Saskatchewan Estate Litigation Update: Choquette v Viczko, 2021 SKQB 167

The recent case of Choquette v Viczko offers guidance on when an executor is required to seek a beneficiary’s consent to sell land. It also explains when no such consent is needed.

Facts:

Joseph Viczko died on September 10, 2011. In his September 24, 2010, will he named his daughter, Donna Boots, as executor and trustee. The primary beneficiaries under the will were Ms. Boots and Joseph Viczko’s other children, Yvonne Choquette and David Viczko.

Certain land was to be sold and the proceeds divided amongst Yvonne and Donna. The relevant wording was as follows:

d. I DIRECT my Trustee to distribute my estate as follows:

  1. It is my intention to sell the W1/2 12-39-27 W2, or any other farmland that I own, (all such farmland herein being described as my farmland), while I am living and distribute the proceeds of sale equally between my daughters YVONNE CHOQUETTE of Cudworth, Saskatchewan and DONNA BOOTS, of Saskatoon, Saskatchewan share and share-alike. However, if I still own my farmland at the time of my death, then my farmland shall be sold by my Trustee and the proceeds divided equally between my daughters YVONNE CHOQUETTE and DONNA BOOTS.
  2. If YVONNE CHOQUETTE predeceases me or fails to survive me for 30 days from the date of my death, then her one-half interest in the proceeds of the sale of my farmland shall be divided equally among the children of YVONNE CHOQUETTE for their own use and benefit absolutely.

Ms. Boots had W1/2 12-39-27 W2 appraised, and she and David Viczko ultimately entered into an agreement for David Viczko and his wife Jennifer Viczko (“the Viczkos”) to purchase the land for the appraised value. The sale was completed, and the land was transferred to the Viczkos on February 23, 2012.

Objection to the land sale by Yvonne Choquette:

After the land had been transferred, Ms. Choquette objected to the sale to the Viczkos. Ultimately she commenced an action, in which she seeks to have the sale of the land set aside and the land returned to the estate. She relied on the provisions of s. 50.5 of The Administration of Estates Act, SS 1998, c A-4.1. That provision holds that an executor shall not sell land “for the sole purpose of distributing the estate among the persons beneficially entitled to it unless those persons concur in the sale.”

However, the provision also gives the court the power to approve the sale of the real property if the court is satisfied that it is in the interest and to the advantage of the estate of the deceased and the persons beneficially interested in it.

Ms. Choquette asserted that the combination of s. 50.5 of the Act and clause 3(d)(i) of the will means that the land sale is invalid because it proceeded without the consent of Ms. Choquette, who is a person “beneficially entitled” within the meaning of s. 50.5(1).

Issue 1: Is Yvonne Choquette a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act?

The court held that Yvonne Choquette was not a beneficiary whose consent to the sale of the land was required under s. 50.5 of The Administration of Estates Act?

The court held that s. 50.5(1) refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the sale of the real property.

But more importantly,   the Court found there was no operation of s. 50.5.  Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for legislative authority to sell the land.

Because of the direction in the will (i.e. to authorize the executor to sell the land), s. 50.5 of the Act does not apply to the circumstances at all

Issue 2: Should the court approve the sale of the land to David Viczko under s. 50.5(4) of the Act?

Even if Ms. Choquette had been required to be consulted, the Court would have given its approval to the sale, over her objection. The court held that the sale was for fair market value, and was necessary to advance the estate administration. Moreover, the sale took place 9 years ago, and to undo it would be very complicated, and incur needless costs:

[40]  The circumstances are these. The sale of the land implemented the testator’s intentions. There is no dispute that the sale was for fair market value. There is no prejudice to Ms. Choquette in the sale being approved, because she will benefit from the fair market value sale that was directed by the testator. The other parties, and Ms. Choquette as well, would be prejudiced considerably by the sale not being approved. The sale to the Viczkos took place nine years ago. Reversing that sale, including addressing David Viczko’s farming of the land for the past nine years, would plunge the estate – along with the individual parties – into a morass of complication and the promise of even more litigation. Approving the sale would permit administration of the estate to move towards a conclusion.

In short, before a beneficiary (who is merely entitled to the proceeds of land, but not actually the land itself) tries to object to a sale of the land, they should examine if they are truly entitled to object to the sale.  

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

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Rebutting the Presumption of Resulting Trust – A Refresher

Today’s post comes from Wagner Sidlofsky LLP, a well-known estate law blog.

The article talks about the importance of creating a contemporaneous evidentiary record of a parent’s intention when gifting property to their adult children.

If a parent places an adult independent child on title to property, there is often a dispute after death as to whether the child was intended to get the property outright, or, hold it for the parent’s estate

The article provides good guidance on what written evidence you should keep if you add your child to a property. It can help avoid a very expensive fight later.

The article by Estate Law Canada can be viewed here. 

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

James Steele Published in CBA Bar Notes – Summer 2021 Edition

James Steele was published recently in the Summer 2021 Edition of CBA Bar Notes. You can read his article below.

Covid-19 Insolvencies: What will the next year bring?

After Covid lockdowns shut down many businesses, one might have expected insolvencies in Canada to rise sharply. However, the reality has been the opposite thus far.

Consumer insolvencies last year were down 30 percent from 2019, while business insolvencies in 2020 were down 24 percent from 2019. The reasons for this appear to be government help, combined with creditor patience. By August 2020, more than 16% of Canadians were receiving some form of income replacement. For very low-income earners, CERB was beneficial. Such earners may have earned more than they were earning pre-COVID. Businesses were also able to take advantage of subsidies.

What will happen when the subsidies are turned off?

However, what will happen to hard-hit businesses when arrangements with creditors end or subsidies are discontinued? The hardest-hit sectors have been retail trade, arts and entertainment, and recreation. Many of these businesses have thus far managed to limp along by making informal arrangements with creditors.

Debt cannot be deferred forever. Moreover, the economy is not predicted to be back in full swing until late 2021 or early 2022. In the meantime, insolvencies will start to rise.

There appear to be two schools of thought of predicting what will happen:

  1. One school predicts that with the vaccine and most people inoculated by the fall, the economy will quickly get back to normal, and massive insolvencies may be avoided to some degree;
  2. The other prediction is that we will not in fact return to normal for quite some time. In the meantime, there will be a significant surge in bankruptcy filings.

While we all may hope for the first prediction to come true, lawyers who act for creditors may be well placed to prepare for a potential surge in collection work or insolvency proceedings. More than a few struggling businesses who have avoided formal insolvency proceedings, may not survive long enough to take advantage of an eventually improving economy.

Lenders may wish to form an early strategy for dealing with their debtors. Each lender will wish to review their own situation. A debtor with only one creditor involves different considerations than heavily encumbered borrowers, who may have numerous other creditors.

Multiple creditors pursuing a very small pool of assets is a common reality in debt collection, and can often produce a situation in which a judgment is little more than a piece of paper. Moreover, even aggressive lenders who pursue collection and thereby force some payments from debtors will wish to be aware of the rules prohibiting preferences if other creditors are involved.

An early conversation with encumbered debtors, to discuss refinancing, a restriction on further lending, a different repayment structure, or still other issues, may be a conversation better had now, rather than later when the situation is more dire.

Saskatchewan Estate Litigation Update: Bryant Estate v Stuart, 2021 SKCA 54

A recent case from the Saskatchewan Court of Appeal clarifies that a beneficiary who seeks an estate accounting is not required to show possible wrongdoing by the trustee before an accounting can be ordered.

    Background:

    The late Franklin Bryant was a beneficiary under his mother’s will.

    Franklin’s executor had concerns about how Franklin’s mother’s estate had been administered. This led Franklin’s estate to ask a Queen’s Bench Chambers judge to require the executrix of the mother’s estate to provide an accounting. The Chambers judge declined to make the order requested, in large part on the basis that there was no evidence of misconduct in the administration of the estate.

      Queen’s Bench decision:

      The Queen’s Bench judge first found that s. 35(1) of Administration of Estates Act did not apply here. Section 35 of the Administration of Estates Act only applied where there had a grant of letters probate or letters of administration. If probate was granted, an accounting was due within 2 years.

      Here, however, the Will of Franklin’s mother did not receive probate. As such, the Queen’s Bench judge found s. 35(1) to be inapplicable.

      Second, the Queen’s Bench judge seemed to suggest that an accounting should only be ordered when there was some suggestion of wrongdoing by the executor. The Queen’s Bench judge wrote as follows:

        [20] Just because the court has the inherent jurisdiction to order an accounting, does not mean it should. I want to be clear that there is no evidence before me that there has been misconduct such that an accounting is necessary. The applicant believes that an accounting will show what has happened to the Corporation’s assets but, as I have indicated, the assets of the Corporation did not pass through the estate of [the Mother]. At the hearing, it became apparent that the applicant was seeking information on his late father’s share in the Corporation that, upon his death, became part of his estate. An accounting of the administration of [the Mother’s] estate will not yield the type of information the applicant seeks. To the extent that the applicant wants information on how the executrix disbursed the bequests, much, if not all, of that was set out in her affidavit.

          Court of Appeal decision:

          The question on appeal was whether the Chambers judge erred in declining to order an accounting of the administration of Franklin’s mother’s estate.

          The Court held that an accounting should have been ordered. The court relied on section 55 of The Trustee Act, which provides as follows:

            55 (1) On the request of a beneficiary of the trust, or the beneficiary’s property attorney or property guardian, a trustee shall provide an accounting to the beneficiary.
            (2) If a beneficiary of the trust, or the beneficiary’s property attorney or property guardian, has been unable to obtain an accounting from the trustee in accordance with subsection (1), the beneficiary of the trust, or the beneficiary’s property attorney or property guardian, may apply to the court for an order directing the trustee to provide an accounting to the court or to the beneficiary.
            (3) Notwithstanding anything to the contrary in the terms of a trust, if a beneficiary of the trust or other interested person has requested information concerning the accounts of a trustee, and the trustee has refused to comply with the request in a reasonable and timely manner, the court may order the trustee to pass accounts in accordance with section 54.

              Section 2(h) of The Trustee Act defines “trustee” to mean, among other things, “an executor or administrator”. 

              The Court of Appeal held that s. 55 imposed an unavoidable obligation on a trustee to provide an accounting.

                [33] In broad terms, it is entirely appropriate to understand s. 55(1) as imposing an unavoidable obligation on a trustee to provide an accounting. That kind of duty is consistent with, and reflects, the fundamental nature of the relationship between a beneficiary and a trustee. Being able to hold a trustee to account ensures that the trustee discharges its fiduciary obligations.

                [40] In this case, it was entirely reasonable for Franklin’s estate to request an accounting. The following points inform my conclusion in this regard:

                  1. The Mother died in November of 2015. Her estate was not probated.
                  2. Christian averred that, notwithstanding many requests for a copy of the Mother’s will, Dorothy had refused to provide one. Dorothy responded by saying only that Christian had not asked “directly” for a copy of the will.
                  3. Dorothy averred that, prior to his death, Franklin had “received funds as a named beneficiary, or joint account holder”. However, she also said, “I am not aware of the particulars of these payments or amounts”.
                  4. Dorothy explained that the bulk of the Mother’s assets were “jointly held” and thereby were “automatically transferred to the name of the individual with who the assets were jointly held”. But, she provided no detail as to the nature of those assets or information about the individuals who had held them jointly with the Mother.
                  5. The only other bequests distributed to beneficiaries, according to Dorothy, were $2,000 for each grandchild, an amount that she averred had been personally delivered to Christian, and $1,000 for each of several designated beneficiaries (who were not identified), including Christian and his siblings. These funds were said to have come from an investment when it had matured. Christian takes issue with this and avers that he and his siblings received only $1,000 each.

                  Franklin’s estate was also held entitled to costs, payable by the Mother’s estate, in the usual way. If there were no assets in the Mother’s estate with which to pay costs, they were to be paid by Dorothy personally because, in the circumstances here, there was no reasonable basis for her to refuse the request for an accounting.

                    Lesson learned:

                    Bryant Estate makes clear that an accounting must not be lightly denied.

                    As per the clear language of s. 55(1), a beneficiary is entitled to an accounting as a matter of course on making a reasonable request. The beneficiary has no obligation to show cause or present a justification for that request.

                    The Court of Appeal did however clarify that frivolous requests for an accounting could be denied by the Court. Examples of frivolous examples could include the below:

                      1. A request for accounting that is made too closely on the heels of another accounting might be unreasonable on the basis that not enough time has passed;
                      2. Second, where the situation concerning the administration of a trust makes a request for an accounting unreasonable. Thus, for example, if the administration of an estate is on the very brink of being completed, it might be unreasonable to request an accounting until matters have been finally wrapped up;
                      3. Third, at some point in time, it may become simply too late in the game for a beneficiary to properly expect an order requiring an accounting. This might be the case, for instance, if a request for an accounting is made many years after the time by which it might have been expected that the administration of an estate would have been completed.

                        Every determination of reasonableness will, of course, always be fact-specific.

                        A side question not raised in Bryant Estate, was whether a party in the position of Franklin’s estate could also simply rely on the inherent jurisdiction of the Court of Queen’s Bench to secure an order for an accounting. That specific question will therefore have to await the guidance of a future court.

                          James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc.

                          Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

                          Read more on our blog.

                          The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

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                          Estate Litigation Update: Munro v James, 2020 BCSC 1348

                          A 2020 decision from the British Columbia Supreme Court makes clear that an agreement to leave a gift in one’s will, is a binding agreement. As such, if one breaches that agreement, the person can be held liable even during their life.

                          In Munro v James, 2020 BCSC 1348, the plaintiffs made an agreement with one Ms. James. Key terms of the agreement included:

                          1. The plaintiffs, Munro and Boughy, would pay Ms. James $100,000;
                          2. The plaintiffs would take care of her farm and ponies for the remainder of Ms. James’ life;
                          3. In exchange for this, the plaintiffs would be allowed to live at the Ms. James’ property, and build a home on the property;
                          4. Moreover, the plaintiffs would be entitled to Ms. James’ estate when she passed (the above terms are the “Contract”)

                          The plaintiffs did indeed move to the James property and took up the tasks involved in managing the farm.

                          Eleven years later, James changed her mind about the Contract. She said she was unhappy with the plaintiffs’ management of her farm. She notified them that she was naming someone else as her beneficiary and gave them 3 months notice that she was terminating the Contract. She then changed her will, naming a friend as the beneficiary.

                          The plaintiffs brought a claim against James, relying on the Contract

                          The Court’s decision  in Munro:

                          The court held that the literal meaning of the Contract was clear: the parties agreed that the plaintiffs would inherit James’ estate upon her death.

                          The Court also affirmed that the law would award specific performance for this Contract by James. Specific performance basically refers to a declaration by the court compelling a party to perform its contractual obligations.

                          The Court said that James had made an anticipatory breach of the Contract. That is, even before her obligation had fallen due, she had repudiated her obligation, without justification. Since the Plaintiffs had substantially performed their side of the Contract, James must do the same. The court made a thorough examination of the plaintiffs’ actions and concluded that they had held up their end of the Contract. 

                          Remedy imposed by the Court in Munro:

                          As such, the plaintiffs were entitled to specific performance, being an entitlement to receive Ms. James’ estate on her death. The Court also ordered:

                          1. That the subject property could not be further encumbered or disposed of without consent of the plaintiffs or order of the Court; and
                          2. That the judgment and a related mortgage between the parties to be registered on title among other things.

                          Contracts to make testamentary dispositions:

                          The decision in Munro offers an opportunity to review prior Canadian decisions on promises to leave testamentary bequests.

                          The overriding principle which emerges from prior cases is that, if the plaintiff can prove the existence of the agreement, the Court will enforce it. Typically, prior decisions arise from situations of a laborer, who has worked for the testator in reliance on an oral promise that the testator will leave them certain property in their will. Often, the property at issue is some piece of land or a home.

                          The Statute of Frauds can offer hurdles to the enforcement of a verbal agreement in relation to land, unless there has been part performance. That is, there must have been actions by the plaintiff, which are  unequivocally in relation to the specific land in issue. If the Court is satisfied that the agreement has been proven, then the Court will typically order  specific performance of that agreement.

                          In Briese v. Dugard, 1936 CarswellMan 8, [1936] 1 W.W.R. 193 (MB CA), one Mr. Streich offered to leave to the plaintiff his house, property, furniture and one half of his money, left after paying his debts, if the plaintiff should keep house for him and look after him until his death, in a manner satisfactory to him. The letters containing the offer could not be produced.

                          The plaintiff accepted the offer and kept house for Streich for 14 months. Then, on September 26, 1934, Streich made a will making said provision for her. The will also provided that the devises and bequests to her should be null ad void if she “shall leave me and cease to care for me.”

                          On February 5, 1935, plaintiff and Streich had a brief quarrel and the plaintiff left his house. On that day he made a new will which made no mention of her. On the second day after she had left him Streich realized he had made a mistake, and asked plaintiff to return. The plaintiff did so and continued her duties as housekeeper and nurse until Streich ‘s death. No wages were ever paid to the plaintiff.

                          The second will (which left the plaintiff nothing) was the one admitted to probate. The plaintiff sued for specific performance of the contract. The Court of Appeal held that the departure of the plaintiff from Streich’s house was not a breach of the contract which had put an end to it. Rather, it was Streich who considered himself in the wrong.

                          The Court held that the parties had affirmed the contract as strongly as they could by conduct. If any memorandum was needed to satisfy the Statute of Frauds , it was supplied by the above-referred-to clause in the will, which had said that the gift would be void if the plaintiff would “leave me and cease to care for me.”

                          The Court made clear its sense that fairness required enforcement of the agreement:

                          40      The plaintiff Briese was not employed for wages either fixed or on a quantum meruit . Unless she can have the house and half the money in the bank she will get nothing. She performed her part in full, and the deceased carried out his promise to the letter, but at the last repudiated it without any valid reason for doing so.

                          41      I would direct the entry of judgment for the plaintiff against the executor for specific performance of the contract to convey to the plaintiff the house and furniture.

                          For example, in Davidson Estate, Re, 1947 CarswellNB 13, 20 M.P.R. 53 (NB CA), an older man had arranged with another woman, to provide housekeeping services for him in his home.

                          The man did not pay her wages, but only some occasional money for herself. In 1938, the man made a will in which he gave the woman the home in which he lived, and the sum of $1,000. He showed the will to her at that time. She said that $1,000 was too small for all the work she had done, but $3,000 would be agreeable. The man agreed, and therefore wrote out the following and signed it:

                          This is to certify that Thomas Davidson at his death has willed Isabelle Johnson his present dwelling house on Carleton Street and Three Thousand Dollars in money.

                          After his death, the woman’s claim to $3,000 was disputed. A beneficiary suggested that the document had been altered, and $3,000 had been improperly inserted for $1,000.

                           The court agreed with the woman, and found no evidence of alteration. Thus, she was entitled to the full $3,000. What is especially interesting, is that the Court in Davidson explicitly affirmed that a contract to leave property by will, is enforceable if it can be proven:

                          6      There is no doubt that a contract to leave a sum of money by a will if satisfactorily proved is enforceable: Ridley v. Ridley (1865), 34 Bev. 478; Briese v. Dugard, [1936] 1 D.L.R. 723; Smith v. McGugan, 21 O.A.R. 542.

                          Finally, in Brownscombe v. Alberta (Public Trustee), 1969 CarswellAlta 31, [1969] S.C.R. 658, the claimant had worked for some 26 years for a disabled farmer. The claimant received little in the way of wages during the whole period but relied on repeated oral promises that the farmer would leave the farm by will to the claimant.

                          The farmer later died without a will. There was no written contract. The Supreme Court however held that the contract had been partly performed, and thus could be enforced, and property given to the claimant.

                          In short, for persons who have provided labor in response to a promised testamentary gift, the law will provide a remedy. Depending on the specific facts, such remedy would likely be available  under  a combination of contractual rights, proprietary estoppel or unjust enrichment.

                          Lessons offered by Munro:

                          Munro is unique, in that few (if any) prior decisions involve a court proceeding which was brought while the testator is still alive.

                          Munro shows that such a contract is enforceable, should the testator attempt to violate the contract. In other words, the person will be held to their promise, and lose any testamentary autonomy to decide what will happen to their estate.  

                          From a practical view, a contract to receive property under the will of another person is not always an ideal way of proceeding. First, it is subject to various uncertainties:

                          1. For example, what if the “testator” falls on hard financial times, and is required to dispose of certain property during their lifetime (after all, a Will operates from the date of death, and only governs what property exists as of death);
                          2. Second, what if they go rogue and make a new secret will without disclosing it (such a will could be challenged, but that  takes time and money to do so);
                          3. Third, unless the agreement is carefully documented, providing its terms in court may take time and expense. A common thread throughout most cases of contractually promised bequests, is that the underlying agreements were drawn up without lawyers (or never put in writing at all).

                          Thus, in a perfect world, a labourer would instead insist on a lawyer-drawn contract, which provided for specific value to be exchanged by the other side, during the lifetime of the other party. However, all lawyers find their client’s situation as they come. Moreover, it may be that the person one is dealing with, will not agree to anything but a promise to leave property by their will.

                          Thus, for such circumstances, the outcome in Munro proves that a valuable judicial remedy exists for those who have been promised property under the will of another person. While Munro was a decision of a British Columbia court, there appeared to be nothing in it that was specific to British Columbia law or legislation. As such, it would be open to other Canadian courts to follow its lead.

                          Saskatchewan Estate Litigation Update: Nelson v Wagner, 2021 SKQB

                          A very useful lesson comes in the recent Saskatchewan decision in Nelson v Wagner. The decision offers guidance on when a court will override claims of solicitor-client privilege, and disclose the file of the solicitor who dealt with a testator.

                          In Nelson, the applicants had commenced a proceeding in which they allege undue influence on the part of John James Nelson in respect of both a will and a transfer of land by Hazel Nelson, deceased.

                          The applicants sought the solicitor’s file of James Turner, the lawyer who had prepared the will. Such a disclosure request is common, as the solicitor’s file notes or materials will often provide helpful evidence on the intentions of the deceased. Such evidence can assist the Court in determining the intention of the testator.

                          Counsel for James Turner, said that Turner could not disclose the contents of his file, without a court order directing Turner to do so, because to do otherwise would breach solicitor‑client privilege.

                          Counsel for Turner did acknowledge the “wills exception” to solicitor-client privilege, which posits that privilege may be overcome where such disclosure will help determine the true intentions of the testator. However, Mr. Turner argued that unless and until the court has first directed a trial of the issue of undue influence, the wills exception does not permit the disclosure order sought.

                          The applicants disagreed, and wanted the solicitor’s file released now, before the Court had decided whether to order  a trial. The applicants said that it was appropriate to disclose it now, because the solicitor’s file itself might reveal evidence which would assist the court in deciding whether to direct the trial of issues in the first place.

                          Outcome:

                          The Court agreed with the applicants and ordered the release of the solicitor’s file. The Court reasoned that to do so would further the interests of the deceased client because the evidence would help the Court ascertain what his or her true intentions were.

                          The Court did recognize that an applicant would need to show more than a mere allegation of undue influence. However, here, there was already significant evidence of undue influence that went beyond a mere allegation. The Court held that as long as there were credible allegations of undue influence, then the appropriate threshold to order disclosure, will have been satisfied:

                          [13] I do not disagree that there is an initial threshold requirement that should be met before a court orders production of a file that may be subject to solicitor-client privilege. However, that threshold requirement is not that this court must first decide whether or not to direct a trial of the issue regarding undue influence. The two‑step process argued for does not require that I first direct a trial of the issue of undue influence. So long as there are credible allegations of undue influence, as there are here, then in my opinion the appropriate threshold has been satisfied. The production, in advance of the decision whether or not to order trial of such an issue serves Foundational Rule 1-3(3)(a), which states:

                          (3) To achieve the purpose and intention of these rules, the parties shall, jointly and individually during an action:

                          (a) identify or make an application to identify the real issues in dispute and facilitate the quickest means of resolving the claim at the least expense; … .

                          The Court noted a number of reasons in favour of production of the file:

                          1. Early disclosure of the file may significantly assist counsel on whether or not to order trial of the issue of undue influence;
                          2. If all parties have this information early on in the process it may result in settlement;
                          3. If not, it will surely serve the purposes of having the claim justly resolved in a timely and the most cost effective manner.

                          For all of the above reasons, the Court ordered that the file was to be disclosed forthwith.

                          Lesson offered by Nelson v Wagner:

                          To understand the full implications of Nelson, we must  understand the context of a will challenge under  Saskatchewan law.

                          Typically, the challenger of a will must go through a two step process:

                          1. Stage 1: The challenger must show that their challenge has raised a genuine issue of capacity or coercion, and is not mere speculation or a fishing expedition;
                          2. Stage 2: If the court finds there is a genuine issue, the court will set the challenge down for a trial process, to be determined by a trial.

                          In Saskatchewan, it is not uncommon for a defender of a disputed will, to initially resist giving up the solicitor’s file to a challenger. The defender (as occurred in Nelson) will argue that it is premature to disclose  the privileged will file, until the challenger has passed stage 1, and actually proven a genuine issue.

                          This position can raise difficulties for challengers, as it can pose a catch 22. If the most crucial evidence of incapacity or coercion may sometimes be in the solicitor’s file, how can the challenger best present their evidentiary case for stage 1, without first accessing the evidence in solicitor’s file.

                          Thus, Nelson clarifies that the challenger of a Will now has the opportunity to obtain the solicitor’s file, before they have satisfied stage 1. All that appears to be required is that the challenger simply provide evidence raising “credible allegations” of incapacity or undue influence.

                          Contacting a Lawyer on this Subject

                          James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

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                          The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

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