Whaley Estate Litigation
 Whaley Estate Litigation Newsletter Vol.3 No. 3 June 2013
 

Greetings!   

   

Thank you for your continued feedback, comments, enquiries and contributions that you wish to share: 

 

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
  • Mediation
  • 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

WEL NEWS   

 

1. B'Nai Brith Canada, June 4, 2013

 

Kimberly Whaley and Debra Stephens presented their paper, "When Does Estate Planning Cross the Line and Become a Fraudulent Preference?",  on June 4, 2013, at Shaarei Shomayim Synagogue at a CLE program for Lawyers and Accountants on Fraud and Estate Litigation. 

 

Click to download their paper

 

The program was well attended. Co-Presenters included colleagues, Charles Wagner, Greg Sidlofsky, Jordan Atin, Rabbi Mordechai Torczyner, Brendan Donovan, Craig Vander Zee, Ian Hull, Archie Rabinowitz and Justin deVries.

 

Some pictures of the event:

 

 


2. Carswell Webinar, June 4, 2013 

 

Kimberly Whaley and Albert Oosterhoff, Professor Emiritus, University of Western Ontario presented a webinar for Carswell-Thomson Reuters on Tuesday, June 4th, 2013, on "Predatory Marriages".   Kimberly Whaley co-authored a book on this topic called: "The Capacity to Marry and the Estate Plan".

 

Predatory Marriages are becoming an increasingly prevalent issue in our society given our ageing population. It is a serious issue requiring closer examination both from a public policy perspective and for the purposes of law reform. Papers and blog postings by Kimberly Whaley on this subject can also be accessed on our WEL blog by clicking here

 

3. LSUC: 2nd Annual Civil Litigation Summit,  June 11, 2013, Donald Lamont Learning Centre, Mini Law School , Estates

 

Kimberly Whaley, presented her paper, "Estate Litigation Update 2013: "A Potpourri of Recent Developments You Should Know About."  at the LSUC Summit  on June 11, 2013. 

 

Download the paper

 

4. STEP CANADA 15th NATIONAL CONFERENCE - June 10 and 11, 2013 at the Toronto Metro Convention Centre

 

Kimberly Whaley, presented on a panel: "In the Barrister's Briefcase: Current Issues in Estate Litigation" together with Michael Kerr, Miller Thomson LLP, and Nancy Golding, Borden Ladner Gervais LLP. This panel was moderated by Timothy Matthews, Stewart McKelvey. Kimberly co-wrote the following papers with Michael W. Kerr (click title to download): 

 

"Estate Litigation: Important Updates and Overview of Recent Case Law on Costs in Passing of Account Applications" 

 

"Limitation Periods in Estate and Trust Litigation"

 

WEL also attended the STEP Gala dinner on June 10, 2013 at the ROM

 

5. Northumberland Elder Abuse Resource Network (NEARN): Aging in Northumberland with Respect, Dignity and Protection: WHAT'S NEXT?  June 12, 2013, Port Hope Town Park Recreation Centre 

 

Kimberly Whaley, Keynote Speaker: "WHAT'S NEXT - Navigating Later Life Transitions" and Heather Hogan both presented on "Planning for Future Disability, Illness and Incapacity"

 

Download the presentation

 

6. CBA, Southern Alberta Elder Law Section,   June 13, 2013, North Calgary Legal Centre, Calgary, Alberta

 

Kimberly Whaley, presented her paper: "Capacity to Marry, Predatory Marriages and the Practice Tips" via Skype on June 13, 2013.

 

7. IFA International Istanbul Initiative on Ageing - October 4-6, 2013, in Istanbul, WOW International Convention Centre

 

Kimberly Whaley, Heather Hogan and Mark Handelman will travel to Turkey in October to attend at the International Istanbul Initiative on Ageing and present on the following: "Canada's Statutory Framework for Reducing Age Discrimination: A Precarious Balance".

 

http://www.ifa-fiv.org/ 

 

2013 IFA Abstract

 

Canada's Statutory Framework for Reducing Age Discrimination: A Precarious Balance

 

Financial abuse and exploitation of older adults is a form of age discrimination. With increasing longevity comes an increase in the occurrence of medical issues affecting cognition. So too, the opportunity for isolation, alienation and undue influence. These sorts of issues can unfortunately invite the financial abuse and exploitation of older adults.

 

Many countries have enacted laws to protect older adults who have diminished capacity. One of the biggest challenges posed by this legislative approach in protecting older adults in Canada is the tension between respect for personal autonomy and the necessity of increased support in the context of diminishing capacity.

 

Our litigation practice sees many of these legislative mechanisms misused to deplete the wealth of older adults. In addition, protective statutory mechanisms can be avoided entirely by opportunists who use civil marriage to prey on older adults with diminished capacity. We call this phenomenon "predatory marriages." We see it occurring with increasing frequency and it raises questions in respect to our statutory approach to balancing personal autonomy with appropriate societal protections.

 

Our paper summarizes the various statutory schemes intended to protect adults with diminished capacity from a Canadian perspective. We review cases that cite these statutes and illustrate the strengths and weaknesses of Canada's framework for protecting older adults from age discrimination. We evaluate this framework's effectiveness in terms of striking the right balance between reducing age discrimination and fostering independence. We discuss innovative and proactive strategies that partner law enforcement agencies, legal practitioners, and the field of social work in a coordinated approach to responding to age discrimination in the form of financial abuse.

 

8. Stevens v Fisher: Moral Obligations Warrant Separate Award

 

JaŽl Marques de Souza wrote an article on the recent case of Stevens v. Fisher, 2013 ONSC 3112 (CanLII). 

 

The article was submitted to Deadbeat for publication and can be read on our blog by clicking here.

LAW REVIEW: CASES AND OTHER LEGAL REVIEWS

 

1. Limitation periods with respect to fraudulent conveyances, fraud, breach of fiduciary duty and misrepresentation.

           

An excerpt out of the paper prepared by Kimberly Whaley and Michael Kerr referenced above, addresses fraudulent conveyances and fraudulent actions in the context of estate matters and the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

 

Fraudulent Conveyances

 

If a fraudulent conveyance is discovered on or after January 1, 2004, it is subject to the 2-year limitation period in the Limitations Act, 2002.  The law previously had provided no limitation period at all for such an action.[1] Toronto Standard Condominium No. 1703 v. 1 King St. West,[2] in that action, the plaintiff wished to amend a Statement of Claim in December of 2008, to include a claim that two mortgages registered in November of 2006 were void as fraudulent conveyances. Master Glustein dismissed the plaintiff's motion for leave to amend as the claim for fraudulent conveyance was subject to the 2-year limitation period and was statute barred.

 

On appeal to the Divisional Court, the appellant submitted that "the proposed amended fraudulent conveyance pleading was not a "claim" as that term is defined in the Limitations Act, 2002, because no injury, loss or damage had yet occurred." The appellant also argued that the Master erred in applying the discoverability principle and for not concluding that s.16(1)(a) of the Limitations Act, 2002 (that there is no limitation period for a proceeding for a declaration with no consequential relief) was applicable to this case. Justice Sachs, however, upheld the Master's decision and held that:

           

"In my view, the Master was correct when he concluded that the proposed claim was a "claim" within the meaning of s.1 of the Limitations Act, 2002. The decision of the   Court of Appeal in Perry, supra, has been superseded by the Limitations Act, 2002. Unlike an "action on the case" it is not essential that a "claim" under s. 1 of the Act "sound in damages" or "create a legal duty, the breach of which gives rise to a cause of action."

           

The Plaintiff is alleging an injury, namely that assets that should be available to satisfy its claim against the Defendants have been put beyond its reach. According to the Plaintiff, that injury occurred as a result of the act of 1KW in granting two mortgages on its assets to HEL. Finally, the Plaintiff is seeking a remedy for its injury - first, a declaration that the transaction that put the assets out of its reach is void and, second, a declaration that its claims have priority over any claims that HEL might make against 1KW.[3]

 

Justice Sachs also confirmed that the Master did not err in his application of the discoverability doctrine, nor in his decision that s.16(1)(a) of the Limitations Act, 2002  did not apply in this case.

 

Fraud, Breach of Fiduciary Duty and Misrepresentation

 

Of notable relevance to estates matters, is the decision in Portuguese Canadian C.U. v. Pires[4] which held that the applicable limitation period for fraud, breach of fiduciary duty and misrepresentation under the Limitations Act, 2002 is 2 years. The Court held that the plaintiff knew in May of 2006 that he had purchased something which was worth less than what he said was represented to him.[5]His claim, commenced in 2010, was statute barred.

 

In Fracassi v. Cascio[6] the Ontario Superior Court of Justice also held that the applicable limitation period for breach of fiduciary duty and oppression under the Limitations Act, 2002, is 2 years.[7]

 

Failure to Account for Trust Funds

 

In the decision in Syndicate Number 963 (Crowe) v. Acuret Underwriter[8] 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.

 

Lloyd's Underwriters, representing Syndicate Number 963, claimed that Acuret failed to properly account for and pay out funds that were remitted to Acuret, in trust for Lloyd's, in January 2002. Lloyd's claimed that they did not become aware that the trust funds had not been accounted for or paid out until April of 2005. Lloyd's commenced an action in October of 2006. Acuret argued that the claim was statute barred. The court held that the two year limitation period applied but as the claim was not discovered until April 2005, it was not statute barred in 2006.

 

Laches

 

While the Limitation Act, 2002 is the main source for limitation periods, the equitable doctrine of laches and the common law doctrines of fraudulent concealment and special circumstances may have an affect on those limitation periods.

 

Doctrine of Laches

 

Historically, statutes of limitations did not apply to equitable claims, so courts of equity developed their own equitable remedies. The doctrine of laches is one such remedy.  It prevents recovery to a plaintiff who is guilty of their unreasonable delay in commencing an action. The leading case is the Supreme Court of Canada case of M(K) v. M(H).[9] The defendant must demonstrate that the delay amounted to the plaintiff's acquiescence to the defendant's conduct or has caused the defendant to alter its position in reasonable reliance on its acceptance of the status quo or otherwise permitted a situation to arise which it would be unjust to disturb. [10]

 

In the estates context, even when a limitation period does not bar a claim, a defendant may plead the doctrine of laches.  See the cases of Hipel Estate, Re[11] and Johnson v. Futerman et al. [12]

 

Doctrine of Fraudulent Concealment

 

Another remedy is the doctrine of fraudulent concealment. This doctrine can be used by a plaintiff to toll a limitation period when material information has been concealed from them by a defendant. In Giroux Estate v. Trillium Health Centre[13] the Ontario Court of Appeal held that the doctrine of fraudulent concealment applied to suspend the running of the limitation period in s.38(3) of the Trustee Act. The Court of Appeal also held that this doctrine survived the new Limitations Act, 2002:

 

In my view s. 38(3) was exempted from the new Act so that its common law status would be preserved and it would remain immune from the discoverability rule. In other words, the legislature intended that s.38(3) should continue to be governed by common law principles. The doctrine of fraudulent concealment is one such principle. [14]

 

Fraudulent concealment applies to situations where 1) the defendant and plaintiff are in a special relationship, 2) given the special or confidential nature of their relationship, the defendant's conduct amounts to "an unconscionable thing for the one to do towards the other"; and, 3) the defendant conceals the plaintiff's right of action, either actively or recklessly. [15]

 

The relationship between an estate trustee and a beneficiary, an inter vivos trustee and a beneficiary or the person holding a power of attorney for property for another would appear to fall within a special relationship.

 

Doctrine of Special Circumstances

 

The doctrine of special circumstances is derived from the Supreme Court of Canada decision of Basarsky v. Quinlan, [1972] S.C.R. 380.  The plaintiff had brought a claim within the applicable limitation period, but later sought to add a new claim after the limitation period had expired. The SCC held that an amendment cannot be made that would prejudice the other party, except in peculiar or special circumstances that warrant the amendment. In Basarsky, the SCC found that the defendant was not prejudiced and allowed the amendment on the basis of special circumstances including the fact that all of the facts relating to the claim and liability were pleaded in the original statement of claim and that the defendants admitted responsibility.

 

However, in the 2008 decision in Joseph v. Paramount Canada's Wonderland,[16] of the Ontario Court of Appeal held that courts cannot extend an expired limitation period under the new Limitations Act, 2002 on the basis "special circumstances". The Court decided that  litigants need certainty when it comes to limitation periods and therefore a court should not be allowed to extend limitation periods at its own discretion.

 

In Meady v. Greyhound Canada Transportation Corp., released concurrently with Joseph, the Court of Appeal also held however that the Limitations Act, 2002 did not repeal the doctrine of special circumstances, despite the fact that the doctrine has been abolished by s. 20 of the Limitations Act, 2002  for cases governed by the limitation periods set out in that Act.

 

The Ontario Court of Appeal held that the doctrine of special circumstances is available to permit a court to add parties to an existing action, despite the expiration of the limitation period in s.38(3) of the Trustee Act[17]

 

In 2009, the Ontario Court of Appeal examined the doctrine of special circumstances in the estate context in Bikur v. Penna Estate (discussed above).  The Court held that the doctrine of special circumstances was available to extend the limitation period under s.38(3) of the Trustee Act.  However, it declined to add the estate of Lorraine Penna as a Defendant to the existing action, because there was no "special or peculiar circumstances" on the facts of the case.

 

 

2. Will Challenges and the Limitations Act, 2002

 

Under the Limitations Act, 2002 no limitation period applies to a claim for a declaration without any consequential relief.[18] Some argue that this applies to will challenges.[19] However, it seems that the court has never squarely considered the question.

 

If the court declares the later of two wills to be invalid and entirely different beneficiaries could inherit the estate. The estate trustee will be bound to comply with the terms of the older will.  Therefore, it is argued that no consequential relief was sought or declared.

 

In Lund v. Rossiter, 2012 ONSC 6777, the estate trustee told a beneficiary that certain assets formed part of the estate and provided him with an accounting. More than two years after the deceased died and after he received the accounting, the beneficiary took the position that the will was invalid.  He alleged that he should have inherited the assets by right of survivorship. The beneficiary maintained that he was asking for declaratory relief.  The estate trustee took the position that the beneficiary was really asking for a consequential order that the estate trustee remedy a breach of her fiduciary duty.  Justice Pollak concluded that "the summary judgment motion procedure was inappropriate" for the application and dismissed the motion.[20] Therefore there is no decision on the limitation period issue.

 

In the case of Kenzie v. Kenzie (2010), 2010 ONSC 4360, 65 ETR (3d) 148, it was suggested obiter that a 2-year limitation period to commence Will challenge litigation begins to run at the point upon which the Certificate of Appointment of Estate Trustee has been issued.  Kenzie v Kenzie, 2011 ONCA 53 (CanLII), <http://canlii.ca/t/2fbxf>, was affirmed on appeal, where the Order of Justice Susan Healey was upheld by Justices Laskin, Feldman and Lang:    

 

[1] The appellant argues that he is entitled to declaratory relief, and that under s. 16(1)(a) of the Limitations Act, there is no limitation period barring his application.  We do not agree with the appellant's argument. 

 

[2] Implicit, if not explicit, in the appellant's application is his intent to seek a finding or findings that would be res judicata in other proceedings.  In our view, that is consequential relief, which takes the appellant's application out of s. 16(1)(a) of the Limitations Act.  Therefore, we agree with the application judge that this application as framed on this record is statute barred.

 

[3] If the appellant has any viable claim - and we make no determination whether he does or does not - it is by an application for an order that the respondent pass the accounts.

 

[4] The respondent concedes that the appellant is entitled for an order for the passing of accounts.  Whether the Limitations Act bars any claim in the different context of a passing of accounts is an issue to be decided by the judge on the passing of those accounts."

 

3The Lawyers Weekly, June 21, 2013, Focus: Wills, Estates, Charities and Trusts

 

Two articles appear, one by Charles Ticker entitled: "Navigating through the minefield: When drafting Wills, it's better to be safe now than sorry later" and by Nora Rock, entitled: "With Wills, the devil lurks in the details".

 

These articles highlight the many challenges and complexity that drafting solicitors face when assisting their clients with the drafting of testamentary documents. 

 

Charles Ticker's article addresses some of the duties of the drafting solicitor including to ascertain testamentary capacity; as well as practice tips; including the keeping of good notes; investigation of title to assets; investigation of jointly held assets; and in particular, speaks to a reported case of Meier v Rose [2012] A.J. No. 115, <http://canlii.ca/t/fpw9m> where Charles Ticker refers to the decision that held a drafting lawyer liable in negligence to a disappointed beneficiary where gift of real property failed. Charles Ticker also emphasizes the need to ascertain assets in foreign jurisdictions, to review instructions carefully, to exercise caution in death bed/hospital Wills, and offers tips on the execution of Wills and the avoidance of delay.

 

In Nora Rock's article, the focus is on proof-reading and adopting a systematic approach to drafting.

 

At Whaley Estate Litigation our cases often see poorly drafted Will documents which lead to litigation and potential liability at the hands of the drafting solicitor.

 

4. Tools and Resources: Notable Links

  

1.  Lifeline

www.lifeline.ca

 

Lifeline service works by providing a 24-7 response centre for emergency assistance in respect of medical issues which help facilitate independence to the older adult.

 

2.  Saint Elizabeth Home Health Care Services 

www.saintelizabeth.com

 

3.  Waddingtons - Transitions

www.waddingtons.ca/transitions

 

Waddingtons are offering a Full Downsizing and Estate Management Service. 



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

[2] Ibid.

[3] Toronto Standard Condo, supra note 54 at paras.28-29

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

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

[6] 2011 ONSC 178 ("Fracassi").

[7] 2011 ONSC 178 ("Fracassi")

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

[9] [1992] 3 S.C.R. 6 (MK v. MH).

[10] Ibid. at para.98.

[11] 2011 ONSC 5259, aff'd 2012 ONCA 371, leave to appeal dismissed 2012 CanLii 76984 (SCC).

[12] 2012 ONSC 4092.

[13] 2005 CanLii 1488 (ONCA) ("Giroux").

[14] Giroux, supra note 74 at para. 33.

[15] Ibid. at para. 23 and 28.

[16] 2008 ONCA 469 ("Joseph"), see also Meady v. Greyhound Canada Transportation Corp. (2008), 90 O.R. (3d) 774 (C.A.), released concurrently with Joseph.

[17] See Bikur, supra note 38 at para. 51.

[18] Limitations Act, 2002, supra note 7 at s.16(1)(a) and see also Boyce, supra note 50 at para. 3.

[19] See Werker, supra note 32; and Archie Rabinowitz, "Limitation Periods in Estate Litigation", Practice Gems: The Administration of Estates 2012; September 13, 2012 ("Rabinowitz").

[20] 2013 ONSC 1338.


UPCOMING PROGRAMS

 

CBA, National Conference, Saskatoon, Saskatchewan

August 18-20, 2013
Speaker: Kimberly A. Whaley, Roundtable discussion

LSCU, The Administration of Estates 2013
September 19, 2013
Chair, Kimberly A. Whaley
 
International Istanbul Initiative on Ageing

Istanbul, Turkey

Speakers, Kimberly A. Whaley, Heather Hogan and Mark Handelman

Info: http://www.ifa-fiv.org/

 

OBA CLE: The Other Side of the Coin: Personal Care and the Estate Lawyer

October 16, 2013

Ameena Sultan and Mark Handelman: "When Matters Get Complicated: Litigating Personal Care Disputes"

 

LSUC, 16th Annual Estates and Trust Summit

November 11-12, 2013, "Aging and the Fractured Family"

Speaker, Kimberly A. Whaley

AJAG Professional Development & Women's Leadership Series

January 14, 2014

Speakers:  Kimberly Whaley and Brian Wilson

Info: http://ajag.ca/Course/ec508e7f-45eb-4f9a-8355-ac28625e768b

 

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Contact Info

10 Alcorn Avenue, 

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

Kimberly A. Whaley
C.S., TEP.
Principal
(416) 355-3250
 
Mark Handelman
Firm Counsel
(416) 355-3254

Ameena Sultan
Associate
(416) 355-3258

 

Benjamin D. Arkin
Associate
(416) 355-3264 
 
JaŽl Marques de Souza

Associate

(416) 355-3266


Heather B. Hogan
Associate
(416) 355-3262
 
Deborah Stade
Office Manager
(416) 355-3252
 
Bibi Minoo
Estates Clerk
(416) 355-3251
 

Marylin Tait 

Legal Assistant

(416) 355-3255

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Whaley Estate Litigation