When a parent transfers assets to an adult child, the rebuttable presumption of resulting trust will apply to that transfer. Unless the child can rebut the presumption, it will be presumed that the child was holding the transferred assets in trust for the parent.
But what kind of evidence will be needed to rebut the presumption? Ideally there would be some kind of documentation made contemporaneously with the transfer to support the parent’s intention. If the documentation is lacking, there may be evidentiary issues where the parent has passed away or is incapable, and is not able to give evidence as to his or her intention at the time of the transfer.
In the recent decision of Pandke Estate v Lauzon, 2021 ONSC 123, the court considered two cheques paid by a mother, Carol, to her adult son and daughter-in-law, Steven and Marnee, in the amounts of $35,000.00 and $90,000.00, respectively, shortly before her death. The court reviewed the evidence in determining whether the presumption of resulting trust was rebutted, or whether Carol had intended the cheques to be gifts.
Carol was diagnosed with terminal pancreatic cancer in 2017, and died about a month following her diagnosis. At the time that she was diagnosed, she lived with her husband, William, to whom she had been married since 1992. Following her diagnosis, it was decided that Carol would move in with Steven and Marnee, as William was not physically capable of providing her the care that she would require. Shortly after moving in with Steven and Marnee, Carol provided a cheque in the amount of $35,000.00, payable to Marnee, with a note on the cheque stating that it was “For Rent”. Four days later Carol provided another cheque payable to Steven, in the amount of $90,000.00, with the note on the cheque stating “Medical Expenses”. The total value of the two cheques constituted the majority of Carol’s liquid assets. William, who was the sole beneficiary of Carol’s estate, challenged these payments following Carol’s death.
The court found that the $35,000.00 payment was intended to be a gift by Carol to Steven and Marnee. Part of the evidence on which the court’s conclusion in this regard was based was Marnee’s hearsay evidence of what Carol had told her about why she was making the payment, being that Steven had left his job to care for Carol and she did not want him to suffer financially as a result. The court found that Marnee’s hearsay evidence could be admitted, notwithstanding that it was hearsay, on the basis that it fell within a traditional exception to the hearsay rule (that the statement is adduced to demonstrate the intentions or state of mind of the declarant at the time the statement was made) and under the principled approach to hearsay evidence as it met the necessity and reliability requirements. The court also found that Marnee’s evidence was corroborated by independent evidence.
However, with respect to the $90,000.00 payment, the court found that there was insufficient evidence to rebut the presumption of resulting trust. Although the court admitted Steven’s evidence of statements made by Carol to him as to her state of mind at the time the cheque was signed, the court also raised other concerns with Steven’s evidence. For instance, the reference to “Medical Expenses” noted on the cheque was concerning, as there were no medical expenses, and the court wondered why Carol would not have simply indicated that it was a gift if that is what she intended it to be. The court was also not convinced by a statement that Steven said was made by Carol that she was making the payment because she did not want Steven to suffer financially because he had left work to care for her, given that only a few days before Carol had made the $35,000.00 payment, which paid off Steven’s truck loan, line of credit, and left around $15,000.00 cash to spare. There was also no corroborating evidence of Carol’s intention to gift the $90,000.00 amount to Steven. As a result, Steven held the $90,000.00 in trust for Carol’s estate.
Unfortunately, it is often the case that payments to adult children are challenged after the parent has died. Unless the parent has taken special care to document his or her intention in making the payment, the intention can be difficult to determine with any degree of certainty. Accordingly, a parent making a gift to an adult child should consider seeking legal advice as to the best way to document such a transfer in order to ensure that their intentions will be upheld. From the opposite perspective, if a parent wants to make a transfer on the basis that their adult child will hold the asset in trust for him or her, or his or her estate, the parent should also consider seeking legal advice to ensure that this is properly documented in order to reduce the chance of issues arising in this regard after his or her death.
Thanks for reading,
You may also enjoy these other blog posts:
I have blogged this week about the general availability of “pour over clauses” and whether you can leave a bequest in a Will to an already existing inter vivos trust. In my blog yesterday I discussed “facts of independent significance” as one of the potential arguments that has been raised to attempt to uphold “pour over clauses”, and how the concept was rejected by the British Columbia Court of Appeal in Quinn Estate v. Rydland, 2019 BCCA 91. In today’s blog I will discuss another argument that was raised in Quinn Estate to try to uphold pour over clauses; the doctrine of “incorporation by reference”.
The doctrine of incorporation by reference at its most basic allows a Will to refer to a separate document which provides for dispositive provisions, with such a separate document being “incorporated” into the Will to be carried out by the executor as part of the administration of the Will. The most common example of incorporation by reference would be a memorandum directing who is to receive various personal items from the testator, with the Will directing the executor to distribute the personal items in accordance with the terms of the separate memorandum.
The general test for whether a document can be incorporated by reference into a Will is:
- It must be clear that the testator in the Will referred to some document then in existence; and
- the document in question must be beyond doubt the document referred to.
When incorporation by reference is raised as part of an attempt to uphold a pour over clause it appears to be the argument that so long as the inter vivos trust was in existence at the time the Will was signed, and the trust is clearly identified by the Will, that it should be able to meet the test for incorporation by reference such that the “pour over clause” can be saved.
In Quinn Estate the court ultimately rejects the attempt to save the pour over clause under the doctrine of incorporation by reference, appearing to emphasize there is a fundamental flaw in the attempt to incorporate a trust by reference into a Will insofar as it does not appear to be the testator’s intention to actually incorporate the terms of the trust into the Will, but rather simply to make a distribution to the separate trust. When something is “incorporated by reference” into a Will it means exactly that, insofar as the terms of the separate document are said to be incorporated into the Will and read as a single document. This concept appears fundamentally at odds with any attempt to make a bequest to an already existing trust under a pour over clause, as the testator never likely intended to have the terms of the trust incorporated into the Will to be administered by the executor as part of the Will, but rather to have the executor make a bequest to the trust to be administered separately from the estate. In emphasizing this point the British Columbia Court of Appeal in Quinn Estate states:
“Strictly speaking, resorting to incorporation by reference to incorporate the original trust document into the will belies the essential nature of a pour-over clause: here it is perfectly clear that the will-maker had no intention of incorporating the trust into his will. He rather demonstrated the obvious intention of making a gift to the trust.”
As my blogs this week have shown, any attempt to leave a bequest in a Will to an already existing inter vivos trust using a “pour over clause” is highly problematic.
Thank you for reading.
Trusts are generally divided into two categories; “inter vivos” or “testamentary” trusts. Inter vivos trusts are broadly defined as trusts that are established by a settlor while they are still alive, typically pursuant to a deed of trust, while testamentary trusts are established in the terms of a Will or Codicil. Generally speaking there is no overlap between an individual’s Will and any inter vivos trust, with any inter vivos trust existing separate and apart from the settlor’s “estate”. But does this have to be the case? Could you theoretically, for example, leave a bequest in a Will to an inter vivos trust that you previously established, thereby potentially increasing the assets governed by the trust upon your death, or must a trust which governs estate assets be a “testamentary trust” established by the Will? The short answer is “it depends”, although any individual considering such a bequest should proceed with extreme caution.
A clause in a Will that provides for the potential distribution of estate assets to a separate inter vivos trust is often referred to as a “pour over” clause, insofar as the assets of the estate are said to “pour over” into the separate trust. The availability and use of “pour over” clauses in Ontario is somewhat problematic.
The fundamental issue with the use of “pour over” clauses that allow a bequest to be made to a trust is that the formalities that are required to make or amend a trust are much lower than the formalities that are required to establish a Will, with trusts often containing provisions that will allow for their unilateral amendment or revocation after their establishments. The statutes which establish the parameters that are required for a Will to be valid are very strict, with a Will only being able to be later amended or altered if it too meets very strict criteria. The potential concern in allowing a distribution from a Will to a separate trust that can easily be amended after the execution of the Will is that it could create the scenario in which an estate plan could be altered after the Will was signed in a way that would not meet the strict formal requirements that would otherwise be required for a Will to be altered or amended.
In Ontario the formalities required for a Will to be valid is established by section 4(1) of the Succession Law Reform Act. A Will that has been signed in accordance with the formal requirements of section 4(1) can only be altered or amended by a Codicil that itself has been signed in accordance with the formal requirements of section 4(1), or if the alterations to the Will meet the requirements of section 18 of the Succession Law Reform Act. Unlike alterations and/or amendments to a Will, an alteration or amendment to a trust does not need to meet any formal statutory requirements for it to be valid, with the only requirements being those stipulated in the trust document itself and/or under the rules in Saunders v. Vautier. As a result, an inter vivos trust to which a bequest was directed using a “pour over” clause could theoretically be changed numerous times after the signing of the Will either with or without the involvement of the testator, thereby bringing into question whether the bequest actually represents the deceased’s testamentary intentions at the time the Will was signed.
In Quinn Estate v. Rydland, 2019 BCCA 91, the British Columbia Court of Appeal upheld the lower British Columbia Supreme Court decision, 2018 BCSC 365, which found that a “pour over” clause which purported to distribute certain estate assets to a trust that was settled by the Deceased during his lifetime was inoperable, with the funds that were to be distributed to the trust instead being distributed on an intestacy. In coming to such a decision the court appears to place great emphasis on the fact the trust in question could be amended unilaterally after the fact and in fact was amended in such a fashion after the execution of the Will.
The court in Quinn Estate provides an excellent summary of the considerations to make when determining whether a “pour over” clause can be upheld, including the concepts of “facts of independent significance” and “incorporation by reference”. I will discuss the concepts of “facts of independent significance” and “incorporation by reference” as they relate to pour over clauses in my remaining blogs this week.
Thank you for reading.
The COVID-19 pandemic has thrown much of what we take for granted on its head. If recent reports are accurate we can potentially add to that list an individual’s right to control their own medical treatment as codified in the Health Care Consent Act (the “HCCA”).
There have been reports in the news recently about advanced planning currently underway about what would happen to the provision of health care if the worst case scenario for COVID-19 should occur and the hospitals are overwhelmed. Included amongst these reports are discussions that certain provisions of the HCCA may temporarily be suspended as part of a new triage system which would allow medical professionals to prioritize who received treatment.
Section 10 of the HCCA codifies that a health care practitioner shall not carry out any “treatment” for a patient unless the patient, or someone authorized on behalf of the patient, has consented to the treatment. The Supreme Court of Canada in Cuthbertson v. Rasouli, 2013 SCC 53, confirmed that “treatment” included the right not to be removed from life support without the patient’s consent even if health practitioners believed that keeping the patient on life support was not in the patient’s best interest. In coming to such a decision the Supreme Court of Canada notes:
“The patient’s autonomy interest — the right to decide what happens to one’s body and one’s life — has historically been viewed as trumping all other interests, including what physicians may think is in the patient’s best interests.”
The proposed changes to the HCCA would appear to be in direct contradiction to the spirit of this statement, allowing health care practitioners to potentially determine treatment without a patient’s consent based off of the triage criteria that may be developed. This “treatment” could potentially include whether to keep a patient on a lifesaving ventilator.
Hopefully the recent downward trend for COVID-19 cases holds and the discussion about any changes to the HCCA remains purely academic. If not however, and changes are made to the HCCA which could remove the requirement to obtain a patient’s consent before implementing “treatment”, you can be certain that litigation would follow. If this should occur it will be interesting to see how the court reconciles any changes to the HCCA with the historic jurisprudence, for as Rasouli notes beginning at paragraph 18 many of the rights that were codified in the HCCA previously existed under the common law, such that any changes to the HCCA alone may not necessarily take these rights away for a patient.
Thank you for reading.
Re Crowley Estate, 2021 ONSC 582, raises an interesting question surrounding the potential impact of counsel missing a procedural deadline in association with a Notice of Objection to the issuance of a Certificate of Appointment (i.e. probate), and whether missing such a deadline is fatal to the Objector’s ability to generally proceed with a challenge to the Will.
The Notice of Objection process is governed by rule 75.03 of the Rules of Civil Procedure. It generally provides that at any time before the issuance of a Certificate of Appointment any individual who appears to have a financial in the estate may file a “Notice of Objection” to the issuance of a Certificate of Appointment. The impact of filing of the Certificate of Appointment is to in effect to pause the probate process, with the applicant Estate Trustee being required to vacate and/or deal with the Notice of Objection before probate can be issued. The process by which the Notice of Objection is generally dealt with is that upon being advised of the Notice of Objection the Estate Trustee is to serve a “Notice to Objector” upon the Objector in accordance with rule 75.03(4), which then provides the Objector with 20 days from the date on which they are served with the Notice to Objector to serve and file a “Notice of Appearance”. If the Notice of Appearance is served by the deadline, the matter proceeds to a motion for directions in accordance with rule 75.03(6), where the court would be asked to provide directions regarding how the objections that were raised are to be adjudicated before the court. If no “Notice of Appearance” is filed by the deadline the Notice of Objection is automatically vacated, and the probate application may proceed as if no Notice of Objection had been filed.
In Re Crowley Estate, the Objector filed a Notice of Objection to the issuance of probate, and was in turn served with a Notice to Objector by the Applicant. The date on which the Objector was served with the Notice to Objector was November 20, 2020, which would have resulted in a deadline of December 10, 2020 for the Objector to serve the Notice of Appearance. The Notice of Appearance was not served however by the Objector until December 15, 2020. The matter was directed by the Registrar to a Judge, who in turn asked the parties to make written submissions regarding the matter. The Applicant’s lawyer took the position that rule 75.03 was “unforgiving” with respect to its deadlines, and that as the Objector had missed the deadline to serve the Notice of Appearance the court was now required to proceed with the probate application as if no Notice of Objection had been filed. Objector’s counsel advised that the reason for the missed deadline was due to health related concerns surrounding COVID-19, appearing to note in any event that even if the Notice of Objection was vacated the Objector would be proceeding with a challenge to the validity of the Will, noting that the Objector had subsequently commenced a separate Application to address the concerns surrounding the validity of the Will on January 7, 2021.
The court ultimately extended the deadline for the Objector to file the Notice of Appearance under rule 3.02, which allows the court to extend any time prescribed by the rules on such terms as are just. In extending the deadline, Justice Boswell notes that the Objector clearly always intended to pursue the objection, and that there is no clear prejudice to allowing the extension. Perhaps interestingly however, although the comment does not appear to have played a decisive role in the final ruling, Justice Boswell references that even if the Certificate of Appointment was issued the Objector would likely have been at liberty to seek the return the Certificate of Appointment under rule 75.05, appearing to give credence to the Objector’s position that they would have been at liberty to proceed with their challenge to the validity of the Will regardless of the missed deadline for the Notice of Objection.
Thank you for reading.
The commencement of an Application for support as a dependant under Part V of the Succession Law Reform Act (the “SLRA”) can be an extremely stressful event for the Applicant. Not only is the Applicant likely commencing court proceedings against fellow family members and/or close friends of the deceased, but there may also be a sense of urgency to the Application to ensure that steps are taken before the estate has otherwise been administered and/or distributed to those who would be entitled to the estate but for the support Application. As a result of these concerns it is not uncommon for the Applicant in the early stages of the Application to seek some form of court intervention to stop and/or stay the administration of the estate until the Application has been adjudicated, thereby ensuring that there are assets remaining in the estate to satisfy any support award should it ultimately be made. But is such court intervention actually necessary?
Under section 67 of the SLRA, once an Estate Trustee has been served with an Application for support under Part V they are automatically required to cease all distributions from the estate unless certain conditions are met. Specifically, section 67(1) provides:
“Where an application is made and notice thereof is served on the personal representative of the deceased, he or she shall not, after service of the notice upon him or her, unless all persons entitled to apply consent or the court otherwise orders, proceed with the distribution of the estate until the court has disposed of the application.”
Section 67(3) provides that any Estate Trustee that makes a distribution in violation of section 67(1) once they have been served with an Application under Part V of the SLRA is personally liable to pay any shortfall should a support order ultimately be made. As a result, any distribution made by the Estate Trustee once an Application for support has been commenced would be at great potential personal liability, as they could personally be required to pay any support order.
Although section 67 of the SLRA automatically stops any external distributions being made once an Application for support has been commenced, it does not stop the internal administration of the estate itself. As a result, the Estate Trustee would, for example, still be at liberty to collect and/or liquidate any estate assets, including any real estate. They just could not distribute those funds to the beneficiaries once the assets had been liquidated. In the event the Applicant should seek a particular asset as part of their support order, such as the transfer and/or use of particular real property, additional steps would need to be taken by the Applicant to ensure that the Estate Trustee did not dispose of the asset while the Application remained before the court. These additional steps would likely be in the form of an order under section 59 of the SLRA, while allows the court to issue an order “suspending” the administration of the estate either in whole or in relation to a particular asset (i.e. the real estate) for such time as the court may decide.
Thank you for reading.
Something that surely no testator or beneficiary wants to see is the failure of a gift made in a Will. Unfortunately, circumstances can arise where the language of a Will may be ambiguous, or where events occurring during the estate administration expose uncertainty in a term of the Will that wasn’t necessarily apparent at the time of drafting or execution.
In Barsoski v Wesley, 2020 ONSC 7407, the estate trustee sought directions from the court regarding a clause in the deceased’s Will that allowed the deceased’s friend (the “Respondent”) to live in the deceased’s home during his lifetime, or such shorter period as the Respondent desires. Upon the earlier of the Respondent advising that he no longer wished to live in the home, or the Respondent “no longer living” in the home, the house and its contents are to be sold, and the proceeds added to a gift to another beneficiary of the Deceased’s Will, a charity, St. Stephens House of London (“St. Stephens”).
The deceased died in June 2017. Confusion arose when it became apparent that the Respondent was not actually living in the home on a full-time basis. This first came up around December 2017 and continued for a couple of years. The home was in London, but the Respondent continued living and working full-time in Toronto following the deceased’s death, and seemingly up until 2019. He then started a full-time job in Sault Ste. Marie in 2019.
The Respondent’s evidence was that he was using the home as his primary residence in that he spent time at the home on weekends 1-2 times per month, and used it as his address for his driver’s license and for CRA purposes. He stated that he planned to live in the home full-time after he retired around July 2021.
St. Stephens, as the gift-over beneficiary of the home, took the position that the Respondent had not been living in the home, and therefore it should be sold pursuant to the terms of the Will.
The court first considered whether the Will gave the Respondent a life estate or a licence to use the home subject to a condition subsequent, concluding that the proper interpretation was that it was a licence with a condition subsequent. The condition subsequent in question was when the Respondent was “no longer living” in the home. The court outlined that a “condition subsequent is void for uncertainty if the condition is ‘far too indefinite and uncertain to enable the Court to say what it was that the testator meant should be the event on which the estate was to determine’”. Accordingly, the court concluded that it was impossible to define, on the terms of the deceased’s Will, what it meant to “live” in the home.
The question of whether, on the facts, the Respondent’s use of the home constituted him “living” there is an interesting one. However, due to the court’s conclusion that the terms granting the Respondent an interest in the home were void for uncertainty, it was unnecessary for the court to make any findings of fact on this particular question.
The estate trustee, who was also the drafting lawyer, gave evidence (that was ultimately inadmissible) that the deceased had been considering some changes to her Will prior to her death. The changes would put time restrictions on the Respondent’s use of the home, including that he would be required to move into the home within 90 days of her death, and not be absent from it for more than 120 days. These additional terms may have provided sufficient certainty for the beneficiary to know what he had to do in order to maintain his interest in the home, and for the estate trustee to administer the estate. Although this evidence had no impact on the court’s decision, it can serve as an important reminder that if one wants to change their Will, one should do so as soon as possible to ensure the Will reflects their wishes at the time of their death.
Thanks for reading,
These other blog posts may also be of interest:
As my colleague, Nick Esterbauer, blogged about last week (here and here), the COVID-19 pandemic has pushed all of us, including the courts and the legal profession, towards the increasing use of technology. This has included the use of video-conferencing for examinations of witnesses in the litigation context. As we adapt to this new world, there are inevitably going to be ‘hiccups’. It is crucial to maintain the integrity of the process and to ensure that virtual examinations are not abused.
A recent decision of the Ontario Superior Court of Justice dealt with just such a situation. In Kaushal v Vasudeva et al., 2021 ONSC 440, the cross-examination of the respondent to an application was held over Zoom. The respondent required an interpreter for his cross-examination, and the respondent, his lawyer, and the interpreter all attended at the lawyer’s boardroom for the examination. They were all in the same room together, but on separate devices. The respondent’s wife and son came to the lawyer’s office with him, but according to the respondent they remained in the reception area at all times. It was confirmed on the record by the respondent’s lawyer that the only people present with the respondent during the examination were the lawyer and the interpreter.
Following the examination, the applicant noticed that a microphone and camera in the respondent’s lawyer’s boardroom had been left on, and he could hear the respondent’s wife and son speaking. It appeared to the applicant that the wife and son had listened in on the examination.
The respondent denied that his wife and son were present in the boardroom during his cross-examination. His lawyer’s legal assistant also provided affidavit evidence that the wife and son were not in the boardroom during the examinations.
The interpreter, however, ultimately swore two affidavits that the wife and son were present in the boardroom throughout the respondent’s examination, and were prompting the respondent’s answers by hand and facial gestures. The court accepted the interpreter’s evidence in its entirety.
The court concluded that there was misconduct during the respondent’s cross-examination on the basis that his wife and son were present and made hand and facial gestures to assist him with his answers. The court further concluded that the respondent’s misconduct amounted to abuse of process and that his affidavit responding to the application must be struck. It was the court’s view that it “must send a strong message that interference in the fact-finding process by abusing or taking advantage of a virtual examination will not be tolerated. In a broader sense, this type of misconduct strikes at the very heard of the integrity of the fact-finding process such that general deterrence is also a factor.”
Thanks for reading,
You may also enjoy these other blog posts:
In a recent decision from the British Columbia Court of Appeal, Mayer v Mayer Estate, 2020 BCCA 282, the court considered an application to reopen a trial to admit new evidence or to have a mistrial declared (the “post-trial application”). The post-trial application arose as a result of an email between the respondent’s daughter-in-law (who had been assisting the respondent with the litigation) and the respondent’s counsel. The appellant had obtained the email from the deceased’s computer. The deceased and the respondent had shared an email address, and when the appellant connected the computer to the internet some emails were downloaded from the shared account, including the email in question. The appellant took the position that the email that she had obtained impugned the respondent’s credibility by contradicting evidence she had given in the previous proceedings. The post-trial application was dismissed, and the appellant appealed the decision.
The Court of Appeal dealt with the question of the email fairly briefly. The post-trial application judge had concluded that the email was a communication that was subject to solicitor-client privilege. The Court of Appeal appears to have accepted that finding.
The content of the email is not specifically set out in the decision, but appears to have related to the purpose for which the respondent had made certain transfers to the deceased. It appears that, notwithstanding the finding that the email was privileged, the court still considered whether the contents of the email did impact the respondent’s credibility.
The respondent swore affidavit evidence in the original proceedings that she had made two transfers to the deceased to assist him in paying some tax debts. The email apparently indicated that at the time the respondent swore her affidavit, she knew that the deceased did not, in fact, have any tax debt. The post-trial application judge’s analysis stated that it appeared the deceased may have been untruthful with the respondent at the time the transfers were made, and probably used the funds for something other than tax debts, which he did not have. However, the respondent’s evidence in this regard was not a lie, because at the time of the transfer, all she knew was what the deceased had told her, namely that he intended to use the funds to pay his tax debts.
Additionally, the post-trial application judge had already addressed minor inconsistencies of this nature in the respondent’s evidence in his reasons from the original proceeding, noting that they were not consequential and fully explained by the respondent.
The Court of Appeal dismissed the appeal. In making this decision, the Court of Appeal notes that “it is apparent that the appellant is seeking largely to re-argue the case as originally tried before Justice Crossin, particularly as to credibility, which is not open to her.”
The Court of Appeal also awarded the respondent special costs (on a higher scale), based on its conclusion that the very serious allegations made and maintained by the appellant against the respondent constituted “sufficiently reprehensible conduct to merit rebuke in the form of an award of special costs”.
Although scenarios may exist where new evidence could have such an impact on credibility that it would warrant reopening a trial, one should be careful to fully assess the nature and strength of such evidence. The award of special costs also serves as further caution that serious allegations such as fraud and perjury should be made very selectively, when they are appropriate and fully supported by the evidence.
Thanks for reading,
You may also enjoy these other blog posts:
When a party is incapable of instructing counsel, or his or her capacity is in question in a proceeding, there are safeguards in place in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), and the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”) to ensure that the incapable party’s interests are protected. The Rules provide for the appointment of a litigation guardian for a party under disability, while the SDA provides for the appointment of “section 3 counsel” when the capacity of a person is in issue in a proceeding under the SDA and they do not have legal representation. While a litigation guardian and section 3 counsel may have a similar purpose, their roles are quite different. Situations may arise where one or the other is required, but there are also times when it may be difficult to determine which one is necessary in the circumstances. The recent decision of Dawson v Dawson, 2020 ONSC 6001 is one such instance.
In Dawson, one of the parties, Michael, was incapable of managing property or instructing counsel, and was the subject of a proceeding under the SDA. Michael’s wife, Josephine, sought to be appointed as his litigation guardian in that proceeding. The Office of the Public Guardian and Trustee (the “PGT”) opposed the appointment of a litigation guardian, and took the position that the appointment of section 3 counsel would be appropriate in the circumstances.
Ultimately, the court appointed Josephine as litigation guardian for Michael, notwithstanding that section 3 counsel would typically be appointed in such a situation. Part of the court’s reasoning was that “[b]oth a litigation guardian and s. 3 counsel are responsible for protecting the interests of a vulnerable litigant, but they do so in significantly different ways.”
The court highlighted the limitations on section 3 counsel, being that they are counsel, not a party. If a lawyer is acting for a client with capacity issues, as may be the case with section 3 counsel, it may be difficult or impossible for the lawyer to ascertain the client’s wishes and instructions. Without instructions from his or her client, a lawyer cannot take a position in a proceeding, even if one assumes that the client would have agreed with that position, or that it is in the client’s best interests. Section 3 counsel cannot make decisions on behalf of his or her client.
A litigation guardian on the other hand, stands in the shoes of the party under disability, and is able to make decisions on behalf of the party. As stated by the court: “[a] litigation guardian therefore does precisely what s. 3 counsel cannot do, that is, make decisions on behalf of a vulnerable person.”
The role of section 3 counsel is very important in the context of proceedings under the SDA, given the significant impact that, for instance, a finding of incapacity, and the appointment of a guardian can have on an individual’s liberty. However, where section 3 counsel is unable to get instructions, the appointment of a litigation guardian may be necessary in order to protect the individual.
Thanks for reading,
These other blog posts may also be of interest: