WEL Newsletter - Volume 6, Number 3 - June 2016

Whaley Estate Litigation provides litigation, mediation and dispute resolution to clients throughout Ontario:

* Albert Oosterhoff, Professor Emeritus Western University, Counsel to WEL consults on matters within his areas of expertise, providing opinions concerning Wills, Estates, Trusts and related Property matters. 
Please Enjoy,

Kimberly A. Whaley


Helen Burgess, has both a Canadian and US JD, joins WEL.  Helen previously worked at the Assistant Crown Attorney's office in Kitchener, and prior to that the University of Windsor's Legal Aid Clinic.  We welcome Helen.

Link to profile on our website 

Kimberly Whaley was interviewed by Husein Panju, host of Lawyered Podcast on May 10, 2016 on: "Predatory Marriages - Power of Attorney Litigation - Undue Influence and Gironda 2013 ONSC 4133 - Treatment of Joint Accounts".
You can access the Lawyered episode at: http://lawyeredpodcast.com/kwhaley

Kimberly moderated a workshop session at the NICE Annual Knowledge Exchange Program on May 26, presented by WEL Lawyer, Laura Cardiff and Marshall Swadron, Swadron Associates, on "Law and Aging: Physician Assisted Suicide"

Arieh Bloom presented at a webinar at the LMR Estates and Succession Practice Group Meeting on June 1, 2016 on the topic of:  "Serving the Estate Trustee - The Lawyer's Dual Roles & Maintaining the Distinction".  


Kimberly Whaley co-presented with Dr. Kenneth ShulmanProfessor, University of Toronto, Department of Psychiatry, Sunnybrook Health Sciences Centre, and Leanne Kaufman, Head, RBC Estate & Trust Services, at the STEP 18th National Conference on June 9, 2016 on:  "A Professional's Toolkit for Identifying and Addressing Decisional Capacity and Undue Influence" which was moderated by Gail Black, QC, TEP, Calgary: Miller Thomson LLP.
The expert panel takes a practical look at identifying mental incapacity or undue influence, reviewing the telltale signs that may arise in everyday life, and discusses the responsibilities of a financial institution or professional adviser when faced with a client who may be mentally incapable or subject to undue influence. The panel also discusses the relationship between an attorney acting under a power of attorney and the professional adviser or financial institution, covering such topics as best practices, mitigating risk, refusing to follow instructions, drafting, and creating the smoothest possible relationship.
Link to: "A Professional's Toolkit for Identifying and Addressing Decisional Capacity and Undue Influence": presented by Kimberly A. Whaley, Leanne D. Kaufman, and  Dr. Kenneth I. Shulman

Resource materials to the presentation can be accessed at:

2. RCMP Seniors Guidebook to Safety and Security


3. Financial Concerns Checklist

6. MFDA for Seniors






Albert Oosterhoff, Professor Emeritus, Faculty of Law, Western University, co-presented with John Poyser, LLB, TEP, Winnipeg: Traditions Law LLP, and Archie Rabinowitz, JD, TEP, Toronto: Dentons Canada LLP, at the STEP Canada 18th National Conference, on June 10,  2016, on "Recent Court Decisions: Is the Landscape of Will Challenges Changing? Is there a limitation period applicable to will challenges? Do the equitable doctrines of estoppel by convention, representation and acquiescence apply to will challenges and, if so, in what circumstances?" which was moderated by Kimberly Whaley, CS, LLM, TEP, Toronto: Whaley Estate Litigation.


Andrea Buncic and Arieh Bloom will be presenting at the RBC Wealth Management Workshop on: "So You Have Been Named And Executor. What Have You Gotten Yourself Into?"  on  June 21, 2016, at the Lazy Daisy's Café, 1515 Gerard St. East, Toronto, 7:00 pm - 8:30 pm . 
Topics include:
The Reality of being an estate executor in Canada;
Proactive ways you and your siblings/family can avoid estate litigation; and
Dealing with estate proceeds strategically.

(i) ANDRADE v ANDRADE,  2016 ONCA 368 (CanLII) http://canlii.ca/t/grq17   
Andrade v Andrade: Resulting Trust, Beneficial Ownership & the Importance of Intention

This is the story of a "tight-knit family that greatly respected and continuously supported their mother".[1] However, this continuous financial support led to a long legal dispute over the beneficial ownership of the family home.


The mother, a widow, immigrated to Canada in 1969 with her five young children. She stayed home to care for her children, who, in turn left school and began working when they were teenagers. When living at home, the children gave their entire earnings to their mother to support the family.

In 1974 the mother had purchased a house that also had two rental units, by borrowing a cash deposit from a member of the community and financing the bulk of the purchase with two mortgages. The house and the mortgages were put in the names of two of her sons as tenants in common. They remained on title long after they moved out of the house. At various times through the years, the mother advertised and rented out the two apartments, collecting rent. While the children gave all of their earnings to their mother, none of the children paid any of the expenses associated with the house directly. All mortgage payments and expenses came out of the mother's bank account.

When one of the sons on title died, his wife as executor of his estate sought to have the house sold to recover her husband's alleged half interest in the property. The mother and the surviving siblings opposed the sale saying the house belonged to the mother as beneficial owner. The daughter-in-law then brought an action seeking a declaration that she was the beneficial owner of a half interest in the house. Sadly, the mother died shortly before the trial.


The trial judge found that the mother did not beneficially own the home and ordered the sale of the property at fair market value with the net proceeds of sale to be divided between the son's wife and the mother's estate (as the other son on title had transferred his half interest to his mother). The trial judge found that the house belonged to the children, as it was "their money" that paid for the house.[2]  The mother may have paid the mortgages but "she made those payments with her children's money, not her own".[3]

As the mother had no money of her own to purchase the house and to pay the mortgages, she could not have been the beneficial owner of the house. He rejected the resulting and constructive trust claims advanced by the mother.


The Ontario Court of Appeal concluded that the trial judge erred in finding that the mother "had no money" of her own.  The money the children earned, once given to the mother became the mother's money, even if it was used to support the family, including paying the mortgage:

In finding that [the mother] had no money of her own, the trial judge conflated "income from paid employment" and "money". He confused the question of whether [the mother] had money with the source of her money, which at least in the early years was the paid employment of her adult children. He did not explain why or how, once the working children gave their paycheques to [the mother], the money remained "their" money. It was no longer their money because they made a gift of it to their mother, knowing she would use it to support the family. [The mother's] bank account was not a trust account. There was no evidence that the money was earmarked for specific purposes. Once the money was given to [the mother] it became "[the mother's] money".[4]

Furthermore, the rent money belonged to the mother. She advertised and found the tenants, collected the rent and deposited it into her accounts.  She also had money from old age security and other sources. The trial judge erred by concluding that the mother had no money, which then formed the basis for the remainder of his decision.

Resulting Trust

A "resulting trust arises when title to property is in one party's name, but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner." (Pecore v. Pecore 2007 SCC 17)

A purchaser money resulting trust can occur "where a person advances a contribution to the purchase price of property without taking legal title" (Nishi v Rascal trucking Ltd. 2013 SCC 33).

There is a presumption of resulting trust where property is acquired with one person's money and title is put in the name of another (except where title is taken in the name of a minor child). The Court of Appeal noted however that the current case did not turn on the application of a presumption.[5] A presumption is of greatest value in cases where evidence concerning the transferor's intention may be lacking. In this case, evidence of intention was not lacking. The trial judge failed to direct himself to the question of the mother's intention; rather he looked at the intention of the children and concluded that they did not intend to set up a trust for their mother. But the question was not whether the legal title holders intended to create a trust for the mother, the question was whether the mother intended to confer beneficial ownership of the property of the legal title holders, to the exclusion of herself and her other children?

The mother was the one who decided to buy the house, the children regarded the house as her property and she only "borrowed" their names for the mortgage because they could qualify for one as they were working. There was no evidence at all that the mother intended to confer beneficial ownership on any of her children when the house was purchased in 1974.

The Court went on to address the fact that the sons paid tax on the net rental income, including a deemed rent for their mother, and the mother took a tax credit for rent "paid" to her sons. The trial judge had concluded that this evidence was the foundation for a public policy reason not to recognize the mother's beneficial interest in the house. The Court of Appeal noted that the trial judge cast the net too broadly in concluding that it would be against public policy to recognize the mother's estate as the beneficial owner of the house when she had received tax credits on the basis that she was not the beneficial owner. There was no evidence that the mother had any say in how her sons filed their taxes and someone can take one position for tax purposes and another in litigation. Her tax filings were not fundamental to the cause of action. Her actual intention in relation to the property was a question of fact to be determined on the whole of the evidence.

The Court of Appeal concluded that the mother was the beneficial owner of the house by way of resulting trust.


This case was interesting as the mother was still alive when the litigation had commenced. Her affidavit, cross-examination and discovery evidence were all admitted at trial. As the Court of Appeal noted, it is common in a resulting trust case in the estate context that evidence of the intention of the transferor is lacking, as often the transferor is deceased. Here the mother was able to give her evidence which was supported by her surviving children.

[1] Andrade v. Andrade 2016 ONCA 368 at para.8 ("Andrade")
[2] Andrade at para. 46, 56, & 64.
[3] Andrade at para. 42.
[4] Andrade at para. 46.
[5] Andrade at para. 61.
[6] Andrade at para. 98.
(ii) FAWSON v DEVEAU, 2016 NSCA 39,CanLII - http://canlii.ca/t/grr0b  
Fawson Estate v. Deveau: Capacity to Designate Beneficiaries

This case highlights the complex nature of capacity issues and the mistaken belief that a person is either simply "capable" or "incapable" with respect to all decisions. This Nova Scotia Court of Appeal cases touches on testamentary capacity, the capacity to execute beneficiary designations, and the application of issue estoppel in capacity proceedings.


The deceased, Margaret Fawson, had three brothers, two of whom she disinherited when she executed her Will in 2004. Between 2002 and 2005 she designated her friend (who was also her executor under her Will) and her third brother as beneficiaries under several investment and RRSP accounts.
After her death, the deceased's two disinherited brother sought a declaration that the Will was invalid as their sister lacked testamentary capacity. In the decision Re Fawson Etsate,[1] Justice Hood concluded that there were suspicious circumstances existing at the time of the execution of the Will as the testator was suffering from delusions. The burden shifted to the propounder of the Will, the executor. The executor did not meet the burden and could not satisfy Justice Hood that the deceased had testamentary capacity at the time of the execution of the will. The Will was declared invalid.

Summary Judgement Motion

After this court decision, the brothers sought the return of the monies paid to the executor and third brother under the beneficiary designations. They brought a summary judgement motion, relying on the decision of Justice Hood as their only evidence. Their argument, simply put, was if their sister did not have testamentary capacity to execute a will, it followed that all of the beneficiary designations would also be invalid as a result of the application of the principle of issue estoppel.

The motion judge disagreed. He found that there was a genuine issue of fact to be determined. While the issue of the sister's testamentary capacity had already been determined before the courts, the issue of her capacity to make the beneficiary designations remained in issue.[2] Justice Coughlan dismissed the summary judgement motion.
Nova Scotia Court of Appeal

On appeal, Justice Farrar on behalf of the Court of Appeal noted the motion judge concluded that issue estoppel did not apply for a number of reasons:
  1. Whether a person had capacity is a question of fact to be determined from all the circumstances;
  2. The time for determining capacity is the time of giving instructions for and executing the document in question;
  3. There was no evidence before him of the instructions or execution of the beneficiary designations;
  4. The issue of the beneficiary designations was not before Hood J.; and
  5. The issues in the two proceedings were different.[3]
Having found that issue estoppel did not apply, it followed that the sister's capacity to execute the beneficiary designations was still a live issue and, therefore, summary judgement was not available. There were material facts in dispute.

The Court also concluded that there were two different burdens at play:

In Re Fawson Estate the burden was on the person challenging the Will to show suspicious circumstances. Once suspicious circumstances were established the burden shifted to the proponent of the Will to show that Margaret Fawson had testamentary capacity at the time of executing the Will. Appellate counsel in oral argument acknowledged that the burden in this proceeding is different. The burden remains on [the challenger of the designations], throughout, to show that Margaret Fawson did not have the capacity to execute the beneficiary designations. Unlike in Re Fawson Estate, there is no shifting burden.[4]

The Court of Appeal concluded that the motion judge did not err in concluding that there was a material issue of fact in dispute. The appeal was dismissed. 

The case reminds us that capacity is decision, time and situation-specific.  This means that a person may be capable with respect to some decisions, at different times, and under different circumstances.  A person is not globally "capable" or "incapable" and there is no "one size fits all" determination for general capacity.  Rather, capacity is determined on a case-by-case basis in relation to a particular or specific task/decision and at a moment in time.

[1] Re Fawson Estate 2012 NSSC 55.
[2] Fawson Estate v. Deveau 2015 NSSC 355 at para. 12.
[3] Fawson v. Deveau, 2016 NSCA 39 at para. 23.
[4] Fawson v Deveau,  2016 NSCA 39 at para. 28.

RBC Estate Workshop for Millennials
June 21, 2016
How to avoid litigation with your siblings/family members
Speakers: Andrea Buncic, Arieh Bloom
B'Nai Brith Seminar
June 21, 2016
Speakers: Lionel Tupman, Arieh Bloom
LSUC, Administration of Estates 2016
September 20, 2016
Chair: Kimberly Whaley and Timothy Grieve
Osgoode Professional Development
September 28-29, 2016
Speaker: Kimberly Whaley
STEP Toronto
October 19, 2016
Attacking and Defending Gifts
Speaker: Kimberly Whaley and John Poyser
Toronto Police College, Elder Abuse Investigators Course
October 20, 2016
Elder Abuse presentation
Speaker: Kimberly Whaley
LSUC Summit
October 24-25, 2016
Solicitor's Negligence
Speakers: Kimberly Whaley and Lionel Tupman
2nd Annual WET Fundamentals Course
October 29, 2016
Contested Passing of Accounts
Speaker: Kimberly Whaley
CBA Wills Estate and Trust PEI
June 23, 2017
Speaker: Kimberly Whaley

Beneficiary designations as inter vivos transfers

Globe and Mail: AGO tour is a diversion and equalizer for dementia sufferers, caregivers

Metro News: B.C. nurse fired after assuming patient's power of attorney, taking coin collection

Mark Handelman published in the Canadian Journal of Anesthesia

National Post: Woman says B.C. father left her out of will because she's lesbian, sues for inheritance

Bill C-14, Parliament's Attempt to Regulate Medical Assistance in Dying, Declared Unconstitutional before it is Passed?

City-TV: Video: New study gives shocking snapshot of elder abuse in Canada

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