Tag: Will Challenge
The recent case of Tilley v Herley 2019 ONSC 5405 serves as a reminder that courts will not approve an interim distribution of the funds in an estate if there is the possibility of new testamentary documents coming to light.
In this case, the deceased had been estranged from her four children for much of their lives; however, she reconciled with one of her children, Roxanne, before her death in 2019. Roxanne was appointed as sole executrix and trustee and was named as the only beneficiary of the entire estate in the most recent will which was executed in 2008. Prior to her death, the deceased transferred the main asset of the estate, a residence in Mississauga, to herself and Roxanne as joint tenants. When she died, the residence passed to Roxanne by right of survivorship.
Two of the other children brought a challenge to the will on the basis that their mother lacked testamentary capacity, that she was unduly influenced by the Respondent Roxanne, and that the will was executed under suspicious circumstances. They also sought a declaration that the residence should be subject to the presumption of resulting trust and should not pass to Roxanne by right of survivorship. Roxanne had already sold the residence and both parties agreed that the proceeds of the sale would be held in trust pending litigation. Roxanne then brought a motion seeking an interim distribution of 25% of the funds held in trust. The rationale behind this was that even if the other siblings’ will challenge was successful and Roxanne lost at trial, she would still receive 25% of the estate as it would be divided up in equal parts amongst the four children.
The case turned on the fact that even though no will prior to 2008 had been located, there was evidence that an earlier will may have existed. This made it impossible to determine that the Respondent’s interest in the estate would be a minimum of 25% and the court found that making an interim distribution of the proceeds would be “premature and inappropriate”. Another relevant factor was that at this early stage in the litigation, there had not been an accounting with respect to the entire estate, including debts and liabilities, as well as future expenses including litigation costs, making it impossible to determine the value of 25% of the estate.
The court dismissed the motion, as there was a possibility that the deceased may have made an earlier will and until this will could be located or its existence could be discounted, it was impossible to know the extent of Roxanne’s entitlement should the will challenge be successful. The court also noted that it was conceivable that none of the deceased’s children would be beneficiaries under a previous will if the 2008 will were to be declared invalid by the court. This case demonstrates that applying for an interim distribution of estate funds can be ill-advised and will likely fail if there is evidence indicating the potential existence of an undiscovered prior will. This would make it impossible for the court to determine the minimum amount that either party may receive if the contested will is declared invalid.
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Ian Hull and Sean Hess
A new Saskatchewan Court of Appeal case sheds more light on the law of standing with respect to will challenges. In Adams Estate v. Wilson, the Appellant executor appealed an earlier decision in which it was held that the Respondent, Mr. Wilson, had legal standing to bring an application to have the deceased’s will proved in solemn form. Mr. Wilson purported to be the deceased’s long-time friend and employee, and he submitted that the deceased had promised to leave him her “ranching operation”; despite this claim, the deceased did not name Mr. Wilson in her will. Instead, she imbued her executor with the discretionary power to distribute the estate to deserving parties, including “certain persons who have been trustworthy and loyal”.
The Chambers judge reasoned that since the statute, Rule 16-46, allows an application by a person who “may be interested in the estate”, Mr. Wilson, as potentially both a creditor and beneficiary, may have been an interested party and therefore had standing. Mr. Wilson succeeded in qualifying himself as a potential creditor because of a related action against the estate. His claim to be a potential beneficiary, though murkier, also succeeded; the claim was that since Mr. Wilson had been “trustworthy and loyal”, the executor could choose to give him a part of the estate in adherence with the will – making him a potential beneficiary.
The Court of Appeal allowed the appeal, finding that Mr. Wilson was a mere “stranger to the will” and, as such, did not have standing. Rather, only the following classes of persons, with specific financial or legal interests in the estate, have standing to challenge a will: (1) Those named as beneficiaries or otherwise designated in the will or other testamentary documents; (2) those to whom the estate would devolve under an intestacy; and (3) those with claims pursuant to The Dependants’ Relief Act, The Family Property Act, and The Fatal Accidents Act. The Court explained that creditors, as Mr. Wilson claimed to be, do not have standing because they have no gain in “interfering with the devolution of property”.
The Court also found fault with Mr. Wilson’s claim to be a potential beneficiary, which was described as disingenuous, circular, and disconnected:
“He ignores that his purpose in requesting standing is to challenge the validity of the Will and the very bequest upon which he based his claim of standing. This is perverse logic because, if successful, Mr. Wilson will have eliminated any chance that he would take under the Will.”
Mr. Wilson was trying to derive rights from a will he was repudiating and suggesting that he might receive a gift from an executor whose legitimacy he denied and against whom he was litigating. He was attempting to win on a legal technicality – on form in spite of substance. In addition to reiterating the parties who may challenge a will, the Court in Adams Estate v. Wilson has put another brick in the wall between those seeking to exploit legal technicalities and the successful results they seek.
Thank you for reading – have a wonderful day,
Suzana Popovic-Montag & Devin McMurtry.
Under Rules 75.01 and 75.06 of the Rules of Civil Procedure, any person who has a financial interest in an estate may commence an application to have a will “proved in such manner as the court directs.” In Neuberger Estate v York, 2016 ONCA 191, the Ontario Court of Appeal clarified that the court has a discretion whether to order that a testamentary instrument be proved. The Court went on to state that Rule 75.06 requires a 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.”
In Joma v Jaunkalns, 2019 ONSC 6788, the Ontario Superior Court of Justice considered the principles mentioned in Neuberger Estate v York. In doing so, the case provides a helpful review regarding the minimum evidentiary threshold to permit a will challenge.
In Joma v Jaunkalns, the deceased, Zenta Palma, died in September of 2018. She was a widow and did not have any children. Zenta’s siblings and only niece, Brigita, predeceased her.
The Deceased was survived by Brigita’s brother, Ronald. She was also survived by Brigita’s husband, Robert, and their children, Michael and Emily.
In 2012, the Deceased executed a Will naming Robert as her estate trustee and Michael and Emily as the residual beneficiaries. Robert’s brother, Viktor, was named as the alternate estate trustee and his children were named as legatees.
Ronald claimed that he was named as a residual beneficiary under an earlier Will but the Will could not be located.
Ronald asserted that, at the time the Deceased executed the 2012 Will, she lacked testamentary capacity and was unduly influenced by Robert. The question before the court was whether Ronald met the required threshold to be granted his request for the 2012 Will to be proven.
Upon considering the evidence of Ronald and Robert, Justice Dietrich found that Ronald did meet the threshold. She arrived at this conclusion based on the following:
- The Deceased was an 84-year old widow who was reliant on her two sisters and her niece and nephew for support and assistance;
- In 2011, the Deceased was taking prescribed medication that would “tranquilize” her;
- The Deceased was taking anti–anxiety medication approximately one month before she executed the 2012 Will;
- Robert’s evidence that the Deceased never had any cognitive impairment was found to be a broad conclusory statement;
- Robert was a physician with experience assessing capacity but he did not offer any evidence of having examined the Deceased or knowing exactly what medication she was taking and in what dosage;
- Ronald’s evidence of Robert’s involvement in the Deceased’s finances raised the spectre of Robert’s potential undue influence over the Deceased;
- For example, Robert undertook a banking transaction on behalf of the Deceased which had upset her so she asked Robert to reverse it.
Based on the evidence above, Justice Dietrich found that Ronald’s evidence amounted to more than suspicion. If accepted, it would call the validity of the Deceased’s Will into question.
Furthermore, a review of the Deceased’s financial records, medical records and the drafting solicitor’s file would be beneficial. Quoting from Seepa v. Seepa, 2017 ONSC 5368, Justice Dietrich went on to state that Ronald “ought to be given the tools such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits.”
In summary, Joma v Jaunkalns demonstrates that the evidentiary burden on a party who wishes to challenge a will is not fairly high. Evidence that amounts to more than a suspicion should suffice.
Thanks for reading!
Ian Hull and Celine Dookie
For further reading on this topic, check out these other blogs:
The testators died in 2008. The family realized there was a disagreement about the validity of their parents’ codicils that year but everything seemed to be on hold until Helen brought an application in 2015 to determine the validity of the codicil. In response, Krystyna brought a motion for summary judgment to dismiss Helen’s application on the basis it is statute barred pursuant to the Limitations Act, 2002. This motion was brought by Krystyna because she was interested in maintaining the force and effect of the codicils that gave her certain properties. Thereafter, Helen cross-motioned for summary judgment on her application.
Rule 20.04 of the Rules of Civil Procedure sets out the basis for summary judgment. Summary judgment shall be granted if: (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) if the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. The Supreme Court of Canada in Hryniak v. Maudlin, 2014 SCC 7, determined that “a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.”
With that in mind, Justice Dietrich found that Krystyna’s motion for summary judgment was appropriate for the following reasons (see para. 35):
- There were no material facts in dispute;
- No additional facts would emerge at trial;
- The application of an absolute limitation period was generally a fairly straightforward factual analysis;
- That based on the evidence before her, this matter can be resolved without a trial and that a trial of this narrow issue would be a more expensive and lengthy means of achieving a just result.
The Ontario Court of Appeal agreed with Justice Dietrich’s finding on this point. The panel emphasized how both parties brought summary judgment motions and filed affidavits with exhibits of their own.
In contrast, a similar summary judgment motion was unsuccessful in Birtzu v. McCron, 2017 ONSC 1420, 2019 ONCA 777 (on the issue of costs, only). The Court in Birtzu found that summary judgment was not appropriate and ordered costs against the defendant in any event of the cause (with reasons that were unreported). That said, the defendant was ultimately successful in proving that the plaintiffs were statute barred after a full trial on all issues.
Thanks for reading!
Doreen So and Celine Dookie
Today’s blog is a continuation of yesterday’s discussion regarding the limitations analysis in Piekiut v. Romoli, 2019 ONSC 1190, 2020 ONCA 26. No limitation period was found to apply where an estate trustee was simply seeking a determination and declaration as to whether certain codicils were valid or not valid.
The testators in this case died in 2008. They had 3 children, Helen, Victor, and Krystyna. A meeting took place in 2008 between all 3 children and a lawyer to discuss the administration of the Estate. During this meeting, Krystyna revealed, for the first time, the existence of codicils and declarations of gift that provide her with an interest in certain properties. Helen refused to acknowledge the validity of these new documents.
In 2015, Helen brings a court application. Her application was later amended, on the consent of parties, in 2018 to reflect that Helen was only seeking a declaration in respect of the validity of the codicils. Thus in 2019, Justice Dietrich’s decision was made in the context of Krystyna’s motion for summary judgment to dismiss Helen’s application on the basis that it was statute barred and Helen’s cross-motion for summary judgment on her application. Justice Dietrich found that, since Helen did not ask the court to determine the ultimate beneficiaries of the properties that were subject to the Codicil or to vest such properties in any particular beneficiary or beneficiaries, her application was not barred by the Limitations Act, 2002.
The Court of Appeal agreed with Justice Dietrich. The panel was also of the view that this case is distinguishable from Leibel v. Leibel, 2014 ONSC 4516 and Birtzu v. McCron, 2017 ONSC 1420 because of the consequential relief that was pleaded in those cases. Since the Court of Appeal decision did not go into the details of the relief sought in Birtzu (unlike its description of Leibel), it is helpful to understand the breadth of the Statement of Claim in Birtzu, which sought the following:
- an Order setting aside the Will;
- an Order setting aside the Deceased’s Powers of Attorney;
- an accounting of the entire Estate, as well as all financial transactions undertaken by the Deceased, or on his behalf, or on behalf of his Estate, from the date that the Deceased’s matrimonial home was sold in 2003 to the date of trial;
- Orders for the production and release of financial and medical information;
- an Order reversing all transactions undertaken by the Defendant, either directly or indirectly, without authority or in breach of her authority, or in breach of her fiduciary duties to the Deceased and to his beneficiaries, including the Plaintiffs;
- an Order tracing the property of the Deceased into the property owned by the Defendant, including her home;
- Orders for injunctive relief, including the issuance of a certificate of pending litigation;
- a Declaration that all property held in the name of the Defendant, or part thereof, is held by her for the benefit of the Plaintiffs;
- damages against the Defendant in the amount of at least $400,000.00, for conversion of property, breach of statutory duty, and/or breach of fiduciary duty;
- pre- and post- judgment interest; and
- costs fixed on a substantial indemnity basis, plus H.S.T.
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The main issue on appeal was whether Justice Dietrich was right in finding that the applicant could still ask the court to determine whether certain codicils were valid (or invalid) seven years after death. Justice Dietrich based her limitations analysis on whether this proceeding would fall under section 16(1)(a) of the Limitations Act, 2002 where there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought”.
In her reasons, Justice Dietrich distinguished the case before her from the other limitations cases that have applied the two-year, basic limitation period to will challenges: Leibel v. Leibel, 2014 ONSC 4516, Birtzu v. McCron, 2017 ONSC 1420, and Shannon v. Hrabovsky, 2018 ONSC 6593. The case before her was different from Liebel, Birtzu, and Shannon because nothing had been done by the respondent beneficiary to propound the codicils that she had an interest in. If the proceeding was started differently in 2015, by the very beneficiary who has an interest in the codicils, then the estate trustee would have a limitations defence against the beneficiary. Since the beneficiary had done nothing, it remained opened to the estate trustee to commence an application for declaratory relief. Such declaratory relief is “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs.’ It is restricted to a pronunciation on the parties’ rights” (see para. 46, 2019 ONSC 1190).
The Court of Appeal agreed that there was no limitation period in this case because the applicant did not seek consequential relief in addition to a determination of the validity or invalidity of the codicils. The Will had not been probated and nothing had been done for seven years to resolve the issue.
“In these circumstances, Helen was entitled to seek declaratory relief, simply to establish the validity, or lack of validity, of the codicils – to define the rights of the parties in order to avoid future disputes.”, Strathy C.J.O., MacPherson J.A., and Jamal J.A.
Thanks for reading and more on these limitation cases to follow later this week!
There have been a number of recent decisions discussing the threshold to be met before a court will allow a will challenge to proceed. These decisions flow from the Ontario Court of Appeal decision of Neuberger Estate v. York, 2016 ONCA 191 (CanLII). We have discussed this case in a number of our blogs. See here, for example.
Today, Rebecca Rauws and I recorded a podcast on the decision of Naismith v. Clarke, 2019 ONSC 5280. In that decision, the court held that the threshold for challenging a will on the basis of testamentary capacity was not met, while it was with respect to the issue of undue influence. The podcast should be posted soon.
More recently, the decision of Maloney v. Maloney, 2019 ONSC 5632 (CanLII) was released. There, the estate trustees brought a motion to remove a Notice of Objection filed by a child of the deceased.
The court ordered the removal of the Notice of Objection. The court noted that there was no basis for setting aside the will. An affidavit from the lawyer who prepared the will set out the circumstances under which the will was prepared. The lawyer had no concerns about the deceased’s capacity. Although the challenger suggested that there were suspicious circumstances surrounding the creation of the will, there was no evidence to support the suspicions. Further, there was no evidence of undue influence. The challenger “has not provided any evidentiary basis to support a further investigation into the validity off this will.” At best, the challenger’s position was that her father would not have drafted his will in such a way. This was not enough to support a challenge.
Of note is the fact that the court had the evidence of the drafting solicitor. In many will challenges, the challenger or the propounder is not able to put this evidence before the court at this early stage due to issues of privilege. Often, the first step in a will challenge proceeding is to obtain an order to allow the evidence of the drafting solicitor to be obtained, along with medical notes and records.
Another important factor noted by the judge was the effect of the will challenge. The challenge stalled the administration of the estate. The court noted that even if the will challenge was successful, it would have no real effect on the distribution of the estate. The will provided that the estate was to be distributed to the three children of the deceased. On an intestacy, the distribution scheme would be the same, except for the specific disposition of an oak china cabinet.
In such cases, the court’s gatekeeping role is a tough one. The court must ensure that frivolous challenges do not proceed, while ensuring that it is able to ascertain and pronounce what documents constitute the testator’s valid will. The threshold should not be too high. As stated succinctly by Justice Myers in Seepa v. Seepa, 2017 ONSC 5368 (CanLII), “At this preliminary stage, the issue is not whether the applicant has proven his or her case but whether he or she ought to be given the tools, such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits.”
Have a great weekend.
This week on Hull on Estates, Paul Trudelle and Christina Canestraro discuss Cavanagh et al. v Sutherland et al., in which the Ontario Superior Court of Justice addresses questions of fact and law related to motions for summary judgment and mistake of fact.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
This week on Hull and Estate, Natalia Angelini and Sydney Osmar discuss Dale v Prentice, in which the Ontario Superior Court of Justice addresses whether a drafting solicitor can represent the estate in a will challenge.
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
Ante-Mortem Probate, or Pre-Death Probate, is a process of probate which validates the Will of a testator during his or her lifetime and may be particularly useful for testators who fear that their Will may be subject to a challenge following their death.
Various models of Ante-Mortem Probate have been explored in the past by American scholars and include the following proposed models:
- The “Contest Model”, reviewed by Professor Howard Fink, is where each of the beneficiaries are identified, including those that would benefit on an intestacy and the testator essentially becomes the moving party in his or her own suit against all possible beneficiaries of his or her Estate. [Antemortem Probate Revisited: Can an Idea Have a Life After Death? (1976) 37 Ohio St LJ 264]
- The “Conservatorship Model”, explored by Professor John H. Langbein, is where the testator is required to apply to the Court in a manner similar to the “Contest Model”, however, instead of each of the specific beneficiaries being involved, a Guardian Ad Litem (Conservator) represents the interest of all potential beneficiaries, including any unborn or unascertained beneficiaries. [Living Probate: the Conservatorship Model (1980)]
- The “Administrative Model”, set out by Professor Gregory S. Alexander and Albert M. Pearson is neither judicial nor adversarial. There is no requirement of notice to the beneficiaries or in fact “interested parties” as one of the significant concerns with the other models of Ante-Mortem Probate is the confidentiality of the testator. [Alternative Models of Antemortem Probate and Procedural Process Limitations on Succession (1979-1980) 78 Mich L Rev 89]
Only certain American States allow Ante-Mortem Probate, whereas Canada does not have any provinces or territories with a similar arrangement.
Given the number of suits that are commenced following the death of testators across Canada, such an arrangement could be beneficial in that at the very least, a testator who expects that there will be a challenge to his or her Estate plan could take an active part in adjudicating whether his or her Will is indeed, valid.
Considering the complicated familial arrangements that are often present in our society today, perhaps addressing challenges of things like capacity of the testator, undue influence or the presence of suspicious circumstances would make more sense before the testator’s death. This is particularly an issue where a testator’s capacity had been in question for a while and the Will being challenged was executed a decade or more before death.
There are, of course, certain potential negative effects of any Ante-Mortem Probate regime, particularly the possibility that it would encourage litigation that would not otherwise arise, following the death of the testator.
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