Whaley Estate Litigation
 Whaley Estate Litigation Newsletter Vol.3 No. 4 July 2013




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



1. Focus on Elder Law and Elder Care


Heather Hogan attended an education session at Mt Sinai Hospital called: "Through the Looking Glass: Alice's Adventures Continue across the Continuum of Care..."  This program was hosted by Mt. Sinai Geriatrics Institute, on Thursday, June 27, 2013, 8:00 am - 5:00 pm.


Speakers included Dr. Samir Sinha, Director Geriatrics at Mount Sinai Hospital. Of particular interest concerning resources for seniors, a presentation by Lee Ringer, CNS, St. Michael's Hospital on: "The Gentle Persuasion Approach: A  Nurse's Experience".  Also notable, a discussion by Jacqueline Lyn, Clinician Leader, CBSOT, on: "What the BSO Community Behavioural Supports Out-reach Team Can Offer Your Patients; and finally an informative session by Chris Fan-Lun and Norm Umali on: "Medication Management across the Continuum".




1. Canadian National Railway Co. v McKercher LLP, 2012 SCC 39 (CanLii)     




Conflicts: When should a lawyer be disqualified for breaching the duty of loyalty, and what factors should be considered in determining whether this qualification is appropriate?


By Heather Hogan, WEL


SCC "recasts" the legal framework for determining remedies in conflict of interest matters


Lawyers are not permitted to accept a retainer if the legal interests of the new client are directly adverse to the legal interests of an existing client. This rule was established as a bright line rule in R. v. Neil, and is one of three salient factors in a lawyer's general duty of loyalty toward a client: the duty to avoid conflicts of interest, the duty of commitment, and the duty of candour. [1]


Breach of this bright line rule can be remedied by disqualifying the lawyer from acting for the new client, but not all breaches require disqualification.


Are there situations where this firm rule shouldn't apply? Should there be a professional litigant exception to this rule? When should a lawyer be disqualified for breaching the duty of loyalty, and what factors should be considered in determining whether disqualification is appropriate? The SCC's decision in Canadian National Railway Co. v. McKercher LLP attempts to answer these questions. [2]




The law firm McKercher LLP ("McKercher") held several retainers with Canadian National Railway ("CN") on a variety of corporate, commercial, tax, debt, collection, real estate and litigation matters.[3] McKercher agreed to represent Gordon Wallace ("Wallace") in his $ 1.75 billion class action against CN and did not obtain CN's consent in that regard. CN did not know about McKercher's apparent breach of loyalty until it was served with Wallace's claim, at which point CN voiced its objection to McKercher's retainer with Wallace.


McKercher then terminated its existing retainers with CN, but CN was not satisfied with that gesture and moved for an Order disqualifying McKercher from acting for Wallace. The Order was granted on the ground that McKercher had violated its duty of loyalty to CN; the motion judge found that McKercher had relevant confidential information about CN that would prejudice CN if McKercher represented Wallace in the class action, and that the nature of Wallace's claim conflicted fundamentally with the duty of loyalty McKercher owed to CN. [4]


The motion judge also found that CN was a professional litigant for the purpose of the Neil analysis, which provides that, in exceptional cases involving existing clients who are large corporate entities, the consent of those clients can be inferred where the legal matters in question are sufficiently unrelated.[5] Nevertheless, the judge found that McKercher could not rely on the implied consent of CN in this instance for three reasons: the long-standing relationship between McKercher and CN, the punitive and aggravated damages sought in Wallace's claim, and CN's express refusal to waive the conflict, which vitiates implied consent. In the view of the motion judge, McKercher should have withdrawn from its retainer with Wallace. [6]


The Saskatchewan Court of Appeal overturned the decision. It found that the judge misapprehended the evidence. The motion judge found that McKercher was CN's "go-to" firm; in fact, although one of CN's in-house counsel made vague assertions about McKercher's knowledge of litigation strategies, the evidence showed that since 2004 McKercher had not held any of CN's litigation files in Saskatchewan.[7] The court held that a broad understanding of a client's litigation philosophy did not qualify as "relevant confidential information." [8]


Although the Court of Appeal found that McKercher did violate its duty of loyalty by accepting the Wallace retainer, the breach was did not arise from the acceptance of the Wallace retainer - it arose from McKercher's treatment of CN after the fact.[9] The court affirmed the motion judge's finding that CN was a professional litigant for the purpose of the professional litigant exception articulated in Neil, but it disagreed with the motion judge's reliance on CN's sense of betrayal and the nature of Wallace's claim in determining that the Wallace retainer would have adverse consequences for CN such that disqualification was necessary.[10] Instead, the Court of Appeal found that it was reasonable for CN's consent to be implied because the salient features of the professional litigant were present: CN is a large corporate client that was not vulnerable or dependant on McKercher.[11] The Court of Appeal held that disqualification was not an appropriate remedy because McKercher had no relevant confidential information, and it terminated its retainers with CN, so its continued representation of Wallace could not prejudice CN.


CN appealed the decision.


SCC's Analysis


In allowing McKercher's appeal, the SCC clarified the circumstances in which the bright line rule applies, examined the particulars of the lawyer's three-part duty of loyalty, and recast the framework for determining when disqualification is an appropriate remedy.


The Duty to Avoid Conflicts of Interest: Is it a Rule or Rebuttable Presumption?


The SCC heard submissions that fiduciary law provides that the duty to avoid conflicts of interest is merely a presumptive rule that can be rebutted in certain circumstances, such as where there is no substantial risk posed to a lawyer's existing client by accepting a retainer with a new client. [12]


The SCC rejected submissions in support of softening the bright line rule, preferring instead to affirm the absolute and categorical nature of the duty to avoiding conflicts; where applicable, the bright line rule prohibits concurrent representation. [13]


There are limits, however, to the scope of the bright line rule. For example, it does not apply:

  • if the legal interests in question are not adverse;
  • if the adverse interests are not legal in nature;
  • if the party raising it seeks to abuse it for tactical purposes; and
  • in circumstances where it is unreasonable for a client to expect that its law firm will not act against it in unrelated matters. [14]

In circumstances where the bright line rule does not apply, law firms must consider whether there is a substantive risk that accepting the new retainer would adversely affect the firm's representation of either client. [15]


Duties of Commitment and Candour


In addition to the duty to avoid conflicts, the duty of loyalty also includes:

Duty of Commitment - lawyers cannot summarily drop a client to avoid conflicts with existing or future clients. [16]


Duty of Candour - lawyers should advise existing clients before accepting new retainers that raise the conflict issue, whether the issue falls within or outside of the scope of the bright line rule. However, before advising an existing client of a potential conflict in a new retainer, the lawyer must first get the permission of the potential client to disclose the potential retainer to the existing client. [17]


McKercher's Actions


McKercher's concurrent representation of CN and Wallace was a breach of the duty to avoid conflicts of interest that fell squarely within the scope of the bright line rule.[18] The SCC endorsed the motion judge's findings:


Finally, it was reasonable in these circumstances for CN to expect that McKercher would not act for Wallace. I agree with the motion judge's findings on this point:


The solicitor and client had a longstanding relationship. CN used the McKercher Firm as the "go to" firm. Although there were at least two other firms in Saskatchewan that also did CN's legal work, I accept the testimony of Mr. Chouc, that the McKercher Firm was its primary firm within this province. . . .  The lawsuit commenced seeks huge damages against CN and alleges both aggravated and punitive damages, which connote a degree of moral turpitude on the part of CN. Simply put, it is hard to imagine a situation that would strike more deeply at the loyalty component of the solicitor-client relationship. [para. 56]


In other words, it was reasonable for CN to be surprised and dismayed when its primary legal counsel in the province of Saskatchewan sued it for $1.75 billion.  [19]


McKercher should have obtained CN's informed consent before accepting the Wallace retainer. [20]


In addition, the SCC held that McKercher breached its duty of commitment by terminating its retainers with CN in an attempt to circumvent its duty to CN, and it breached its duty of candour by failing to disclose to CN that it intended to accept the Wallace retainer. [21]


Recasting the Framework for Determining the Remedy for Breach of Duty of Loyalty


In disqualifying McKercher, the motions judge based his decision on concerns about the potential for the misuse of confidential information and the impairment of McKercher's ability to continue to represent CN on its existing retainers.


The SCC did not agree that either of these factors were relevant for consideration in determining a remedy for breach of the duty of loyalty.




Instead, they "recast" the framework for determining the appropriateness of disqualification as follows:


Disqualification may be required:  (1) to avoid the risk of improper use of confidential information; (2) to avoid the risk of impaired representation; and/or (3) to maintain the repute of the administration of justice. ...


[C]ourts faced with a motion for disqualification on this third ground should consider certain factors that may point the other way. Such factors may include:  (i) behaviour disentitling the complaining party from seeking the removal of counsel, such as delay in bringing the motion for disqualification; (ii) significant prejudice to the new client's interest in retaining its counsel of choice, and that party's ability to retain new counsel; and (iii) the fact that the law firm accepted the conflicting retainer in good faith, reasonably believing that the concurrent representation fell beyond the scope of the bright line rule and applicable law society restrictions.


The SCC remitted the matter to the Queen's Bench to be decided in accordance with the SCC's reasons.




The SCC has confirmed that the bright line rule in Neil prohibits concurrent representation in related matters and in unrelated matters.[23] In these circumstances, is does not matter if the existing client is a large corporate entity or professional litigant; lawyers cannot accept that new retainer unless both clients involved provide informed consent. [24]


Where the bright line rule does not apply, lawyers must apply the substantive risk analysis to determine whether or not they can accept the new retainer. [25]


Some of the Parties' submissions were concerned that some clients would take the unreasonable view that the bright line rule applies in circumstances where it otherwise would not. On the other hand, as the instant case suggests, some lawyers may be of the view that the bright line rule does not apply in circumstances where the existing client believes it should. In either case, the SCC has affirmed that courts will set aside the bright line rule if those clients are unreasonable in their expectation that the rule applies.[26] And if the client is correct in the view that the bright line rule does apply, courts will ensure that lawyers do not act in matters where they would be subject to conflicting pressures. [27]


The professional litigant exception as articulated in Neil still stands. However, the Court in CN v. McKercher seems to avoid the use of words like "exception" when discussing the bright line rule. Instead, lawyers with clients that are large professional entities must ask themselves if it is unreasonable for a client to expect them to decline new clients who may act against the large, existing client.[28] If such a position would be unreasonable, then the bright line rule does not apply, and the lawyer can apply the substantive risk analysis to determine whether the new retainer can be accepted.


Going forward, courts now have a framework for determining when disqualification is the appropriate remedy for a breach of loyalty. Part of that framework rests on the assumption that the legal profession can and will properly identify when the bright line rule applies, and apply the substantive risk analysis when the rule does not apply.


It will be interesting to see how the Queen's Bench remedies McKercher's breach of loyalty when it reconsiders its previous decision to disqualify the firm. 


A review of case law by the CBA's Task Force on Conflicts of Interest concludes that the courts are beginning to take a less mechanical approach to the analysis of conflict issues.[29]  This conclusion appears to gain traction in CN v. McKercher. The SCC seems to want lawyers and their clients to avail themselves of a no-nonsense, categorical approach to avoiding conflicts. At the same time, the Court is sensitive to the potential for clients and/or their lawyers to get it wrong some of the time. To that end, either clients or their lawyers can ask the court to determine whether or not a lawyer can properly fulfil their duty of loyalty on the retainers in question. But clients seeking disqualification will need to consider the fact that the court's framework for applying that remedy starts with the premise that the lawyer in question applied the appropriate tests and made the right decision.


2. Cerqueira Estate v Ontario, 2013 CarswellOnt 8725, 2013 ONSC 4263




Limitation Periods and Estates


This estate involved a motion brought under Rule 21.01(1)(a) of the Ontario Rules of Civil Procedure to determine a question of law before trial where the determination was considered "plain and obvious" with a view to disposing of all or part of the action.


The plaintiffs had issued an action for damages for medical negligence in relation to Antonio Cerqueira, deceased.  Mr. Cerqueira died in hospital on August 31, 2009 and the action involved allegations of negligence against the physicians treating Mr. Cerqueira while in hospital.


The statement of claim was issued more than 2 years after Mr. Cerqueira's death by in or about 19 days.  The plaintiffs allege that it was not until September 17, in or about 17 days past the 2-year date of death mark, that they discovered that the deceased's medical disclosure revealed a result alleged to have been indicative of the negligence and not discoverable until that moment.


The moving parties for a determination under Rule 21.01 relied on section 38(3) of the Trustee Act, R.S.O. 1990, which provides that all action by or against an estate must be brought within 2 years of the deceased's death.


Section 38(1) and 38(3) provides 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.


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.


In defending the motion brought, the plaintiff relied on Rule 1(1) of the Public Hospitals Act, R.R.O. 1990, reg. 965-Schedule B, as well as the Doctrine of Fraudulent Concealment, and in particular, the decisions in  Charette v Trinity Capital Corporation, 2012 ONSC 2824 (CanLii), where Justice Strathy noted as follows:


"A limitation period may be extended, or possibly interrupted, by fraudulent concealment".


This principle was also articulated in  Giroux Estate v. Trillium Health Centre 2005 CanLII 1488 (ON CA), (2005), 74 O.R. (3d) 341, [2005] O.J. No. 226 (C.A.)  at paragraph 22, which states:


"Fraudulent concealment has been defined to include "conduct, which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for one to do towards the other".


Moreover, the plaintiffs contended that they discovered the cause of action only on September 17, 2009, and the 2-year limitation period fell on a Saturday, so the action was issued on the following business day, the Monday, September 19, 2011.


Justice Ellen J. Macdonald of the Ontario Superior Court of Justice, did not agree with the plaintiffs that the limitation period could be extended to such a time as the plaintiffs could reasonably discover a cause of action pursuant to section 38(3).


Indeed, the court determined that there is no discoverability exception to section 38(3). Accordingly, an action brought for or against an estate over 2 years after the deceased's death, is statute-barred, even if a claim was not discovered within the 2-year limitation period. The authority for this is Waschkowski v. Hopkinson Estate, 2000 CanLII 5646 (ON CA), [2000] 47 O.R. (3d) 370.


In other words, based on the limitation provision and the language of section 38(3) of the Trustee Act, the discoverability principle does not apply.


This is yet another case which confirms that many estates claims are subject to a 2-year limitation period from the date of death.


Again, for further information on limitation periods, a recent article written by Kimberly Whaley and Michael Kerr of Miller Thomson LLP, and presented at the June 2013 STEP Conference can be accessed by clicking here.


3. The Law Times, July 8, 2013, Volume 24, No. 23, ran an article: "Judge calls on colleagues to embrace trials: Ruling's treatise on access to justice decries reluctance to adjudicate"


Link to article


In this article written by Yamri Taddese, commented on the decision of Justice David Brown in  York University v Michael Markicevic, of June 25. Justice Brown was critical of the "slow pace of the justice system" contributing to the high cost of litigating. Justice Brown in part opined as quoted in the article, that a part of the answer to the conundrums faced by the court system is to focus on bringing cases to trial quickly and efficiently rather than always looking to alternatives such as mediation.


The issue of access to justice is of course an issue which remains unresolved and is an issue for the entirety of the profession.  Reference was made in the article to a recent report apparently released by the Action Committee on Access to Justice in Civil and Family Matters where it was stated that the court working group, also called for "including judges and court administrators taking a leadership role in terms of enhancing the quality of the administration of justice".


Justice Brown focussed on the value of quick trials and judges acting as "engaged problem solvers."


4. Nicholson v Gemnay, 2013 ONSC 4098 (CanLii) 




More clarity on the use of summary judgment motions


This was a motion for summary judgment to dismiss the action against the defendant pursuant to rule 20.04 of the Ontario Rules of Civil Procedure.


The action itself concerned a claim for damages arising from dealings between the plaintiffs and the defendants, concerning a self-directed investment account. The plaintiffs sought to recover monies lost at the hands of the defendants as well as a claim seeking a tracing order under the Fraudulent Conveyances Act.


The court reviewed rule 20.04(2) and in particular 2.1, as well as the decision in Combined Air Mechanical Services v. Flesch, 2011 ONCA 764 (CanLII), 2011 ONCA 764, 108 O.R. (3d), and in particular "the full appreciation test as set out at paragraph 50"


"In deciding if these powers (set out in rule 20.04(2.1) should be used to weed out a claim as having no chance of success or be used to resolve part or all of an action, the motion judge must ask the following question:  can the full appreciation of the evidence and issues that is required to make dispositve findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial."


Justice Lofchik determined on the evidence presented that there was no money to trace, in that it was clear where the funds went. Moreover, that any claim under the Fraudulent Conveyances Act was premature until it was established that any money was indeed owed to the plaintiff and further that it could not be paid.


Applying the "full appreciation" test, Lofchik J. found that the trial was not necessary to make dispositive findings with respect to the liability of the defendant to the plaintiff.  The court decided that there was no real chance of success against the defendant at trial and that the action should be dismissed.


5. Blanchard v Bober, 2013 CarswellOnt 5184, 2013 ONSC 241




Summary Judgment


This is another summary judgment motion brought by the respondents dismissing the applicant's claim that the Will of the deceased be declared null and void, having been obtained through undue influence, or in the alternative, that the applicant was a dependant of the deceased pursuant to Part V of the Succession Law Reform Act, R.S.O. 1990, c 26, for whom no adequate provision was made.


Again, the court reviewed the decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, and made the following decision:


Undue Influence


[8]       The applicant's allegations of undue influence by Linda Bober are unsupported by any other material. He argues that Ms. Parent's cross-examination raises issues that are relevant to his assertion but it does not contain any information that contradicts her assertion that the deceased had full capacity, was seen independently of her daughter and knew exactly how she wanted her affairs ordered.


[9]       Her law associate, Mr. Laing's, cross-examination is explicit that Rita Seguin was very specific that she wanted the applicant to get nothing, that he already had gotten enough and was a "freeloader". A specific acknowledgement and direction were provided to the law firm that confirms her wishes (Exhibit E, Affidavit of Linda Bober).


[10]     Section 13 of the Evidence Act, R.S.O. 1990, c. E.23, requires that in an action involving an estate no opposite party may obtain a judgment on uncorroborated evidence. There is no corroboration here. The care provided to the deceased by her daughter, especially after the death of her husband in 2007, does not raise a presumption of undue influence: Smith Estate v. Rotstein, 2012 ONSC 2117 (CanLII), 2012 ONSC 2117, [2010] O.J. No. 1527 (S.C.J.). There is nothing in the material beyond the applicant's belief and uncorroborated statements he said were made to him by the deceased. There is no evidence whatsoever of actual coercion as required: see Scott v. Cousins, [2001] O.J. No. 19 (S.C.J.).


[12]   ... indicating a contrary view to that expressed in Rita Seguin's will, and proof of undue influence by Linda Bober, it shows Linda Bober's intention to follow her mother's independent mind, even when it resulted in a reduction of the total money to be received by her from her mother's estate. Her intention to provide the applicant a further gift prior to his commencing this litigation, is consistent with her behaviour and referenced in the correspondence that accompanied the cheque to Robert Blanchard."


The court further found that there was no basis in evidence that the applicant was at any time a dependant of the deceased such that both the issue of undue influence and dependant's relief for support as claimed was determined not to be a genuine issue requiring a trial.

[1] R. v. Neil, [2002] 3 SCR 631, 2002 SCC 70 (CanLII) [Neil cited to CanLII].

[2] Canadian National Railway Co. v. McKercher LLP, 2013 SCC 39 (CanLII) [CN v. McKercher cited to CanLII].

[3] Wallace v Canadian Pacific Railway SKCA 108, 375 Sask. R. 218, 2011 SKCA 108 (CanLII) ∂ 7 [Wallace cited to CanLII].

[4] Wallace  28 & 29.

[5] Neil ∂ 28; Wallace ∂ 26.

[6] Wallace26.

[7] Ibid.  ∂ 76 to 78.

[8] Ibid. 77.

[9] Ibid.  ∂ 83.

[10] Ibid.  ∂ 93.

[11] Ibid.95.

[12] Video feed of the SCC's hearing of this matter can be viewed here: http://dl.dropboxusercontent.com/u/30801873/McKercher.mp4

[13] CN v. McKercher29.

[14] Ibid.33, 35, 36, 37, 41.

[15] Ibid.38.

[16] Ibid.44.

[17] Ibid.46, 47.

[18] Ibid.53.

[19] Ibid.52.

[20] Ibid.54.

[21] Ibid.55, 57.

[22] Ibid.66.

[23] Ibid.41.

[24] Ibid.39.

[25] Ibid.41.

[26] Ibid.37.

[27] Ibid.40.

[28] Ibid.

[29] The CBA Task Force on Conflicts of Interest - April 2013 Update (link here)




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

October 4-6, 2013

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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Kimberly A. Whaley
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Mark Handelman
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Ameena Sultan
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Benjamin D. Arkin
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JaŽl Marques de Souza


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Heather B. Hogan
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Deborah Stade
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Bibi Minoo
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Whaley Estate Litigation