I think the coverage of George H.W. Bush’s recent funeral tweaked my interest in some of the things that make Canada unique. Once again, former Prime Minister Brian Mulroney was chosen to give a eulogy for a U.S. President (he spoke at the funerals for both Ronald and Nancy Reagan as well). And what a eulogy it was – personal, humorous at times and eloquent throughout.
The Globe and Mail described Mulroney as “emerging as something of the eulogist-in-chief for American commanders-in-chief.” That speaks very highly for Mr. Mulroney but also very highly for Canada. It’s clear that there was (perhaps still is?) a high level of respect for our country and the role we play in the world.
Aside from having a former Prime Minister who was clearly adept at fostering close international friendships, what else makes us unique? I think it starts with the country itself:
- We have about 20% of the world’s fresh water
- Almost one-third of the country is covered in trees – and we have 10% of the world’s forests
- We have the world’s longest coastline
- Along with the U.S., we share the longest demilitarized border in the world
We may not have the population size to match many other countries, but certainly have the physical size.
The quirky side
We also have character. Maybe that’s what the U.S. political elite love about us. Consider these:
- We love comfort: We eat more mac ‘n cheese than any other country in the world (I have no idea who measures this stuff)
- We’re sweet: One Canadian province (Quebec) makes more than 77% of the world’s maple syrup
- We’re inventive: Hawaiian pizza was invented by an Ontario man, not by the Hawaiians
- We’re procrastinators: We didn’t get our own flag until our country was nearly 100 years old
- We’re talkers: The famous Canadian interjection “eh”is listed in the Canadian Oxford Dictionary as a valid word. Who knew?
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I recently blogged about the growing use of home DNA tests and what impact an unexpected result could have upon your rights as a beneficiary of an estate. While such a blog was from the perspective of an individual who discovered through a home DNA test that their biological father was not in fact the individual they previously believed it to be, and the potential impact such a finding could have upon their status as a beneficiary of their “father’s” estate if their interest was based on their status as a “child”, questions would also emerge in such a scenario if you were the Estate Trustee of such an estate regarding what you should do.
If you are the Estate Trustee of an estate in which a bequest is based on parentage (i.e. an intestacy or a bequest to a testator’s “issue” or “children”), and you discover that one of the beneficiaries has voluntarily taken a home DNA test which revealed that they were not in fact related to the deceased, could you still make a distribution to such a beneficiary? If you have already made a distribution to such a beneficiary, is there a risk that the other beneficiaries could now make a claim against you as Estate Trustee, alleging that you distributed the estate to the incorrect individuals and that they have suffered damages as a result?
In response to whether an Estate Trustee could potentially be liable to the other beneficiaries for historically paying out amounts to a beneficiary who it is later discovered was not actually related to the deceased, it would appear that the Estate Trustee likely would not be liable under such a scenario. In my previous blog I discussed the provisions of the Children’s Law Reform Act (the “CLRA“) which establish a person’s legal parentage in Ontario, and the various presumptions establishing an individual’s father. While sections 13(1) and 14(1) of the CLRA allow the court to make a subsequent different declaration as to a person’s parentage, section 14(2) of the CLRA provides that such an Order “does not affect rights and duties that were exercised or performed, or interests in property that were distributed, before the order was set aside“. As a result, it would appear, arguably, that if an Estate Trustee historically made a payment to an individual based off of parentage, and a subsequent declaration is made by the court that the individual in question was not actually the parent of the beneficiary, the historic payment to the beneficiary could not be put in issue or reclaimed provided that at the time the payment was made the beneficiary was still presumed and/or declared to be the child of the deceased.
The issue of what an Estate Trustee is to do if a payment has not yet been made and they discover that an individual who they previously believed to be a beneficiary is not in fact related to the deceased could be more complicated. In the event that the other beneficiaries who could be affected by the distribution do not unanimously consent to continue to allow the distribution to the individual notwithstanding the results of the DNA test, it is possible that one or all of the other beneficiaries may later bring a claim against the Estate Trustee for negligence, alleging that the Estate Trustee knew about the results of the DNA test before making the distribution and that they have suffered damages as a result of the distribution. To offset such a risk, it may be wise for the Estate Trustee in such a scenario to bring an Application for the opinion, advice and direction of the court pursuant to section 60(1) of the Trustee Act and/or rule 14.05, asking the court to determine whether the distribution may still be made to the potential beneficiary in light of the results of the home DNA test.
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One of the most gifted items this past holiday season were apparently the home DNA tests which can reveal your genetic ancestry or even if you are predisposed to certain health conditions. As anyone who has taken one of these tests (myself included) can tell you, the test results also contain a long list of other individuals who have also taken the test who you are related to, allowing you to reconnect with long lost relatives.
While my own test results did not reveal any family secrets, the same cannot be said for other individuals who have taken the test, as there have been a growing number of articles recently about how home DNA tests have revealed family secrets which otherwise may never have come to light. Although not all of these secrets are necessarily negative, such as finding a long-lost sibling, others, such as finding out that the individual who you believed to be your father was not in fact your biological father, could be life changing. For the latter, the phenomena is apparently common enough that the Atlantic has reported that self-help groups have formed around the issue, such as the Facebook group “DNA NPE Friends”, with “NPE” standing for “Not Parent Expected”.
In reading through these stories I couldn’t help but wonder if having such a result could impact your potential entitlements as a beneficiary of an estate. What happens if, for example, the individual who you previously believed to be your biological father but the test reveals was not in fact your father should die intestate, or should leave a class gift to his “children” in his Will without specifically naming the children. Could finding out that you were not actually biologically related to your “father” result in you no longer being entitled to receive a benefit as a beneficiary? Could you potentially be disinherited as a beneficiary of an estate by voluntarily taking a home DNA test if your right to the gift is founded upon you being related to the deceased individual?
Who is legally considered an individual’s “parent” in Ontario is established by the Children’s Law Reform Act (the “CLRA“). Section 7(1) of the CLRA provides that, subject to certain exceptions, the person “whose sperm resulted in the conception of a child” is the parent of a child. Section 7(2) of the CLRA further provides for a series of presumptions regarding the identity of the individual’s “whose sperm resulted in the conception of a child“, including, for example, that there is a presumption that such an individual is the birth parent’s spouse at the time the child is born, or the individual in question certified the child’s birth as a parent of the child in accordance with the Vital Statistics Act (i.e. signed the birth certificate). To the extent that there are any questions about parentage, section 13(1) of the CLRA provides that any interested individual may apply to the court at any time after a child is born for a declaration that a person is or is not the legal parent of the child.
In applying these presumptions to our previous questions about the home DNA test, if, for example, the individual who you previously believed was your biological father was your birth mother’s “spouse” at the time you were born, or signed the birth certificate, it would appear that, subject to there being a declaration under section 13(1) of the CLRA to the contrary, there would continue to be a presumption at law that the individual who you previously believed to be your biological father would continue to be your legal “parent” in accordance with the CLRA. To this respect, in the absence of a formal declaration under section 13(1) of the CLRA that the individual was no longer your legal “parent”, there would appear to be an argument in favour of the position that the individual who you previously believed to be your biological father would continue to be your legal “parent”, and that you should continue to receive any benefits which may come to you as a “child” on the death of your “father”, whether on an intestacy or a class bequest to his “children” in his Will.
This presumption, of course, is subject to the ability of any interested person (i.e. the Estate Trustee or one of the other beneficiaries) to seek a formal declaration under section 13(1) of the CLRA that you were not in fact a “child” of the individual you believed to be your biological father. If such a formal declaration is ultimately made by the court, you would cease to be the legal “child” of the individual who you previously believed to be your biological father, and would likely lose any corresponding bequests which may have been made to you on an intestacy or as a member of the class “children” in the Will.
The use of DNA tests to establish the potential beneficiaries of an estate is not a new phenomenon (see: Proulx v. Kelly). What is new, however, are people voluntarily taking such tests en masse in a public forum, potentially voluntarily raising questions about their rights to receive an interest in an estate when such questions would not have existed otherwise.
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If you are anything like me you have previously struggled with how you are to refer to Masters in court. Referring to them as “Master” always felt a little bit awkward, while at the same time you were always not sure if the more formal “Your Honour” was reserved solely for Judges.
If you have ever experienced similar uncertainty wonder no more, as the Consolidated Practice Direction for the Ontario Superior Court of Justice was recently amended to clarify how you are to refer to Masters in court. In accordance with the revised item 114 of the Practice Direction, it is confirmed that you are to refer to Masters as “Your Honour” in English and “Votre Honneur” in French.
Now that the potential embarrassment of using the incorrect honorific in referring to Masters has been resolved, now may also be an opportune time to provide a reminder that in accordance with item 58 of the same Consolidated Practice Direction lawyers are not required to gown when appearing before a Master.
So in summary, in accordance with the updated Consolidated Practice Direction you are to refer to Masters as “Your Honour” when appearing before them, while at the same time you are not required to gown. Consider yourself properly prepared for you next appearance before a Master.
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A recent decision of the Ontario Court of Appeal considered whether s. 7 of the Limitations Act, 2002 applies to extend the time within which an estate trustee can bring a claim that arose prior to a deceased person’s death.
Section 7 of the Limitations Act, 2002 provides as follows:
7 (1) The limitation period established by section 4 does not run during any time in which the person with the claim,
(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and
(b) is not represented by a litigation guardian in relation to the claim.
(2) A person shall be presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proved. 2002, c. 24, Sched. B, s. 7 (2).
(3) If the running of a limitation period is postponed or suspended under this section and the period has less than six months to run when the postponement or suspension ends, the period is extended to include the day that is six months after the day on which the postponement or suspension ends.
In Lee v Ponte, 2018 ONCA 1021, the estate trustee of the deceased person commenced a claim more than 2 years after the date on which the limitation period began to run, as determined by the trial judge. As a result, the action was statute barred.
The estate trustee appealed, taking the position that section 7 of the Limitations Act, 2002 should be “liberally construed”. The estate trustee argued that a deceased person is incapable of commencing a proceeding because of “his or her physical, mental or psychological condition”. He also argued that policy reasons support allowing additional time for an estate trustee or litigation guardian to be appointed and take over the management of the affairs of the incapable/deceased person.
The Court of Appeal disagreed and did not allow the appeal. In its view, the “grammatical and ordinary sense of the words of s. 7 are simply not elastic enough to apply to a deceased person and to construe an estate trustee to be a litigation guardian.”
Although the outcome is not surprising, it does serve as a reminder that limitation periods can be unforgiving. Estate trustees would be well-advised to act swiftly in reviewing the affairs of a deceased person in order to determine whether any claims may have arisen prior to death, and whether the expiry of any limitation periods are looming.
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Other blog posts that may be of interest:
It is not uncommon for a trust or a Will to provide a trustee with broad and unfettered discretion in the administration of the trust or estate. We have previously blogged about the powers and duties of estate trustees, stating that it can be difficult to determine how such discretion should be exercised. Often, a trustee is given broad discretion to encroach on the capital of a trust or estate, for the benefit of a beneficiary. The issue then is: what factors can a trustee consider in determining whether to exercise their discretion to make a capital encroachment?
Broadly speaking, if a trustee is given unfettered discretion by a settlor or testator, the court will only intervene in the trustee’s decision-making if the trustee has exercised his or her discretion on the basis of mala fides, or bad faith. While there are a number of specific factors that a trustee may properly consider, for the purpose of this blog I will focus on one, namely the extent to which a trustee can consider a beneficiary’s income and/or assets.
Where a trustee is being asked to encroach on capital for the benefit of an income beneficiary, the trustee must consider the application of the even hand rule (briefly discussed in this blog). In doing so, a trustee may be tempted to consider the income beneficiary’s financial circumstances, as this information could illuminate how the trustee’s decision may affect the income beneficiary as compared to the capital beneficiary. However, the case law seems to indicate that this would not be a proper consideration.
In Re: Luke,  O.W.N. 25, the court considered whether the income beneficiary, who was also the trustee, should first look to her own financial resources before exercising her power to encroach on capital for her own benefit. The court determined that she did not have to first exhaust her own resources, as the testator had not expressed an intention in his Will that she do so. Similarly, in Hinton v. Canada Permanent Trust Company, (1979), 5 E.T.R. 117 (H.C.), a corporate trustee requested information from an income beneficiary as to the beneficiary’s own financial resources in the context of the trustee exercising its discretion to encroach on capital. Again, the court found that the testator had not indicated an intention in his Will that the income beneficiary’s income should be a factor in determining whether to encroach on capital, and the income beneficiary’s resources were, accordingly, not relevant.
The foregoing principle has been followed in a number of other decisions over the years, thus appearing to support the impropriety of considering a beneficiary’s personal financial resources as a factor in making capital encroachments, absent an intention by the testator in this regard.
Thanks for reading and Happy Holidays!
Other blog posts that may be of interest:
Some people would be surprised to know that there are now more Torontonians ages 65+ than children aged 15 and below. By 2041, the number of people over the age of 65 is expected to double. Nationally, seniors are projected to constitute one-quarter of the Canadian population by the year of 2036.
The City of Toronto found that a plan and an appropriate strategy were needed to be put in place, in order to ensure that the needs of the growing population of seniors are being met.
The City first addressed this question on April 12, 2011, when Council directed the Executive Director, Social Development, Finance and Administration to develop a comprehensive strategic plan for seniors in consultation with other levels of government, school boards, relevant community organizations and individuals, businesses and academia that is adequately funded, financially feasible and able to be implemented. A particularly important aspect of Council’s direction was the request that the strategy include helping seniors remain in their own homes longer.
On May 7, 2013, Council unanimously approved the Toronto Seniors Strategy: Towards an Age-Friendly City. Between 2013 and 2017, various progress reports were generated and on July 4, 2017, City Council adopted the Tenants First Phase 1 Implementation Plan. A particular area of interest in this plan was that the City Council approved the strategic integration of City programs and services for seniors and responsibility for management of the 83 seniors-designated buildings within the Toronto Community Housing Corporation portfolio under a new Seniors Housing and Services entity that is separate from Toronto Community Housing and is more directly accountable to City Council.
Most recently, a report for action was generated on April 30, 2018 indicating that the manner in which the City currently organizes its housing and services for seniors does not meet their needs and this problem will be exacerbated as the population continues to grow over the next 10-15 years.
The following recommendations were made:
- City Council to approve Version 2.0 of the Toronto Seniors Strategy and direct City Divisions and Agencies to implement the 27 high-impact recommendations contained in the report;
- City Council to direct the Executive Director, Social Development, Finance and Administration to work with the Executive Director of Financial Planning to report back on the financial impact of fully implementing the 27 high-impact recommendations once the service delivery plans have been fully developed for the medium-term initiatives.
It is encouraging to see that the City of Toronto is taking initiatives such as these to care for its aging population, moving forward. To learn more about this important endeavour check out the Toronto Seniors Strategy Version 2.0 report here.
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Canada is currently in the midst of a postal strike. Although the strike is currently “rotating” in nature, with different communities being subject to the strike on different days, it is possible that the strike could become country wide should negotiations remain unsuccessful. Although concern may immediately turn to the potential impact of a full strike upon online holiday shopping, a full national strike could also have an impact upon the legal world in relation to the service of documents.
Canada Post remains a vital service to the legal community, amongst other things remaining one of the official means of service upon a lawyer of record pursuant to rule 16.05 of the Rules of Civil Procedure. Although there are alternate service mechanisms available to serve documents upon a lawyer of record should the strike become national, such as potentially using a courier, there are certain documents which the Rules of Civil Procedure provide may only be served by mail.
Rule 74.18(3) of the Rules of Civil Procedure contemplates that an Application to Pass Accounts is to be served by regular lettermail, providing:
“The applicant shall serve the notice of application and a copy of a draft of the judgment sought on each person who has a contingent or vested interest in the estate by regular lettermail.” [emphasis added]
Although such a rule typically assists the Applicant in serving the Application to Pass Accounts in a streamlined and cost effective manner, as otherwise personal service of the Application to Pass Accounts would be required pursuant to rule 16.01 as an “originating process”, the rule does not contemplate what is to occur in the circumstance that service by regular lettermail is not possible (i.e. in a full work stoppage). In such circumstances, how can the Applicant ensure that the Application to Pass Accounts is properly served as required by the Rules of Civil Procedure?
From a common sense standpoint there are likely alternatives readily available to serve the Application materials other than by regular lettermail, including potentially by courier or by personal service. From a strict reading of rule 74.18(3) however, service of the Application to Pass Accounts by any means other than “regular lettermail” is not proper service, such that it is possible that a beneficiary may argue that they have not been properly served should you serve them by any other means. Should this occur, it is possible that an Order validating service and/or substituting service for alternative means under rule 16.04 may be required.
Thankfully at present the strike is only “rotating” in nature, such that we can continue to mail out documents such as Applications to Pass Accounts to be served in accordance with the Rules of Civil Procedure (subject to any potential daily interruptions should your community be striking on a particular day). Should circumstances change however, and there is a full work stoppage, it is possible Orders may have to be sought validating and/or substituting service for service in a manner other than by regular lettermail for those items such as Applications to Pass Accounts which the Rules provide may only be served by mail.
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People can become upset when they find out that they have been written out of a Will. This frustration can often become multiplied when the individual in question received a significant bequest under a prior Will, believing the that the prior Will in which they received a more significant interest should govern the administration of the estate. In looking for recourse or answers, the “disappointed beneficiary” can often lash out against the drafting lawyer who was retained to prepare the new Will, believing that it was somehow improper or negligent for them to have prepared the Will, and that they have suffered damages in the form of the lost bequest. Some “disappointed beneficiaries” will even go as far as to commence a claim against the drafting lawyer for having seen to drafting the new Will. But can such claims be successful?
In order for the “disappointed beneficiary” to successfully have a claim against the drafting lawyer, the court must find that the drafting lawyer owed a “duty of care” to the beneficiaries under the prior Will. Generally speaking, the only individual to whom a drafting lawyer owes a duty of care when seeing to the preparation of a Will is the testator (and the beneficiaries listed in the new Will by extension). Although the court will sometimes in limited circumstances extend a duty of care to “disappointed beneficiaries”, such circumstances typically exist when the testator advised the drafting lawyer of an intention to benefit a certain individual, however as a result of the actions of the drafting lawyer such an individual did not end up receiving the intended bequest (see White v. Jones and Hall v. Bennett Estate). Such circumstances appear notably distinct from bequests to beneficiaries under a prior Will, for by creating a new Will the testator is in effect communicating to the drafting lawyer an intention to no longer benefit the individuals under the prior Will.
The Alberta Court of Appeal in Graham v. Bonnycastle succinctly summarizes why the court is typically not willing to extend a duty of care from the drafting lawyer to the beneficiaries listed in a prior Will, stating:
“There are strong public policy reasons why the solicitors’ duty should not be extended. The imposition of a duty to beneficiaries under a previous will would create inevitable conflicts of interest. A solicitor cannot have a duty to follow the instructions of his client to prepare a new will and, at the same time, have a duty to beneficiaries under previous wills whose interests are likely to be affected by the new will. The interests of a beneficiary under a previous will are inevitably in conflict with the interests of the testator who wishes to change the will by revoking or reducing a bequest to that beneficiary…” [emphasis added]
In noting that there are other avenues available to such “disappointed beneficiaries”, including challenging the validity of the new Will, the court in Graham v. Bonnycastle goes on to state:
“As noted above, several decisions have recognized the untenable situation that would be created by extending solicitors’ duty of care to include beneficiaries under a former will. Beneficiaries under a former will have other remedies available to them, and may block probate of the will where testamentary capacity is not established. The estate also has a remedy available where it suffers a loss as a result of solicitor negligence. There is no justification for imposing a duty on solicitors taking instruction from a testator for a new will to protect the interests of beneficiaries under a former will. There is not a sufficient relationship of proximity and there are strong policy reasons for refusing to recognize the existence of a duty. It is not fair, just and reasonable to impose a duty.” [emphasis added]
As cases such as Graham v. Bonnycastle suggest, the court appears unwilling to extend a duty of care from the drafting lawyer to a beneficiary listed under a prior Will. If no duty of care exists, no claim may now be advanced by the disappointed beneficiary against the drafting lawyer for any perceived “damages” they may have suffered on account of the new Will having been drafted. This appears true even if it is ultimately found that the testator lacked testamentary capacity at the time the new Will was signed.
Thank you for reading.
As anyone who has ever watched the show Friends can attest, “breaks” can happen in any relationship. For those attempting to claim common law spousal status however, what impact, if any, do such “breaks” have upon the length of time that the couple has to be together? Do you have to re-set the clock of the relationship after every “break”, or can the “breaks” be ignored?
Part V of the Succession Law Reform Act incorporates the definition of “spouse” from section 29 of the Family Law Act. Section 29 of the Family Law Act in turn defines “spouse” as including “two persons who are not married to each other and have cohabited continuously for a period of not less than three years“. This definition is often what is being referred to when someone says that a relationship is “common law”, with significant corresponding legal rights potentially being given to the two individuals if they are found to be “spouses”.
As the word “continuously” is included in the definition, one would be forgiven for thinking that there cannot be any “breaks” in the relationship, and that you must have a continuous three year period of “cohabitation” for two people to be considered spouses. As we will see below however, this may not necessarily be the case.
I have previously blogged about the factors that the court may look to in determining whether two people are “cohabitating”, with the Supreme Court of Canada in M. v. H. having confirmed that you look to the factors listed in Molodowich v. Penttinen to determine whether to individuals are “cohabitating” to the extent that their relationship becomes spousal. For the purpose of this blog however, the interesting question which follows is whether a couple who otherwise meets enough of the factors from Molodowich to be considered to be “cohabitating”, but had a “break” in their relationship during the three year period, could still be considered “spouses”.
In Boothe v. Gore,  O.J. No. 4376, the Ontario Court of Justice (General Division) provides the following commentary regarding the effect of a “break” on a relationship:
“The law in Ontario recognizes that a man and a woman are considered to have continuously cohabitated, despite that while living together, there might have been separations for varying periods of time before reconciling. Cohabitation does not terminate until either party regards it as being at an end, and, demonstrate convincingly that this is the party’s intent. A brief cooling off period does not convincingly show a settled state of mind that cohabitation has terminated…
The effects of temporary separations depends on the intention of the parties. When one party leaves the other and provides an objective basis to believe that they do not intend to resume cohabitation and the separation lasts for a meaningful period of time, the period of cohabitation could well have been interrupted.” [emphasis added]
As Boothe v. Gore suggests, a “break” in a relationship should not necessarily preclude a finding that two persons are common law spouses. Rather, the court is to attempt to ascertain the intentions of the parties at the time of the “break”, with the spousal status only coming to a close if either of the parties regards the relationship as being “at an end“, or the period of separation lasts for a “meaningful period of time“.
Thank you for reading.