Dear Kenneth,

WEL wishes from all of us for a Happy Hanukkah, Merry Christmas & an even Happier New Year in 2023.

Our WEL Team has been very busy this December helping clients with many mediations and court dates throughout. The month seems to have gone by terribly quickly adding into the mix a few conference presentations by our team members for the Toronto Police, TLA, STEP, Canadian Lawyer, Cross-Country Book Club and more.

I went to London for the STEP Council meeting as the incoming Canadian Council representative for a day of meetings. I also presented at the digital assets and fiduciary access special interest session with Barrister, Leigh Sager, New Square Chambers, Tracey Woo, RBC Wealth Management, RBC Trust, Demetre Vasilounis, Fasken’s, and Ross Belhomme, Jennifer Zegal, Jack Burroughs, Dr. Niklas Schmidt, Dave Michels, and Sayuri Kagami.

It was a wonderful afternoon of learning. The other special interest groups including contentious trusts and estates, business families, cross-border estates, international client, and mental capacity also had presentation sessions.

I was invited to the STEP Chair’s Reception hosted in a beautiful 1828 Georgian Building where Nancy Golding presented her concluding Chair’s remarks.

Finally, before returning, I attended the STEP Private Client Awards 2022/23 at the London Park Lane Hilton where the awards were presented for: Accountancy Team of the Year (large, midsize); Boutique Firm of the Year; Contentious Trusts and Estates Team of the Year (large, midsize); Digital Assets Practice of the Year; Employer of the Year; Family Business Advisory Practice of the Year; Financial Advisor Team of the Year; International Legal Team of the Year (large, midsize); Investment Team of the Year; Multi-Family Office Team of the Year; People’s Choice Advisor of the Year; Philanthropy Team of the Year; Private Client Team of the Year (large, midsize); Trust Company of the Year (large, midsize); Vulnerable Client Advisory Practice of the Year; Young Practitioner of the Year. It was a really splashy evening with many well-deserved recognitions. Congratulations to all of the shortlisted finalists and award winners!

Link to the award recipients: https://pca.step.org/winners-2022

Just before the digital assets session based on the Quadriga case and the LexisNexis’s publication Digital Asset Entanglement: Unravelling the Intersection of Estate Laws and Technology authored by Sharon Hartung and Jen Zegel, which is the second Digital Assets publication Sharon was involved in, she sadly lost her battle with cancer. I want to offer a tribute to Sharon – I will remember Sharon for the outstanding, energetic, kind person that she was, who contributed to our profession and our learning and understanding of this complicated new class of assets. Her first publication, Your Digital Executor came out a few years ago. Sharon was a professional engineer, TEP, and a retired Royal Canadian Military, Air Force Captain, as well she was possessed of a host of other impressive professional designations. She contributed greatly and her loss will be felt-she will be missed. Our condolences to her friends, colleagues, family and loved ones. Our congratulations on her achievements and those with Jen Zegel on their successful publication.

As ever, enjoy the read,

Kim

WEL HOLIDAY SPECIAL – A HOLIDAY ESCAPE WITHOUT LEAVING THE CITY 

By Evan Pernica 

The Toronto Christmas Market has been a holiday tradition for more than ten years, popping up in the Distillery District every year to welcome the holiday season. Freshly rebranded this year as The Distillery Winter Village, this spot for holiday cheer attracts thousands of visitors every year and even made the shortlist of CNN’s world’s best Christmas markets - making it only one of two markets in North America to make the list. 

While we’re always fans of the classics, it should be no surprise that this year’s fresh approach to the Market has created one of the city's most desirable holiday destinations. Complete with a 50-foot Christmas tree (sponsored by Dior this year!), locally made and handcrafted goods, rustic cabins lining the distillery, and over 75 retailers and restaurants, the experience is intended to be reminiscent of a magical European Christmas market.

The showstopper of the Christmas Market is always the 50-foot tall Christmas tree, but this year’s upgrade by Dior brings a sense of undeniable opulence - decorated with hundreds of blue ornaments, thousands of matte gold balls, and nearly 70,000 white lights, it’s no wonder that our social media feeds are consumed with images of this iconic attraction lately.

While we could go on about the infectious visuals spread out across every corner of the Market, a true review wouldn’t be complete without indulging in some of the delicious and seasonal eats that bring modern twists to nostalgic holiday favourites. 

If you’re itching for a taste of Christmas dinner before the 24th, then the Christmas poutine from Wildly Delicious is a must-have. Their golden fries are topped with squeaky cheese curds, gravy, and cranberry sauce. It’s like a turkey dinner with your favourite sides wrapped in one bite.

For those looking to warm up, follow your nose to the smell of melted cheese for a plate of hot sea salt & rosemary potatoes topped with melted swiss raclette. It's a classic dish done right with its creamy, slightly sweet, slightly nutty taste paired perfectly with soft mini potatoes. 

Of course, no trip to the Christmas Market is complete without a cup of hot cocoa, but if you’re looking for a unique spin on this local favourite then Soma might have what you’re looking for. As a chocolate factory focusing on quality ingredients with innovative twists, their Maya version of hot chocolate is made with spicy dark chocolate, chilli peppers, orange peel, and ginger. While not for the faint of heart, the spicy kick aims to bring that perfect umami flavour to balance out the richness of the chocolate. 

For those chocolate purists out there, try heading to Balzac's for their traditional cup of cocoa topped with a generous serving of whipped cream. 

For anyone looking to experience the Christmas Market for themselves, admission is free of charge until 4 pm - but be weary, the Christmas Market can get busy with Torontonians wanting a taste of the magical holiday spirit. 

CONGRATULATIONS TO THE WINNERS OF THE STEP PCA AWARDS, DECEMBER 13, 2022

WEL congratulates the winners of the 2022 STEP Private Client Awards:

Accountancy Team of the Year (large firm): Mazars

Accountancy Team of the Year (midsize firm): Arcadia Trust Group

Boutique Firm of the Year: Karlin & Peebles

Contentious Trusts and Estates Team of the Year (large firm): Baker McKenzie

Contentious Trusts and Estates Team of the Year (midsize firm): Maurice Turnor Gardner

Digital Assets Practice of the Year: Dr. Niklas J.R.M. Schmidt

Employer of the Year: Burges Salmon

Family Business Advisory Practice of the Year: Forsters

Financial Advisor Team of the Year: Holden & Partners

International Legal Team of the Year (large firm): McDermott Will & Emery

International Legal Team of the Year (midsize firm): Boodle Hatfield

Investment Team of the Year: Waverton Investment Management

Multi-Family Office Team of the Year: Stonehage Fleming

People’s Choice – Trusted Advisor of the Year:Tina Wüstemann

Philanthropy Team of the Year : Herbert Smith Freehills

Private Client Legal Team of the Year (large firm): Burges Salmon

Private Client Legal Team of the Year (midsize firm): Harbottle & Lewis

Trust Company of the Year (large firm): ZEDRA

Trust Company of the Year (midsize firm): ACCURO

Vulnerable Client Advisory Practice of the Year: Kith & Kin Law Corporation

Young Practitioner of the Year: Matteo Yoon, Herbert Smith Freehills

The Geoffrey Shindler Award for Outstanding Contribution to the

Profession: Jennifer J. Wioncek

Lifetime Achievement Award: Simon Jennings

https://pca.step.org/winners-2022

CONGRATULATIONS TO THE RECIPIENTS OF THE 2022 STEP FOUNDER’S AWARDS  

WEL congratulates the recipients of the 2022 STEP Founder’s Awards, which are given to members who have made ‘an exceptional and outstanding long-term contribution to the Society above and beyond that normally expected of a member, through office in their branch, or elsewhere in the voluntary life of the Society’.

Congratulations Aileen Battye, Elaine Blades, Susan Jane Fielding, Ashley Fife, Stephen Lawson, Hans-Rudolf Jost, Berenice Carrasquedo López, Hélène Marquis, and Michael Woolf.

CONGRATULATIONS TO STEP NEW TEPS

WEL congratulates the latest recipients of the prestigious Trust & Estates Practitioners (TEP) designation granted on December 1, 2022:

Diploma Programs: David Egyes, and Sandra Koller

Expertise:  Faye Kravetz, Parveen Karsan, and Scott Binns

Essay Program: Alexandra Deguire, Anna Kamateros, and Fatah Kadiri

By Albert H. Oosterhoff

Re Richards, 2022 ONCA 216 ^[1]

1. Introduction

The decision of the Ontario Court of Appeal gives reasons for concern. There are two aspects to it: (1) the interpretation of the trust in question; and (2) the dictum in paragraph 13 of the reasons to the effect that the provision of the trust would offend the public policy underlying the Bankruptcy and Insolvency Act.^[2] Moreover, the court did not consider whether the trust created a protective trust.

2. Facts and Decisions

Michael Richards’s father created a Trust of a house in Toronto. The trustees had to hold the property in trust for Michael’s parents for life, with the intent that they could live in the house. Clause 5.2.2 of the trust provided that when the last of the parents died, the trustee was to distribute the trust fund (including the property and any chattels) to Michael if he was then alive. The father died in 2010 and the mother in 2020. However, the trustees sold the house before the mother’s death, and they held the proceeds in trust.

Michael was an undischarged bankrupt. He owed a large sum of money to Royal Bank of Canada (‘RBC’), and it filed a bankruptcy application against Michael in 2019. In 2020 RBC took an assignment of the rights of the Trustee in Bankruptcy. It moved to recover the sale proceeds up to the amount owed by Michael and argued that the proceeds constituted property of the bankrupt.

Michael pleaded clause 4.2 of the Trust. It provides:

Any right of a Beneficiary to receive any income or capital of the Trust Fund as a result of a mandatory direction to the Trustees to make such a distribution, including, for greater certainty, a mandatory entitlement of a Beneficiary to the exclusive use, occupation and enjoyment of the Real Property and the Chattels . . . . shall be enforceable only until such Beneficiary shall become bankrupt . . . whereupon and so long as the effect or operation thereof shall continue, the Beneficiary’s Interest shall cease until the cause of the Beneficiary’s Interest becoming vested in or belonging to or being payable to a person other than such Beneficiary shall have ceased to exist . . . and then the Beneficiary’s Interest shall again be allocated to such Beneficiary as aforesaid unless and until a like or similar event shall happen whereupon the Beneficiary’s Interest of such Beneficiary shall again cease and so on from time to time.

Michael argued that his interest in the property could not vest in the Trustee in Bankruptcy since he had no rights to the property under clause 4.2 until he was discharged from bankruptcy. Until then his rights were suspended. And only on his discharge would the property vest in him under clause 5.2.2.

The bankruptcy judge disagreed. She held that the mandatory distribution provision in clause 5.2.2 overrode clause 4.2. In particular, she held that Part IV of the Trust, which contained clause 4.2, applied during the lives of the parents, whereas Part V, which contained clause 5.2.2, applied after they died. Thus, she held that the property constituted property of the appellant and therefore the proceeds of sale vested in the Trustee in Bankruptcy.

The Court of Appeal agreed with the bankruptcy judge.

This conclusion may well be correct, but it is impossible to determine that because the reasons do not reproduce enough of the Trust to confirm that conclusion. And the reasons of the bankruptcy judge do not seem to be available. I shall therefore have to proceed on the assumption that the decisions of the bankruptcy judge and the Court of Appeal are correct on this issue.

3. Dictum

But that does not end the matter. The Court of Appeal’s reasons contain the following dictum:

13     We would also observe that, if the interpretation of the Trust is as contended by the appellant, it would offend the public policy that underlies the BIA by allowing persons to place assets out of the reach of their creditors. As Rowe J. said in Chandos Construction Ltd. v Deloitte Restructuring Inc,^[3] “the anti-deprivation rule renders void contractual provisions that, upon insolvency, remove value that would otherwise have been available to an insolvent person’s creditors from their reach.”

But with the greatest respect, the Chandos case is not authority for the point the court is making. It was a contract case (as is clear from the quotation) and in a contract situation the anti-deprivation rule applies. However, Richards was not a contract case but a unilateral act by a settlor and different considerations apply in that case, as I shall now explain.

4. Protective Trust

It is of course quite true that you cannot settle property upon yourself until bankruptcy. Such a disposition is regarded as a fraud on your creditors.^[4] And that rule dates back to early statutes that avoided fraudulent conveyances. The issue arose in Re Knechtel Furniture Ltd.^[5] The company established a pension plan for its employees under a trust agreement. Both the company and the employees contributed to the plan. The plan provided that on dissolution of the plan any surplus was to be paid to the company, but that if the company was then bankrupt the surplus should be used to increase the benefits of the employees. The company made an assignment in bankruptcy and the court held that insofar as the surplus consisted of contributions made by the company that provision was void as against the trustee in bankruptcy.

What happened in Chandos was different but nonetheless similar. A general contractor entered into a contract with a subcontractor under which it would pay 10 percent of the contract price to the general contractor if the subcontractor filed an assignment into bankruptcy, which it did. The general contractor sought to offset the amount it owed the subcontractor against the fee the subcontractor owed to it under the contract. That would eliminate the debt and give the general contractor a provable claim in the bankruptcy. However, the court held that this was contrary to public policy because it would place value out of the reach of the subcontractor’s creditors.

But the matter is different if the owner of property leaves the income and capital in trust for someone else, such as a child, until the child’s bankruptcy. That constitutes a protective trust. And the common law has long recognized the validity of the protective trust device.

The protective trust is based on the distinction in the doctrine of estates between conveyances upon determinable limitation and upon conditions subsequent. The latter seek to convey an absolute interest that is cut short by a condition subsequent, whereas the former conveys a qualified estate that is or may be shorter in duration than the full estate. Estates upon condition subsequent contain words of condition, whereas estates upon determinable limitation contain words of duration. A condition that cuts an absolute interest short will be held void as a restraint on alienation, whereas a determinable limitation is valid. An old case, Brandon v Robinson,^[6] illustrates the difference. A father left part of his estate to his son Thomas for life, but on condition subsequent that if he made an assignment in bankruptcy his interest would end. On Thomas’s death the capital was to be paid to his statutory next of kin. Thomas became bankrupt and Lord Eldon held that the condition was void and that the assignee in bankruptcy was entitled to the future income. However, in dictum his Lordship noted the father could have achieved his purpose if he had made Thomas’ interest determinable upon bankruptcy. In Rochford v Hackman^[7] the Vice Chancellor applied that dictum in a situation in which the testator gave a life interest to his son determinable upon his bankruptcy, which was valid. Thus, it is clear from these cases that while a provision for termination of an interest on alienation or bankruptcy by way of a determinable interest is valid, a provision that seeks to prevent a beneficiary from alienating the interest, whether voluntarily or involuntarily as in bankruptcy, by way of a condition subsequent is void as a restraint on alienation.

These rules also apply to personal property. Further, the testator or settlor can provide that on the happening of the determining event the property shall be paid or transferred to others.

Thus, a protective trust is one in which a testator or settlor gives a life interest to one person (the primary beneficiary) with a gift over to others once a determining event has occurred. Indeed, it often happens that the settlor or testator provides that once the determining event occurs the trustees will hold the property upon a discretionary trust in favour of a class of beneficiaries that may include the primary beneficiary.

Of course a settlor or testator can achieve a similar result simply by creating a discretionary trust under which the trustees have a discretion to pay or not to pay money to a wastrel. Alternatively, the trustees can be given a mere power to pay the wastrel.

Protective trusts were very common in England and so the legislators enacted a statutory form of the protective trust in the Trustee Act 1925.^[8] Jurisdictions in the Antipodes followed suit.^[9] In those jurisdictions it is not necessary to spell out the protective trust in detail in the trust. Instead, the statutory form can be included simply by giving the beneficial interest to a named person ‘upon protective trusts’.

There is no similar legislation in Canada, so here we need to spell out the protective trust in detail, which can certainly be done. Re Williams^[10] is an older Ontario case in which the Court of Appeal gave effect to a protective trust in a will. The court did not refer to it in Re Richards. The testator left the residue of her estate to pay the income to her daughter Helen for life, subject to the following provisions:

THIRD: I hereby direct and declare that in the case of my said daughter Helen Madeline Peck, the said income payable to her shall be paid to her as aforesaid unless or until she shall become bankrupt or shall assign, charge or encumber the said income or do or suffer something whereby the said income or some part thereof would through her act or default or by operation or process of law if belonging to her absolutely become vested in or become payable to some other person or persons, or in the event that my Trustees in their sole discretion are of the opinion that my said daughter is reckless or improvident in the use of the said income, and upon the occurring of any such event and so long as the effect and operation thereof shall continue and so long as my said Trustees shall deem advisable, her right to receive such income shall cease and the said income shall be no longer payable to her and so until the cause of the said income ceasing to be payable to her shall have ceased to exist or to be effectual or operate and then her right to receive such income shall revive and the said income shall thereafter be payable to her as aforesaid unless or until the like event or any such event as aforesaid shall happen again whereby the said income, or some part thereof, would, if belonging absolutely to her, become vested in or payable to some other person or persons or my said daughter is making improvident use of such income whereupon her right to receive it shall again cease and it shall no longer be payable to her until the cause for the said income ceasing to be payable to her shall have ceased to exist or to be effectual or operate in the manner or to the like effect as above mentioned and then her right to receive the said income shall immediately revive and the said income shall be payable to her as aforesaid and so from time to time if and whenever any of such events shall occur and the effect and operation thereof continue or discontinue as aforesaid. If any such event occurs above mentioned in consequence of it the said income shall not be payable to my said daughter then so long as the right of my said daughter to receive it shall have ceased and be not existing the Trustees herein may in their uncontrolled absolute discretion:

(1) expend such part of the said income, if any, as they shall deem advisable in the maintenance of my said daughter, or

(2) pay the said income or any part thereof to any person or persons for and on behalf of my said daughter for her maintenance or general welfare on such terms and conditions as my Trustees may have power to prescribe, or

(3) retain the said income or any part thereof and add it to the capital of the trust fund or

(4) pay and dispose of the said income in partially one manner and partially the other or others.

The will then went on to leave the capital to two charities on Helen’s death.

Thus this was a typical protective trust that is very similar to the provisions of clause 4.2 in the Richards Trust. Laidlaw JA, who delivered the judgment of the court in Re Williams said at paragraphs 13 and 14:

[The testator] thought that a bequest of money to her daughter might not be used with care and prudence. She wanted to guard against waste and dissipation of any of her money in the hands of her daughter, but, at the same time, wanted her daughter to have the enjoyment of it in a proper way during her lifetime. She intended that there should be a supervision and control exercisable at any and all times as to the manner of spending the money to be provided in her will for her daughter. It was logical and reasonable that the responsibility for seeing to the proper use of that money should be placed upon the trustees of her estate. Therefore, her plan and intention was to give her trustees power to deprive her daughter of the income if, in their opinion, it was being used by her in a reckless and improvident manner. The vesting of such a power in trustees of an estate is not unusual. It may be found in reported cases, and nowhere, so far as I know, has such a provision been rejected by the Courts. In In re Coe’s Trusts^[11] it was the testator’s wish that his son should have the whole benefit of certain moneys if he should conduct himself “steadily and to the satisfaction of his trustees”. It was held that this was in effect a trust for the son with the power to the trustees to deprive him of the fund if he should not conduct himself steadily and to their satisfaction. Vice-Chancellor Sir W. Page Wood, says:^[12]

The trustees had clearly a discretionary power of depriving the son of the principal moneys in question . . . .

14     In Re Fox^[13] it appears that the following provision in a will was in question: “If at any time during the period of five years after my death it appears to my executors . . . that my said son . . . does not remain sober, I give them power to sell and dispose of the said property . . . .” That provision was held to be valid.

Laidlaw JA went on to say:^[14]

The words of Boyd C. in Re Fox,^[15] are most pertinent in this case. He said:

It would be unfortunate if the Court was obliged to interpose difficulties in giving effect to the intentions of testators so obviously framed for the well-being, and well-doing, of the objects of their bounty, and especially so when these objects are their own children.

Indeed, this has been the approach to protective trusts in England and elsewhere from the outset and they have never been regarded as contrary to public policy.

It is true that in Williams the court focused on the power given to the trustees and held it valid. It did not hold expressly that a protective trust is valid. But it is clear that the court understood that it is valid. And this is understandable, for such trusts have been used for many years and their validity have never been questioned. It is understandable why this is so. The courts have recognized that parents want to limit the gift to a child in some cases and they are entitled to do in accordance with the freedom of testation principle. Moreover, the creditors of such a child cannot complain since the child received a limited interest, subject to termination, rather than an absolute interest.

In my opinion it follows that if clause 4.2 in the Richards Trust had not been held to be overridden by clause 5.2.2, clause 4.2 would have constituted a valid protective trust.

It is true that, in its Report on the Law of Trusts, the Ontario Law Reform Commission concluded that the protective trust was not used much in Ontario.^[16] For that reason it declined to recommend a protective trust provision in a revised Trustee Act. Indeed, it took the view that just as the law invalidates a restraint on the alienability of a legal fee simple, it should also invalidate a restraint on alienation ‘imposed upon a life estate or other limited interest, where the restraint is introduced by way of limitation, or determinable interest [as in the protective trust]’. The Commission did not recommend the abolition of the protective trust. But it did take the view that creditors of the principal beneficiary should be able to apply to the court for payment of their claims.^[17] However, that recommendation has never been enacted. Indeed, the Report itself was never implemented

5. Spendthrift Trust

The protective trust must be distinguished from the comparable American device of the spendthrift trust. Under this device a trust that provides that a beneficiary may not alienate her interest is generally valid. In American law such a provision is regarded as a material purpose of the trust and courts will not invalidate such a purpose. Hence, the spendthrift trust is not restricted to the determinable life interest of a beneficiary under a protective trust but has a broader reach. The spendthrift trust is recognized in most American states either by case law or by statute, but its terms vary across the country. In some cases it is regarded as absolute, whereas in others creditors are sometimes allowed to reach the property.^[18]

---

[1] 2022 ONCA 216.

[2] RSC 1985, c B-3.

[3] 2020 SCC 25, 449 DLR 4th 293, para. 31.

[4] Re Burroughs-Fowler, [1916] 2 Ch 251.

[5] (1985), 20 ETR 217 (Ont SC).

[6] (1811), 18 Ves Jun 429, 34 ER 379.

[7] *1852), 9 Hare 475, 68 ER 597.

[8] C 19, s 33(1).

[9] See, e.g., Trustee Act 1925 (ACT), s 45; Trustee Act 1925 (NSW), s 45, Trustee Act 1973 (Qld). s. 64; Trustee Act 1898 (Tas), s 30; Trustee Act 1958 (Vic), s 39; Trustee Act 1962 (WA), s 61; Trustee Act 1961 (NZ), s 42.

[10] 1946 CarswellOnt 84, [1947] OR 11 (CA).

[11] (1858), 4 K & J 199, 70 ER 83.

[12] Ibid., at p 203.

[13] (1885), 8 O.R. 489.

[14] Re Williams, paragraph 15.

[15] Re Fox, supra, p 492.

[16] Ontario Law Reform Commission, Report on the Law of Trusts (Toronto: Ministry of the Attorney General, 1984).

[17] Ibid, Volume 2, pp 362ff.

[18] See generally AW Scott, WF Fratcher, and ML Ascher, Scott and Ascher on Trusts 5th ed (New York: Aspen Publishers, 2006ff) §§15.2ff.

By Albert Oosterhoff

Guest v Guest, [2022] UKSC 27.^[1]

1. Introduction

The doctrine of proprietary estoppel seems to be receiving more and more attention. The 2017 decision by the Supreme Court of Canada, Cowper-Smith v Morgan,^[2] is now the leading case in Canada. But questions remain about the nature and correct foundation of the doctrine. The United Kingdom Supreme Court engaged in a detailed consideration of its nature and foundation in Guest v Guest. The judgments in the case will undoubtedly be of great interest in Canada too. So it is important to consider the case in some detail. It contains two sets of reasons: a majority judgment by Lord Briggs, with which Lady Arden and Lady Rose agreed, and a minority judgment by Lord Leggatt, with which Lord Stephens agreed. While both Lord Briggs and Lord Leggatt allowed the appeal, they reached different conclusions on the remedy. The reasons are very long.

They run to 282 paragraphs, plus an appendix to Lord Leggat’s reasons on quantification of loss.

2. Facts

Many cases in which proprietary estoppel is argued involve farm properties and that is also the case in Guest. David and Josephine Guest operated a dairy farm for many years. They had three children, Andrew, Jan, and Ross. Andrew, the eldest, was born in 1966. He left school in 1982 at age 16 to work full time on the farm. He lived with his parents but after he married, he and his wife lived in a cottage on the farm. Early on, David told Andrew, ‘One day my son, all this will be yours’, and he repeated that for many years. Andrew understood that his parents would leave the farm to him, and he relied on their promise. Thus, he worked on the farm for minimum wages for 33 years. He earned diplomas in agricultural management and took over more and more responsibilities at the farm. The parents made wills in 1981 which provided that Andrew and Ross (who was 11 years younger than Andrew) would inherit the farm, subject to payment of a legacy to Jan. David and Josephine operated the farm for many years in partnership with Andrew. Eventually, relations between Andrew and David broke down. In 2014 the parents made new wills in which they disinherited Andrew, except for his right to continue to live in the cottage. Negotiations to resolve their differences were unsuccessful and in 2017 the parents dissolved their partnership with Andrew, gave him notice to quit the cottage, and made new wills in which they excluded Andrew entirely.

Andrew then found employment as a senior herdsman at another farm and, having learnt that his parents had disinherited him, brought proceedings against his parents in 2017. In those proceedings he relied on the doctrine of proprietary estoppel. Meanwhile, the parents sold the dairy herd but still farm the land and want to continue to do so.

3. Trial Judgment^[3]

The trial judge, HHJ Russen QC, made detailed findings of fact in his judgment.^[4] He concluded that until Andrew and his parents had a falling out, David consistently led Andrew to believe that he would succeed to the farming business and inherit a major share in the farm. That changed somewhat when Ross also became part of team and was expected to receive an inheritance as well, and Andrew understood and accepted that. The trial judge also found that Andrew had relied on his father’s assurance and would not have worked on the farm for minimum wages if his father had not promised him an inheritance.

The remedy the trial judge awarded required David and Josephine to pay Andrew an immediate lump sum, composed of:

(a) 50% after tax of either the market value of the dairy farming business (professional determined) or the value realized by sale of the business in consequence of the judgment; and

(b) 40% after tax of either the market value of the freehold land and buildings at the farm (professionally determined) or the proceeds of sale in consequence of the judgment, but in either case so that the parents received a life interest in the farmhouse, subject to their being responsible for the upkeep while in possession.

4. Court of Appeal

The parents were granted leave to appeal only on the question of the remedy, not on the finding that a proprietary estoppel had been established.

The Court of Appeal dismissed the appeal.^[5] It held that the trial judge was entitled to take account of Andrew’s expectation as ‘a strong factor in deciding how to satisfy the equity’. The court rejected a remedy based on any increase in the value of the land because it would not reflect the nature of the assurances given. It also rejected an approach based on valuing Andrew’s loss of opportunity to work elsewhere.

5. The Supreme Court

5.1 Lord Briggs

His Lordship began his reasons by affirming that the remedy for Andrew is the equitable remedy of proprietary estoppel. It is of interest that he says the remedy ‘is all about promises to confer an interest in property, usually land’ (para 4). He makes the same point elsewhere.^[6] Indeed, Lord Leggatt also makes the point in para 151 where he quotes the following passage from the dictum of Lord Scott of Foscote in Cobbe v Yeoman’s Row Management Ltd:^[7]

The estoppel becomes a ‘proprietary’ estoppel … if the right claimed is a proprietary right to or over land but, in principle, equally available in relation to chattels or choses in action.

The point is important because it has occasionally been argued that the doctrine of proprietary estoppel can only be raised with respect to real property. These references make it clear that that view is incorrect.

Although the doctrine often confers on the person who relied on the assurance an interest in property, there are many cases in which that is not appropriate. Then the court must fashion a different remedy, such as awarding equitable compensation, perhaps discounted if the date for performance of the property lies in the future (para 6).

Lord Briggs then noted that during the last 25 years there has been a fundamental divergence on the question of the correct foundation of proprietary estoppel. Some favour satisfying the promisee’s expectation, whereas others claim that compensating for the detriment is what underlies the remedy (para 7). His Lordship first considered the problem from the perspective of first principles (paras 8ff). He noted that the remedy imposed seeks to ‘eliminate, or at least mitigate, the affront to conscience’ occasioned when the promisor resiles from the promise. Although detrimental reliance is not foundational to the remedy, it is a relevant aspect of it, for without it there is no equity. However the harm done by resiling from the promise differs from the detriment, which lies in the past and can no longer be undone. He concluded that the idea that all problems in framing a remedy can be solved by ‘identifying either compensation for detriment or fulfilment of expectation … as the true purpose of the remedy, is misconceived. In his view, the true purpose is ‘dealing with the unconscionability constituted by the promisor repudiating his promise’ (para 13).

His Lordship then engaged in an exhaustive examination of the authorities from the nascency of the remedy in the 1860s (when it was not yet known by its modern term) to the present. He noted that early proprietary estoppel cases suggest that ‘expectation is the main driver of the remedy’ (para 22). That was confirmed by the followings statement by Oliver J in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Limited:^[8]

… if under an expectation created or encouraged by G that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, [A] acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation.

Of course giving the promisee an interest in the property is not always the best remedy. Sometimes it is, but in other situations the promisor may be required to compensate the promisee for the expense he has incurred. And the court can then also make payment of compensation a charge on the property if that is appropriate. The point is that the choice of remedy is flexible (para 34).

Some courts were misled by a dictum of Scarman LJ in Crabb v Arun District Council.^[9] The court sought to fulfill the plaintiff’s expectations in that case in the fairest way, while at the same time ensuring that his expectations were not exceeded. It did not seek to compensate the plaintiff for the detriment he suffered. In that context Scarman LJ said, ‘I would analyse the minimum equity to do justice to the plaintiff as a right either to an easement or a licence upon terms to be agreed’.^[10] On this point Robert Walker LJ said in Jennings v Rice^[11] ‘Scarman LJ’s reference to the minimum does not require the court to be constitutionally parsimonious, but it does implicitly recognize that the court must also do justice to the defendant’. Moreover, as Lord Briggs notes (in para 13), the dictum was not ‘minimum equity’, but ‘minimum equity to do justice’.

Other cases introduced the notion of proportionality, which they derived from dicta in Australian cases. On that point Robert Walker LJ said. ‘The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result, and a disproportionate remedy cannot be the right way of going about that’.^[12]

Lord Briggs expressed the following view on the matter (para 44):

No one would disagree with the notion that a remedy must be proportionate to the harm. But in the present context that begs the question whether the harm is the detriment or rather (as I think) the loss flowing from the repudiation of the expectation. Nonetheless by that means the seed of proportionality has become firmly embedded in the English law of proprietary estoppel.

Then he examined a number of modern cases in which the concept of proportionality was accepted, including Henry v Henry,^[13] which contains the following dictum, ‘Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application’.

Lord Briggs then returned to the controversy between the essential purpose of the exercise of the court’s discretion in proprietary estoppel cases. First he notes that a long line of English authority has ‘generally followed the expectation-based approach’ and that no authority that favours that approach takes the view that therefore it must compensate for the detriment suffered. While the cases do show that there must be ‘some proportionality between the remedy and the detriment, they rejected the idea that the aim of the remedy was compensation for the detriment. Second, he states his opinion that the ‘supposed logic of the detriment-based approach is … both faulty in origin and wrong in its inevitable result’. While reliant detriment is necessary for awarding equitable relief, ‘it is the repudiation of the promised expectation which constitutes the unconscionable wrong’ (paras 52-53).

His Lordship then considers Australian authorities and concludes that, despite some influential dicta in minority judgments, the courts ultimately held that proprietary estoppel is not founded on compensation for detriment but on the promisee’s expectation (para 58).

By way of summary Lord Briggs then states (para 61):

Drawing together this lengthy review of the authorities and looking at the matter historically, I suggest that what has happened may be summarised in this way. For over a century, starting in the 1860s, the courts of equity developed an equitable estoppel-based remedy, the aim of which was to prevent the unconscionable repudiation of promises or assurances about property (usually land) upon which the promisee had relied to his detriment. The normal and natural remedy was to hold the promisor to his promise, because that was the simplest way to prevent the unconscionability inherent in repudiating it, but it was always discretionary, and liable to be tempered by circumstances which might make strict enforcement of the promise unjust, either between the parties or because of its effect on third parties. While reliant detriment was a necessary condition for the equity to arise, the court’s focus on holding the promisor to his promise was not aimed at “protecting” the promisee from the detriment, still less compensating for it. It was aimed at preventing or remedying the unconscionability of the actual or threatened conduct of the promisor, with the effect, but not the aim, that it tended to satisfy the expectations of the promisee.

His Lordship went on to speak about the practical problems that may arise when the court seeks to fashion an appropriate remedy in many different fact situations, for example, when it desirable to come up with a ‘clean break’ so that the parties no longer have to live together, or when, as in this case, the promisor has broken his promise well before its intended performance.

Lord Briggs expressed the view that ‘the court should firmly reject the theory that the aim of the remedy for proprietary estoppel is detriment-based’ (para 71). He acknowledges that the concept of proportionality has been adopted by the cases, ‘as part of the assessment of whether a proposed remedy to deal with the proven unconscionability based on satisfying the claimant’s expectations works substantial justice between the parties’. But he notes that while it is a good servant, it is a bad master and defines it as ‘no more than a useful cross-check for potential injustice’. He believes that ‘the best summary of the proportionality test is that the remedy should not, without some good reason, be out of all proportion to the detriment’ (para 72). Moreover, the court must not carry out the question of proportionality on the basis of pure financial comparison (para 73).

In his opinion, the court should normally approach the matter in two stages. The first stage is to determine whether the promisor’s repudiation of his promise is indeed unconscionable, having regard to the promisee’s detrimental reliance on it (para 74). The second stage is where the court considers the remedy. The court should normally begin with the assumption that the simplest way to remedy the unconscionability arising from the repudiation is to hold the promisor to his promise. However, the court may have to take into account reasons given by the promisor showing that something less than full performance will negate the unconscionability but will still satisfy the equity (para 75). Finally, if it is shown that ‘specific enforcement of the promise, or its monetary equivalent, would be out of all proportion to the cost of the detriment to the promisee’, the court may have to limit the extent of the remedy (para 76).

Lord Briggs then applied these principles to the facts. He took into account the uncertainty in identifying the exact interest in the farm David promised to Andrew in light of the need to make provision also for Ross and Jan. He also considered the fact that David was over 70 and Andrew almost 50, and that the matter arose some time before the promise was to be fulfilled. That gave rise to questions of futurity and cohabitation, or acceleration and a clean break. On the other hand there was no real uncertainty about Andrew’s detrimental reliance and its extent.

His Lordship was particularly concerned about the acceleration issue. He concluded that the trial judge exceeded his discretion because he failed to provide for a general discount since Andrew would be receiving the remedy early, with the result that Andrew in effect received more than he was promised (para 100). Moreover, all the parties may have preferred a complete break (para 103). Consequently, His Lordship fashioned a remedy that would give the parents the ability to choose between two alternative forms of relief:^[14]

1. if they preferred a clean break with Andrew, they could sell the farm to enable them to make a lump sum payment to him that would be discounted because of the early receipt; or

2. the farm could be placed in trust so that Andrew would receive it when his parents died but they could continue to enjoy the property while they lived.

His Lordship expressed the hope that the parties can agree on the calculation of the amount under the first option, thereby avoiding professional costs, but if that is not possible the matter can be remitted to the Chancery Division.

Thus, his Lordship allowed the parents’ appeal to this extent (para 106).

It seems to me that this is a brilliant solution to a particularly difficult fact situation and fashions a remedy that is appropriate in the circumstances.

5.2 Lord Leggatt

Although this judgment is longer, my discussion of it will be significantly shorter than for Lord Brigg’s judgment since Lord Leggatt’s is a minority judgment and covers much the same ground.

Lord Leggatt also begins with a consideration of the nature of the ‘equity’, and after describing the facts, he discusses the development of the proprietary estoppel remedy. He also provides an exhaustive examination of the case law, including the issues raised especially during the last quarter century.

His Lordship then engages in a lengthy search for principles that should govern the court in determining whether the facts raise proprietary estoppel and how to fashion a remedy. These include such things as detrimental reliance, reliance on a non-binding promise, avoidance of detriment, ‘minimum equity’, difficulty in quantifying reliance loss, monetary compensation, proportionality, and other factors. In the process, he discusses many of the cases that have addressed these matters. He summarizes the principles as follows (para 255):

… the core principle underpinning the grant of relief is that equity will not allow A [the promisor] to go back on the promise made without ensuring that B [the promisee] does not suffer detriment as a result of B’s reliance on it. The aim of the remedy is thus to prevent detriment to B in the circumstances which have arisen.

Thus, Lord Leggatt seems to take a slightly different view of the fundamental basis of proprietary estoppel than Lord Briggs.

His Lordship notes that there are two methods of achieving this aim. The first will compel the promisor to perform the promise, or to award the promisee a sum of money that will place him in as good a position as if the promise had been performed. The second awards the promisee a sum of money that compensates the promisee’s reliance loss. However, there are also two kinds of cases. The first is one in which the date to perform the promise has occurred. The second kind is one in which the promise is not yet due to be performed, but the promisor refuses to perform it. The two kinds of cases are likely to result in different remedies.

Lord Leggatt noted that the trial judge failed to give adequate reasons for the remedy he awarded. Nor did he consider whether the remedy was proportionate to the detriment Andrew suffered. And further, he made only a minor. allowance for the acceleration in the receipt of the property. More important, the trial judge failed to analyse the detriment.

Accordingly, his Lordship re-exercised the judge’s discretion. Both parties had asked the Supreme Court to fix the amount of the award if the Court should decide that compensation should be assessed on a reliance basis, as this would avoid another trip to the High Court and the costs associated with it. His Lordship therefore concluded his reasons by stating that he would allow the appeal and require David and Josephine to pay Andrew £610,000 as equitable compensation. He added an Appendix to his reasons in which he explains how he decided on that figure.

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[1] [2022] UKSC 27.

[2] 2017 SCC 61, [2017] 2 SCR 754.

[3]I have derived the facts at trial and at the Court of Appeal, recorded below, principally from the judgment of Lord Leggat at paragraphs 126-135. 

[4] [2019] EWHC 869 (Ch).

[5] [2020] EWCA Civ 387.

[6] In paras 12 and 61.

[7] [2008] UKHL 55 para 14.

[8] [1982] QB 133 at 144, emphasis supplied by Lord Briggs as para 31.

[9] [1976] Ch 179 (CA).

[10] Ibid., pp 198-99, emphasis supplied.

[11] [2002] EWCA Civ 159, para 44.

[12] Ibid., para 56.

[13] [2010] 1 All ER 988 para 65, a case on appeal from St Lucia. In passing, I note that in Cowper-Smith v Morgan, footnote 2, supra, para 47, the Supreme Court of Canada also endorsed the proportionality principle, saying:

Since the equity aims to address the unfair or unjust detriment the claimant would suffer if the owner were permitted to resile from her inducement, encouragement, or acquiescence, ‘there must be a proportionality between the remedy and the detriment which is its purpose to avoid’.

Lord Briggs does not refer to Cowper-Smith v Morgan, but Lord Leggatt quotes this passage in his judgment as para 230.

[14]For a convenient summary of the two choices, which I have made grateful use of, see the excellent blog by Alison Parry for Today’s Wills & Probate, https://todayswillsandprobate.co.uk/guest-v-guest-one-day-my-son-all-this-will-be-yours-or-will-it/.

By Oliver O'Brien

Not enough Canadians have a will in place. According to the most recent Canadian Financial Capability Survey (2019), only 55% of Canadians have a will. For people under 35, that number drops to only 22%, whereas more than half of Canadians 65 and over have updated their wills in the past five years.

Last month saw the annual ‘Make a Will Month’, a public awareness campaign championed across Ontario by the Ontario Bar Association (OBA). The OBA hosts multiple legal information sessions at libraries and community hubs across Ontario presented by member volunteers with expertise in wills and estates law. These sessions are intended to assist the public in understanding the importance and benefits of having a will and having it prepared by a lawyer.

The OBA also help members of the public access the requisite legal expertise. The OBA publishes a “Find-a-Lawyer Database” on its website, where members of the public can search and discover wills and estates lawyers in their communities.

The Canadian government also offer guidance on their website. Information can be found at:

https://www.canada.ca/en/financial-consumer-agency/services/estate-planning/will-estate-planning.html

During this years Make a Will Month, Kim Whaley, alongside Ian Hull and Jordan Atin from Hull and Hull LLP, presented a webinar on Wills and Estates planning with Canadian Lawyer Magazine. The webinar polled its participants, asking them “what is the main reason many Canadians don’t have a will in place?”. Of the 190 responded, nearly two thirds (62%) believed that people did not know where to start or it was too complicated. Cost was the answer for 27% and time constraints for 11%. The presentation can be found here.

A lack of understanding and familiarity surrounding wills is an important reason why so many Canadians do not have wills. Other reasons include the cost involved and the lack of considerable assets, usually at younger ages. Many people also procrastinate in drafting their wills as think that they have many years ahead of them before they need to consider the issue. Sometimes the realization that a will is a necessity comes too late and only after an unfortunate or unforeseen circumstance, such as when an unexpected death or disability occurs. To avoid the added stress on families during an already emotional time, it is wise to meet with an estate planning lawyer to help draw up a basic estate plan, which includes the drafting of a proper will, before these circumstances occur.

From a litigation perspective, not having a will or not having a proper will in place can be problematic. A lack of a will can create bitter family disputes, as well as legal battles between siblings, all of which can cost thousands of dollars, if not more. Scenarios like this can be avoided by drafting a proper will.

Subject to the provisions of the Succession Law Reform Act^[1] (SLRA) concerning dependant support claims and the Family Law Act^[2] (FLA) concerning the surviving spouses right to equalization of the net family property, the benefit of having a will is that it allows an individual to:

• decide who will administer the estate and have the final say in dealing with the testator’s remains;
• decide who will benefit from the estate and keep the assets out of the hands of people the testator does not want to benefit (like an estranged relative);
• put in place proper estate planning structures (like a trust) to ensure a disabled spouse or child receives an appropriate level of care and has sufficient assets to maintain this care after the testator’s death;
• identify who should care for minor children, if any;
• plan and save the estate money on taxes; and
• give gifts and charitable donations, which can help offset the estate tax.

If an individual dies intestate or partially intestate, one’s property is subject to distribution per the provisions of the SLRA. The terms for distribution in intestacy or partial intestacy depend on whether the deceased had a spouse (not including a common-law spouse) or a spouse and children. If the deceased did not have a spouse, children, surviving parents, siblings, nieces or nephews, then the estate will be divided among their next of kin. Only if a deceased has no surviving next of kin will their estate escheat to the Crown.

The terms for an intestacy in the SLRA must be read and considered together with those provisions in the act for dependant’s support and the applicable provisions under the FLA to form a comprehensive legislative scheme.

If your clients don’t yet have an estate plan in place, it is important for them to learn about the value of making an estate plan. It’s also the time for your clients to review any estate plans which they may have already made. It is important to inform your clients that an estate plan should be reviewed on a regular basis to ensure that it matches their intentions and personal and familial circumstances.

It is also important to remind clients of the value of making an estate plan with a wills and estates lawyer. The investment in a professionally prepared estate plan is arguably the most valuable investment that a person can make, since it is designed to protect all other investments through the ultimate transfer of wealth upon death.

Thanks to the OBA, there are plenty of free legal resources than members of the public can access and can help them in the process of making a will.

MAKE A WILL MONTH HIGHLIGHTS NEED FOR PROPERLY DRAFTED WILLS

OBA MEMBERS LEADING FREE PUBLIC INFORMATION SESSIONS

November is Make a Will Month, and the Ontario Bar Association (OBA) is once again spearheading a campaign to educate the public about the need for a will and how lawyers can help people draft one properly. Throughout the month, volunteers from the OBA will be leading free information sessions for the public in communities across Ontario.

“Make A Will Month is a perfect example of the great work being done by our members right across the province,” says OBA President Karen Perron. “It’s a service that not only shows the involvement so many of our volunteer lawyers have in their communities, but also showcases the expertise of the OBA and its members, and how valuable this knowledge is for the public.”

Drafting mistakes in wills can lead to ambiguities, problems and costly litigation, even in families where everyone gets along. Digital assets, retirement savings, marital status, and online accounts are just a few things that must be considered. Documents should also be reviewed on a regular basis to ensure wills are up to date.

“Wills have changed over the years, but the importance of having one hasn’t,” says Darren Lund, chair of the OBA’s Trusts and Estates Law Section. “These days, there are more and more factors that people must think about when making a will or updating it. Since wills help provide for loved ones, they need to be drafted in a way that truly reflects a person’s wishes. Lawyers can give people the peace of mind that comes with knowing it has been done right.”

QUICK FACTS

• According to the most recent Canadian Financial Capability Survey (2019), only 55% of Canadians have a will. For people under 35, that number drops to only 22%
• More than half of Canadians 65 and over have updated their wills in the past five years

Reasons given as to why no will:

• Where to start: 49%
• Cost: 27%
• Too complicated: 13%
• Time constraints: 11%

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[1] Succession Law Reform Act, R.S.O. 1990

[2] Family Law Act, R.S.O. 1990

By Brett Book

Some recent news to share which may be noteworthy for those with loved ones who are currently in hospitals awaiting a bed in a long-term care home.

On August 31, 2022, the Government of Ontario passed Bill 7, the More Beds, Better Care Act, 2022. The Bill has been enacted as Chapter 16 of the Statutes of Ontario, 2022.

The Bill aims to simplify the process in moving patients designated by an attending physician or clinician as requiring an alternative level of care (“ALC”) from hospital care into long-term care homes. The Bill amends the Fixing Long-Term Care Act, 2021, adding a new provision which authorizes certain actions to be carried out without the consent of ALC patients. The Bill also amends the Health Care Consent Act to facilitate the transition of patients who require an alternative level of care. The Bill adds a new section to the Fixing Long-Term Care Act (60.1) and applies to any person who occupies a bed in a hospital under the Public Hospitals Act and has been designated by an attending clinician in the hospital as requiring an alternate level of care because, in the clinician’s opinion, the person does not require the intensity of resources or services provided in the hospital care setting.

A placement co-ordinator may now do the following, with or without a request from an attending clinician:

i.Determine the ALC patient’s eligibility for admission to a long-term care home;

ii.Select a long-term care home or homes for the ALC patient in accordance with the geographic restrictions that are prescribed by the regulations;

iii.Provide to the licensee of a long-term care home the assessments and information set out in the regulations, which may include personal health information;

iv.Authorize the ALC’s patient’s admission to a home; and

v.Transfer responsibility for the placement of the ALC patient to another placement co-ordinator who, for greater certainty, may carry out the actions listed in this paragraph with respect to the ALC patient.

On September 21, 2022, Ontario Regulation 484/22 came into force. This Regulation amended the general regulation under the Long-Term Care Act (Ontario Regulation 246/22). Pursuant to the new regulations, when determining an ALC patient’s eligibility for admission to a long-term care home, placement co-ordinators must satisfy themselves of the following:

i.They must meet with the patient and provide them with pertinent information about the long-term care home placement process and the implications of refusing to provide their consent to a particular placement;

ii.They must provide the patient with payment information about the long-term care home accommodation in addition to how they can apply for a fee reduction; and

iii.They must consider the patient’s physical and mental heath, requirements for medical treatment and health care, functional capacity, requirements for personal care, and behaviour. In doing so, a co-ordinator can request that a physician, registered nurse or nurse practitioner at the hospital conduct an assessment of the patient. If the patient or their substitute decision-maker does not consent to the assessment, the person conducting it is then required to base their assessment only on a review of the patient’s existing hospital records. The co-ordinator is also permitted to consult with various care provides to the ALC patient and collect certain personal health information about said patient.

If a placement co-ordinator determines a patient is eligible for admission to a long-term care home, the co-ordinator must also discuss waiting lists and approximate admission times, vacancies, and where to find long-term care home information with the patient or their substitute decision-maker.

If the patient or their substitute decision-maker refuse to submit an application, the placement co-ordinator is authorized to make a selection. In doing so, they must consider:

i. The patient’s condition and circumstances;

ii. The class of accommodation requested by the patient (if any); and

iii. The proximity of the home: it must be within 70 kilometers from the patient’s preferred location or 150 kilometers if the patient’s preferred location is in northern Ontario (unless there are no homes or vacancies in that area).

Where it concerns the proposed fees for persons who refuse a valid offer of admission and chose to remain in hospital, the Hospital Management Regulation under the Public Hospitals Act has been amended in support of Bill 7. This amendment came into force on November 20, 2022, and provides that if a discharged patient remains in the hospital for more than 24 hours after the date set out in the discharge order, the hospital shall charge the patient a fee of $400 for every day that the patient remains in hospital following the expiry of that 24-hour period.^[1]

According to the Ontario Hospital Association (“OHA”), there were 5,930 ALC patients in Ontario as at August 17, of which 40 per cent were waiting for a space in a long-term care home.^[2]

This Bill is one of the first steps in the Ontario government’s ‘Plan to Stay Open: Health System Stability and Recovery’ which was released by the government in March of 2022. According to the Ontario government, “We are on track to build 30,000 new long-term care beds in the province by 2028, with 31,705 new and 28,648 upgraded beds in development. This is the largest long-term care development program in a generation and these beds have already started to come on-line and will continue to do so over the next decade.”^[3] The plan includes five areas of focus:

1.  Preserving Hospital Capacity;

2.  Providing the Right Care in the Right Place;

3.  Further Reducing Surgical Waitlists;

4.  Easing Pressure on Emergency Departments; and

5.  Further Expanding Ontario’s Health Workforce.

The More Beds, Better Care Act, 2022 has been met with some opposition.

The Ontario Health Coalition’s executive director, Natalie Mehra, provided that “this is a fundamental question of justice. Elderly patients are not taking undue resources any more than other patients. It is the cruelty of ageism laid bare and the Ontario Human Rights Commission must finally take action.”^[4] At the same time, Anthony Dale, president and CEO of the OHA has previously told CBC Toronto that he is in support of the Act, noting that “Ontario’s hospitals are rapidly becoming the health-care provider of last resort for thousands of people who actually need access to home care, long-term care and other services. This is not appropriate for these patients.”^[5]

On November 21, 2022, the Canadian Press reported that the Ontario Health Coalition had officially launched a constitutional challenge against Bill 7. According to the Canadian Press, the Health Coalition, along with the Advocacy Centre for the Elderly (“ACE”), will be co-applicants for the Charter Challenge, which asks the Ontario Superior Court of Justice to strike down the law as a violation of the Charter of Rights and Freedoms. According to Steven Shrybman of Goldblatt Partners LLP, “Bill 7 represents an unprecedented and egregious deprivation of the Charter rights of many elderly and vulnerable hospital patients in respect of both their right to life, liberty, and security of the person and to equality,”^[6]

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[1] R.R.O. 1990, Reg. 965: HOSPITAL MANAGEMENT.

[2] Canadian Press, “Ontario government passes controversial long-term care bill without public input” August 31, 2022, accessed online: https://www.cbc.ca/news/canada/toronto/bill-7-passes-ontario-long-term-care-1.6568125

[3] Government of Ontario, “Plan to Stay Open: Health System Stability and Recovery” August 18, 2022, accessed online: http://www.ontario.ca/page/plan-stay-open-health-system-stability-and-recovery

[4] Ibid.

[5] Ibid.

[6] Meredith Bond and The Canadian Press, “Ontario health care advocates launch constitutional challenge against controversial Bill 7” November 21, 2022, accessed online: https://toronto.citynews.ca/2022/11/21/bill-7-constitutional-challenge-ontario/

By Brett Book

On December 13, 2022, Oliver O’Brien and Brett Book attended a two-hour webinar hosted by the Ontario Bar Association (“OBA”) on ‘Arguing a Motion in Estate Litigation.’

The webinar was moderated by Matthew Urback of Shelby Righton LLP and featured a panel of Estate litigators.

The focus on the webinar surrounded preparing various motions in a fact pattern which dealt with an estate, residue, transfer of real property, and suspicion of cognitive decline.

The panelists began by discussing how to go about drafting an effective Notice of Motion. The discussion surrounded important considerations such as time and cost, whether the motion can be done on consent, and whether it will be opposed.

The panelists reminded viewers of the importance of understanding what legal tests need to be met in the type of motion you’re drafting. The example used was the appointment of an Estate Trustee During Litigation (“ETDL”). The take-away was to have a framework in mind when approaching drafting.

The webinar provided some helpful drafting tips such as formatting to make the motion easy to follow, narrowing the issues you’re going to address, and dealing with each aspect of relief being sought by categorizing the relief you are seeking.

The panelists also looked at affidavit building and provided a thorough overview on how you gather evidence, rules, credibility of evidence, organization, presentation and delivery.

Before concluding, the panelists went over some tips for presenting oral arguments. One of the most pertinent points was to avoid simply repeating what your factum is saying; make your oral arguments stand-out by preparing a compendium and highlight specific documents you’re referring to.



Overall, the webinar was practical, informative, easy to follow and provided viewers with a general ‘start to finish’ overview of arguing a motion in estate litigation. The focus on what to put in an affidavit and what not to put in was particularly helpful as was the ability to have multiple perspectives on what works and what doesn’t in practice.

By Brett Book

On December 5, the Ontario Court of Appeal (“ONCA”) released its decision in the case of Jonas v. Jonas.^[1] The appeal of the March 18, 2022 judgment of Justice Cory A. Gilmore of the Superior Court of Justice dealt with the interpretation of the last will and testament of a senior lawyer with experience in wills and estates who died on March 26, 2018 (the “date of death”). More importantly, the appeal centred around the proper interpretation of the clause in the Will which dealt with the residue of the estate. In dismissing the appeal, the ONCA panel of van Rensburg, Sossin and Copeland JJ.A. revisited the application of the “armchair rule” in interpreting the Will.

In May 2021, Albert Oosterhoff of WEL Partners wrote extensively on the origins and modern application of the “armchair rule”. His blog entitled ‘When Can a Judge Sit in the Testator’s Armchair?” is very informative and can be found here.

In Jonas, the deceased was survived by a common law spouse and four children, including the appellant. At the date of death, the deceased also had four grandchildren. The deceased’s common law spouse and two of his daughters were appointed Estate Trustees. The Office of the Children’s Lawyer (“OCL”) was also a party to the litigation, representing the grandchildren and unascertained beneficiaries of the estate. The appellant appealed the judgment of the application judge interpreting the last will and testament of the deceased, dated July 31, 2015 (the “Will”).

The relevant clause in the deceased’s Will reads as follows:

I DIRECT my trustees to divide the rest, residue and remainder of my estate as follows: forty per cent (40%) to be divided equally among my children who shall survive me and sixty per cent (60%) to be divided equally between my grandchildren and my great grandchildren (if any) who shall survive me or be born within ten years of my decease, in equal shares per stirpes. Provided that the share to my grandchildren shall be kept and invested by my trustee and used for the support of such grandchildren and for their education and then paid to each of them upon such grandchild attaining the age of 40.

The Court held that the distribution of the 40 percent of the residue was satisfied when the children received a partial distribution from the estate. All children except the appellant agreed that the distribution constituted their 40 percent share. However, at issue was the remaining 60 percent of the residue.

In particular, there was a dispute over the meaning of the term “in equal shares per stirpes” in the residue clause. In response, the Estate Trustees brought an application seeking the court’s opinion, advice, and direction regarding the distribution.^[2]

The appellant held the view that all of the residue (including the 60 percent) should be equally divided amongst the children. According to the appellant, “if a child has no children on the vesting date (10 years after the date of death), the child will receive one-quarter of the total residue, being 10 percent of the 40 percent allocation and 15 percent of the 60 percent allocation. Any grandchildren alive on the vesting date will receive an equal share of their parent’s 15 percent share of the 60 percent.”^[3]

The application judge did not share this interpretation and instead preferred the position taken by the OCL that the entire 60 percent shall be divided equally among all grandchildren alive on the date of death plus any grandchildren or great grandchildren born by the vesting date. The application judge also held that the rule in Saunders v. Vautier^[4] applied and that the funds will be available to each beneficiary as of the vesting date and upon turning 18.

Standard of Review

The decision looked at the standard of review, holding that pursuant to Housen v. Nikolaisen,^[5] the standard of review on a pure question of law is correctness. The Court also looked to Trezzi v. Trezzi,^[6] holding that on questions of fact or mixed fact and law such as the interpretation of the Will, the standard of review is that of palpable and overriding error (unless there is an extricable point of law which is then subject to a correctness standard).

The application of the “armchair rule”

The Court looked to the “armchair rule” which was set out in Dice v. Dice Estate and reiterated that in applying this rule:

The court must determine the testator’s intention as ascertained from the language that was used and the will as a whole. Where the intention cannot be ascertained from the plain meaning of the language used, the court may consider the surrounding circumstances known to the testator when making the will. The court sits in place of the testator and assumes the same knowledge they had of the extent of their assets, the size and makeup of their family, and their relationship to the family members, based on the evidence presented.^[7]

In Jonas, the Court determined that the application judge considered six different interpretations of the residue clause. Only two were argued before her, that being the appellant’s and the OCL’s. She preferred the OCL interpretation of per stirpes as a “gift over” and based this on the testator’s intention to create two classes of beneficiaries to ensure equal distribution within those classes. The application judge held that “accepting an interpretation that gives any Grandchild less or any Child more would be inconsistent with the Testator’s intentions…”^[8]

The appellant attempted to introduce a new interpretation through her factum, proposing that the children hold the 60 percent in residue in trust for the benefit of any grandchildren or great-grandchildren during the vesting period, with the funds then reverting to the children only if they have no children or grandchildren after 10 years. The appellant relied on case law for her proposed interpretation of per stirpes, including Re Harrington^[9], however, she was unable to point to case law which involved a similar situation as the Will in the case at bar where two separate classes of beneficiaries from two different generations were created.^[10]

The Court did not accept the appellant’s case law as persuasive, holding that the application judge’s reliance on the analysis of the term in Dice Estate to be supportive of the understanding of per stirpes as a type of “gift-over” mechanism.

The application judge took the approach that where a testator fails to identify which generation forms the stirpes, the court must look at the language of the will for context. In this case, the application judge determined that per stirpes in the context of the Will in the case at bar reflected an intention to benefit the living grandchildren, and any other grandchildren or great grandchildren born within the vesting period, equally.

Disposition

The Court ruled that the application judge properly applied the armchair rule. There was an ambiguous clause at issue and a number of interpretations were proposed. In the end, the application judge chose the interpretation that most closely conformed to her assessment of the testator’s intention, reading the Will as a whole at the time it was made.

The Court declined to interfere with the application judge’s exercise of discretion in apportioning the costs as she did between the appellant and the estate. The respondent OCL was held to be entitled to its costs of the appeal in the amount of $17,771.78, payable by the appellant personally or out of her share of the Estate.

---

[1] 2022 ONCA 845 [Jonas].

[2] Jonas, supra note 1 at para. 8.

[3] Ibid, at para. 9.

[4] (1841), 41 E.R. 482 (Eng. Ch. Div.).

[5] 2002 SCC 33, [2002] 2 S.C.R. 235.

[6] 2019 ONCA 978, 150 O.R. (3d) 663, at para. 15.

[7] Ibid, at para. 13.

[8] Ibid, at para. 14.

[9] [1985] O.J. No. 1046 (H.C.) at para. 21, rev’d, (February 19, 1986), 239/85 (C.A.)

[10] Ibid, at paras. 18-19.

By Evan Pernica

In the world of estate planning, it is a common occurrence for people to change and update their wills. Unfortunately, most people are unaware of the strict formal requirements to create valid wills in Ontario, and can take steps that have unintended consequences.

A frequent example of this occurs when people write handwrite comments, notes, or changes on their already executed wills.

While some people might make these hand-written comments for the purpose of reminding themselves of future changes that they wish to make to the document, and some people may believe that their handwritten comments will actually change the terms of their previous will, this subjection intention becomes lost if the will is discovered after the person passes away.

Instead, the current approach by courts in Ontario is to give valid testamentary effects to handwritten additions to wills if they meet the criteria under the Succession Law Reform Act (“SLRA”) of either a holograph will or an alteration to the document they are written on.^[1]

Creating a Holograph Codicil

By virtue of sections 6 and 7 of the SLRA, individuals are able to make a valid will solely in their own handwriting as long as they sign the document and, with some exceptions, their signature is placed below the written dispositions:

Holograph Wills:

6.     A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence or signature of a witness.^[2]

Position of Signature:

7.     (1) In so far as the position of the signature is concerned, a will, whether holograph of not, is valid if the signature of the testator made either by him or her or the person signing for him or her is placed at, after, following, under or beside or opposite to the end of the will so that it is apparent on the face of the will that the testator intended to give effect by the signature to the writing signed as his or her will.^[3]

Regarding when a person’s handwritten comments will be considered sufficient to “make a will” under s.6 of the SLRA, in King v. King-Fleming (Litigation Guardian of) (“King”), the Ontario Superior Court focused on two elements that must be met by the handwritten terms:

1.  the written additions must, on their own, be sufficient to form an entire holograph will; and  

2.  the formal requirements of execution found under section 7 of the SLRA must be satisfied by the hand-written additions.^[4]

As for when handwritten additions can meet the requirement of “standing on their own” to form a will, further clarification can be found in decisions such as Bennett et al. v. Gray / Bennett et al. v. Toronto General Trusts Corporation, where the Supreme Court of Canada set out that:

A holographic paper is not testamentary unless it contains a deliberate or fixed and final expression of intention as to the disposal of property upon death, and that it is incumbent upon the party setting up the paper as testamentary to show, by the contents of the paper itself or by extrinsic evidence, that the paper is of that character and nature.^[5]

Turning now to the further question of when handwritten statements can be found to have formed a “deliberate or fixed and final expression of intention as to the disposal of property upon death”, the court explored this concept in Rezaee (Re) and found that a statement written, signed, and dated by a person on a cocktail napkin, bequeathing all of his wealth and property to a named close friend, was sufficient to constitute a deliberate or fixed and final expression of intention as to the disposal of property upon death and created a valid holograph will.^[6]

As such, it appears that as long as hand written additions can on their own form a coherent and legible sentence that affects the disposition of property, and the formal requirements of execution found in sections 6 and 7 of the SLRA are met, then the handwritten additions made on a will can form a valid codicil.

Altering a Previous Will

Looking at when words will alter the will they are written on, rather than forming an independent codicil, the language of section 18 of the SLRA provides that changes made to a will shall be given testamentary effect if the testator (the person making the will) and any required witnesses sign the document in the required location(s). Unfortunately, if these formal requirements for witnessing and signing the document are not met when the changes are made, the written in words will instead invalidate the terms they are intending to effect:

Alterations in will

18 (1) Subject to subsection (2), unless an alteration that is made in a will after the will has been made is made in accordance with the provisions of this Part governing making of the will, the alteration has no effect except to invalidate words or the effect of the will that it renders no longer apparent.

How validly made

(2) An alteration that is made in a will after the will has been made is validly made when the signature of the testator and subscription of witnesses to the signature of the testator to the alteration, or, in the case of a will that was made under section 5 or 6, the signature of the testator, are or is made,

(a) in the margin or in some other part of the will opposite or near to the alteration; or

(b) at the end of or opposite to a memorandum referring to the alteration and written in some part of the will.^[7]

Although the language of this legislation can appear technical and difficult to understand, the essential elements are that written alterations must simply be accompanied by the same formal requirements for execution as the will they are written on.

This view was explored and set out by the Ontario Superior Court in CIBC Trust Corporation v. Horn, providing:

The effect of section 18 generally is to render invalid alterations made after the will was executed, unless such alterations were made in accordance with the formal requirements which govern the validity of the particular will. Generally speaking, an alteration made to a formal will once it has been executed is valid only if the alteration is signed by the testator and attested and signed by two witnesses.^[8]

Codicil or Alteration

In the face of these two paths towards validating handwritten comments on wills, testators who write on their wills should be careful to make sure that either:

• The handwritten words can stand on their own to express a testamentary disposition and meet the formal requirements to form a codicil under sections 6 and 7 of the SLRA; or
• The handwritten words change the effect(s) of the will they are written on, and meet the same formal requirements for execution as the will they are written on, as set out by section 18 of the SLRA.

---

[1] Succession Law Reform Act, R.S.O. 1990, c. S.26.

[2] Ibid at, s. 6.

[3] Ibid at s.7.

[4] King v. King-Fleming (Litigation Guardian of) (1995), 10 E.T.R. (2d) (Ont. Gen. Div.)

[5] Bennett et al. v. Gray / Bennett et al. v. Toronto General Trusts Corporation, 1958 CanLII 49 (SCC),         [1958] SCR 392.

[6] Rezaee (Re), 2020 ONSC 7584.

[7] Supra, note 1, at s.18

[8] CIBC Trust Corporation v. Horn, 2008 CanLII 39783 (ON SC) [CIBC Trust]

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