In contentious litigation, it is quite rare for a court to award complete indemnity costs to one of the parties. The decision to award costs, and the amount of such costs, is within the court’s discretion. There are a number of factors for the court to consider in exercising its discretion, as set out in Rule 57.01 of the Rules of Civil Procedure, including factors relating to the conduct of a party.
Where a party has made an offer to settle pursuant to Rule 49 of the Rules of Civil Procedure, there are certain costs consequences if that party is successful, including the scale of costs to which they are entitled. Rule 49 specifically sets out when a party is entitled to partial or substantial indemnity costs. But in what circumstances will the Court increase the scale of costs to complete indemnity?
The recent decision of Churchill v Churchill, 2019 ONSC 5137 considered this issue. There had been a dispute between children over their mother’s estate. The plaintiffs were virtually entirely successful at trial as against the respondent, their brother, and had made several offers to settle that were more favourable to the brother than the results at trial. The court concluded that the plaintiffs were entitled to substantial indemnity costs from the date of the offers made, but raised the additional question of whether the scale of costs should be increased to complete indemnity, in view of the brother’s conduct throughout the proceedings. Citing the Ontario Court of Appeal, the court stated that, in order to increase the scale “the conduct of the losing party would have to be based on their serious misbehaviour so, as to fall within the category of ‘reprehensible’ behaviour”.
The court considered the brother’s behaviour, including his misappropriation of estate assets, failure to comply with court orders, and perseverance with meritless claims despite a number of court hearing with rulings adverse to the brother and two adverse costs awards. Although the brother was self-represented, that did not justify his conduct.
The plaintiffs’ complete indemnity costs were approximately $77,000.00. Ultimately, the court concluded that the plaintiffs were entitled to more than substantial indemnity costs, and awarded them costs in the amount of $75,000.00.
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A few months ago, I blogged about a New Yorker article that discussed the challenges of living well now that people are living longer than ever, and what is being done about it. One of the topics addressed was the difficulty of marketing certain products that are aimed at older adults, mainly because we do not want to buy something that will remind us that we are aging or old.
A recent article in MIT Technology Review asked an interesting, and related, question: Why are products for older people so ugly?
One quote in particular, I think, sums up the issue quite well:
Presented with products that are ‘brown, beige, and boring,’ many older people will forgo convenience for dignity.
Unfortunately, most individuals and companies who design products for older people seem to make assumptions about what older people are looking for in a product. For instance, they may assume that an older person cares more about functionality than aesthetics. In many cases this is not necessarily true, and the older person in question will likely end up feeling that the product ultimately draws unwanted attention to their age and particular needs.
The article discusses the idea that older people should be more directly involved in conversations about how to design the products that they need, or that are aimed at them. This would, of course, be helpful to those designing and using the products, but would also allow older people who may feel that they are no longer seen as contributing to society, do something that they may find useful and fulfilling.
The “Longevity Explorers” consulting group was created around this concept. It started with a group of older people meeting to discuss aging in order to pinpoint the areas that product developers should focus on. Participants can suggest topics they want to cover, and there is also a moderator who will introduce a main discussion topic. In 2017, a separate branch of the group was introduced to serve as paid focus groups for companies. Each “Explorer” receives a fee for participating in the focus group, and in exchange, the company gets feedback from their targeted customers (namely, seniors) about a product that they are designing.
This seems like a much-needed shift in how we think about products for older people. If we can focus on creating products that not only address the needs of older people, but are designed in a way that will make seniors want to use the product, both the companies selling the products, and importantly, the older people using them, will benefit.
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Financial elder abuse can take many forms. We have previously blogged about elder abuse by family members, as well as the role technology plays in the increase in phone and email scams affected seniors.
This Global News article tells the story of an elderly couple who claim they were pressured into selling their house.
The couple had lived in their home in Woodbridge, Ontario, for over 20 years, and had no plans to move or sell their home. Although the house was not for sale, in February 2012, a real estate agent showed up at the couple’s door with an offer to purchase the home. There is some dispute about the subsequent interactions between the couple and the agent, but ultimately, a contract was signed for the sale of the couple’s home. After seeking advice from a lawyer, the couple refused to close on the sale of the home. The buyer brought a claim against the couple to enforce the contract, and it appears from the article that, as of October 2018, the litigation remained ongoing.
The couple say that, initially they ignored the offer to purchase that had been delivered by the real estate agent. The husband told his daughter that he had asked the agent several times to give him a few days to consult with his children before finalizing any deal. On the other hand, the agent says that negotiations occurred over a three-day period, and the couple had several days to consider the offer and consult with their children.
There is also a question of whether the couple was capable of entering into the sale transaction. The couple’s daughter says that the wife was 84 years old at the time and suffering from early onset dementia, and that the husband was not fluent in English.
The couple’s daughter believes that her parents were pressured into agreeing to sell their home by the agent. The article mentions that a similar situation could come up with any door-to-door salesperson, as elderly people are generally home during the day, and will typically open their door and talk to people. Unfortunately, there isn’t really a simple solution if an older adult is pressured into an agreement. If the other party to the agreement is intent on enforcing it, the senior may need to resort to failing to comply with the terms of the contract, which is likely to lead to litigation. That can be a stressful and time-consuming endeavour—the couple in the article are apparently still involved in litigation years after the contract was entered into.
Incidents like these are an unfortunate reminder that elder abuse continues to be an issue, and that it can take many forms. That being said, with increased attention will come increased awareness, which, I hope, will lead to the prevention or avoidance of similar issues in the future.
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Thanks to the New York Times, I found out about where most of Bob Ross’s paintings have been kept all these years. Bob Ross was the iconic host of the television show, The Joy of Painting. The PBS show ran from 1983 to 1994 and these old episodes continue to be watched on television, YouTube, and Netflix today.
In each episode, Bob taught his audience how to paint landscapes from his own imagination and memories. According to this NYT video, Bob would paint three versions of the same painting for each episode. Given the amount of episodes, Bob is estimated to have painted over a thousand paintings for the show alone.
Bob’s paintings are owned by a company known as Bob Ross, Inc. Bob Ross, Inc. was originally owned by Bob, his wife, Jane, and Annette and Walt Kowalski. The Kowalskis are credited with discovering Bob and financing his early career. When Bob died in 1995, predeceased by his wife Jane, the Ross’s shares of the company were left to the Kowalskis.
To date, Bob Ross, Inc. does not sell Bob’s paintings. It is a company that sells painting supplies, books and dvds, and other fun items like t-shirts and coffee mugs.
As a privately held corporation, Bob Ross Inc. can continue to hold onto Bob’s paintings for the foreseeable future. Only time will tell if the shareholders of Bob Ross Inc. might change their minds about Bob’s paintings. For now, the company has donated a collection of Bob’s paintings to the Smithsonian and the rest of us will just have to paint our own paintings by learning from Bob.
Just for fun, and to finish off my theme for the week, here is a video for happy little Bob Ross waffles.
Golden Fall Foliage Autumn Yellow Maple Tree Season
The use of planning tools such as a “Henson Trust” is an often discussed topic in the estate law world for what can be done to allow an individual who receives benefits from the Ontario Disability Support Property (“ODSP”) to receive an inheritance from an estate without losing their benefits. Although the Henson Trust can be an effective tool to allow an individual to receive an inheritance from an estate while not losing their benefits, as a central tenant of the Henson Trust is that the inherited funds do not “vest” in the beneficiary until the trustee makes a distribution in their favour (thereby allowing funds in the trust not to count against the asset limit provided for by ODSP before they are distributed), a beneficiary and/or Estate Trustee cannot create a Henson Trust after the testator has died as the inherited funds have typically already “vested” in the beneficiary and therefore would count against the asset limits for ODSP. As a result, if a beneficiary who receives an interest in an estate is also an ODSP recipient (and the Will did not use a tool such as a Henson Trust to ensure the inherited funds do not count against the ODSP qualification criteria), there is the risk that the beneficiary could lose their ODSP benefits as a result of the inherited funds putting them offside the ODSP qualification criteria.
Although advance planning is always preferable when dealing with a situation in which a potential beneficiary receives ODSP, sometimes for whatever reason a testator does not take steps prior to their death to ensure that their estate plan includes tools such as a Henson Trust that would allow the beneficiary to receive the inheritance as well as continue to receive their benefits from ODSP. Should this occur, although the options available after the testator’s death are more limited to the beneficiary, there remain certain remedial steps that could be taken by the beneficiary to help to insulate them against the risk that their newly inherited funds would disqualify them from ODSP.
The general parameters for who is entitled to ODSP and how it is to be administered is governed by the Ontario Disability Support Program Act (the “Act“), section 5(1) of which provides that the government through regulation is to establish a maximum “asset limit” for an individual who receives ODSP. The regulation that establishes the asset limit is O.Reg. 222/98 (the “Regulation”), section 27(1) of which sets $40,000.00 as the current maximum “asset limit” for an individual who receives ODSP (although such an asset limit is potentially higher if the individual has a spouse or dependants).
As a result of section 5(1) of the Act in collaboration with section 27(1) of the Regulation, if an ODSP recipient’s total assets exceed the $40,000.00 maximum asset limit after receiving their inheritance they would likely lose their ODSP benefits. To this respect, if the potential inheritance the beneficiary/ODSP recipient is to receive is significant, there is the very real risk that if no steps are taken to help to insulate the inheritance from counting against the asset limit the beneficiary would lose their ODSP benefits.
Although section 27(1) of the Regulation provides that the ODSP recipient’s assets may not exceed the maximum threshold, section 28(1) of the Regulation lists certain assets and/or interests which are deemed not to be included in the calculation of an ODSP recipient’s assets. These “non-counting” assets potentially include a trust that is established by a beneficiary with funds that they inherit from an estate. Specifically, item 19 of section 28(1) of the Regulation provides that the following would not count against the asset limit:
“Subject to subsection (3), the person’s beneficial interest in assets held in one or more trusts and available to be used for maintenance if the capital of the trusts is derived from an inheritance or from the proceeds of a life insurance policy.”
Section 28(3) of the Regulation then further provides:
“The total amount allowed under paragraphs 19 and 20 of subsection (1) shall not exceed $100,000.”
As a result of section 28(1)19 of the Regulation in conjunction with section 28(3), if an ODSP recipient receives an inheritance or the proceeds of a life insurance policy they are allowed to put up to $100,000.00 of such funds into a trust to be held for their benefit without such funds counting against their asset limit for ODSP. As a result, if the inheritance that the ODSP recipient is to receive is $100,000.00 or less (or close to $100,000.00 such that any excess over $100,000.00 would not put them offside the asset limit), the potential option of putting the inheritance into a trust for the benefit of the ODSP recipient may be available to help insulate the inherited funds from counting against the asset limit.
If a beneficiary/ODSP recipient would like to explore the possibility of establishing such a trust after death they should speak with a lawyer to ensure that the trust is drafted in compliance with ODSP requirements.
Thank you for reading.
At what point does a settlement become final? Is it when the parties agree on all of the terms of the settlement and sign a written agreement, such as minutes of settlement? Or at an earlier time?
In the recent decision of Cox v Baker, 2019 ONSC 2859, the court was asked to make a determination as to whether a binding settlement had been reached. The litigation involved an inter vivos trust (the “Trust”) settled by a mother for the benefit of her two daughters and subsequent generations. After the death of Donna (the second to die of the two daughters), the three living beneficiaries were Donna’s sons, Brett and Brent, and her niece, Marnie. Brett was the sole trustee after Donna’s death.
Prior to her death, Donna was living at a house that was owned by the Trust (the “Property”), with her husband, John. About a year after Donna’s death, in March 2018, John brought an application against Brett, as trustee of the Trust, and against all three of the beneficiaries, personally, seeking, among other things, an interest in the Property by way of resulting and/or constructive trust.
In May 2018, John and Brett ran into each other at Donna’s gravesite. They discussed John’s application, John advised Brett that he would call his lawyer and withdraw his application, and the two shook hands. Thereafter, a number of emails were exchanged between counsel for John, and counsel for Brett, Brent, and Marnie. It appeared that the parties had reached an agreement that John would withdraw his application, without costs, provided that all parties sign a mutual release. However, John subsequently took the position that there was never a binding settlement agreement, as the parties had not agreed on the specific terms of the mutual release. Brett, Brent, and Marnie brought an application to enforce the settlement.
Ultimately, the court concluded that a binding settlement had been reached. Some of the key factors were, in the court’s finding, that there had been a mutual intention between the parties to create a legally binding contract, and that all essential/material terms had been agreed upon. The court also noted that the agreement had been reduced to writing by way of the email exchanges between counsel.
The court specifically considered whether the fact that the parties had not yet agreed on the specific wording of the mutual release was necessary to create a binding settlement. After reviewing the case law, the court concluded that, unless there is some indication that the settlement was conditional on the parties also agreeing on the language for a release, it is not required that the parties agree on the specific terms of such a release before there will be said to be a binding settlement agreement.
The court also commented on the importance of the principle of finality, which demands that settlements entered into with the assistance of legal counsel be upheld, as it is a matter of good public policy to encourage settlement. Settlements of this kind should be upheld other than in exceptional cases, which the present case was not.
This decision is an important reminder that, if the parties have reached an agreement on all essential terms, even if the more minor details have not been agreed upon, and the minutes of settlement and/or release have not been finalized and executed, a binding settlement may still exist. Parties should be aware that once a binding settlement has been reached (which could happen prior to signing minutes of settlement), they cannot simply change their minds. It is important to keep this in mind at all stages of a negotiation, and to be alert as to when it could be said that all essential terms have been agreed upon.
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These days, life expectancy is longer than ever. We have previously blogged (for instance, here and here) about some considerations and consequences of having a longer life expectancy. A recent article in The New Yorker considers aging, and in particular, anti-aging now that people are generally living longer. The online version can be found here: Can We Live Longer but Stay Younger?
One of the problems with living longer, as highlighted in the New Yorker article, is that we still must deal with the challenges and realities of aging. What we really want is not eternal life but rather, eternal youth.
The article discusses several efforts to address or counteract the types of issues that we face as we age. For instance, a geneticist at Harvard has successfully extended the life of yeast, and is moving on to human trials. A Harvard molecular biologist, George Church, has had success reprogramming embryonic stem cells to essentially turn an old cell into a young cell. Church’s work has been done so far on mice and dogs, but there are plans to commence human clinical trials within the next five years.
The goal of the work being done by Church is to live better, not necessarily longer: “The goal is youthful wellness rather than an extended long period of age-related decline.” The article discusses the nature of this age-related decline, through the illustration of a “sudden aging” suit that allows the wearer to experience the physical challenges of aging, including boots with foam padding to produce a loss of tactile feedback, and bands around the elbows, wrists, and knees to simulate stiffness. The point of the aging suit is to help create empathy and understanding about how difficult each and every task (an example was reaching up to a top shelf and picking up a mug) can be for older adults, both physically and mentally. So the question becomes, if we are living so much longer, but with age, every day and every task becomes much more difficult, what can we do to counteract that?
The work being done related to anti-aging and the creation of products to make older people’s lives easier is interesting and seems to be moving in new directions. For instance, the article mentions the difficulty of marketing certain products aimed at older people, because we do not like the idea of buying something that reminds us that we are old. So instead of selling a personal-emergency-response system to send an alert and seek assistance in the event of a fall, or some other physical emergency, in the form of a pendant worn around the neck, it is suggested that the most effective such device would be an iPhone or Apple Watch app.
Unfortunately, the issue of dementia is still a concern. There still does not appear to be a cure in sight for Alzheimer’s or other forms of dementia. The causes remain unclear. The effects, however, are evident. One of the individuals mentioned in the article was Professor Patrick Hof, who studies brains. On the physical effects of dementia on our actual brains, Professor Hof notes that “[y]ou can’t tell any difference, even under extreme magnification, between an aging non-demented brain and a younger human one…But, holding an Alzheimer’s brain in your hand, you can see the atrophy.” It appears that there is still a lot of work to be done in this area, in particular.
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I recently came across an article discussing a court’s decision in respect of what appears to be a claim for dependant’s support in Tasmania. In the decision of Booth v Brooks  TASSC 35, the deceased died with a Will that did not leave anything to his estranged daughter. The deceased was also survived by a long-term partner and two adult sons, who were mentioned in his Will.
The daughter made a claim under a Tasmanian statute, the Testator’s Family Maintenance Act 1912 (the “TFMA”). Section 3(1) of the TFMA states as follows:
3 (1) If a person dies, whether testate or intestate, and in terms of his will or as a result of his intestacy any person by whom or on whose behalf application for provision out of his estate may be made under this Act is left without adequate provision for his proper maintenance and support thereafter, the Court or a judge may, in its or his discretion, on application made by or on behalf of the last-mentioned person, order that such provision as the Court or judge, having regard to all the circumstances of the case, thinks proper shall be made out of the estate of the deceased person for all or any of the persons by whom or on whose behalf such an application may be made, and may make such other order in the matter, including an order as to costs, as the Court or judge thinks fit.
By comparison, section 58(1) of Ontario’s Succession Law Reform Act, (the “SLRA”) seems to have quite similar language. Section 58(1) provides:
58 (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
Under the SLRA, in order to qualify as a “dependant”, one must be a spouse, parent, child, or brother or sister of the deceased, to whom the deceased was providing support or was under a legal obligation to provide support immediately before his death. The TFMA, on the other hand, provides in section 3A that the persons who may make an application pursuant to section 3(1) are the:
- parents (if the deceased person dies without a spouse or children); and
- person who had a certain relationship with the deceased, and who was entitled to receive maintenance from the deceased at the time of his or her death.
In Booth v Brooks, the court concluded that the daughter had been left without adequate provision. One of the factors that lead to this conclusion was that the deceased had not had a good relationship with the daughter throughout her life and had not provided her with any direct financial support. In particular, the court stated that the deceased’s “abnegation of parental responsibility during childhood increases the moral obligation of the testator to the child”.
It seems that the key difference in the law in Tasmania versus Ontario that came into play in the Booth v Brooks decision, which would likely have resulted in a different outcome had the scenario arisen in Ontario, is that the TFMA does not require that a spouse, child, or parent be receiving or entitled to support or “maintenance” at the time of the deceased’s death. Interestingly, the Tasmanian law seems to lean the other way—if the deceased has not provided adequate support during his or her lifetime, it may increase the ability of a child or spouse to obtain support from the deceased’s estate.
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A recent decision dealing with the estate of a French rock star highlights the potential relevance of social media evidence in estates matters.
Johnny Halliday, known as the “French Elvis”, died in 2017, leaving a Last Will and Testament that left his entire estate to his fourth wife, disinheriting his adult children from a previous marriage. The New York Times reports that French law does not permit a testator to disinherit his or her children in such a manner, and the adult children made a claim against the estate on that basis. The issue became whether the deceased singer had lived primarily in the United States or in France.
Halliday was active on Instagram, using the service to promote his albums and tours, as well as to share details of his personal life with fans. The adult children were, accordingly, able to track where their father had been located in the years leading up to his death, establishing that he had lived in France for 151 days in 2015 and 168 in 2016, before spending 7 months immediately preceding his death in France. Their position based on the social media evidence was preferred over that of Halliday’s widow and their claims against the estate were permitted.
Decisions like this raise the issue of whether parties to estate litigation can be required to produce the contents of their social media profiles as relevant evidence to the issues in dispute. Arguably, within the context of estates, social media evidence may be particularly relevant to dependant’s support applications, where the nature of an alleged dependant’s relationship with the deceased, along with the lifestyle enjoyed prior to death, may be well-documented.
The law regarding the discoverability of social media posts in estate and family law in Canada is still developing. While the prevalence of social media like Instagram, Twitter, and Facebook is undeniable, services like these have not become popular only in the last fifteen years or so and it seems that users continue to share increasingly intimate parts of their lives online.
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It is not uncommon for the lawyer who drafted a testator’s will or codicil to subsequently be retained by the Estate Trustees after the testator’s death to assist with the administration of the estate. The rationale behind the drafting lawyer being retained to assist with the administration of the estate appears fairly self-evident, for as the drafting lawyer likely has an intimate knowledge of the testator’s estate plan and assets they may be in a better position than most to assist with the administration of the estate.
While retaining the drafting lawyer to assist with the administration of the estate is fairly uncontroversial in most situations, circumstances could become more complicated if there has been a challenge to the validity of the testamentary document prepared by the drafting lawyer. If a proceeding has been commenced challenging the validity of the testamentary document, there is an extremely high likelihood that the drafting lawyer’s notes and records will be produced as evidence, and that the drafting lawyer will be called as a non-party witness as part of the discovery process. If the matter should proceed all the way to trial, there is also an extremely high likelihood that the drafting lawyer would be called as a witness at trial. As the drafting lawyer would personally have a role to play in any court process challenging the validity of the will, questions emerge regarding whether it would be proper for the drafting lawyer to continue to represent any party in the will challenge, or would doing so place the drafting lawyer in a conflict of interest?
Rule 3.4-1 of the Law Society of Ontario’s Rules of Professional Conduct provides that a lawyer shall not act or continue to act where there is a conflict of interest. In the case of a drafting lawyer representing a party in a will challenge for a will that they prepared, an argument could be raised that the drafting lawyer is in an inherent position of conflict, as the drafting lawyer may be unable to look out for the best interests of their client while at the same time looking out for their own interests when being called as a witness or producing their file. There is also the potentially awkward situation of the drafting lawyer having to call themselves as a witness, and the associated logistical quagmire of how the lawyer would put questions to themselves.
The issue of whether a drafting lawyer would be in a conflict of interest in representing a party in a will challenge was dealt with in Dale v. Prentice, 2015 ONSC 1611. In such a decision, the party challenging the validity of the will brought a motion to remove the drafting lawyer as the lawyer of record for the propounder of the will, alleging they were in a conflict of interest. The court ultimately agreed that the drafting lawyer was in a conflict of interest, and ordered that the drafting lawyer be removed as the lawyer of record. In coming to such a conclusion, the court states:
“There is a significant likelihood of a real conflict arising. Counsel for the estate is propounding a Will prepared by his office. The preparation and execution of Wills are legal services, reserved to those who are properly licensed to practise law. Counsel’s ability to objectively and independently assess the evidence will necessarily be affected by his interest in having his firm’s legal services found to have been properly provided.” [emphasis added]
Decisions such as Dale v. Prentice suggest that a lawyer may be unable to represent any party in a will challenge for a will that was prepared by their office as they may be in a conflict of interest. Should the circumstance arise where the drafting lawyer is retained to assist with the administration of the estate, and subsequent to being retained someone challenges the validity of the Will, it may be in the best interest of all parties for the drafting lawyer to indicate that they are no longer able to act in the matter due to the potential conflict, and suggest to their clients that they retain a new lawyer to represent them in the will challenge.
Thank you for reading.