Sunday, October 04, 2015

CBA Will, Estate and Trust Fundamentals for Estate Practitioners

The Wills, Estates and Trusts section of the Canadian Bar Association is presenting a four-day program on Will, Estate and Trust Fundamentals at the Intercontinental Toronto Centre, in Toronto, Ontario. The program is national in scope, and has a strong faculty. It is geared to lawyers "practicing in the area of trusts and estate planning, estate litigation and tax in their first seven years of practice, as well as general practitioners, accountants, trust officers and aligned professionals seeking a background in trust and estate law issues and related topics."

The course is proving to be quite popular, but as of a week ago, there were still a few spots available. For registration information, see the CBA website here.

Saturday, September 19, 2015

BH v. JH

In a wills variation claim in British Columbia, the Supreme Court of British Columbia is called upon to decide whether a will has made adequate provision for a spouse or child, and if not, what provision is adequate, just and equitable in the circumstances. There are so many circumstances that vary considerably from case to case, such as the size of the estate, financial circumstances of the parties, relationships between the parties and the will-maker, the will-maker’s reasons for making the will he or she did (to name a few), it is difficult to predict the outcome of any particular case.

While there is a virtually limitless variation in the facts, the courts apply certain principles in deciding these cases. For example, when a claim is asserted by or on behalf of the will-maker’s spouse, the courts will look at what the spouse would have received under family law, if instead of the will-maker dying, there had been a breakdown of the spousal relationship. This analysis appears mandated by the Supreme Court of Canada, in Tataryn v. TatarynEstate, [1994] 2 S.C.R. 807, in which the court said that the legal obligations that the will-maker had to a spouse or child are given priority over competing moral claims in determining whether to vary a will, and the extent of any variation. This analysis does not necessarily create certainty—there are plenty of disputes about the entitlement of the parties on a breakdown of a marriage or marriage-like relationship—but does offer some measure.

But when a spouse makes a wills variation claim is the court always required to vary the will to such an extent that the spouse will receive at least as much as he or she would have received in a family law claim? Or may the court award less in some circumstances. I ask this question in light of the decision  in a recent Supreme Court of British Columbia decision, BH v. JH, 2015 BCSC 1551. In that case, the Court awarded the surviving spouse less than what the Court found she might have received on a breakdown of the marriage.

KH and DH married in 1956 (the reported decision uses initials only). They had two sons, BH and NH, and a daughter, JH. KH, the husband, bought a residential property in Langley in 1962 and built the family home on it.

Sadly, DH suffered from paranoid Schizophrenia, was hospitalized on and off from 1964 to 1975, when she moved into a group home due to her illness. Thereafter, she visited with her family, primarily to have contact with her children, but lived apart from her husband. However, neither ever started a family law claim against the other, and the children acknowledged that they never heard their father speak of getting divorced.

KH died on September 13, 2009. In his will, apart from some of his personal effects left to his sons, he left his entire estate to his daughter, JH.

The two sons applied to vary the will, and the Public Guardian and Trustee of British Columbia also asserted a claim on behalf of DH.

The estate consisted primarily of the residence in Langley, which had an assessed value at the time of his death of just under $475,000. The Court found that the net value of the estate at the date of death, taking into account a mortgage on the property, and other debts and expenses was $370,000 (the amount that was realized on the sale of the property a few years later, was higher).

At the time of KH’s death, his wife received pension income of $1200 per month, and her expenses were just under that. She had about $8000 in savings.

KH’s daughter JH had lived with him until his death. She assisted him with household chores, and her assistance increased during the last years of his life, when he was ill. She continued to live in the house, until it was sold in a foreclosure in 2012. She does not have a strong employment history, and was earning minimum wage as a casual working at the time of trial, while living in a woman’s shelter. She had no savings.

Each of the sons had careers and families, although their means are described by the Court as modest.

The Court considered KH’s legal obligations to his wife, followed by his moral obligations. With respect to the legal obligations, the Court considered what she would have received in a breakdown of the relationship as at the date of death under the Family Relations Act, which was the applicable law in 2009 (this law has since been changed and replaced by a different property division under the Family Law Act).

While KH and DH were physically separated since 1975, they remained spouses until KH’s death. The Court found that if DH had brought a Family Relations Act claim for an equal division of assets in 2009, the court would likely have reapportioned KH’s assets in his favour, taking into account the long separation, and the fact that he paid the mortgage and other expenses. The Court found that she would have received “no more than one third of the value of the Property.”
The Court found that it was unlikely that she would have received spousal support. She had made little contribution to raising the children after she was hospitalized, and KH had limited pension income when he died.

In awarding DH $60,000, the Court also considered the following:

[92]         At the time of the testator’s death, DH was 80 years old.  While her basic needs were met at the group home, it was foreseeable that with the contingencies of aging she may require more care than the group home is able to provide, and the funds to pay for that care.  Society’s reasonable expectation would be that a judicious spouse would provide some financial protection against the contingencies of his wife’s old age, to the extent that his means and the other claims upon his estate permitted.  In my view, the deceased’s moral duty was enhanced where his spouse was incapable of managing her own financial or legal affairs.

In contrast to his obligation to DH, KH had no legal obligation to his two sons. The Court found that he did have a moral obligation to make provision for them, and KH did not make adequate provision for them. But their moral claims were not as strong as their sisters in light of her “companionship for her father, her contributions through taking him on trips, sharing housekeeping expenses and caring for her father as he aged and his health declined....”  KH also had the greatest need.

The Court awarded each of the two sons $50,000.

The aspect of this decision that may prove controversial is the award of $60,000 to DH. If DH as a spouse would have been entitled to one third of the value of the family assets (I appreciate that the Court said “no more than” ), and in view of the fact that she had little or none of the family assets in her own name, should she have received at least that portion of the estate? Based on a net value of $370,000, that would have entitled her to just over $123,000. The other question that may be asked about the outcome is whether the amount should have been determined on the basis of the assessed value of the house at the date of death, without reference to the proceeds that were ultimately received on the sale of the house. The difference may reflect both that the assessed value for property tax is not always accurate, and inflation. It may be preferable for the court to award a portion instead of a fixed amount to allow for fluctuations in value of assets between the date of death, the trial and the actual distribution (see Graham v. Chalmers, 2010 BCCA 13 at paragraph 42, which I wrote about here). 

Saturday, September 12, 2015

British Columbia Law Institute Project on Litigation Financing

The British Columbia Law Institute is starting a new project on litigation financing. Here is the press release:

Vancouver, 11 September 2015 – The number of self-represented litigants in British Columbia’s courts has been steadily increasing. In her 2013 report, University of Windsor Faculty of Law professor Dr. Julie Macfarlane wrote that the inability to afford legal counsel is the most consistently-cited reason for self-representation and a lack of access to justice.
In response, the British Columbia Law Institute is starting a new project on litigation financing to explore the public, private, and third-party funding opportunities used in British Columbia, Canada, and in other commonwealth jurisdictions. The project will explore the potential opportunities for structural, systemic, or legal changes that could improve the financing options for litigants.
“There is a need to identify structural and legal changes necessary to facilitate the greater participation of low-income individuals in court processes,” said Kathleen Cunningham, Executive Director of the BCLI. “By exploring a selection of options for litigation financing and evaluating their utility and potential for implementation, this research will provide an important first step towards improving access to justice in British Columbia.”
The final Study Paper is expected to be available at in January 2017.
This project has been made possible thanks to generous funding from the Law Foundation of British Columbia.
The British Columbia Law Institute strives to be a leader in law reform by carrying out the best in scholarly law-reform research and writing and the best in outreach relating to law reform.
Contact: Alexandre Blondin
Research Lawyer
(604) 822 0981

Saturday, August 29, 2015

British Columbia Law Institute Seeks Comments on New and Emerging Issues for Update to Pension Division Question and Answer Materials

The British Columbia Law Institute published the first edition of its book Questions and Answers About Pension Division on the Breakdown of a Relationship in British Columba in 1996.The third edition was published in 2013, and is available here.

The British Columbia Law Institute is now seeking input for the fourth edition. I will quote the press release:

The law on pension division is rapidly evolving. BCLI is working to keep pace with it by developing the fourth edition of its popular Questions and Answers on Pension Division at the Breakdown of a Relationship resource.

Do you have a question about the new Pension Benefits Standards Act or its interaction with the Family Law Act?

Do you have comments about a particular area of the law you would like to see explained in more detail in the 2016 update?

This new update will examine the upcoming changes to pension benefits standards in the new Pension Benefits Standards Act, explore the effects of ancillary provisions in the Family Law Act, as well as review developments in the common law since its last publication in March 2013. This will be the fourth edition of the Q & A materials – an ongoing project dating back to March 1996.

Thomas G. Anderson, QC, a specialist in pension law, particularly dealing with dividing entitlement when a relationship ends, is once again working closely with the BCLI to perform this update. He noted, “In my view, this is an extremely valuable project.  When a relationship ends, often the most valuable assets the parties possess are their retirement benefits.  It's important for the Q & A materials to continue to serve as an up-to-date practice resource for the BC legal community, other professionals involved in pensions and benefits, and members of the general public.”

The final publication is expected to be available at in Spring 2016.

BCLI is currently receiving submissions, questions, and comments about suggested updates for the fourth edition of the Q & A materials. BCLI is accepting submissions at until 30 October 2015.

The British Columbia Law Institute strives to be a leader in law reform by carrying out the best in scholarly law-reform research and writing and the best in outreach relating to law reform.

Contact: Alexandre Blondin
Research Lawyer
(604) 822 0981

Sunday, August 23, 2015

Gifts Void Against Public Policy: McCorkill Estate

The usual rule in Canada is that a will-maker may leave wealth to whom he or she chooses. This is subject to claims of a spouse or children under various wills variation or dependent relief legislation, which varies from province to province, but apart from such legislation, it is generally true that a will-maker my choose his or her beneficiaries.
Though not common, there is another exception to the usual rule. A court may find a gift to be void as being contrary to public policy.

Harry Robert McCorkill, who died on February 20, 2004, left his estate to the National Alliance, a white supremacist organization based in the United States.
His sister challenged the gift on the grounds that it was against public policy. If successful, she and her brother would inherit the estate as Harry McCorkill’s next-of-kin (he did not have a spouse or children).

Mr. Justice Grant of the New Brunswick Court of Queen’s Bench, in McCorkill v. Streed, 2014 NBQB 148 (CanLii)  reviewed the National Alliance foundational documents as well as various publications, which he described “as racist, white supremacist and hate-inspired.  They are disgusting, repugnant and revolting.” He found that the organization's communications were hate propaganda, and as such violated the Criminal Code of Canada.
Before concluding that the National Alliance’s activities did offend public policy, Mr. Justice Grant set out the authorities dealing with gifts that are void as against public policy as follows:

[58]   What constitutes public policy is a question that has been considered in many cases. In the case of Re: Wishart Estate (No. 2) 1992 CanLii 2679 (NBQB); (1993) 1992 CanLII 2679 (NB QB), 129 NBR (2d) 397 Riordon, J. considered whether or not a direction in a will to destroy four horses violated public policy. He quoted extensively from the Missouri case of Eyerman et al v Mercantile Trust Co. N.A. et al 524 S.W.2d 210 including the following:
The term ‘public policy’ cannot be comprehensively defined in specific terms but the phrase ‘against public policy’ has been characterized as that which conflicts with the morals of the time and contravenes any established interest of society.  Acts are said to be against public policy ‘when the law refuses to enforce or recognize them, on the ground that they have a mischievous tendency, so as to be injurious to the interests of the state, apart from illegality or immorality’.  Dille v. St. Luke’s Hospital, 355 Mo. 436; 196 S.W. 2d 615, 620 (1946); Brawner v. Brawner, 327 S.W. 2d 808, 812 (Mo. banc 1959).
[59]   In Canada Trust Co. v. Ontario Human Rights Commission 1990 CanLII 6849 (ON CA), [1990] O.J. No. 615 (O.C.A.) the court considered whether a trust document establishing a charitable trust based on white supremacy, religious supremacy, racism and sexism violated public policy. Writing for the majority, Robins, J.A. stated at paragraph 34:
34.     Viewing this trust document as a whole, does it violate public policy?  In answering that question, I am not unmindful of the adage that “public policy is an unruly horse” or of the admonition that public policy “should be invoked only in clear cases, in which the harm to the public is substantially incontestable, and does not depend on the idiosyncratic inferences of a few judicial minds”: Re Millar, 1937 CanLII 10 (SCC), [1938] S.C.R. 1,  [1938] 1 D.L.R. 65 [per Crocket J., quoting Lord Aitkin in Fender v. Mildmay, [1937] 3 All E.R. 402, at p. 13 S.C.R.].  I have regard also to the observation of Professor D.W.M. Waters in his text on the Law of Trusts in Canada, 2nd ed. (Toronto: Carswell, 1984), at p. 240 to the effect that:
The courts have always recognized that to declare a disposition of property void on the ground that the object is intended to contravene, or has the effect of contravening public policy, is to take a serious step.  There is the danger that the judge will tend to impose his own values rather than those values which are commonly agreed upon in society and, while the evolution of the common law is bound to reflect contemporary ideas on the interests of society, the courts also feel that it is largely the duty of the legislative body to enact law in such matters, proceeding as such a body does by the process of debate and vote.
Nonetheless, there are cases where the interests of society require the court’s intervention on the grounds of public policy. 
[60]   In the case of Re Estate of Charles Millar, Deceased 1937 CanLII 10 (SCC), [1938] S.C.R. 1 Duff C.J. stated at p. 4:
It is the duty of the courts to give effect to contracts and testamentary dispositions according to the settled rules and principles of law, since we are under a reign of law; but there are cases in which rules of law cannot have their normal operation because the law itself recognizes some paramount consideration of public policy which over-rides the interest and what otherwise would be the rights and powers of the individual.  It is, in our opinion, important not to forget that it is in this way, in derogation of the rights and powers of private persons, as they would otherwise be ascertained by principles of law, that the principle of public policy operates.
[61]   Public policy, then, embodies the “interests of society” as expressed in the morals of the time, the common law and legislation. In respect to the latter in Canada Trust Co., supra., Tarnopolsky, J.A. stated at paras. 92-94:
92      Public policy is not determined by reference to only one statute or even one province, but is gleaned from a variety of sources, including provincial and federal statutes, official declarations of government policy and the Constitution.  The public policy against discrimination is reflected in the anti-discrimination laws of every jurisdiction in Canada.  These have been given a special status by the Supreme Court of Canada in Ontario Human Rights Commission v. Simpsons-Sears Ltd., 1985 CanLII 18 (SCC), [1985] 2 S.C.R. 536, 52 O.R. (2d) 799 (note), 17 Admin. L.R. 89, 9 C.C.E.L. 185, 7 C.H.R.R. D/3102, 86 C.L.L.C. Paragraph17, 002, 23 D.L.R. (4th) 321, [1986] D.L.Q. 89 (note), 64 N.R. 161, 12 O.A.C. 241, at p. 547 S.C.R., p. 329 D.L.R. 
The accepted rules of construction are flexible enough to enable the Court to recognize in the construction of a human rights code the special nature and purpose of the enactment (see Lamer J. in Insurance Corporation of British Columbia v. Heerspink, 1982 CanLII 27 (SCC), [1982] 2 S.C.R. 145 at pp. 157-58), and give to it an interpretation which will advance its broad purposes.  Legislation of this type is of a special nature, not quite constitutional, but certainly more than the ordinary – and it is for the courts to seek out its purpose and give it effect.
93      In addition, equality rights “without discrimination” are now enshrined in the Canadian Charter of Rights and Freedoms in s. 15; the equal rights of men and women are reinforced in s. 28; and the protection and enhancement of our multicultural heritage is provided for in s. 27.
94      Finally, the world community has made anti-discrimination a matter of public policy in specific conventions like the International Convention on the Elimination of All Forms of Racial Discrimination (1965), G.A. Res. 2106 A (XX), and the International Convention on the Elimination of All Forms of Discrimination Against Women (1979), G.A. Res. 34/180, as well as Articles 2, 3, 25 and 26 of the International Covenant on Civil and Political Rights (1966), G.A. Res. 2200 A (XXI), all three of which international instruments have been ratified by Canada with the unanimous consent of all the provinces.  It would be nonsensical to pursue every one of these domestic and international instruments to see whether the public policy invalidity is restricted to any particular activity or service or facility.   
Next Mr. Justice Grant considered whether it was sufficient for the gift to be to an organization whose activities were against public policy to declare the gift void. In contrast to most of the cases in which a gift or a condition to a gift is found to be void as against public policy, Mr. McCorkill’s will does not expressly provide that the funds in his estate are to be used to promote an object (in this case hate propaganda) that is against public policy. One may make a valid gift in a will to a bad person, even one who has committed horrendous crimes.
Mr. Justice Grant distinguished between a gift to a person who has committed a crime, and an organization whose very purpose is contrary to public policy. He wrote:
[72]   While the jurisprudence on voiding bequests on the grounds of public policy tends to deal with conditions attached to specific bequests, in my opinion the facts of this case are so strong that they render this case indistinguishable from those. 
[73]   Unlike most beneficiaries, the National Alliance has foundational documents which state its purposes.  Moreover, those purposes have been expanded upon, explained and disseminated in various forms of media by the NA since its inception.  They consistently show that the National Alliance stands for principles and policies, as well as the means to implement them, that are both illegal and contrary to public policy in Canada.  If the organization has changed in these respects since its inception then it was incumbent upon the respondent, particularly through the evidence of Erich Gliebe, the current President of the National Alliance, to demonstrate that in this application.  It has not done so.
[74]   The facts of this case can be distinguished from most other cases because in most cases, a beneficiary of an estate does not “stand for” something identifiable. They don’t have foundational documents.  A drug dealer does not “stand for” dealing drugs.  He or she may have a criminal record of doing that but that does not mean that that is what they stand for. Their crimes are not the purpose for which they exist, their raison d’ĂȘtre.
Accordingly, the gift to the National Alliance is void. In the result, the estate will go to Mr. McCorkill’s next-of-kin. The New Brunswick Court of Appeal upheld Mr. Justice Grant’s decision, (2015 NBCA 50(Canlii).
Post Script

The quotations in the reasons for judgment from the National Alliance publications are bound to make the strongest of stomachs turn. But one line caused me to giggle. In describing its “Aryan values,” one document says:
In specific terms, this means a society in which young men and women gather to revel with polkas or waltzes, reels or jigs or any other White dances, but never to undulate or jerk to [adjective omitted]… jazz or rock rhythms. …
I have nothing against polkas or waltzes (and I am not sure what reels or jigs are) but I cannot conceive of my world without jazz.

Saturday, August 15, 2015


I spend a great deal of my time writing about decided-estate-litigation-court cases. Yet, in my experience the vast majority of disputes are settled through negotiation, and increasingly through mediation. I attend far more mediations than trials. I believe many other lawyers who practice in this area of law have similar experiences.
But because mediations are confidential, I cannot write about the facts, negotiations, or the outcomes. They are not reported like trials. I only know about the ones I attend, and it would be a breach of my obligations of confidentiality for me to write about those.

Furthermore, mediation is not frequently discussed in reported court decisions.
There is, however,  a recent court decision in which Mr. Justice Kent describes the merits of the mediation process. The case is Matsqui First Nation v. Canada (Attorney General), 2015 BCSC 1409. The dispute concerns whether the Matsqui have a constitutional right to fish for salmon for domestic purpose in an area of the Fraser River and, if so, whether the Federal Government is infringing on those rights.

The Matsqui First Nation delivered a Notice to Mediate pursuant to the Notice to Mediate (General) Regulation. The Federal Government did not consider the dispute amenable to mediation, and applied to court for an order exempting it from mediation. To succeed, the Government would need to establish that mediation would be “materially impracticable or unfair.”
In reaching his decision that the Federal Government ought not be exempted, Mr. Justice Kent summarized many of the merits of mediation in which he quotes a decision from the Alberta Court of Queen’s Bench, IBM CanadaLimited v. Kossovan, 2011 ABQB 621 (CanLii):

[16]         The Kossovan case, supra, also made various observations about the alternative dispute resolution process which may be apposite here:

[39]      It is a fallacy to think that the outcome of a [mediation] will always result in a substantial compromise to one’s initial position. While one of [the] objects of [alternate] dispute resolution is to get both parties to “move” from their initial positions to one which they can mutually accept, the ultimate objective is achievement of a judicious outcome that all parties can live with, put behind them and move on.
[41]      A number of plaintiffs enter into the litigation process, believing [in the justness of their cause and] that they are entitled to recover the full amount of their claim. Positions may be based on what they have been told by counsel, personal principles, or … corporate direction. Yet despite this belief successful settlements are often reached. Parties may be persuaded to resolve the dispute once the weaknesses in their own case is revealed to them, given the uncertainties of litigation. Having a [suitably qualified and experienced mediator] outline the strengths and weaknesses of each party’s case may cause one or both of the parties to modify their settlement positions. Alternatively, if a strong case is put forward where ability to recover is in issue, creative repayment solution might be successfully canvassed.

[42]      A belief that there is little room for flexibility and no major concessions … will be made does not act to render the [mediation] process futile. ...
[43]      Even if the parties are unable to reach a settlement, this does not mean that attendance at the [mediation] has been “futile”. Multiple other benefits may be obtained. ... The parties may be able to narrow down or agree [on issues] during the [mediation] process. At the very least, getting together to refine the legal issues and plan the next court steps can also result in time and cost savings. A good faith commitment to a process that may ultimately resolve the dispute, or shorten trial time and reduce heavy trial costs is never a futile endeavor.
[17]         I agree that settlement of the claims in this case may confront formidable obstacles. However, after participating in dozens of mediations in more than 30 years of practice at the bar before joining the bench, I agree with and endorse the observations made in the Kossovan case.
[18]         The beauty of mediation lies in its confidentiality and flexibility. With the assistance of a skilled mediator, the parties are free to speak to each other directly and to frankly express their concerns and interests without fear of prejudicing the litigation should the matter not settle. That is to be encouraged. Empathy and apology can and often does play a powerful role. Seemingly intractable positions become less so. The legal issues framed in the pleadings frequently do not reflect the real interests or concerns motivating the litigants. Creative remedies not available to the court can be forged to bridge differences. Important relationships can be repaired.
In reference to the dispute before him, Mr. Justice Kent reasoned:

[19]         In this case, the Matsqui seek declaratory relief respecting a perceived aboriginal right protected and preserved by the Constitution. This is not the sort of remedy that is readily available in a mediation process. They undoubtedly know this, yet they have initiated the mediation nonetheless. Presumably they believe there is some basis for settling the claim available. It may have little to do with the formal legal relief sought in the litigation. One cannot help but ask what do the parties have to lose by confidentially exchanging and explaining perspectives and interests? If nothing else, perhaps some accommodations and efficiencies may be reached regarding evidence or other trial process that may reduce mutual inconvenience and cost. At best, some sort of creative resolution in principle may emerge, albeit subject to later ratification by superiors if necessary. At worst, the case will simply proceed to trial in a couple months’ time with an interim “loss” of one or two days’ effort.

Saturday, July 25, 2015

World War I Probate

Kimberly Wallis gave me a copy of a grant of probate from the United Kingdom dated October 28th, 1914. The process for obtaining a grant of probate appears to have been very efficient in those days, as the deceased had died just 23 days earlier, on October 5, 1914.

What was most striking about the grant was the page stapled to it, which read:

This Grant is made upon the condition that no portion of the assets shall be distributed or paid during the War to any beneficiary or creditor who is a German or Austro-Hungarian subject wherever resident, or to any one on his behalf, or to or on behalf of any person resident in Germany or Austria-Hungary, of whatever nationality, without the express sanction of the Crown, acting through the Treasury; and if any distribution or payment is made contrary to this condition the Grant of Probate or Letters of Administration will be forthwith revoked.

Upon an application to the Solicitor to the Treasury there will be no difficulty in proper cases in obtaining the sanction of the Treasury to the payment of a moderate sum out of assets to beneficiary or creditors who are German or Austro-Hungarian subjects resident in this country at the commencement of the War and during the War.