Evidence in Estate Litigation

You are currently browsing the archive for the Evidence in Estate Litigation category.

End Of Life Decisions – Do Doctors Have The Right To Decide?

November 11, 2011 in Applications for the Opinion and Direction of the Court, Elder Law, Evidence in Estate Litigation, Halacha and Estate Litigation, Public Policy & Estates by Charles Wagner

Mr. Rasouli was in a permanent vegetative state. Fed through a tube inserted into his stomach, he was only being kept alive by a mechanical ventilator.  Believing there was no realistic hope of recovery the doctors wanted to remove his life support. His family said no.  Who has the right to make these decisions? 

The doctors suggested that they do.   The family disagreed.

As Shia Muslims, Mr. Rasouli’s family believed that as long as a person was alive everything should be done to prevent death.  Accordingly, they opposed the doctors’ plan to withdraw the mechanical ventilation. 

This case was first heard by Madam Justice Himel of the Ontario Superior Court of Justice (FN1).  It was appealed to the Ontario Court of Appeal (FN2).  Now leave is being sought to have the matter heard by the Supreme Court of Canada.   Thus far, the courts have sided with Mr. Rasouli’s family.  This case depends on the definition of “treatment” in the Ontario Health Care Consent Act (FN3) (the “Act”) and the steps set out by the Act to resolve disagreements between doctors and substitute decision makers about treatment plans.  Let’s review the law.

The Act provides that medical treatment shall not be administered without the consent of the patient.  If the patient is not capable of giving consent, the treatment must be approved by the person appointed as the patient’s substitute decision-maker.  Sounds simple?  It’s not. 

Key to the Court’s review is the legal meaning of the word “treatment”(FN4).  Also fundamental to the decision making process are the real wishes of the patient.  The substitute decision-maker’s wishes were unimportant – it’s what the patient wanted to do that is key.

The doctors argued that, in this context, “treatment” as defined in the Act does not include the withholding or withdrawal of treatment that had no medical value to the patient. Hence, the withdrawal of such treatment could be done without the patient’s consent. The doctors argued that the Act merely enshrined the common law which recognized a doctor’s right to withhold or withdraw treatment.  The doctors further argued that according to the common law they were not permitted to continue “inhumane” treatment even if the patient or his substitute decision-maker demanded it.  What did they mean by “inhumane”?  In my review of similar cases, and paraphrasing some of the arguments, it seems that in this situation the doctors may feel that continuing unnecessary treatment diminishes the quality of life of the patient and exposes him to gratuitous discomfort and indignity.  It is the extension of death – not life and they argue is inhumane (FN5).

There was some sympathy at the Ontario Court of Appeal for this position.  While they dismissed the doctors’ appeal the Court recognized that their position was serious and warranted careful consideration.

Let’s examine why they sided with the Rasouli family.  There are a number of definitions relating to “treatment” in the Act and both the Superior Court of Justice and the Court of Appeal pointed out that the definition of a “plan of treatment” involved “… the withholding or withdrawal of treatment in light of the person’s current health condition”.  Moreover, given that Mr. Rasouli’s wishes were not known, the Act allowed the doctors to apply to the Health Care Consent and Capacity Board to disregard the substitute decision-maker’s decision to maintain life support. At issue before the Board would be what was in the best interests of the patient. 

The court decisions will likely only delay the argument as to who has the right to decide.  Both the doctors and the Rasouli Family have a right to appeal to the Ontario Superior Court of Justice the decision of the Board on questions of law or fact. On an appeal, the court is authorized to exercise all the powers of the Board, to substitute its opinion for that of a physician, a substitute decision-maker or the Board or to refer the matter back for a rehearing. (FN6)

Why is this case so important to the Jewish community?

End of life issues have halachic implications.  Do we want a stranger whose views on end of life issues may not be in accordance with halacha to be the decision maker?  It is for this reason that both the Rabbinical Counsel of America (RCA) and Agudath Israel have drafted Halachic Living Wills.  I have written extensively on this topic and refer the reader to http://bit.ly/halivwill  This article canvasses the issues, reviews some relevant case and provide links to both the RCA and Agudath Israel precedents (FN7).  I caution the reader that these precedents were drafted for American jurisdictions.  Accordingly, anyone contemplating their use should review the halachic living will precedents with a competent lawyer in your jurisdiction to ensure they would be enforceable here.   

There is another issue relevant to all Canadians regardless of their religious affiliations.  Our health care system is in crisis.  Many say that it is underfunded and mismanaged.  At the initial hearing before Madam Justice Himel the hospital, separate and apart from the doctors, brought up the issue of limited resources.  At the hearing, their lawyer argued that hospitals could be overwhelmed with individuals with no hope of recovery remaining on life support for extended periods of time and thereby deny those who can be helped access to scarce resources.  This issue was not argued at the Court of Appeal, but it is an issue of importance.  Is the lack of funding a driving issue in this debate? 

This short review of the case law should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

Charles B. Wagner is a partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate, commercial and tax litigation.

 ___________________________________________________________

FN1.  Rasouli (Litigation Guardian of) v. Sunnybrook Health Sciences Centre 2011 CarswellOnt 1650, 2011 ONSC 1500, 105 O.R. (3d) 761, 231 C.R.R. (2d) 26.  An online version of the decision is available at Rasouli v. Sunnybrook Health Sciences Centre, 2011 ONSC 1500 (CanLII).

FN 2.  Rasouli (Litigation Guardian of) v. Sunnybrook Health Sciences Centre  2011 ONCA 482.  An online version of the decision is available at Rasouli v. Sunnybrook Health Sciences Centre, 2011 ONCA 482.

FN3.  See online version of the legislation provide by e-laws which can be found at Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A

FN4.  The Ontario Court of Appeal’s decision at paragraphs 19-24  review the relevant provisions with respect to the use of the term “treatment” under the Act.  See sections 1, 2, 10, and 21.  The Court of Appeal’s analysis is set out below.

20]      Of those provisions, the operation of s. 21 of the Act warrants brief explanation. It sets out the principles that a substitute decision-maker must follow in deciding whether to give or refuse consent to a proposed treatment on behalf of an incapable person.

[21]      Under s. 21(1)1., if the substitute decision-maker knows of a wish, applicable to the circumstances, expressed by the incapable person while he or she was capable, after attaining age 16, then the substitute decision-maker must abide by that wish and give or refuse consent in accordance with it. (Ms. Salasel accepts that that provision has no application in her husband’s case).

[22]      Section 21(1)2. applies where the substitute decision-maker is unaware of any such wish (as is the case here) or where compliance with such a wish proves impossible. Under those circumstances, a substitute decision-maker must act “in the incapable person’s best interests” in deciding whether to give or refuse consent to a proposed treatment.

[23]      Section 21(2) of the Act sets out various factors that a substitute decision-maker must take into account in deciding whether the proposed treatment is or is not in the incapable person’s best interests. Broadly speaking, those factors fall under two heads, one relating to the values, beliefs and wishes of the incapable person (s. 21(2)(a) and (b)), the other to the nature and medical value of the treatment proposed in the circumstances (s. 21(2)(c)).

FN5.  Please see Justice Cullity’s decision Scardoni v. Hawryluck, 2004 CanLII 34326 (ON SC) and in particular paragraphs  39 -50 where he reviews the concept of well being under section 21(2) (c) of the Act.  In this court case a decision of the Board was appealed to the court. The Board directed the family to consent to the removal of their mother from a ventilator. The family argued that by virtue of a power of attorney for personal care they were appointed as substitute decisions makers.  While the decision of the Board was overturned on the issue of “Best Interests” and “Quality of Life” Justice Cullity agreed with the Boards position when it stated, “We thought “well-being” involved more than mere life itself. The phrase is subjective as used because it was used in conjunction with the word “condition,” which connoted to us a more objective assessment of the status of a person’s illnesses and physical situation. “Well-being” includes considerations such as the person’s dignity and levels of pain.”

FN6.      Appeals to the Ontario Superior Court of Justice from decisions of the Board on questions of law or fact are permitted by section 80 of the Act. On an appeal, the Court can substitute its opinion for that of the doctor, the substitute decision-maker and or the Board.  Equally important the Court “may receive new or additional evidence as it considers just.”

FN7.     See the website provided by the Orthodox Union of  Orthodox Rabbis entitled “End of Life Issues – Halachic Resources and Forms”.  This is available on line at http://bit.ly/ouresrc and is an invaluable resource.  Please note that any precedent used has to be taken to a competent lawyer in your jurisdiction to determine if the forms provided are applicable to the particular client and specific jurisdiction.  Questions to be addressed include whether  there will compliance with the formalities of execution in the relevant jurisdiction and whether the requirement under the Halachic power of attorneys to consult a rabbi and be bound by his decision constitute a delegation?   If it does then is the Power of Attorney is invalid or is it saved by the concept of  “protector” as outlined in Waters; Law of Trusts in Canada? I have addressed some of these issues in an article “Are Halachic Powers of Attorney for Personal Care Binding in Ontario?” which can be found at http://bit.ly/halivwill

A Trustee Is Not Entitled To Use Trust Property For His Own Benefit

March 29, 2011 in Applications for the Opinion and Direction of the Court, Costs, Costs in Estate Litigation, Evidence in Estate Litigation, Executors / Trustees, Passing of Accounts and Executor's Fees, Public Policy & Estates, Retirement and Removal of Trustees, Unjust Enrichment, Constructive Trust and Quantum Meruit Claims in Estates, Variation of Trusts by Charles Wagner

 Justice Strathy of the Superior Court of Justice ordered that Mr. Zimmerman repay nearly $500,000 in compensation he took as an attorney for property (FN1).  The judge also ordered that he personally pay the legal costs of the other side amounting to $284,362.19 (FN2).    What happened?

 Let me first introduce you to Robert and Signe McMichael.  During their lives they collected Canadian art from artists like Tom Thomson and the Group of Seven members. In 1964 they donated their art collection to the province of Ontario and by 1981 the Collection had grown to include more than 2,000 artworks. This Collection is truly a Canadian national treasure. (FN3).

In 2001 Robert and Signe McMichael made mirror wills (FN4).  Both husband and wife left everything to each other.  Signe’s Will, (like her husband’s) said that if her spouse predeceased her, then when she died, Signe’s assets would be donated to the Collection.   Mr. McMichael died in 2003 and his assets were inherited by his wife. 

 After her husband’s death, Mrs. McMichael signed a power of attorney appointing Mr. Zimmerman as her sole attorney for property.   In early 2004 Mr. Zimmerman’s lawyers prepared a trust document appointing Mr. Zimmerman as the trustee.  Mr. Zimmerman then transferred virtually all of Mrs. McMichael’s assets including the art collection into the trust so that there was virtually nothing left in her estate. 

 Under this new trust, Mr. Zimmerman had sole and unfettered discretion to decide which art related organization would receive Signe’s assets years after her death.  Effectively, the new trust rendered the Will meaningless. Instead of inheriting everything immediately after Signe’s death, the Collection would get nothing.  If the new trust went unchallenged it was totally up to Mr. Zimmerman to decide whether the Collection would receive any of Signe’s assets.

 When Mrs. McMichael died in 2007 her niece and husband, the executors under the Will, commenced a legal proceeding.  They asked the court to declare that the Power of Attorney and the Trust were void on the ground that Signe lacked capacity.   They also wanted Mr. Zimmerman to pass his accounts in a separate proceeding. 

 The only issue before Justice Strathy was Mr. Zimmerman’s passing of accounts.  To pass his accounts Mr. Zimmerman had to show what assets of Signe’s he received and how the money under his control was spent.  As an attorney for property it was Mr. Zimmerman’s statutory and common law duty to keep proper accounting records and proof/vouchers to demonstrate that the money spent was for the benefit of Mrs. McMichael.  This duty is imposed on trustees because it is a basic fundamental principle of trust law that Mr. Zimmerman, as a trustee, was not entitled to use the trust property for his own personal benefit.  If Mr. Zimmerman did use Signe’s assets for his own personal benefit or if he could not account or explain to the court how he spent the money then he would be liable to return it.

 When Mr. Zimmerman tried to pass his accounts the fireworks started.

 Whatever accounting that was provided was incomplete.  Mr. Zimmerman could not or would not provide proper explanations about how he spent the money.  The court found that Mr. Zimmerman breached his fiduciary duties and failed to exercise his powers and duties diligently, with honesty and integrity and in good faith, for the incapable person’s benefit.  Mr. Zimmerman did not comply with his obligation to keep proper accounts and was not in a position to prove that he administered the trust prudently and honestly. He did not have the accounts ready and was not able to give full information when required. 

 Mr. Zimmerman infuriated the court because he failed to respond to appropriate objections to his accounts.   The judge drew an adverse inference that by failing to respond properly to the questions raised by the Collection and the estate trustees Mr. Zimmerman was guilty of taking the money for himself and would be required to reimburse the estate for those disbursements and expenses (FN5).

 This short review of the case law should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

 Charles B. Wagner is a partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate, commercial and tax litigation.

 _______________________________________________________________________________________

FN1.  Please see Zimmerman v. McMichael Estate  2010 CarswellOnt 3481, 2010 ONSC 2947, 57 E.T.R. (3d) 101, 103 O.R. (3d) 25 and in particular paragraphs  29 and 88 and 90 for the proposition that a fiduciary may not profit from his role, paragraph 30 for the fiduciary’s duty to account, and paragraphs 35,43 45, 49 and 89. 

 

FN2.  Please see the second Zimmerman decision.  The first was decided on May 20, 2010 and cited in FN1.  The second was decided on October 4, 2010  and can be found as Zimmerman v. Fenwick 2010 CarswellOnt 8372, 2010 ONSC 5452.

FN3.  Robert and Signe McMichael  founded  the Collection,. Some of the history of the Collection, is described in the judgment of the Court of Appeal in McMichael v. Ontario (1997), 36 O.R. (3d) 163, [1997] O.J. No. 4661 (Ont. C.A.), leave to appeal refused, (S.C.C.)..  Their website can be found at http://www.mcmichael.com/

FN4.  It is important not to confuse the terms “Mirror Wills” and Mutual Wills.   Mirror Wills are identical to one another.  Mutual Wills creates an agreement which equity enforces that the wills will not be changed.   I refer you to the explanation of Histrop, Estate Planning Precedents which excerpts from Canadian Forms of Wills, 4th ed. BY Terence Sheard and the late Rodney Hall,  “  Although a will is by its nature revocable, a testator may, by agreement, create equities in his assets that will be enforceable against those who derive title from him (Dufour v. Pereira (1769), 1 Dick. 419; Stone v. Hoskins, [1905] P. 194; 39 Hals., 3rd ed., p. 851; see also Re Hagger, [1930] 2 Ch. 190). The commonest manner in which such equities are created is through the making of joint or mutual wills  but the mere fact that two wills are made in identical terms does not of necessity imply any agreement to constitute equitable interests so as to, in effect, make the will of the survivor irrevocable” .

FN5.  The finding of an adverse interest is very important with respect to accounting.  Under the common law section 32(6) and 42 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30  and under the regulations Accounts and Records of Attorneys and Guardians, O. Reg. 100/96 the attorney for property has a absolute strict duty to in accordance with the regulations, keep accounts of all transactions involving the property of the grantor of the Power of attorney.  Justice Strathy, in his judgment, addresses what happens when the attorney fails to keep proper records: 

Duty to Account:  trustee has an obligation to keep proper accounts. A trustee must keep a complete record of his/her activities and be in a position at all times to prove that he/she administered the trust prudently and honestly. He/she must have the accounts ready and give full information whenever required. (see para 30)

Adverse Inference:  An attorney who fails to retain receipts supporting substantial cash withdrawals or expenses charged against the incapable person’s property has not adequately carried out his/her duties and will be held personally liable for the unsubstantiated withdrawals (para 35)  It is a basic principle of trust law that a trustee is not entitled to use the trust property for his or her own personal benefit.  Trustee has onus to prove disbursements were legitimate.   If a trustee cannot account for or explain disbursements or expenses charged against a trust he/she is personally liable to the trust for those disbursements (paragraphs 43 45, 49 and 89).

DNA Testing and Estate Litigation

February 11, 2011 in Applications for the Opinion and Direction of the Court, Claims Against Estate: Summary Procedure, Court Proceedings to Ascertain Heirs of an Estate, Estate Litigation, Evidence in Estate Litigation, Executors / Trustees, Probate, Public Policy & Estates, Unjust Enrichment, Constructive Trust and Quantum Meruit Claims in Estates, Wills by Charles Wagner

“She is not my daughter.”

The court heard evidence that the late Kerry Kelly did not believe Shauna was his daughter. (FN1)    Kerry believed that Shauna’s mother “… cheated on me with no sex protection”.  The judge believed Pamela Proulx, Kerry’s sister, who said that Kerry never recognized Shauna to be his biological daughter.  Aunt Pamela applied to court to obtain a DNA test of Shauna and compare it to a sample of Kerry’s DNA to see whether Shauna was Kerry’s biological daughter.  Shauna opposed the application.  Let us review some of the reasons why the DNA test was worth fighting about and the legal arguments used by each side.

Kerry died intestate which means that he passed away without a legal will.  According to the law of Ontario (FN2) where an unmarried person dies intestate his children receive the estate. (FN3)   For all purposes, the law of Ontario is that a person is the child of his or her natural parents with the only exception being adopted children (FN4).  Since Kerry did not have a will Shauna’s entitlement to an inheritance turned on her being the biological child of Kerry.  So now we understand why Aunt Pamela wanted Shauna to take a DNA test and why Shauna resisted taking one.  If the DNA test proved that Shauna was not Kerry’s real daughter then she does not get an inheritance from Kerry’s estate.  On what grounds could Shauna argue that she did not have to take the DNA test?

Shauna argued that that under s. 8 of the Children’s Law Reform Act Kerry was presumed to be the father of Shauna because he was married to Shauna’s mother at the time of Shauna’s birth and he was also listed as Shauna’s father on the Statement of Live Birth.  Shauna argued that it was up to her aunt to rebut that presumption of paternity and, until she did, no DNA test should be ordered.

Aunt Pamela relied on section 10 of the Childrens Law Reform Act which provides that in a court case in which a child’s parentage is at issue the court may order that DNA tests take place and if that person refuses to submit to a DNA test the court may draw such inferences as is appropriate.  There is no mention in section 10 that Aunt Pamela had to rebut the presumption of parentage.  Now that you have heard both sides – what do you think Justice Coats ordered?

Justice Coats ordered that the DNA test take place.  In his view DNA testing was objective, impartial and scientific evidence and it was in the interests of justice for the court to consider the best evidence.   He preferred DNA testing to the contradictory and less certain evidence offered by the parties and other family or community members.  Does that mean that judges will always order DNA testing?  Not necessarily.

This short review of the case law should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­________________________________________________________________________________________

FN1.  This name of this case is Proulx v. Kelly, 2010 ONSC 5817 and can be found on line at http://www.canadalawbook.ca/summaries/pdf/10334117.pdf

FN2.  See Part II of the Succession Law Reform Act, R.S.O. 1990, c. S.26 and “Law of Intestacy in Ontario” found at http://www.wagnersidlofsky.com/articles/intestacy-in-ontario.php

FN3.  This is not a simple matter. For example, see section 47(2) of the Succession Law Reform Act, R.S.O. 1990, c. S.26 which deals with the situation where a child dies before his parent.  For example, if father had 3 children A, B and C.  Assume A had 2 children of his own.  A died before father.  If father died without a will then his estate would be divided in three equal shares.  1/3 to B, 1/3 to C and 1/3 to A’s children.  With respect to Ontario Intestacy law even if A died before his father the intestate inheritance law acts still gives A his share of the estate just as if A did not predecease his father.  The late A’s portion of his father’s estate goes to A’s children.

FN4.  See section 1 of the Children’s Law Reform Act

Resulting Trusts, Clean Hands and Who Gets the Cottage

January 16, 2011 in Applications for the Opinion and Direction of the Court, Claims Against Estate: Summary Procedure, Equity, Estate Litigation, Evidence in Estate Litigation, Fraud, Unjust Enrichment, Constructive Trust and Quantum Meruit Claims in Estates, Wills by Charles Wagner | 1 comment

Albert was always a bully and Dad loved him best.  Judy became a successful doctor and, in part to get away from her dysfunctional family, she moved to Montreal.  When Dad died, Judy was happy to see that her father left his $1,000,000.00 estate equally to both his children.  But, Albert had other ideas.

Albert went to court and claimed that 20 years ago he bought a cottage which was now in their father’s name.  That cottage, now worth 400,000.00, was transferred to Dad 20 years ago because Albert was being investigated by the Canada Revenue Agency for failing to pay taxes for five years.  Albert feared that the Canada Revenue Agency would take the cottage away so he transferred the property to his father for $50,000.00 except Dad never paid Albert a dime.  Albert claimed that his father had held the cottage in a resulting trust for him and it now had to be transferred back to Albert.  With the evidence presented there could be no doubt that Albert paid for the cottage, maintained the property and that the father participated in the scheme to protect the asset from the Canada Revenue Agency. 

In our fictional scenario Albert could argue that in Ontario there is a legal presumption that people make bargains and not gifts.  Accordingly, if Albert paid for everything the court should presume that he has a beneficial interest in the cottage.  This is the basis of his resulting trust(FN1) claim.

Judy might argue that even if Albert’s story was true he still does not deserve to get the cottage when the whole thing was based on a scheme by Albert to cheat Revenue Canada.  As Professor Waters stated in his text Waters’ law of Trusts in Canada, “The basic principle is that a person may not have the assistance of equity if the person does not come with clean hands”.(FN2).   Arguably,  if Albert tried to cheat on his taxes he did not have clean hands and should not benefit from the equitable remedy of a resulting trust.  How could it be fair for Albert to have it both ways?  To the Canada Revenue Agency Albert said the cottage belonged to Dad and now to Judy he is saying it belonged to him.  Given his intention to cheat Canada Revenue Agency does Albert deserve the benefit of an equitable remedy? 

In Holland v Holland (FN3) Justice Reilly of the Ontario Superior Court of Justice faced a similar question.  A husband transferred a cottage into his wife’s name in exchange for $15,000.00.  No money changed hands and the whole thing was a plan to avoid having an asset that would be seized for unpaid taxes.  When the couple split up the husband claimed to have a beneficial interest in the cottage. This is an excerpt of the judge’s decision “…a declaration of resulting trust is an equitable remedy. In order to obtain such remedy, the applicant must approach the court with clean hands.  In this case, Mr. Holland did not do so. ….It is for Mr. Holland to persuade the court that he is entitled to an equitable remedy and I conclude he has failed to do so.”

Would this reasoning in a family law dispute apply to an estate litigation matter?  Maybe.  Having dealt with these types of cases I can only repeat that these are very complicated matters and some courts have taken the view that despite the improper intention, if no one was in fact defrauded (for example, if it turned out that Albert never really owed Canada Revenue any money) then he might get the cottage back.

This short review of the case law should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

Charles B. Wagner is a partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focussed on estate, commercial and tax litigation.

________________________________________________________________________________________
FN1. There is a difference between a resulting trust and a constructive trust. A constructive trust has nothing to do with the intention of the parties. It is a flexible tool used by the courts to redirect funds or property which has been wrongly taken. It is an equitable remedy used by the courts to address an unjust enrichment. Waters, Law of Trusts in Canada, 2nd ed. (Toronto: Carswell, 1984) at p. Defines a resulting trust as an equitable trust that arises whenever one party buys property and has it gratuitously conveyed to another or into the joint names of himself and another.”:

FN2. See Waters’ Law of Trusts in Canada, 3rd Ed. 9 — Revocation: Setting the Trust Aside
9.II — Setting the Trust Aside B. Fraud by Settlor.

FN3. Holland v. Holland 2007 CarswellOnt 7195, [2008] W.D.F.L. 49, 49 R.F.L. (6th) 97, 161 A.C.W.S. (3d) 767. Justice Reilly’s decision considered a number of cases involving a transfer of property where the intent was to defeat creditors. Most persuasive was His Honour’s quote of Lord Denning in Tinker v. Tinker, [1970], 1 All E.R. 540 at 542:
“… I am quite clear that the husband cannot have it both ways. So he is on the horns of a dilemma. He cannot say that the house is his own and, at one and the same time say that it is his wife’s. As against his wife, he wants to say that it belongs to him. As against his creditors, that it belongs to her. That simply will not do. Either it was conveyed to her for her own use absolutely; or it was conveyed to her as trustee for her husband. It must be one or the other. The presumption is that it was conveyed to her for her own use; and he does not rebut that presumption by saying that he only did it to defeat his creditors. I think that it belongs to her.”