial is an important tool under section 49(4) of the Estates Act, it is not the only potential tool or thing to consider under section 49 of the Estates Act when involved in an Application to Pass Accounts.
These additional tools and considerations for an Application to Pass Accounts as found in section 49 of the Estates Act include section 49(3), which provides the court with the ability to consider any “misconduct, neglect, or default” on the part of the executor or trustee in administering the estate or trust within the Application to Pass Accounts itself, and may make any damages award against the executor or trustee for such misconduct within the Application to Pass Accounts itself without a separate proceeding being required. As a result, if, for example, a beneficiary should raise an allegation of negligence in the Notice of Objection against the executor for something such as a complaint that certain real property that was owned by the estate was sold undervalue, the court under section 49(3) of the Estates Act has the power to consider such an allegation and, if ultimately proven true, may order damages against the executor for any loss to the estate within the Application to Pass Accounts process itself. Without section 49(3) the beneficiary may otherwise have been required to commence a new and separate Action against the executor to advance these claims and/or be awarded damages.
Section 49 also contains answers to numerous procedural questions which may come up in an Application to Pass Accounts which otherwise are not mentioned in the Rules of Civil Procedure, including section 49(9) which provides what the executor is to do when an individual has died intestate and you are unable to locate any next of kin to serve, and section 49(10) which provides the court with the ability to appoint an expert to review and opine on the accounts on behalf of the court when the accounts are particularly complex.
Thank you for reading.
A motion to transfer an estate matter that was commenced in the Brantford Superior Court of Justice to the Toronto Estates List was recently considered in the Estate of Byung Sun Im, 2018 ONSC 2223.
The procedure to be followed in a Rule 13.1.02 motion to transfer is set out in the Consolidated Provincial Practice Direction (at Part III, B) when the request to transfer pertains to a proceeding in the Central East, Central West, Central South and Toronto Regions. Motions to transfer should be brought, in writing, to the court location which the moving party is seeking to transfer the matter. Therefore, if you are seeking to transfer a matter to the Toronto Estates List, then the written motion should be filed with the Toronto Estates List.
Given that the plaintiff (or applicant) has a prima facie right to select the venue of a proceeding (subject to any applicable statutory requirements), the onus is on the party that seeks a transfer to satisfy the test set out in Rule 13.1.02(2).
In this particular case, the action was predominately based on an estate trustee’s dealings with estate assets. The deceased, the estate trustee, the majority of the beneficiaries, and the main estate assets were located in Toronto. The one person in Brantford was the plaintiff.
However, various interim orders and smaller issues were dealt with in Brantford. Prior proceedings related to this Estate were also decided and disposed of in Brantford. Justice Firestone agreed that the location of the assets had little bearing on how the assets ought to be divided. He also noted that there was an absence of evidence related to the convenience of the witnesses in addition to the convenience and location of the parties themselves. The convenience of counsel is not a basis to order the transfer of a proceeding.
Ultimately, the moving party failed to satisfy the test set out in Rule 13.1.02(2):
“… the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,
(a) that it is likely that a fair hearing cannot be held in the county where the proceeding was commenced; or
(b) that a transfer is desirable in the interest of justice, having regard to,
(i) where a substantial part of the events or omissions that gave rise to the claim occurred,
(ii) where a substantial part of the damages were sustained,
(iii) where the subject-matter of the proceeding is or was located,
(iv) any local community’s interest in the subject-matter of the proceeding,
(v) the convenience of the parties, the witnesses and the court,
(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,
(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,
(viii) whether judges and court facilities are available at the other county, and
(ix) any other relevant matter. O. Reg. 14/04, s. 10.”
Thanks for reading! For those of you who are also interested in the Practice Directions for the Toronto Estates List, you may access them here.
Rule 48.14 Interpreted! When will the Registrar Dismiss an Action for Delay? How Does it Apply to Estate Matters?
As recently as November 25, 2016, the Associate Chief Justice of the Superior Court, the Hon. Justice Marrocco, released a written endorsement in Daniels v. Grizzell, 2016 ONSC 7351, interpreting portions of Rule 48.14 since administrative dismissals may now occur from and after January 1, 2017.
The Registrar will Not Dismiss for Delay When…
According to the Hon. Justice Marrocco, “the Registrar will not dismiss an action for delay if the following events take place at least 30 days before the expiry of the applicable period:
- a party files a timetable signed by all the parties; and
- a party files a draft order establishing the timetable;
In addition, if a consent timetable signed by all the parties, and a draft order is filed, the Registrar shall not dismiss the action pursuant to Rule 48.14.”
Motion for Status Hearing and Motion to Set Aside the Dismissal
If the parties are unable to reach a consent, a motion for a status hearing may brought before the expiry of the applicable period pursuant to Rule 48.14(5). The Hon. Justice Marrocco clarified that “the Registrar shall not dismiss the matter until the motion is heard even if the matter is heard after the dismissal date prescribed by the Rule.”
Moreover, “the dismissal of an action by the Registrar can be set aside under Rule 37.14”.
Rule 48.14 Does Not Apply to Applications and Applications Converted to Actions
As it pertains to those of us engaged in estates, trusts, and substitute decision making matters, Rule 48.14 “does not apply to proceedings commenced by an application. Accordingly, estate matters which are commenced by way of an action are subject to the Rule; estate matters commenced by application are not. For practical reasons grounded in the coding of actions and applications in the court’s information management system, the application of Rule 48.14 is determined at the time the proceeding is commenced. For the same reason, applications which are converted to actions are not subject to Rule 48.14.”
Thank you for reading!
The phrase “the expiry of the applicable period” is repeated in the various subrules to Rule 48.14 and we want to take this opportunity to illustrate the meaning of this particular phrase. This phrase is important because it pertains to when an action may be automatically dismissed by the Registrar pursuant to Rule 48.14(1).
Essentially, going forward, actions are given five years from the date of commencement before they may be dismissed for delay by the Registrar. “The expiry of the applicable period” is the expiration date that is referred to in Rule 48.14(1), in which,
48.14 (1) Unless the court orders otherwise, the registrar shall dismiss an action for delay in either of the following circumstances, subject to subrules (4) to (8):
- The action has not been set down for trial or terminated by any means by the later of the fifth anniversary of the commencement of the action and January 1, 2017.
- The action was struck off a trial list and has not been restored to a trial list or otherwise terminated by any means by the later of the second anniversary of being struck off and January 1, 2017.
The expiry of the applicable period for an action commenced on the date of this blog, i.e. November 29, 2016, will be November 29, 2021.
The expiry of the applicable period for an action commenced on the date Rule 48.14 came to force and effect, i.e. January 1, 2015, will be January 1, 2020.
The expiry of the applicable period for an action commenced on the date the Winter Olympic games began in Vancouver, i.e. February 12, 2010, will be January 1, 2017.
This is the case because January 1, 2017 is later than the fifth anniversary of an action commenced on February 12, 2010, whereas the fifth anniversary of the commencement dates in examples 1 and 2 are later than January 1, 2017.
Therefore, it is extremely important to keep in mind that any actions commenced before January 1, 2012 may be dismissed by the Registrar on January 1, 2017.
The Law Society of Upper Canada recently released an e-Bulletin that outlines recent amendments to our Rules of Professional Conduct with respect to conflicts of interest.
Like the changes made to the Rules of Professional Conduct in late 2014, some of which dealt exclusively with practice involving wills and estates, these amendments are in part based on the Model Code of Professional Conduct, which was created by the Federation of Law Societies of Canada in 2011 to assist in implementing consistent professional standards throughout the country in light of increased lawyer mobility from province to province.
The new conflict of interest rules expand upon the changes implemented to reflect the terms of the Model Code, and introduce a reference to the 2013 decision of the Supreme Court of Canada in Canadian National Railway Co. v. McKercher LLP. This decision and the commentary added under Rules 3.4-1 and 3.4-2 refer to a “bright line rule”. While its scope in respect of conflicts of interest is suggested to be limited, the bright line rule can apply to unrelated work done by a lawyer for two clients if the advancement of one client’s interests are adverse to the immediate legal interests of another client. Even a “substantial risk of impairment” of the representation of a current client is noted to give rise to a conflict. In cases where there is actual impairment (rather than the mere risk of same), client consent to act in light of the conflict does not allow a lawyer to act.
The Report of Convocation with respect to these amendments indicates that the Rules of Professional Conduct were amended to provide lawyers in Ontario with further guidance in recognizing and dealing with conflicts of interest through the additional commentary. While the amendments to the rules themselves are relatively minor, all lawyers, including estate practitioners, should make themselves familiar with them and review the relevant commentary when faced with situations of potential conflict.
Further changes to the Model Code of Professional Conduct have now also been proposed to address obligations of a lawyer who leaves one law firm to work elsewhere. Only time will tell whether these proposed amendments to the Model Code ultimately make it into our Law Society’s Rules of Professional Conduct.
Thank you for reading.
Lessons from Neuberger Part 1: Does an interested person have an automatic right to proof in solemn form?
The Ontario Court of Appeal released not one, but two, decisions last week in relation to a Will Challenge proceeding. In addition to Spence v. BMO Trust Company, 2016 ONCA 196 (which is well covered by the media, and by our blog here), the Court of Appeal also released the decision of Neuberger v. York, 2016 ONCA 191.
The case of Neuberger v. York involves the Estate of Chaim Neuberger. The late Chaim Neuberger was a holocaust survivor, and Toronto real estate mogul, whose success equated to a fortune of over $100 million on his death according to the National Post. Chaim was predeceased by his wife, Sarah Neuberger, and he was survived by his daughters, Edie Neuberger, and Myra York, and the adult children of Edie and Myra. Edie and Myra were the named Estate Trustees of Chaim’s 2010 Wills, as well as his prior 2004 Wills.
Chaim passed away on September 25, 2012, and Edie brought an application to challenge the validity of Chaim’s 2010 Wills on December 19, 2013. In January, 2014, Edie’s son, Adam, also brought a motion to challenge the validity of Chaim’s 2010 Wills, amongst other relief. Edie’s Will Challenge was dismissed at first instance, along with Adam’s Will Challenge.
On appeal, Adam argued that an “interested person” is entitled, as of right, to have a Will proved in solemn form, prior to a grant of probate. Adam argued that this right stems from Rule 75.01 of the Rules of Civil Procedure, which reads as follows:
FORMAL PROOF OF TESTAMENTARY INSTRUMENT
75.01 An estate trustee or any person appearing to have a financial interest in an estate may make an application under rule 75.06 to have a testamentary instrument that is being put forward as the last will of the deceased proved in such manner as the court directs.
On this point, the unanimous Court of Appeal disagreed. The Hon. Justice Gillese considered a plain reading of Rule 75.01, in conjunction with Rule 75.06, and determined that an “interested person” may request proof in solemn form but cannot require it (at paragraph 84). Moreover, “the court has a discretion whether to order that a testamentary instrument be proved, as well as a discretion over the manner in which the instrument is proved” (at paragraph 87). The correct approach to Rule 75.06 requires an applicant, or moving party, to “adduce, or point to, some evidence which, if accepted, would call into question the validity of the testamentary instrument that is being propounded” (at paragraph 89).
Thanks for reading! Stay tuned this week for more lessons from Neuberger.
The Rules of Civil Procedure are quite clear as to when a lawyer may answer questions on behalf of their client during an examination for discovery. The Rules though, appear to be less clear with respect to cross-examinations on affidavits, and as such, attention must be turned to case law.
According to Rule 31.08 of the Rules of Civil Procedure, questions on an oral examination for discovery, “…shall be answered by the person being examined but, where there is no objection, the questions may be answered by his or her lawyer”. Simply put, if the examining party objects to an answer being given by the deponent’s lawyer, the examined party must answer the question and not their lawyer.
The rationale for this can be found in the Divisional Court decision of The Polish Alliance of Canada v. Polish Association of Toronto, where Justice Lauwers (quoting the Law of Civil Procedure in Ontario) states that: “…counsel for the party being examined should not interfere with the examination; the examiner is entitled to the evidence of the witnesses and not to that of counsel”.
Justice Lauwers provides further rationale (quoting Witnesses): “The primary reason for prohibiting communication between counsel and witness while testifying at trial is to prevent counsel from telling the witness what he or she should say. The same concern exists during a discovery, and consequently, the same basic restriction against counsel/witness communication should be in place”.
Therefore, whether it be an examination for discovery or a cross-examination on an affidavit, a lawyer may answer questions on behalf of the deponent, only if the examining party does not object. There is no distinction between the two forms of examinations.
As a part two of my blog from Tuesday, the Superior Court recently released a decision on the issue of disclosure for surveillance evidence.
The litigation in Bishop-Gittens v. Lim also arose from a motor-vehicle accident. In this particular case, the Plaintiff brought a motion, prior to opening submissions at trial, to exclude surveillance evidence that had been gathered by the Defendant. The issue before the Court was whether the Defendant should be allowed to rely on the surveillance and video footage for impeachment purposes under the following set of circumstances:
- there was no reference to surveillance in the Defendant’s affidavit of documents, as none had been conducted at that time;
- during the examination for discovery, the Defendant advised the Plaintiff that no surveillance had taken place;
- surveillance was conducted one month after the Defendant’s examination for discovery and over various days two years after the initial surveillance;
- the Defendant did not deliver a revised affidavit of documents in advance of trial; and
- there was no disclosure of the surveillance evidence until a letter disclosing the particulars of the surveillance, without a copy of the surveillance evidence itself, was delivered to the Plaintiff less than one month before trial.
Justice McKelvey concluded that the Defendant was in breach of the Rules, and
“In light of the defence’s failure to disclose the surveillance information in a prompt manner, it is apparent that this evidence may not be referred to during the trial unless leave is given by this court. The test for leave in connection with both a failure to disclose a document under rule 30.08 and the failure to correct an answer on discovery under rule 31.09 is governed by rule 53.08. This rule provides that where evidence is admissible only with leave of the trial judge, “leave shall be granted on such terms as are just and with an adjournment if necessary, unless to do so will cause prejudice to the opposite party or will cause undue delay in the conduct of the trial.”
The case law makes it clear that, in considering whether leave should be granted under rule 53.08, a trial judge must grant leave unless to do so will cause prejudice that cannot be overcome by an adjournment or costs. See Marchand (Litigation Guardian of) v. The Public General Hospital Society of Chatham (2000), 2000 CanLII 16946 (ON CA), 51 OR (3d) 97 (ON CA). As noted in the Iannarella decision, this mandatory orientation is understandable, since relevant evidence, including surveillance, is ordinarily admissible.”
Ultimately, Justice McKelvey allowed the Defendant to rely on the surveillance evidence only for the purposes of impeachment. The present circumstances before Court was distinguished with Iannarella because the trial not yet begun and neither party had taken any steps at trial which could result in prejudice by not knowing that this evidence may be introduced.
Thanks for reading (again)!
In keeping with modern advances in our society, The Honourable Coulter Osborne (former Associate Chief Justice of Ontario), was asked to propose some options that would assist in making our civil justice system more accessible and affordable. The Honourable Coulter Osborne submitted his findings and recommendations and in December 2008 The Civil Rules Committee filed amendments, which are scheduled to come into effect on January 1, 2010 (amendments can be found here). It is important to note that there is no transitional stage with respect to the amendments coming into force.
The following are a few amendments that caught my eye:
1. Rule 1.04 (1.1) provides that the court shall make orders and give directions that are proportionate to the importance and complexity of issues, and the amount involved, in the proceeding.
2. Rule 1.08 will permit the court, on its own initiative, to hear matters by telephone or video conference.
3. Pursuant to Rule 20 (summary judgment), the general test to obtain judgment is the moving parties ability to show that there is "no genuine issue for trial". Rule 20 has now been amended which imposes the burden on the moving party to show that there is "no genuine issue requiring a trial".
4. In actions commenced in Toronto, Ottawa and Essex County, mandatory mediations are to take place within 180 days, rather than from 90 days of filing the first defence unless the court orders otherwise.
5. Where the discovery tools are likely to be implemented in a litigious matter, Rule 29.1 now requires the parties to agree to a discovery plan before the earlier of 60 days after the close of pleadings or such longer period as agreed. The discovery plan must be in writing and it must include the intended scope of documentary discovery, taking into account relevance, costs and the importance and complexity of the issues.
6. With respect to examinations for discovery, regardless of the number of parties or other persons to be examined, no party is allowed to examine for more than seven hours unless the party has obtained the consent of the parties or has obtained a court order.
7. The monetary jurisdiction of the Small Claims Court will be increased to $25,000.00.
Again, these amendments were made with a view that it would make our civil justice system more accessible and affordable. For instance, permitting courts to hear matters via telephone or video conference will free up judicial resources, and reduce Lawyers fees. Increasing the monetary jurisdiction of Small Claims Court to $25,000.00 will provide access to justice for many in need and at the same time eliminate the demanding obligations that are imposed upon parties under the Rules of Civil Procedure. I will be looking on with interest as these amendments take effect in the new year.
Thank you for reading and have a great day.
Listen to the deemed undertaking rule.
This week on Hull on Estates, Paul and Allan discuss the deemed undertaking rule and its application to estate matters.