Executor Ordered to Produce Deceased’s Medical Records

Executor Ordered to Produce Deceased's Medical Records

An Alberta case Petrowski v Petrowski 2005 ABQB ordered the executor to produce medical records of the deceased pointing to her obvious conflict of interest in having the exclusive authority in relation to a doctor’s confidentiality when there was reason to question the testator’s mental capacity at the time of various transfers.

The decision was referred to in Armstrong v Katanko 2019 BCSC 1519 with seeming approval, but distinguishing it on the basis that Petrowski was for production of medical records and Kotanko was for lawyer-client records.

It is often crucial to obtain a complete set of the deceased’s medical records when alleging lack of mental capacity, undue influence, unconscionable contract and similar remedies in the estate litigation.

In Petrowski the deceased transferred property to his daughter, the plaintiff’s sister, during his lifetime. The sister is also the executor of his estate.

The plaintiff sought an order that he be allowed unfettered access to medical information about his father, including the ability to interview the doctors. The sister argued that as executor, she had exclusive authority in relation to a doctor’s duty of confidentiality.

The court noted the sister’s obvious conflict of interest:

“ It seems to be manifestly unfair that Joan, because she is named executrix in a will, the validity of which is also challenged, should have unfettered access to medical information concerning the deceased, and able to deny her brother the same unfettered access.”

Further, if an executrix has exclusive authority in relation to a doctor’s duty of confidentiality to the deceased, it would, in my view, constitute an abuse of that authority for the executrix, to use her authority to advance her own personal position in litigation, as distinct from the position of the estate.

If the inter vivos land transfers had been made to a third-party, and there was reason to question the transferor’s mental capacity at the time of the transfers, it could be the executrix’s duty to challenge the transfers for the benefit of the estate. In that sense the executor’s interest ias inter vivos transferee of the deceased’s land may conflict with her duties as executrix.

Removal of a Committee or Litigation Guardian

Removal of a Committee or Litigation Guardian

The applicable case law and test for the appointment and removal of committee or litigation guardian of a patient’s estate is the Supreme Court of Canada decision of Gronnerud v Gronnerud (2002) 2 SCR 417, which essentially was a useful statement of the parens patriae jurisdiction of the court in the best interests of the patient.

In that decision, the litigation guardians were removed on the basis that the guardians were in a conflict of interest towards the dependent adult. There was also an added element of acrimony or a high level of conflict between the guardians in the opposite parties in the litigation, which was found to amount to a conflict of interest.

In Gronnerud , the court stated evidence must demonstrate that the litigation Guardian is both qualified and prepared to act, and in addition is indifferent as to the outcome of the proceedings.

The third criterion, that of indifference to the result of the legal proceedings, essentially means that the litigation Guardian cannot possess a conflict of interest with respect to the interests of the disabled person.

Indifference by a litigation Guardian requires that the Guardian be capable of providing a neutral, unbiased assessment of the legal situation of the dependent adult and offering an unclouded opinion as to the appropriate course of action.

In essence the requirement of indifference on the part of a litigation Guardian is a prerequisite for ensuring the protection of the best interests of the dependent adult. A litigation Guardian who does not have a personal interest in the outcome of the litigation will be able to keep the best interests of the dependent adult front and center, while making decisions on his or her behalf. Given the primary of protecting the best interests of disabled persons, it is appropriate to require such disinterest on the part of a litigation Guardian.

It is acceptable in most cases, and perhaps desirable and some cases, to have a trusted family member or a person with close ties to the dependent adult act as litigation Guardian.

There are, however, exceptions, such as in the situation where there is a particularly acrimonious and long-standing dispute among the children concerning their dead parent’s estate. In such cases, the indifference required to be litigation Guardian is clearly absence.

Essentially the same criteria for the removal of a litigation Guardian is the same as in the case of removal of a committee. See Re Poon 2005 BCSC 254.

The requirement that the property Guardian not be in conflict of interest is a proxy for ensuring that the property Guardian protect the best interests of the dependent adult. Similar to the requirement the litigation Guardian be indifferent, at minimum, a property guardian must be able to handle the finances of the represented party in a disinterest, unbiased manner.

Although the statute is clear in stating that being a family member or potential beneficiary is insufficient by itself to prove a disqualifying conflict, in some cases, a family members or potential beneficiaries, there is evidence of other factors indicating a lack of objectivity. It is the unusual case where a family member or potential beneficiary in a troubled estate can demonstrate an absence of conflict and bus act as property Guardian.

Conflict of Interest: Disqualifying a Lawyer

Disqualifying a Lawyer for Conflict of Interest

Stewart v Stewart 2016 BCSC 2256 dismissed an application to have an acting lawyer disqualified as counsel for having a conflict of interest.

The court set out the criteria for such an application.

The two questions to be asked in determining whether there is a disqualifying conflict of interest are:

(a) Did the lawyer receive confidential information attributable to a solicitor-client relationship relevant to the matter at hand?

(b) Is there is a risk that that information will be used to the prejudice of the client? (MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235 (S.C.C.) [MacDonald Estate]; Manville Canada Inc. v. Ladner Downs, [1993] B.C.J. No. 554 (B.C. C.A.), aff’g (1993), 63 B.C.L.R. (2d) 102 (B.C. C.A.).)

37 As was stated by Justice Bauman (as he then was), in Jackson Estate v. Ritch, 2003 BCSC 1942 (B.C. S.C.) [Jackson Estate] at para. 65, the first question involves two aspects: did the lawyer receive confidential information relevant to the matter at hand, and was the lawyer in a solicitor-client or near solicitor-client relationship with the applicant.

38 The near solicitor-client relationship arises in “circumstances where there has developed a relationship of confidence in the same or a related matter”: Jackson Estate at para. 59.

39 The analysis of whether a near solicitor-client or informal solicitor-client relationship existed involves considering whether the applicant “bared its soul” to the lawyer it seeks to disqualify: Jackson Estate at para. 67 referring to MacDonald Estate.

40 In Brookville Carriers Flatbed GP Inc. v. Blackjack Transport Ltd., 2008 NSCA 22 (N.S. C.A.), Justice Cromwell (as he then was), considered at paras. 50-53 the issue of when retainers are “related”:

50 Whether two retainers are related must be considered in light of the underlying purpose of the inquiry. In the MacDonald Estate analysis, the focus is on protection of the client’s confidential information. In that context, two matters will be sufficiently related to trigger the principle if, as Goudge J.A. put it in Chapters at para. 30, ” . . . it is reasonably possible that the lawyer acquired confidential information pursuant to the first retainer that could be relevant to the current matter.” The issue is not so much whether the subject-matter of the two retainers is the same, but whether confidential information learned in one would be relevant to the other. Ultimately, the “overriding policy” must be “that the reasonably informed person would be satisfied that no use of confidential information would occur” MacDonald Estate, p. 1260.

51 Under the principle relevant here, that concerning acting against a former client in a related matter, the focus is different. As the cases and commentators show, the scope of this duty is very limited absent confidential information being at risk. This broader continuing duty of loyalty to former clients is based on the need to protect and to promote public confidence in the legal profession and the administration of justice. What is of concern is the spectre of a lawyer attacking or undermining in a subsequent retainer the legal work which the lawyer did for the former client or of a lawyer effectively changing sides by taking an adversarial position against a former client with respect to a matter that was central to the previous retainer. Basinview is an example of the former: the new retainer involved the lawyer attacking or attempting to undermine the very legal services provided to the former client. Harris and Chiefs of Ontario are examples of the latter: the new retainer involved attacks on the honesty and integrity of the former client in relation to exactly the same sort of matters as the lawyer acted to defend in the previous retainer. In either type of case, the relationship between the two retainers must be very close so that the lawyer in the new retainer is attacking or undermining the value of the legal work provided to the former client or effectively changing sides in a matter that was central to the previous retainer.

52 It is important, in my view, that this principle not be applied too broadly. One must not lose sight of the important right of parties to retain and instruct the counsel of their choice or of lawyers to earn a living free of undue restriction. Moreover, one must not ignore the possible strategic use of applications to disqualify counsel. As Binnie, J. pointed out in Neil at para. 14, “[i]f a litigant could achieve an undeserved tactical advantage . . . by … using ‘the integrity of the administration of justice’ merely as a flag of convenience, fairness of the process would be undermined.”

53 It is also important that the scope of these duties be as clear as possible. To be avoided is an approach ” . . . on a case-by-case basis through a general balancing of interests, the outcome of which would be difficult to predict in advance.”: Strother at para. 51. This sort of uncertainty intrudes unduly into the rights of parties to retain counsel of choice, nourishes misuse of the principles for tactical purposes and generally undermines rather than reinforces public confidence in the legal profession and the administration of justice.
[Emphasis added.]

41 The applicable standard is that of a reasonably informed person, apprised of the facts: MacDonald Estate at para. 53. In making this determination, there should be a cautious approach to disqualification applications. The court should interfere with a party’s right to representation by counsel only in clear cases: Manville Canada Inc. v. Ladner Downs (1993), 63 B.C.L.R. (2d) 102 (B.C. C.A.) [Manville] at para. 51; Merrick v. Rubinoff, 2013 BCSC 2352 (B.C. S.C.) [Merrick] at para.14.

42 Both this court and the Court of Appeal have provided additional direction on the circumstances in which a disqualification application should succeed:

(a) to demonstrate that the current action is a related matter, there must be more than “a mere assertion of similarity”: LS Entertainment Group Inc. v. Wong, 2000 BCSC 1789 (B.C. S.C.) [LS Entertainment] at para. 53;

(b) “given the drastic nature of the remedy there should be compelling and cogent evidence which provides a sufficient connection between the retainers”: LS Entertainment at para. 54 citing Moffat v. Wetstein (1996), 135 D.L.R. (4th) 298 (Ont. Gen. Div.) at 326;

(c) disqualification ought only to occur where there is evidence of “real or actual mischief”. A “mere perception or appearance of a conflict of interest is not sufficient to find a disqualifying conflict of interest”. Instead, the court must have regard to reality rather than perceptions and appearances: Maedou Consulting Inc. v. 0887455 B.C. Ltd., 2015 BCSC 2009 (B.C. S.C.), para. 43; LS Entertainment at para. 70; Manville (S.C) at paras. 45-49;

(d) even where the MacDonald Estate requirements are met, disqualification is a discretionary remedy that is equitable in nature. Disqualification of the lawyer can only be justified if it prevents the imposition of a greater injustice on the party applying for the disqualification than that suffered by the party whose counsel is disqualified: Manville (S.C.) at para. 51; Merrick at para. 23; and

(f) generally, courts in this province have taken a cautious approach in ordering the removal of counsel contrary to the wishes of the client, thereby acknowledging the right of a litigant to the choice of his or her own counsel: Coutu v. Jorgensen, 2004 BCCA 400 (B.C. C.A.)at para. 31.


Independent Legal Advice – 7 Factors to Look For

Independent Legal Advice

I am typically attempting to set aside a transaction or a will and I often look to see if there was independent legal advice (ILA) given and if so, was it truly independent.

For example on a recent file a daughter took her mother to a lawyer and instructed the lawyer to transfer the mother’s property into joint tenancy with her mother’s  grandson, the son of the instructing daughter.

The owner/grandmother then died and the grandson purported to be the owner of the property.

When we obtained and reviewed the lawyers file, he not only took instructions to prepare the transfer from the mother of the recipient grandson of the interest in joint tenancy,  but the bill was also rendered to the daughter , while meanwhile the lawyer  takes the position that he acted for the donor grandmother.

If so, where was her independent legal advice?

Factors to Look For in Independent Legal Advice

1. The person taking advantage of the wealth transfer is present at the time the advice is given or the time the documents are signed.

2. Some or all of the instructions have come from the person taking advantage from the transaction.

3. The lawyer does not have a full understanding of the client’s overall asset picture, and is unable to assess or to discuss the extent to which it will impoverish them.

4. The lawyer has any prior professional relationship with the person taking advantage.

5. The lawyer has a past or current personal relationship with the person taking advantage (e.g., childhood friend, best friend of lawyer’s wife).

6. The lawyer is upon close scrutiny really acting for someone other than the client, or is acting in a joint retainer with the person taking advantage.

7. Any part of the fees are being paid by the person taking advantage under the rela­tionship rather than by the client himself or herself.

Passing Over an Executor

Passing Over an Executor

Passing over an executor utilizes essentially the same legal criteria as removing an executor except it occurs before the named executor starts to act in the representative capacity.

Re Thommasson Estate 2011 BCSC 481 removed a named  executor who was not a beneficiary but his siblings wished to review a questionable land transaction made to him by the deceased prior to death .

The criteria for the passing over of an executor is essentially the same as removing an executor- the court’s are reluctant to do so except for good reason having regard to the best interests of the beneficiaries.

19      Courts are hesitant to interfere with the testator’s right to nominate his or her executor. However, the court has both a statutory power under s. 31 of the Trustee Act, R.S.B.C. 1996, c. 464 and an inherent power to remove or pass over a trustee or executor: Mardesic v. Vukovich Estate (1988), 30 B.C.L.R. (2d) 170 (B.C. S.C.); Seaton Estate, Re, 2003 BCCA 555 (B.C. C.A.).

20      Section 31 of the Trustee Act provides:

If it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court, it is lawful for the court to make an order appointing a new trustee or trustees, whether there is an existing trustee or not at the time of making the order, and either in substitution for or in addition to any existing trustees.

21      In Mardesic, Finch J. (as he then was) in finding it necessary and expedient to remove the trustee because he was in a conflict of interest with the interests of all the beneficiaries of the estate, noted that s. 31 conferred a very broad power on the court.

22      The test for removal of an executrix or trustee is set out in Conroy v. Stokes, [1952] 4 D.L.R. 124 (B.C. C.A.), where the Court confirmed at 126-127 that the main test for removal of a trustee is the welfare of the beneficiaries:

In Letterstedt v. Broers (1884), 9 App. Cas. 371, their Lordships of the Judicial Committee held that the main principle upon which the jurisdiction of Courts of Equity has been exercised to remove old trustees and substitute new ones in cases requiring such a remedy, is the welfare of the beneficiaries of the trust estate.

23      In Stadelmier v. Hoffman (1986), 57 O.R. (2d) 495 (Ont. Surr. Ct.), (sub nom. Stadelmier v. Hoffman), the Court found the executor should be passed over because there was a conflict as a result of the fact the executor could not attack the gift and transfer of properties to him while at the same time maintaining in his personal capacity that the transfers were proper. The Court summarized the findings at 500:

In considering the fitness of the respondent to act as an executor I have considered also the duties of an executor in a general way. One duty of an executor is to bring in the estate for distribution among the beneficiaries. If it is perceived, on good grounds, that that important duty is compromised by a personal conflict of interest because the executor will be asked to sue himself to recover what may be a large part of the estate property, he must be passed over. That consideration is particularly important when the action against the executor is for a very significant amount in respect to the size of the estate.

24      In this case, Alex asserts he should not be removed because it would be pre-judging the case. He says that Brian is seeking to overturn the testators’ right to nominate an executor. Alex submits that the possibility of a future lawsuit is not sufficient to overturn a testator’s right to nominate an executor. He relies on the following cases for the proposition that this is not an appropriate case in which to pass over him as an executor: Hautakoski Estate, Re, 2009 BCSC 868 (B.C. Master); De Cotiis v. De Cotiis, 2008 BCSC 1206 (B.C. S.C. [In Chambers]); Le Roux v. Shannon, 2009 BCSC 331 (B.C. S.C. [In Chambers]); and Fawcett Estate v. Steiner, 1998 CarswellBC 625 (B.C. S.C. [In Chambers]).

25      Brian provided the following authorities in which the courts found a conflict that warranted either passing over or removal of an executor or trustee because of either a potential or actual conflict: Stadelmier v. Hoffman; Mardesic; Montgomery v. Osborne Estate1993 CarswellOnt 3482 (Ont. Gen. Div.); Maki Estate, Re, 2007 BCSC 1034 (B.C. Master); and Stern v. Stern, 2010 MBQB 68 (Man. Q.B.).

26      It is clear from reviewing the case law that each case turns on its own facts.

27      In this case, Alex is not a beneficiary under either of his parents’ wills, and his only interest in the estates is as an executor. The other named executor wants to make enquiries into the transfer of the Property to Alex in order to determine what, if any, interest the estates have in the Property, and what, if any, obligations Alex and his wife have to the estates as a result of the transfer.

28      The application is not to remove Alex as an executor but simply to pass over him so that an enquiry can be undertaken of the transfer of the Property to him and his wife by the deceased in 2006, and a determination can be made if any further actions need be taken in regards to the Property.

29      In the circumstances of this case, it is my opinion that there is a perceived conflict of interest between Alex in his role as an executor and his interest in his personal capacity. If an action is instituted by the executors as a result of the transfer of the Property, it would be against Alex. In my opinion, Alex, in his capacity as executor, cannot attack the transfer of the Property to himself while at the same time maintaining, in his personal capacity, that the transfer of the Property was proper. By making such a finding I am not prejudging the case. I am simply of the view that, in the circumstances of this case, if an action is commenced as a result of the enquiries into the transfer, Alex cannot conscientiously act as a plaintiff in his capacity as an executor in a case where he will be the defendant.

30      As a result I conclude that the passing over of Alex is necessary and expedient. His right to apply to be added as a co-executor under the grant of probate after the enquiry has been completed is reserved. There will be a grant of probate naming Brian as the personal representative of the estate of Herbert Thomasson and the estate of Agnes Annie Thomasson.

Prohibiting Lawyer From Acting

Prohibiting Lawyer From Acting

Rubin Estate v Rubin Estate 2017 ONSC 1404  dealt with an application of prohibiting Lawyer from acting for her siblings and mother who were being sued by one daughter.

The lawyer in question had previously given US tax advise on a ” no names basis” and the court found that this did not warrant sufficient grounds to prohibit the lawyer from acting as counsel.

2. Lawyers can be prohibited from acting against a person where:

a. the lawyer has received relevant confidential information from the person attributable to a lawyer client relationship; and

b. there is a risk that the lawyer will use the person’s confidential information to the prejudice of the person.

Ontario v. Chartis Insurance Co. of Canada, 2017 ONCA 59 (Ont. C.A.) (CanLII) at para.33.

In the leading Supreme Court of Canada case on this topic, MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235 (S.C.C.), Mr. Justice Sopinka adverted to this very issue.

In discussing the need to protect the client’s confidentiality during a motion to remove opposing counsel, Sopinka J. held that clients cannot be required to prove that their former lawyer had confidential information because “[i]n order to explore the matter in depth may require the very confidential information for which protection is sought to be revealed.”

To avoid this conundrum, the Supreme Court of Canada created a rule under which all that a former client needs to do is to show that there was a previous relationship between the client and the lawyer related to the lawyer’s current, adverse retainer, and the court will then infer that confidential information was imparted to the lawyer by the former client unless the lawyer proves otherwise.

Moreover, if the lawyer wants to try to prove that no confidential information was disclosed to him or her, the lawyer’s burden “must be discharged without revealing the specifics of the privileged communication.” See MacDonald Estate at pp. 1260 and 1261.

 Accordingly, I do not have to assess whether a lawyer who receives information on a “no names” basis has a duty akin to a law firm marketing its services to a potential client as discussed in Ainsworth Electric Co. v. Alcatel Canada Wire Inc., 1998 CarswellOnt 2162 (Ont. Master).

Nor do I have to try to balance the applicant’s right to a lawyer of her choosing against the respondents’ right to protection of their confidences in a solicitor client relationship. In light of the disclosure of the email, there is no more confidential information in the hands of the applicant’s firm and therefore there is no risk of the applicant’s lawyer illicitly using any confidential information in his firm’s possession.

Probate Revoked For Improper Service

Probate Revoked For Improper Service

Al- Sabah Estate 2016 BCSC 1781 both have a probate revoked and removed the administrator for both failing to disclose important information to the court as well as sending the required probate notice to her close relatives at addresses that were mostly incorrect and could have easily been corrected.

The court held that   equity favoured the revocation of grant of letters of administration and followed the decision of Desbiens v Smith Estate 2010 BCCA 394 where a grant of probate was set aside in order to allow a wills variation action brought” out of time”, but the defendants had not received notice of the probate application due to an incorrect address used by the executor who should have been more diligent.

40      Moreover, I am satisfied that, at the time she applied for the grant of letters of administration of the estate, Sheikha Salem failed to disclose to the court pertinent information that ought to have been disclosed.

41      Where the evidence discloses that the person who is obliged to give notice failed to exercise sufficient diligence to ascertain the correct address to which the notice was to be mailed, the notice requirements of the Act are not complied with, and the court has a general discretion to revoke a grant of letters of administration: Desbiens v. Smith Estate 2010 BCCA 394 (B.C. C.A.) at paras. 21 to 35 inclusive. I do note that that decision dealt with the Act’s predecessor, the now-repealed Estate Administration Act, which was replaced by the Act. However, the general principles of law remain applicable.

42      When it is alleged that an administrator should be removed because he or she is not acting in the best interests of the estate, the main factor to be considered is the welfare of the beneficiaries: Veitch v. Veitch Estate, 2007 BCSC 952 (B.C. S.C.) at para. 22

Executor Cannot Use Estate Funds To Defend Personally

Executor Cannot Use Estate Funds To Defend Personally

In a Wills variation claim (now section 60, WESA) an executor cannot use estate funds to defend him or herself if a beneficiary, and may  use reasonable estate  funds to defend the claim but only in the capacity of executor and not beneficiary.

In a wills variation claim the executor cannot use estate funds to defend his personal interests.

The executor may have his reasonable legal fees paid in his role as executor but should have separate counsel in most cases and the fees should be kept to a minimum–typically for advising on estate developments, liabilities and assets.

Generally, the executor is required to play a neutral role in litigation, and as a result of having to play a neutral role, the executor is generally entitled to special costs from estate.

But when the executor is also a beneficiary the costs must be separated.

If one counsel acts for the executor in both the capacity of executor and personal beneficiary, then the legal fees must be apportioned between the two separate roles, with the estate paying only for the role of executor. Wilcox v Wilcox 2002 BCCA 574.

Steernberg v. Steernberg Estate (2007), 33 E.T.R. (3d) 78, 74 B.C.L.R. (4th) 126, 40 R.F.L. (6th) 106, 2007 BCSC 953, 2007 CarswellBC 1533, Martinson J. (B.C. S.C.); additional reasons to (2006), 2006 CarswellBC 2751, 32 R.F.L. (6th) 62, 28 E.T.R. (3d) 1, 2006 BCSC 1672, [2006] B.C.J. No. 2925, D. Martinson J. (B.C.S.C.)  is one of my favourite cases, primarily for the reason in the headnote.

Prior to this case, it was not uncommon for defendants to routinely use estate funds in the hope of depriving a plaintiff of sufficient resources to continue the fight.

Steernberg levels the playing field by making each party pay for their own legal costs as the litigation proceeds, save for the executor, who must remain neutral in the litigation.

Here are the facts of Steernberg:

The Wife, husband’s son, husband’s three daughters and husband’s brother-in-law were beneficiaries under husband’s will.

The Plaintiff wife challenged husband’s will–husband’s son was the executor of the will.

An offer to settle made under R. 37 of Rules of Court, 1990 was signed by son as executor and the other four beneficiaries, but not on behalf of son in his personal capacity as beneficiary.

Legal fees for defendant’ litigation counsel of $148,250.62 and legal fees of counsel for executor of $72,895.24 were deducted before net values of estate were calculated.

Shortly after the trial ended and before reasons for judgment were issued, the estate paid defendants’ litigation counsel’s invoice of $60,700.

None of these payments were made or recorded with the wife’s consent and no funds from estate were made available to the wife before, during or after trial for her legal fees.

During the trial, the wife raised the concern that the defendants took substantial sums of money out of estate for legal fees to defend action before the trial started.

The parties agreed that the issue would be decided after the court gave its decision on whether will should be varied.

It was inappropriate to withdraw funds from estate at start of litigation, or throughout the course of litigation to fund defence of Wills Variation Act claim in the absence of a court order or unanimous agreement of beneficiaries

In a Wills Variation Act (S. 60 WESA) claim the validity of will itself was not being challenged and there was no need for the executor to “defend” will

The son was not entitled, in his neutral role as executor, to make a R. 37 offer and he did not join in the offer in his personal capacity as a beneficiary.

It was not an offer made on behalf of all persons beneficially interested in the assets of the estate and hence would not be binding on the estate.

The losing beneficiaries must pay the wife’s costs personally, not out of the estate.

It was directed that the executor pass his accounts before a registrar and that the registrar inquire into and make recommendations with respect to the net value of the estate after taking into account appropriate legal fees and income that ought to have been earned on the funds had they remained invested.

Incorporation By Reference In Wills

Wills on occasion mention another document in existence that the will maker wants to be given effect in the terms of the incorporation by reference in wills.

Re Kellogg Estate 2013 BCSC 2292 pagraphs 74-79 discusses the law relating to incorporation by reference.


[74]     The clause in the Will which I refer to as the “Incorporation by Reference Clause” is the following (and is also set out in paragraph 15(b) above):

“If for any reason the said Trust shall not be in existence at the time of my death, or if for any reason a court of competent jurisdiction shall declare the foregoing testamentary disposition to the Trustee under said Trust as it exists at the time of my death to be invalid, then I give all of my estate including the residue and remainder thereof to that person who would have been the Trustee under said Trust as Trustee, and to their substitutes and successors under the Trust, as such trust is described hereinabove. Property held by the designated Trustees shall be held, managed, invested, reinvested and distributed by the Trustees upon the terms, trusts and conditions contained in said Trust pertaining to the period beginning with the date of my death. The terms, trust and conditions shall be those as were constituted in said Trust (giving effect to amendments, if any, hereafter made) immediately prior to its state of non-existence or determination of invalidity, and for that purpose I do hereby incorporate such Trust by reference into this my Will.”

[Underlining Added]


[75]     The requirements for incorporating a document into a will were described in Re Mihalopulos  ( 1956) 5 DLR (2d) 628, Alta SC, as follows at para. 9:

It seems clear from the authorities that if a document is to be deemed as having been incorporated into a will, two conditions must be satisfied.:

(1) It must be clear that the testator in the will referred to some document then in existence; and

(2), the document in question must be beyond doubt the document referred to: Jarman on Wills, 8th ed., p. 154; Re WatMns (1865), L.R. 1 P.&D. \9; Allen v. Maddock (185%), 11 Moo. P.C. 427, 14 E.R. 757; Singleton v. Tomlinson (1878), 3 App. Cas. 404; Re Smart, [1902] p. 238; University College of North Wales v. Taylor, [ 1908] P. 140; Smart v. Prujean (1801), 6 Ves. 560, 31 E.R. 1195.

[76]     In Re Edwards’ Will Trusts, [1948] 1 Ch. 440, the English Court of Appeal incorporated into a will some but not all terms of a written trust settlement. Lord Greene M.R. said as follows at p. 448:

It seems to me that the directions for incorporation are directions to read into the will the entirety of a document which the testator no doubt thought would be effective. But if, on writing them into the will, it turns out that part of them is invalid from some rule of law, as in the present case, I cannot read the testator’s directions as meaning that therefore, the whole process of incorporation must be abandoned. I think that the effect of it is that so much of the settlement as can validly have operation as part of a testamentary disposition is left to take effect according to its true construction.

[Underlining Added].

[77]     Here, the KF Trust Indenture and the Will were dated the same day. The Pour-Over Clause refers to the trust as being in existence. I conclude that at the time that RPK executed the Will, the KF Trust was in existence, and the trustee was bound by the terms of the KF Trust Indenture.

[78]     The Incorporation by Reference Clause refers to the terms of the KF Trust “giving effect to amendments, if any, hereafter made”. As discussed under the heading “Pour-Over Clause”, it is contrary to the Wills Act for a testator to change a will by an instrument which does not comply with the requirements of the Wills Act.

Conflict of Interest

What is Considered a Conflict of Interest?

Lawyers must at all times avoid any conflict of interest and be vigilante against it.

Whenever a trust relationship exists, the common law imposes fiduciary (trust) duties on the person in the position of trust, i.e the trustee or fiduciary. The fiduciary’s duties are the most onerous duties imposed by our law.

These fiduciary duties are imposed on lawyers who receive confidential information from clients or potential clients. Clearly a lawyer is in a fiduciary (trust) relationship with his or her clients. As such, the lawyer must avoid situations where the lawyer has, or may develop, a conflict of interest.

This simple notion is based upon the fundamental principle that a lawyer must provide complete and undivided loyalty, dedication, full disclosure and good faith to all for whom he or she acts.

Lawyers are in a unique position because they and their clients enjoy an extremely high level of confidentiality– lawyers are the only professionals who cannot be compelled to disclose confidential communications (except in highly unusual situations under court order). The potential for abuse is obvious –thus the obligation on the lawyer to avoid any conflict of interest.

In the good old days, lawyers sometimes acted for both sides in various transactions. Looking back it was only in 1982 that the Ontario Court of Appeal recognized a conflict of interest in a lawyer purporting to act for both sides in the sale of a business. This seems basic now.

Nevertheless, it is always startling to see some lawyers experiencing great difficulty in recognizing apparently obvious conflicts. They may hold on tenaciously to files where, to any objective outsider, there is a clear conflict of interest.

What is a “Conflict of Interest”?

“A conflict is a substantial risk that the lawyer’s representation of the client would be materially and adversely affected by the lawyer’s own interests or by the lawyers’ duties to another current client, a former client, or a third person.” R. v. Neil (2002) 3 S.C.R. 631.

The rules of engagement between lawyer and client have become increasingly complicated. Each provincial law society has its own guidelines for avoiding conflicts of interest and each lawyer should be very familiar with those guidelines. It is important too, to seek proper advice when the potential for a conflict of interest arises.

Nevertheless, neither the law society guidelines nor the advice given are binding on the courts.

This article will briefly review the recent developments in the law of conflicts of interest.

Over the past twenty years, three decisions of the Supreme Court of Canada have greatly developed the law and raised the standards protecting clients’ confidential information. These include:

MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235

R v Neil [2002] 3 S.C.R. 631

Strother v. 34364920 Canada Inc. [2007] 2 S.C.R. 177

The MacDonald Estate case is the most important decision for the purposes of this paper.

This case involved a student then junior lawyer who assisted on a case. When senior counsel became a judge, the young lawyer joined another firm. As it happened this new firm had a client involved in litigation against counsel’s former client. This young lawyer was not involved in the ongoing litigation which was about to be set down for trial.

The former client brought a motion for a declaration that opposing firm was ineligible to continue to act. In effect the client said, this lawyer acted for me previously and now is seeking to act against me i.e. there is a conflict of interest.

Naturally enough the other side wished to retain their longstanding counsel. Affidavits were filed claiming that no breach of confidence had occurred.

The Supreme Court of Canada stated that in determining such a case, the court must consider three competing values, namely

a) the concern to maintain the high standards of the legal profession and the integrity of the justice system;

b) the concern that a litigant ought not to be deprived of his or her counsel of choice without good cause;

c) the desirability of permitting reasonable mobility in the profession

Speaking for the majority Sopinka J. said as follows:

“Typically, these cases require two questions to be answered: (1) Did the lawyer receive confidential information attributable to a solicitor and client relationship relevant to the matter at hand? (2) Is there a risk that it will be used to the prejudice of the client?”

The court held that once it is shown that there existed a previous relationship which is sufficiently related to the retainer from which it is sought to remove the solicitor, the court shouldinfer that confidential information was imparted unless the solicitor satisfies the court that no such confidential information was shared. The court also ruled that it should draw the inference that confidential information will be disclosed, unless satisfied otherwise of the basis of clear and convincing evidence

In this case the court disqualified the lawyer as she was in possession of confidential information, and there was insufficient evidence to rebut the strong inference of disclosure.

Counsel Need Not Be Retained for the Duty to Arise

Bell v Nash (1993) 83 B.C.L.R. (2d) 155 (B.C. C.A.) is an example of how a seemingly insignificant phone call may result in disqualifying counsel from acting. In this case, an estranged wife telephoned a lawyer to retain him in matrimonial litigation. It was some time later that the lawyer realized he was already acting for her husband.

Because the wife had clearly disclosed confidential and relevant information to the husband’s lawyer during their telephone conversation, the court enjoined the lawyer from continuing to act for the husband.

The decision, by today’s standards, is not surprising. That case followed the decision of Manville Canada Inc. v Ladner Downs (1992) 63 B.C.L.R. (2d) 102 where the court stated “if the applicant has reposed confidence in a lawyer in circumstances which properly give rise to an expectation of confidentiality, that applicant has an interest in protecting that confidence even if it was not, in the strict sense, a client of the lawyer”.

In other words, it is not necessary for there to be a formal retainer between the applicant and the lawyer to bring into play the principles set forth in the MacDonald Estate.

Cewe Estate

The recent decision of Mr. Justice Hinkson in Cewe Estate v. Mide-Wilson 2009 BCSC 975 is the latest example of the courts willingness to stand counsel aside on the basis of conflict of interest. Below is a greatly simplified version of the case. This case should be read in full by counsel as it clearly enuniciates the various factors to be considered in determining a potential conflict.

In June of 2008, Jack Cewe died leaving an estate worth over $100 million. He had been predeceased by his wife, his daughter (and only child) and his grandson.

Mr. Cewe’s daughter had been married to Carsten Mide. They had a daughter Kirsten Mide-Wilson who was thus a granddaughter to Jack Cewe.

In late 1994 the Mr. Cewe had made a will, which designated the granddaughter Ms. Mide-Wilson as alternate beneficiary, in the event the death of Mr. Cewe’s wife and daughter.

That all changed in 2007-2008 when Mr. Cewe executed three wills and two Alter Ego trusts. The new wills made relatively small bequests to the son-in-law and to the granddaughter with the great balance of the Cewe estate going to his two Trustees– Mr. Cewe’s long time employee George and Mr. Cewe’s long time friend, Alice.

These Trustees commenced proceedings to pronounce the validity of the latest 2008 will and the Alter Ego trusts.

The son-in-law Mr. Mide and granddaughter Ms. Mide- Wilson counterclaimed alleging lack of capacity and undue influence.

Accordingly, the law firm preparing those documents quite properly declined to act further.

The Trustees got new legal representation however the disappointed beneficiaries, Mr. Mide and Ms. Mide-Wilson, applied to remove the Trustees’ new lawyers on the basis of conflict of interest.

Two intervening matters occurred which were relevant to the court application.

1) The lawyer who had drawn the 1994 wills had since joined the Trustees’ new law firm

2) Two members of the Trustees’ new firm had been representing Mr. Mide and his company in Alberta litigation since 2006. The firm had received substantial fees from him.

After an extensive review of the law the Court removed the new firm on the basis of conflict of interest. It did so principally because the new firm now seeking to act against Mr. Mide had been representing him in the Alberta litigation for some time.

Mr. Justice Hinkson found the new firm had a duty of loyalty to Mr. Mide which prevented them from acting against him and concluded that they could not simply to decide to prefer a new client over an existing one. He ruled that to allow the law firm to continue to act would “represent a failure to maintain the high standards of the legal profession and the integrity of our system of justice”


Decisions such as Cewe Estate serve to underline the great onus on law firms to conduct careful screening processes to avoid possible conflicts of interest. The recruitment of practising lawyers should also involve a careful screening process for potential conflicts.

Failure to do so may be very costly. Apart from unrecoverable fees and disbursements it may involve a malpractice claim and a conduct review by the Law Society.