Client Privilege and the Wills Cases Exception

wills exception

Client privilege and the wills cases exception are the few line of cases that will not remain privileged after death.

It is very frequent in estate litigation that for various reasons, the disinherited parties often wish to obtain the wills files of the solicitor who drafted the wills on behalf of the deceased.

This frequently causes contested chambers application as to whether or not privilege will continue to apply to the files after the death.

 

As a general rule, all communications between a lawyer and his or her client, in the course of the lawyer client relationship, are privileged and that privilege remains forever unless the client waives it.

That solicitor client duty  to claim privilege applies to former or deceased clients, subject to the exception that on death, the deceased’s instructions concerning a will, which were privilege during his or her lifetime, may be disclosed.

 

Fawcett v Steiner and Fawcett Estate 21 ETR (2d) 686, provides a good summary of the leading principles that apply with respect to solicitor client privilege as it relates to wills:

 

  1. Once the lawyer client relationship arises, the privilege becomes permanent, unless the client waives it (Descoteaux v. Mierzwinaki,    [1982] 1 S.C.R. 860) and a solicitor’s duty to claim the privilege applies to former or deceased clients, subject to the exception that on death, the deceased’s instructions concerning a will, which were privileged during his or her lifetime may be disclosed.

 

2. By extension, the exception for wills cases permits posthumous disclosure of the settlors’ instructions concerning the creation of an inter vivos trust containing life and remainder interests {Geffen  v. Goodman Estate [1991] 2 S.C,R, 353

 

3. Legal professional privilege, or solicitor/client privilege, can be waived and that privilege belongs to the client, so the client is the party who can waive the privilege.  Until the client waives the privilege, the awyer owes a duty to assert it on the client’s behalf (Bell   v.   Smith,     [1968] S.C.R. 664 (Ont.).

 

4.With respect to waiver of privilege, although the privilege continues after the client’s death, an executor may waive it on behalf of a deceased client                 {Goodman  v. Geffen,    [1991] 5 W.W.R. 389 at 409-414 (S.C.C.).

 

5.the prerequisites of a valid waiver are that the client must know of the privilege and the right to claim it, and intend to relinquish it, and appreciate the consequences of doing so.

 

6. Where the purpose for seeking disclosure of the confidential communications between lawyer and client was for the purpose of attempting to defeat the testator’s true intentions, as opposed to determining the true intentions of the testator, then the application (for production of the solicitor’s file) will be dismissed

Gordon  v.   Gilroy,    [1994] B.C.J. No. 1927 (B.C.S.C. Was applied.

In that case, the court concluded that the purpose of seeking disclosure of the confidential information was not for the purpose of determining the testator’s true intentions, or even the reasons for them which were fully stated in the will itself, but rather for the purpose of attempting to defeat those intentions.

He found that the plaintiffs were seeking disclosure of the confidential communications in an attempt to overturn the will and defeat the testamentary wishes of the deceased.

That decision was a wills variation action, and stands for the proposition that a solicitor’s will file is not compilable and remains privileged in such actions, unless the validity of the document is in question.

Ad Hoc “Casual” Fiduciary Relationships

Fiduciary- ad hoc

Sedin Estate v Rusin 2011 BCSC 1207 is an excellent example of financial abuse of an elderly person by a trusted financial advisor who was found to be in a casual and ” ad hoc “fiduciary relationships with the deceased.

The deceased and her husband became friends with the defendant financial advisor when the deceased was 69 years of age and the defendant was 32 years old. The deceased remained friends with the defendant after her husband’s death and in fact became dependent on the defendant for management of her finances as her health deteriorated.

The deceased was a modest woman and an unsophisticated investor who is the trial judge found, placed unwavering trust and reliance in the defendant and his abilities to manage her finances.

The deceased sold her house to the defendant’s company when she was 92 years old for $270,000.

The company issued a debenture as security but never made payments thus causing a significant loss to the deceased and her estate.

The executor brought action for damages arising from breach of fiduciary duty and the action was allowed.

The court found that an ad hoc fiduciary relationship existed between the testator and the defendant who had undertaken to look after the deceased financial well-being and to act in her best interests, and he accepted this role answer financial manager.

The defendant had power over the deceased finances, which he unilaterally exercised in a way that directly affected the deceased’s interests.

The deceased was exceptionally vulnerable to the defendant’s control, and the defendant was found to have breached his fiduciary obligation when he took advantage of the deceased by arranging for the sale of her house to his limited company.

In particular the defendant breached his fiduciary duty by providing worthless security for funds advanced by the deceased, and for failing to repay the principal amounts that the deceased invested with him.

The following exerpt of law is from the Sledin case:
Fiduciary Relationships

64    Certain relationships on account of their very nature result in fiduciary obligations for one of
the parties. For example, a lawyer has a fiduciary obligation to his or her client and a trustee has a
similar duty to his or her beneficiary. These types of relationships are generally referred to as per

se fiduciary relationships.

 

  • An ad hoc fiduciary relationship is one that does not fall within the traditional categories of fiduciary relationships. Instead, it is one that arises out of the specific circumstances and dynamics of the particular relationship.
  • In dissenting reasons in Frame v. Smith, [1987] 2 S.C.R. 99 (S.C.C.) at para. 60, Wilson J. described what she considered to be the general characteristics of a fiduciary obligation as follows:

 

  1. The fiduciary has scope for the exercise of some discretion or power.
    1. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests.
    2. The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.

 

  • These observations of Madam Justice Wilson were later endorsed in International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574 (S.C.C).
  • The Supreme Court of Canada revisited the issue of fiduciary obligations and the constituent elements of such relationships in Hodgkinson v. Simms, [1994] 3 S.C.R. 377 (S.C.C), and Perez v. Galambos, 2009 SCC 48 (S.C.C).
  • While the characteristics of a fiduciary relationship articulated in Frame continue to be relevant in determining whether such a relationship exists, the more recent case authorities have recast those characteristics and added to them.
  • It is now clear that for an ad hoc fiduciary relationship to exist, the court must be satisfied that one party undertook, either expressly or by implication, to act for the benefit and best interest of another party: Galambos, at para. 66.
  • Moreover, a relationship whose distinguishing feature is only the vulnerability or power imbalance of one party vis a vis another will not, without any additional features, meet the threshold of a fiduciary relationship: Galambos, at paras. 67 and 74. 

The Presumption Against Intestacy

presumption against intestacyPresumption Against Intestacy In Wills Interpretation

Re Murray Estate 2007 BCSC 1035 has been previously blogged by disinherited.com and is a good case relating to the rules of construction in interpreting a will.

One of the golden rules of wills interpretation is that the court will not alter or add to the words of the will unless it is perfectly clear that the will does not express the intention of the testator.

That is particular so was drafted by the solicitor.

Another golden rule is the presumption against an intestacy– if the will is capable of two interpretations, the court will prefer the interpretation which disposes of the whole state in preference to that which results in an intestacy.

 

in Prouse v Scheuerman 2001 BCCA 100, restated a famous quote from Re Harrison (1885) 30 Ch.D. 390, :

” There is one rule of construction, which to my mind is a golden rule, that when a testator has executed a will in solemn form you must assume that he did not intend to make it solemn farce – that he did not intend to die intestate when he is gone through the form of making a will. You look, if possible, to read the wills was to lead to a testacy, not an intestacy. This is a golden rule.”

 

Similarly in re Craig (1976) 14 O.R.(2d) 589, affirmed on appeal stated the rule specifically at page 261:

” A court should only tamper with and add to the words of the will, particularly when drafted by a solicitor, where it is perfectly clear that the testator has not accurately, or completely expressed his intention. In other words, a case which is almost beyond argument.

In order to supply words not present in the will, a court must be certain:

a) that there has been an unintentional omission, and

b) as to the testator’s precise intention, but the testator meant to do.

Tracing and Accounting For Assets

TracingTracing & Accounting For Assets

It is very common in estate litigation that the form of an asset may change substantially over a period of time.

For example a bank account of cash can be converted into a stock portfolio, which in turn can be used to buy a house that is subsequently sold and put into long-term bonds.

As long as those funds can be identified, they can be traced and accounted for, and where appropriate and ordered by the court, transferred into the name of a rightful heir.

 The principals relating to orders for tracing and accounting were articulated by  Pitfield J. in  Ruwenzori Enterprises Ltd. v. Walji, 2004 BCSC 741 at paras. 240-242 and 245, aff’d 2006 BCCA 448:

1]    Neither tracing nor an accounting is a remedy.  Each is a process designed to assist in the perfection of a remedy…

2]    It follows that tracing is the process employed to identify and particularize the manner in which funds have been applied.  The results of the tracing permit a claimant to determine whether it will opt for a proprietary remedy in respect of funds derived from it, or a monetary judgment in respect thereof.

3]    An accounting is directed at the determination of profit, gain or loss derived from assets in respect of which tracing has identified a right to, and the claimant has opted to assert, a proprietary interest.

 

4]    Upon termination of any part of the tracing process at their option or otherwise, [the plaintiffs] will be entitled to elect to apply to confirm a proprietary interest in respect of assets other than those in respect of which the election to do so has already been made and by virtue of my reasons granted, or to enter judgment for the amounts I have enumerated and to apply for judgment in respect of any additional funds identified by the tracing process.

Agreements Not to Revoke a Will

Binding agreementBinding Agreement Not to Revoke Will

Kayne v Wright et al  2012 BCSC 119 is an excellent example of “mutual wills” which on occasion arise in estate litigation disputes.

The general principle in law is that a will is always revocable.

Most married couples execute what are commonly known as mirror wills, as the wills are virtually identical but for the change of names between the testators.

In a mutual will situation however there must be evidence of an agreement not to revoke one’s will that must be  clear and unequivocal.

If the court finds that there was a binding agreement between the parties, and one of the parties subsequently revokes that will and executes another, then the beneficiaries of the revoked will have a claim in law for constructive trust against the offending testator’s estate and its beneficiaries.

In this case, the husband agreed to give his wife a life interest in a condominium, make provisions in his will giving her a life interest in another property he might own at his death, and transferring to her his registered retirement income funds.

In exchange, the female party agreed to use the condominium for maintenance and support during her lifetime and to make a will which provided for in your revocable gift of the remainder of her estate to the males estate after gift of $30,000 was paid to each of her children.

The court referred to each of their wills/codicil and noted for example that the male parties’ will contained the following words:

“and it is understood that this paragraph of my will shall be your revocable, this life estate being granted to my wife in consideration of the term in her will providing for the remainder of her estate, after gift of $30,000 paid to each of her children, to fall into my estate.

The wife had similar wording in her will.

The husband subsequently died and the wife shortly thereafter changed her will on two occasions prior to her death, and change the beneficiaries from her late husband’s estate, to her own new beneficiaries.

 

THE LAW AND ANALYSIS

 

[      The doctrine of mutual wills and the obligations flowing from them was discussed by Mr. Justice Cullity in Edell v. Sitzer (2001), 55 O.R. (3d) 198 (Ont. Sup. Ct. J.).  He stated at paras. 57-58:

[57]    ”  The doctrine of mutual wills has traditionally been applied in cases where individuals have made separate wills pursuant to an agreement with respect to their terms.  Most commonly, they have agreed that each will obtain a benefit under the other’s will and that other specified individuals will receive the property of each of them on the death of the survivor.  In some cases of this sort, the benefit obtained by the survivor under the other’s will has been a life interest; in other cases, it has taken the form of an outright gift.  Where the requirements for the application of the doctrine are satisfied, the survivor will not be permitted to defeat the agreement by revoking his or her will after the death of the other.  This result is achieved by the imposition of a constructive trust on the survivor’s estate for the benefit of those who were intended to benefit under the agreement. ( emphasis added)

[58]      The most fundamental prerequisite for an application of the doctrine is that there be an agreement between the individuals who made the wills.  It has been repeatedly insisted in the cases that:  (a) the agreement must satisfy the requirements for a binding contract and not be “just some loose understanding or sense of moral obligation” (Re Goodchild (Deceased), [1996] 1 All E.R. 670 (Ch. D.), at p. 681)[;] … [b] It must be proven by clear and satisfactory evidence; and (c) it must include an agreement not to revoke the wills.”

This doctrine was also discussed extensively by Madam Justice Southin for the Court of Appeal in Brynelsen Estate (Administrator of) v. Verdeck and O’Hara, 2002 BCCA 187 at paras. 14-29.

Lost Wills and the Presumption of Revocation

Lost WillsLost Wills and the Presumption of Revocation

An update to this article is that since the introduction of WESA on April 1, 2014, I anticipate that the courts will be more willing to allow copies of wills as proof of the testator’s intention to more easily admissible into probate

Often when a person dies, his or her original will cannot be found and will never be found.

Frequently years have passed between between the date the will was signed and the testator’s death.

In many circumstances a true copy of the will be accepted for probate in the place of the original will.

However, if the will was last known to be in the custody of the testator, and is not found after the death of the testator, then the presumption is that the testator destroyed the will with the intention of revoking it.

The presumption of revocation may be rebutted by evidence such as the following:

A. The character of the testator;

B. The existence of codicils;

C. Statements made to beneficiaries with respect to provisions made for them; and

D. Words and actions of the testator before and after the execution of the will.

The degree of evidence required by the Courts to rebut this presumption is not usually very high.

If the existence of a valid will is proved then the presumption of revocation is rebutted. The contents of the will must then be proved.

If there is a copy or completed draft, and the solicitor who prepared the will gives evidence as to proof of execution by the testator, there should be sufficient evidence of the contents of the will.

If there is no copy or completed draft, the evidence of the witness as to the contents of the will may be sufficient, even if that witness has an interest in the will.

Such evidence may include statements made by the testator before or after the execution of the will, evidence that the witness with the will, evidence of codicils to a will that reference to the will in written documents.

Rectification of Error in Will Refused

rectification 2Rectification of Error in Will Refused By Ontario Court of Appeal

Robinson Estate v Robinson 2011 CarswellOnt 5819 once again demonstrated the limited jurisdiction that exists in the courts to remedy a mistake and omission made in the deceased’s will, even by the drafting lawyer.

The deceased testator executed 2 separate wills, one was to deal with property held in her native Spain as well as England, and a subsequent one to deal with her Canadian property.Continue reading

Court “Regrettably” Declares Will Executed Before Marriage To Be Void

Will Executed After MarriageWill Executed Before  Marriage “Regrettably” Declared Void

 

Please note that due to the implementation of WESA. this will no longer be the law for wills signed on or after  April 1, 2014 

MacLean Estate v. Christiansen 2009 BCSC 1159 is a good example of the legal hardship that can ensue if a testator executes a will before his or her marriage.

This is because section 15 (a) of the Wills Act, RSBC, provides that a will is revoked by the marriage of the testator, unless there is a declaration in the will, that it is made in contemplation of the marriage.Continue reading