COVID-19 Impact on Mediation & Rules of Civil Procedure

COVID-19 Impact on Mediation & Rules of Civil Procedure

As COVID-19 continues to cause uncertainty and while impacting the economy and our lives so deeply, many predict that this global pandemic will bring an increase in matters being litigated.

“My experience has been, in my practice, that significant global events are almost always followed by litigation, and I expect that COVID is no exception,” says Linda Plumpton of Torys LLP, the Canadian Law Awards Litigator of the Year for 2020. She goes on to say: “You look at the tech bubble bursting in the early 2000s, then the Great Recession in 2008 I

expect that the COVID trend will be similar, and we’re already seeing that play out in a number of areas. My own view is that we’re really just on the cusp of what will probably be years of litigation to follow.”

This is supported by Statistics Canada, which documents the number of civil court cases per year in Canada and in the provinces individually. For Ontario, prior to the Great Recession in 2008, there were 259,374 initiated cases in 2007-2008. In the two years that followed,  initiated cases went up to 276,396 and then to 283,378. With an expected rise in litigation, mediation should be a considered forum for parties to resolve their legal matters before trial.

Mandatory mediation: Estates, trusts and substitute decisions

 Rule 24.1.01 of the Ontario Rules of Civil Procedure (the Rules) states: “This Rule provides for mandatory mediation in specified actions, in order to reduce cost and delay in litigation and facilitate the early and fair resolution of disputes.”

These specified actions are further explained in Rule 75.1. In fact, for the City of Ottawa, the City of Toronto and the County of Essex, mediation is already mandatory for estates, trusts and substitute decision  matters under Rule 75.1.

Rule 75.1 states that, except in a contested Passing of Accounts, the applicant shall make a motion, in the same way as under R. 75.06 (which is an Application or Motion for Directions), seeking directions for the conduct of the mediation. Rule 75.1.05(2) states that the Notice of Motion for mediation directions is to be served within 30 days after the last day for serving a Notice of Appearance, and the motion may be combined with other motions.

Changes due to COVID-19: September 2021

 The Rules largely remain the same for mediation with some interesting changes allowing for remote mediation. Prior to these changes, mediation was in person. This was an accepted practice, and any other form of attendance may have required a judge’s permission or threatened to halt settlement discussions. Now the  reference to in person has been revoked, allowing for virtual/remote mediation. A necessary change to permit mediations to continue as we navigate this pandemic.

On Sept. 21, 2021, the definition of “designated party” in Rule 75.01.03 will be amended by striking out “in person.” (0. Reg. 526/21, s. 3)

On Sept. 1, 2021, Rule 75.l.05(4)(d) was revoked. It originally stated that on hearing of the motion under rule 75.1.05, the motion seeking direction respecting conduct of the mediation, the court may direct: “d)  which parties are required to attend the mediation session in person, and how they are to be served;” The following is now substituted: “(d) which parties are required to attend the mediation session, the method of attendance and the manner of service;” (See: 0. Reg. 526/21, s. 4.)

Mediators should also note the change to sub rule 75.1.07(7) which states: “The mediator shall, immediately on being chosen or assigned, fix a date for the mediation session and shall, at least 20 days before that date, serve on every designated party a notice (Form 75.1B) stating the place, date and time of the session and advising that attendance is obligatory.” On Sept,1, subrule 75.1.07 (7) of the Regulation was amended by adding “and the method of attendance” after “the place, date and time of the session.” (0. Reg. 526/21, s. 5)

Benefits of mediation

 The benefits to mediation are countless. They include allowing clients greater involvement in the agreed upon settlement, confidentiality and certainty of the result. The main benefit to mediation is that clients will have an opportunity to settle and move on to the next chapter in their lives. Even if the parties do not come to a settlement, mediation allows for both sides to better understand the adverse position which increases the likelihood of settlement later in the litigation.

In times of uncertainty like a pandemic, mediation brings certainty. Now that mediations are permitted to be remote, they have become more accessible, and more parties should consider mediation even if it is not mandatory for them.

Estate COVID problems part two: The importance of a will

Estate COVID problems part two: The importance of a will

A common  theme executors  and loved ones are faced with is when their loved one dies without a will, also called dying intestate. In the first article in this series we wrote regarding the intestate succession process when a person dies without a will. Many issues arise when one dies intestate and family members may find themselves in litigation.

As of today, COVID-19 has killed over 2.35 million people worldwide. In these unprecedented times, it is imperative to consider estate planning so loved ones are left with a clear plan as to the administration of an estate and can take advantage of any tax savings. A will is a crucial aspect of estate planning.

COVID-19: Remote execution of will

Prior to the COVID-19 pandemic, a testator was required to have their will witnessed in the physical presence of two people. The government of Ontario responded to the COVID-19 pandemic with the regulation for Signatures in Wills and Powers of Att orn ey. This regulation allowed for the use of videoconferencing for witnessing and allowed for signatures to be signed in counterpart .

It is important to note that virtual  witnessing  is only  permitted  for a specific time period, which has been extended numerous times. Currently, the use of virtual witnessing has been extended to March 21, 2021 and it will likely be made permanent with the new legislation brought by the Attorney General, Doug Downey.

Affidavit of Execution

The Affidavit of Execution of Will or Codicil Form 74. 08 has also been amended effective Jan. 1, 2021. Here is the new form.

Advantages of a will: Estate trustee appointed

The advantage of drafting a will, other than having a clear roadmap of how assets should be handled and distributed, is the appointment of an estate trustee. In fact, the will itself (considered a ” living document “) bestows the power to the estate trustee to administer the estate.

Is probate required? 

It is a misconception that probate (applying for a Certificate of Appointment of Estate Trustee)  is always required. There are many scenarios where probate becomes necessary, for example, to deal with real property (depending on how title is held). Another example is when a person dies without a will, and therefore, there is no document giving them the authority to administer the estate.

Depending on the scenario, probate may not be necessary to administer an estate. There is a notable savings in both legal fees and the Estate Administration Tax (EAT) if probate is not needed.

If  an estate trustee decides to  apply for probate (with or without a will), they  will be required to pay an EAT which is 1.5  per cent of the value of the estate (defined as “all assets owned by the estate”). It is calculated as $15 for every $1,000 of the value of the estate for estates over $50,000.

As of Jan. 1, 2020, there is no EAT for estates valued at less than $50,000.

Exceptions: Primary/secondary will

 There are a few exceptions to the EAT encompassing the value of the estate –   which is when having an estate planner is an asset. As per the government website: “If the deceased had multiple wills and the court issues  a Certificate  of Appointment  of Estate Trustee  with a  Will Limited  to  the  Assets Referred to in the Will, only assets included in that specific will can be included in the value of the  estate .”

There are instances when a person dies  with  more than one  will, known as a  primary  and secondary will. This is done  so that the primary  will may  be probated  (and taxes paid on these  assets)  whereas the secondary will is not probated (taxes are not paid on these assets).

This is usually done when there is a large estate and certain assets require probate to be dealt with upon death, such as real property, and others do not require probate but require direction as to who should inherit them, such as artwork, vehicles, Royal Daulton collectibles.

Not taxed: Real property outside Ontario

 There are assets that are not subject to EAT such as: real properties outside Ontario, a beneficiary designation in a life insurance policy, RRIF, RRSP, TFSA (this is because it passes outside of the estate) and debts owed by the deceased.

This is a general overview of some key takeaways regarding the importance of an estate plan and the benefits of a will. These issues are even more important during COVID-19 and individuals may wish to take advantage of virtual options while they last.

There are some certainties in life and, while no one likes to think about them, they remain: death and taxes.

This is the second of a two-part series.

Estate COVID problems: The rogue trustee

This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.

Estate COVID problems: The Rogue Trustee

A common theme in an administration of any estate is the breakdown of relationships between family members. Sometimes the estate trustee takes it upon themselves to make distributions that are not pursuant to the will or intestacy laws. It could be because they feel that they deserve more money over the other beneficiaries. Whatever the reason, an estate trustee should never endeavour to change the distribution as set out  in a will or on intestacy laws without a court order.

Beneficiaries of a will or under intestacy who have not been given their inheritance because of an estate trustee’s conduct have recourse. This series of articles looks to address the problem: “I  am a beneficiary  of a will but I have not received my gift,” or “what do I do if the  estate trustee  is not distributing according to the will?”

No probate

If the beneficiary learns that they will not be receiving a gift before the estate trustee has applied for probate, then the beneficiary may file to the court a Rule 75.03 Notice of Objection to  the  estate  trustee’s appointment. Essentially, the beneficiary would object to the estate trustee from obtaining the certificate of appointment because of the estate trustee’s conduct or conflict, which would interfere with them being able to act impartially among all beneficiaries (this is the even-hand rule).

The role of the estate trustee requires the trustee to serve the  estate. If the estate trustee is unable to act neutrally and honour the last wishes of the deceased, or the laws of intestacy, then the beneficiary has a strong case to seek the removal of the estate trustee . Just because an estate trustee is a creditor does not mean they cannot act neutrally . Should an estate trustee be deemed by the court to have breached their fiduciary duties, they may be penalized  with partially or fully reduced compensation, and in some instances forced to pay back the improper distributions to the estate with interest.

Duty to account

If the estate trustee has been appointed, either they obtained a Certificate of Appointment with or without a will, or were appointed in the will, then they have a duty to account to the  beneficiaries. This means that the estate trustee must keep accurate records of the assets and transactions of the estate. The beneficiaries are entitled to see all the monies going in and out of the estate.

If  the estate trustee is delaying distribution  because they do not  want to  distribute to a beneficiary, or if they are not reporting anything to a beneficiary, or if a beneficiary suspects that they are not getting what they are owed, then the beneficiary can obtain an order to compel the estate trustee to pass their accounts (Rule 74. l S(h)) . If the beneficiary disagrees with the accounting, then they can file and serve a Notice of Objection to the Accounts (Rule 74.18(7)).

Other options include s. 37 of the Trustee Act, which states that a party may apply for an estate trustee to be removed or Rule 75 . 06 where the beneficiary may apply for the directions of the court.

The bottom line is if someone is a named beneficiary in a will or on intestacy, then they have the right to claim their inheritance.

What is different with COVID?

Luckily, the courts have adapted with the times and are hearing matters via Zoom. Law offices have transitioned to providing services to clients virtually. Though the medium is different, the law remains the law.

More on COVID-era estate law in part two of this series.

Truths and Rumours During COVID-19 Crisis

 

Truths and Rumours During COVID-19 Crisis

The biggest problem writing about what lawyers should know during COVID-19 is that most of the information comes from social media, group email chains, or what you hear through the grape vine. There are also so many Notices it is hard to keep up!

Just like an affidavit – Where I make statements based on information provided by third parties, I will state the source of such information.  If I am not sure of the source – I will list this under rumours. If from a credible source, these will be listed as truths with link if needed.

I do focus on the Superior Court – but here are links to the OCJ, Federal Court, Court of Appeal,  and Supreme Court.

So without further adieu, let’s begin:

Where can I find the Notice to the Profession for Superior Court?

The Ontario Superior Court Website in “What’s New.”

When will the Ontario Superior Court open?

Truth – The Superior Court has suspended hearings but is not closed. It is still “open.” According to the Notice to the Profession, effective May 19, 2020: The Ontario Superior Court of Justice suspended regular operations as of Tuesday, March 17, 2020. Small Claims court proceedings are suspended.

Given the on-going public health situation due to COVID-19 and the uncertainty as to when it will be safe to return to courthouses, the SCJ:

  1. Will not resume in-person hearings of any court matters until July 6, 2020, at the earliest.  It will, however, continue to hear matters virtually, and expects to shortly further expand the scope of matters that will be heard virtually.
  2. Will not recommence criminal or civil jury selection or jury trials until September, 2020at the earliest.”

When will my matter be re-scheduled?

Truth –  Appears to depend on the matter and location of court.

If it is a non-urgent matter the Superior Court has announced that starting April 6, 2020, they will start hearing other matters (in addition to “urgent” matters). The information appears to differ based on the region of the court.

The PDF Toronto Estate List is pasted below and click here for the link to the commercial list.

Toronto Estate List – matters scheduled after March 15, 2020 are adjourned until after June 1, 2020 and not currently being rescheduled. A further update to Changes to the Commercial List was made on May 5, 2020 with general remarks and suggested protocols found here.

Toronto Commercial List – same as above, rescheduled after June 1, 2020, but the courts will contact counsel to indicate rescheduling.

Rumour – It seems likely that the courts will be adjourning until at least after July 6, 2020 if your matter doesn’t fall into the “what they are willing to hear after April 6, 2020”.

Can I still file my materials?

Truth – According to the Consolidated Notice for Procedures Governing Civil and Family matters: “For matters that are not “urgent” or have not been identified to be dealt with in a Region’s Notice, counsel and parties are discouraged from physically attending courthouses to file documents in person.  Parties should file Claims or Statements of Claims, Statements of Defence or certain other civil Pleadings through the Civil Claims Online Portal for Superior Court civil matters. Plaintiff’s Claims in Small Claims Court matters should be filed through the Small Claims Court online filing service.  Limited family proceedings can also be filed electronically through the Ministry of the Attorney General’s website for filing divorce applications.”

The courthouses seem open – but ask you not to go in. They want you to file online. Check your region.

Toronto Estates List – materials can be filed and these include: Notices of Application will be issued but with a date “to be fixed by Registrar,” Notices of Objection, probate/Certificate of Appointment Applications, motions for consent, ex parte orders.

Rumour – Toronto Estate List asking you to serve by regular mail. Some have had success filing in person.

Some courts seem to be accepting by regular mail, others file online, others say their limited hours to receive filings are for urgent matters only if approved by a judge. Best way to move forward would be to email your court co-ordinator.

Can I get an Application Date?

Truth – As stated above, Notices of Application will be issued but with a date “to be fixed by Registrar”

Rumour – It is unknown whether the courts will reach out to Applicants to set a date or if the Applicants are expected to contact the court to seek a date. It is expected these dates will be very far in the future.

Why have there been so many notices?

Truth – Things are evolving quickly. Here is the Notices no longer in effect.

What about limitation periods?

Truth – in an unprecedented move, limitation periods are suspended and retroactive to Monday, March 16, 2020. Click here for the link. Please note: the Construction Act is exempt.

Can a judge still sign a consent order?

Truth – appears yes, though depends on your court region and matter.

Rumour –  It seems to be that if you email the trial co-ordinator, they will point you in the right direction. The concern is that it may require drafting a whole motion record just to get a draft order signed, but it seems to depend on what the trial co-ordinator says, the court, and the matter.

What matters will be heard?

Truth – Your matter must still be URGENT! Or fall under the accepted matters being heard. The process for your matter to be heard, again depends on your court and this part is detailed very clearly on the Notice. A helpful article for what is deemed urgent can be found here.

As per the Responsibilities of Lawyers and Parties: “During this temporary suspension of in-court operations, counsel and parties are expected to comply with existing orders and rules of procedure, as well as procedures in this and other Regional Notices, to bring cases closer to resolution, to the extent they can safely do so through virtual means.  This guidance also applies to self-represented parties.

For example, where it is possible through virtual means to comply with procedural timelines, produce documents, engage in discoveries, attend pre-trials, case conferences and hearings, and respond to undertakings, those steps should be pursued.  Where COVID-19 has prevented lawyers and parties from fulfilling their obligations, they should be prepared to explain to the Court why COVID-19 has rendered compliance not feasible.”

Rumour – The courts appear to be more willing to hear general matters but it appears there is still a triage judge who approves what will be heard. Urgent still means urgent, some examples: if someone is dying, will be harmed or put in harm, will become homeless, serious financial harm or a matter directly related to COVID-19. You usually need to explain to the trial co-ordinator why your matter should be heard.

Can I commission an affidavit without being in the same room?

Truth – Yes. The Law Society has issued a helpful Q&A link here.

The best practice is to be in the same room, but as a result of COVID-19, the requirement that “every oath and declaration shall be taken by the deponent in the presence of the commissioner or notary public” is not requiring the lawyer or paralegal to be in the physical presence of the client. Commissioning via video conference will be permitted. It is up to the lawyer to manage these risks.

What about Wills?

Under s. 7.0.2(4), of the Emergency Management and Civil Protection Act, the Lieutenant Governor in Council made an order permitting virtual witnessing for wills and powers of attorney provided that at least one person who is providing the service as a witness is a licensee pursuant to the Law Society Act.

Executions of a will is allowed in counterparts: “Identical copies of the will in counterpart, which shall together constitute the will.”

Can I file an unsworn documents?

Truth: For urgent matters, the notice states that unsworn affidavits may be delivered but the affiant must be able to participate by phone/videoconference to swear/affirm affidavit.

Rumour: It seems for non-urgent matters, lawyers seem to be accepting a draft of an unsworn affidavit from the lawyer stating their client has reviewed the affidavit, confirms its truth and their client to swear the affidavit at a later time. However, see above, affidavits during this time may be commissioned without being in the physical presence.

What about identifying and verifying clients?

Truth – There is a difference between identifying and verifying clients.

There is no requirement to meet with a client face-to-face to identify the client.

Identification is for the purposes of taking instructions from your client and can be done over the phone, email, or video conference.

Verification is for the purpose of payment, receipt, or transfer of funds and requires face-to-face by you or another commissioner/guarantor to swear an attestation as to their identity. This is all on the LSO link.

Can I serve parties by email now?

Truth – The Rules of Civil Procedure are still in effect but lawyers are expected to act reasonably. A judge would likely think counsel’s refusal to accept service via email during this pandemic is not acting reasonably.

In Ali v Taraq, 2020 ONSC 1695 (Canlii)  dated March 19, 2020, Justice Myers allowed service to be made by email as effective service when sent, in his endorsement, without requiring a formal order or motion for this issue.

Can I serve the Crown by email, such as the PGT?

Truth – Yes. There has been an order changing how documents are served on the Crown, Ministers of the Crown including the Attorney General of Ontario, the Children’s Lawyer, the Public Guardian and Trustee and the Director of the Family Responsibility Office has been issued under the Emergency Management and Civil Protection Act.

Effective immediately, the following documents for any civil (non-criminal) proceeding, administrative proceeding or intended proceeding must be served by email until further notice to:

  • cloc.reception@ontario.ca for originating processes (e.g., a notice of claim, a statement of claim, a notice of application or other document that initiates a proceeding) to be served on the Crown or any Minister of the Crown including the Attorney General of Ontario
  • clbsupport@ontario.ca for a Notice of Constitutional Question to be served on the Attorney General of Ontario
  • frolegalservice@ontario.ca for any legal document required to be served on the Director of the Family Responsibility Office
  • OCL.LegalDocuments@ontario.ca for matters required to be served on the Children’s Lawyer including service on any other person where a document must be left with the Children’s Lawyer
  • PGT-Legal-Documents@ontario.ca for matters required to be served on the Office of the Public Guardian and Trustee including service on any other person where a document must be left with the Public Guardian and Trustee
  • the email address of the counsel of record for the Crown, Minister, Family Responsibility Office, Children’s Lawyer or Public Guardian and Trustee in any ongoing proceedings (for any documents other than originating processes)

Emails should less than 10MB and must include the sender’s name, address, telephone number and email address.

Order is below.

Are evictions suspended?

Truth – Eviction orders have been temporarily suspended on March 19, 2020 until further notice. “Tribunals Ontario will not issue any new eviction orders until further notice.”

What else should I do or know?

Truth – Follow your court on twitter – the Superior Court of Ontario handle is @SCJOntario_en

There are some great online programs offered by the community (organizations like TLA, OBA, and Advocates Society) to get your CPD hours.

I’m doing virtual coffee meetings – if you want to chat on zoom, feel free to reach out!

Stay home. Stay safe.

I’m sure I’ll be updating you soon.

 

Estate List Notice:

Changes to Toronto Region Estates List Operations in Light of COVID-19, March 23, 2020

  1. In accordance with the Notice to the Profession issued by Chief Justice Morawetz, March 15, 2020, all regular matters which have been scheduled and are not urgent, or time sensitive, are adjourned to after June 1, 2020 and are not currently being rescheduled, subject to any further direction from the court.
  2. The judges of the Estates List will continue to hear and decide urgent and time sensitive matters. The procedure for urgent matters on the Estates List is the same as the procedure for urgent matters on the Commercial List and will be in accordance with the procedure set out in the Changes to Commercial List Operations in Light of COVID-19 March 16, 2020 advisory, with necessary changes. For greater certainty, all urgent requests and materials on the Estates List should be sent to the Commercial List trial coordinator at Toronto.commerciallist@jus.gov.on.ca.
  3. There is no change to the usual procedure for filing materials in matters that are to be considered by the court in writing, including motions for consent orders and ex parte orders. Materials for matters to be heard in writing may still be filed at the Estates Office, subject to any further direction of the court.
  4. Applications for Certificates of Appointment are still being accepted and processed by the Estate Office.
  5. Notices of Application (Forms 14E, 74.44, and 75.5) will continue to be issued by the Estates Office but instead of fixing a return date the Notice of Application shall indicate that the matter will be heard: “on a date to be fixed by the Registrar.”
  6. Notices of Objections (Form 75.1) may be filed in the Estates Office as usual.

Order for Service via Email to Crown