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LAW REVIEW: CASES AND OTHER LEGAL REVIEWS
1. Will Challenges
I read an article in the Step Journal, July 2013, Volume 21, Issue 6: www.STEP.org/Journal, entitled: "The Evidential Burden: on the Validity of Will Disputes in England and Wales", by Oliver Auld. [1]
Mr. Auld ["Auld"] opines that disputes concerning the validity of a Will are rarely straightforward. Auld attributes this to the difficult findings of fact the court is required to make often on the basis of limited evidence respecting a testator's intentions. While Auld's article reviews a number of U.K. decisions, the principles and his address of the complexities respecting evidence are common ground in Will Challenges in Ontario.
In Will challenge cases, we have the difficulty of not having the now deceased person being unable to speak to his/her intentions. Section 13 of our Ontario Evidence Act, requires corroborative evidence in allegations made in the context of a Will challenge. Ontario Evidence Act, Section 13 provides:
"Actions by or against heirs, etc.
13. In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence."
Auld refers to evidence from the testator as a difficult commodity in that people generally do not discuss their testamentary intentions. As a result, a challenger usually relies on witness evidence of friends, neighbours, and family members and points out that such evidence can be partisan and may be unable to address the key issues. Additionally, witnesses give their evidence at trial and their reliability can also be uncertain making the outcome of these types of disputes difficult to predict.
Indeed, these proceedings are difficult to predict on many levels. Not just with respect to the credibility of the evidence, or weighing of the evidence by the court, but also with respect to costs consequences.
Auld reviews the law pertaining to England and Wales, and some recent disputed Will cases, which demonstrate how the court tend to approach evidential issues and how the absence of direct evidence can lead to a judgment that a Will is invalid. Some of the decisions reviewed are quite interesting.
Auld refers to the grounds to challenge a Will which he states broadly comprise of:
- The Will was not executed in accordance with Section 9 of the Wills Act, 1837. This of course accords to our provisions in the [Ontario] Succession Law Reform Act, R.S.O. 1990, Section 4:
Execution
4.(1)Subject to sections 5 and 6, a will is not valid unless,
(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;
(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and
(c) two or more of the attesting witnesses subscribe the will in the presence of the testator;
- The testator lacked the requisite mental capacity to make the Will at the relevant time. Similarly in Ontario, a product of common law, we utilize this similar ground to challenge a Will;
- The testator did not know and approve the contents of the Will before executing it. Similarly, in Ontario, a ground to challenge a Will can be lack of knowledge, and approval;
- The testator was unduly influenced by a third party to make the Will. Similarly in Ontario, a ground to challenge a Will can be undue influence which is tantamount to a fraud; and
- A third party procured the Will by forgery or other means of fraud. Similarly, again, in Ontario, fraud or forgery can be a ground upon which a Will could be challenged.
The burden of proof in the circumstances of a challenge is similar in the U.K. to Ontario, and is although reviewed by Auld, will not be reviewed by me. Rather, will focus on some of the interesting decisions reviewed by Auld.
FRAUD
The first decision reviewed by Auld concerned fraud.
The decision of Wyniczenko v Plucinska-Surowka [2005] EWHC 2794 (Ch) is interesting because the testator left her estate to a TV aerial repairman that she had hired and the Will was made in highly suspicious circumstances.
Indeed, the TV aerial repairman prepared the Will himself and arranged for friends to witness it.
There was a lack of any clear evidence of either mental illness or coercion and the expert evidence on the signature of the testator was not conclusive.
Interestingly, the suspicious circumstances surrounding how the Will was made and the fact that there was no evidence that the testator was ever aware of its existence, was sufficient for the court to infer that the testator neither knew of not approved of its contents and therefore was set aside.
UNDUE INFLUENCE
In the Court of Appeal case of Gill v Woodall [2010] EWCA Civ 1430: http://www.bailii.org/ew/cases/EWCA/Civ/2010/1430.html, the deceased and her husband had mirror Wills leaving their estate to each other on the first death and the RSPCA on the second death, thus excluding their only daughter. The daughter challenged the Will on the grounds of want of knowledge and approval or undue influence by the testatrix's late husband. At first instance the judge found the Will was invalid on the basis that the husband was overbearing and coerced the wife into leaving her estate as he wished it.
On appeal, the Court of Appeal preferred to find the Will invalid on the basis that there was no affirmative evidence that the testatrix ever knew and approved of the contents of her Will and that accordingly, there was no need to consider undue influence. In this case, the evidence demonstrated that the initial instructions to the Wills were given by the husband alone and there was no evidence that the wife ever read her Will.
Similarly, in another recent case, that of Schrader v Schrader [2013] EWHC 466 (Ch), Auld refers to this case as a rare example of the case where the court made a finding of undue influence where the alleged perpetrator was available for cross-examination.
In this case, the High Court found that the son of the deceased had unduly influenced his mother to cut his more successful brother out of the bulk of her estate despite the lack of any direct evidence of coercion. The court formed its judgment on the basis of the mother's vulnerability and dependance on the son and on the son's forceful, physical presence and volatile personality. The court opined that the son had a misplaced belief that his parents had favoured his other sibling financially during their lifetime, and commented on his attempts to distance himself from the preparation of the Will and the lack of any identifiable reason for the testatrix to disinherit her other son of her own volition.
Auld states that this case is somewhat exceptional and it nevertheless further demonstrates a willingness by the courts to make adverse findings on the validity of a Will on the basis of indirect evidence where the circumstances of the making of the Will are suspicious.
These cases and their application will be of assistance and may be of some assistance in Will challenges cases in Ontario.
TESTAMENTARY CAPACITY
On testamentary capacity, the recent Court of Appeal decision in Hawes v Burgess [2013] EWCA Civ 74, was reviewed by Auld and he highlights the comparative difficulty in establishing a claim on the grounds of lack of testamentary capacity, in contrast to want of knowledge and approval despite the similarities in the evidential burden.
In Hawes, the testatrix had excluded her son from her Will. The son and one daughter challenged the Will on the grounds of lack of testamentary capacity and want of knowledge and approval. At first instance, the court determined that the Will was invalid for lack of testamentary capacity on the basis of expert evidence that the testatrix was suffering from vascular dementia, likely to have impaired her ability to understand and deal with her property.
However the Court of Appeal overturned the High Court decision on testamentary capacity. The Court of Appeal stated that in spite of evidence of dementia, it was felt that it was "a very strong thing" for a judge to find that the testatrix lacked capacity when the Will had been prepared by an experienced solicitor who had met with her at the relevant time and had been satisfied that she had the requisite capacity.
The court also expressed caution on relying on medical evidence not based on any meeting with or medical examination of the testatrix at the relevant time or at any time.
Accordingly, despite the fact that the solicitor read the Will to the testatrix before she signed it, the Court of Appeal found that she did not know and approved of its contents, and the evidence supported the contention that the son was considered to have been a "controlling force" behind the Will and had probably misled the solicitor about why the testatrix purportedly wished to disinherit. Above all, the court found that there was a failure to provide any affirmative evidence other than the Will that the testatrix had ever intended to exclude her son from her estate.
2. STEP Journal, July 2013, Volume 21, Issue 6 [2]
Challenges to Wills, Tracy Harris
In this STEP article, Tracy Harris reviews the recent case of
In Ontario, dependants make claims through the provisions of the Succession Law Reform Act,[3] Part V. However the similar legislation in England and Wales is: The Inheritance (Provision for Family and Dependant) Act, 1975 (1975 Act).
The recent Lilleyman decision of 2012 is a case where a successful claim was made by the second wife of the deceased as a dependant. The defendants to the claim were Nigel and Christopher Lilleyman, the deceased's two sons by an earlier marriage, who were both the executors and in principle, the beneficiaries under the deceased's Last Will and Testament. The deceased died after being married to his second spouse for just over two years, as at the date of death. The deceased was a successful businessman and owned two companies. The defendants worked in the two companies.
Prior to the marriage, each owned their own homes and during the marriage they bought a property together and considered it a marital home. They bought an additional property which was occupied by one of Mrs. Lilleyman's sons, who had been living with her when she met the deceased and a third holiday home that the deceased purchased in his sole name. Both of the two other properties were owned jointly by the parties at the date of death. The deceased's Will gave Mrs. Lilleyman limited rights of occupation in both homes that were jointly owned and she was also given certain personal property and effects and a limited monthly income. The judge noticed various factors when considering the claim as a dependant including financial resources and needs, both at the time of trial and in the future and the obligations and responsibilities of the deceased towards both her and his sons, and the size and nature of the deceased's estate. The judge also considered what Mrs. Lilleyman may have been awarded had the parties divorced known in the U.K. as the "divorce cross-check". The reason for this being that the marriage was of a short duration. A key issue between the parties was how much of the business asset should be taken into account as marital property.
The judge concluded that only a portion of the business assets should be taken into account because the deceased had built up the companies before his marriage. The portion that the judge attributed was the portion which represented the increase in the value of the businesses during the marriage.
At the time of the trial, Mrs. Lilleyman was 66 years old and not expected to have any significant earning capacity.
In her own right she jointly owned 50% of the two properties. The judge did find that there was a shortfall in Mrs. Lilleyman's income on an annual basis including future capital requirements as well as her income requirements.
What is of particular relevance is that the judge decided the case taking into strong consideration the antagonism that had developed between the parties and opined that there ought to be a clean break as he did not think it was realistic for Mrs. Lilleyman to have a life interest in assets belonging to the estate. The court therefore ordered that Mrs. Lilleyman should have the estate's share of Water Meadows.
On costs, the court made comment on the usual order as to costs being the successful claimant would be awarded costs out of the funds in the estate. Notably in this case, however, the defendants had made a generous offer, more generous than the amount awarded by the trial judge.
When considering costs, the judge acknowledged that any award against the dependant would reduce the amount she received by way of provision from the estate. The judge did, however, conclude that it would not be unreasonable for Mrs. Lilleyman to be ordered to pay the defendants' costs after the effective date of the offer. However in the end the judge ordered that Mrs. Lilleyman pay only 80% of the costs incurred by the defendants because of the defendants' conduct of the claim.
In respect of conduct it is particularly notable that the judge penalized the defendants in their failure to acknowledge that the Will did not make reasonable financial provision for Mrs. Lilleyman, which had led to a "no holds barred" approach to the litigation.
3. The British Columbia Family Law Act
View the act on www.bclaws.ca
Reforms came into place in March 2013 with respect to the
Family Law Act in that the new Act extends the legislative property division regime to couples living in a "marriage-like" relationship.
Given that throughout the provinces our courts have often great difficulty identifying a marriage-like relationship, it is thought that this new legislation may bring with it more litigation.
Our case law has determined that spouses, whether married or not married, may indeed be spouses, even where they do not co-habit and live in the same house or even the same country. Likewise, case law has demonstrated that courts have found a spousal relationship where there has been no children or no sexual relations. Often the case law determines a spousal relationship on the intention of the parties.
For a discussion of spousal relationships, please read Kimberly Whaley's 'Advocates' Quarterly' article "The Intersection of Family Law and Estates Law: Post-Mortem Claims Made by Modern Day Spouses" by clicking here.
It will be interesting to see some of the litigation arising out of the new legislation, and in particular, the division of assets acquired during the relationship and assets owned before the relationship and the interaction of trust holdings.
4. The STEP Journal, July 2013, Volume 21, Issue 6
Features an article titled "Cohabitee Claims" [4] by Tracey Dargan.
In this article we see that the UK are also experiencing an increasing number of unmarried couples subjecting the legal rights of cohabitees to great debate. Cohabitation is growing in family type in the UK. The statistics referenced by Tracey Dargan show that in 2012, 5.9 million people were cohabitating with a predicted 1 in 4 couples cohabitating by 2031.
Under English law which covers England and Wales, on divorce, married couples can apply to the court for income and capital orders. Without reasons to do otherwise, the court will try to split assets equally. Unmarried couples, like in Ontario, have no right to make similar applications and are limited to claims over property and children.
Contrast this with the developing legislation in the new family law provisions in BC, and it will be interesting to see the development of cohabitee rights in the coming years.
5. Faris v Eftimovski: Decision Under Rules 24.01 and 48.14 of the Ontario Rules of Civil Procedure
http://canlii.ca/t/fxrbm
This appeal concerned the question: "under what circumstances should an action be dismissed by the court following a status hearing?"
In this case, the appellant appealed from an order of Justice Healey dismissing his action for delay after a status hearing was held at the Superior Court of Justice in Barrie as well as seeking leave to appeal the costs fixed by the status hearing judge.
This is an interesting decision which, in my view, will cause the court to perhaps give greater consideration to the dismissal of proceedings at a status hearing. Though often approached as a procedural issue where the hurdle of the administrative dismissal is often easily overcome, this case provides further precedent value with respect to the ability to have proceedings which are fraught with delay dismissed.
The appellant commenced the action in 2007 and there was in effect a breach of contract and breach of fiduciary obligation and duty claim. The claim was commenced by Notice of Action and the claim was issued in or about January 2008. The delay seemed to continue from the outset of the action. During the currency of the claim, one of the defendants died and an order was sought to continue against the estate.
In the status hearing judgment at first instance, the two-part test as to whether the applicant's action should be dismissed for delay referenced the decision in Savundranayagam v. Sun Life Assurance Co. of Canada
(2008), 67 C.C.L.I. (4th) 241 (Ont. Div. Ct.):
The test referenced is summarized as:
- the onus is on the plaintiff to show why the action should not be dismissed for delay at the status hearing;
- the plaintiff must explain the delay so as to satisfy the court that the action should proceed; and
- the plaintiff must satisfy the court that there would be no prejudice to the defendants.
The status hearing judge noted that her findings on delay were sufficient in themselves to warrant dismissal of the appellant's action. Yet the status hearing judge rejected the appellant's argument that prejudice would be attenuated because of evidence captured from the examination of one of the parties in another proceeding involving a prior action.
Accordingly the status hearing judge dismissed the appellant's action for delay. The appellant argued that the test applied to dismiss an action for delay at a status hearing under Rule 48.14(13) should be the same as that applied under the rule governing a motion brought by a defendant to have a plaintiff's action dismissed for delay pursuant to Rule 24.01(1).
Under Rule 24.01, it enables a defendant who has complied with the
Rules to take a deliberate procedural step to dismiss an action where the plaintiff has been delinquent in one of the manners enumerated under Rule 24.01 as follows:
24.01 (1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed,
(a) to serve the statement of claim on all the defendants within the prescribed time;
(b) to have noted in default any defendant who has failed to deliver a statement of defence, within thirty days after the default;
(c) to set the action down for trial within six months after the close of pleadings; or
(d) Revoked: R.R.O. 1990. Reg. 194, r. 24.01 (2).
(e) to move for leave to restore to a trial list an action that has been struck off the trial list, within thirty days after the action was struck off.
Under Rule 48, it provides a number of mechanisms to enable the court to control the pace of litigation. One part of this mechanism is the Registrar's ability to serve a status notice to prompt action by a delinquent plaintiff under Rule 48.14(1) or 48.14(2).
After the relevant status notice is served, Rule 48.14(8) enables a party to request that the Registrar arrange a status hearing. The disposition of a status hearing is governed by Rule 48.14(13) as follows:
Disposition at Status Hearing
48.14(13) At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay and,
(a) if the presiding judge or case management master is satisfied that the action should proceed, the judge or case management master may,
(i) set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,
(ii) adjourn the status hearing to a specified date on such terms as are just, or
(iii) if the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,
(iv) make such other order as is just; or
(b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay.
The plaintiff is then required to demonstrate that there was an acceptable explanation for the delay and establish that if the action were allowed to proceed, the defendant would suffer no compensable prejudice.
In this decision, the court opines that since the purpose of Rule 48 is to enable the court to control the pace of litigation and ensure that disputes are resolved in a time-effective manner, imposing the onus on the plaintiff to show cause why the action should not be dismissed for delay is fair.
This court therefore held that the responsibility to move the action lies chiefly with the plaintiff. [5]
The court stated that Rules 24.01 and 48.14(13) each offer distinct means that may lead to the same end, the dismissal of an action for delay.
Importantly, the court opined that the status hearing judge's assessment must be considered in light of the general rule that "the party who commences the proceeding bears primary responsibility for its progress". [6]
Accordingly the Court of Appeal concluded that the status hearing judge did not err in the assessment of delay and prejudice to the appellant and gave effect to this ground of appeal and the Appeal Court dismissed the appeal, not interfering with the status hearing judge's decision. The Court of Appeal fixed costs at $10,500.00 to the respondents inclusive of applicable taxes and disbursements.
6. Smith v. Cataraqui Cemetery Company, 2013 ONSC 2468 (CanLII)
http://canlii.ca/t/fx6s8
In this case, the court was asked to determine whether or not Cataraqui Cemetery Company was a proper respondent to the application commenced by the Smith applicants; to order certain declaratory relief including of an injunctive nature; to determine lineal descendants; and to determine burial rights and care and maintenance privileges respecting certain descendants pursuant to the purchase of interment lots in 1869 by Darius and Joseph Smith; and all this in accordance with the Funeral, Burial and Cremations Act, 2002, S.O. 2002, c. 33
In 1869, the brothers Darius and Joseph Smith purchased 64 plots for interment of human remains in the Cataraqui Cemetery.
The respondent, Cataraqui Cemetery, takes the position that it is not a proper party to the proceeding. Instead, the respondent argues that the applicants ought to have served all of the potential heirs of the late Joseph Smith and Darius Smith, which would involve over 1,000 to 2,000 respondents.
At paragraph 5, the respondent argues that the right of interring in a burial plot succeeds to the next-of-kin of the interment rights holder:
The Respondent's position:
[5] The Respondent argues that the right of interring in a burial plot secedes, speaking generally, to the next-of-kin of the interment right holder (Strathcona Cemetery Co. Taylor [1924 3dlr 623 (ALTA) SC, Appellate Division at para. 39). Accordingly, it is the Respondent's position that the onus lies with the Applicants to prove that they have an inherited the right of interment through bequest or succession. This principle, according to the Respondent, is enunciated in both the By-laws of the Cemetery, as well as, the Registrar of Cemeteries' interpretation of the Funeral, Burial and Cremation Services Act (the Act). This Act came into force July 1st, 2012, and replaced the old Cemeteries Act, which had been in effect since 1990. The Act governs the day-to-day operations of all cemeteries in Ontario. This includes the sale and transfer of interment rights. The Act provides that the Minister of Government Services shall appoint a Registrar for the purposes of the administration of the Act. Generally, any questions regarding the operation of the cemetery and/or interpretation of the Act itself are passed from the General Manager of the cemetery to the Registrar. All cemeteries in Ontario follow, more or less, this chain of command, according to the Affidavit of Robert Lemmon, General Manager of the Respondent Cemetery. The Act defines "interment rights" as the right to require or direct the interment of human remains in the lot or plot. The Act also defines "interment right's holder" as the person who holds the interment rights with respect to a lot or plot whether the person be the purchaser of the rights, the person named in the Certificate of Interment or such other person to whom the interment rights have been assigned.
[6] Section 48 of the Act provides that only an interment rights holder or a person authorized to act on the holder's behalf has the right to inter any human remains in the lot or plot to which the interment rights relate in accordance with the cemetery by-laws.
[7] The Respondent's position is that only the purchaser(s) of interment rights (in this case, Darius Smith and Joseph Smith), or their legal representative(s), may authorize interment in the plot(s) they hold rights over.
[8] The Respondent argues that the Applicants failed to provide satisfactory documentary evidence to establish any one of the three Applicants is the interment right holder of any of the Smith plots located in the Cataraqui Cemetery. Until such time as one of the possible two thousand heirs of Darius or Joseph Smith can provide satisfactory documentary evidence that they are the interment right holder, none of the remaining plots purchased by Darius and Joseph Smith can be used and, in effect, these plots shall forever be sealed.
In the analysis provided by the court from paragraphs 20 through 35, the court looked at the retroactive applicability of the newly enacted legislation of July 1, 2012, the Funeral, Burial and Cremation Services Act, S.O. 2002, and determined that the Act and the applicable provisions had retrospective applicability.
The court determined that the applicants were indeed the lineal descendants of the interment rights holders.
The court agreed with the applicants that it would be almost impossible to locate and serve all possible heirs as well as being very costly.
The court determined that the 1869 deed to Darius and Joseph Smith is the equivalent of what is now referred to as a "an interment rights certificate".
The proper time for interpretation of the deed was as at 1869 as determined by the court.
The court found that the intentions of the parties to the 1869 deed was to permit transfer of the interment rights to heirs which would be defined broadly, such that it includes lineal descendants or family members of lineal descendants of either brother. The court found that it could not have been the intention of any of the parties to the deed, to limit heirs "to immediate descendants or heirs at law". The reasons for this were enunciated by the court at paragraph 25 (1) through (3).
Indeed the court found the Smith family, over generations, itself treated the definition of "heirs" in the 1869 deed as including all lineal descendants. The court found that the respondent's argument respecting estoppels cannot apply here because the Registrar advised the cemetery that, the fact it made mistakes in the past and allowed persons to be interred, they were not interment rights holders or did not have authority from the interment right holder to be interred, does not justify continuation of the error. In the court's words: "Continuing to do so, would violate the potential rights of the actual interment rights holder, according to the respondent". [7]
The court rejected the estoppels argument. Also the court found that the Cataraqui Cemetery Company, by its actions, permitted generations of the Smith family including mother and father of the three applicants to believe that they were legally entitled to be buried in the Smith family plots. Indeed, succeeding generations of the Smith family acted upon the respondent's interpretation of interment rights.
The court opined that prejudice would be caused to the applicants by a change in position after so many years. The Ontario Court of Appeal case of Beer v. Townsgate One Limited, 1997, 36 O.R. (3d) 1365 Ontario Superior Court, at paragraph 68 of the judgment where the court stated:
[33] The trial judge concluded that, if the misrepresentations had not been made to Astrug and Privis by the sales agents, they would not have entered into the agreements. Townsgate submits nonetheless that these two purchasers did not rely, in a reasonable manner, on the misrepresentations. The appellant relies on the following statement by Schroeder J. in Hinchey v. Gonda, [1955] O.W.N. 125 at 128 (H.C.J.):
It is, of course, well settled that a representation, to be of effect in law, should be in respect of an ascertainable fact as distinguished from a mere matter of opinion. A representation which amounts merely to a statement of opinion, judgment, probability or expectation, or is vague and indefinite in its nature and terms, or is merely a loose, conjectural or exaggerated statement, goes for nothing, though it may not be true, for a man is not justified in placing reliance on it.
Accordingly, applying the law of estoppel to the case, the judge found that the respondent's silence in fact, and in permitting interment to over 20 Smiths since 1869 without formal proof that they are interment rights holders in the Smith family plots, prevents them from now insisting the applicants prove that they are the interment rights holders of the said lots.
The court did find that the applicants were the lineal descendants of the interment rights purchasers and that the deed provides that the "heirs" of Darius and Joseph Smith are entitled to interment in the Smith family plots.
The court found that the respondent was the proper party and that all of the possible heirs need not be served. Additionally, the court found that 31 additional interment plots remain of the 64 purchased in 1869. The permanent and mandatory order prohibiting the respondent from interfering with the rights of the applicants was granted.
As to costs, the court has invited written submissions and it will be interesting to learn the outcome of the costs order.
[1] Step Journal, July 2013, pages 32-33
[2] STEP Journal, July 2013, Volume 21, Issue 6, pages 34-35
[3] Succession Law Reform Act, R.S.O. 1990, Ch. S.26, Part V
[4] STEP Journal, July 2013, Volume 21, Issue 6, pages 71
[5] Paragraph 33 of judgment
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