Wills Exception to Solicitor-Client Privilege

The general rule is that if a client gives her lawyer confidential information, the lawyer must not disclose it, and indeed cannot be compelled to disclose it, without the client’s permission. This is called solicitor-client privilege, and the purpose of this rule is to allow the client to speak or write freely to his or her lawyer to get advice without having to worry that the lawyer will disclose the communication between them.

As with most legal rules, there are exceptions. One exception is referred to as the “wills exception.”

Solicitor-client privilege applies when a client speaks with her lawyer for advice and to give instructions to her lawyer to prepare a will. The lawyer is required to keep the conversation with the client confidential. If the lawyer retains the client’s original will, the lawyer must not release it to anyone other than the client, nor divulge the contents, without the client’s permission.

After the client’s death, the lawyer releases the client’s last will to the client’s personal representative. The will itself is no longer subject to solicitor-client privilege. This makes sense; it would be pointless to make a will disposing of your property at death, if nobody can find out about it when you die.

But even after the client’s death, the discussions that the client had with her lawyer remain privileged. When you engage a lawyer to make a will, you may have very private discussions with your lawyer about your children and other family members, that you would not want others to find out about (including perhaps your children or other family). Furthermore, you may want advice about potential claims related to your estate, and you would not be inclined to speak freely if those who may make the claims can find out after your death what you have told your lawyer.  After the client’s death, her executor or personal representative may be able to give the lawyer permission to disclose the communications, but the general rule continues to be that the lawyer must keep the communications confidential.

So what is the wills exception?

Although the case was about a trust rather than a will, Madam Justice Wilson’s judgment in Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, explains the principle and purpose well.

In Geffen, the executor of his mother, Tzina Burnette Goodman’s will challenged a transfer made by her during her lifetime of a house to a trust. He claimed that her brothers procured the transfer to the trust by undue influence. Tzina Goodman had inherited the house from her own mother, and under the terms of the trust she retained a life interest in it, and following her death, the house, or proceeds of sale, would be divided equally among her children, nieces and nephews. (The case is also a leading authority on the presumption of undue influence, but perhaps I will save that for another post.)

At trial, the trustees of the trust called the lawyer who took instructions from Tzina Goodman, drafted the trust and handled the transfer, to testify at trial about his discussions with Ms. Goodman.  His evidence was important to the issues of whether she understood the trust and was acting freely on the basis of independent legal advice.

The trial judge, after considering the lawyer’s evidence held that Ms. Goodman was acting voluntarily and found that the trust was valid. The Alberta Court of Appeal allowed Ms. Goodman’s executor’s appeal, and the trustees then appealed to the Supreme Court of Canada, which restored the trial judge’s decision that the trust was valid.

One of the issues in the Supreme Court of Canada was whether the Ms. Goodman’s lawyer who acted for her in setting up the trust and transferring the house should have been permitted to testify on behalf of the trustees. Ms. Goodman’s executor argued that his evidence was subject to solicitor-client privilege, and that he breached that privileged when he testified about his communications with he client.

Madam Justice Wilson in her reasons for judgment (there were three separate judgments in the Supreme Court of Canada) addressed this issue. She noted the significance of the lawyer, Mr. Pearce’s evidence:

51.     The  trial judge's admission of the evidence of Mr. Pearce, the solicitor who drafted the trust agreement, is challenged by the respondents.  Mr. Pearce's evidence is crucial in this case for two reasons.  First, it may help to ascertain what the precise circumstances surrounding the deceased's entry into the trust agreement were.  And secondly, this evidence is vital to the determination of whether Mrs. Goodman received independent advice concerning the proposed transaction.

She explained the general rule that communications between a client and her lawyer are privileged:

56      It has long been recognized that communications between solicitor and client are protected by a privilege against disclosure. The classic statement of the rationale behind this rule was made over 150 years ago by Brougham L.C. in Greenough v. Gaskell(1833), 1 My. & K. 98 at 103, 39 E.R. 618 at 620-21:

The foundation of this rule is not difficult to discover. It is not (as has sometimes been said) on account of any particular importance which the law attributes to the business of legal professors, or any particular disposition to afford them protection, though certainly it may not be very easy to discover why a like privilege has been refused to others, and especially to medical advisers.

But it is out of regard to the interests of justice, which cannot be upholden, and to the administration of justice, which cannot go on, without the aid of men skilled in jurisprudence, in the practice of the Courts, and in those matters affecting rights and obligations which form the subject of all judicial proceedings. If the privilege did not exist at all, every one would be thrown upon his own legal resources; deprived of all professional assistance, a man would not venture to consult any skilful person, or would only dare to tell his counsellor half his case.

 57      More recently, this court has described the privilege as a "fundamental civil and legal right": see Solosky v. Canada, [1980] 1 S.C.R. 821 at 839, 16 C.R. (3d) 294, 50 C.C.C. (2d) 495, 105 D.L.R. (3d) 745, 30 N.R. 380. Thus, while at one time it was thought that the privilege belonged to the solicitor and not to his client, there is now no doubt that the privilege belongs to the client alone. One consequence of this is that confidential communications between solicitor and client can only be divulged in certain circumscribed situations. The client may, of course, herself choose to disclose the contents of her communications with her legal representative and thereby waive the privilege. Or, the client may authorize the solicitor to reveal those communications for her. Even then, however, the courts have been cautious in allowing such disclosures, so much so that they have assumed for themselves the role of ensuring that without the client's express consent a solicitor may not testify. Thus, in Bell v. Smith, [1968] S.C.R. 664, 68 D.L.R. (2d) 751, this court held that there had been a violation of solicitor-client privilege when a former solicitor of the plaintiffs in a motor vehicle accident claim was subpoenaed by the defendants and testified as to the settlement discussions that had taken place. Spence J. said at p. 671:

It is rather astounding that Mr. Schreiber should be subpoenaed to give evidence on behalf of the defendants as against his former clients and that he should produce his complete file including many memoranda and other material all of which were privileged as against the plaintiffs and whether the plaintiffs' counsel objected or not that he should be permitted to so testify and so produce without the consent of the plaintiffs being requested and obtained.

 Lord Chancellor Eldon said, in Beer v. Ward (1821), Jacob 77, 37 E.R. 779, at p. 80:

... it would be the duty of any Court to stop him if he was about to disclose confidential matters ... the Court knows the privilege of the client, and it must be taken for granted that the attorney will act rightly, and claim that privilege; or that if he does not, the Court will make him claim it.

 58      So important is the privilege that the courts have also stipulated that the confidentiality of communications between solicitor and client survives the death of the client and enures to his or her next of kin, heirs, or successors in title: see Bullivant v. Attorney General for Victoria, [1901] A.C. 196 (H.L.); Stewart v. Walker (1903), 6 O.L.R. 495 (Ont. C.A.); and Langworthy v. McVicar (1914), 25 O.W.R. 297, 5 O.W.N. 345.

The underlying purpose of solicitor-client privilege is to protect the client. But where the validity of a will or a trust is challenged on the basis that it did not reflect the client’s true intentions, the interests of the client are furthered by allowing the lawyer to testify about the communications with the client to determine the clients’ true intentions. It is because allowing the lawyer to testify furthers the now deceased's clients interest that there is an exception to the solicitor-client privilege.

Madam Justice Wilson wrote at paragraphs  62 through 65:

62      In the Law of Evidence in Civil Cases (1974), the authors, Sopinka and Lederman, argue that Canadian courts have approached the admissibility of this sort of evidence in a unique way, although the same result has been arrived at. For instance, inStewart v. Walker, supra, it was alleged that the testator had died intestate. The deceased's solicitor, however, had in his possession a copy of a will providing that he, the solicitor, was to be left the greater part of the deceased's estate and was appointed as sole executor. It was contended that the solicitor should not be permitted to give evidence as to the existence or validity of the will. The Ontario Court of Appeal, however, felt that the solicitor should have been permitted to testify, saying at pp. 497-98: 

The nature of the case precludes the question of privilege from arising. The reason on which the rule is founded is the safeguarding of the interests of the client, or those claiming under him when they are in conflict with the claims of third persons not claiming, or assuming to claim, under him. And that is not this case, where the question is as to what testamentary dispositions, if any, were made by the client. As said by Sir George Turner, Vice-Chancellor, in Russell v. Jackson (1851), 9 Ha. 387, at p. 392: "The disclosure in such cases can affect no right or interest of the client. The apprehension of it can present no impediment to the full statement of his case to his solicitor ... and the disclosure when made can expose the Court to no greater difficulty than presents itself in all cases where the Courts have to ascertain the views and intentions of parties, or the objects and purposes for which dispositions have been made." It has been the constant practice to apply the rule here stated in cases of contested wills where the evidence of the solicitors by whom the wills were prepared, as to the instructions they received, is always received. And the application of a different rule in this action would deprive the plaintiff of a considerable part of the proof of his case.

 63      Similarly, in Re Ott, [1972] 2 O.R. 5, 7 R.F.L. 196, 24 D.L.R. (3d) 517 (Surr. Ct.), where the issue was whether the testator by tearing it up intended to revoke a later will and revive an earlier one, Anderson Surr. Ct. J. held that the discussion that took place between the deceased and his solicitor at the time of the destruction of the will was admissible. At p. 11 he said: 

... since it is of essence to the case to find out the intention of the testator when he destroyed the will whether or not he was revoking his will unconditionally or whether he was only tearing it up on condition that an earlier will was thus revived, the whole issue turns on this question and it would seem to me that to invoke the privilege of the client, after the client is deceased would make it impossible for the Court to determine the intention of the testator in tearing up the will. In the interests of justice, it is more important to find out the true intention of the testator.

 64      In the present case the respondents argue that no analogy can be drawn between these wills cases and the situation here. I disagree. It is implicit in their argument that the common law has as yet only recog nized an "exception" to the general rule of the privileged nature of communications between solicitor and client when dealing with the execution, tenor or validity of wills and wills alone. Their argument is reminiscent of earlier days when the "pigeon hole" approach to rules of evidence prevailed. Such, in my opinion, is no longer the case. The trend towards a more principled approach to admissibility questions has been embraced both here and abroad (see, for example, in Canada, Ares v. Venner, [1970] S.C.R. 608, 73 W.W.R. 347, 12 C.R.N.S. 349, 14 D.L.R. (3d) 4 (hearsay), and R. v. Khan, [1990] 2 S.C.R. 531, 79 C.R. (3d) 1, 59 C.C.C. (3d) 92, 41 O.A.C. 353, 113 N.R. 53 (hearsay), and in the United Kingdom, Director of Public Prosecutions v. Boardman, [1975] A.C. 421, [1974] 3 W.L.R. 673, [1974] 3 All E.R. 887(H.L.) (similar fact)), a trend which I believe should be encouraged.
 

65      In my view, the considerations which support the admissibility of communications between solicitor and client in the wills context apply with equal force to the present case. The general policy which supports privileging such communications is not violated. The interests of the now deceased client are furthered in the sense that the purpose of allowing the evidence to be admitted is precisely to ascertain what her true intentions were. And the principle of extending the privilege to the heirs or successors in title of the deceased is promoted by focusing the inquiry on who those heirs or successors properly are. In summary, it is, in the words of Anderson Surr. Ct. J. in Re Ott, supra, "in the interests of justice" to admit such evidence.

Presumption in an Application to Probate a Copy of a Will if the Missing Original was Last in the Possession of a Will-Maker Who Lost Capacity

The general rule is that an executor must have the original will in order to obtain a grant of probate in British Columbia, but it is possible to probate a copy or obtain a grant of probate based on other evidence of the will if the original goes missing. But as I have written before, if the will was last in the possession of the will-maker, there is a presumption that the will-maker destroyed the original will in order to revoke. The presumption may be rebutted with evidence that the will-maker would not have intended to revoke the will.

What happens if the missing original will was last in the possession of the will-maker, but the will-maker’s mental functioning declined to the point where she was no longer capable of making or revoking a will?

Mr. Justice Jenkins considered this issue in the recent case of Polischuk Estate v. Perry, 2014 BCSC 1089.

Nettie Polischuk signed her will on August 31, 2004. She outlived her husband, and had no children. She appointed her lawyer, Steven Wong, as her executor and left most of her estate to her sister. Because she appointed Mr. Wong as executor and left a portion of her estate to him in lieu of executor fees, he referred her to another lawyer for independent advice and to witness the will.

She was later diagnosed with Alzheimer’s decease in 2010 and on February 27, 2010, she was declared incapable of managing her affairs, and the Public Guardian Trustee of British Columbia took over her finances.

After her death on December 20, 2012, her executor was unable to find her original will.

Mr. Wong brought a petition to ask the Supreme Court of British Columbia to probate an unsigned copy of the will he drafter for her in 2004. Three of Ms. Polischuk’s nephews, who were not beneficiaries of the 2004 will, but who would receive a share of her estate if she died without a will,

Mr. Justice Jenkins found that the copy of the will reflected the terms of the will that Ms. Polischuk signed.

There was some evidence that she had contemplated making a change to her will to appoint a friend as an alternate executor, but no evidence that she wanted to change the beneficiaries of her will or revoke it.

Mr. Justice Jenkins noted the presumption that if a missing will was last in the possession of the will-maker, the she destroyed it to revoke it. But he held that there is a different presumption if the will-maker lost capacity to revoke a will. He wrote:

[63]         In this case, the evidence shows that Nettie was mentally stable on August 31, 2004, but as of February 9, 2010, she was declared to be mentally unable to manage her financial and legal affairs due to Alzheimer’s disease. We do not know at what exact point between these two dates Nettie became unable to manage her affairs due to her cognitive impairment.

 [64]         In Re Broome, [1961] M.J. No. 51 (C.A.), 29 D.L.R. (2d) 631 at p. 633 [Re Broome], Freedman, J.A. said:

It seems to me that fundamentally this case turns on the question of onus of proof. No one saw the testator destroy his will. In fact it may never have been destroyed. It has simply not been found after very extensive searches therefor. In such circumstances - leaving aside for the moment the question of insanity - there is a prima facie presumption that the testator destroyed the will animo revocandi . Such presumption, however, may be rebutted by evidence, which, however, must be clear and satisfactory: 34 Hals. 2nd ed., p. 87. The intervention of insanity after execution of the will, however, creates a different situation. That an insane person lacks the legal capacity to revoke his will is unquestionable. If Reuben Broome destroyed his will while insane such destruction would not constitute revocation of the will. On that both counsel agree. But since there is no evidence as to when he destroyed his will - assuming he did so - there is a sharp divergence between counsel as to what presumptions apply and to who must bear the burden of proof.
[Emphasis added.]

 [65]         And continuing at p. 634, Freedman, J.A said :
The rule places on the party alleging revocation the burden of showing that the destruction occurred while the testator was of sound mind.

 [66]         The preceding law establishes that the burden of proof is, in most circumstances, on the party asserting that the will was in fact lost and not destroyed. Re Broome, however, notes that the burden of proof shifts in the circumstance where a person becomes mentally incapable/unstable. When that situation arises, the evidentiary burden shifts to the party alleging that the testator destroyed the will to prove that the destruction occurred while the testator had capacity.

Mr. Justice Jenkins held that the nephews opposing the petition to probate the copy had not met the burden on them of proving that Ms. Polischuk had destroyed the will in order to revoke it.

He also found that it was unlikely that she would have revoked it. The terms were reasonable. She did not place the will in her safety deposit box, and it could have gone missing in her house. She had a long history of getting Mr. Wong’s advice, and it is unlikely she would have revoked it without going to a lawyer. There was evidence that she understood the effects of dying without a will, and she wanted to avoid that. She did not dispose of property in a manner inconsistent with the will. She told a witness in 2010 that she had a will (although by then her functioning was impaired). There was some evidence that a will was sent to the Public Guardian and Trustee’s office, although no will was found.

Accordingly, Mr. Justice Jenkins granted probate of the unsigned copy of the will

Evidence That a Missing Person Has Died

If someone strangely disappears, how can you prove that they died?

In British Columbia, we have the Survivorship and Presumption of Death Act, which allows an interested person to make an application to the Supreme Court of British Columbia for an order declaring that a missing person has died. An “interested person” means someone who would be legally affected by the missing person’s death, such as his next of kin or beneficiary of life insurance. The order must state the date the person is presumed to have died.

Other Canadian provinces have similar legislation. For example, Saskatchewan has The Missing Persons and Presumption of Death Act.

It was in Saskatchewan where Antonie Anne Medzech disappeared after being dropped off by her son at a shopping plaza on December 13, 2002. As succinctly set out by Justice Danyliuk,

She was never seen or heard from again. There was no activity involving any of her finances. It is as if she was swept off the earth. Diligent police investigations yielded nothing.

Nine years later, her son applied to the Saskatchewan Court of Queens Bench for a declaration that his mother died. On these facts, in Re:Medzech, 2012 SKQB 216 Justice Danyliuk had little difficulty in making the declaration that she had died. In his reasons, Justice Danyliuk set out a list of some of the evidence that is helpful to the court in an application for a declaration that someone has died:

[9]                    On all applications of this type, certain materials should be filed as a matter of course. While the following list is not intended to be exhaustive, it may be of some assistance to counsel in drafting future applications of this type:

A.  The Disappearance
(i)         Are there any indications at all as to what happened to the missing person?
(ii)        Is there evidence as to possible explanations, such as accident, suicide, homicide or misadventure?
(iii)      What was the health status (physical and mental) of the person? In some cases, medical evidence may be required.
 (iv)      What was the personal and legal status of the person? That is, was he or she facing family strife, relationship issues, financial trouble, employment issues, or legal problems?
(v)        Within the time prior to disappearance did anything out of the ordinary occur that involved or affected the person?
(vi)      Had the person previously disappeared, for any time and any reason? Full particulars should be provided, to show whether this was in or out of character for the person.
(vii)      Was a suicide note, or any other indicator of a reason to disappear, left by the person?
(viii)     Apart from the above, were there any other signs or indicators that the person had  a plan to have or disappear, or any possible reasons for doing so?
(ix)      Prior to the disappearance, did the person take, remove, sell, gift or otherwise deal with or dispose of any assets, including: money, investments, debts, credit facilities, clothing, personal items, sentimental items, pets, vehicles? Did they access a safety deposit box?
(x)        Did the person do or say anything in the nature of a “goodbye” or indicate they would be gone forever or for an extended period?
(xi)      Were any recent changes made to a last will and testament, power of attorney, or health care directive?
(xii)      What type(s) of relationships did the person have with family, friends, colleagues and co-workers? Where were all such people located?
(xiii)     Did the person have acrimonious or bad relationships with anyone?
(xiv)     How abrupt was the disappearance?
 (xv)      Did the person have relationships with others where regular contact was maintained? If so, what happened to this contact?
(xvi)     Do any of these people have any theories as to what happened to the missing person?

B.  The Investigation
(i)         Was the person’s disappearance reported to the police? If not, why not? If so, when? Account for any delay.
(ii)        Did the police investigate and, if so, what were the steps taken and results obtained?
(iii)      If possible, file copies of the police reports and/or evidence from the investigating officer(s).
(iv)      Did any family or friends take steps to try to trace or locate the person and, if so, what was done?
(v)        Was the media involved in efforts to locate the person? Provide particulars.
(vi)      Was a private investigator retained to attempt to locate the person?
(vii)      Were any inquiries made at and near the last known location the missing person was known to have been?
(viii)     If there are any places the person might go to, were inquires made in such location(s)?
(ix)      Were financial records investigated regarding activity before and after the disappearance? Was anything out of the ordinary? Were credit checks conducted?
(x)        Were inquiries made of government agencies to determine recent activities? This would include passports, pensions, licences and registrations, taxes and benefits, other official documents.
 (xi)      Were inquiries made of the person’s health care providers to determine if they have any helpful information?
(xii)      Were electronic media checked (computers, flash drives, email accounts, social networking sites) for activity or information?
(xiii)     Were transporters (airlines, rail, vehicle rental, travel agents) checked for recent involvement with the missing person?
(xiv)     Were cellphone accounts investigated?

C.  The Financial Situation
(i)         Did the person have a will? If possible, file a copy.
(ii)        Provide an inventory of the person’s assets and debts, both at the time of disappearance and the time of application.
(iii)      If there have been any changes in family, dependant or beneficiary structure since disappearance, provide full details including how the person’s property would pass to beneficiaries.
(iv)      Provide a full description of the family both at date of disappearance and date of application, including whether such family members had spouses or issue, and if any have died, particulars as to their estates.

 The other question that the Court needed to address is the time at which Mrs. Medzech was presumed to have died.

In the intervening years since she disappeared, Mrs. Medzech’s husband and her daughter also died. She died without a will. If she died before her husband and daughter, then they (and now their heirs) may have an entitlement to part of her estate under Saskatchewan’s laws dealing with how assets are distributed when someone dies without a will. If she were found to have died after them, then they (and their estates) would not have an interest.

Justice Danyliuk found that in the circumstances it was most likely that she died on the date she disappeared, and the Court declared that December 13, 2002 was the date of death.

Hearsay and Estate Litigation

If I testify in court that Jill told me that Jack fell down and broke his crown in order to prove that Jack did, in fact, fall down and broke his crown, then my evidence is hearsay. Testimony about an out of court statement by someone else to prove the truth of the matter asserted by that other person is hearsay. In British Columbia, hearsay is generally not admissible in court.

But my testimony about what Jill told me about Jack may be admissible in some circumstances. For example, I may be relating what Jill told me, not to prove that Jack fell down and broke his crown, but for the non-hearsay purpose of explaining why I called an ambulance. Or, the court might admit my testimony, even to prove that Jack fell down and broke his crown, if the court finds that the evidence is necessary and it is sufficiently reliable to consider despite the fact that it is hearsay.

In estate litigation, the courts often consider statements about what the deceased person had said. Often the court receives such evidence without objection. On what basis are these statements admitted? Most reported estate litigation judgments in British Columbia do not contain discussions about the admissibility of statements about what the deceased said. Mr. Justice Groves’ decision in the recent case of Modonese v. Delac Estate, 2011 BCSC 82, is an exception.

Regina Delac died on August 20, 2005. She had two children: a son, Marko Delac, and a daughter, Helena Modonese. With the exception of a three-year period beginning in 1989, Marko Delac lived with his mother in her home on Royal Oak Avenue in Burnaby. His wife and, while they were growing up, his children, also lived in the Royal Oak Avenue home.

A couple of years before she died, Regina Delac signed a transfer form, transferring her house into a joint tenancy with her son. She signed the transfer in front of a notary public, whom her son had contacted, while sitting in Marko Delac’s car. Mr. Delac was either in the car or standing nearby when she signed the transfer.

On Regina Delac’s death, title to the house at Royal Oak Avenue passed to her son by right of survivorship. Her only other financially valuable asset was her bank account which held about $35,000.

In her will, Regina Delac said that her estate was to be divided equally between her son and daughter. But if the house passes to Marko Delac by right of survivorship, there would only be $35,000 less estate liabilities to be divided between Regina Delac’s two children.

Helena Modonese challenged the transfer of her mother’s house into a joint tenancy with her brother on the grounds of undue influence and resulting trust.

To establish undue influence, Ms. Modonese relied on a presumption that arises when the nature of the relationship between the person who makes a gratuitous transfer (in this case Regina Delac) and the recipient (her son) is such that the recipient s in a position to dominate the transferor. When the presumption arises, then the recipient must prove that he did not exercise any undue influence, often by showing that the transferor acted spontaneously and received independent advice.

A resulting trust is a presumption that arises when one person gratuitously transfers property to another. The presumption is that the transferor did not make a gift, but rather that the recipient holds the property in trust for the transferor, and after the transferor’s death, for his or her estate. The recipient may rebut the presumption of resulting trust by proving that the transferor intended to make a gift of the property.

Ms. Modonese relied on statements her mother made to her, to daughter Linda Modonese, and to Regina Delac’s sister Helen Uzelak, to challenge the transfer of the house into a joint tenancy with her brother. For example, Regina Delac told her sister that Marko Delac had slapped and choked her in 1989 or 1990. After this incident the police came, and Marko Delac and his family moved out of the home for three years. Mr. Justice Groves summarized the evidence objected as hearsay at paragraphs 73 and 74:

[73] In their written submissions, the parties highlight a number of statements made by the deceased, which the defendant asserts are inadmissible hearsay. The most important of these for the present purposes appear to be:
(a) A statement to Linda Modonese regarding a physical altercation between Marko and Regina;
(b) A statement to Helena and Linda Modonese to the effect that it was Regina’s intention for Helena and Marko to share equally in the estate and more specifically in the house;
(c) A statement to Helen and Helena wherein Regina told them that she was afraid of upsetting Marko;
(d) A statement to Helen and Helena wherein Regina told them that she was afraid of Marko;
(e) Most importantly, Helen’s evidence that prior to her death, Regina told her that she had signed something and that she did not know what she signed. The defendant had told her to sign. She did not like this. She wondered how the defendant’s name was on the municipal tax notice.  

[74] An out of court statement tendered for the truth of its contents is presumptively inadmissible. The hearsay rule has been traditionally regarded as an absolute rule, and acts as an exception to the general principle that all relevant evidence is admissible.

Mr. Justice Groves considered whether the evidence fell within a tradition category of hearsay exceptions. These are certain categories of out-of-court statements that the courts have developed over many years. He then considered whether those statements that do not fall within a traditional category should be admitted under the principled approach of considering the necessity and reliability of the evidence.

Statements Regina Delac made to others that she was afraid of her son, and that she intended for her children to share her house and bank accounts equally, fall within the traditional hearsay exceptions for statements made to prove a person’s intention, mental or emotional state. Mr. Justice Groves wrote at paragraphs 82 through 86:

[82] In Pasko v. Pasko, 2002 BCSC 435, 100 B.C.L.R. (3d) 354 [Pasko], a dispute arose as to the admissibility of statements made by deceased parents to their children in connection with a dispute over whether property had been gifted to certain of the children. Halfyard J. noted at para. 10 that there is an “exception to the hearsay rule which permits evidence to be given of statements made by deceased persons as to their present state of mind (including intention), which statements need not be against interest, provided that the deceased person's state of mind is relevant to an issue in the case.” 

[83] Pursuant to this exception, Mr. Justice Halfyard admitted statements relating to the deceased parents’ intentions to confer a gift, made before and at the time of the two transactions in question.

[84] Following Pasko, if I am wrong in concluding that the statements concerning Regina’s intention to divide her assets equally are not admissible pursuant to s. 5 of the WVA, they ought to be admitted pursuant to this exception to the hearsay rule.

[85] Declarations of mental or emotional state are also an established exception to the rule against hearsay. In R. v. Smith, [1992] 2 S.C.R. 915, 94 D.L.R. (4th) 590 [Smith cited to S.C.R.], the Court held that the state of mind exception to the hearsay rule permits reception of evidence to prove the declarant’s state of mind, but not the truth of the factual assertion which may be contained in it. Statements attributed to a deceased declarant tending to show her state of mind, namely a fear of the defendant, are admissible under this exception to the hearsay rule: R. v. Evans, 2002 BCSC 1674 at para. 35, [2002] B.C.J. No. 3100. 

[86] Accordingly, the statements attributed to Regina concerning her fear of the defendant and her fear of upsetting him are admissible pursuant to this exception.

Mr. Justice Groves admitted Regina Delac’s statements of physical violence, and that she signed something her son told her to sign but did not know what she signed under the principled exception, which he explained as follows:

[88] The statements referred to above under headings “a” and “e” (the physical altercation and the evidence that Regina did not know what Marko had asked her to sign) do not appear to neatly fit under any of the established exceptions to the hearsay rule. I now turn to a consideration of the “principled approach” to hearsay.

(i) Necessity

[89] The principle of necessity does not mean that the hearsay evidence must be necessary in order for a party to prove his or her case. As described by the Court in Smith at 933, the criterion of “necessity” refers to the necessity of the hearsay evidence to prove a fact in issue. To satisfy necessity, the party adducing the evidence must prove that hearsay is the only available means of putting that evidence before the court. Necessity is obviously made out in this case. If Regina’s statements are to be adduced at all, they can only be presented in hearsay form because of her death.

(ii) Reliability

[90] When assessing the reliability of a hearsay statement, the court should adopt a functional approach. Starting from the premise that hearsay statements are presumptively inadmissible, it should then search for indicia of trustworthiness sufficient to displace the general exclusionary rule. In each case, the focus of the inquiry must be on the particular dangers arising from the hearsay nature of the evidence: R. v. Blackman, 2008 SCC 37 at para. 42, [2008] 2 S.C.R. 298. 

[91] This requirement can be satisfied in one of two ways: First, where there is an absence of any real concern about the truth of the statement because of the circumstances in which the statement was made; and second, where the truth and accuracy of the evidence can be sufficiently tested by means other than contemporaneous cross examination: Khelawon at paras. 62-63.

[92] All relevant factors and the context should be considered, including the presence of supporting or contradictory evidence in appropriate cases.

[93] In Anderson v. Anderson, 2010 BCSC 911, 58 E.T.R. (3d) 291 [Anderson], the pivotal issue in the trial was similar to that raised in the present case: Did the deceased gift the defendant the legal and beneficial interest in property absolutely through an inter vivos transfer? Accordingly, the actual intention of the deceased at the time of the transfer was of fundamental importance. On the issue of hearsay pertaining to this issue, Dardi J. held:

57 The reporting of some of the Deceased's statements by interested parties raises a concern regarding the reliability of those statements. This evidence must be carefully scrutinized. Adopting the approach in Stephens v. Austin, 2003 BCSC 341, I have nevertheless determined that the Deceased's statements adduced in evidence meet the threshold requirement of reliability. I conclude that the fact that some of the witnesses relating the statements are interested parties may be adequately dealt with in the determination of the weight to be attributed to any particular statement.

58 In my view, the real issue with some of the evidence and the weight to be accorded to it is whether the statements were in fact made by the Deceased. The Court must first find on a balance of probabilities that the statement was made before it goes on to determine the treatment and weight of such evidence: Creutz v. Winther Estate, 2007 BCSC 1463. In essence, this assessment turns on the reliability of the various witnesses: Halfpenny v. Holien (1997), 37 B.C.L.R. (3d) 186 (S.C.).

[94] Regina had no motive to fabricate the two statements attributed to her. They were not self-serving. The statements at issue were made in the context of everyday intimate conversations between close relatives and friends, which is an accepted indicator of reliability: R. v. Pasqualino, 2008 ONCA 554 at para. 43, 233 C.C.C. (3d) 319. The defendant has pointed to no evidence that would contradict these statements. Accordingly, the statements possess sufficient hallmarks of threshold reliability to justify admission under the principled exception.

[95] As Dardi J. noted in Anderson, the real issue in this case is whether or not Regina actually made the alleged statements at issue to Helen and Linda Modonese, which requires an assessment of these witnesses’ credibility. I find them both to be credible witnesses.

(I think that the statement that Regina Delac did not know what she signed could also have been admitted under the state of mind exception.)

Mr Justice Groves found that the presumption of undue influence applied because there was a potential for domination in the relationship between Marko Delac and Regina Delac. In making that finding, he considered:

1. Regina’s statements that she feared Marko and did not want to upset him;
2. Marko’s physical abuse of his mother;
3. Regina’s statement to Helen that she signed documents at Marko’s direction and that she did not appreciate the nature and consequences of these documents;
4. Marko was granted an enduring power of attorney, which he used over the plaintiff’s assets, granting him control over her affairs and subjecting him to fiduciary obligations (On the fiduciary relationship between an attorney and donor, see Egli v. Egli, 2004 BCSC 529 at paras. 76-79, 28 B.C.L.R. (4th) 375, aff'd 2005 BCCA 627, 48 B.C.L.R. (4th) 90.);
5. Marko’s attempts to prevent his mother from having contact with the plaintiff, isolating her from other family members;
6. Regina’s reliance upon Marko for companionship, help around her home, and in dealing with her general affairs.

Marko Delac did not rebut the presumption of undue influence. The notary did not provide any independent advice to Regina Delac.

Furthermore, the transfer into a joint tenancy was subject to the presumption of resulting trust, and Marko Delac was unable to prove that his mother intended to make a gift of the house to him.

In the result, Helena Modonese was successful, and the house will be divided equally between Regina Delac’s two children under her will.

I should note that although I have focused this post on the hearsay issues, Mr. Justice Groves’ reasons for judgment in Modonese v. Delac Estate also contain thorough analyses of the law of undue influence, the requirements for independent legal advice, and the presumption of undue influence in British Columbia.

Re: Elsie Jones

When you talk to your lawyer, you may want to keep the conversation private. If the lawyer divulges what you say, it could hurt your interests in a law suit. Or you might find it embarrassing.

Privacy is protected in a couple of ways. First, a lawyer has an ethical duty to keep client conversations and other communications with the lawyer confidential unless the client authorizes the lawyer to disclose information.

Secondly, under Canadian law, there is a legal rule called solicitor-client privilege. This rule provides that a lawyer must not, and cannot be compelled, to divulge information from a client in a court proceeding unless the client has waived the privilege. There are some exceptions to solicitor-privilege but not very many. The principle that a client may speak freely to a lawyer to obtain advice without having to worry that what the client says may somehow be used to harm his interest is fundamental in Canadian law.

Although the lawyer’s obligation to kept client communications confidential and solicitor-client privilege are similar, they are not identical.

This is illustrated by the recent British Columbia Supreme Court decision in Re: Elsie Jones, 2009 BCSC 1306. The case is a dispute about whether Elsie Jones was mentally competent to transfer her condominium to her daughter, Maureen Ringrose. Elsie Jones has been declared incompetent and the Canada Trust Company has been appointed as her committee (in other words her adult guardian.) Elsie Jones two sons say that she was incompetent when she transferred the condominium. The Canada Trust Company asked the court to determine if Maureen Ringrose is entitled to keep the condominium, or if it must be returned to Elsie Jones.

When Elsie Jones transferred the condominium, she had a lawyer. When the lawyer was being cross-examined he said that he had also done some estate planning or Elsie Jones at about the same time as the transfer. The lawyer refused to produce his file to the parties to the lawsuit. His position was that it was both confidential and privileged. He would only produce the file if the court ordered him to do so.

Mr. Justice Savage was asked to rule on whether the file should be produced, and, if so, to whom. He agreed with Elsie Jones’ lawyer that it was confidential, and he was right to insist on a court order.

Although the file was confidential, it was relevant to the question of whether the transfer of the condominium was valid. Mr. Justice Savage did not elaborate on how it was relevant, but it does seem that the file would show how the transfer fit into Elsie Jones' overall estate plan, and would likely be helpful in showing her thinking and capacity.

Relevance to the proceeding trumps confidentiality.

Mr. Justice Savage then considered solicitor-client privilege. He found that this was the type of communication protected by the rule. Although not absolute, the rule had very few exceptions. He held that the estate planning file was subject to solicitor-client privilege, and could not be disclosed unless the privilege is waived by the client.

Because Elsie Jones is incompetent, and the Canada Trust Company is her committee, Canada Trust Company has her rights to the file, and can decide whether or not to waive the solicitor-client privilege. Unless they waive it, the file may not be produced in the proceeding.

While relevance trumps confidentiality, solicitor-client privilege trumps relevance.

This decision leaves Canada Trust Company in the difficult position of deciding whether it is appropriate to waive the solicitor-client privilege.

Burden of Proof in a Civil Lawsuit

I think most people in Canada are aware that in a criminal case in Canada, the Crown has to prove that the accused is guilty beyond a reasonable doubt.

But in a civil lawsuit, the standard is different. The person who has the burden of proof (usually the plaintiff making the claim) must prove his or her case on a balance of probabilities.

What does the “balance of probabilities” mean? It simply means that the judge must find that it is more likely than not that what the person who has the burden of proof says happened is the truth. The judge does not have to be free from all reasonable doubt. He or she must be able to decide if one version of events is more likely true than another version.

In some British Columbia cases, the courts have suggested that a higher standard of proof than the balance of probabilities is required if someone is making very serious allegations of wrongdoing. For example, if I say I lent you some money, but you didn’t repay me on time, I would have to prove my case on a balance of probabilities. But if I say you acted fraudulently, I would need to meet a higher standard of proof, perhaps something in between the civil standard of balance of probabilities and the criminal standard of beyond a reasonable doubt.

In a decision released on Thursday, October 2, 2008, the Supreme Court of Canada rejected the notion that a higher standard of proof than the balance of probabilities is required in a civil case.

In F.H. v. McDougall, 2008 SCC 53, the plaintiff sued an Oblate Brother of a residential school the plaintiff had attended as a child. The plaintiff claimed that the defendant had sexually assaulted him thirty years ago, when the plaintiff was 10. Despite some inconsistencies in the plaintiff’s evidence, the trial judge believed him, and the plaintiff won.

The majority of the British Columbia Court of Appeal overturned the trial judge’s decision. The Court of Appeal held that the plaintiff had not met the burden of proof, which the court described as being “commensurate with the occasion” when morally blameworthy conduce is alleged.

Mr. Justice Rothstein wrote the unanimous judgment of the Supreme Court of Canada, restoring the trial judge’s decision for the plaintiff. He contrasted criminal cases, where the higher standard of proof beyond a reasonable doubt is closed linked with the presumption of innocence, with civil suits. In civil suits society is indifferent as to whether the plaintiff or defendant wins.

The Court also considered the impracticality of imposing a higher probability. It is easy to understand the idea that one has to meet a standard of 51%, but not 60% or 70%.

Mr. Justice Rothstein left no room for equivocation: “I would reaffirm that in civil cases there is only one standard of proof and that is proof on a balance of probabilities.”

Expert Medical Evidence in Will Challenges

It is helpful to get evidence from medical professionals before the court in disputes about the capacity of a deceased person to make a will. Although the test for capacity to make a will are legal tests (I have written about them here), medical evidence is certainly useful. Yet, it can be a challenge obtaining a medical opinion concerning capacity after someone has died. In some cases, the lawyer who drew the will asked a doctor to assess the testator before the will was signed. But, in many cases, no one examined the testator for the purpose of determining capacity.

A recent decision of the Supreme Court of British Columbia illustrates how a party to case about testamentary capacity may use expert medical evidence, even from a psychiatrist who never examined the testator. The case is Woodward v. Grant, 2007 BCSC 1192.

The plaintiffs challenged Mr. Joe Roberts will dated October 30, 2002. Mr. Roberts had made an earlier will in which he had left most of his estate to one of the plaintiffs, Marilyn Woodward. Although Ms. Woodward was still a beneficiary under the 2002 will, she received a smaller share than she would have if the earlier will were Mr. Roberts’ last will. She sought an order from the court declaring that the 2002 will was invalid on the grounds that Mr. Roberts did not have capacity when he made the will.

There was evidence that Mr. Roberts had some memory problems and confusion at around the time he made the 2002 will.

The defendants provided evidence in support of their position that Mr. Roberts had capacity from Dr. Les Sheldon, a geriatric psychiatrist. Dr. Sheldon had never examined Mr. Roberts. He reviewed Mr. Roberts’s clinical records made by Dr. Roberts’ doctors. Dr. Sheldon expressed the opinion that although Mr. Roberts suffered from some executive dysfunction, Mr. Roberts did not suffer from moderate or severe dementia, or anything that would impair his abilities to make a valid will.

The court admitted the clinical records into evidence on the basis that they are business records. They are admissible for the observations recorded and for the fact that doctors made certain diagnoses, but not as proof that the diagnoses are correct.

The plaintiffs objected to Dr. Sheldon’s evidence. But Madam Justice Gray held that his evidence was admissible. Dr. Sheldon’s evidence was relevant. His evidence assisted the court in understanding the technical facts in the clinical records, and the significance of observations recorded in the records, including test results.

Madam Justice Gray found that Mr. Roberts did have capacity to make the 2002 will. She considered, in addition to the medical evidence, the evidence of the lawyer who took the will instructions, as well as other witnesses in arriving at her decision.

What is the Significance of a Power of Attorney in a Joint Account Dispute?

In this my seventh part in a series of posts on the Supreme Court of Canada's decisions in Pecore v. Pecore, 2007 SCC 17, and Madsen Estate v. Saylor, 2007 SCC 18, I write about the significance of evidence that the parent who transferred funds into joint accounts with a child also appointed that child as an attorney under a power of attorney. In each of these cases, a father transfered investments into joint accounts with a daughter. The issue was whether, after the father's death, the daughter could keep the balance of the accounts as her own, or had to account to the father's estate for the funds. In each case, the father had also appointed the daughter his attorney under a power of attorney.

There are two ways to approach this evidence. On the one hand, it could be argued that if the father gave the daughter a power of attorney, it would not be necessary for the father to also put funds into joint accounts with his daughter if his intent in opening a joint account was to allow his daughter have access to the account solely for convenience. The daughter could use the power of attorney to use her father's account to assist him in paying his bills, or getting cash for him. Why would he bother to open a joint account with his daughter unless he intended to make a gift of the funds in the account to his daughter? On this analysis, adopted by the Ontario Court of Appeal in Pecore, evidence of the power of attorney supported the daughter's argument that her father intended for her to keep the funds in the joint accounts on the father's death as a gift.

On the other hand, the father might have opened the joint account as another means to allow the daughter to assist him. In Madsen Estate, the majority of the Ontario Court of Appeal did not consider the power of attorney as compelling evidence that the father intended a gift.

Mr. Justice Rothstein in Pecore wrote that the court could consider a power of attorney, but it is not determinative, and the court should "use caution in relying upon it." He pointed out that the person granting the power of attorney may do so to facilitate assistance with other affairs.

I think that Mr. Justice Rothstein is right to urge caution. I know of instances where employees of financial institutions have suggested the use of joint accounts to their customer for convenience after the customer has given the financial institution a copy of the power of attorney.

In the next part of this series, I will discuss the significance of how the parties dealt with the ownership of the joint accounts for tax purposes.

My previous in this series were as follows:

In my first post, I summarized the facts of these cases.
In my second post, I wrote about the presumptions of resulting trusts and of advancement.
In my third post, I wrote about how the Court dealt with the issue of whether a gift of a right-of-survivorship is testamentary, requiring compliance with wills legislation.
In my fourth post, I wrote about the Supreme Court of Canada has relaxed the rule against evidence of statement and acts after a transfer has occurred.
In my fifth post, I wrote about the joint account documents.
In my sixth post, I wrote about the relevance of whether the contributor of the joint account continued to use and control the account during his lifetime.

Joint Account Disputes: The Relevance of Use and Control

On May 3, 2007, the Supreme Court of Canada released reasons for judgment in two disputed cases about joint accounts. The issue the court addressed in each case was whether a surviving joint account owner was entitled to keep the funds in the account on the death of the other joint account owner. In each case the deceased had contributed all of the funds to the accounts. In one case, the court held that the surviving joint account owner was entitled to keep the funds. In the other, the survivor had to return the funds to the deceased’s estate.

This is my sixth post in my series on Pecore v. Pecore, 2007 SCC 17, and Madsen Estate v. Saylor, 2007 SCC 18. In this post, I will summarize Mr. Justice Rothstein’s discussion in Pecore of the relevance of the fact that the deceased’s joint account owner had used and exercised control over the account during his lifetime. In each of these cases, a father transferred funds into joint accounts with his daughter. For convenience, I will refer to the contributor as the father, and the surviving joint account owner as the daughter, but the same principles apply to other relationships.

Mr. Justice Rothstein said that the court may consider whether the father used and controlled the joint account. But, he wrote, such evidence may be of marginal assistance.

He gave three reasons. First, the fact that the father continued to exercise control may reflect the dynamics of the relationship, rather than whether the father intended to make a gift to the daughter. On the other hand, an aging father might transfer funds into a joint account to allow the daughter to manage the funds for him without intending to make a gift.

Secondly, the daughter may leave funds in the account so that the father’s needs are met even if she is entitled to withdraw funds.

Thirdly, the father may intend to give the daughter the right-of-survivorship at the time of the transfer, and still use and control the funds during his lifetime.

In my seventh post in this series, I will discuss the relevance of how the parties have treated the joint accounts for tax purposes.

You can link to one of my previous posts in this series as follows:

In my first post, I summarized the facts of these cases.
In my second post, I wrote about the presumptions of resulting trusts and of advancement.
In my third post, I wrote about how the Court dealt with the issue of whether a gift of a right-of-survivorship is testamentary, requiring compliance with wills legislation.
In my fourth post, I wrote about the Supreme Court of Canada has relaxed the rule against evidence of statement and acts after a transfer has occurred.
In my fifth post, I wrote about the joint account documents.

Joint Account Documents and Disputed Joint Accounts

A father contributes the funds into a joint bank account with his daughter. They sign a joint account agreement with the bank that says that on the death of one joint account owner, the survivor is entitled to withdraw the balance. The father dies. The daughter claims the funds, but either the father’s executor, or the beneficiary of his will claim the daughter holds the funds in trust for the father’s estate. Should the court consider the joint account agreement when deciding who gets the funds?

This is one of the questions the Supreme Court of Canada considered in two recent decisions, and this question is my topic in my fifth in a series of posts on the decisions in Pecore v. Pecore, 2007 SCC 17, and Madsen Estate v. Saylor, 2007 SCC 18.

As I have previously written, in earlier decisions the Supreme Court of Canada has held that the joint account agreement with a bank sets out the rights and obligations between the account holders on the one hand, and the bank on the other. The joint account agreement does not set out the rights and obligations to funds as between the estate of a deceased joint account owner, and the surviving joint account owner.

In Pecore, Mr. Justice Rothstein said that in some circumstances the joint account agreement may provide evidence of whether the person who made the contribution intended for the joint account owner to keep the balance in the account on the contributor’s death. He wrote at paragraph 61,

While I agree that bank documents do not necessarily set out equitable interests in joint accounts, banking documents in modern times may be detailed enough that they provide strong evidence of the intentions of the transferor regarding how the balance in the account should be treated on his or her death: see B. Ziff, Principles of Property Law (4th ed. 2006), at p. 332. Therefore, if there is anything in the bank documents that specifically suggests the transferor’s intent regarding the beneficial interest in the account, I do not think that courts should be barred from considering it. Indeed, the clearer the evidence in the bank documents in question, the more weight that evidence should carry.

It would be difficult to quarrel with the point that the court may consider documents the parties signed when the court tries to find out whether the person contributing the funds intended to make a gift.

On the other hand, in practice, I question how helpful the banking documents will be, or whether the courts should give the joint account agreement much weight. I don’t think I have seen joint account agreements that make a distinction between title to the accounts, and the beneficial interest (the right to the use and enjoyment) in the accounts. I think in practice the bank documents generally say that the survivor is entitled to deal with the account, and withdraw the funds. This does not shed any light on whether the now deceased person who contributed the funds intended the survivor to keep the funds, or for the funds to be distributed according to the deceased’s will.

If the joint account agreement did provide more detail to address this issue, I question whether many people would read and understand the detail. Lawyers are not usually involved in setting up joint accounts, even when the joint accounts involve substantial amounts. I have never been asked to review a joint account agreement before it was signed. In most cases, the contributor is setting up a joint account with a close relative, whom he or she completely trusts. The joint account owners don’t take a great deal of time to read the fine print.

In my next post in this series, I will write about the Supreme Court of Canada’s discussion of the relevance of whether the contributor continued to control the joint account during his lifetime.

If you are interested in reading my previous posts on these two cases, I summarized the facts of these cases in my first post. I discussed the presumption of advancement in my second post. I wrote about how the Court dealt with the issue of whether a gift of a right-of-survivorship is testamentary, requiring compliance with wills legislation in my third post. In my fourth post, I wrote about the Supreme Court of Canada has relaxed the rule against evidence of statement and acts after a transfer has occurred.

The Supreme Court of Canada Relaxes the Rule in Shephard v. Cartwright

The Supreme Court of Canada recently released two judgments on the issue of whether, on the death of one joint account owner who contributed all of the funds into the joint account, the surviving account owner gets to keep the funds, or must hand them over to the deceased’s estate. In each of Pecore v. Pecore, 2007 SCC 17, and Madsen Estate v. Saylor, 2007 SCC 18, a father contributed the funds to joint account with one of his daughters. In Pecore, the daughter was entitled to keep the funds. But in Madsen Estate, the daughter had to return the funds to her father’s estate.

I have summarized these cases in my first post. In my second, I wrote about the majority’s decision that an adult child who receives assets gratuitously from his or her parent has the burden of persuasion to convince a court that the parent intended to make a gift. In my third post, I discussed the Court’s decision that joint accounts are not testamentary, and the forms creating joint accounts do not need to comply with legislation governing the form of wills.

In this post, I discuss the issue of whether courts may consider what the person who has transferred assets to another gratuitously said or did after the transfer.

In these disputes between a surviving joint account owner, and the deceased’s estate, the court attempts to discover what the deceased’s intention at the time he or she transferred funds into the joint accounts. When a parent intending to make a gift transfers funds into a joint account with a child, the parent has made the gift at the time of the transfer. Once the gift is made, the parent is not entitled to take back the gift if the parent changes his or her mind. (Although, as a practical matter, if it is a joint account, the parent might be able to simply withdraw the funds, defeating the gift.)

Now, supposing two years after a mother has transferred her investments into a joint account with her son, she tells her friend that she set up the joint accounts to allow her son to assist her in managing the investments, but she did not intend to make a gift. Should a court consider this conversation after the mother has died? Perhaps, the mother intended to make a gift at the time of the transfer, but changed her mind.

What if, on the other hand, the mother tells her friend two years after the transfer that she did intend to make a gift? The statement is against the mother’s self-interest, and might be considered more reliable.

Some courts, including the House of Lords in Shephard v. Cartwright, [1955] A.C. 431, have said that in trying to find out what someone intended, the court may only consider what he or she says or does before the transfer or at about the same time as the transfer, unless what he or she says or does is against his or her own interest. Under this rule, if the mother in our example says two years after the transfer that she did not intend to make a gift, her statement would not be admissible. But, if she said that she did intend a gift she transferred the funds, this statement would be admissible even if she made it two years after the transfer.

In Pecore, Mr. Justice Rothstein held that statements or other acts showing intention were admissible even if they were made after the transfer. Such statements are admissible if they are relevant to deciding what the person making the transfer intended when the transfer was made. The trial judge can then assess the reliability and persuasiveness of the evidence.

Accordingly, the Supreme Court of Canada has relaxed the stricter rule of evidence prohibiting trial courts from even considering potentially self-serving statements of intention made after the transfer. Instead, the trial judge may hear and consider such evidence, although it might not carry as much weight as a statement made close in time to the transfer.

In my fifth post in this series, I will write about the Court’s discuss of the evidentiary value of the terms of the joint account documents.

Jung v. HSBC Trust Company

Yesterday, the British Columbia Court of Appeal ordered a new trial in Jung v. HSBC Trust Company, 2006 BCCA 549.

I wrote about the trial court's decision in Jung, Re Estate of Horace Lee, 2005 BCSC 1537, in this post on November 5, 2005. At trial, Mr. Justice Burnyeat found that the testator, Hubert Lee, had inserted the names of the beneficiaries of a will he made in 1985, after the witnesses to the will had signed the will. The trial judge held that although the 1985 will was valid, the additions made after the will was witnessed could not be given effect. Mr. Justice Burnyeat considered in depth the doctrine of dependent relative revocation, and held that the revocation clause in the 1985 will did not revoke Mr. Hubert Lee's earlier will leaving his estate to his brother Horace Lee.

In the Court of Appeal, the appellants, who were named as beneficiaries in the 1985 will, challenged the trial judge's finding of fact that the beneficiaries' names were inserted after the 1985 will was witnessed. At trial both witnesses testified that the beneficiaries' names were already in the 1985 will when they witnessed it. But, the trial judge had preferred the evidence of a lawyer who testified that one the witnesses had told the lawyer on the telephone that the portions of the will containing the gifts to the beneficiaries were blank when the testator and the witnesses signed the will.

The Court of Appeal held that the trial judge ought not to have relied on the lawyer's testimony of what the witness told the lawyer as proof that the names of the beneficiaries were not present when the will was signed. The lawyer's evidence of the telephone conversation could be used to impeach the witness' evidence at trial. For example, the trial judge was entitled to find that the witness' evidence at that the will was complete was not reliable on the basis of the witness' previous inconsistent statement to the lawyer. But, the Court of Appeal held that the trial judge could not make a finding of fact that the will was blank on the basis of the lawyer's evidence.

The difficulty with the lawyer's evidence is that it was hearsay. In other words, it was a statement made of what the witness told the lawyer for the purpose of proving that what the witness told the lawyer was true. Although in some cases hearsay evidence is admissible to prove the truth of the contents of the statements, there must first be sufficient indicia that the hearsay statements are both necessary and reliable. In this case, the Court of Appeal held that there were insufficient indicia of reliability to admit the witness' statement to to the lawyer as evidence that the names of the beneficiaries were not in the 1985 will at the time the testator and witness' signed it.

The Court of Appeal did not comment on Mr. Justice Burnyeat's analysis of the doctrine of dependant relative revocation.
[After a new trial, reported here, Mr. Justice Silverman found that the portion of the will containing the gifts to the other siblings was in the will when Henry Lee and the witnesses signed the will. I have now written about the decision here.]