Whaley Estate Litigation

Whaley Litigation Newsletter Vol. 2 No. 7 October 2012




We continue to invite feedback, comments, inquiries and even contributions you wish to share to:


Whaley Estate Litigation provides litigation, mediation and dispute resolution services to you or your clients in the following practice areas:

  • Will, Estate, Trust Challenges/Interpretations
  • Dependant Support Claims
  • Passing of Estate, Attorney, Guardian and Fiduciary Accounts
  • Capacity Proceedings
  • Guardianships
  • Power of Attorney Disputes
  • Consent and Capacity Board Hearings
  • End of Life Decision Making
  • Treatment Decision Disputes
  • Elder Law
  • Solicitor's Negligence
  • Opinions
  • Agency Services
  • Counsel to Estate Trustee(s) and Estate Trustee(s) During Litigation and other Fiduciaries
  • Section 3 Counsel under the Substitute Decisions Act
Please enjoy,


Kimberly A. Whaley
Whaley Estate Litigation



1. Kim and Avi Dahary were published in an article entitled DeLorenzo Sends Cautionary Message to Estate Trustees in the September 10, 2012 Vol. 23, No. 28 edition of the Law Times.


Click to download a PDF scan of the article


2. Kim and Ben Law were published in an article entitled Predatory Marriage Challengers Have Limited Options, in the September 21, 2012 Vol. 32, No. 19  edition of the Lawyers Weekly.


Click to download a PDF scan of the article


3. Kim and Erin were published in an article entitled Remarriages and Common Law Arrangements: Estate Claims by 'Spouses' in the July Vol. 27 No. 7 edition of  Money and Family Law.


Click to download a PDF scan of the article


4. Erin Cowling was interviewed by Yahoo Financial on Digital Assets


Click to read on Yahoo: Digital assets becoming key in estate planning



1. Howard Brenhouse v. Elyse Debra Brenhouse et al. (unreported decision)


In the unreported endorsement of the Honourable Madam Justice Carol Brown, dated April 2, 2012, the court was asked to order a capacity assessment pursuant to section 79 of the Substitute Decisions Act, 1992, S.O. 1992, c.30 (the "SDA").


According to the endorsement, the Applicant had been appointed by the Westchester County Surrogate Court in New York State, as the guardian for the Respondent, in respect of monies and property management arising out of an inheritance from the Respondent's father's estate.


It is important to consider the New York State legal and legislative provisions for a moment which provide that the court may appoint a guardian for a person if:


(a)  The court determines the appointment is necessary to manage the property and financial affairs of that person; and

(b) (i) the person agrees to the appointment or (ii) the person is "incapacitated".


Moreover, a determination of incapacity requires a finding, based on clear and convincing evidence that: 


(a) the person is likely to suffer harm because she is unable to provide for property management, and 

(b) she cannot adequately understand and appreciate the nature and consequences of such inability.


The New York State Surrogate Court considerations for assessment and declarations of incapacity to manage financial affairs, are quite different therefore from those of Ontario, as governed by the SDA.


The Applicant requested an order in respect of the Respondent concerning Ontario assets held by the estate of her late father.


There was conflicting evidence before the court with respect to the capacity of the Respondent.


The Court provided a legal analysis of section 79 of the SDA with a review of the presumption of capacity, referring to the cases of Abrams v Abrams, 2008 CanLII 67884 (O.N.S.C.) at paragraph 48; Flynn et al v. Flynn December 18, 2007, unreported Ont. SCJ Court File No.: 03-66/07, and a consideration of the privacy and freedom from coercive interference with one's physical and mental autonomy in the case of Kitcher v Kitcher, 2009 CarswellOnt 81, at paragraph 10.


Notwithstanding the Westchester County Surrogate Court found that the Respondent was an incapacitated person requiring a guardian to represent her interest in her father's estate, the evidence was not sufficient for C. Brown J. who, in part, relied on the Respondent's evidence which included a letter from her family doctor and from her financial planner.


C. Brown J. referred to some of the evidence produced by the Applicant as causing some concern, but not sufficient to raise reasonable grounds to believe that the Respondent was lacking in capacity.


C. Brown J. was very cautious with respect to her decision and ordered that the assets held in the Respondent's name be paid into the Ontario Superior Court in Toronto, to be held on behalf of the Respondent pending further applications.


This decision is important in its analysis in balancing the competing factors to consider in making a guardianship application and in ordering a capacity assessment.  It is important for the court to have strong prima facie evidence that a section 79 assessment is warranted,  weighed as against the inherent jurisdiction of the court and the provisions of the SDA to protect the vulnerable.  In this case, the court particularly noted the differences as between the New York State Surrogate Court and those of the Ontario Court in applying the factors to consider when determining incapacity, as well as the evidence available.


It is unknown what the outcome of the application was. But what is clear, is that the Ontario Superior Court of Justice will not lightly grant a section 79 assessment.  The court emphasized the onus placed upon an Applicant to raise reasonable grounds to suggest an individual is lacking in capacity and is vulnerable, such that an intrusive measure be taken for the purposes of protection.


2. Zheng v Zheng


In Zheng v Zheng the Applicant sought leave to appeal an order granting the Respondent's application under section 79 of the SDA, in this case compelling the Applicant to undergo a further psychiatric assessment.


This is another case involving relief sought under section 79 of the SDA.

This application sought relief under the SDA for a declaration of incapacity to manage the person and property of an individual, as well as terminating a guardianship appointment.


In support of the termination of the guardianship of her person, the Applicant provided thorough assessment reports of various types from a qualified assessor under the SDA. The assessments came to the conclusion that the factors applied in the original guardianship application wherein the Applicant was found incapable no longer applied and that the Applicant was capable of the decisions assessed. The application was adjourned to permit the assessments to be reviewed by a qualified neuropsychologist who had been involved in the original 2007 guardianship orders. The neuropsychologist found that the Applicant was capable of both personal care and property management.


However on the return of the application, the Respondent brought a motion pursuant to section 79(1) of the SDA, compelling the Applicant to undergo yet a further assessment by an assessor selected by the Respondent.


The original motion's judge granted the order requiring such assessment without providing reasons for his decision. The order has subsequently been stayed pending the outcome of a motion for appeal.


The Honourable Justice H.J. Wilton-Siegel analyzed the purposes of the SDA, in particular section 79, the nature and circumstances of the proceedings, the medical evidence and non-medical evidence as well as the wishes of the Applicant, in concluding that all of the considerations reviewed weigh against an order for further assessment.   Wilton-Siegel J., noted there was no evidence before the court that cast doubt on the objectivity and independence of the assessors whose reports had already been provided by the Applicant. The court found that the Applicant demonstrated good reason to doubt the correctness of the motion judge's decision and that the appeal satisfied the requirement that it invoke a matter of such importance that leave to appeal should be granted. The court opined that the appeal engaged the constitutionally protected dignity of the individual - in this case, of a person without capacity seeking to terminate guardianship orders. There are no other reported decisions dealing with an assessment under section 79(1) in this context.[1]


Most notably at paragraph 41, Wilton-Siegel J., opines:


"without reasons for the order but in the face of the extensive evidence as to the applicant's capacity, I think there is a good arguable case that the order does not appropriately balance the autonomy of the individual and the duty of the state to protect the vulnerable in the particular circumstances of this case. The effect of the order is potentially to discriminate against the person under a disability, relative to a person not under disability, for the purposes of a proceeding under section 79(1) of the Act.  It is important that the principle of the court's role in the present circumstances be addressed."


The court, in its very thorough analysis, even explored possible other grounds upon which the court may consider the possibilities of a further assessment as follows:


"[34] ...The first ground is that the applicant failed to satisfy an onus placed on her to demonstrate capacity. This would involve a reverse onus which is excluded by the language of section 79(1).


[35] A second ground is the existence of the current guardianship orders. As mentioned above, this would also effectively reverse the onus on the motion or effectively impose a higher threshold than a reasonableness standard. Such an approach disregards the autonomy of the individual.


[36] A third ground is that further information is simply better information and cannot hurt. This was specifically addressed in Urbisci v. Urbisci,2010 ONSC 6130 (CanLII), 2010 ONSC 6130, at para. 27:


In his decision in Abrams v. Abrams (S.C.), Strathy J. identified the key interests at stake on an application under section 79(1) of the SDA:


...The appointment of an assessor to conduct what is essentially a psychiatric examination is a substantial intervention into the privacy and security of the individual. As Mr. Justice Pattillo said in Flynn v. Flynn (December 18, 2007), Doc. 03-66/07 (Ont. S.C.J.): "[a] capacity assessment is an intrusive and demeaning process."


As Strathy J. noted elsewhere, although the utility of a capacity assessment cannot be understated, "it is important to resist the temptation to order an assessment based on the argument 'it can't hurt.' It can hurt."


[37] In summary, an assessment is not available if the purpose is to provide certainty to the court, to ease the concerns of guardians or relatives, or to respond to allegations of incapacity."


These are interesting factors all of which support the end decision not to order a further assessment, whether a S. 79 SDA assessment or otherwise.


3. The Trustee Act, Section 23.1


Section 23.1 of the Trustee Act gives Trustees express authority to use estate assets in respect of the administration of the estate, subject to review by a court on a passing of accounts.


Filing of accounts

            23.  (1) A trustee desiring to pass the accounts of dealings with the trust estate may file the accounts in the office of the Superior Court of Justice, and the proceedings and practice upon the passing of such accounts shall be the same and have the like effect as the passing of executors' or administrators' accounts in the court.  R.S.O. 1990, c. T.23, s. 23 (1); 2000, c. 26, Sched. A, s. 15 (2)


Fixing compensation of trustee

           (2) Where the compensation payable to a trustee has not been fixed by the instrument creating the trust or otherwise, the judge upon the passing of the accounts of the trustee has power to fix the amount of compensation payable to the trustee and the trustee is thereupon entitled to retain out of any money held the amount so determined. R.S.O. 1990, c. T.23, s. 23 (2).


In the review above under the PART I WEL NEWS item 1, in the Law Times article entitled DeLorenzo: Sending Cautionary Message to Estate Trustees, the decisions therein reviewed seem to suggest that a trustee may not be authorized to pay from trust property, legal costs associated with the trusteeship. However as a reminder, section 23(1) of the Trustee Act, as referenced above supports the trustee and its authority to pay such expenses directly from the trust property subject to later disallowance by the court.


In the Ontario Court of Appeal case of Kerry (Canada) Inc., v. DCA Employees Pension Committee[2], the court stated succinctly that a fiduciary trustee is permitted to pay expenses properly incurred in carrying out the trust from the trust property, or alternatively, to seek indemnification from the trust for any such expenses.  Accordingly, whether the trust fund is used at first instance, or there is a reimbursement is irrelevant-the principal stands and is also supported by the case of Re Grimthorpe [1958] 1 Ch. 615; [1958] 1 All E.R. 76.


Accordingly, as long as a trustee forms the requisite bona fide opinion that the litigation costs are "properly incurred", than the trustee is entitled to treat the estate as a means to pay at first instance, subject to being ordered to pay it back by a subsequent court order, or review on a passing.


4. Estate Limitation Periods Revisited: 2 years prevails in most circumstances


The Limitations Act, 2002, S.O. 2002, c.24, Schedule B, Section 4, (the "Act"), establishes the basic limitation period of (two) 2 years, which runs from the date a "claim" is discovered. A "claim" is defined as a "claim to remedy an injury, loss or damage that occurred as a result of an act or omission." The Limitations Act applies to all claims except those listed in section 2 of the Act and the limitation period is preserved by other statutes set out in the schedule to section 19 of the Act: click to link.


The schedule to section 19 of the Act, (linked above) preserves the 2-year limitation period set out in section 38(3) of the Trustee Act.


The combination of the two acts, read together with that of section 38(1) and section 38(3) of the Trustee Act collectively provide a 2-year limitation period from the date of the deceased's death for an estate trustee of an estate to sue for all torts or injuries to the deceased person or to the property of the deceased.


Section 38(1) state as follows:


Actions by executors and administrators for torts


"38. (1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but, if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act.


Actions against executors and administrators for torts


(2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person's property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong.


Limitation of actions


(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.


The limitation period in section 38(3) of the Trustee Act begins to run from the date of death. Discoverability principles do not apply to overcome the statutory bar imposed by section 38(3) of the Trustee Act.[3]


Section 38 of the Trustee Act was enacted to provide a statutory remedy for the estate trustee to bring a claim within 2 years of the date of death for torts or injuries to the person and property of the deceased. At common law, there is no cause of action available to an estate for any tort or injury to the deceased or the deceased's property.


Notably, courts have held that a breach of contract is a personal injury which falls within the ambit of section 38(1) of the Trustee Act.[4] A breach of contract claim too is caught by the 2-year limitation period prescribed by sections 4 and 5 of the Limitations Act.


Section 5 of the Limitations Act codifies the common law discoverability principle. It is the plaintiff who bears the evidentiary burden to prove a claim is issued within the limitation period prescribed by the Limitations Act.[5] In Ferrara v Lorenzetti, Justice Lauwer found that the plaintiff's action was statute barred because the action crystalized when the plaintiff entered into a settlement which the court found was the requisite time that the damage was suffered.  The effort to set aside the settlement was an attempt to reverse the damage. In the end, the failure of that attempt did not revive the negligence claim.


Section 5(2) of the Limitations Act provides a "rebuttable presumption" that a claim is discovered on the day that the act/omission on which the claim is based takes place. The burden therefore is to establish that the claimant did not know or could not have known, with reasonable diligence before the expiry of the limitation period, that the injury/loss/damage was caused by or contributed to by an act or omission of another party.[6]


When the material facts on which the claim is based have been discovered, or ought to have been discovered, is the time at which the cause of action arises for the purposes of the Limitations Act.[7]


It is important to note that a plaintiff is not required to know all of the facts underlying a claim at the time of discovery, rather 'enough facts'; and as such, then the claim would be considered to have been discovered, and the limitation period beings to run.[8]


Notably, if a fraudulent conveyance is discovered on or after January 1, 2004, it is also subject to the 2-year limitation period in the Limitations Act, 2002, despite the law previously where there was no limitation period at all for such an action.[9]


Of particular note to estate matters as we learn from the case of Boyce v. Toronto Police Services Board, the Limitations Act, 2002, includes actions in equity. Actions in equity which were not subject to the limitation periods under the old regime now fall under the Limitations Act 2002.[10]  There are many equitable type claims raised in estate disputes, particularly by spouses.


In the Ontario Court of Appeal decision of Boyce v. Toronto Police Services Board, it was also determined that claims for breach of fiduciary duty are caught by the phrase "claims pursued in court". These claims do not fall within any of the exceptions under the Act. A 2-year limitation period therefore applies.


Of further notable relevance to estates matters, is the decision in Portuguese Canadian C.U. v. Pires.[11] The applicable limitation period for alleged fraud, breach of fiduciary duty and misrepresentation under the Limitations Act, 2002, is 2 years.[12]  In the decision in Syndicate Number 963 (Crowe) v. Acuret Underwriter[13] it was accepted that the 2 year limitation period under the Limitations Act 2002, applied to an action arising out of a failure to account for trust funds.  This is important when looking at estate accountings.


In the Estate of Blanca Esther Robinson (Re)[14] it was determined that rectification claims are subject to section 4 of the Limitations Act and a 2-year period applies therefore, whereas previously, they were not caught by the Limitations Act.


Finally, it should not be assumed that a limitation period only begins to run when related litigation is resolved. This has particular relevance to solicitor's negligence claims raised in the estates arena.[15]  Often damages are not crystallized until the estate litigation is resolved and the potential claims against a drafting solicitor, if any, therefore must be looked at within the 2-year period from the date of death.

5. Hanson Estate v Hanson


Joint Tenancies


The recent 2012 decision of the Ontario Court of Appeal in Hanson Estate appears to have lowered the threshold for finding that a joint tenancy has been severed through a "course of dealing". Common law suggests that a joint tenancy can be severed in one of the following ways:

  1. By unilaterally acting on one's own share, for example, by selling or encumbering it or severing the joint tenancy;
  2. Through mutual agreement between the co-owners to sever the joint tenancy; or
  3. Through any course of dealing sufficient to intimate that the interest of all were mutually treated as constituting a tenancy in common.

In this Ontario Court of Appeal decision, the court addressed what conduct constitutes a "course of dealing" sufficient to establish the severance of a joint tenancy.


Notably, the court opined that the inquiry must look to the totality of the evidence and the co-owner's course of conduct.


[1] Ying (Cindy) Zheng v. Long Zheng, 2012 ONSC 3045 (CanLII), para 40

[2] Kerry (Canada) Inc. v. DCA Employees Pension Committee, 2007 ONCA 416 (CanLII)

[3] Lafrance Estate v. Canada Attorney General 2003, CarswellOnt 994, at para 47

[4] LeCour Estate v. North American Life Assurance Co., 2000 CanLII 16849

[5] Ferrara v Lorenzetti, Wolfe Barristers and Solicitors, 2012 ONSC 151 (CanLII) - 2012-01-06

[6] Blinn v Burlington (City), 2010 ONSC 3446 (CanLII) - 2010-06-29

[7] Kenderry-Espirt v. Burgess, MacDonald, Martin and Younger, 2001 CanLII 28042 (ONSC)

[8] Lawless v. Anderson, 2011 ONCS 102 (CanLII)

[9] Toronto Standard Condominium No 1703  V 1 King St. West, 2010 ONSC, 2129 Div. Crt, dismissing appeal from 2009 CanLII 55330

[10] Boyce v. Toronto Police Services Board, 2012 ONCA 230 CanLII - 2012-04-10

[11] Portuguese Canadian C.U. v. Pires, 2012 ONCA 335, affirming 2011 ONSC 7448 (CanLII)

[12] Fracassi v. Cascio, 2011 ONSC 178

[13] Syndicate Number 963 (Crowe) v. Acuret Underwriter Inc., 2009 CanLII 51195 (ONSC)

[14] Estate of Blanca Esther Robinson (re) , 2010 ONSC 3484 (CanLII) - 2010-06-24

[15] Isailovic v. Voyvodic, 2010 ONSC 3484 (CanLII)

[16] Hanson v. Hanson Estate, 9 R.F.L. 7th 251, 2012 CarswellOnt, 2051 Ont. CA



LSUC Estate Litigation Practice Essentials 2012

October 30, 2012 - 9:00 am - 12:30 pm

Removal of Estate Trustees

Speaker: Kimberly Whaley, paper prepared by Kimberly Whaley and Erin Cowling
Info: http://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE12-0101401 


STEP (Society of Trust and Estate Practitioners) Program

November 13, 2012

Estate Planning Issues Related to Divorce and Blended Families 

Osgoode Hall Law School, The Donald Lamont Centre

Info: http://www.step.ca/programs.asp?b=Toronto


LUSC Estates & Trusts Summit

November 14, 2012

Estate Claims Arising out of Remarriages

Speaker: Kimberly Whaley  


Canadian Centre for Elder Law (CCEL) 2012 World Elder Law Study Group
Advocacy and Aging: From Storytelling to Systematic Change

November 16-17, 2012
Vancouver, B.C.  

"Telling the Story of Elder Abuse in the Courts"

Speakers: Kimberly Whaley and Ameena Sultan

Info: http://www.bcli.org/news/events/conferences


STEP (Society of Trust and Estate Practitioners) Program

January 9, 2013

Estate Trustee Liability
Osgoode Hall Law School, The Donald Lamont Centre 

Chair: Kimberly Whaley

Info: http://www.step.ca/programs.asp?b=Toronto 


OSGOODE Professional Development - Advising the Elderly Program

February 12, 2012

Remarriages and Common Law Arrangements: Estate Claims by Spouses

Osgoode Professional Development Centre

Speaker: Kimberly Whaley


STEP (Society of Trust and Estate Practitioners) Program

February 13, 2013

US Tax Issues with Life Insurance Policies 

Osgoode Hall Law School, The Donald Lamont Centre 

Info: http://www.step.ca/programs.asp?b=Toronto


CBA Spring 2013 Conference: Substitute Decision-Making and Elder Law (National Elder Law Section)

April 15-16, 2013

Chair: Kimberly Whaley


STEP (Society of Trust and Estate Practitioners) Program

April 16, 2013

RCA's, IPP's and Health and Wealth Trusts

Osgoode Hall Law School, The Donald Lamont Centre Info: http://www.step.ca/programs.asp?b=Toronto


LSUC Six-Minute Lawyer

April 24, 2013

Passing of Accounts: The recommended Best Practices for Passing of Accounts

Chair: Kimberly Whaley

Info: http://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE13-0041101 


LSUC Six-Minute Lawyer 

April 24, 2013

Elder Law

Chair: Kimberly Whaley

Info: http://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE13-0041101  


STEP (Society of Trust and Estate Practitioners) Program

May 8, 2013

Make Your Golden Years Golden...Planning For and Advising on Personal Care Powers of Attorney and Advance Directives

Osgoode Hall Law School, The Donald Lamont Centre 

Chair: Kimberly Whaley

Info: http://www.step.ca/programs.asp?b=Toronto 

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10 Alcorn Avenue, 

Suite 301
Toronto, ON, M4V 3A9
Tel: (416) 925-7400 
Fax: (416) 925-7464


Kimberly A. Whaley
C.S., TEP, LL.M.
(416) 355-3250

Mark Handelman
(416) 355-3254

Ameena Sultan
(416) 355-3258


Erin C. Cowling
(416) 355-3262

Benjamin D. Arkin
(416) 355-3264


Deborah Stade
(416) 355-3252


Bibi Minoo
(416) 355-3251

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Whaley Estate Litigation