Wills Drafting: The Myth of the “Simple Will”

Wills Drafting- The Myth of the “Simple Will” _ Disinherited

It must be stressed that any document that has consequences as permanent and far-reaching as a Will can never be “simple.”

Even a straightforward Will can be fraught with drafting problems and potential liability.

A Will speaks from death and cannot be altered after death. Thus Wills can be viewed as potential
“time bombs” of liability. Although sections 58 and 59 of the Wills, Estates and Succession Act now allow an opportunity to correct errors, to confirm what the testator really meant, to fill in the gaps, or to modify the ambiguous, a small drafting error can create an ambiguity that may take years to resolve in the Courts.

A Will is a very personal document, quite literally, a testator’s last word about how his or her
estate is to be disposed of. The only constraints on the testator’s wishes are public policy and the law. If neitheris contravened, the testator can make almost any type of Will.

Duties of the Wills-Drafter

The Wills practitioner has several important duties, including the following.

1. Spending sufficient time to properly canvass with the client his or her instructions, and then understanding those instructions precisely after giving appropriate advice with respect to same

2. Translating the instructions into testamentary provisions that are valid and clearly express the testator’s intentions

3. Gathering all the information required to properly prepare the Will and to give effect to the testator’s wishes

4. Taking into account other documents to which the testator is a party, such as those dealing with assets that pass outside of the estate, and applying legal principles that may affect the provisions of the Will

Simply put, it is the Wills practitioner’s duty to ask the right questions and draft the Will properly in accordance with the client’s instructions.

Fees

1. Fees should be based on the practitioner’s actual time and not the supposed “going rate.”

2. The practitioner should explain to the client the amount of time it properly takes to prepare a Will, the amount of expertise required for same, the risk of liability, and the value of the assets that are being dealt. That will help persuade the client that the cost may be higher than he or she wishes to pay, but that it is still good value in the “big picture” of things. It should be stressed that the Will is dealing with the client’s lifetime accumulated assets.

3. If the client is unwilling to pay, then it is open to the practitioner to refuse to do the work.

4. If the practitioner accepts the work, he or she accepts the responsibility of doing it properly and promptly.

Getting the Necessary Information From The Client

Clients frequently attend at the Will- drafter’s office with firm instructions about how they want to dispose of their estates. It is the Will-drafter’s duty to properly examine and scrutinize such instructions because many of them may be neither practical nor advantageous to the interest of the estate or to the beneficiaries. The Will-drafter must educate the client and explain to him or her the nature and consequences of the proposed testamentary provisions.

It is not uncommon for the client’s initial instructions to be flawed. Clients often have firm opinions as to what they want to achieve with their Will that are often simply not practical, or even possible, and would almost certainly end in litigation. It is the job of the drafting practitioner to provide proper objective counsel in this regard.

To get the correct information, the practitioner must ask the right questions. The Will practitioner can simply never have too much information to give proper advice.

The bottom line is there is a duty on the Will-drafter to carry out the client’s instructions as closely as possible, but there is an equally important duty to make sure that clients understand they should not necessarily do what they want to do, and if they insist after proper advice, they must accept and approve the consequences.

Probing the Client’s Mind

I would be remiss in any discussion regarding the taking of Will instructions, especially from the elderly and frail, not to start with a wise quote from Chalmers v. Uzelac 2004 BCCA 533.

1. Every solicitor who, as part of his or her practice draws Wills, should read, mark and inwardly digest at least once each year the judgment of Sir John Alexander Boyd, C. in Murphy v. Lamphier (1914), 31 O.L.R. 287, the Canadian locus classicus on a solicitor’s duty in taking instructions, especially at pages 318-321.

2. That duty is owed not only to those who might, or ought to be, objects of the testator’s bounty but also to the testator, for only the solicitor can be the testator’s voice from the grave; the solicitor discharges that duty by making proper inquiries of the testator at the time of the making of the will and by taking and preserving proper notes of the responses and of any observations relevant both to capacity and to knowledge and approval of the contents of the will. The reason for the latter obligation ought to be obvious but, lest it is not, I state it: How can a judge put confidence in the testimony of a solicitor who says, years (here 9) after taking instructions, but keeping no notes of those instructions, that the testator said this or that as the reason for changing an earlier will?

In Murphy v. Lamphier, as cited in the Chalmers case, the duty of a lawyer taking Will instructions was discussed as follows.

It is an error to suppose that, because a person can understand a question put to him and give a rational answer, he is of sound mind and capable of making a Will: the competency of the mind must be judged by the nature of the act to be done, and from a consideration of all the circumstances of the case.

The grand criterion by which to judge, whether the mind is injured or destroyed, is to ascertain the state of the memory. Memory affords all the materials on which to exercise judgment and to arrive at a conclusion or resolution.

In the case of a person enfeebled by old age or with faculties impaired by disease, and particularly in the case of one labouring under both disabilities, a solicitor called in to prepare a Will does not discharge his duty by simply taking down and giving expression to the words of the client, without being satisfied by all available means that testable capacity exists and is being freely and intelligently exercised in the disposition of the property; and, in dealing with a person needing protection and advice, it is important for the solicitor to find out if there be a former Will, and its nature, with a view of getting at the reasons for any variations or changes therefrom, if such changes be contemplated.

The notes of haste, stealth, and contrivance attached to this transaction, and were not removed by the evidence.

The duty was similarly described by Kroft J. in Friesen v. Friesen Estate (1985) 33 Man.R. (2d) (Q.B.) at para 77, as follows.

6. The duty upon a solicitor taking instructions for a Will is always a heavy one. When the client is weak and ill, and particularly when the solicitor knows that he is revoking an existing Will, the responsibility will be particularly onerous.

7. A solicitor cannot discharge his duty by asking perfunctory questions, getting apparently rational answers, and then simply recording in legal form the words expressed by the client. He must first satisfy himself by a personal inquiry that true testamentary capacity exists, that the instructions are freely given, and that the effect of the Will is understood.

Sample Organizational Chart for a Will

One tried-and-true technique of Will-drafting is to break the Will down into its basic components, to demystify the task at hand. Here is a sample of how most Wills can be broken down.

Part One: Initial Matters

(A) Revocation of prior Wills

(B) Appointment of executor and trustee

(C) Appointment of alternate executor and trustee

(D) Appointment of guardian, if applicable

Part Two: Disposition of Estate

(A) Vest property in trustee

(B) Payment of debts, testamentary expenses

(C) Disposition to beneficiaries

(a) Specific bequests
(b) Legacies
(c) Residue
(d) Alternative gift(s) of residue

Part Three: Administration of Estate

Powers of Executor/Trustee
(1) Power of sale or conversion

(2)  Trust for minors

(3)  Payment for minors

(4)  Investment powers

(5)  Power of distribution in specie

(6)  Power to carry on business and other powers that may be necessary or appropriate

Part Four: Closing Matters

Miscellaneous provisions, for example

(1) Charging clause
(2) Funeral wishes

Remember that the client must “know and approve the contents” of the Will. So that can be achieved, 5. the goal should be to draft a Will the client may read and understand for him or herself. The use of a logical arrangement of paragraphs and clauses such as displayed in the above-noted organizational chart will assist the client in that endeavour. The use of headings and definitions and the numbering of paragraphs and clauses will also assist in that regard. Bearing 6. in mind the aging population, using a reasonably large font is advisable.

It should be noted that words used in a Will are given their ordinary meaning by the Courts. Also, a judge should consider only the Will and the facts and circumstances known to the client at the time the Will was made to determine the client’s testamentary wishes.

Style of Drafting: 20 Dos and Don’ts

1. Strive for simplicity without sacrificing precision.

2. Be brief without sacrificing comprehensiveness.

3. Be consistent in the use of tense and the use of terms. All of the clauses to be used must then be looked at together to ensure a uniform drafting style throughout. The Will created must not look like a patchwork quilt of style and language as this could lead to interpretation problems and possible negligence claims.

4. Use modern plain language rather than verbose and archaic expressions. For many years now, there has been a movement toward the use of plain language to replace legalese and bureaucratic writing. Plain language is straightforward prose, carefully written with the needs of its primary readers in mind. Strive to make your average sentence length shorter and to simplify your sentence structure.

5. Eliminate redundant words and phrases. Will-draftspersons have the tendency to use couplets and triplets when one word carries the intended meaning. For example the words “nominate, constitute, and appoint” could be condensed to simply “appoint.” The words “give, devise, and bequeath” could be shortened to simply “give.”

6. Strive to not use foreign words in Wills unless you are referring to foreign places or persons. For example, do not use Latin phrases such as “bona fide” when the English “good faith” conveys the same meaning. Similarly, do not use expressions such as “cy-pres” or “en ventre sa mere,” when they can be replaced with “as near as possible” and “in its mother’s womb.”

7. Do not use the word “issue” that ordinarily means all of a person’s lineal descendants, but instead use the words “child,” “children,” “grandchild,” and/or “grandchildren,” as appropriate. Similarly, do not use the words “per stirpes” or “per capita” but instead describe the method of distribution.

I once litigated the following clause from a Will that used the word “issue.”

To divide the residue of my estate between my daughters Mary and Joan who survive me in equal shares per capita but if any child of mine predeceases me leaving issue him or her surviving, the issue of that deceased child surviving me shall take (and if more than one in equal shares per stripes as tenants in common) the share which his or her or their parent would have taken if living.

The deceased had a son who had predeceased him by 10 years leaving two children. At the time the deceased executed his Will, he had only the two daughters Mary and Joan. The Will was poorly drafted in that it used both the words “any child of mine” as well as the words “leaving issue him or her surviving.” I argued that the issue of the deceased son, namely the deceased son’s children and grandchildren, should share equally in the estate with Mary and Joan.

Leaving aside the poor draftsmanship that resulted in the litigation, I have never yet met a client who wishes to provide for all of his or her lineal descendants. Clients usually wish to provide only for their children, but if a child has predeceased, leaving children of his or her own, then for those children, that is the grandchildren of the client, in the place of the deceased child.

8. Do not do a codicil to revise an existing Will, as it is too easy to make a mistake. Disregard the client’s concerns about costs in this regard. If the client wants to make a change to a Will, then draw a new Will.

9. When providing for the distribution of the estate residue, try to use percentages or shares rather than specific amounts. Then add the percentages or shares several times to ensure they add up to 100 per cent. In Sarkin v. Sarkin Estate, 36 E.T.R.139, the draftsperson did use shares, but the shares added up to only 55 per cent of the residue. As a result, the remaining 45 per cent went by way of a partial intestacy.

10. Do not use precatory words such as “wish” or “request,” as they are not binding on the executor.

11. Be precise in your description of assets to avoid ambiguities.

12. Check carefully for inconsistent clauses.

13. Check to see that no intestacy or partial intestacy has been created. I once litigated a homemade Will where the testatrix included a specific clause stating she did not wish her brother to ever share in her estate by reason of bad past behaviour. She executed the Will without having included a residual beneficiary clause and thus created a partial intestacy. The effect was that her next-of-kin, namely, her brother, inherited.

14. Sufficiently identify each beneficiary and record his or her contact information. Charities can be a particular problem, as it is necessary to understand the structure of the charity and to ascertain which part of the charity the testator wishes to benefit, as well as to ensure the charity’s name is stated correctly. If possible, the charity should be contacted to ensure accuracy. Leaving a bequest to “charitable and educational institutions” will undoubtedly lead to much litigation among various charities and education institutions.

15. Be consistent in the words you use.

16. Try not to include a gift of a specific parcel of property to a beneficiary as there is a good likelihood the testator will not own the property at the time of his or her death. A better way to accomplish such an intention is to use a clause such as “to transfer to Mary, if she survives me, whatever house and property I own at the time of my death,” or such similar-type wording.

17. Only attempt to do the type of Wills with which you are completely experienced and are totally comfortable doing.

18. Review the Will clause by clause very carefully with the client. It should never be a cursory review. It may be helpful to paraphrase each clause to the client in simple terms, as many clients will not really understand what most of the clauses mean. It is suggested that where possible and practical, email, fax, or mail a copy of the Will to the client to review prior to seeing him or her in your office. That will give the client time to consider and reflect on the Will and to make any changes he or she considers appropriate. That is preferable to the client attending at your office and requesting changes to be made on the spot, as such changes are often rushed.

19. Use technology but beware that it sometimes does strange things, like leave out paragraphs and make other such unexplained mistakes.

20. Do not rely solely on a checklist- type Will instruction sheet. Make real notes, including observations confirming you probed the Will- maker’s mind to check for mental capacity and noted his or her statements as to next-of-kin and the value of assets. On completing a Wills file, avoid using a form reporting letter that has clauses that do not relate to the particular instructions.

Conclusion

I again stress there is no such thing as a simple Will. While a Wills practice can be enjoyable and rewarding, the draftsperson can never let his or her guard down for one instant regarding the myriad potential problems that can arise in this type of practice.

The client needs firm advice and guidance throughout the taking of instructions and again during the review of the Will at the time of execution.

 

This article was originally published by The Scrivener Volume 27 Number 4 Winter 2018.

23 Signs of Undue Influence in Dysfunctional Families

23 Signs of Undue Influence in Dysfunctional Families

Undue influence is very common in dysfunctional families and many of the indicators to watch out for are summarized in this blog.

I am frequently approached by members of a family who suspect that one or more of their siblings have unduly influenced or will try to do so that a parent will provide a disproportionate share if not all of their assets to that sibling(s).

The problem is further compounded due to the typical lack of communication that exists amongst dysfunctional family members.

Such dysfunctional family members are almost by definition suspicious and estranged from each other, combined with a problematic relationship with one or both parents.

The following are some guidelines for those who are trying to determine if unduly influence has been or is attempted to being exercised upon an elderly parent by one or more siblings. Please note that in law, undue influence must amount to coercion and not simply sustained pressure:

How to identify undue influence:

1. Check to see that the parent has gone to a lawyer of his or her choosing, particularly with a past history of working together, as opposed to being taken to a lawyer who only known to or friendly with the sibling in question;

 

2. Try and determine if your parent has sufficient mental capacity to properly instruct a lawyer of his or her choosing;

 

3. If the family is ethnic determine if the parent has sufficient language skills to instruct the lawyer without the use of an interpreter, and be particularly wary of the questionable sibling acting as interpreter;

 

4. Be aware of red flags, such as a black sheep member of the family suddenly reappearing and becoming the caregiver and decision-maker for the elderly parent;

 

5. If the parent lives in a care home, or independent living, try and make as many caregivers and knowledgeable people aware of any potential problems that you fear may arise by a sibling, whom you suspect may attempt to unduly influence your parent;

 

6. Be familiar with the assets owned by your parent(s) and who manages or oversees those assets, and inform all involved as to concerns of potential undue influence;

 

7. Be aware of any appointment of power of attorney or change in power of attorney to any sibling that is not to be trusted by his or her other siblings- usually such individuals have a history of manipulation;

 

8. Be aware of any threats of violence, or threats of putting an elderly vulnerable parent into a nursing home against his or her will;

 

9. Be aware of any depression, or drug or alcohol abuse that the elderly parent may be experiencing and are having problems dealing with;

 

10. Be aware that if you have concern about financial abuse of an elderly parent, you should report the matter to the Public Guardian and Trustee for the Province of British Columbia, who has a statutory duty to investigate the circumstances;

 

11. Inform the family doctor or other treating physicians of any concerns that you may have as to possible manipulation to the point of undue influence of an elderly parent;

 

12. Compile a list of events, circumstances and a timeline that may indicate circumstances that may collectively amount to undue influence;

 

13. Be aware of any significant decline in physical or mental capacity on the part of the parent;

 

14. Be aware of any drastic changes in the provisions of the will or power of attorney that under the circumstances do not make sense;

 

15. Be aware of the parent being kept in isolation from others, and being unavailable to take telephone calls;

 

16. Be aware of dependency on others, particularly a suspected sibling, when the parent is dependent on the sibling for sight, hearing, mobility, speech, personal needs, or care;

 

17. Look for signs of inappropriate clothing, cleanliness, bruising or untreated injuries;

 

18. Be aware of signs of early dementia, which typically involve some of or all of the following problems -short-term memory loss, disorientation, confusion, and difficulties with finances;

 

19. Be aware of signs of depression, agitation, frustration, mood swings, difficulty making decisions and other such significant changes in the parents emotional makeup;

 

20. Be aware of significant gifting and donations that are totally out of character for the elderly parent- this may involve the suspected sibling or may also involve third-party predators such as telephone solicitations;

 

21. Be aware when a third-party, particularly the suspected financial abuser, speaks for and on behalf of the elderly parent who typically withdraws from such conversations;

 

22. Insist upon financial transparency between siblings and parents with respect to financial decisions and estate planning;

 

23. Trust your gut feeling and be cognizant of the body language of both the parents and the suspected financial abuser, for such signs as anxiety, insecurity, embarrassment, or general unwillingness to talk about financial or care matters

Proprietary Estoppel (SCC)

Proprietary Estoppel (SCC)

In a significant win for disinherited individuals who were promised to inherit an asset, the Supreme Court of Canada in Cowper-Smith-Smith v. Morgan , 2017 SCC 61 reversed the BC Court of Appeal and allowed a claim for proprietary estoppel.

FACTS:

The trial judge had found that a non-owner of property, who gave assurances that were relied upon by the plaintiff, with respect to her future intentions, based on the assumption that she would inherit from her mother, the owner, was obligated I equity to carry out the effect of that promise.
The deceased mother transferred her house into joint tenancy with her daughter in 2001.
In 2002. The mother made a will, leaving her estate equally to her three children.

The mother’s investment accounts over several years were transferred into joint names with the daughter.

A declaration of trust for the house in bank accounts was signed in 2001 that stated that the daughter would be entitled absolutely to those assets upon the death of the mother.

Despite the fact that the trust declaration in joint ownership, if valid assured that the estate would be virtually devoid of assets, the mother also executed a new will that appointed the sister as executor and provided that the estate would be divided equally among the three children.

The defendant sister told her siblings that the house was put into her name only, so that she could assist in their mother’s affairs and that the asset would all eventually go to her mother’s estate.

The defendant daughter promised to transfer a one third share in the house in order to lure him back to Canada in order to assist his sister in caring for his mother.

The trial judge allowed the claim of the brother on the basis that he relied upon the promise made by his sister when he agreed to return to Canada to take care of his mother when the sister reneged on her promise to transfer to him her one third of the house, even though she did not own the house when she promised to transfer the brother one third of it.

The Court of Appeal reversed the trial judge decision on the basis that the sister did not own the property when she promised to transfer it to her brother.
The Supreme Court of Canada reversed the appeal court and allowed the claim of the brother to succeed on the basis of proprietary estoppel.

 

THE LAW:

To establish proprietary estoppel, one must first establish an equity of the kind that proprietary estoppel protects.

An equity arises when:

  1. A representation or assurances is made to the claimant, on the basis of which the claimant expects that he or she will enjoy some right or benefit over property;
  2. The claimant relies on that expectation by doing or refraining from doing something and his or her reliance is reasonable in all of the circumstances, and;
  3. The claimant suffers a detriment a s a result of his or her reasonable reliance, such that it would be unfair or unjust for the party responsible for the representation or assurance to go back on his or her word and insist on his or her strict legal rights.

When the party responsible for the representation or assurance possesses an interest in the property sufficient to fulfill the claimant’s expectation, proprietary estoppel attaches to that interest, and protects the equity by making the representation or assurance binding.

It is not necessary that the party responsible for the expectation own an interest in the property at the time of the claimant’s reliance-when the party responsible for the expectation has or acquires sufficient interest in the property, proprietary estoppel will attached to that interest and protect the equity.

Whether a claimant’s reliance was reasonable in the circumstances, is a question of mixed law and fact. A trial judge’s determination of this point, is absent palpable and overriding error, entitled to deference.

When a claimant has established proprietary estoppel, the court has considerable discretion in crafting a remedy that suits the circumstances, an appellate court should not interfere unless the trial judge’s decision evinces an error in principle, or is plainly wrong.

A claimant to establish is the need for proprietary estoppel is entitled only to the minimum relief necessary to satisfy the equity in his or her favor, and cannot obtain more than he or she expected.

Further, there must be a proportionality between the remedy, and the detriment.

Courts of equity must strike a balance between vindicating of the claimant’s subjective expectations and correcting that detriment.

Here, both the brother and a sister had clearly understood for well over a decade that their mother’s estate, including the family home, would be divided equally between her three children upon her death.

It was a sufficiently certain that the sister would inherit a one third interest in the property for her assurance to be taken seriously as one in which the brother could rely.

An equity arose in favor of the brother when he reasonably relied to his detriment on the expectation that he would be able to acquire his mother’s one third interest in the family home.

The equity could not have been protected by proprietary estoppel at the time it arose, because the sister did not then own an interest in the property.
However, proprietary estoppel did attach to the sisters interest as soon as she obtained it from the estate.

The sister as executor, could be ordered to transfer a one third interest in the property to each of the estate beneficiaries, so that her promise to her mother may be fulfilled.

Highest Court Encourages Alternatives to Trial

Highest Court Encourages Alternatives to Trial

The Supreme Court of Canada released its decision in Hryniak v. Mauldin (2014 S.C.C. 7, [2014] 1 S.C.R. 87) and encouraged alternative solutions to a trial.

In her decision, Karakatsanis, J. called for “a shift in culture” (para. 20). She recognized that the adjudication of civil disputes by way of a full trial has become illusory for many litigants (para. 24). She encouraged litigants and members of the judiciary to consider alternatives to a trial, including motions for summary judgment.

27      Karakatsanis, J. began her analysis of the issue of access to justice by emphasizing that “Our civil justice system is premised upon the values that the process of adjudication must be fair and just. This cannot be compromised.” (See para. 23.)

28      The principles of fairness and justice, the latter in particular, are reflected in Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194. In determining whether there is a genuine issue requiring a trial, a judge hearing a motion for summary judgment is entitled to exercise fact-finding powers “unless it is in the interest of justice for such powers to be exercised only at a trial” (rule 20.04 (2.1)).

29      With respect to the interest of justice, Karakatsanis, J. concluded that, “What is fair and just turns on the nature of the issues, the nature and the strength of the evidence and what is the proportional procedure” (para. 59). She also emphasized consideration of the litigation as a whole:

The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach. (para. 60)

30      The Ontario Court of Appeal has, in a number of recent decisions, emphasized the obligation on a judge hearing a motion for summary judgment “to assess the advisability of the summary judgment process in the context of the litigation as a whole”. (See: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 35 and Hamilton (City) v. Thier & Curran Architects Inc., 2015 ONCA 64, at para. 22.)

Executors/Trustees Must Care For Estate Assets

Executors/Trustees Must Care For Estate Assets

The law is clear that a personal representative (executors, trustees, and administrators)  has a duty to care for the assets of the estate: Stanger v. Royal Trust Co., [1947] 1 W.W.R. 538, [1947] 2 D.L.R. 534 (Sask. C.A.).

Personal representatives undertake their duties in furtherance of their fiduciary relationship to the beneficiaries of the estate: Montreal Trust Co. v. Sproule, [1979] 6 W.W.R. 372, 103 D.L.R. (3d) 368 (Alta. Q.B.); Gibson Estate, Re, [1930] 2 W.W.R. 400 (Man. C.A.); Low v. Gemley (1890), 18 S.C.R. 685 (S.C.C.) held that persons who accept the office of executors or trustees must be supposed to accept it with the responsibility at all events for the possession of ordinary care and prudence.

Executors or trustees must undertake their responsibilities with ordinary care and prudence:

Low v Gemley was cited in Melito Estate v. Melanson, 2012 ONSC 2584 (Ont. S.C.J.) at para 81, 2012 CarswellOnt 5318 (Ont. S.C.J.)

Adding, Substituting and Removing Parties to an Action

Adding, Substituting and Removing Parties to an Action

Stewart v Stewart 2017 BCSC 1532 also dealt with Rule 6-2 (7) that deals with adding, substituting or removing parties to a court action.

Rule 6-2(7)(a) provides:

(7) At any stage of a proceeding, the court, on application by any person, may, subject to subrules (9) and (10),
(a) order that a person cease to be party if that person is not, or has ceased to be, a proper or necessary party,

66 The plaintiff relies on Bilfinger Berger (Canada) Inc. v. Greater Vancouver Water District, 2014 BCSC 1588. There, a defendant sought to remove a plaintiff as a party on the basis that the plaintiff that was named as the “Joint Venture” was not a legal person in and of itself. Notwithstanding the fact that the other plaintiffs had acknowledged that they were jointly and severally liable for anything for which the Joint Venture might be liable, the court did not accept the defendant’s submission that the Joint Venture itself ought to be removed as being unnecessary with Justice Griffin stating:

a) on an application under Rule 6-2(7)(c), for the addition of a party, all that is required is that the application establish that there is a “possible cause of action”: Terasen Gas Inc. v. TNL Construction Services Ltd., 2011 BCSC 1345at para. 12;

b) under this sub rule there is also no requirement to demonstrate the likelihood that an allegation can be proven. The threshold is a low one: The Owners, Strata Plan LMS 989 v. Port Coquitlam (City), 2003 BCSC 1398at para.10;

c) it may be appropriate to name individuals as defendants under Rule 6-2(7)(b), even if it has been conceded that vicarious liability will attach to another named defendant: Edwards v. British Columbia, 2006 BCSC 710at paras. 13-21;

d) the test for joinder under Rule 6-2(7)(b) will be met where the involvement of the party is material in an evidentiary sense to ensure that all matters in the proceeding may be effectively adjudicated upon: British Columbia v. R.B.O. Architecture Inc., 1994 CarswellBC 1931 (S.C.) at para. 8; and

e) the test for adding or substituting a party is whether a party “ought to be have been joined as a party” or if their participation is “necessary”. A party is “necessary” if their participation is required to effectively adjudicate all matters at issue, whereas a party “ought” to be joined in situations including where it may “be more than mere convenience but less than a necessity”: Kitimat (District) v. British Columbia (Ministry of Energy and Mines), 2006 BCCA 562at paras. 28-29.

Life Estate Can Be Partitioned

Life Estate Can Be Partitioned

Aho v Kelly 1998 CarawellBC 1285 held that a one third owner of a property who also held a life estate in the property had the right to capitalize the life estate and force a sale of the property under the partition of property Act. The other two co owners could not have partitioned the property while the life estate was in place but the holder of the life estate could do so.

Here, this petitioner is a tenant in common in her own right. While she is also a trustee with the respondents under s. 96 of the Estate Administration Act (if that section still applies in light of the 1995 settlement), she nevertheless enjoys an independent capacity as a tenant in common and in that capacity she can invoke s. 2 of the Partition of Property Act.

28 Obviously, a court would be extremely cautious in ordering the sale of lands subject to a life estate where the life tenant does not consent. But where the life tenant agrees, the court enjoys jurisdiction to order a sale:

Chupryk v. Haykowskl (1980), 110 D.L.R. (3d) 108 (Man. C.A.) leave to appeal S.C.C. refused (1980), 110 D.L.R. (3d) (S.C.C.) 108n

29 Chupryk was a case similar to that at bar to the extent that the life tenant there was also a reversioner as to a one-third interest in title to the lands. Matas J.A. considered the cases at length. He summarized the Ontario cases (at 62):

The relationship of tenants in common to each other and to a life tenant has been considered in several decisions. In summary, it has been held (not unanimously) that partition legislation may be invoked in Canada only by persons having “an estate in possession” or having “the immediate right to its possession”: Laskin, ibid, p. 402.

In an early case, Lalor v. Lalor (1883), 9 P.R. 455, it was held by Proudfoot J., that a tenant for life is entitled to a partition and where there is a right to a partition there may be a right to a sale as the Court may determine. But in Murcar v. Bolton (1884), 5 0.R. 164 (followed in Rajotte v. Wilson (1904), 3 0.W.R. 737) in a contest between a life tenant and her children who held the remainder in fee, as tenants in common, it was held by a majority (2:1) that there was no power to compel a sale of land as against the tenant for life. …

30 Matas J.A. concluded (at 65):

… In my respectful view (supported, I think, by the reasoning in Lalor, supra, and in the dissenting judgments in Murcar and Bunting, supra) Mr. Chupryk is entitled to apply for an order for sale and the Court is empowered under the Act to exercise its equitable jurisdiction to make the order. The power is discretionary: Fritz v. Fritz (No. 1), 57 Man. R. 510, [1950] 1 W.W.R. 446, [1950] 2 D.L.R. 104 (C.A.).

No doubt the discretion would be exercised cautiously. It would be a rare case where a life tenant would be compelled to suffer partition or sale against his wishes. But here, the life tenant, who is also the registered owner of an estate in remainder, has not objected to a sale.

31 Chupryk was considered in Morris v. Howe (1982), 38 O.R. (2d) 480 (Ont. H.C.).

32 DuPont J. held (at 485, referring to Chupryk,):

To the extent that this decision may be seen as authority for the propositions that a life tenant may obtain sale of land over the opposition of a remainderman, or that one of several remainderman may obtain partition (and hence possibly sale) of the lands before the remainder has fallen into possession and without the consent of a prior life tenant, Lalor and Bunting v. Servos, establishes that the law of this province is to the contrary. But I think the conflict between the laws of Manitoba and Ontario in these respects may be more apparent than real. The essential fact in Chupryk, was that all the parties interested in the land desired sale. This, it appears to me, distinguishes the case from the various Ontario decisions to which I have referred. This also distinguishes it from the instant application.

33 It will be seen that the case at bar presents a different variation on the theme in Morris . Here one of the reversioners, who is also a life tenant, seeks a sale of the lands.

34 In Morris, DuPont J. goes on to say (at 485):

I do not think that where, as here, land is subject to consecutive interests of a sole life tenant and a remainderman, this Court can or ought to grant the life tenant an order the effect of which will be to defeat the remainderman’s interest in the lands without his consent and against his reasonable opposition. I find that the respondent’s opposition to sale of the lands is reasonable, having regard to all the circumstances. I leave open for future consideration factual situations where it can be concluded that such opposition is not reasonable.

35 I conclude that it is open to me to follow Chupryk, and I do so.

36 That then engages the court’s discretion under sections 2 and 7 of the Partition of Property Act.

37 I will deal with the exercise of my discretion, after I have considered the remaining questions which I have posed.

(b) Common Law Life Estate and Value

38 Clearly a common law life estate is a property interest having some “value”. I use that word in the sense of an amount of money or goods for which a thing can be exchanged in the open market. At common law, a life estate is alienable. Upon a transfer it becomes an estate pur autre vie.

39 Kwasnycki (supra) reminds us that a life tenant has the right to occupy the property in question and to rent or lease the whole or part thereof for his or her lifetime and to enjoy the net income therefrom.

44 That a common law life estate has value was finally, implicity, recognized in Crow v. Samiroden (December 22, 1997), Doc. New Westminister S0-34057 (B.C. S.C.) and Blowers, Re (1985), 24 E.T.R. 143 (Man. Q.B.).

45 I repeat the second question in this analysis:

Does the common law life tenant’s interest have a value capable of capitalization which should properly be discharged out of the proceeds of sale under the Partition of Property Act?

I respond in the affirmative.

Duress

The Threshold for Establishing Duress

Milionis v Rivas 2017 ONSC 5001 discussed the law of duress when an application was brought to seek a declaration that a $400,000 mortgage was invalid as it was purportedly signed under duress. The court disagreed as it is difficult to set aside an agreement based on duress.

The Court stated:

Given that the law does not lightly set aside an agreement, the threshold for establishing duress is high. In Barton v. Armstrong, [1976] A.C. 104, at 121 (J.C.P.C.), Lord Wilberforce (dissenting in the result) stated:

The action is one to set aside an apparently complete and valid agreement on the ground of duress. The basis of the plaintiff’s claim is, thus, that though there was apparent consent there was no true consent to the agreement; that the agreement was not voluntary. This involves consideration of what the law regards as voluntary, or its opposite; for in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained — advice, persuasion, influence, inducement, representation, commercial pressure — the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion. In this the law, under the influence of equity, has developed from the old common law conception of duress — threat to life and limb — and it has arrived at the modern generalisation expressed by Holmes J. — ” subjected to an improper motive for action ” (Fairbanks v. Snow 13 Northeastern Reporter 596, 598). [Emphasis added]

65 Duress requires proof of pressure that:

(1) the law regards as illegitimate, such as threat of any form of illegal action; and

(2) is applied to such a degree as to amount to a “coercion of the will” of the party relying on this defence.

The following considerations apply in determining whether there is a “coercion of the will”:

(1) did the party relying on this defence protest?

(2) was there an alternative course open to him or her? (3) was he or she was independently advised? (4) after entering the agreement did he or she take steps to avoid the agreement after entering it? See A.A. v. A.G, 2017 ONCA 243, paras. 26-27; Gordon v. Roebuck (1992), 9 O.R. (3d) 1 (C.A.), at para. 3.

66 An agreement obtained through duress is voidable at the instance of the party subjected to the duress unless by another agreement or through conduct, either express or implied, he affirms the impugned agreement at a time when he is no longer the victim of duress: Stott v. Merit Investment Corporation (1998), 63 O.R. (2d) 545 (C.A.), at para. 49.

Life Estate Valuation

Life Estate Valuation

Re: Zarowiecki 1092 CarswellMan 99 dealt with the valuation of a life estate in a homestead and followed the formula dictated by the Supreme Court of Canada in Re Morice v Davidson (1943) SCR 545, utilizing actuarial calculations.

The Supreme Court of Canada decision, Re Morice; Morice v. Davidson, [1943] S.C.R. 94, 545, [1943] 1 D.L.R. 680, [1943] 4 D.L.R. 658, establishes the proper procedure to be followed. At p. 97 Hudson J. states:

When the appellant and respondent agreed to sell the property, they were selling two separate estates: the life estate of the appellant and the remainder of the fee simple held by the respondent as executor of the estate. The proceeds of the sale belonged to the parties in the proportion which the life estate bore to the remainder.

Further:

20 “… the value of the life estate must be ascertained on the basis of $4,275”, (the net proceeds of the sale) “being the value of both life estate and remainder, and when this is done the appellant will be entitled to be paid the amount fixed as value of the life estate.” And at p. 98:

If the parties cannot agree no doubt the amount should be fixed on a reference with the aid of an actuary.

21 There has been no agreement in this case nor any apparent hope of agreement.

22 The learned justice concluded, at p. 98:

The net proceeds of the sale of the homestead should be divided in proportion to the respective values of the life estate and of the remainder, the widow accordingly receiving out of such proceeds the share representing the value of the life estate.

23 The net proceeds of the sale of the homestead property amounted to $202,284.51, as agreed by counsel. The value of the widow’s life estate, the amount to which she is entitled out of the sale proceeds, is calculated on the basis of actuarial evidence. The ingredients in the calculation are the interest rate, the value of the property and the life expectancy of the widow: Re Casselman (1974), 6 O.R. (2d) 742, 47 D.L.R. (3d) 354 (H.C.).

24 Two experts were heard in the present case on the application of the three factors. Dr. John McCallum, economist and professor of finance and administrative studies at the University of Manitoba, testified that the interest rate to be used would represent a real rate of return. That would take into account such items as inflation and any other of a negative character, as opposed to the nominal interest rate. He stated that in conventional use in North America, two to three per cent were indicative of a real return. He found that three per cent in this case would be a not unreasonable figure.

25 Mr. John Corp, consulting actuary of Reed Stenhouse, adopted the three per cent interest rate as an acceptable and reasonable real rate of return in his calculation of the life interest based on the sale proceeds. He also took into account, he testified, the age of Mary Zarowiecki, which, it was agreed, was 82 years at the time of sale. He used the Manitoba Life Tables for females, 1975-77, published by Statistics Canada. Mr. Corp found that the proportion of the value of the property attributable to the life tenant is 17.83 per cent. The time of sale, when the life estate was disposed of, was the proper time on which to base the calculation. According to Mr. Corp’s testimony, he followed accepted actuarial practice.

26 I find that the value of the life estate is 17.83 per cent of the net proceeds of the sale of the homestead or $36,067.39, which sum is payable forthwith in a lump sum upon receipt by the estate of the sale proceeds.

Occupational Rent Ordered For Non Vacating Son

Occupational Rent Ordered For Non Vacating Son

An order for occupational rent of $42000 per month was ordered against a son who had lived with his mother and who effused to vacate the estate asset home for ten months after his mother’s passing in Fileppelli Estate 2017 ONSC 4923.

The Court also ordered that the son vacate the property.

I agree with the views of Justice Daley in Bergmann v. McMahon, 2010 ONSC 993, at paras. 37-39, that occupation rent is akin to a claim for unjust enrichment. Mr. Filippelli was clearly enriched by being able to occupy Goldsboro and the Applicants were deprived of both the occupancy of and the use of the property as well as rental income that could have been generated from it. There was no juristic reason for the enrichment received by Mr. Filippelli. I note that Daley J. at para. 7 also found that the property taxes represented a liability of the estate.

21 Furthermore, as stated by Justice Low in Broos v. Broos, 2009 CanLII 68463 (Ont. S.C.) (at paras. 5 and 15), in a similar fact situation, where she found there was no justification for the respondent’s continued occupation of the estate property, she ordered that he vacate the property within 30 days. She found that by not paying compensation to the estate the respondent had denied the estate the opportunity to realize rental income and that he had benefited to the detriment of the beneficiaries. It does not appear that Low J. was asked to order occupation rent.

22 In the circumstances, as we are talking about rent going back to October 2016, I order that the occupation rent payable be $2,000 per month for a total of $20,000 for the period October 2016 to September 2017 inclusive. I also order that Mr. Filippelli pay the pest control services cost in the amount of $282.50 as clearly that was required because of the way in which he was maintaining (or I should say not maintaining) the property. The report from the City states that Goldsboro was not being kept free of rodents on the main floor cupboards and in the laundry room in the basement. This corroborates the evidence of the Applicants that Mr. Filippelli is not keeping the property clean.