Saturday, November 28, 2015

Lane Estate

There have now been several reported cases in British Columbia in which the courts have been asked to give effect to a document that does not meet the formal requirements for a valid will pursuant to section 58 of the Wills, Estates and Succession Act. This section allows the court to give effect to a document or other record as a will if the court is satisfied that it reflects the testamentary intentions of a deceased person.

I have written about the first reported case dealing with this issue in British Columbia, Estate of Young, 2015 BCSC 182, here, and another case Beck Estate, 2014 BCSC 676, here. In both these cases the courts gave effect to a document that did not comply with the formal requirements.

We now have a reported case in which the Supreme Court of British Columbia declined to give effect to any of the non-compliant documents the Court was asked to consider. The case is Lane Estate, 2015 BCSC 2162, a decision of Mr. Justice Pearlman.

Elda Lane made a will in 1994 in which she left the residue of her estate to be divided equally between her son, Warwick Lane, and her daughter, Deborah Alsop. She signed the will in the presence of two witness in accordance with the formal requirements for a valid will.

On her death on April 14, 2015, Ms. Lane’s main assets were her house and a bank account. The value of her estate was approximately $400,000.

Between April 14, 2012 and January 9, 2015 she made seven documents in which she purported to leave her house and her funds to her son (the words she used to describe the assets she was leaving to her son varied, such as house and bank account, house and money, house and everything).  Some were signed and some were not:

The April 14, 2012, October 21, 2012 and July 2013 notes are each signed at their end by the deceased.  On the May 3, 2014, November 3, 2014, December 15, 2014 and July 9, 2015 notes, the deceased wrote her name at the top of the note, and either signed "Mom" at the end of the note, or in the case of the November 3, 2014 note, left the end of the note unsigned.

Elda Lane told her son several times that she wanted to leave him her house and that she left a note in her house. He told her that if she wanted to change her will, she should see a lawyer, but she said that the note was “good enough.”

Mr. Justice Pearlman found that all of the notes were authentic, that she had capacity to make a will, and that there was no evidence of undue influence. He inferred that the relationship between Elda Lane and her daughter was “strained,” but that they were not “estranged.”

Applying the Estate of Young, and Beck Estate decisions as well as the Manitoba Court of Appeal decision in George v. Daily,[1997] M.J. No. 51, Mr. Justice Pearlman considered whether  the notes, or any of them, represented a deliberate and fixed or final intention of Ms. Lane’s testamentary intentions.

He considered the factors both for and against giving effect to the documents:
[44]         The factors that might support a finding that the notes represent the testamentary intention of the deceased are:
(a)          the deceased used the formal language of "I, Elda Lane leave ... to my son" in several of the notes;
(b)          some of the notes are signed at their end by the deceased;
(c)          the deceased told the petitioner she wanted him to have her house after she died and that she had left a note to that effect;
(d)          six of the notes contemplate a distribution of the estate by which the petitioner would receive all of the residue of the estate.  The October 21, 2012 note identifies the property to be left to the petitioner as including the deceased's principal assets, her house and the Scotiabank account.
[45]         I have excluded the April 14, 2012 note.  That note, written on the back of a Safeway receipt, states that the deceased is leaving her house to her son, and that she is leaving her son "in charge of my bank account ... with Scotia Bank."  In my view, the latter statement is as consistent with an expression of a wish by the deceased that the petitioner manage her finances as it is with an intention to make a bequest.  I find that the April 14, 2012 document is not a deliberate or fixed and final statement of the deceased's testamentary intention.
[46]         The factors that weigh against a finding that one or more of the notes represent the deceased's testamentary intentions are as follows:
(a)          each of the notes is written on the back of a receipt, grocery list, calendar, or other scrap paper, suggesting impermanence and informality rather than a fixed and final intention;
(b)          none of the notes were witnessed.  They all lack one of the fundamental hallmarks of formal validity;
(c)          there is no express revocation of the deceased's Will.  This case is distinguishable from Estate of Young where the document admitted to probate was generally consistent with the deceased's will;
(d)          none of the documents bear a title.  In Beck Estate, unlike this case, the deceased described the document in issue as a codicil to her last will.  She left instructions for the document to be read out by her lawyer.  She also left a copy with her executor.  Here, there is no evidence that the deceased either showed or provided copies of her notes to anyone else;
(e)          the deceased appears to have made the December 15, 2014 and  January 9, 2015 notes at times when she thought she might shortly die.  By suggesting that the gift was contingent upon her imminent death these notes may not represent an expression of the deceased's fixed and final testamentary intention;
(f)           some of the documents are in the form of personal notes addressed to the petitioner, a further departure from the formal requirements of a testamentary document.
[47]         In the particular circumstances of this case, I attach little weight to the deceased's apparent belief that her notes were effective to change her Will.  None of the notes explicitly state an intention to revoke her gift of one-half of the residue of the estate to Ms. Alsop.

He concluded that they did not represent Ms. Lane’s testamentary intentions.

[48]         After weighing all of these factors, I find on the balance of probabilities that the notes, whether considered individually or collectively, do not represent a deliberate and final expression of the deceased's testamentary intentions.  In making that determination, I give particular weight to the absence of any witnesses, the fact that all of the notes were made on scrap paper, the absence of any express revocation of the Will or the gift of one-half of the residue to Ms. Alsop, the lack of any evidence the deceased had any rational basis for disinheriting Ms. Alsop, and indeed the lack of any evidence that the deceased ever turned her mind to how the wishes she expressed in the notes would affect her earlier testamentary dispositions.

In the result, the residue of Elda Lane’s estate will be divided equally between her daughter in accordance with her 1994 will.

Tuesday, November 24, 2015

Significant Increase in Assets Exempton for Persons Receiving Brititsh Columbia Disability Benefits

Earlier this month the Ministry of Social Development and Social Innovation announced that a person receiving Persons with Disabilities benefits from the Government of British Columbia will be able to have funds of up to $100,000 without it affecting his or her eligibility to receive the benefits. Here is an excerpt from the press release:

Beginning Dec. 1, 2015, the amount of assets that people receiving disability assistance may hold without losing eligibility for assistance will rise to $100,000 for an individual with the Persons with Disabilities (PWD) designation, and $200,000 for a couple where both have PWD designation. Currently, the asset limits are $5,000 and $10,000 respectively.

And for the first time in B.C., persons with disabilities will be able to receive cash gifts with no effect on their eligibility for assistance. Under current policy, people receiving income and disability assistance can only receive one-time gifts without affecting their eligibility.

In the case of an inheritance, the higher asset limits will free up many clients from having to set aside that money in a trust.

For those of my clients making wills leaving a significant amount of money to a child or other beneficiary who is receiving Persons with Disabilities benefits in British Columbia, I will continue to suggest in many cases that they create a discretionary trust for the beneficiary, rather than an outright gift. First, if the amount exceeds the new limit, then a trust will still be necessary for the beneficiary to continue to be eligible for the benefits. Secondly, the rules may change in the future, and perhaps the exemption may be lowered again.

Saturday, November 21, 2015

CBA National Wills, Estates and Trusts Section

I had the privilege of chairing the Canadian Bar Association National Wills, Estates and Trusts Section meeting in Ottawa last weekend. The participants included the executive of the national section, and chairs of provincial and territorial wills, estates and trusts sections across Canada.

Our section is especially active in professional development and law reform.

This fall we held a webcast, entitled "The Changed Landscape: the Impact of New Tax Rules on Trusts and Estate Donations," and a four-day course in Toronto on "Wills, Estate and Trust Fundamentals for Estate Practitioners," which was sold out. At our meeting last weekend, we agreed to apply to hold a similar course again next year in Toronto, adding another day to the program. In future years, the section may hold this course in other parts of Canada.

Much of our focus on legislation and law reform is on taxation affecting estate planning and administration. This is a logical area for us to focus on nationally, because most other legislation affecting wills, estates and trusts is provincial, and varies from province-to-province. In the last few years, we have made submissions to the Department of Finance Canada concerning the proposal to eliminate graduated rates for testamentary trusts (except for the first three years of an estate), on reforms to encourage charitable giving, and to the Canada Revenue Agency in respect of its policies on Canada Pension Plan remissions in respect of remuneration received by personal representatives of estates.

Last weekend, we struck up a committee to look at further submissions to Finance Canada concerning the changes to taxation of life interest trusts (I have written about some of the significant problems the changes will pose to estate plans here).

One project unique to our section is the National Wills, Estates and Trusts – Succession Law: Tables of National Concordance. These tables set out a summary of laws relating to succession and incapacity planning for each province and territory.  To list just a few, the tables include summaries of legislation governing the formal validity of wills, procedures for obtaining an estate grant, the distribution of assets on an intestacy, and requirements for making valid enduring powers of attorney. The tables are accessible by all members of the Canadian Bar Association, and are also published by Carswell.

This summer, our then chair Rosie Dikeakos accepted  on behalf of our section the National Sections Council Award of Excellence.

You may read more about the National Wills, Estates and Trusts Section on the Canadian Bar Association website here

Saturday, October 31, 2015

Standard Provision Representation Agreements

I have had people come to me after they, or sometimes their family, have been told by a health care provider that they need a power of attorney. Usually in these cases, the reason the health care provider has advised a patient to get a power of attorney is because the patient had already declined mentally, and needs assistance with financial decisions. In some cases, the patient may still be functioning well enough to make an enduring power of attorney, but in others it is too late: the patient has declined to the point where he or she does not have the capacity to make an enduring power of attorney.

In British Columbia, when someone has lost the capacity to manage his or her finances, one option available for a relative or friend is to apply to the court to be appointed as a committee for the incapable person. I have written about committeeships before. Although in some cases necessary, the process is intrusive, usually takes a few months, and is relatively costly.

There is another alternative available in some circumstances: a representation agreement with the standard provisions in section 7 of the Representation Agreement Act.

I usually draft representation agreements for clients in conjunction with enduring powers of attorney. Usually, the representation agreement allows my client to appoint a representative to assist with or make personal and health care decisions for her if she declines and needs assistance, while the enduring power of attorney allows my client to appoint someone to handle her property and finances for her.

But section 7 of the Representation Agreement Act provides that you can give a representative some powers over financial decisions. Section 7(1) provides:

 7  (1) In a representation agreement made under this section, an adult may authorize his or her representative to help the adult make decisions, or to make decisions on behalf of the adult, about any or all of the following:
(a) the adult's personal care;
(b) routine management of the adult's financial affairs, including, subject to the regulations,
(i)   payment of bills,
(ii)   receipt and deposit of pension and other income,
(iii)   purchases of food, accommodation and other services necessary for personal care, and
(iv)   the making of investments;
(c) major health care and minor health care, as defined in the Health Care (Consent) and Care Facility (Admission) Act, but not including the kinds of health care prescribed under section 34 (2) (f) of that Act;
(d) obtaining legal services for the adult and instructing counsel to commence proceedings, except divorce proceedings, or to continue, compromise, defend or settle any legal proceedings on the adult's behalf.
The level of mental functioning required to meet the legal criteria for making a representation agreement with the powers set out in section 7 is lower than that required to make an enduring power of attorney.

Section 12 (2) of the Power of Attorney Act provides that a person is not capable of making an enduring power of attorney if that person (referred to as the “adult” in the legislation) cannot  understand all of the following:

(a) the property the adult has and its approximate value;
(b) the obligations the adult owes to his or her dependants;
(c) that the adult's attorney will be able to do on the adult's behalf anything in respect of the adult's financial affairs that the adult could do if capable, except make a will, subject to the conditions and restrictions set out in the enduring power of attorney;
(d) that, unless the attorney manages the adult's business and property prudently, their value may decline;
(e) that the attorney might misuse the attorney's authority;
(f) that the adult may, if capable, revoke the enduring power of attorney....”
In contrast section 8 of the Representation Agreement Act provides:

Test of incapability for standard provisions
8  (1) An adult may make a representation agreement consisting of one or more of the standard provisions authorized by section 7 even though the adult is incapable of
(a) making a contract,
(b) managing his or her health care, personal care or legal matters, or
(c) the routine management of his or her financial affairs.
(2) In deciding whether an adult is incapable of making a representation agreement consisting of one or more of the standard provisions authorized by section 7, or of changing or revoking any of those provisions, all relevant factors must be considered, for example:
(a) whether the adult communicates a desire to have a representative make, help make, or stop making decisions;
(b) whether the adult demonstrates choices and preferences and can express feelings of approval or disapproval of others;
(c) whether the adult is aware that making the representation agreement or changing or revoking any of the provisions means that the representative may make, or stop making, decisions or choices that affect the adult;
(d) whether the adult has a relationship with the representative that is characterized by trust.
There are of course some who won’t meet the lower threshold of capacity to make a representation agreement with the standard provisions, but I suspect that many who have recently been diagnosed with dementia will be able to do so, even if they no longer have a sufficient understanding of their assets to make an enduring power of attorney.

The financial powers you may give a representative in section 7(1)(b) are not as extensive as the powers you may give an attorney in an enduring power of attorney. But they are fairly extensive, and in many cases, may be sufficient. Section 2 of the Representation Agreement Regulation defines routing management of the adult’s financial affairs as follows:

2  (1) For the purposes of section 7 (1) (b) of the Act, the following activities constitute "routine management of the adult's financial affairs":
(a) paying the adult's bills;
(b) receiving the adult's pension, income and other money;
(c) depositing the adult's pension, income and other money in the adult's accounts;
(d) opening accounts in the adult's name at financial institutions;
(e) withdrawing money from, transferring money between or closing the adult's accounts;
(f) receiving and confirming statements of account, passbooks or notices from a financial institution for the purpose of reconciling the adult's accounts;
(g) signing, endorsing, stopping payment on, negotiating, cashing or otherwise dealing with cheques, bank drafts and other negotiable instruments on the adult's behalf;
(h) renewing or refinancing, on the adult's behalf, with the same or another lender, a loan, including a mortgage, if
(i)   the principal does not exceed the amount outstanding on the loan at the time of the renewal or refinancing, and
(ii)   in the case of a mortgage, no new registration is made in the land title office respecting the renewal or refinancing;
(i) making payment on the adult's behalf on a loan, including a mortgage, that
(i)   exists at the time the representation agreement comes into effect, or
(ii)   is a renewal or refinancing under paragraph (h) of a loan referred to in that paragraph;
(j) taking steps under the Land Tax Deferral Act for deferral of property taxes on the adult's home;
(k) taking steps to obtain benefits or entitlements for the adult, including financial benefits or entitlements;
(l) purchasing, renewing or cancelling household, motor vehicle or other insurance on the adult's behalf, other than purchasing a new life insurance policy on the adult's life;
(m) purchasing goods and services for the adult that are consistent with the adult's means and lifestyle;
(n) obtaining accommodation for the adult other than by the purchase of real property;
(o) selling any of the adult's personal or household effects, including a motor vehicle;
(p) establishing an RRSP for the adult;
(q) making contributions to the adult's RRSP and RPP;
(r) converting the adult's RRSP to a RRIF or annuity and creating a beneficiary designation in respect of the RRIF or annuity that is consistent with the beneficiary designation made by the adult in respect of that RRSP;
(s) making, in the manner provided in the Trustee Act, any investments that a trustee is authorized to make under that Act;
(t) disposing of the adult's investments;
(u) exercising any voting rights, share options or other rights or options relating to shares held by the adult;
(v) making donations on the adult's behalf to registered charities, but only if
(i)   this is consistent with the adult's financial means at the time of the donation and with the adult's past practices, and
(ii)   the total amount donated in any year does not exceed 3% of the adult's taxable income for that year;
(w) in relation to income tax,
(i)   completing and submitting the adult's returns,
(ii)   dealing, on the adult's behalf, with assessments, reassessments, additional assessments and all related matters, and
(iii)   subject to the Income Tax Act and the Income Tax Act (Canada), signing, on the adult's behalf, all documents, including consents, concerning anything referred to in subparagraphs (i) and (ii);
(x) safekeeping the adult's documents and property;
(y) leasing a safety deposit box for the adult, entering the adult's safety deposit box, removing its contents and surrendering the box;
(z) redirecting the adult's mail;
(aa) doing anything that is
(i)   consequential or incidental to performing an activity described in paragraphs (a) to (aa), and
(ii)   necessary or advisable to protect the interests and enforce the rights of the adult in relation to any matter arising out of the performance of that activity.
But there are limitations, the most significant one in most cases, is that the standard provision representation agreement may not include a power to dispose of real estate. In cases where the person suffering from mental disability has a home that needs to be sold, it will be necessary to apply for a committeeship if that person no longer has the capacity to make the transaction herself.

The limitations are set out in section 2 (2) of the Representation Agreement Regulation as follows:

(2) For greater certainty, the activities that under subsection (1) constitute "routine management of the adult's financial affairs" do not include any of the following:
(a) using or renewing the adult's credit card or line of credit or obtaining a credit card or line of credit for the adult;
(b) subject to subsection (1) (h), instituting on the adult's behalf a new loan, including a mortgage;
(c) purchasing or disposing of real property on the adult's behalf;
(d) on the adult's behalf, guaranteeing a loan, posting security or indemnifying a third party;
(e) lending the adult's personal property or, subject to subsection (1) (v), disposing of it by gift;
(f) on the adult's behalf, revoking or amending a beneficiary designation or, subject to subsection (1) (r), creating a new beneficiary designation;
(g) acting, on the adult's behalf, as director or officer of a company.
There are also limitations on the powers that the maker of a representation agreement under section 7 may give to the representative over health care and personal care. For example, you cannot give the representative the power under section 7 to make a decision to refuse health care necessary to preserve life.

As a safeguard, someone making a standard provision representation agreement under section 7 must also name a monitor, unless the representative is the person’s spouse, the Public Guardian and Trustee, a trust company, a credit union, or unless there are two representatives who are required to act unanimously. The monitor may review the accounts and records that the representative is required to keep.

A representation agreement made under section 7 is a good option for someone who has declined to the point where she can no longer make an enduring power of attorney, but still has sufficient functioning to choose who can make or assist her with financial decisions. It is less expensive and intrusive than a court appointed committee. But the powers the representative has under section 7 will not be sufficient if the person suffering from mental disability owns real estate that needs to be sold.

Tuesday, October 27, 2015

Old Lahaina Courthouse

I took these photos of the Old Lahaina Courthouse in Lahaina, Maui, Hawaii this summer. After it opened in 1860, this building served as a customs house and courthouse. Now it is a museum. I found this information on the Lahaina Restoration Foundation website.

Saturday, October 17, 2015

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.

Monday, October 12, 2015

Varying a Final Wills Variation Order

Apart from a successful appeal, can the courts vary a final wills variation order in British Columbia? Although I have never seen it done, in limited circumstances, the answer appears to be “yes.”

Part 4, Division 6 of the Wills, Estates and Succession Act allows a spouse or child of a deceased will maker to apply to court to vary a will if the will maker did not make adequate provision for them. If the Court finds that the will-maker did not make adequate provision for his or her spouse or children, as the case may be, the Court may vary the will to make such provision as the Court thinks “adequate, just and equitable in the circumstances.”
Subject to the right of an appeal, once the Supreme Court of British Columbia makes an order varying a will (or refusing to vary the will), then that is usually the end of the matter. The will-maker’s personal representative carries out the will as varied.
But there are limited circumstances where a Court could vary the Court’s variation of the will. Section 71 of the Wills, Estates and Succession Act provides:
Court may cancel or vary order
71  If the court has ordered periodic payments, or that a lump sum be invested for the benefit of a person, the court may
(a) inquire whether, at any subsequent date, changes in the circumstances of the person in whose favour the order was made have resulted, in whole or in part, in the person's entitlement to adequate provision separate from the order, and
(b) cancel, vary or suspend its order, or make another order.
Despite some changes in the wording, this provision is substantially similar to section 14 in the Wills Variation Act, which it replaced when the Wills, Estates and Succession Act came into place.
The section would not apply to a variation in which the person on whose behalf the will is varied is awarded a specific sum of money, or an asset, or a percentage of the estate, which are the more common types of awards made nowadays. It would apply in more limited circumstances, such as an order setting aside a sum of money or percentage of the estate, out of which payments are to be made to the claimant, with giving the claimant an entitlement to the whole of the fund. For example, the court could set aside $200,000 to be invested, with $2000 per month paid out of that fund to the claimant, and with anything left in the fund on the claimant’s death divided among the other beneficiaries.
I have not found any court cases that have applied section 71 (or the earlier similar provisions in the Wills Variation Act, and Testator's Family Maintenance Act).
I have difficulty conceiving when it would be applied under the modern principles applied to wills variation cases. The provision strikes me as a holdover from the days when the legislation was seen more as a vehicle for ensuring that a husband and father (in the 1920s, it was usually a husband and father) did not leave his wife and children destitute. It was more common for the courts to make orders that provided for monthly payments to meet a spouse’s or child’s needs. The current section 71 appears to be intended to cover a situation where those needs are met by a different source, perhaps through employment, recovery from an illness, or another inheritance.
Under the more modern approach, as articulated by the Supreme Court of Canada in Tataryn v. Tataryn [1994] 2 S.C.R. 807, the court considers whether the will maker satisfied his or her legal and moral obligations to the claimant. If not, then the court varies the will to satisfy those legal and moral obligations. The awards will often be greater than that required to satisfy the claimant's basic financial needs, sometimes significantly so including awards in the millions.
The court considers whether adequate provision has been made to the spouse and children at the time of death the will-maker’s death, although the Court may consider a substantial change in circumstances between the date of death and trial when making the variation (Landy v. Landy Estate, (1991) 60 B.C.L.R (2d) 282 (CA)).
The variation satisfies the will-maker’s obligations to the claimant, and logically the successful claimant has established a corresponding entitlement.
If the court finds that the will-maker did not make adequate provision for a spouse or children, and the court varies the will, then I have difficulty conceiving how a change in the claimant’s circumstances after the trial judgment should affect his or her entitlement, irrespective of the structure of the variation ordered by the court (outright share of an estate, or periodic payments). Either the will-maker met his or her legal and moral obligations at the time of death, or he or she did not. If not, why should an improvement in his or her spouse or children’s circumstances after trial change that?