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Dear
,
Believe it or not, this is our 100th Newsletter! On this occasion, I wish to convey my thanks for continuing to share a read with us.
Every month for going on 9 years now, we have prepared a newsletter to keep you informed about our monthly events and achievements. We always want you to know what we are up to! We like to provide you with a legal update, and to keep you informed on upcoming education programs we are involved in.
Many of you often reach out with your kind comments on our efforts, and now, in turn, I too, would like to thank you for your continued support, and for trusting us with your legal business.
With Gratitude & Appreciation,
Kim
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| 1. MONEY & FAMILY LAW, MAY 2019
Kimberly Whaley's article Life 'What is Proper and Adequate Interim Support and How is it Measured?' was published in the May 2019, Issue 34-5 of Money & Family Law.
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| 2. ONTARIO BAR ASSOCIATION PRESENTATION - TORONTO PUBLIC LIBRARY, BARBARA FRUM BRANCH, SENIORS MONTH, JUNE 27, 2019
Matthew Rendely was invited with thanks by Emily Siskins, Manager of Communications and Information Services at the Ontario Bar Association to present on "Law Affecting Older Adults Session", at the Toronto Public Library - Barbara Frum Branch. Matthew focused his presentation on the importance of elder abuse awareness. The event was well attended.
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3. SOCIAL MEDIA DISCOVERY AND CIVIL LITIGATION IN CANADA, THE ADVOCATES' QUARTERLY, VOL. 50, NO. 1 JUNE 2019
Alexander Swabuk's article
"Social Media Discovery and Civil Litigation in Canada"
was published in the June 2019, Vol. 50, no. 1 journal of The Advocates' Quarterly.
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| 4. FIDUCIARY COMPENSATION AND PASSING OF ACCOUNTS, THE ADVOCATES' QUARTERLY, VOL. 50, NO. 1 JUNE 2019
Albert Oosterhoffs's article "Fiduciary Compensation and Passing of Accounts" was published in the June 2019, vol. 50, no. 1, journal, The Advocates' Quarterly.
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WEL Congratulates Chambers and Partners Ranked Lawyers - High Net Worth - Private Wealth Disputes - Canada
Ranked: Band 1
Archie Rabinowitz, Gowling WLG (Canada) LLP
Clare Burns, WeirFoulds LLP
Daniel J. Dochylo, Borden Ladner Gervais LLP
Ian Hull, Hull & Hull LLP
Kimberly Whaley, Whaley Estate Litigation
Melanie Yach, Aird & Berlis LLP
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(i) THREE PART REVIEW OF
NOVA SCOTIA SUPREME COURT DECISION RE TESTAMENTARY AUTONOMY
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A recent decision of the Nova Scotia Supreme Court has declared that there is a right to testamentary autonomy under section 7 of the
Charter. The decision of the court found two provisions of the Nova Scotia
Testators' Family Maintenance Act
("
TFMA
") to be unconstitutional, to the extent they provided for non-dependent adult children to claim for support. This decision and the potential impact it may have on support legislation in other provinces has caused a great deal of concern for estate practitioners.
In the following three-part analysis:
- Kimberly Whaley addresses the decision and the court's application of the Charter to the TFMA;
- Sareh (Lua) Ebrahimi discusses the potential implications that this decision may have for support legislation in other provinces, and;
- Bryan Gilmartin discusses the law in the United States which has long held testamentary autonomy to be a constitutionally protected right allowing a testator to freely disinherit his or her dependants.
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PART 1:
NOVA SCOTIA SUPREME COURT: TESTAMENTARY AUTONOMY IS A CONSTITUTIONALLY PROTECTED RIGHT & SECTIONS OF PROVINCIAL DEPENDANT SUPPORT LEGISLATION HELD UNCONSTITUTIONAL
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by Kimberly Whaley
An interesting and legally fascinating development in the law of testamentary autonomy and dependant support has arisen out of the Nova Scotia case Lawen Estate v Nova Scotia (Attorney General), 2019 NSSC 162 (CanLII), http://canlii.ca/t/j0frk. The Nova Scotia Supreme Court has found that testamentary freedom is a constitutionally protected right and as such, that sections of that province's dependant support legislation that define "dependant" violate the Charter of Rights and Freedoms ("Charter").
Brief Background
A father left $50,000 to two of his three adult daughters, the residue of his estate to his son and nothing to his remaining adult daughter. The three daughters brought actions pursuant to the Testators' Family Maintenance Act, RSNS 1989, c 465 ("TFMA") alleging that their father's Will failed to make "adequate provision" for them (similar to a dependant support claim under Part V of the Succession Law Reform Act in Ontario).
The defendants in that action, brought a separate application seeking declarations that sections 2(b) and 3(1) of the TFMA (which define "dependant") violate section 2(a), or, section 7 of the Charter.
They argued that the provisions should be read down to "refer only to children to whom a testator owes a legal obligation and not children to whom a testator owes a 'moral obligation." In other words, the TFMA should not "permit adult non-disabled children to advance court applications pursuant to the TFMA." The applicants were granted public-interest standing by the Court which permitted them to challenge the provisions of the TFMA as public-interest litigants under s.52(1) of the Constitution Act, 1982.
[1]
The Legislation
Subsection 3(1) of the TFMA permits a judge to make an order for "adequate maintenance and support" for a "dependant" where the testator has not done so.
The definition of "dependant" is found in s. 2(b) of the TFMA and means the "widow or widower or child of a testator." "Child" is defined as including a child lawfully adopted by the testator; a child of the testator not born at the date of death of the testator; or a child of which the testator is the natural parent. Therefore, to qualify as a "dependant" within the meaning of this definition, the applicant does not require actual dependency or need, but only need be a child, widow, or widower of the deceased.
Most dependant relief legislation across Canada has a narrower class of potential applicants and excludes adult children who are not in some form of dependency on the testator. For example, Ontario's legislation defines a dependant as a spouse, parent, child, or sibling of the deceased "to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death". However, Nova Scotia has not amended its legislation to narrow the definition of "dependant."
[2]
In addition to the legislation, the Court noted the line of case law that has held that the obligation imposed by the TFMA rests on "moral" as well as "legal" considerations, including the case of Tataryn v Tataryn Estate, [1994] 2 SCR 807 which "confirmed that one of the pillars of dependants' relief legislation, as traditionally framed includes a moral obligation." Tataryn had been accepted as a good authority in interpreting the TFMA.
Justice Bodurtha first addressed the impact of the current legislation on testamentary autonomy, and observed that the issue of whether testamentary autonomy is a constitutionally protected right has not been considered by the courts.
Section 7 - Right to Life, Liberty and Security of the Person
After reviewing various Supreme Court of Canada cases[3] addressing Section 7 of the Charter, Justice Bodurtha agreed with the applicants that the right to liberty is not limited to the right, "not to be locked up in jail," and that it "relates to individual values and how an individual orders his or her private affairs." Further, Justice Bodurtha also agreed with the respondent, Attorney General, that s. 7 does not protect property or economic rights.
Ultimately, however, Justice Bodurtha concluded that:
[f]rom a
Charter point of view, the various statements about the potential significance of testamentary autonomy, in my view, support the conclusions that 1) testamentary autonomy is not necessarily a
purely economic or property matter, and 2) it
can rise to the level of fundamental personal choice of the kind contemplated in the caselaw under s.7.[emphasis in original].
[4]
Subsection 2(a) Principles of Fundamental Justice
Under section 2(a) of the Charter everyone has the fundamental freedom of "conscience and religion." The applicants argued that the TFMA provisions violated freedom of conscience. The testator's "moral decision" should be regarded as a matter of conscience. Justice Bodurtha disagreed and concluded:
Whether or not "conscience" stands apart from "religion," this is insufficient as a basis for asserting a right under s.2(a). A violation of s.2(a) cannot simply follow from a finding that a decision is a fundamental personal choice of the kind discussed in the section 7 caselaw. At the very least, as the Attorney General argues, "conscience" must mean something analogous to religious belief. In my view, the applicants s.2(a)
Charter challenge with respect to subsections 2(b) and 3(1) of the
TFMA must fail.
[5]
Section 1 Analysis
Section 1 of the Charter guarantees the rights and freedoms set out in the Charter to "such limits prescribed by law as can be demonstrably justified in a free and democratic society."
Citing the framework set out in R v Oakes for a Section 1 analysis, Justice Bodurtha concluded that "section 7 violations are particularly difficult to justify under section1."
[6]
Demonstrable justification requires that the "objective" of the legislation be "pressing and substantial." The Attorney General argued that the TFMA is intended to enforce testators' moral obligations to make adequate provision for their dependants. The pressing and substantial objective, according to the Attorney General, "may be characterized as balancing the legitimate proprietary interests of his or her heirs in respect of family provision....This means balancing the importance of a testator's will with that of ensuring that the financial needs of spouses and children of testators are adequately met."
[7]
However, Justice Bodurtha concluded as follows:
[N]one of this adequately demonstrates the objectives or purpose to be achieved by the legislature choosing to include non-dependant adult children with the category of potential applicants. To the extent that the Attorney General has identified a purpose or objective, it is the purpose of the legislation, as a whole. But the TFMA, as a whole, is not under attack. No one suggests that the entire Act should be struck down.
In this case, the difficulty for the Attorney General is that the objective of the specific legislative act that is impugned here - allowing a non-dependent adult child to advance a claim against an estate for "adequate provision" - rests on a moral justification. It is clear from decisions such as Sauve that, while there may be circumstances in which the courts will defer on "social policy" issues, that will not automatically be the case. Especially, on a decision to limit fundamental rights
. . . .in my view, the Attorney General has not identified any pressing and substantial objective that is served by the specific inclusion of non-dependent adult children in the class of "dependants" eligible to apply under the TFMA.
[8]
Section 1 Summary
Justice Bodurtha found that if the objective of the limitation on testamentary rights is accepted as a pressing and substantial one, the TFMA provisions satisfy the other steps of the Oakes test (rational connection, minimal impairment). However, Justice Bodurtha found that the justification failed at the first step:
[T]he Attorney General has not set out a pressing and substantial objective for the specific aspect of the legislation that is under attack. The Attorney General has not identified a pressing and substantial objective to be achieved by expanding coverage under the
TFMA to non-dependant adults. The section 7 violation cannot be justified under section 1 of the
Charter.
[9]
Justice Bodurtha decided that "reading down" the impugned provisions of the legislation was the appropriate and effective remedy for the Charter breach. The definition of "dependant" is to be read down to exclude non-dependant adult children.
Takeaway
According to this case, there is a right to a more absolute testamentary freedom under section 7 of the Charter. This is the first case in Canada that grants constitutional protection to testamentary autonomy. Courts have previously been reluctant to find that section 7 protects economic or property rights. Arguably, the Nova Scotia Supreme Court may have now opened the door to an elevated testamentary autonomy, one of a "fundamental personal choice" contemplated by section 7, rather than simply a pure "economic or property matter." It will be interesting to see what happens to this case on appeal (I would hazard a guess that an appeal would likely be heard) and too importantly, whether other provincial courts will agree that testamentary freedom is a constitutionally protected right.
[1]
See the decision to grant standing: Lawen Estate v Nova Scotia (Attorney General), 2018 NSSC 188.
[2]
Lawen Estate at para 40.
[3]
Blencoe v British Columbia (Human Rights Commission), 2000 SCC 44; Gosselin v Quebec (Attorney General), 2002 SCC 84; R v Jones, [1986] 2 SCR 284; Godbout v Longueuil (City), [1997] 3 SCR 844; R v Morgentaler, [1988] 1 SCR 30; Carter v Canada (Attorney General), 2015 SCC 5; and Association of Justice Counsel v Canada (Attorney General), 2017 SCC 55.
[4]
Lawen Estate at para 61.
[5]
Lawen Estate at para 75
[6]
Lawen Estate at para 80.
[7]
Lawen Estate at para 84.
[8]
Lawen Estate at paras 96-97.
[9]
Lawen Estate at para 117.
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PART 2 - WHO IS NEXT? WILL OTHER PROVINCES WITH SIMILAR WORDING AS THE NOVA SCOTIA LEGISLATION FOLLOW SUIT
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by Sareh (Lua) Ebrahimi
Testamentary freedom refers to the concept where a person, in making their will, has free reign in deciding what to do with his or her property upon death. In Ontario, testators generally have the right to decide how to distribute their property freely. However, two Ontario statutes may circumscribe testamentary freedom:
(1) Part V of the Succession Law Reform Act
[1]
(dependant support), and
(2) Part I of the Family Law Act
[2]
(property rights of legal spouses).
Testamentary freedom can also be limited by the doctrine of public policy which can void a bequest that is in violation of public policy.
[3]
All the provinces and territories of Canada have some form of dependants' support legislation, which limits a testator's testamentary freedom to a certain extent, however, the wording of the legislation is not identical as to who constitutes a dependant, the Court's discretion in making the award and the quantum thereof and the
threshold language used for when a support payment will be ordered.
Therefore, this may lead to different results depending on the province in which the claim is brought.
Most provincial statutes have limited the definition of "dependant" to exclude an adult independent child or have limited dependant support relief claims to cases where the testator has a legal obligation to provide support or to the dependant's financial need of such support.
[4]
WEL Partners has in its book on Dependants' Support in Chapter 2 explores the various dependant's support legislation across Canada, and discusses the important similarities and differences that may exist. This chapter can be found online at page 13 at:
http://welpartners.com/resources/WEL-on-dependants-support.pdf
.
The Supreme Court of Canada in examining the interests protected by "dependant support" legislation in the context of the British Columbia Wills Variation Act in Tataryn v. Tataryn Estate,[5] held:
"...The desire of the legislators who conceived and passed it was to "ameliorat[e]
... social conditions within the Province". At a minimum this meant preventing those left behind from becoming a charge on the state. But the debates may also be seen as foreshadowing more modern concepts of equality. The
Act was passed at a time when men held most property. It was passed, we are told, as "the direct result of lobbying by women's organizations with the final power given to them through women's enfranchisement in 1916". There is no reason to suppose that the concerns of the women's groups who fought for this reform were confined to keeping people off the state dole. It is equally reasonable to suppose that they were concerned that women and children receive an "adequate, just and equitable" share of the family wealth on the death of the person who held it, even in the absence of demonstrated need.
The other interest protected by the Act is testamentary autonomy. The Act did not remove the right of the legal owner of property to dispose of it upon death. Rather, it limited that right. The absolute testamentary autonomy of the 19th century was required to yield to the interests of spouses and children to the extent, and only to the extent, that this was necessary to provide the latter with what was "adequate, just and equitable in the circumstances."
The ("Tataryn") case and the Ontario Court of Appeal in Cummings v. Cummings ("Cummings")[6] affirmed that moral considerations are a relevant factor for courts to consider in dependant support claims. Tataryn articulated a two-stage test which focuses first on legal duties and then second on moral duties that the deceased owed to the dependant applicant. Meanwhile, Cummings affirmed that moral considerations are a relevant factor for courts to consider in dependants' support claims. In short, when examining all of the circumstances of an application for dependant's support, the court must consider:
- What legal obligations would have been imposed on the deceased had the question of provision of support arisen during his lifetime; and
- What moral obligations arise between the deceased and his or her dependants as a result of society's expectations of what a judicious person would do in the circumstances?
In Ontario a dependant is defined in s 57 of the SLRA as:
a Spouse, Ex-spouse, Common-law partner who cohabited continuously for 3 years, or in a relationship of some permanence if they are the natural or adoptive parents of a child, Parent, grandparent, sibling, child or grandchild.
All of the above must be someone to whom the deceased was under a legal obligation to provide support immediately before death.
Ontario Courts refer to the two-part test in the SLRA to determine who qualifies and meets the test of a "dependant" as set out in s. 57 of the SLRA. The first part of the test determines whether individual falls under the category of a dependant and the second part of the test looks at whether the deceased, immediately before death, was providing, or had a legal obligation to provide support to the Dependant. An application for dependant support will not pass the second part of the test on the basis of a moral obligation in the absence of the existence of a legal obligation to support.
This was confirmed in the Ontario Court of Appeal case
Verch Estate v. Weckwerth
[7]
, where the court pointed out the appellants cited no grounds to support their claim that a properly executed will may be set aside by the court pursuant to "some alleged overarching concept of a parent's moral obligation to provide on death for his or her independent, adult children."
There has always been a tension in the law about the scope of a person's "moral" obligations. In particular, does a person have a moral obligation to provide financially for an independent adult child? Even if such a moral obligation exists, in what circumstances should a judge enforce it?
In Nova Scotia, the legislation is broad enough to include adult independent children's ability to bring a dependant support application on moral grounds.
Section 2(b) of Nova Scotia's
Testators' Family Maintenance Act
[8]
(the "
TFMA
") defines a "dependant" as follows: "the widow or widower or the child of a testator."
Furthermore, the Act did not have a needs-based test, any child of the deceased is entitled to apply to the court for support out of the deceased's estate, regardless of actual dependency or need.
Section 3 (1) of the Act [9] states that "
Where a testator dies without having made adequate provision in his will for the proper maintenance and support of a dependant, a judge, on application by or on behalf of the dependant, has power, in his discretion and taking into consideration all relevant circumstances of the case, to order that whatever provision the judge deems adequate be made out of the estate of the testator for the proper maintenance and support of the dependant."
In 2016, the Supreme Court of Nova Scotia in the case of Irving v. Irving Estate, [10] summarized dependants' support law in that province:
"The issue of adequate provision for family members in a testator's will has been judicially considered on many occasions over the past number of years. Cases submitted by counsel and considered include: Zwicker Estate v. Garrett [1976] N.S.J. 20 (NSCA); Tataryn v. Tataryn Estate 1994 CanLII 51 (SCC), [1994] 2 S.C.R. 807; David v. Beals Estate 2015 NSSC 288 (CanLII). These authorities and cases referred to therein establish that:
- Testators have the absolute freedom to dispose of their property in a manner they choose subject to any statutory limitations.
- The court should not, except in clear and definite cases, prevent testators from disposing of their estates as they please. In this regard an applicant bears the civil burden of proof on a balance of probabilities.
- No one factor listed in section 5(1) of the Act [11] is to be looked at in isolation. The court must look at all relevant facts and surrounding circumstances to determine whether a testator breached a moral duty to make adequate provision for an adult child.
- The imposition of a moral duty does not require that all family members be treated equally."
Brief Background
In Irving the testator left $1,000.00 bequest to one of her children (the applicant) and the residue of her estate (approx. $100,000.00) to be split among her remaining four children. The applicant was self-sufficient, he owned his own home, he had unilaterally ceased contact with his family, had been out of their lives since 2001, and did not offer comfort or support to his dying parents despite being requested to do so. The Court dismissed the applicant's claim as he did not establish relevant circumstances which could allow the Court to intervene and deviate from the testator's expressed intentions.
Recent Decision of the Nova Scotia Supreme Court
Recently the case of
Lawen Estate v Nova Scotia (Attorney General)
[12]
, the facts of which have been summarised in the article above, the Court held that the
testators right to absolute freedom to dispose of their property is a constitutionally protected right, when
Justice Bodurtha found two provisions of the Nova Scotia Testators' Family Maintenance Act ("TFMA") to be unconstitutional, to the extent they allowed non-dependent adult children to make a claim for support under the Act. This appears to be the first case in Canada granting constitutional protection for testamentary decisions. Other courts have been reluctant to find that section 7 protects economic or property rights, so it may well be overturned on appeal.
Who is next?
This decision could have an impact on other provinces with similar wording as the Nova Scotia legislation - such as New Brunswick, Newfoundland and Labrador and British Columbia - as they might also become faced with applications arguing the constitutionality of legislative provisions that provide for the maintenance of independent adult children or even question the constitutionality of Dependant's relief legislation backed up by the argument of freedom of testation as a constitutionally protected right in terms of Section 7 of the Charter.
As at the date this article was written, the timeline for an appeal application has not expired. It will be very interesting to see if the decision will be appealed to the Court of Appeal and whether the Court will share the same view as the trial judge.
[1]
Succession Law Reform Act, RSO 1990, c S.26
[2]
Family Law Act, RSO 1990, c. F.3
[4]
Alberta legislation: Wills and Succession Act, SA 2010, c-W 12.2, Part 5, s88, Manitoba Legislation: Dependants Relief Act, CCSM c D37, s2(1), Northwest Territories legislation: Dependants Relief Act, RSNWT 1988, c D-4, S2(1), Nunuvat legislation: Dependants Relief Act, RSNWT (Nu) 1988, c D-4, s2(1), Ontario legislation: Succession Law Reform Act, RSO 1990 c S 26, Part V,s 57-62, Prince Edward Island legislation; Dependants of a Deceased Person Relief Act, RS PEI 1988, c D-7, s2, Civil Code of Quebec-Articles 684- 685, Saskatchewan legislation: The Dependants' Relief Act, 1996, SS 1996 c D-25.01, s 6(1),Yukon Territories legislation: Dependants Relief Act, RSY 2002, c 56, s2.
[6]
Cummings v. Cummings, (2003) 5 E.T.R (3d) 81 (Ont. S.C.J,), (2003) O.J. No. 601 (Ont. S.C.J.); affirmed (2004)69 O.R (3d) 398 (Ont. CA), (2004) O.J. No. 90 (Ont. CA).
[9]
Testators' Family Maintenance Act, RSNS 1989, c 465
[10]
Irving v. Irving Estate,
2016 NSSC 188.
[11]
Testators' Family Maintenance Act, RSNS 1989, c 465, Section
5 (1)
Upon the hearing of an application made by or on behalf of a dependant under subsection (1) of Section 3, the judge shall inquire into and consider all matters that should be fairly taken into account in deciding upon the application including, without limiting the generality of the foregoing,
(a) whether the character or conduct of the dependant is such as should disentitle the dependant to the benefit of an order under this Act;
(b) whether the dependant is likely to become possessed of or entitled to any other provision for his maintenance and support;
(c) the relations of the dependant and the testator at the time of his death;
(d) the financial circumstances of the dependant;
(e) the claims which any other dependant has upon the estate;
(f) any provision which the testator while living has made for the dependant and for any other dependant;
(g) any services rendered by the dependant to the testator;
(h) any sum of money or any property provided by the dependant for the testator for the purpose of providing a home or assisting in any business or occupation or for maintenance or medical or hospital expenses.
[12]
Lawen Estate v Nova Scotia (attorney general), 2019 NSSC 162
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PART 3 -
HOW THE UNITED STATES SHOWS US THE POTENTIAL CONSEQUENCES OF HOLDING TESTAMENTARY AUTONOMY TO BE A FUNDAMENTAL RIGHT
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by Bryan Gilmartin
Lawen Estate v. Nova Scotia (Attorney General)
, a recent decision of the Nova Scotia Supreme Court, held that certain provisions contained within Nova Scotia's Testators' Family Maintenance Act ("TFMA")[1] violated Section 7 of the Constitution Act, 1982 (the Charter) because testamentary autonomy is a fundamental right protected by Section 7 of the Charter.
[2]
The Case
In Lawen, the deceased, Jack Lawen, left a $50,000 legacy to two of his three daughters and the residue to his son. Lawen's three daughters commenced an action pursuant to the TFMA, claiming that Lawen's will failed to provide them with adequate provision. Lawen's son brought an application seeking a declaration that sections 2(b) and 3(1) of the TFMA violated Section 7 of Charter. Sections 2(b) and 3(1) of the TFMA read as follows:
2 In this Act, [....] (b) "dependant" means the widow or widower or the child of a testator; ["child" includes a child: lawfully adopted by the testator, of the testator not born at the date of the death of the testator, of which the testator is the natural parent]
3(1) Where a testator dies without having made adequate provision in his will for the proper maintenance and support of a dependant, a judge, on application by or on behalf of the dependant, has power, in his discretion and taking into consideration all relevant circumstances of the case, to order that whatever provision the judge deems adequate be made out of the estate of the testator for the proper maintenance and support of the dependant.
Accordingly, Section 7 of the Charter reads as follows:
Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
The court found that the "liberty" protected by Section 7 includes an individual's right to make decisions of fundamental importance and furthermore concluded that testamentary autonomy qualified as a "fundamental personal choice" eligible for Charter protection under Section 7. The court found that to allow an adult independent child to bring a claim for dependent support violated a testator's Section 7 rights. Accordingly, the court read down relevant portions of the Act held to be unconstitutional thus preventing independent adult children from being able to bring a claim for support under the TFMA.
What is Testamentary Autonomy?
Testamentary autonomy, often referred to as testamentary freedom, is the basic principle that affords testators with the absolute right to dispose of their property at death in any manner of their choosing. Historically, testators were provided with unfettered discretion to dispose of their property.
The model law that prevails in the provinces of Canada does not concern any such individually vested rights of inheritance.[3] Rather, no one is entitled to receive anything under a testator's will unless legislation says otherwise.[4] Accordingly, Canadian legislation and jurisprudence have recognized that if a deceased had sufficient assets at the time of his or her death, the deceased rather than the state should be responsible for providing continued support to his or her dependants.
Legislation such as the TFMA and the Succession Law Reform Act [5] here in Ontario have been introduced in part, to restrain a testator's testamentary autonomy in favour of dependants whom the testator was legally obligated to support immediately prior to death. This legislation has codified specific obligations owed by a testator that remain unfulfilled at his or her death. This renders the principle of testamentary autonomy a more "elastic" concept liberally interpreted on a case-by-case basis by way of judicial discretion.
[6]
Furthermore, In Tataryn v. Tataryn, the Supreme Court of Canada restricted testamentary autonomy by recognizing and enforcing a testator's moral obligation to provide support. This broadened the court's discretion to recognize and enforce obligations that were not legally enforceable on the testator prior to death.
[7]
A Lesson to Be Learned From the United States of America
In the Lawen decision, the court recognized that the broad language of sections 2(b) and 3(1) of the TFMA permitted those who are non-dependant adult children to bring a claim under the legislation. However, the TFMA also permits the court to use its discretion in deciding whether a claim should succeed given the circumstances. The court, rather than exercising its discretion and denying the claim for support, treaded into dangerous waters by declaring testamentary autonomy to be a fundamental right protected by the charter.
The United States has long wrestled with the prioritization of testamentary autonomy over provision for a testator's family and dependants. To this day, many jurisdictions permit a testator to totally disinherit his or her minor children and dependants in favor of the freedom to distribute wealth as he or she sees fit. There is little in the way of legislative protection against such disinheritance, which is a clear indication of the value that the United States places on Testamentary Freedom.
[8]
The Supreme Court of the United States has held the ability to transmit property at death to be a constitutionally protected right.[9] Accordingly, legislation and jurisprudence have continued to recognize that "[t]he organizing principle of the American law of donative transfers is freedom of disposition, and as such, property owners have the nearly unrestricted right to dispose of their property as they please."
[10]
Furthermore, state courts have held that "[a] basic principle underlying any discussion of the law of wills is that an individual has the right and the freedom to dispose of his or her property, upon death, according to the dictates of his or her own desires."
[11]
Except for a few states, the probate laws of the United States permit the disinheritance of dependants.[12] Thus, under the common law, the obligation to support a dependent ends at the death of the testator/obligor.[13] Few states such as California, Montana, North Dakota and South Dakota have enacted legislation that states that a parent's estate must provide for any child would otherwise become a public charge if the parent while alive was obliged to support the child.
[14]
However, by and large, the United States has rejected the evolution experienced by most other common law jurisdictions that have sought to protect a deceased's dependants by limiting testamentary autonomy.
Why Does This Matter?
The United States provides an extreme example of how testamentary autonomy has been bolstered in a way that offers a testator nearly unrestricted freedom to dispose of his or her property free of any obligation owed to dependants. The Lawen decision does not suggest such an extreme departure from support legislation but creates a platform that may inspire future decisions to depart from legislation that has been designed to protect those who depend upon a testator for support.
Whether such a vast departure from common law and legislation will stand remains to be seen. We can only hope that courts will proceed with caution as to avoid being pinned against the Charter in such cases where testamentary autonomy ought to be limited in favour of those who depend upon a testator for support.
[1]
R.S.N.S. 1989, c. 465.
[2]
Lawen Estate v. Nova Scotia (Attorney General), 2019 NSSC 162 [Lawen].
[3]
Albert H. Oosterhoff, Oosterhoff on Wills, 8th edition (Thomson Reuters, 2016) at 849.
[4]
Re Spencer Estate, 2016 ONCA 196 at para 32.
[5]
Succession Law Reform Act, RSO 1990 c. S.28.
[6]
Oosterhoff, supra note 3 at 851.
[7]
Tataryn v Tataryn,
[1994] 2 SCR 807.
[8]
Ralph C. Brashier, Protecting the Child From Disinheritance: Must Louisiana Stand Alone?, 57 LA. L. Rev. 1, 1 (1996).
[9]
Hodel v. Irving, 481 U.S. 704, 716 (1987).
[10]
Restatement (Third) of Prop.: Wills and Other Donative Transfers ยง10.1
(AM. LAW INST. 2003).
[11]
Matter of Hastings' Est.,
567 P.2d 200 (Wash. 1977).
[12]
Brashier, supra note 6.
[13]
McKamey v. Watkins,
273 N.E.2d 542, 542 (Ind. 1971)
.
[14]
Adam J. Hirsch, Freedom of Testation / Freedom of Contract, 95 MNLR 2180, 2253.
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(ii)
NAVIGATING THE TWILIGHT ZONE: DECISION MAKING CAPACITY AND DEMENTIA
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by Prudence Etkin
"There is no possibility of mistaking midnight from noon, but at what precise moment twilight becomes darkness is hard to determine."
When individuals are suffering from dementia, it is a particularly challenging task to assess their medical, legal, and financial decision making capacity. In Adler v Gregor,[1] the court addresses capacity in respect of the validity of powers of attorney and an inter vivos gift.
Background
In 2015 Mrs. Adler granted sole powers of attorney to one of her two daughters (the "Respondent"), with the assistance from long-term estate counsel. These power of attorney documents were only to be released in the event that Mrs. Adler was found to lack capacity, by a physician or licensed capacity assessor. In response, the other daughter (the "Applicant") brought an application seeking to uphold new 2017 powers of attorney, on grounds that included that Mrs. Adler had the requisite decisional capacity during the execution.
Mrs. Adler was living independently in 2015. By August 2016, she was receiving support seven days a week, twice a day, and by November 2016 had moved to a senior residence's home. In February 2017, Mrs. Adler issued her daughter/Respondent's cheque for $25,000. In August 2017, following the recommendation of both a geriatrician and family physician, Mrs. Adler received a capacity assessment and was found to be incapable of managing property and incapable of granting a power of attorney for property.
The Applicant challenged the reliability of these assessments and arranged for her mother to see new counsel for the purposes of drafting and executing new powers of attorney. This counsel was unaware of the previous capacity assessment. New powers of attorney were drafted in September 2017. In October 2017, the applicant arranged for Mrs. Adler to receive a second capacity assessment, which found Mrs. Adler capable of granting powers of attorney.
Analysis
The Honourable Justice Penny noted the long history of acrimonious conflict between the sisters and their desire to engage in lengthy proceedings. His Honour ordered the matter to be heard in one day without viva voce evidence.
Capacity to Grant Powers of Attorney
While the nature of the task determines the standard of capacity, there are two foundational elements to be considered:
"1) ability to understand information relevant for making decisions; and
2) ability to appreciate the consequences of a decision".
[2]
His Honour referred to Section 8 of the capacity assessment regime under the Substitute Decisions Act[3] (the "SDA") which deals with granting powers of attorney for property, and provides that:
A person is capable of giving a continuing power of attorney if he or she,
(a) knows what kind of property he or she has and its approximate value;
(b) is aware of obligations owed to his or her dependents;
(c) knows that the attorney will be able to do on the person's behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney;
(d) knows that the attorney must account for his or her dealings with the person's property;
(e) knows that he or she may, if capable, revoke the continuing power of attorney;
(f) appreciates that unless the attorney manages the property prudently its value may decline; and
(g) appreciates the possibility that the attorney could misuse the authority given to him or her.
The Honourable Justice Penny made note of the fact that both parties were heavily involved in the respective capacity assessments. In particular, the Respondent was found to have exerted significant influence over the October 2017 assessment. Looking to the guidelines and relevant provisions in the SDA, His Honour reinforced that capacity assessments were never intended to be "used as weapons in high conflict litigation such as this."[4] In this case, the court found that both assessments were obtained for this purpose, in contemplation of litigation and that "this kind of use of capacity assessments by parties or their lawyers is improper and should be discouraged in the strongest possible terms by counsel and the Court."
[5]
As a result, both capacity assessments were rejected on the grounds of bias, interference, and a variety of deficiencies in the actual assessments. His Honour made a number of other observations to assist in the determination of Mrs. Adler's capacity to grant powers of attorney in September 2017. Those factors included, but were not limited to an assessment from Mrs. Adler's family physician, a status review from a community care centre, a report from Regional Nursing Services, and anecdotal evidence from friends and family. A finding of incapacity for any task is a "serious incursion into the rights and privacy of the person."[6] Justice Penny referenced, Abrams v. Abrams to reinforce the gravity of a declaration of incapacity, which should be understood as an attack to the autonomy and freedom of the individual.[7] In viewing the evidence as a whole, Justice Penny found that the grantor lacked capacity to appreciate the consequences of the September 2017 powers of attorney. As a result, the 2015 powers of attorney were found to be the only valid powers granted
The Inter Vivos Gift
The three essential elements of a gift include:
1) the donor's intention to make a gift;
2) acceptance of the gift by the donee; and
3) delivery of the gift.
The issue in this case was whether the donor had the requisite decisional capacity to make a gift, and if it was made of her own free will. In Teixeira v Estate of Maria Markgraf, the court established that in cases of a gift by cheque, "it is the date the cheque is cashed, not when it is written, that gives effect to the gift."
[8]
In June 2017, the Respondent was a joint owner of the mother's accounts for almost two years and had been helping manage her property. After the cheque was written, but prior to it being cashed, the donor was diagnosed with dementia and prescribed a drug for treatment. A month later the cheque was cashed. At this time, the family physician noticed a significant deterioration and recommended a capacity assessment. In light of the facts, Justice Penny concluded that the Respondent should be regarded as her mother's fiduciary and that the acceptance of significant gifts was "highly inappropriate."
[9]
The Respondent failed to establish, on a balance of probabilities, that the donor had the requisite capacity to make the gift, and was ordered to put $25,000.00 back into the donor's account.
Takeaways
Determinations of decisional capacity are highly complex, particularly where individuals are suffering from dementia. The purpose of the SDA capacity assessment regime is to assist with the necessary exercise of balancing the protection of vulnerable individuals without undermining personal autonomy and free will.
This case demonstrates some judicial reticence towards circumstantial evidence in proceedings on decisional incapacity. Each case however has to be viewed on its individual facts - making capacity proceedings highly complex. Justice Penny reinforced the importance of a contextual approach in instances where capacity assessments are rejected on the basis of unreliability and interference. Lastly, this case can be used to nuance the decision in McCabe.[10] Where the court suggests that a poorly executed capacity assessment is better than nothing. In McCabe, there were issues with the standard of the assessment, however, the witnesses were considered to be honest and credible. The decision in Adler speaks to the importance of the intentions that prompt the capacity assessment. Capacity assessments should not be used as weapons in contentious litigation and capacity assessors should not be influenced by the party who requests the assessment which is a basic factor in obtaining court expert reports.
[1]
Adler v. Gregor, 2019 ONSC 3037
[8]
Teixeira v Estate of Maria Markgraf et al., 2017 ONSC 427 at para 46.
[10]
McCabe v. McCabe and another [2015] EWHC 1591 (Ch)
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Access to Justice, Bridging the Gap, Elder Law for Everyone
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Institute 2020 Elder Law Section Program
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Capacity for Lawyers: Elder and Real Estate Matters
February 26, 2020
Speaker: Matthew Rendely
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http://www.cbapd.org/details_en.aspx?id=ON_ON20ELD02T
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