Title Insurance 101 You just moved into your new property. You go to install a new fence, and you discover that it’s not on the property line – 6 inches of your land has been on your neighbor’s side of the fence for years! Uh oh… now what? Title insurance might save the day! What is Title Insurance? Title insurance is a type of insurance policy that protects property owners and lenders from losses associated with title issues or other covered risks. “Title” describes your legal right of ownership to the land. Effectively, title insurance allows purchasers to insure against future potential title issues, rather than conducting additional due diligence at the outset of the transaction. Title insurance requires one-time payment, with the policy being effective for as long as you own the property. Common Coverage Offered by Title Insurance The following is a non-exhaustive list of potential issues that a standard title insurance policy may cover: Title defects Unmarketability of title Legal issues involving access Encroachment issues, adverse possession, property line disputes Easements over the property (i.e. Someone has a legal right of way over the property) Liens or charges on title Work orders from a municipality Tax or utility arrears from previous owner Certain violations of municipal regulations Title fraud or forgery Title insurance policies also usually contain a litigation provision in which the insurer undertakes to defend your title and other insured risks in any court case that is based on the provisions in your policy. For example, if a neighbour was to build a structure that encroached onto your land, if covered under the policy, the title insurer may assist in retaining counsel on your behalf, commencing a proceeding, and may pay for all legal fees and expenses incurred to rectify the issue. What is Not Covered? Title insurance policies often contain numerous exemptions or restrictions that are not typically afforded under a standard policy. Some title insurers will provide additional endorsements, depending on the circumstances at hand, to meet your specific needs. If title insurance does not insure over an issue, you will need to speak with your lawyer for further direction on how to proceed. The following is a non-exhaustive list of issues that are not usually covered by a standard title insurance policy: Physical and structural defects to the property Certain governmental powers/intervention (i.e. expropriation, violation of by-law etc.) Environmental risks Risks that are created by, allowed by, known to, or agreed to by the insured A common area of confusion lies in the distinction between title insurance and home insurance. While home insurance protects an insured from unexpected loss or damage to the physical property, title insurance protects the insured from loss or defects relating to the legal title of the property. It is imperative to note that title insurance is not an alternative to home insurance. Is Title Insurance Mandatory? It is not mandatory to purchase title insurance when acquiring a property in Ontario. Nevertheless, a lender may refuse to provide financing if a title insurance policy is not taken out on their behalf (i.e. a lender policy). The most common alternative to title insurance is to obtain a solicitor’s opinion on title. This alternative requires your lawyer to conduct numerous “off-title” searches that can be costly and time consuming. You would also need to provide your lawyer with, or obtain, an up-to-date survey of the property. The cost to obtain an up-to-date survey alone would likely exceed the cost of a standard title insurance policy, which is why many mortgagors opt to obtain title insurance. Furthermore, the only recourse that a purchaser may have in relation to a missed title defect would be against the lawyer who provided the opinion, which may be further limited given the circumstances and conduct of the parties. Given the potential liability for giving a solicitor’s opinion on title, many lawyers refuse to act on transactions that are not title insured. Working with your Lawyer While title insurance may provide coverage for certain losses, it is not an alternative to retaining a lawyer on your transaction, and there is no replacement for sound legal advice and competent representation. Title insurance and lawyers work in conjunction to provide maximum protection to homeowners. For example, if you do find yourself needing to commence litigation against a neighbor, it is often worth first checking if your issue is covered by title insurance. If you have questions about property-related litigation or title insurance, please contact Graeme R. Oddy, lawyer at Devry Smith Frank LLP at 416-446-5810 or Graeme.oddy@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, LitigationJanuary 31, 2024
My Ex-Spouse’s Income Has Increased Substantially Since Separation. Am I Entitled To More Spousal Support? If you find yourself in a situation where your ex-spouse has experienced a substantial increase in income since the time of your separation, you may be wondering whether you are entitled to a reassessment of spousal support. What is Spousal Support? Spousal support is financial assistance that one spouse may be required to pay to the other spouse after a separation or divorce, ensuring the recipient’s financial stability. Spousal support is usually paid on a monthly basis; however, it can also be paid as a lump sum. According to section 15.2 of the Divorce Act and further discussed in the Supreme Court of Canada case, Bracklow v. Bracklow, there are three reasons a spouse would be entitled to spousal support: Compensatory spousal support, which is meant to compensate the lower-income earning spouse for sacrifices and contributions made during the marriage; Non-compensatory spousal support, which is meant to allow the recipient spouse to enjoy a similar lifestyle as they did while married; and, Contractual. In determining whether to award spousal support, a judge must consider many factors, including: The parties’ financial situations; The length of time the spouses cohabited; The roles of each spouse during the marriage; The impact of the breakdown of the marriage on each party’s financial situation; The ongoing responsibilities for the care of children; and, Any previous arrangements made regarding spousal support. The Spousal Support Advisory Guidelines provide parties and the Court with some guidance in determining the quantum and duration of when calculating reasonable spousal support. It is important to remember, however, that the Court retains discretion and the Guidelines are advisory only – they are not law. Are you entitled to increased spousal support if your former partner’s income increases? If one party experiences a significant change in their income after a spousal support arrangement has been made, it may constitute grounds for seeking a variation in spousal support, and the receiving party may be eligible for a reassessment of spousal support amounts. Whether you are entitled to an increase in spousal support if your former partner’s income increases is largely discretionary and is dependent on the circumstances and basis of the entitlement to spousal support. A spousal support order would not change automatically, and it is the responsibility of the recipient spouse to apply to vary the order. According to section 17(4.1) of the Divorce Act, before the court varies a spousal support order, it must be satisfied that a change in the condition, means, needs, or other circumstances of either former spouse has occurred since the making of the spousal support order. For example, since non-compensatory spousal support is intended to allow the lower-income earning spouse to enjoy a similar lifestyle as they did while married, an increase in income would usually not be relevant. A recipient’s entitlement to post-separation increases in income is more likely to be found in cases of compensatory support. Chapter 14.3 of the Spousal Support Advisory Guidelines discusses that “a rough notion” of causation is applied to post-separation income increases for the payor when determining if the income increase should impact spousal support entitlements. As such, it will depend on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the income increase, and the reason for the income increase. The likelihood of full or substantial sharing becomes more likely with child support cases, given the fact that there is a strong compensatory nature of the claim. If there is no child support in question, the Court will consider the following: long traditional marriages; medium-length and longer marriages; strong compensatory claims where there is primary responsibility for child-rearing; strong compensatory claims in longer marriages; prior agreements discussing future increases in income; support/cohabitation while in school; payor spouse continuing in the same job or area of work post-separation claims that were impacted by an inability to pay; and, income increases shortly post-separation. Varying the Spousal Support Order If the payor spouse does not consent to vary the spousal support order, it may be necessary to commence a Motion to Change. If applying for a variation, the applicant must meet the threshold to prove that there is a material change in the circumstances. The material change must be substantial and continuing, and if known at the time of the initial order, would likely have resulted in a different order. Determining what constitutes a material change is up to the court’s discretion. Conclusion Navigating the complexities of spousal support in the face of a significant increase in your ex-spouse’s income requires a careful understanding of the legal framework due to its highly discretionary nature. For more information regarding spousal support and/or family law-related topics, please contact Laura Dyke at Devry Smith Frank LLP at (416) 446-3327 or laura.dyke@devrylaw.ca This blog was co-authored by Articling Student, Toni Pascale. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” By AlyssaBlog, Family LawJanuary 25, 2024August 20, 2024
Wealth and Estate Planning Resolutions for the New Year As you embark on a new year filled with possibilities, consider prioritizing resolutions that ensure lasting financial security and peace of mind for you and your loved ones. Take these proactive steps in wealth and estate planning to safeguard your legacy and make certain that your wishes are honoured: Make or update your Will Assets: Provide a comprehensive inventory of your assets, including real estate, investments, and personal property. Beneficiaries: Clearly outline who will inherit your assets, specifying individuals or groups of individuals. Guardians: For parents of minor children, appoint guardians who will provide care and support in your absence. Executorship: Choose a reliable executor to oversee the distribution of your assets in accordance with your wishes. Funeral Wishes: Communicate your preferences for funeral arrangements, alleviating the burden on your loved ones during a challenging time. Charitable Donations: If philanthropy is close to your heart, include provisions for charitable donations in your will. Powers of Attorney POA for Personal Care: Appoint an individual responsible for making determinations regarding your healthcare, nutrition, living arrangements, clothing, hygiene, and safety in the event you lack the capacity to make these decisions independently. POA for Property: Appoint an individual to manage your financial affairs, covering everything from bill payments and managing debt to handling investments and property transactions in the event you lack the capacity to make these decisions independently. Managing Assets outside of your Will (not included in your Estate) Life Insurance: Review and update life insurance policies to align with your current financial situation and protect your loved ones. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. TFSA and RRSPs: Strategically manage Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) to maximize tax advantages. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. Joint Accounts: With a joint bank account comes the right of survivorship. This means that when one of the account owners passes away, the surviving owner will take full ownership of the account. In theory, the bank account will not form part of the deceased’s estate since the surviving owner has full legal title to the account through the right of survivorship. Joint Tenancy: A joint tenancy creates a right of survivorship, which means that if one party dies, their interest is automatically transferred to the surviving tenant(s). Digital Assets Social Media Accounts: Develop a plan for the management or closure of social media accounts, preserving your digital legacy. Financial Accounts: Safeguard access information for online financial accounts to facilitate a smooth transition for your loved ones. Cryptocurrency: Provide clear instructions on how to access and manage cryptocurrency holdings, addressing a frequently overlooked aspect of estate planning. Password Management: Implement secure password practices and communicate access details to trusted individuals. Business Succession Planning Sole Proprietorships: If the business is a sole proprietorship, it ceases to operate upon the owner’s death. Develop a comprehensive plan for the seamless transfer of ownership and management responsibilities. Partnerships: Partnerships may or may not dissolve upon the death of a partner depending on the partnership agreement. Alternatively, a deceased partner’s interest may be transferred to a designated party such as a spouse. It is important to make provisions for transfer of ownership upon the death of a partner to determine whether the business will continue to operate and if so, with whom at its helm. Corporations and Shareholder Agreements: A Shareholders’ Agreement typically covers crucial business transition matters such as ownership of shares, the transfer or sale of shares, procedures in the event of a shareholder’s death, and the resolution of disputes among shareholders. Ownership of voting and preferred shares for a corporation can become a heavily contested matter if adequate provisions are not made. Creditor Protection Transferring Assets inter-vivos: Explore strategies for transferring assets to spouses or children during your lifetime as a gift to avoid complications with Probate. Bankruptcy Protection: Bankruptcy protections are afforded to certain assets, such as PRDSPs, RRSPs, RRIFs, and DPSPs. Contribution to these plans over an individual’s lifetime can ensure their family and dependants are guaranteed to receive some amount from their estate, especially if beneficiaries are designated from the outset. Timing Considerations: Be mindful that contributions to the aforementioned assets (as PRDSPs, RRSPs, RRIFs, and DPSPs) and inter-vivos transfers made within 12 months of declaring bankruptcy may not receive the same level of protection. By taking these proactive steps and deliberate measures, you can be confident that your loved ones will be well-provided for in the future. The experienced legal team at Devry Smith Frank LLP is here to assist you in navigating the intricacies of Ontario’s legal landscape. For more information regarding Estates and Estates-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Owais Hashmi. By AlyssaBlog, Wills and EstatesJanuary 3, 2024
Demystifying the Confusion – Maintaining PR Status in Canada Residency Requirements to Maintain Canadian Permanent Resident Status If you are seeking to maintain your permanent resident status in Canada, you must meet the residency requirements set by Immigration Refugees and Citizenship Canada (IRCC). As a general rule, to keep your permanent resident status, you must have been in Canada for at least 730 days over the course of the last five (5) year period. It is important to note that these 730 days do not need to be continuous. A permanent resident is generally free to leave and enter Canada at any time with a valid permanent residence card. Most permanent resident cards expire after five years. There are some exceptions in relation to this residency requirement, as some of the time you spend outside of Canada may count towards your permanent resident status. The following are three exceptions to the permanent residency requirement: You are sent to work outside of Canada full-time by a Canadian employer with the expectation that you will return and resume your employment in Canada You accompany your spouse, common-law partner or parent who is a permanent resident and who is sent to work full-time outside Canada by a Canadian employer with the expectation that they will return and resume their employment in Canada. You live outside of Canada with your spouse, common-law partner or parent who is a Canadian citizen. If you meet any of the above-noted exceptions, the time spent in a foreign country during these activities may be credited as time spent in Canada, towards the 730-day requirement. These exceptions only apply to maintaining your permanent resident status. Residency Requirements to Apply for Canadian Citizenship When applying for Canadian citizenship, you must meet distinct residency requirements, in addition to the other eligibility criteria as outlined by Immigration Refugees and Citizenship Canada (IRCC). To meet the residency requirements for citizenship, you must have been physically present in Canada, as a permanent resident, for at least 1095 days in the preceding five (5) years from the date you sign the application. There are two (2) counting exceptions that may allow for time spent outside of Canada, or time spent in Canada prior to becoming a permanent resident, to be credited toward the 1095-day citizenship requirement. The following exceptions are only applicable to citizenship applications: You are legally in Canada as a “temporary resident” or a “protected person” You are outside of Canada as a Crown servant or are accompanying a family member who is a crown servant. It is important to note that each day spent in Canada as a temporary resident or protected person only counts as one-half day when calculating the number of days for your citizenship application, to a maximum of 365 days. For example, if you were a student legally studying at a Canadian university for 500 days (i.e. a temporary resident), only 250 of those days would be credited as time spent in Canada for your application. Furthermore, if you studied in Canada for 800 days, you would only be credited with 365 days, as this is the maximum number of days that can be credited as a temporary resident or protected person. Time That Does Not Count Towards Any Residency Requirements If you are incarcerated, under a probation order, a paroled inmate, or illegally present in Canada (i.e overstaying your visa), this time will not count towards any of the above-noted residency requirements. Failing to Meet the Residency Requirements A failure to meet the residency requirements does not automatically result in the loss of your permanent residence status. Even if your permanent resident card expires, you do not lose your status. Permanent resident status can only be lost in certain circumstances, such as voluntarily renouncing your status or having a removal order made against you. If you wish to maintain your permanent residence status but have not met the residency requirements in the preceding five (5) years, you have the option of waiting to apply until you meet the above-noted criteria. However, during the time that your permanent resident card is expired, it is not advisable to travel outside of Canada. If you are outside of Canada when your permanent resident card expires, you will need to apply for a “Permanent Resident Travel Document”, which may delay your return to Canada. In any event, you must be in Canada to apply for a new PR card. Likewise, if you are seeking to become a Canadian citizen and have not met the residency requirements in the previous five (5) years, you can simply wait to apply until you have met the 1095-day requirement in the preceding five (5) years from your application date. An experienced lawyer, knowledgeable in the complex intricacies of Canadian immigration law, is essential in solving your immigration needs. If you are looking to submit an application to Immigration Refugees and Citizenship Canada or are interested in seeking further guidance in US or Canadian immigration law, please contact Benjamin Grubner, lawyer at Devry Smith Frank LLP at 416-446-3328 or at Benjamin.grubner@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, ImmigrationDecember 26, 2023May 23, 2024
City Council Greenlights ‘Luxury’ Home Tax: Incoming Changes to Toronto’s Municipal Land Transfer Tax (MLTT) A land transfer tax (LTT) is a government-imposed fee applied when ownership of a property transitions from one owner to another. Typically borne by the buyer, this tax is calculated as a percentage of the property’s purchase price and varies based on location and local government policies. Land transfer taxes serve to generate revenue for the government, which can then be used to fund essential public services, such as healthcare, education, and infrastructure. The Municipal Land Transfer Tax (MLTT) was originally introduced on February 1, 2008, and is in addition to the provincial Land Transfer Tax (LTT) on residential properties transferred within the City of Toronto In early 2023, the Toronto City Council (the “Council”) sought additional housing-related revenue to address a funding shortfall. Initially, the Council proposed a 1% increase to the MLTT for “luxury” homes priced over $2 million. The proposed increase aimed to boost the housing supply and provide financial relief for homebuyers after the unprecedented surge in housing prices during the COVID-19 pandemic. Facing a concurrent 5.5% property tax increase, organizations like the Toronto Regional Real Estate Board (TRREB) contested the proposal. They argued that such an increase would deter “move-up” buyers from listing their properties, adversely affecting housing supply and affordability. Instead of proceeding with the proposed 1% increase, on September 6, 2023, the Council approved graduated MLTT rates with additional thresholds for high-value residential properties containing at least one, and not more than two, single-family residences. The new additional MLTT threshold rates will be applicable to any property transfers that are either officially registered or for which the MLTT becomes due on January 1, 2024, or any date thereafter and will impact high-value residential properties that are valued at $3 million or above. The current and new additional MLTT rates are broken down by the applicable thresholds and rates as follows: Current MLTT Rates Value of Consideration MLTT Rate Up to and including $55,000 0.5% $55,000.01 to $250,000 1.0% $250,000.01 to $400,000 1.5% $400,000.01 to $2,000,000 2.0% > $2,000,000 2.5% Additional MLTT thresholds and rates, for property valuations greater than $3 million, effective January 1, 2024: Additional MLTT Rates Value of Consideration MLTT Rate > $3M to $4M 3.5% > $4M to $5M 4.5% >$5M to $10M 5.5% >$10M to $20M 6.5% >$20M 7.5% The MLTT is calculated based on different tax rates for different portions of the property’s value. For example, if you were purchasing a property for $3.5 million, your current MLTT calculation would be broken down as below: Current MLTT for a $3.5M Residential Property Graduated Calculation Amount 0.5% on the first $55,000 Calculation: 0.005 * $55,000 $275 1.0% on the next $195,000 ($250,000 – $55,000) Calculation: 0.01 * $195,000 $1,950 1.5% on the next $150,000 ($250,000 – $400,000) Calculation: 0.015 * $150,000 $2,250 2.0% on the next $1,600,000 ($2,000,000 – $400,000) Calculation: 0.02 * $1,600,000 $32,000 2.5% on the remaining $1,500,000 ($3,500,000 – $2,000,000) Calculation: 0.025 * 1,500,000 $37,500 TOTAL MLTT: $73,975 Teraview provides a free MLTT calculator with the current rates here. Therefore, if you were purchasing a property prior to January 1, 2024, for $3.5 million, the MLTT would be $73,975. As of January 1, 2024, a property purchased for $3.5 million in Toronto, would incur an MLTT of $78,975 resulting in an additional $5,000 in MLTT. MLTT for a $3.5M Residential Property as of January 1, 2024 Graduated Calculation Amount 0.5% on the first $55,000 Calculation: 0.005 * $55,000 $275 1.0% on the next $195,000 ($250,000 – $55,000) Calculation: 0.01 * $195,000 $1,950 1.5% on the next $150,000 ($250,000 – $400,000) Calculation: 0.015 * $150,000 $2,250 2.0% on the next $1,600,000 ($2,000,000 – $400,000) Calculation: 0.02 * $1,600,000 $32,000 2.5% on the next $1,000,000 ($3,000,000 – $2,000,000) Calculation: 0.025 * 1,000,000 $25,000 3.5% on the next $500,000 ($3,500,000 – $3,000,000) Calculation: 0.035 * 500,000 $17,500 TOTAL MLTT: $78,975 The City of Toronto website provides a free MLTT calculator with the new rates here. In addition to the applicable MLTT, the LTT is also calculated on a gradual basis and charged at the time of registration of the transfer of the property. For a purchase price of $3.5 million, you would be paying $73,955 in LTT in addition to the MLTT costs above, irrespective of whether the transaction is completed prior to, or after January 1, 2024. Teraview provides a free LTT calculator here. This approved increase in the MLTT on residential properties valued at $3 million and above, is one revenue stream that the City of Toronto is utilizing as part of its approved long-term financial plan, to aid in its budgetary shortfall for 2024. The long-term repercussions of the MLTT rate increase on the residential real estate market are uncertain. This adjustment has the potential to discourage prospective purchasers from entering the luxury market, leading to the emergence of a segment of buyers more attuned to pricing sensitivity. It might also incentivize buyers to explore properties below the MLTT increase threshold, fostering a market that is more stable and sustainable. If you are considering purchasing a high-value residential property with a valuation over the $3 million threshold, it may be prudent to take advantage of the opportunity to complete the transaction prior to January 1, 2024, to avoid increased MLTT expense. For more information, assistance, or any other questions regarding new home purchases, renovations, or other real estate transactions, please contact Ashley Almeida at Devry Smith Frank LLP at (416) 446-3335 or at ashley.almeida@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Owais Hashmi. By AlyssaBlog, Real EstateDecember 18, 2023December 15, 2023
The Problem With “Do-It-Yourself” or Holographic Wills in Ontario As we described in a previous blog, testators can make two kinds of Wills in Ontario: formal Wills, which are typed, often drafted by a lawyer, signed by the testator, and require two witnesses to attest to the testator’s signature; and Holographic Wills, which are simply handwritten by the testator and signed. Despite the lack of formality surrounding holographic Wills, they are just as legally binding as formal Wills in Ontario: courts have held that holographic Wills can revoke a prior formal Will[1] and revive a previously revoked formal Will.[2] Moreover, as holographic Wills don’t require the services of a lawyer, they can be created quickly and at little to no cost. However, there is good reason why holographic Wills are not the preferred testamentary instrument of most Ontarians – this blog will highlight several problems which can arise with holographic Wills and lead to lengthy and costly disputes for your estate and beneficiaries. (1) Legislative Requirements While the legislative requirements surrounding holographic Wills are more relaxed than formal Wills, there are still mandatory elements that a holographic Will must have to be valid. Section 6 of the Succession Law Reform Act (SLRA) sets out the basic elements of a holographic Will: 6 A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness. First, a holographic Will must be entirely in the deceased’s handwriting. It cannot be partially typed or a “fill-in-the-blanks” document. Testators also cannot use the doctrine of incorporation by reference to incorporate a typed Will into a holographic Will, as the court held in Re: Lacroix Estate.[3] In Lacroix, the testator was hospitalized with cancer during the COVID-19 pandemic in 2020. Due to restrictions on visitors in the hospital, the testator could not execute the formal Will prepared by her lawyer. Instead, the testator attached the following handwritten document to her draft Will: Tuesday, May 26, 2020 I, Rebecca Stephanie Lacroix, declare that this holographic will shall constitute my last will and testament and I hereby incorporate into this my will the attached draft will which I have initialed on each page for identification purposes. RSLacroix The court found that this written document satisfied the SLRA requirements for a holographic Will; however, it alone was not a valid testamentary document, as it did not independently dispose of any property.[4] Moreover, as the draft Will was typed and not handwritten by the testator, it could not form part of a holographic Will.[5] Second, a holographic Will must be signed by the testator. Section 7 of the SLRA states that the testator’s signature should be at the end of the Will, whether formal or holographic. In general, any dispositions or instructions underneath the signature, or inserted after the document was signed, will not be effective.[6] However, since Ontario’s shift from a strict compliance regime to a substantial compliance regime in January 2022, courts have the discretion to declare a Will valid even if it does not meet all of the legislative requirements. Under section 21.1(1) of the SLRA, if the Superior Court of Justice is satisfied that an improperly executed document sets out the testamentary intentions of a deceased, they can, on application, order that the document is valid and fully effective, as if it had been properly executed. Despite these reforms, section 21.1(2) of the SLRA maintains Ontario’s ban on electronic Wills and codicils, per section 31(1) of the Electronic Commerce Act. (2) Testamentary Intent and Language In addition to the legislative requirements in the SLRA, there is also a common law requirement that a holographic Will must contain “a deliberate or fixed and final expression of [the testator’s] intention as to the disposal of property upon death.”[7] This intention does not have to be expressed in explicit testamentary language; it can be inferred from the context of the document itself and its contents. For example, the court in Laframboise v Laframboise held that a document was a holographic Will, despite its use of “Informal” in the title of the document, failure to appoint an estate trustee, and failure to use traditional testamentary language. Here, after reading the document as a whole, the court found that the use of “Informal” referred to the fact that the Will was not typed, witnessed, and created with the assistance of a lawyer.[8] Similarly, the court has also inferred intention from the surrounding context of the document. In Rezaee (Re), at a dinner party, the testator wrote out and signed the following document: I, Kamran Rezaee, hereby give all my wealth and property to my close friend Mr. Siamak Naftchi. (signed) Kamran Rezaee, March 20, 2018. The court found that this was a valid holographic Will and showed testamentary intent, from the context of the testator being diagnosed with terminal cancer and undergoing cancer treatments for a year and a half at the time of writing the document.[9] This is not always the case; the court in McKenzie v Hill held that the following handwritten document created by the deceased was not a valid holographic Will: October 28, 2014 An Agreement to Transfer Property I Joyce B. Hillman residing at The Red Woods Seniors Retirement (sic) do solemnly states (sic) that I wish to transfer my property at 12 Clarence Street, number 12 unit, Ottawa, Ontario, K1N 5P3 to my Brother Cecil McKenzie to be the sole owner. He can sell it at any time he wishes to do so without any interference by anyone. I have appointed him guardian and to be in full control of my finances. I set my hand this 28th day of October two thousand & fourteen and sign this agreement. Signed Joyce B. Hillman Witness: Audrey E. Logan Here, the court could not find any testamentary intention: the document does not refer to the deceased’s death, suggest that the transfer was to be triggered by the deceased’s death, and is titled as an “Agreement”, not a Will.[10] As indicated in the cases above, absent clear testamentary language, holographic Wills are left open to challenges from interested parties and interpretation by the courts. Even when the Wills were ultimately upheld, the proceedings to validate the Wills resulted in a significant cost and delay to the administration of the estate. Moreover, as many holographic Wills are prepared by laypeople without a thorough understanding of the law, issues of uncertainty, ambiguity, and omission may also arise and require judicial intervention. For instance, in Laframboise, the testator failed to appoint an estate trustee. Testators may also fail to account for certain outcomes in their estate, such as if a beneficiary pre-deceases them if there are not enough assets in the estate to cover the bequests, and what happens to the residue, or remainder, of the estate after the specific bequests. (3) Capacity Challenges All testators, whether executing a formal or holographic Will, must have testamentary capacity. Hall v Bennett Estate states that a testator must have a “sound disposing mind”, which requires that they: understand the nature and effects of a will; understand the nature and extent of their property; understand what they are disposing of under the will; remember the people they are expected to benefit under the will; and where applicable, understand the nature of claims that may be made by people they excluded from the will.[11] While testamentary capacity is assumed absent evidence to the contrary, problems can arise when the circumstances surrounding the creation of a holographic Will are suspicious or raise questions about the testator’s capacity. In Laframboise, after separating from his wife, the testator prepared a holographic Will, leaving only his wedding ring and wedding pictures to his wife, and then took his own life. His wife challenged the Will on the basis of lack of testamentary capacity. The court rejected this argument. The court found that the testator was depressed, but that there was no evidence that the depression impacted any of the factors laid out in Hall above.[12] The letters to his wife and family before his death “indicate a full appreciation of what he was about to do and why he felt compelled to do it…[and] indicate a tortured mind, not a deranged mind.”[13] Likewise, in McGrath v Joy, after a day of heavy drinking and marijuana use, the testator wrote a suicide note and took his own life. In the note, the testator stated that he did not want his wife to get anything under a previous Will he drafted in 2016, and asked his named estate trustee to make sure that this happened. Here, the Court of Appeal found that the note was a valid holographic Will and that the testator had the requisite capacity, as he met the factors in Hall.[14] The Court found that the application judge erred in not finding that the testator had capacity by basing their opinion on the testator’s use of drugs and alcohol, and not the legal principles set out in Hall.[15] Although the testators in Laframboise and McGrath were ultimately found to have capacity, the circumstances surrounding the creation of the Wills provided a sufficient basis for a Will challenge. Without a drafting lawyer to attest to the testator’s capacity, the courts were also left to determine capacity based on expert evidence and witness testimony, both of which added time and cost to the proceedings. Conclusions The ultimate purpose of a Will is to provide you with peace of mind that your beneficiaries and assets will be properly taken care of after your death. While a holographic Will seems like an easy, cheap, and convenient way to do so, particularly with the new substantial compliance regime, it comes with significant risks which could lead to costly and lengthy litigation and your final wishes being disregarded. As is the case with most legal matters, the safest option is to consult with an experienced Wills and estates lawyer to ensure that your Will is clear, certain, and enforceable. If you have questions about Wills or another estate matter, please visit our website or contact Jillian C. Bowman from Devry Smith Frank LLP at 249-888-4639 or Jillian.Bowman@devrylaw.ca. This blog was co-authored by law student, Leslie Haddock. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” [1] For example, see Niziol v Allen, 2011 ONSC 7457. [2] For example, see Estate of Harold Franklin Campbell (Re), 2023 ONSC 4315. [3] 2021 ONSC 2919. [4] Ibid at paras 25-26. [5] Ibid at para 26. [6] Succession Law Reform Act, RSO 1990, c S26, s 7(3). [7] Bennett v Toronto General Trusts Corp, 1958 CanLII 49 (SCC) at p 396. [8] 2011 ONSC 7673 at paras 14-16 [Laframboise]. [9] 2020 ONSC 7584 at para 30. [10] 2022 ONSC 4881 at paras 31-32. [11] 2003 CanLII 7157 (ON CA) at para 14. [12] Laframboise, supra note 8 at para 21. [13] Ibid at para 25. [14] 2022 ONCA 119 at para 51. [15] Ibid at para 67. By AlyssaBlog, Wills and EstatesDecember 11, 2023
Garnishment: Frequently Asked Questions What is garnishment? Garnishment is a legal process often initiated when individuals default on their financial obligations. Garnishment orders allow creditors to seize assets – typically a person’s wages – from third parties. These orders can also be used to access funds in a debtor’s bank account. This financial recourse is usually pursued by creditors when they have exhausted other means of debt collection. In most cases, garnishment can only be sought after a creditor has obtained judgment against a debtor. However, in some instances, like with debts owed to the Canada Revenue Agency (CRA), garnishment can occur without the necessity of obtaining a court order. Who can seek an order for wage garnishment? Various types of creditors and institutions can obtain a garnishment order to recover the money owed to them. These entities encompass a wide range of financial institutions and government bodies, including credit card companies, collection agencies, government agencies (such as the Family Responsibility Office or CRA), entities responsible for collecting student loans, payday lenders, banks, and private lenders. To what extent can wages be garnished? The extent to which wages can be garnished varies based on the type of debt and the jurisdiction in which you reside. Generally, if someone owes debt in Ontario, the maximum percent of their wages that can be garnished is 20%. However, when it comes to the enforcement of an order for support or maintenance, a maximum of 50% of a person’s wages can be garnished. Ultimately, a court has the ability to determine the amount to be garnished based on each individual’s finances. What cannot be garnished? Not all types of income are subject to wage garnishment. The Ontario Works Act, provides that basic financial assistance is not subject to garnishment, attachment, execution, or seizure. This safeguard ensures that individuals who are already in vulnerable financial situations can maintain access to essential support. Similarly, government pension income, such as the Canada Pension Plan and Old Age Security, is shielded from garnishment from standard creditors. However, it should be noted that such income can be seized by the CRA. Can you stop a garnishment? The short answer is no. One of the only ways to stop a wage garnishment order is to pay off the debt. Otherwise, if your financial situation calls for it, you can make a consumer proposal or file for bankruptcy, both of which create an automatic stay of proceedings. Conclusion Garnishment is a legal process implemented to facilitate the repayment of debts when other avenues have been exhausted. It is a tool used by creditors and government agencies. The regulations governing it can vary by jurisdiction and the type of debt. Understanding the limits on garnishment and the protections in place for certain types of income can help individuals navigate the complexities of debt repayment and maintain their financial stability during challenging times. For more information regarding Bankruptcy, Collections, Fraud, and/or Trusts related topics, please contact Hyland Muirhead at Devry Smith Frank LLP at (416) 446-5092 or hyland.muirhead@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Toni Pascale. By AlyssaBlog, Collections and Mortgage RecoveryDecember 4, 2023November 30, 2023
YCC 435 v. Karnis et. al. DATE: November 28, 2023CASE: 2022-00183NCitation: York Condominium Corporation No. 435 v. Karnis et al. Order under section 1.44 of the Condominium Act, 1998.Member: Stephen Roth, MemberThe Applicant,York Condominium Corporation No. 435Represented by Erik Savas, CounselThe Respondents,Monika Karnis, Dana Karnis and Lawrence KarnisRepresented by Marc Kemerer, CounselHearing: Written Online Hearing – June 15, 2022 to October 30, 2023 REASONS FOR DECISIONA. INTRODUCTION[1] This is an application brought by York Condominium Corporation No. 435 (“YCC435’) asking that Monika Karnis’ (“Ms. Karnis”) sixty-pound White German Shepherd service dog, Sophie, be permanently removed from her unit pursuant to subparagraph 1.44 (1) 2 of the Condominium Act, 1998 (the “Act”) and YCC435’s governing documents.[2] Karnis resides in the unit with her husband and brother. Her parents, Dana Karnis and Lawrence Karnis own the unit. Lawrence Karnis was added as a party at the commencement of the hearing on consent of all parties. Mr. Kemerer confirmed he represented Lawrence Karnis.[3] As a preliminary matter, the Respondents asked the Tribunal to adjourn this case while Ms. Karnis’ application to the Human Rights Tribunal of Ontario (“HRTO”) proceeded. After receiving submissions from the parties, I released a decision dated August 12, 2022, dismissing Ms. Karnis’ request and ordering that the CAT case proceed.[4] This was a very lengthy hearing, in part because the parties requested time on two occasions to try to resolve the dispute. I played no role in these negotiations, and they do not factor in my decision-making. Their efforts in this regard were unsuccessful and the hearing resumed.[5] YCC435’s declaration prohibits all dogs in the high-rise unit where Sophie resides. The Respondents submit that Sophie should be allowed to remain in the unit despite the “no pets” rule as an accommodation under the Ontario Human Rights Code (“the Code”).[6] While YCC435 accepted that Ms. Karnis has a disability as defined in section 10 of the Code and requires a service dog as accommodation, it objects to Sophie’s size and breed. YCC435 supports her having another breed of dog, which it considers safer.B. ISSUES[7] Given that YCC453 acknowledges that Ms. Karnis requires accommodation, does it have a legal basis to reject Sophie on the basis of weight or breed?[8] Should Sophie be removed from Ms. Karnis’ unit?[9] Would YCC435 suffer undue hardship if Sophie remained in the unit?C. EVIDENCE AND ANALYSIS [10] The Applicant called two witnesses. YCC435’s condominium manager, Ovidiu Floroiu testified. Mr. Floroiu served as the day-to-day manager from March 2021 to December 2022. Additionally, Annie Imer, officer and director of YCC435, provided testimony. She serves as president of YCC435 and owns and occupies a unit in the complex.[11] Karnis testified on her own behalf. Elizabeth Baker, the owner and lead trainer at Thames Centre Service Dogs “(TCSD”) where Ms. Karnis obtained Sophie, also testified for the Respondents.[12] Karnis testified that that on August 16, 2021, she qualified to obtain a service dog from TCSD, an organization that specializes in breeding and training dogs for those with disabilities. She testified that she informed the lead trainer, Ms. Baker, that she suffers from a condition that can lead to vertigo, dizziness and therefore instability when walking. She testified that her application to TCSD included a July 7, 2021, medical report from Dr. Linder who supported her application. I have reviewed the report, which is brief, and indicates Dr. Linder supported her application stating that a service dog would provide significant benefit for Ms. Karnis’ condition. Ms. Karnis testified that a service dog’s role was to support her and steady her during periods of instability. Ms. Karnis could grab the dog’s harness and steady herself by holding the dog. She also testified that Sophie was trained to use her sense of smell to touch her with her nose and alert her of an impending medical event. Ms. Karnis testified that Elizabeth Baker recommended a White German Shepherd to accommodate her because this breeding line was calm, had submissive personality, would weigh at least 1/3 of her own weight and because of the breed’s strong training abilities. Ms. Karnis testified that no other breed was recommended.[13] I have reviewed a December 9, 2021, letter from specialist Dr. J. Rosenblut supporting a service animal for Ms. Karnis. Dr. Rosenblut confirmed that a service dog would be trained to alert Ms. Karnis and to provide immediate support. I have also reviewed an August 2022 report from Dr. Linder indicating that Ms. Karnis “requires a service dog that is large enough for mobility work, specifically steadying her when she feels dizzy or is experiencing vertigo.”[14] The Applicant argued that a service dog is needed only in a stabilizing role and does not accept an alerting role. Given Ms. Karnis’s testimony and Dr. Rosenblut’s report, I find that Sophie’s role extends to both a stabilizing and a preventative alert role.[15] Sophie was born on August 17, 2021. Ms. Karnis made her first payment of $2000 to TCSD on September 18, 2021 for Sophie’s breeding and training. Training began immediately after payment. In total, Ms. Karnis testified that she paid $15,000 for Sophie and her training.[16] There is no dispute that Ms. Karnis first advised YCC435 of her intention to acquire a service dog by email on September 23, 2021, three days after she made her first payment. She stated as follows:Hello, I have been approved for a service dog by my physician and a training school that specialises in my disability. The training school’s website is below. I am not yet sure when I will receive the dog, it may be the end of October or in the new year, depending on where it is in its training. Please let me know if you have any questions or concerns.[17] YCC435 acknowledged receipt on the same date and Ms. Karnis was advised that the matter would be discussed with the board at its September 29th meeting and that management would respond with updates.[18] In response, Ms. Karnis offered to speak with the board and answer any questions. This offer was politely declined with the explanation that communication from the board would be relayed through the condominium manager.[19] Between Ms. Karnis’ first email of September 23 and mid-December 2021, Ms. Karnis and Mr. Floroiu exchanged several emails addressing the threshold question as to whether the board accepted that Ms. Karnis had a disability requiring a service dog. The board was not satisfied that the first medical reports established the need for a service dog and eventually hired counsel to address Ms. Karnis’ request. While this delay frustrated Ms. Karnis, by mid-December 2021 the board accepted Ms. Karnis’ disability and the need for a service dog. At the commencement of the hearing, counsel for the Applicant confirmed that Ms. Karnis’ need for a service dog was accepted and not an issue in dispute.[20] Imer testified that on December 15, 2021, the board sent Ms. Karnis a letter confirming its agreement to accommodate by allowing a service dog and that the Board would also be sending a draft accommodation agreement (“AA”) to her after the January 5, 2022 Board meeting to sign.[21] Having not yet received the draft AA, Ms. Karnis emailed Mr. Floroiu on January 8, 2022, referencing the delay and complaining of the ongoing maintenance and training costs she was incurring:The board was to send me an accommodation agreement for my medical needs on the fifth. Could you ask them to send it as it is now three days late, and five days late by Monday. These constant delays and late responses from the board are distressing. I have been made to pay large amounts of money monthly for the dog’s maintenance and training, which I could be providing at almost no cost if I was allowed to implement my plan shown to the board. This process has been invasive and degrading. I understand the need for due diligence, but I am disappointed with the lack of decency shown by the board.[22] On January 10, 2022, Ms. Karnis’ counsel advised YCC435 that Ms. Karnis would be bringing the dog home and that the AA would be negotiated in good faith. At this time, the dispute related to the breed and weight of the dog had not yet arisen.[23] It was not until January 22, 2022, when Ms. Karnis was presented with a draft AA containing a provision prohibiting certain breeds considered dangerous by the board, including German Shepherds, and a weight restriction of twenty-five pounds, that the dispute became apparent.[24] In response, Ms. Karnis’ counsel sent a letter to the Applicant dated January 25th, 2022, advising that Ms. Karnis intended to acquire a White German Shepherd dog and objected to the weight restriction and characterization of that breed as dangerous. Additionally, the letter indicated that the board knew of the breed previously and raised no complaint. On January 27, 2022, Ms. Karnis counsel emailed YCC435s counsel indicating that Ms. Karnis would be proceeding with bringing Sophie home, and that in the meantime, on a without prejudice basis, Ms. Karnis agreed to abide by the AA terms as amended other than breed and weight restrictions.[25] On January 28, 2022, YCC435’s counsel advised Ms. Karnis’s counsel that it did not accept the German Sheppard breed and that there was no evidence that a service animal of a different breed couldn’t satisfy her request for accommodation. Furthermore, Ms. Karnis was advised that YCC435 does not have an obligation to provide MS. Karnis with her preferred method of accommodation.[26] Karnis brought Sophie home on or about February 1, 2022.[27] There is disagreement between the parties as to when the Board first became aware that Ms. Karnis’ service dog was a White German Shepherd. Ms. Karnis testified that she advised Mr. Floroiu verbally during a telephone conversation on October 19, 2021. She testified that during this conversation, Mr. Floroiu was condescending and stated to her that “anyone can get a doctor’s note” and “we can’t have dogs in here willy-nilly.” She testified that she had to correct Mr. Floroiu when he repeated back to him German Shepherd by stating that the service dog was a White German Shepherd. Mr. Floroiu testified that when he spoke to Ms. Karnis by telephone on October 19, 2021, and November 8, 2021 that Ms. Karnis never mentioned the breed on either occasion. Mr. Floroiu testified that when he first learned of the intent to acquire this breed from the January 25, 2022 letter from Ms. Karnis’ counsel, he immediately informed the Board. Ms. Imer testified that the Board first became aware of the breed when it received the January 25, 2022, letter.[28] I accept Ms. Karnis’ testimony. I find it more likely that the White German Shepherd breed was mentioned to Mr. Floriou on October 19, 2021, but that this information was not passed onto the Board because the Board was still addressing the threshold issue of the need for accommodation.[29] Ms. Imer testified and acknowledged that Ms. Karnis advised YCC435 that she had been approved for a “service dog” by her physician and a training school that specialized in her disability. She was aware that a dog may arrive by the end of October 2021 or in early 2022. However, Ms. Imer pointed out that the email chain between Ms. Karnis and the condominium management firm did not indicate the size and breed of the dog.[30] Ms. Imer acknowledged receiving the “Q and A’ document from Ms. Karnis in her email dated September 28, 2021. Ms. Karnis argues that the following passage referencing large dogs put the Applicant on notice that she was obtaining a large dog:Q. Are you able to care for a service dog in a condo living situation? A. I have grown up with large dogs and am very familiar with their needs. However, a service dog is an animal that may have an accident in public areas. I am perfectly willing and capable of cleaning up any messes that may happen. [31] I find that providing this document is evidence that Ms. Karnis was not hiding the fact that she was obtaining a large dog. However, this document does not indicate the exact size or breed.[32] It is evident that the board never made inquiries with Ms. Karnis on breed and weight prior to sending the draft AA in January 2022. The Applicants’ witnesses made no such assertion. While YCC435 is critical of Ms. Karnis for not raising the breed before January 2022, the Board was aware that Ms. Karnis had been approved for a dog from TCSD and that the dog could arrive as early as October 2021. It is not clear when the board turned its collective mind to this issue of restricting breed and weight, but it was likely first meaningfully discussed at its January 5th, 2022 Board meeting after YCC435 had accepted Ms. Karnis’ need for a service dog.[33] While the parties argued strenuously about when the board first became aware of the White German Shepherd breed, I find it inconsequential. In either version, Ms. Karnis first became aware that breed and weight were at issue in January 2022. By then, Sophie was several months into her specialized training and Ms. Karnis had committed substantial financial resources to training and boarding her service dog. While the board’s awareness of breed is imputed by their agent’s knowledge (Mr. Floriou), had the Board had actual knowledge at the end of October 2021, I find that the crystallization of the issue and the impasse between the parties would simply have arisen earlier, but not likely soon enough to result in a resolution between the parties.[34] YCC435 argued that Ms. Karnis unilaterally proceeded to bring Sophie home knowing the board’s objection, rather than engaging with YCC435 in the accommodation process as required. I do not agree. Rather, I find that the parties were quickly at an impasse. The Board was not going to accept a White German Shepherd with a weight of about sixty pounds. Ms. Karnis was not prepared to abandon Sophie’s training, accept a delay to find and train another dog with potential inferior results, and suffer the negative financial consequences of that decision.[35] The context of when Ms. Karnis first entered into an agreement with TCSD and notified YCC435 of her disability and intention to bring home a service dog is important. In September 2021, YCC435 had one Rule that touched on accommodation for disability. In her testimony, Ms. Imer referred to YCC435’s Rule 1(g), effective September 20, 2018, which states, “No dogs are allowed in the high-rise units or on the common elements, unless licensed as a guide dog.”[36] On its face, this Rule addressed service dog accommodation because of visual impairments. This Rule was not broad enough to address the wide variety of disabilities that YCC435 may have to accommodate under the Code by permitting a service dog. It was not broad enough to capture Ms. Karnis’ disability, which was eventually accepted by the board. Significantly, the Rule in effect at the time contained no weight or breed restrictions for service dogs for visual impairments.[37] The nature of Rule 1(g) is relevant in that when Ms. Karnis proceeded to commit financial and time resources to purchase and train Sophie in September 2021, there was no indication that weight and breed would be restricted by inference to Rule 1(g). It is uncontested that she only became aware that breed and weight were contentious when the draft AA was sent to her on January 12, 2022. When Ms. Karnis was asked why no reference to breed or weight existed in the email exchanges between September 23 and December 2021, she testified that she was not aware these would be contentious issues. I accept this testimony.[38] I find that when Ms. Karnis committed to Sophie, she was relying on YCC435’s anticipated duty to accommodate that was not restricted to a visual impairment disability. No Rule was in place at the time putting her on notice that the board would restrict weight and breed when fulfilling its obligation to accommodate with a service dog.[39] In April 2022, YCC435 passed a new Rule that prohibited a number of breeds including German Shepherds and dogs weighing in excess of 25 pounds when accommodating. Counsel for YCC435 advised me at the commencement of the hearing that it would not be relying on this Rule because it was not in effect when Ms. Karnis brought Sophie home. As such, the validity and reasonableness of this Rule was not before me, nor have I considered it as to the merits of the case. Does Ms. Karnis require a service animal of Sophie’s Size? [40] Ms. Karnis described herself as 5 foot 7 inches tall and weighing 195-200 pounds. She testified that Sophie’s weight fluctuates between 60 and 65 pounds.[41] The Applicant submits that the medical reports do not prescribe the size and breed of dog required to meet Ms. Karnis’s needs.[42] Elizabeth Baker testified for the Respondents. She has held the position of owner, director and lead trainer at TCSD for twenty years, from 2003 to 2023. She testified that she had a specialty in training service dogs for persons with brain injuries, psychiatric and autistic conditions. She currently has forty-five White German Shepherds working with individuals with disabilities. Additionally, she testified that she has trained guide, hearing, and diabetic service dogs. She identifies as self-taught. She lists extensive speech engagements, published articles, teaching assignments and media experiences related to dogs and service dogs on her curriculum vitae. She testified to being a member of numerous organizations related to service animals such as the Canadian Association of Professional Dog Trainers. She stated she has trained approximately 450 service dogs during her career.[43] Ms. Baker is a participant witness who had a commercial relationship with Ms. Karnis prior to the dispute between the parties. The parties had an opportunity to make submissions on whether Ms. Baker was qualified to provide opinion evidence related to service dogs. I find that Ms. Baker possesses the skill, expertise and knowledge to provide an opinion on issues related to Sophie and her ability to accommodate Ms. Karnis’ disability. Ms. Baker was not retained solely for the purpose of providing an independent expert opinion. This is similar to a family doctor in a therapeutic relationship providing evidence on behalf of a patient. While the witness can provide opinion evidence, a relationship pre-existed the dispute. I agree with the Applicant’s submission that some of Ms. Baker’s tone suggested advocacy. However, this is insufficient for me to reject Ms. Baker’s evidence on these three key points:1) She recommended the White German Shepherd as the best breed to accommodate Ms. Karnis’ disability.2) A full-grown dog of Sophie’s weight was necessary to stabilize Ms. Karnis’ weight when unsteady.3) A full-grown dog of Sophie’s height was necessary so that Ms. Karnis could easily grab Sophie’s harness when unsteady.[44] Ms. Baker’s evidence is unchallenged by any competing qualified medical or service dog trainer witness.[45] Ms. Baker testified that potential clients undergo an interview process to qualify to obtain one of TCSD’s service dogs. She stated that White German Shepherds, like Sophie, are an ideal breed for Ms. Karnis’ condition as they are calm, emotionally intelligent, sensitive and loyal, and are not suited to work as police dogs because they are less aggressive than regular German Shepherds. She explained that Ms. Karnis required a dog of at least one-third of Ms. Karnis’ weight and that Sophie weighs 55-60 pounds fully grown and stands twenty-five inches tall. Furthermore, she stated that Sophie was trained specifically to focus on caring for Ms. Karnis and avoiding interactions with other people. She stated that a dog of twenty-five, or even forty pounds was not suitable because of the size requirements. Additionally, she stated that the Standard Poodle breed, for example, has a fine bone density and would not be able to safely and adequately support Ms. Karnis’ weight. She testified that she recommended and chose this specific breed after considering Ms. Karnis’ requirements. She stated that White Shepherds have a higher intelligence than other breeds, are less social and do not break free to seek attention from others. I accept Ms. Baker’s testimony.[46] I have considered that Ms. Baker recommended Sophie to Ms. Karnis prior to the parties’ dispute, satisfying me that her recommendation was based on her skill and experience without influence of litigation advocacy. She could have recommended any breed. The Applicant argues that Ms. Baker had a vested interest in recommending this particular breed because she was only training White German Shepherds when Ms. Karnis applied for her service dog. I am not persuaded that Ms. Baker would have recommended a White German Shepherd if it was not optimal for Ms. Karnis’ condition. I am satisfied that Ms. Baker’s evidence carries sufficient objectivity and impartiality for me to rely on her evidence.[47] Ms. Baker testified that Ms. Karnis qualified to have a trained service dog in August 2021. Throughout the process, she stated that she was not contacted by YCC435.[48] The evidence is clear that Ms. Karnis’ medical condition can result in a loss of balance and requires Sophie to help stabilize herself. Ms. Karnis’ counsel argues that Ms. Baker, who has in excess of twenty years specializing in training and providing service dogs, has confirmed that a White German Sheperd is the best service animal for Ms. Karnis. He argues that this type of opinion is beyond the expertise of medical doctors. I agree.[49] Ms. Imer conceded in testimony that the Board did not consult with any medical or dog training/breeding experts before making its determinations. She agreed that she had no experience, training or education in service dogs for disabled persons. Is Sophie dangerous and menacing?[50] Ms. Imer testified that within days of Ms. Karnis’ counsel’s letter of January 25th, 2022, Ms. Karnis was observed in the condominium lobby with Sophie.[51] Ms. Karnis testified that Sophie is a calm and well-trained service dog.[52] Ms. Imer referred to a February 10, 2022 Facebook post by Ms. Karnis posted in a condominium resident run group where Ms. Karnis introduced Sophie and the dog’s role to help manage her disability. Ms. Imer referred to a portion of the post that indicated that Sophie had not yet been fully trained. Ms. Karnis acknowledged writing the post. Additionally, Ms. Karnis testified that she printed and distributed notices to the other units on her floor about Sophie’s presence. I view Ms. Karnis’ actions as a transparent attempt to alert fellow residents as to why she has a dog in a “no pet” complex.[53] Ms. Imer testified that the board became aware that Sophie was observed leaping or jumping onto residents in the lobby. The details of these incidents, or who observed them, including the nature and frequency were not included in her evidence. Ms. Imer testified that the board also became aware of a note that Ms. Karnis wrote to another resident apologizing that her dog had “got out of the unit” and that Sophie had startled the resident. She stated that Ms. Karnis apologized in the note for her dog’s “bad manners.”[54] Ms. Imer testified that on February 15, 2022, the board became aware of an email complaint from another resident about “irritating” noises from Ms. Karnis’ unit in what sounded like a steel ball bouncing on hardwood floor and rolling from a pet playing with it.[55] In testimony, Ms. Karnis addressed the instances referred to by Ms. Imer. Ms. Karnis testified that she brought Sophie home agreeing to abide by the remainder of the AA terms and specifically that she would not allow Sophie to unreasonably bark or cause a disturbance. She testified that she has abided by these terms. She acknowledged that two weeks after bringing Sophie home, on February 16, 2022, Sophie slipped out her door and ran down the hallway as an elderly woman was opening her door. She acknowledged that the woman was startled but she was not injured. She stated that she was able to get Sophie under control immediately. She wrote to this neighbour to apologize. She states that Sophie was a five-month-old puppy in a new home at the time this incident occurred. She described this as one instance and not reflective of Sophie’s general behaviour and temperament and that Sophie continued to be trained after this incident.[56] Ms. Karnis also acknowledged the noise complaint and testified that the complaint was isolated to one occasion. She is not aware of any other issues with Sophie’s behaviour other than the two described. She testified that Sophie has fully completed her training. Since she brought Sophie home, she has devoted hundreds of hours to Sophie’s training to perform her duties and not be distracted by food, people or loud noises. She said that by May of 2022, Sophie achieved a success rate of 80-90% on behavioural first commands. As of October 2022, she described Sophie as being fully trained.[57] Ms. Imer testified that the board considered the German Shepherd breed to be dangerous and could inflict severe or fatal wounds on a resident if attacked. Additionally, the board considered the breed to be intimidating and/or menacing to residents given its breed or size. It was the Board’s view that Sophie was a very large and intimidating dog and would cause severe harm to a person if she attacked. She stated the breed is objectionable based on its size, weight, ability to frighten or intimidate residents, and ability to cause very serious harm to a person if it attacked, especially in confined areas in the condominium. Furthermore, Ms. Imer stated that Sophie is considered by the board to be an undue hardship for the corporation and its residents.[58] I find that Sophie has been trained specifically to perform as a service dog for Ms. Karnis. Both Ms. Baker and Ms. Karnis describe her as a well-trained dog with a gentle disposition. I find their evidence persuasive and on a balance of probability to be reliable and true. The behaviours described by Ms. Imer do not lead to a reasonable inference that Sophie is dangerous or menacing and such a conclusion is untenable and patently unreasonable. I accept that Sophie startled a neighbour soon after Ms. Karnis brought Sophie home. I accept that another neighbour complained of noise on one occasion. I have insufficient evidence to connect either of these issues specifically to the breed or weight of the dog. I find that these two incidences occurred in the very early stages of Sophie’s arrival and there is no evidence of repeated or ongoing issues. It appears that Sophie is living in reasonable harmony in the complex with the other residents.[59] The Applicant explained of the board’s concern that Sophie could seriously injure someone on account of her size and breed. I have no expert evidence before me on what basis the White German Shepherd breed is more dangerous than other dogs of a similar size that the board would permit. But more importantly, the evidence sways me that Sophie poses minimal risk. The board focused on the breed rather than Sophie. While it is not evident to me that the board turned its collective mind and distinguished the White German Shepherd breed from the general German Shepherd breed, it is not evident that the board turned its mind to Sophie’s personality, behaviour and training apart from the breed, but focused solely on her breed. Appropriate due diligence requires the board to consider these factors. Rather, the evidence from Ms. Imer is the bald statement that it considers Sophie dangerous given her size and breed. Given that I have found that a dog of Sophie’s size is required, I have been provided with no rationale why the board would not come to the same conclusion with another breed of similar size. The board cannot insulate itself from scrutiny when addressing accommodation requests without providing a cogent rational for its position after using reasonable diligence. I have been presented with insufficient evidence that the board took reasonable steps to fully inform itself and investigate Ms. Karnis’ request and specifically, whether Sophie posed an unreasonable risk.[60] I cannot conclude that Sophie generally exhibits menacing behaviour. I accept that she has been trained for a specific purpose and objectively is not an animal that has a propensity to be unsafe anymore than any other dog would. Realistically, the extensive nature of her training should provide comfort to the board. To restrict Sophie on the basis that she is presumed dangerous, or menacing based on nothing more than her breed and size is patently unreasonable.[61] The Applicant argues that Ms. Karnis cannot provide assurances that Sophie will not harm another person or dog. However, the Applicant also submits that any type of dog comes with risk by stating “a dog is a dog, and its good and decent behaviour cannot be assured.” This argument seemingly applies to all dogs, even a Labrador Retriever or a Poodle, which the board is prepared to accept. Asking for a guarantee is an impossible burden which Ms. Karnis is not required to meet. The Business Judgment Rule and the Duty to Accommodate[62] The Applicant relies on the business judgment rule as justification for removing Sophie. It is argued that board members are in a far better position than a court or tribunal to determine what is in the best interest of their community. It is submitted that as long as the board acts reasonably and in good faith, it should not be second guessed. Otherwise, it is submitted that the CAT runs the risk of supplanting the judgement of elected board members and managing the business affairs of the condominium. Unless patently unreasonable, it is argued that decisions of the Board should be upheld since the board is not acting judicially but rather in a policy making role. It is argued that the business judgment rule protects decisions of the board from exacting scrutiny provided they are a product of reasonable conduct of good faith judgment. It is argued that deference should be accorded to a board in enforcing its declaration and Rules where the interpretation adopted is a reasonable one and made in good faith. It is further submitted that when extending accommodation under the Code, the board has latitude under the business judgment rule to attach reasonable conditions to its accommodations in the interests of the condominium and its members as a whole. It is further argued that the board does not have to offer an evidentiary basis for adopting a particular Rule.[63] In Hanley v. Heritage Court Kingston Ltd, 2013 HRTO 808, The Ontario Human Rights Tribunal described both the procedural and substantive duty to accommodate:…duty to accommodate up to the point of undue hardship consists of two elements, one is procedural and the other is substantive…The procedural element requires an individualized investigation of accommodation measures and an assessment of the applicant’s needs. The substantive element requires a consideration of the accommodation offered or a respondent’s reasons for not providing accommodation.[64] In Central Okanagan School District v. Renaud, 1992 CanLII 81 (SCC), at para. 984, the Supreme Court of Canada noted that the duty to accommodate requires “more than mere negligible effort.”[65] YCC435 was established by the declaration as a “no pets” building and the board is required to ensure that the rules are applied, and owners and residents are required to follow the rules as set out in the declaration. A blanket prohibition against pets could be discriminatory if an owner or resident has disability-related needs and requires an animal because of those needs.[66] The Act and its governing documents are subject to the rights accorded owners and occupants of condominium units under the Code. Those rights and entitlements to accommodation are not limitless or unfettered. Accommodation must reasonably meet disability needs and must not result in undue hardship to the Applicant. These are well settled principles.[67] In part, the Applicant argues there is no basis for Sophie to remain in the unit under the Code. Essentially, the Applicant argues that the White German Shepherd is Ms. Karnis’ preferred breed. The Applicant frames the issue as whether any other permitted breed exists other than a White German Shepherd that is reasonably capable of meeting Ms. Karnis’ accommodation needs. The Applicant argues that an accepted breed such as the Labrador Retriever could accommodate Ms. Karnis’.[68] The Applicant refers me to the Ontario Court of Appeal decision 3716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, in reference to the business judgment rule. In this matter, the Respondent condominium board refused to approve changes for an owner who wanted to rent out his commercial parking spots on an hourly versus monthly basis unless the owner provided 24-hour security because trespassers could more easily enter the building. The court indicated that the jurisprudence has occasionally recognized that decisions rendered by boards of condominium corporations should be shown some deference, however the topic had not been addressed in great detail: As representatives elected by the unit owners, the directors of these corporations are better placed to make judgments about their interests and to balance the competing interests engaged than are the courts. For instance, in this case the security concerns arose in part as a result of the condominium’s location, and the Board members’ knowledge of that area is clearly an advantage that they enjoy over any court subsequently reviewing their decision.[69] The Court went on to explain:the first question for a court reviewing a condominium board’s decision is whether the directors acted honestly and in good faith and exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. If they did, then the board’s balancing of the interests of a complainant under s. 135 of the Act against competing concerns should be accorded deference. The question in such circumstances is not whether a reviewing court would have reached the same decision as the board. Rather, it is whether the board reached a decision that was within a range of reasonable choices. If it did, then it cannot be said to have unfairly disregarded the interests of a complainant.[70] Ultimately, the Court concluded the Board acted in good faith, was transparent as to the nature of its concerns, concluding that the condominium was in a high crime area and its decision was reasonable.[71] The Applicant also referred me to the Tribunal decisions Martis v. Peel Condominium Corporation No. 253, 2021 ONCAT 60, and Simcoe Condominium Corporation No. 89 v. Dominelli, 2015 ONSC 3661), where it was found there was no evidence that the resident medically required a dog in excess of the condominium’s weight restriction for pets. I find these cases of limited value as I have concluded based on Ms. Baker’s evidence that Ms. Karnis requires a dog that weighs in the 60-pound range. The Applicant further refers to Martis and the Tribunal’s finding that in extending accommodation to a resident under the Code, the board has latitude under the business judgment rule to attach reasonable conditions to its accommodation in the interests of the condominium and its members as a whole.[72] The first question I am to answer in reviewing the board’s decision is whether the Board acted honestly and in good faith and exercised the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. There may have been an element of skepticism when Ms. Karnis first approached the board; but, I have no evidence of bad faith when the board investigated Ms. Karnis’ need for a service animal. However, I conclude that the board did not exercise the care, diligence and skill that a reasonable board would exercise in comparable circumstances before rejecting Sophie.[73] Unlike in 3716724 Canada Inc. v. Carleton Condominium Corporation No. 375, a commercial matter where an owner desired the board to amend its Rules so that the owner could use parking spots more profitably, Ms. Karnis’ has requested accommodation in accordance with the Code based on the principles of dignity, individualization, integration and full participation. The extent to which the board is required to exercise its care, diligence and skill needs to reflect the importance of these principles. Accommodation is necessary to ensure that people with disabilities have equal opportunities. Responding to and investigating Ms. Karnis’ request to reside in the condominium complex safely requires a degree of due diligence and skill that reflects the weighty nature of this request. Generally, the more at stake requires a higher level of due diligence and skill by the board.[74] The nature of Ms. Karnis’ request is individual to her. Her request was straightforward: She asked to house a White German Shepperd who weighs approximately 60 pounds and had been trained specifically for her condition. When balancing the needs of the condominium with that of Ms. Karnis, the board must weigh all relevant factors. It has a positive duty to seek out and consider relevant information. Ms. Karnis asked if it was possible to meet with the board to discuss her request. This was denied. The board did not take the opportunity to explore the White German Shepherd breed with Ms. Baker or why Ms. Baker recommended Sophie. Ms. Imer provided testimony that suggests the board took insufficient steps to investigate if Sophie posed a real danger. I find that the board took only negligible steps.[75] The board was aware by at least January 8th, 2022, that Ms. Karnis had been made to pay large amounts of money monthly for the dog’s maintenance and training. When balancing the needs of Ms. Karnis and the condominium, it had an obligation to exercise a higher level of diligence. [76] YCC435’s rationale for rejecting Sophie is essentially the following:· The Board considers the breed dangerous· It considers Sophie menacing and dangerous and capable of causing serious harm if Sophie attacked someone· It considers Sophie a preference and that other less dangerous dogs are capable of meeting Ms. Karnis needs.[77] I find the board failed to reasonably investigate and consider Ms. Karnis’s individualized request to house Sophie and whether doing so would cause undue hardship.[78] Respondent’s counsel argues that a new service dog would take years to obtain and come at a significant cost given that $15,000 was spent on training Sophie. While it is not exactly clear how long the delay would be, I agree that the delay would be significant and come at considerable cost.[79] Given the lack of diligence and given that Sophie poses minimal threat, I do consider it patently unreasonable to order her removal.[80] Human rights case law makes it clear that the purpose of the Code is to accommodate a person’s needs, not their preferences. Based on Ms. Baker’s testimony, I find that a dog weighing approximately 60 pounds is a need. Also based on her testimony that the White German Shepherd breed is the recommended and best breed for Ms. Karnis’ condition, I find that this breed is also a need. Ms. Baker provided persuasive rationale why the White German Shepherd breed was superior to the Poodle and Labrador Retriever breeds, two breeds that the Applicant argued could have accommodated Ms. Karnis. Undue Hardship[81] The Applicant has a duty to accommodate, unless it would result in undue hardship. Section 17(2) of the Code places the onus on the Applicant to show that accommodation would cause undue hardship.[82] The Applicant refers me again to the business judgment rule. The Applicant argues that the board’s opinion on what is an undue hardship should be given substantial weight.[83] While the Applicant has argued undue hardship, no evidence or persuasive argument has been put forth to substantiate undue hardship. There is no evidence that Sophie’s presence creates a financial/cost hardship, requires outside sources of funding or requires any health and safety requirements. I accept that some residents may be leery or even afraid of dogs generally, and perhaps more so with large dogs. I appreciate that some residents may have decided to live at this condominium because of its” no pets” status. I find that that these considerations in of themselves do not rise to undue hardship. Remedy Requested[84] YCC435 asks that Sophie be removed. If I find that Sophie is not to be removed, the Applicant alternatively requests that the Respondent enter into the AA consistent with the version supplied on January 28, 2022, modified to provide for a White German Shepherd dog weighing 60 pounds. Ms. Karnis’ counsel submitted that his client is willing to negotiate an AA but submits that only if the parties come to an impasse in this negotiation, should the CAT become involved in the dispute. This, of course, would require a new Application.[85] I do not order the parties to enter into an AA. It shall not be a condition of accommodation. However, I encourage the parties to be considerate and cooperative. Ms. Karnis’ counsel has stated she is willing to enter into an AA. I expect that if the Applicant makes reasonable requests, she will endeavour to cooperate, as she has been doing. Regardless of whether the parties enter into an AA, I order that Sophie shall, at all times while on the common elements, wear a service animal vest to help ensure that other residents are aware of the reason for the exemption allowing her to reside in the condominium. Costs[86] The Tribunal’s Rule 48.1 provides:If a Case is not resolved by Settlement Agreement or Consent Order and a CAT member makes a final Decision, the unsuccessful Party will be required to pay the successful Party’s CAT fees unless the CAT member decides otherwise.[87] The Applicant was not successful in obtaining the order it desired, so it is not entitled to its incurred fees of this application.[88] Both Parties requested costs.[89] Rule 48.2, provides:The CAT generally will not order one Party to reimburse another Party for legal fees or disbursements (“costs”) incurred in the course of the proceeding. However, where appropriate, the CAT may order a Party to pay to another Party all or part of their costs, including costs that were directly related to a Party’s behavior that was unreasonable, undertaken for an improper purpose, or that caused a delay or additional expense.[90] I find that none of the parties’ behaviour during the course of the hearing was unreasonable, undertaken for an improper purpose, and did not cause any delay or additional expense. I award no costs.[91] Costs for the period before the Application was filed may be awarded where the declaration and/or rules provide for indemnification of such costs. The declaration in this case includes a general indemnification provision. The Applicant seeks those costs; however, given I have found that Sophie can remain, I award no indemnification costs. D. ORDER[92] The Tribunal orders:1. Ms. Karnis may keep Sophie with her on the condominium property as a manner of accommodation in relation to her disability.2. Ms. Karnis shall ensure Sophie shall at all times wears a service animal vest while on the condominium’s common elements. Stephen Roth Stephen Roth Member, Condominium Authority TribunalReleased on: November 28, 2023 By AlyssaBlog, Condo LawNovember 30, 2023December 7, 2023
What Should You Do When a Co-Owner Doesn’t Want to Sell? If you partly own property, but your co-owner does not want to sell (or develop, or mortgage, etc.), don’t worry, you have options. Sometimes we make a foolish investment; sometimes we split up with our partners; sometimes we fight with our family members. Sometimes we just aren’t in agreement about what to do next. If you are a registered owner and you feel stuck, the answer is simple: bring an application for partition or sale under the Partition Act, RSO 1990 c P4. The Partition Act Under the Partition Act, any co-owner, whether by joint tenancy or tenants in common, seeking to force the sale or division of land they own with others can bring an application for a partition or sale of the land. This would allow a joint-owner of a property whose co-owner does not want to sell to seek an order that their property be sold or divided. Any person with an interest in land in Ontario may make an application for partition under the Partition Act. This includes the guardian of a minor who is entitled to the possession of an estate. Though, a proceeding for partition or sale by or on behalf of a minor needs to be on notice to the Children’s Lawyer. An application for the partition or sale of land will proceed under the directions of the court to ensure that everything proceeds fairly. This is to prevent the partition or sale of land being advantageous or disadvantageous to any of the parties. The Result In most cases, the court will order the sale or division of the property even if all of the owners do not agree to it. If the property is a condominium or home, and the property cannot reasonably be divided, then it must be sold and the profits be divided amongst the co-owners. In Brienza v. Brienza, 2014 ONSC 6942, the decision of Davis v. Davis, 1953 CanLII 148 (ON CA) was considered, which sets out the general principles to determine when partition and sale should be granted. The Court of Appeal stated as follows: “There continues to be a prima facie right of a joint tenant to partition of sale of lands. There is a corresponding obligation on a joint tenant to permit partition or sale, and finally the Court should compel such partition or sale if no sufficient reason appears why such an order should not be made.” It is therefore likely that the application for partition or sale will usually be granted. There are, however, exceptions. For example, the court will not order the sale or division of property if the application is brought in extreme bad faith, or if the application is part of a family law claim. The court in Brienza stated that the court’s discretion to refuse partition and sale is narrow and that in order to justify the refusal to grant partition and sale there must be “malicious, vexatious or oppressive conduct.” If this is the case, the onus is on the party resisting the partition or sale to demonstrate why the application should be refused. It is becoming more and more common to purchase a property with a co-owner in today’s economy. If you have questions or concerns about your jointly-owned property or would like to bring an application for partition or sale, please contact our legal team to arrange a consultation. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Samantha Lawr. Book A Consultation Name Phone Email Message Form By submitting this form I acknowledge that my meeting today does not mean that Devry Smith Frank LLP (“DSF”) is acting as my lawyers. I direct DSF to take no steps with respect to my matter until I have provided a monetary and written retainer, as acceptable to DSF. I may sign a retainer agreement and provide a monetary retainer (other than the consult fee) today. If I do not, I know that I can contact Devry Smith Frank LLP in the future to inquire about retaining the firm. Send By AlyssaBlog, Real EstateNovember 13, 2023April 16, 2024
Ontario Court Acknowledges Estate Trustees’ Right to Indemnification, Denies Use of Estate Funds for Litigation Estate distribution and the associated legal battles often bring forward intricate legal questions, especially when changes are made to wills or disputes arise among the beneficiaries. In the recent decision of Santos et al v. Coghlan et al, 2023 ONSC 4862 from the Ontario Superior Court of Justice, the intricacies of estate distribution and the denial of using estate funds for trustees’ litigation costs were brought to light. Background Hans and Colleen Luettge, who married in 1987 and had children from prior marriages, made wills in January 2005. Their wills specified that the surviving spouse would inherit the deceased spouse’s estate. Upon the passing of the surviving spouse, the estate would be divided equally among their combined seven children.[i] In August 2011, Colleen passed away, transferring a significant portion of her assets to Hans prior to her death.[ii] After Hans’ passing in May 2021, a legal dispute arose. It was revealed that Hans had made significant alterations to his will in November 2020, deviating from the initially planned equitable distribution among all seven children.[iii] Instead, he designated his four children as primary beneficiaries, providing $30,000 each to two of Colleen’s children and completely excluding one of her children, Terry, from any inheritance.[iv] Litigation The legal proceedings commenced when the applicants, Hans’ children, filed for a certificate of appointment of estate trustee with a will. The respondents, Colleen’s children, opposed by filing a notice of objection, contending that Hans lacked the mental capacity to formulate the 2020 will.[v] The applicants commenced an application on January 27, 2022, seeking, inter alia, an order to strike the respondents’ Notice of Objection and a declaration affirming the validity of Hans’ November 2020 will. Alternatively, they sought an Order for Directions. A hearing for the application was scheduled for June 14, 2022.[vi] In response to the applicants’ request to strike their objection, the respondents presented evidence supporting their claims. They also extended a Rule 49 offer on April 25, 2022, allowing the applicants to withdraw their request to strike the objection and validate Hans’ last will with no cost implications.[vii] The offer also provided that the parties would consent to a mutually acceptable Order for Directions. Order for Directions from Justice Phillips The parties appeared before Justice Phillips on June 14, 2022, and a consent Order for Directions was issued on June 16, 2022. The order, among other things, provided that “the remaining relief sought by the Applicants in their Notice of Application is hereby dismissed” and that “the determination of costs relating to this appearance is hereby postponed to a date to be decided upon by any of the parties.”[viii] The Order for Direction also explicitly stated that the Estate Trustee “may not distribute or disburse any estate assets, unless such distribution is approved under this Order or agreed upon in writing by the parties involved in this proceeding.” Respondent’s Motion for Further Directions The respondents later brought forth another motion for directions, pursuing two specific orders: Firstly, they requested costs associated with the applicants’ earlier abandoned attempt to strike their notice of objection. Secondly, they sought an order preventing the applicants from utilizing estate assets to cover their legal expenses.[ix] Court’s Ruling and Analysis The respondents’ motion for the specific orders hinged on the interpretation of the Order for Directions provided by Justice Phillips. Entitlement of Costs Kaufman JA found that based on the resulting Order of Justice Phillips, it can be inferred that the Offer was in fact accepted.[x] The applicants agreed to no longer pursue orders striking the respondents’ Notice of Objection or affirming the validity of Hans’ November 2020 will. The applicants were also found to have consented to an Order for Directions agreeable to the parties. These terms aligned with the respondents’ offer.[xi] According to the offer’s terms, if accepted after that date, the applicants would have to pay the respondents’ partial indemnity costs.[xii] Kaufman JA found that the applicants ultimately accepted the respondent’s offer after the specified deadline, and therefore should cover the respondents’ partial indemnity costs, which were fixed at $14,000.[xiii] Coverage of Litigation Costs from Estate Funds The Order explicitly stated that the Estate Trustee could not distribute or disburse any estate assets without approval under the order or written agreement from the involved parties.[xiv] While it granted the trustee the authority to manage the estate, including consolidating assets and paying the deceased’s debts, it did not directly address the funding of litigation costs. Although the Court agreed with the applicants that trustees were generally entitled to reimburse themselves for expenses reasonably incurred in connection with the administration of the Estate without obtaining the beneficiaries’ prior consent or a court order, it nonetheless concluded that the Order for Directions precluded them from paying out litigation fees from the Estate.[xv] The court argued that the listed actions in paragraph 14 (d) of the Order primarily pertained to the administration of the estate, as opposed to litigation concerning claims against the estate. Additionally, the court emphasized the need for equity and the importance of “maintaining a level playing field during estate litigation.”[xvi] Kaufman J also noted that Colleen Luettge had transferred a significant amount of her assets to Hans during her lifetime, likely with the intention of those assets being shared among her and Hans’ children after his passing.[xvii] This created a situation where the applicants had ample resources to finance their legal battle against the respondents. The Court ultimately ruled that the applicants were prohibited from paying any further legal fees in relation to this proceeding out of the Estate.[xviii] Additionally, the applicants shall reimburse the Estate for any legal fees incurred in this proceeding that have been paid out of the Estate within 45 days of the decision.[xix] Conclusion Santos et al v. Coghlan et al, 2023 ONSC 4862 offers a fascinating glimpse into the complexities and nuances of estate planning and inheritance disputes. It serves as a reminder that the court’s role in estate litigation extends beyond the mere interpretation of wills and distribution of assets. It also involves ensuring a level playing field and protecting the integrity of estate assets. While estate trustees usually have the right to be indemnified for expenses related to estate administration, the court’s discretion and the specific details of an Order for Directions can impact their ability to use estate funds for litigation costs. In this case, the court’s decision reflects a commitment to fairness and the maintenance of equitable conditions for all parties involved, making it a significant precedent in estate litigation matters. For more information regarding Estates Litigation-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Owais Hashmi. [i] Santos et al v. Coghlan et al, 2023 ONSC 4862 at para 1. [ii] Ibid at para 2. [iii] Ibid at para 3. [iv] Ibid. [v] Ibid at para 4. [vi] Ibid at para 7. [vii] Ibid at para 9. [viii] Ibid at para 11. [ix] Ibid at para 5. [x] Ibid at para 16. [xi] Ibid. [xii] Ibid at para 17. [xiii] Ibid. [xiv] Ibid at para 29. [xv] Ibid at para 21. [xvi] Ibid at para 34. [xvii] Ibid at para 33. [xviii] Ibid at para 41. [xix] Ibid. By AlyssaBlog, Wills and EstatesOctober 23, 2023October 19, 2023
