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ONTARIO ELECTRIFIES

MANITOBA EXECUTOR HIT WITH REIMBURSEMENT ORDER

HOW TO TREAT JOINT ACCOUNT MONEY

WHAT IS A COMMON LAW SPOUSE

ONTARIO ELECTRIFIES

The Province of Ontario has electrified. Put more correctly, the Province has now inaugurated a scheme whereby the searching of titles and indeed registration is all done electronically and not through paper. As I understand it, although other jurisdictions have allowed for off site searching of titles, Manitoba being one such jurisdiction, Ontario is the first place in the world, never mind Canada or North America to require documents to be registered electronically.

Now, the Province of Ontario has implemented this program in stages so that for the most part, the entire Province has been covered. The area where I do most of my work, in the District of Kenora, has just now come on stream and as of November 7, 2005 documents can be registered in an electronic way. As of February 7, 2006, the Province of Ontario will require registration to be completed by this method and the transition phase will end. Now, just what does this actually mean? Even I am unsure of the answer to that question as I do believe that it will take some time before the implications of this revolutionary step regarding land registration become clear. What I do know is that on the one hand, it will make registration simpler or at least on the face of it, I get that impression.

The process has now created a verb out of the word "message". I now must "message" the other solicitor who acts for the purchaser if I am for the vendor and vice versa. It is also a process that technically does not require the signature of any party to the document. It is up the lawyer to insure that his client knows what being done for him or her. I have begun already the setting up of the program and am into the new system. Like anything else, it is always strange to learn something new but at the same time it is challenging.

Thus, if you have any searches or registrations to do, let me know. The turn around time should be faster or at least that is my expectation down the road.

MANITOBA EXECUTOR HIT WITH REIMBURSEMENT ORDER

In a recent case from the Manitoba Court of appeal, the executor of an estate was refused her application to stay or delay a previous order of the court to the effect that she repay the estate over $ 30, 000.00 which sum represented what she had spent on renovating a house promised to her son in the will of the deceased. This case was reported as TODOSICHUK v. CATHERINE DAVIDUIK. The decision was given by Mr. Justice Martin Freedman, who is the son of the former Chief Justice of the Court of Appeal of the Province of Manitoba, the late Mr. Samuel Freedman.

What happened here is that there had been a case involving these parties because certain residuary beneficiaries of the deceased were upset that the person looking after the deceased in her lifetime,(committee is the legal word) had spent over $ 30, 000.00 from the estate of the then living testatrix and used the money to spent it on renovations to the home of her son. Her rationalization was that he was to get the house by the will of this woman ultimately and so she was spending money now on what would be his at some time in the future.

What the appeal court stated was that the original trial judge had made some very serious findings that were critical of the committee and that court had ordered the committee to repay the estate the funds taken inappropriately. Todosichuk appealed that decision of the lower court and last year the Manitoba Court of Appeal dismissed this appeal concurring with the trial judge that there was overwhelming evidence that the committee had tried to benefit her own son at the expense of the residuary beneficiaries under the will. In fact, the committee was ordered to pay the funds into court and that is a rare case indeed. Then the committee asked the Court of Appeal to delay the implementation of their order while she applied for leave to go to the Supreme Court of Canada. The Manitoba Court of Appeal declined to allow this delay. In order to obtain a stay, the appellant had to demonstrate that without it, she would suffer irreparable harm. The court was clearly incensed by what it perceived to be a significant departure from the standard required. Mr. Justice Freedman wrote, "... it is on the question of harm, and who will suffer the greatest risk of harm, that my decision to deny the stay was based. The residuary beneficiaries provided evidence raising valid concerns about the applicant's actions in relation to property she owned all of which is related to her ability to pay and harm if a stay is denied. In particular, after the trial judge's decision was granted, the applicant, according to the affidavit of one of the residuary beneficiaries that was filed, conveyed for $ 1.00 her interests in certain farmland to her son. Previously title had been in both names".

As a result, m the residuary beneficiaries sued the applicant and her son alleging fraudulent conveyances In short, the whole of the evidence amounted to serious worry and concern about the actions of the applicant and her application for a stay was refused.

Should anyone be surprised at his outcome? Given the impropriety of her actions, I think it was inevitable.

HOW TO TREAT JOINT ACCOUNT MONEY

I want to address an issue which seems to be of some significance these days. I give you the following scenario. A widow, feeling that she is having trouble or a little more difficulty managing her own money due to physical and/ or mental problems, decides to open up a joint bank account with one of her adult children. This scheme is a practical way to operate an account during the lifetime of the widow as it allows her and her child to sign and make deposits into the account. Yet, this same flexibility may well run opposite to the intention of the widow when she dies.

What typically happens is that the widow chooses to open up or change her existing account to create a joint account to include the adult child with a right of survivorship as is the case with joint accounts. Often, the account is opened with only one of the adult children since other children live out of the area and it is not convenient to have the other children listed on the account. The money that goes into the account comes from only one source- the widow. It does not occur to anyone to consult a lawyer about this seemingly innocuous step. All of the material from the bank indicates that the child will now be in a position to assist his or her parent if needed.

When the widow dies, the common law doctrine of survivorship steps into play and the adult child now becomes the owner of this account. In short, total and complete title to this account now vests in the name of this adult child and no probate is required for the administration of this asset. Now, that may well be what was intended by the widow but I would suggest from my experience that this result was not what the widow had in mind at all. It is likely the case that the widow wants to have all of her children benefit from this account yet only one of them is allowed by law to do so. The only way the others would get a sniff of this account is if the surviving joint owner, the adult child, recognizes the fact that the mother wanted this account split evenly between all of the children and then makes a division on her or his own to effect this plan

The big question to be asked is this. Should equity demand that this interest, inherited by operation of law, be interfered with so that the funds are required to be returned to the account and not allowed to be paid out to this single child? Or should the presumption of advancement be recognized so that the establishment of the joint account with one child is in fact confirmed? The question looms even larger if you picture the parent setting up this account as a fully autonomous and responsible person who has chosen to manage her affairs during her lifetime in this way thus avoiding a lawyer to draft a will and to obtain Probate of the estate at death. These are not unreasonable steps to take by any person and quite logical for any of us to follow.

There have been not so surprisingly reported cases on this very subject. On the one hand, there is the Ontario case of McLear v. McLear Estate wherein Mr. Justice Heaney accepted the proposition that the realities of today's society are more favourable to the notion that easy administration of a parent's estate is preferable to an implied gift with a right of survivorship. Hence, the trial judge felt that the money ought not to go to the survivor automatically on death. On the other hand, in the Alberta case of Plamendon v. Czaban, Mr. Justice Cote of the Court of Appeal disagreed that the basic principle of advancement to that single surviving child should be abolished. He felt then that no expensive Christmas or birthday gifts would be safe. So what is the difference between gift giving driven by parental love and property transfers caused by a desire to effect convenient administration of one's financial affairs? These are thorny questions.

WHAT IS A COMMON LAW SPOUSE

I thought I had a good handle on what constituted a common law spouse but recently my client was the loser with respect to his brother's estate. It turned out that his recently deceased brother in Ottawa left an estate never having married or having children and was survived by only his brother in Winnipeg with whom he had a very limited relationship owing to various factors. He died intestate that is without a will, and on the face of it, the brother would get it all and that all included a pension payout of over $ 175, 000.00. He also left debts of over $ 20, 000.00. It seemed simple enough except that there emerged the intervention of a lady who said that she was the common law spouse of the deceased. At the time of the death, the couple was not living together but in the same area (the Ottawa region). They had lived apart in two different locations for over 2 years. The applicable legislation governing the pay out of the $ 175, 000.00 pension was clear that if the couple were not spouses or common - law partners for at least a year before the death, there was no claim by that spouse. I thought that this was conclusive. Yet, this woman stated that she was in fact the common- law spouse even though they lived apart. Her evidence as presented in lengthy affidavits was to the effect that she and the deceased lived apart on purpose as he drank and she did not want him in the house to affect her children in a harmful way. But, she said we still saw each other regularly and had a sexual relationship. He made the payments on our jointly owned house. I felt that the fact that he made these payments was no different a situation than those where married couples agree to separate and as part of the arrangement, one spouse agrees to continue to keep up the monthly mortgage payments. Essentially, that is all that transpired here. The evidence mounted by the brother was to the effect that no one had seen her around the apartment building where the deceased lived. I was fairly confident that in a case where the parties had made a concrete decision to live apart, she could not succeed in her quest to be called and accepted as the common- law spouse. Yet, the panel of three people from the RCMP where the pension was locked in (as the deceased had been a former employee of the RCMP) accepted this woman as the common- law spouse of the deceased. I did not even get any reasons for the decision. This case only shows me that nothing is certain. Were it feasible to take this case to a higher level, I would love to do so, but my client is not interested in pursuing this further. Sad to say, I am now having trouble getting the common- law spouse to accept the responsibilities of paying off the debts of her late partner. Now, that is the final straw- give me the money and you the brother, pay his debts.