Dear Kenneth,

Halloween seems to have had a long and diverse history in its development, encompassing traditions of many countries and cultures, over thousands of years before becoming a night of pumpkin carving, trick-or-treating, spooky costumes, and sweet treats. Its tradition is thought to have originated with the ancient Celtic festival of Samhain where bonfires and costumes alike were adorned to scare away the ghosts. For the Celts, the day marked the end of summer and the harvest, and the beginning of the dark, cold winter, a time of year that was often associated with human death and the new year when the worlds of the living and the dead became crossed.

These last few years we have all missed out on Halloween fun. This year I will leave some treats outside for the neighbourhood children, but I have to say, it always having been one of my favourite times of year, is losing some of its appeal with no young children in the house to celebrate the spook with. Maybe WEL will have to consider a Halloween Party in its future instead of a Summer Party.

WEL has welcomed Oliver and Evan these past few weeks, links to their bios are below in the news section, and it has been fun for all of us to have new talent join our practice.

Wishing you all a Happy Halloween. Enjoy the spooky movies, avoid the nightmares, and have some fun!

Thank you for your continued support of our team and as ever, Enjoy the read!



Kim

Our friend and colleague, Irit Gertzbein, LL.B., TEP, Gertzbein Law, kindly provided us with an article to be shared with our readers. "In Matters of Inheritance, Not All Nieces and Nephews are Equal" can be viewed on the WEL Blog: https://welpartners.com/blog/2022/10/in-matters-of-inheritance-not-all-nieces-and-nephews-are-equal/

Irit Gertzbein has practiced trusts & estates law for close to two decades. With a kind and personal touch, Irit provides comprehensive and sophisticated estate planning and estate administration legal services to clients of all levels of wealth in a variety of complicated life circumstances, including, foreign jurisdictions, blended families and adversarial parties. View the nature of Irit’s work on her website at: https://www.gertzbeinlaw.com/

OBA AWARD OF EXCELLENCE IN CIVIL LITIGATION 

WEL congratulates Tom Curry, Lenczner Slaght LLP, recipient of the 2022 Award of Excellence in Civil Litigation, and Sarit Batner, McCarthy Tétrault LLP, as the 2021 Award Recipient.

Sarit Batner and Tom Curry will be honoured at a gala dinner and award ceremony to be held on Tuesday, November 22, 2022, at the Ritz-Carlton, in Toronto

https://www.cbapd.org/details_en.aspx?id=ON_ON22CIV21T

STEP EXCELLENCE AWARDS, 2022 

WEL congratulates Vanina Wittenburg TEP, Hunters Law LLP, and all the other graduates, on winning the STEP Excellence Awards 2022. The STEP Excellence Awards recognise the top-scoring student at distinction level (70 per cent and above) per STEP exam or assignment, Essay Route, and the highest-scoring graduates across each of the STEP Diplomas, aggregated across the four diploma papers. The individuals listed here represent the best and the brightest practitioners – many of whom will be names to watch out for in the years ahead.

https://excellence.step.org/Winners

By Albert H. Oosterhoff

1. Introduction

Gough v Leslie Estate^[1] is an interesting case for several reasons. First, there was a problem with the way in which the matter came before the chambers judge in that the parties bifurcated the proceedings. And that caused the chambers judge to reach an aberrant decision. Second, there was a question whether the appellant could raise a ‘different’ issue on appeal, that is, the issue of secret trust that was not raised at first instance. And third, there was a detailed discussion about the nature of a secret trust and when it arises.

2. Facts

Allan Leslie (‘Allan’ or the ‘testator’) lived in a common law relationship with Shannon Gough (‘Shannon’). The testator also had a daughter, Megan Leslie (‘Megan’). In 2014 Allan made a Will in which he appointed Megan his executor, devised his house to Megan, and left his RRSP and pension plan benefits to Shannon. On the same day the three parties entered into a written Agreement, not referred to in the Will. It provided that Shannon could live in the house and enjoy the income from the RRSP, but on her death the capital would pass to Megan. In November 2015, Allan and Shannon had a falling out. He made a new Will in which he revoked ‘all former wills and other Testamentary Dispositions made by me’. The 2015 Will gave all the residue of the estate, including the house, to Megan. It made no mention of the 2014 Agreement and made no provision for Shannon. In 2018 Allan made a codicil to his 2015 Will in which he gave a RRIF to Shannon and the residue of the estate to Megan. After Allan’s death, Shannon remained in the house in accordance with the 2014 Agreement.

Megan then brought a ‘Contentious Matters’ application for a determination whether the Agreement was testamentary and was thus revoked by the 2015 Will. If the court should find that the Agreement was not testamentary, a subsequent hearing was scheduled to determine what effect the Agreement had on the estate. The later hearing was cancelled because the chambers judge concluded that the Agreement was testamentary and was therefore revoked by the 2015 Will. As the Court of Appeal noted, ‘this well-intended economy faltered on an attenuated record unsupported by appropriate jurisprudence’. On his own motion the chambers judge also questioned the enforceability of the Agreement because it seemed to offend the principle against repugnant gifts in that it qualified the absolute gift of the house to Megan in the 2014 Will.

Shannon appealed and for the first time argued that the Agreement created a secret trust. The Court of Appeal invited oral and written submissions on the issue, while Megan argued that it could not be considered because it had not been raised at first instance.

The Court of Appeal allowed the appeal. It held that the Agreement was not testamentary but created a secret trust that did not offend the repugnancy principle. The Court considered a number of issues described below.

3. Should the Court entertain the secret trust argument?

Megan argued that the argument raised a ‘new issue’, and a ‘new issue’ should not be considered on appeal. However, the Court applied a statement by the Supreme Court of Canada in R v Mian,^[2] in which the Court said, ‘Issues that form the backdrop of appellate litigation will typically not be “new issues”’. In this case the problem arose because the parties chose to bifurcate the proceedings and confine the issue at first instance to the question whether the Agreement was testamentary in nature. However, Megan acknowledged that the Agreement contained trusts, and Shannon argued on appeal that the chambers judge erred ‘in failing to consider that a beneficiary designation need not be made by will’. As the Court of Appeal notes (para 17), ‘One cannot ask a legal question such as “Is this a testamentary instrument?” but then frustrate the correct reply by avoiding the legal analysis by which that reply can be given’. The Agreement was before the court and legal nature of the obligations it imposed was central to the question whether the Agreement was testamentary.

Moreover, the Court noted (with reference to Mian, para 43), ‘Even if secret trusts were a “new” issue, the Court may have a duty to raise it if an injustice would result’ (para 18). ‘Because the secret trust point decides the testamentary instrument question posed, it would be unjust to ignore it’ so long as the parties have opportunity to address it (ibid). Indeed, the Court went on to quote further from Mian (para 40)” ‘… courts also have the role of ensuring that justice is done’, and quoted from Lord Denning’s judgment in Jones v National Coal Board,^[3] about the role of trial judges: ‘a judge is not a mere umpire to answer the question “How’s that?” His object above all is to find out the truth, and to do justice according to law. The Supreme Court in Mian went on to state that this is true also of appellate judges.

4. Is the Agreement a testamentary instrument?

As noted, the chambers judge held the Agreement to be testamentary because, quoting the well-know statement from Cock v Cooke,^[4] ‘if the person executing [the instrument in question] intends that it shall not take effect until after his death, and is dependent upon his death for its vigour and effect, it is testamentary’. The Chambers judge held that because the Agreement disposed of Allan’s property on his death and was revocable, it was testamentary.

The Court of Appeal disagreed and quoted from Corlet v Isle of Man Bank Ltd^[5] in which the Alberta Court of Appeal noted that the words ‘vigour and effect’ apply ‘not to the result to be obtained by, or to the performance of, the terms of the instrument, but to the instrument itself’. And it went on to state, ‘If the document is “consummate” to create a trust in praesenti, though it be performed after the death of the donor it is not dependent upon his death for its vigour and effect’. Thus in Gough the Court of Appeal held that the Agreement was not testamentary.

5. Secret Trust

The Court of Appeal noted that the issue of secret trusts was relevant to determining whether the Agreement was testamentary. It went on to note that a secret trust arises when a beneficiary under a will undertakes to hold property on trust for specified objects (those terms having been communicated to him and he having accepted them). The beneficiary is then bound to hold the property on trust for the agreed upon objects. Of course, in this case the beneficiary’s undertaking took the form of a written Agreement rather than an oral promise, as is often the case. But that makes no difference. Secret trusts are often explained on the basis that if the secret trustee fails to carry out her undertaking that constitutes fraud. The Court of Appeal quotes from several authorities in which fraud is said to be the basis of the secret trust. I am not convinced that this is the correct analysis, because fraud does not always arise. A better explanation may be that the constructive trust arises to perfect the testator’s intentions and to protect detrimental reliance. In passing, I note that an alternative argument that a secret trust is imposed to reverse unjust enrichment is not plausible, for in that case the property would have to be returned to the estate, since the remedy for unjust enrichment is restitution. But that would frustrate the testator’s intention to benefit the specified objects.^[6]

In many respects, a secret trust can be compared to a situation that attracts the mutual wills doctrine, a point raised by Shannon (para 31). It also arises because of the parties’ Agreement and gives rise to a constructive trust. And the Agreement is not revoked when one party revokes his will.

The Court of Appeal went on to dismiss Megan’s argument that the Agreement was not a secret trust because it was not secret. It noted that secret trusts do not have to ‘secret’ and that their secrecy relates to their private character. Megan also argued that the Agreement did not satisfy the three certainties to form a trust and that it was constituted. The Court does not really address these arguments. I believe that they fail to take into account the nature of a secret trust. It arises because of the beneficiary’s undertaking and equity enforces it for that reason. It is not an express trust for which these requirements are necessary. It is true that once the testator dies and the beneficiary acquires the property there is then a trust which satisfies those requirements. But they do not have to be satisfied when the constructive trust arises.

6. Breach of procedural fairness and error on the principle of repugnancy

The Court then went on to hold to consider these issues, because the Chambers judge discussed, of his own motion, whether the Agreement was of dubious enforceability, and because he found that the Agreement breached the principle of repugnancy. On the first point the Court held that the judge’s remarks did not constitute the ratio of the case but agreed that Shannon was right to raise this point. On the second point, the Court took the view that creating a trust that modifies an absolute gift in a will ‘need not engage the principle of repugnancy. It agreed with Shannon’s argument that the principle of repugnancy did not arise in this case. The Agreement created a limited occupation interest and that was not repugnant to the fee simple interest that Megan would eventually enjoy. With respect, it seems to me that, by definition, if a secret trust is acknowledged to exist, then it clearly limits the interest that was given to the beneficiary under the will. If A agrees to hold property that the testator gives to her in the will for B, the principle of repugnancy is irrelevant and is not engaged. A’s interest is solely that of trustee. Similarly, if A agrees to hold Blackacre that the testator devises to her in the will for B for life, with remainder to A, again the principle of repugnancy is irrelevant and is not engaged.

---

[1] 2022 NSCA 25, 75 ETR 4th 1.

[2] 2014 SCC 54 at para 35.

[3] [1957] 2 All ER 155 (CA), p 159.

[4] (1866), LR 1 Pro & Div 241.

[5] [1937] 3 DLR 163 (Alta CA).

[6] For a discussion of these arguments, see Oosterhoff on Trusts, 9th ed by Albert H Oosterhoff, Robert Chambers, and Mitchell McInnes (Toronto: Thomson Reuters, 2019), §12.4.1(a). In fact the debate whether a secret trust is an express or a constructive trust has never been resolved by a court, but I believe that treating it as a constructive trust is the more principled view. See further Waters’ Law of Trusts in Canada, 5th ed (Toronto: Thomson Rogers, 2021), pp 314-16. 567-68.

By Albert Oosterhoff

1. Introduction

Re Grace Estate[1] is a rather unusual case. It seems that counsel at the original hearing failed to advise the court of the presumption of due execution,^[2] usually referred to by its Latin name, omnia praesumuntur rite esse acta.^[3] That led the court to reach an incorrect decision^[4] and the executor applied for a reconsideration. The case is important because it serves as a reminder of that very basic presumption, and because it reviews the law on reconsidering a decision.

In the context of proving a will the court can apply the presumption if the testator has complied with the statutory formalities of signing the will in the presence of two witnesses who then attest her signature in her presence. The court can then hold the will to be valid.^[5] Some cases say that the presumption can be applied if the will contains a proper attestation clause.^[6] However, the leading case, Re Laxer,^[7] held that the presumption can be applied even in the absence of such a clause. It can also be applied even though the witnesses cannot be traced.^[8]

2. Facts

The executor was the father of the testator, and he made an application for proof of his daughter’s will in solemn form. The testator’s mother opposed the application on the ground that the testator did not read or know the contents of the will before she signed it, that she signed the will under suspicious circumstances, and that she may have lacked capacity.

In the first hearing,^[9] Justice Lyster held that the mother failed to establish suspicious circumstances but that the executor failed to prove that the testator read the will or had it read to her. In her opinion this meant that the executor did not have the benefit of the presumption of testamentary capacity. Therefore, he had to prove that the testator had capacity and knew and approved the contents of the will. The executor applied for reconsideration of her decision.

3. Reconsideration

Justice Lyster concluded that this was a proper case for her to exercise her discretion to reconsider her decision since the order arising from the first decision had not yet been entered, so the court was not functus officio. The case was not one of hearing fresh evidence, as is often the case, but rather one in which, as the applicant submitted (para 8) that ‘the parties failed to advise the court of a line of binding authority directly on point which could substantially alter the result. While she acknowledged that the discretion to reconsider must be exercised sparingly, she held that it was in the interests of justice to reconsider her decision in the unique circumstances of this case.^[10]

4. Application of the Presumption

In reaching her original decision, Justice Lyster relied on this passage in the decision of the Supreme Court of Canada in Vout v Hay:^[11]

… Although the propounder of the will has the legal burden with respect to due execution, knowledge and approval, and testamentary capacity, the propounder is aided by a rebuttable presumption. Upon proof that the will was duly executed with the requisite formalities, after having been read over to or by a testator who appeared to understand it, it will generally be presumed that the testator knew and approved of the contents and had the necessary testamentary capacity.

In her second decision, Justice Lyster candidly acknowledged that she took the emphasized words to mean that the propounder of a will has to establish that the will was read over to or by the testator before the presumption of due execution applies.

Then she relied on a case that was not referred to at the first hearing, Yen Estate v Chan.^[12] In that case the court referred^[13] with approval to the decision of the Ontario Court of Appeal in Re Laxer,^[14] which quoted and applied the following paragraph from the decision of Lindley LJ in Harris v Knight:^[15]

The maxim, "Omnia praesumuntur rite esse acta," is an expression, in a short form, of a reasonable probability, and of the propriety in point of law of acting on such probability. The maxim expresses an inference which may reasonably be drawn when an intention to do some formal act is established; when the evidence is consistent with that intention having been carried into effect in a proper way; but when the actual observance of all due formalities can only be inferred as a matter of probability. The maxim is not wanted where such observance is proved, nor has it any place where such observance is disproved. The maxim only comes into operation where there is no proof one way or the other; but where it is more probable that what was intended to be done was done as it ought to have been done to render it valid; rather than that it was done in some other manner which would defeat the intention proved to exist, and would render what is proved to have been done of no effect.

In Yen Estate the Court of Appeal agreed with the trial judge that Vout v Hay did not do away with the presumption. It applied Laxer because: (a) Vout does not say that the presumptions are no longer valid; (b) the issue of due execution was raised only tangentially in that case; and (c) it cannot be assumed that the Supreme Court got rid of the long-standing presumption without mentioning it or explaining why they were doing so when it was unnecessary to resolve the issue before them. In fact, in Vout the court did not need to consider the presumption of due execution because there was direct evidence that the will had been executed properly.

In Yen Estate the Court of Appeal also agreed (para 18) with the following passage from Laxer,^[16] which the trial judge in Yen Estate had endorsed:

The authorities supporting the application of the presumption favouring due execution of a testamentary instrument lay down a very sound and salutary principle, since a contrary rule would make the rights of devisees and legatees depend not only upon the honesty, but also upon the frail and slippery memory of witnesses. No man could be sure of dying testate, since the dishonesty or forgetfulness of a witness could frustrate all his precautions to comply with the requirements of the law.

Justice Lyster noted that the statutory formalities for a valid will were observed because the testator signed the will in the presence of two witnesses, who then attested her signature. Further, the will contained an attestation clause. She held (para 27), ‘These facts give rise to a rebuttable presumption that Ms. Grace knew and approved the contents of the will. Moreover, since there were no suspicious circumstances, the onus was on the mother to rebut the presumption and she failed to do so. She did ask the testator if she read the will and the testator said that she did not. But after the witnesses arrived, her father asked her if the will contained her wishes. She said yes, and this evidence was confirmed by one of the witnesses.

Thus, Justice Lyster held that the will had been proved in solemn form and granted probate to the executor.

---

[1] 2022 BCSC 1283.

[2] Ibid., para 4.

[3] The Latin phrase means, it is presumed that all things have been properly and correctly done.

[4] Indexed at 2022 BCSC 653.

[5] Re Riva (1978), 3 ETR 307 (Ont Surr Ct).

[6] See, e.g., Kirpalani v Hathiramani (1992), 46 ETR 256 (Ont Gen Div); Beniston Estate v Shepherd (1996), 16 ETR 2d 71 (BCSC).

[7] [1963] 1 OR 343, 37 DLR 2d 192 (CA).

[8] Re Riva, supra.

[9] 2022 BCSC 653.

[10] Justice Lyster relied, inter alia, on Dowell v Hamper, 2019 BCSC 1592; Signcorp v Vancouver (City) (1986), 9 BCLR 2d 238 (SC); Menzies v Harlos (1989), 37 BCLR 2d 249 (CA); and Hodgkinson v Hodgkinson, 2006 BCCA 158.

[11] [1995] 2 SCR 876, 1995 CarswellOnt 186, para 26. Emphasis supplied by Justice Lyster.

[12] 2013 BCCA 423.

[13] Ibid., para 14.

[14] Footnote XX, supra, para 28.

[15] (1890), 15 PD 170 at pp 179-80.

[16] Supra, para 35, per Schroeder JA.

By Brett Book

On December 31, 2022, the temporary emergency measure permitting the virtual verification of identity without authentication will end in Ontario. This means that effective January 1, 2023, verifying identity by only viewing an individual and their government-issued photo documentation virtually will no longer be permitted. Licensees who choose to verify the identity of an individual using video conferencing technology or other forms of virtual communication will be required to authenticate the government-issued photo identification document.^[1]

According to the Law Society of Ontario this change is reflective of existing provincial health and safety measures, recognizes that three alternative methods are available to licensees for verifying the identity of an individual who is not in their physical presence, and aligns with the requirement under By-Law 7.1 that all documents and records used for verification purposes be authentic, valid, and current.

Licensees who verify the identity of an individual in-person using the government-issued photo identification method are not, however, required to take authentication steps other than examining the identification document to ensure it is authentic, valid, and current.

What is required to authenticate?

Licensees may assess the authenticity of the government-issued photo identification document by:

1. Asking the individual to scan their government-issued photo identification document using the camera on their mobile phone or electronic device, and
2. Using technology^[2] to compare the features of the government-issued photo identification document against:

• Known characteristics (e.g., size, texture, character spacing, raised lettering, format, design)
• Security features (e.g., holograms, barcodes, magnetic strips, watermarks, embedded electronic chips), or
• Markers (e.g., logos, symbols).

Taking these steps should confirm that the document is authentic as issued by the federal, provincial, or territorial government.

If you are unable to meet your client or potential client, virtual verification is not the only method available.

Alternate Verification Methods

Where licensees are unable to meet with an individual in person, they may verify the identity of that individual by using one of the following methods:

• Credit File Method
• Dual Process Method
• Using an Agent

For a quick reference, licensees are encouraged to download a copy of the LSO’s Client Identification and Verification Flowchart: Client Identification and Verification Flowchart

---

[1] https://lso.ca/lawyers/practice-supports-and-resources/topics/the-lawyer-client-relationship/virtual-verification-of-client-identity

[2] For example, the Digital Identification and Authentication Council of Canada (“DIACC”) has developed a directory of products that assess identification documents and verify the identity. The directory provides an overview of technology products that use government-issued photo identification cards combined with biometric facial scans to verify and authenticate identity documents.

A Case Review of Law Society of Saskatchewan v. Abrametz, 2022 SCC 29 https://canlii.ca/t/jqbs7

By Nima Hojjati

In Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, the Supreme Court (“SCC”) addressed (i) the doctrine of abuse of process for inordinate delay in administrative proceedings, and (ii) the standard of review applicable to questions of procedural fairness and abuse of process in statutory appeals.[1]

Background and Blencoe

The respondent lawyer was found guilty of conduct unbecoming and disbarred without a right to apply for readmission for almost two years.[2] During the disciplinary proceeding, they applied for a stay based on inordinate delay amounting to an abuse of process.[3] The stay application was dismissed by the Hearing Committee for the Law Society but allowed on appeal by the Court of Appeal for Saskatchewan.[4] The majority of the SCC allowed the appeal and held that while the Court of Appeal correctly determined the standard of review, they failed to properly apply it.[5]

The majority further held that Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44 (“Blencoe”), remains the applicable authority for inordinate delay in administrative proceedings and rejected calls to “Jordanize” by bringing it into conformity with contemporary approaches to delay in the criminal justice system addressed in R. v. Jordan, 2016 SCC 27.[6]

Blencoe sets out a three-step test to determine whether delay that does not affect hearing fairness amounts to an abuse of process: (i) first, the delay must be inordinate, (ii) second, the delay itself must have directly caused significant prejudice, and (iii) third, there needs to be a final assessment of whether the delay amounts to an abuse of process by being manifestly unfair to a party or in some other way bringing the administration of justice into disrepute.[7]

Abuse of Process

The doctrine of abuse of process stems from the court’s inherent and residual discretion.[8] It is a broad concept that applies in various contexts.[9] In criminal law, unfair or oppressive treatment of an accused can constitute abuse of process and warrant judicial intervention.[10] In civil law, it can warrant a motion to strike or preclude re-litigation of an issue.[11] The doctrine is broad and can be appreciated on a spectrum.[12]

Abuse of process is characterized by its flexibility.[13] Unlike res judicata or issue estoppel, “it is not encumbered by specific requirements”.[14] The “primary focus is the integrity of courts’ adjudicative functions, and less on the interests of parties”.[15] Fairness and the proper administration of justice are central to the doctrine.[16] In administrative proceedings, abuse of process is a question of procedural fairness[17] and the duty to be fair is relevant at all stages.[18]

Abuse of process can lead to various remedies, up to an including the ultimate remedy of a permanent stay of proceedings.[19] Where a stay is not warranted, other remedies can include a reduction in the sanction[20] and/or costs.[21] 

Standard of Review

In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”), the SCC applied the appellate standards of review from Housen v. Nikolaisen, 2002 SCC 33, to statutory appeals from administrative decisions.[22] The majority in Abrametz added that “where questions of procedural fairness are dealt with through a statutory appeal mechanism, they are subject to appellate standards of review”.[23]

As a statutory appeal, the standard of review in Abrametz was correctness for questions of law, and palpable and overriding error for questions of fact and question of mixed fact and law[24] (absent an extricable error of law). An “error is palpable if it is plainly seen and if all the evidence need not be reconsidered in order to identify it, and is overriding if it has affected the result”.[25] An “appellate court is not free to interfere with factual conclusions merely because it disagrees with the weight to be assigned to the underlying evidence”.[26]

The majority held that abuse of process is a question of law, and the applicable standard of review was correctness.[27] However, the Hearing Committee’s findings with respect to inordinate delay[28] and significant prejudice[29] were subject to the standard of palpable and overriding error.

In dissent, Justice Côté noted that the presumptive standard of review from Vavilov is reasonableness, by contrast with Mission Institution v. Khela, 2014 SCC 24 (“Khela”), where the Court confirmed that “the standard for determining whether the decision maker complied with the duty of procedural fairness will continue to be ‘correctness’”.[30] Justice Côté noted that procedural fairness is a “general common law principle” that exists “independently of statutorily confined administrative regimes”.[31]

The majority distinguished Khela and Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12 (“Khosa”), from Abrametz on the basis that those decisions concerned judicial review and the granting of prerogative writs, not statutory appeals.[32]

Justice Côté would have kept the standard of correctness as the starting point of the analysis in the context of procedural fairness review.[33] Admittedly, Justice Côté noted that the majority’s approach would usually lead to the same result where the enabling statute establishes an appeal mechanism because procedural fairness is a legal standard, and “the assessment of whether an administrative decision maker complied with this duty is a question of law subject to correctness review on appeal “.[34]

Justice Côté noted that the majority applied the standard of palpable and overriding error to two requirements of the Blencoe test, namely inordinate delay and significant prejudice, and applied the standard of correctness to the third step of “conducting a final assessment”.[35] Justice Côté further noted that inordinate delay would have constituted an abuse of process on its own, “it is the legal standard against which an administrative body’s conduct is measured”, and should have been subject to correctness review.[36]

Future Discussion

As discussed in a previous WEL blog post on “Procedural Fairness at the Consent and Capacity Board”, Justice Myers held in [K.] v. Weinroth, 2022 ONSC 2748, that a proceeding is either fair or it is not, there is no other standard of review.[37] Although Abrametz sought to clarify the standard of review for procedural fairness on statutory appeals, Justice Côté’s dissent demonstrates ongoing conceptual challenges. In particular, questions remain for procedural fairness outside of statutory appeals where Khela and Khosa may need to be reconciled.

---

[1] Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, at para 3 (“Abrametz”).

[2] Abrametz at para 1.

[3] Abrametz at para 2.

[4] Abrametz at para 2.

[5] Abrametz at para 4.

[6] Abrametz at paras 38 and 45-48.

[7] Abrametz at para 43 and 101.

[8] Abrametz at para 33.

[9] Abrametz at para 34.

[10] Abrametz at para 34.

[11] Abrametz at para 34.

[12] Abrametz at para 76.

[13] Abrametz at para 35.

[14] Abrametz at para 35.

[15] Abrametz at para 36.

[16] Abrametz at para 36.

[17] Abrametz at para 38.

[18] Abrametz at para 58.

[19] Abrametz at paras 76 and 83.

[20] Abrametz at paras 92-98.

[21] Abrametz at para 99.

[22] Abrametz at para 27; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para 36.

[23] Abrametz at para 27.

[24] Abrametz at para 29.

[25] Abrametz at para 113 (original emphasis).

[26] Abrametz at para 113.

[27] Abrametz at para 30.

[28] Abrametz at para 116.

[29] Abrametz at para 124.

[30] Abrametz at paras 161-163.

[31] Abrametz at para 165.

[32] Abrametz at para 28.

[33] Abrametz at para 169.

[34] Abrametz at para 169.

[35] Abrametz at para 181.

[36] Abrametz at para 182 (original emphasis).

[37] [K.] v. Weinroth, 2022 ONSC 2748 at para 11.

By Evan Pernica

Recently, in the reported decision, Henderson v. Sands et al.[1] (“Henderson”), the Court confronted the topic of financial risks borne by Estate Trustees, providing they may be required to “pay their own legal and accounting fees up front where the litigation will not result in any financial benefit to the beneficiaries and where the litigation is focused on whether the Estate Trustee should be removed.”[2]

By way of brief summary, in Henderson, the Applicant, a named beneficiary of the estate and a daughter of the testator, sought, amongst other relief, an Order removing the Respondent as Estate Trustee.[3] Further to the application, the Court endorsed Orders on consent requiring the Respondent Estate Trustee to pass their accounts, and setting out a preservation order prohibiting the assets of the Estate to be used for any purpose other than making legitimate tax and liability payments on behalf of the Deceased and subject Estate.[4]

Imposing significant obligations and associated legal and accounting fees, the Respondent Estate Trustee brought a motion to fund their expenses with estate assets that had been frozen by the aforementioned preservation order.

In their motion, the Respondent Estate Trustee relied on such cases as Geffen v. Goodman and Toller James Montague Cranston (Estate of) for the propositions that:

• generally speaking, Trustees are entitled to be indemnified for all costs, including reasonable legal costs in defending an action, and do not require the consent of beneficiaries to pay litigation fees from an estate account;[5] and, that
• there are public policy reasons for indemnifying Estate Trustees, such as that individuals will be hesitant to accept appointments as an Estate Trustee if they are required to personally fund all expenses themselves and then seek reimbursement from the Estate.[6]

Ultimately, the Court distinguished the authorities relied upon by the Respondent Estate Trustee for lacking the context of a preservation order, and dismissed the Respondent Estate Trustee’s motion for funding on the grounds that: 

• the Respondent Estate Trustee was acting in their personal benefit in defending their position as the named Estate Trustee.[7] Quoting DeLorenzo v. Beresh, the Court endorsed the position that because the Applicant is required to bear their own legal costs, and the outcome of the litigation may affect each party’s cost consequences, it is preferable that each of the parties bear their own costs until the litigation is completed;[8] and, that
• it is not contrary to public policy to require Estate Trustees to pay their own legal and accounting fees up front where the litigation carries no financial benefit to the beneficiaries and is focused on whether the Estate Trustee should be removed because the actions of the trustee themselves are challenged.[9]

The result of this decision places Henderson alongside its common law predecessors such as Geffen v. Goodman and Toller James Montague Cranston (Estate of), and augments the already complex landscape of obligations, entitlements, and indemnities afforded to Estate Trustees. From a litigator’s perspective, it will be interesting to see the application of this decision moving forward.

---

[1] Henderson v. Sands et al., 2022 ONSC 2959 [Henderson].

[2] Ibid, at para. 22 [emphasis added].

[3] Ibid, at para 6.

[4] Ibid, at paras 8 – 9.

[5] Ibid, at paras 16 – 17 (referring to Geffen v. Goodman, 1991 CanLII 69(SCC) and Toller James Montague Cranston (Estate of), 2021 ONSC 1347).

[6] Ibid, at para 22.

[7] Ibid, at para 19.

[8] Ibid, at paras 20 – 21 (citing DeLorenzo v. Beresh, 2010 ONSC 5655). 

[9] Ibid, at paras 22 – 23 (citing Fenwick v. Zimmerman, 2008 CanLII 41307 (ON SC)).

By Brett Book

On October 18, 2022, the Court Services Division of the Ministry of the Attorney General released its updated Estates Procedures Manual.

This comprehensive manual was created to provide guidance to estate court staff in the Ontario Superior Court of Justice who process probate Applications and other estate court Applications. The manual consists of 19 sections which deal with areas such as the probate process, Estate Administration Tax and document filing fees, contentious proceedings, and Applications to pass accounts, among other important areas.

The Ministry of the Attorney General is now providing automatic updates to those who email with such a request.



A copy of the manual can be requested by sending an email to [email protected]

By Oliver O’Brien

In the recent case of Fair v BMO Nesbitt Burns Inc., 2022 ONCA 711. https://canlii.ca/t/jsg6c, the Court of Appeal reviewed an appeal from a summary judgment motion made in the Superior Court. At first instance, the claimant made two separate but interrelated claims against BMO and Mr Fair’s Estate, a claim against BMO for breaching a duty of disclosure and a claim against the Estate for unjust enrichment. The second issue of the case turned on lack of evidence to support the material facts of the claim as required by s. 13 of the Evidence Act, R.S.O. 1990, c. E.23 (“Evidence Act”).[1]

Evidence of material facts are important in litigation, especially so when it concerns the challenging of estates. It reflects one aspect of Estates and Trusts law which seeks to protect the deceased testator and their estate, who are not alive to express their wishes and version of events.

Background

Shortly before the death of Lloyd Fielder Fair on November 23, 2016, the beneficiary designations of three investment accounts held with BMO Nesbitt Burns were changed[2]. Before the amendment, the beneficiary of the three accounts was his wife of 10 years and appellant Anne Elizabeth Fair[3]. After the amendment, the beneficial entitlement went to his children and respondents from Mr. Fair’s previous marriage, Adam Raymond Fair and Ashley Christina Abbott[4].

After Mr. Fair’s unexpected death, the appellant learned of the change and claimed it was a breach of agreement she had had with Mr. Fair. First, the appellant sued BMO, alleging they had violated their duty when failing to advise her of the change when it occurred[5]. Second, she sued the Estate of Mr. Fair and his children, alleging there was a constructive trust held over the proceeds of the investment accounts for her via unjust enrichment[6].

Justice C.F. de Sa of the Superior Court dismissed both claims on summary judgment. On the first claim against BMO, the motion judge found no duty to disclosure. The investment accounts were not held jointly with appellant, so no duty of confidence existed. The judge also found no basis for the second claim of constructive trust. The appellant used the case of Moore v Sweet, 2018 SCC 52, found not to be applicable. The appellant failed to get corroboration for material facts of her claim, as required by s.13 of the Evidence Act[7]. The appellant believed the Court had erred in findings and the issues needed a trial to resolve them[8].

Duty to disclose claim



The Court of Appeal dismissed the claim against BMO for breach of duty. The appellant’s case was premised on a duty to disclose by BMO and both courts deemed no duty existed.[9] Mr Fair’s accounts were not held jointly with the appellant and “there is also no obligation either in [statute] or common law to notify third parties about an individual’s beneficiary choices.”[10] Disclosing the change would have been a breach of Mr. Fair’s privacy and right to dispose of assets how he chooses.[11]

The appellant’s argument on appeal included contention that BMO is not a bank, but rather an investment advisor, and as such, owed a duty under Davidson v Noram, 2005 13 B.L.R. (4th) 35 (Ont. S.C.).[12]  However, the Court of Appeal noted that the application was misplaced since disclosure matters are material to account holders and the appellant was not an account holder.[13]

The Court of Appeal upheld the motion judge’s decision and noted that while there was consent between Mr. Fair and the appellant for BMO to share account information, this did not in and of itself create a duty on BMO to disclose account changes made by one owner to another.[14]

Unjust Enrichment claim, lack of Corroboration

The Court of Appeal also dismissed the appellants’ unjust enrichment claim against Mr Fair’s estate.

The court agreed with the motion judge, finding no basis for the application of Moore v Sweet[15]. In that case, Ms. Moore had an agreement with the holder of a life insurance policy to be designated and maintained as its beneficiary, paying premiums to keep policy in force. In violation of agreement, the policy holder designated Ms. Sweet as beneficiary. In Moore, the agreement that formed the basis of her successful claim were clearly established (she paid the premium, was designated beneficiary and it was maintained[15]).

In Fair v BMO, the agreement was an affidavit that Mr. Fair and the appellant agreed that their investments, with one exception, “would pass on to the survivor in the event that one should die.”[17] There was no explanation as to when or how agreement was made, as the motion judge states, “apart from the [appellant’s] assertion, there is nothing that would support the existence of an actual ‘agreement’”[18]. The designations made to the appellant were revocable and thus vague on whether there was clear agreement to maintain them in effect without change[19].

At issue in the second claim was the lack of corroboration to prove what the appellant claims Mr. Fair agreed to was true[20]. Section 13, of the Evidence Act, requires that there be corroboration of material facts alleged by an opposite or adverse party of any matter occurring before the death of the deceased.[21] Mr. Fair’s agreement with the appellant included designating her the entire Estate. In examination for discovery, the agreement was described as all of Mr. Fair’s investment accounts, not just those designated.[22] Since the appellant could not provide any corroboration to set the matter straight, instead claiming exception from it, she failed in her claim.

Fair v BMO highlights how corroboration of material facts is an important consideration in Estates litigation. Section 13 of the Evidence Act exists and effectively acts to protect the deceased and the estate, addressing the obvious disadvantage faced by the dead as they cannot explain their version of events or respond to current version of events.

---

[1] Fair v BMO Nesbitt Burns Inc., 2022 ONCA 711 at paras 1 and 10 (“Fair v BMO”).

[2] Fair v BMO at para 1.

[3] Ibid

[4] Ibid

[5] Fair v BMO at para 2

[6] Ibid

[7] Fair v BMO at para 10.

[8] Fair v BMO at para 5.

[9] Fair v BMO at para 4.

[10] Ibid; citing Justice C. F. de Sa

[11] Ibid

[12] Fair v BMO at para 5.

[13] Fair v BMO at para 8.

[14] Fair v BMO at para 7.

[15] Fair v BMO at para 12.

[16] Ibid

[17] Fair v BMO at para 13.

[18] Fair v BMO at para 10; citing Justice C F de Sa

[19] Fair v BMO at para 15.

[20] Ibid

[21] Fair v BMO at para 12; citing Burns Estate v Mellon, (2000), 48 O.R. (3d) 641 (C.A)

[22] Fair v BMO at para 14.

ILCO ANNUAL CONFERENCE

November 3, 2022

Contentious Estate Law Update

Speaker: Kimberly Whaley & Bryan Gilmartin

https://www.ilco.on.ca/events/2022-conference

ONTARIO POLICE SEMINAR

November 4, 2022

Elder Abuse Course

Speakers: Rebecca Betel and Brett Book

TORONTO LAWYERS ASSOCIATION FAMILY & ESTATES PROGRAM

November 24, 2022

Dearly Departed and Separated: The Intersection of Family and Estates Law

Speaker: Kimberly Whaley

https://tlaonline.ca/viewEvent.html?productId=6906

CANADIAN LAWYER WEBINAR

November 24, 2022

Avoiding Traps and Claims When Drafting Wills

Speakers: Kimberly Whaley, Ian Hull & Jordan Atin

Free Registration: https://www.bigmarker.com/KeyMediaWebinars/Child-Proofing-Your-Will-Recognizing-Avoiding-Common-Traps-for-Solicitors

STEP SPOTLIGHT SESSIONS, 2022

Digital Assets SIG Session

December 9, 2022

Speaker: Kimberly Whaley

https://www.stepevents.org/event/b04eb7ef-ad1f-4571-8929-01dad36f6a62/summary 

RBC Podcast: Plan for Incapacity: Protect Yourself with Powers of Attorney

Misdescription of a RRIF – Application of Falsa Demonstratio Principle

Life Estate or Licence – A Continuing Conundrum

No Assent – Property Does not Vest

The Presumption that a Will Speaks from Death: A Case Review of VanSickle Estate v. VanSickle