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

WEL

CLICK HERE TO VIEW WEL FIRM DIRECTORY

PART I: WEL NEWS

1.

WEL WELCOMES ANDREA McEWAN, ASSOCIATE LAWYER

Andrea McEwan has joined WEL as an Associate Lawyer.

Link to her profile

2. WEL WELCOMES FELICITY FENTON

WEL welcomes Felicity Fenton, who joins our legal assistants' team.

3. CANADIAN LEGAL LEXPERT DIRECTORY 2016 EDITION

Kimberly Whaley has been Lexpert Directory Ranked as "Most Frequently Recommended" in the 2016 Canadian Legal Lexpert Directory .

4.

WEL & SCOTIA WEALTH MANAGEMENT TEAM UP IN THE SCOTIABANK RAT RACE FOR UNITED WAY

On June 16, 25 members of "THE SWARM" (SCOTIA WHALEY ALLIED RUNNNG MACHINE) participated in the 2016 Scotiabank Rat Race for the United Way raising a total of $5,359. Congratulations and thanks to all who participated.

5.

B`NAI BRITH SEMINAR, JUNE 21, 2016

Arieh Bloom presented his article: "IS HE DEAD YET? The Laws of Matanah Shechiv Meira and Donatio Mortis Causa" at the B'Nai Brith Seminar on June 21, 2016.

Link to article

6.

ESTATES LIST TORONTO - COURT UPDATE: AMENDED FORM 74.44 REQUIRED

On May 26, 2016, O. Reg. 147/16 came into force amending Form 74.44 (Notice of Application to Pass Accounts) of the Rules of Civil Procedure. The amended form reflects changes to Rules 74 relating to filing requirements and timelines for passing of accounts.

Court staff have been accepting both the new and old versions of Form 74.44 since May 26, 2016, but June 30 was the last day the old form would be accepted; now, counsel must use the amended form, which is available here: http://ontariocourtforms.on.ca/en/rules-of-civil-procedure-forms/

7. JUNIOR TRUST AND ESTATE PRACTITIONERS GROUP, AUGUST 29, 2016

Professor Albert Oosterhoff will be speaking to the Junior Trust and Estate Practioners group at WEL on August 29 on the topic "Discrete Functions of Probate and Construction."

8.

ESTATES AND TRUST SUMMIT, NOVEMBER 3, 2016

Professor Albert Oosterhoff will be delivering his paper entitled: "The Discrete Functions of Courts of Probate and Construction" at the Estates and Trust Summit on November 3, 2016.

9.

OBA ELDER LAW, NOVEMBER 16, 2016

Professor Albert Oosterhoff will be co-presenting with Kimberly Whaley in the Family Life Plans/Predatory Marriages session of the inaugural OBA Elder Law Program on November 16, 2016.

9.

THE ESSENTIAL RETIREMENT GUIDE, WILEY

Kimberly was quoted in the book authored by Frank Vettese: "The Essential Retirement Guide, Chapter 16, Watch Out For Your Children", regarding Power of Attorney documents.

10.

YOUNG WOMEN IN LAW, YWL

Andrea Buncic is a board member of Young Women in Law (YWL) and is promoting their Wellness Week which is being run from July 18th to the 22nd, 2016.

PART II: LAW REVIEW

(i) PATON ESTATE V. ONTARIO LOTTERY AND GAMING CORPORATION (FALLSVIEW CASINO RESORT AND OLG CASINO BRANTFORD) 2016 ONCA 458,(CanLII), http://canlii.ca/t/gs1f5

'Estate Trustee' Gambles Estate Assets Away: Are the Casinos Liable?

In this 2-1 split decision the Ontario Court of Appeal[1] overturned the striking of a claim against the Ontario Lottery and Gaming Corporation ("OLG") for damages resulting from the defrauding of two estates by an addicted gambler. The plaintiffs alleged that the OLG was liable for the losses to the estates as it was in knowing receipt of trust funds, was unjustly enriched and the OLG was negligent. The motion judge struck the claim as disclosing no reasonable cause of action.

The plaintiffs successfully appealed the decision, with Justice Pardu writing for the majority and potentially paving the way for a Court to determine that the OLG is liable to third parties for the action of gamblers at their casinos.

Facts

A law clerk (Shellee Spinks)[2] forged a testator's signature on an alleged will appointing herself as estate trustee. She then stole over $4 million from the estate and others, by forging documents, selling estate assets and taking the money for herself. She gambled away approximately $3 million over a 14 month period at Fallsview Casino Resort and the OLG Casino Brantford (both owned and operated by the OLG) until she was arrested in March 2008. The statement of claim alleged that at the casinos Ms. Spinks held herself out as a lawyer.

Motion to Strike

The plaintiffs brought a claim against OLG with the following causes of action: knowing receipt of trust funds, unjust enrichment, and negligence. The defendants successfully brought a Rule 21 motion to strike out the pleading on the grounds that it disclosed no reasonable cause of action. The motion judge concluded that the fact that Ms. Spinks held herself out as a lawyer to the operators of the casinos did not mean that they had notice she was gambling with trust funds. Also, the OLG had valid juristic reasons for retaining any money received and finally the OLG did not owe a duty of care to the plaintiffs.

Court of Appeal - Majority Decision by Justice Pardu

On a motion to strike the court must take the facts pleaded in the claim as true, unless they are patently ridiculous or manifestly incapable of being proven, and the approach must be generous, erring on the side of allowing a novel, but arguable, claim to proceed.[3]

Knowing Receipt of Trust Funds - A stranger to a trust may be liable where it received trust property for its own benefit; has knowledge of facts which would put a reasonable person on inquiry; and fails to inquire as to the possible misapplication of trust property.[4] Justice Pardu was not convinced that the appellants' claim for knowing receipt could not possibly succeed. On a generous reading of the claim, and given the allegation that the OLG had good reason to suspect that the money gambled by Ms. Spinks might have been stolen (knowledge sufficient to put a reasonable person on inquiry) but failed to take the necessary action, the claim should be allowed to proceed.

Unjust Enrichment - Justice Pardu noted that the motion judge did not consider that the juristic reasons for the enrichment by OLG might be vitiated on the ground of unconscionability. This approach has been used in an Australian case where a party argued that as a "pathological gambler" the casino's actions in luring him back to the casino and encouraging him to gamble were unconscionable. Therefore, it was not plain and obvious that the claim for unjust enrichment was certain to fail.

Negligence - While recognizing that there were some "formidable barriers" to a finding that casinos owe a duty of care to third parties who are victims of problem gamblers, the Court also noted that this situation was analogous to that of a commercial host who serves alcohol to an intoxicated patron who then drives and injures an innocent third party.

Justice Pardu concluded: "These are novel claims. A factual record is necessary to allow a court to confidently make judgments about the legal and policy issues raised, and to determine whether it is fair and just to expect casinos to pay some compensation for the high social costs of gambling out of the revenues generated by that activity. I am not persuaded that the appellants' action is certain to fail". The appeal was allowed and the motion to strike out the claim was dismissed.

Dissent by Justice Hoy

Hoy J. would have dismissed the appeal. Hoy J. noted that it was significant that the appellants did not plead that the OLG actually knew that Spinks was a problem gambler, was wilfully blind to that fact, or wilfully and recklessly failed to make inquiries that an honest and reasonable person would make. For the appellants' claim to have a reasonable prospect of success, the pleaded facts must be capable of supporting the inference that the gambled funds were obtained through breach of trust. Hoy J. found that the pleaded facts did not support this.

Furthermore, Justice Hoy agreed with the motion judge that the casino had juristic reason to retain the money gambled by Spinks and distinguished the case relied upon by Justice Pardu with respect to that juristic reason being vitiated by 'unconscionability".

Finally, Justice Hoy noted that the relationship between the OLG and the appellants was distant and indeterminate. On the facts presented in the claim, "it was not reasonable to expect the OLG to have the appellants in contemplation when arranging or managing its affairs . . .there is no reasonable prospect that sufficient proximity between the OLG and the appellants would be found".[5]

Conclusion

This case will be interesting to follow and see if the plaintiffs will be able to recover any of the lost estate funds. While being allowed to advance the claim is one thing, actually winning the case is another challenge altogether.

[1] Paton Estate v. Ontario Lottery and Gaming Corporation (Fallsview Casino Resort and OLG Casino Brantford) 2016 ONCA 458 ("Paton Estate").

[2] In her role as a law clerk Ms. Spinks also defrauded $893,000 from the trust funds of the lawyer she worked for - see Law Society of Upper Canada v. Michael Stephen Puskas 2013 ONLSHP 127 (CanLII).

[3] Paton Estate at para. 12

[4] Citadel General Assurance Co. v. Lloyd's Bank Canada, [1997] 3 SCR 805 at para. 49.

[5] Paton Estate at para. 143.

(ii) ROMANOSKI ESTATE V. SEBURN 2016 ONSC 3481 (CanLII), http://canlii.ca/t/grwj1

The Rights of Mothers of Unborn Children to Sue for Pecuniary Damages

Romanoski Estate v. Seburn[1] looked at the question of whether a mother of an unborn child whose father died as a result of the negligence of another, could pursue a claim under s.61of the Family Law Act ("FLA") for pecuniary losses. At the heart of the issue was whether or not the mother was a "spouse" within the meaning of Part III of the FLA.

Facts

The plaintiff mother was pregnant when the father of her unborn child was killed in a car accident. At the time of the accident the mother and father had only been living together for approximately 7 months and were not married. The child, Tamia, was born 7 months after the father was killed. A claim for pecuniary damages under section 61 of the FLA was commenced against the driver of the car and the bar that served the driver alcohol. The daughter, mother, and the father's estate were listed as plaintiffs.

Motion

The defendants brought a summary judgment motion arguing that the mother could not claim for damages.

Sweeny J. first concluded that there was no genuine issue requiring a trial and that the summary judgment process provided enough evidence to fairly and justly answer the question raised on the motion.

The mother's ability to pursue a claim comes from section 61 of the FLA which provides that:

61.(1) If a person is injured or killed by the fault or neglect of another under circumstances where the person is entitled to recover damages, or would have been entitled if not killed, the spouse, as defined in Part III (Support Obligations), children, grandchildren, parents, grandparents, brothers and sisters of the person are entitled to recover their pecuniary loss resulting from the injury or death from the person from whom the person injured or killed is entitled to recover or would have been entitled if not killed, and to maintain an action for the purpose in a court of competent jurisdiction.

"Dependent" and "Spouse" in Part III are defined as:

"dependant" means a person to whom another has an obligation to provide support under this Part;

"spouse" means a spouse as defined in subsection 1(1), and in addition includes either of two persons who are not married to each other and have cohabited,

(a) Continuously for a period of not less than three years, or

(b) In a relationship of some permanence, if they are the natural or adoptive parents of a child.

The definition of "child" in s.1(1) of the FLA reads:

"child" includes a person whom a parent has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody;

The defendant moving party argued that the definition of "child" in section 1.1 of the FLA requires that the father exhibit a settled intention to treat the child as a child of the marriage and, since the child was not born, that could not occur. The Court found that the definition is an extended definition that was not relevant to the issue before the Court. This definition would apply for the purposes of determining child support to a child who is neither a natural or adopted child.

The mother relied on Dagg v. Cameron (which we blogged about here) in which the applicant was the mother of a child en ventre sa mere at the date of the father's death and the issue was whether she was a "spouse" for the purposes of the Succession Law Reform Act, RSO 1990 c. S. 26 ("SLRA"). However, unlike the FLA, the SLRA includes in the definition of "child" a "child conceived before and born alive after the parent's death".

In the present case, Sweeny J. concluded that:

[25]. . . In interpreting the specific provisions in the FLA, the legal fiction of en ventre sa m�re must be considered. Tamia has a claim as an unborn child. It would be consistent with the legal fiction that [the mother] would also have a claim. The birth of Tamia and the relationship between [the mother] and [the father] prior to the death of [the father], establish the "some permanence" requirement of the definition of spouse in Part III of the FLA.

[26] The purpose of s. 61 is to acknowledge the harm done to families as a result of the death of a family member. The section is entitled "right of dependents to sue in tort." In my view, it is consistent with the intention and purpose of the FLA that the mother of a child en ventre sa m�re should be entitled to pursue a claim for pecuniary loss arising out of the death the child's father under s. 61 of the FLA.

Sweeny J. concluded that the mother was therefore entitled to pursue her claim under s. 61 of the FLA.

Conclusion

This is yet another case in a long line of cases in family law and estates law where the definition of "spouse" has been litigated. Being a "spouse" is not a cut and dry definition and will depend on many factors, including the legislation under which the proceeding is being brought.

[1] 2016 ONSC 3481

(iii) NEUBERGER ESTATE V. YORK, REPORTED IN THE ONTARIO REPORTS, JUNE 24, 2016: 2016 ONCA 191

Neuberger Estate v York, 2016 ONCA 191 has been reported in the June 24, 2016 edition of the Ontario Reports. Link to online version of the June 24 OR Edition.

PART III: UPCOMING EVENTS

LSUC, Administration of Estates 2016

September 20, 2016

Chair: Kimberly Whaley and Timothy Grieve

Osgoode Professional Development

September 28-29, 2016

Speaker: Kimberly Whaley

www.osgoodepd.ca

STEP Toronto

October 19, 2016

Attacking and Defending Gifts

Speaker: Kimberly Whaley and John Poyser