Litigation may be simply described as an act or process of settling a dispute in a court of law. For instance, when family members cannot agree on an issue relating to a parent's Will or Power of Attorney, the dispute can be heard by a judge of the Court of King's Bench in Manitoba.
The Will
Generally speaking, Will disputes often relate to a challenge that the testator did not have capacity at the time they gave instructions to the lawyer to draft the Will or was unduly influenced to make bequests in the Will that they would not have made of their own volition. Other disputes relating to the Will often focus on the manner in which the executor has failed to properly administer the estate.
Power of Attorney
A parent, for example, may appoint one or more children to look after their affairs in the event they become incapacitated. Once more, issues of capacity sometimes arise whereby it is alleged that the donor (the parent) did not have the capacity to instruct the lawyer at the timethe Power of Attorney documents were being drafted or was unduly influenced to appoint aparticular individual to act as their attorney. (Note: the term attorney can be confusing. In the context of wills and estates matters, attorney does notmean lawyer but refers to the individual being appointed to look after the donor's financial affairs.)
The second area of dispute often relates to how the attorney has administered or looked afterthe donor's finances. The taking of property inappropriately, inappropriate gifting,and/or taking questionable fees for acting as attorney are areas where disputes often arise.
The Executor's Role
The Wills Act governs wills in Manitoba. They must be properly executed, i.e. witnessed by two individuals who are not beneficiaries and signed by the testator.Upon the testator's passing away, a Request for Probate can be made by the executor to theCourt of King's Bench. The Probate Office will review the Will to determine whether itappears to have been properly executed and will, most times, issue a Grant of Probate,thereby resulting in the executor becoming a court-appointed trustee.
Executors have a fiduciary duty to act in the best interest of the estate and beneficiaries. Theyare to gather in assets, pay all debts, and then distribute the estate in accordance with thetestator's wishes as set out in the Will. They also have a duty to provide to the beneficiaries an accounting as to what they have done.
Estate Disputes
Sometimes, it is unnecessary for an estate to be probated. For example, if, prior to their passing, the deceased disposed of most of their property, owned property jointly with a surviving spouse or common-law partner, or named designated beneficiaries on accounts, there may not be a need fora Grant of Probate to transfer real property or gain access to bank accounts and investments. For the most part,however, the process begins with the executor making a Request for Probate.
If, in fact, there is a suspicion that perhaps the deceased did not have capacity or was undulyinfluenced to write or change a preexisting Will, our Court of King's Bench Rules permit aCaveat to be filed at the court that prevents a Request for Probate from proceeding until suchtime as the person filing the caveat has been given notice and an opportunity to file an application incourt to challenge the Will.
In other words, the administration of an estate can actually beprevented before it is even started.Even if there is no Will, the deceased's assets need to be dealt with, and issues can arise. In Manitoba, The Intestate Succession Act puts forth a "formula" to distribute an estate when there is no Will to the deceased's next of kin.
There can also be claims in estates even where no challenge is made to the Will, but there is a spouse or common-law partner of the deceased or a dependent of the deceased who claims they were not adequately provided for under the Will. In Manitoba, these claims are rooted in The Family Property Act and The Dependants Relief Act, respectively.
Application to Court
Whether the dispute relates to a Power of Attorney or a Will, the usual process in bringing thematter to the attention of a judge is to file what is called a Notice of Application. Once more, thisprocess is set forth in the Court of King's Bench Rules.
The Notice of Application is a summary of the concerns and issues you have as an interested party, either through an interestin the deceased's estate or as a family member with respect to their affairs while they are still alive. It may be that you will be asking the court to put in somecontrols concerning how the executor has conducted themselves, or youmight be asking the court to review the circumstances surrounding the making of a Will andultimately seeking a declaration that the Will is invalid.
The Notice of Application process is also available to the executor. If an issue arisesduring the course of the estate administration, an executor can seek "advice and direction" from the courtwith any concerns or interpretation matters, including any issues that are brought up by beneficiaries or where co-executors, who must act jointly, cannot agree on a course of action.
Affidavits
The Notice of Application must be supported by evidence. The "story" must be told in a manner that sets outwhat issues have arisen either with respect to the preparation and execution of the Will or theadministration of the estate. This evidence ispresented in affidavit form. The applicant's affidavit usuallysets out a brief family history and background concerning the deceased, along with a morefocused presentation of the concerns. If, for example, there are issues relating to testamentary capacity, there may be affidavits presented by healthcare providers or others who cared for the deceased around the time the Will was executed.
The Process
The Notice of Application and supporting affidavit or affidavits are filed with the court and thenmust be served on all interested parties. Those who might be reasonably defined as interestedare usually members of the family, beneficiaries and often the Office of the Public Guardian and Trustee,especially if there are beneficiaries under the age of 18 or the matter concerns a person incapable of managing their own affairs (typical in Power of Attorney matters).The Notice of Application will have an initial return date before the court. The Court of King'sBench in Winnipeg has a sitting called the Uncontested List, Monday through Friday at 10:00a.m. The first court appearance is usually two to three weeks after service of the Notice of Application and affidavit.
The First Court Appearance
The Uncontested List may be best described as a "triage" court. The judge reviews thematerials and determines whether or not the matter is urgent, can proceed on anuncontested basis or ought to be referred to what is called the "Contested List."
The parties who have received the Notice of Application and supporting affidavit material areentitled to be represented by counsel if they so choose and further are entitled to file their ownaffidavits in response. In fact, sometimes, the individuals who are served file their ownindependent Applications, raising other issues that they would like the judge to review anddetermine.
Usually, this first court appearance is adjourned to permit the parties to file their materials and toensure that every interested party has been served. In fact, this initial appearance on theUncontested List may be adjourned more than once before the judge, after hearingrepresentation from counsel and individuals concerned, makes a determination as to how, froma procedural standpoint, the dispute should proceed.
What about Power of Attorney Disputes?
The process of having the court determine a Power of Attorney dispute is the same as with a Wills dispute. Powers of Attorney in Manitoba are governed by The Powers of Attorney Act, which specifically provides that an interested party may make application to court for adetermination of an issue. Similarly, the attorney who has issues that cause them concernmay make application to court for advice and direction. The same template is followed withrespect to the Court of King's Bench on first appearance on the Uncontested List acting as a triage station to determine what process should be followed to bring the dispute to an expeditious and just conclusion.
The Contest
Sometimes, disputes are viewed as urgent by the parties, and the court agrees. In these cases,the process can be expedited by the court and the matter heard by a judge on fairly short notice,i.e. within days or weeks of the initial court appearance.
In most cases, however, the triage process results in the judge directing that the matter be referred towhat is called the Contested List. This usually occurs where there are key factual disputes thatcannot be readily ruled upon by the judge without a fulsome hearing.
What is contained in the affidavit is tested by cross-examinations. In most cases, the partieswho have sworn or affirmed affidavits are cross-examined in a lawyer's office before a courtreporter. The answers and questions are transcribed and a transcript is prepared for later usein court.
Sometimes, the matter proceeds before a judge who will hear legal arguments based onthe evidence contained in the affidavits and cross-examinations which are filed with the court.
In certain cases, the court determines that issues of credibility need to be addressed and the parties must appear in personbefore a judge at trial to testify in open court.
In addition to the parties directly interested in the estate, sometimes experts are called upon totestify whether they are medical experts or perhaps financial experts, such as financial planners or accountants.
What about settlement?
It is often said that most disputes are resolved by way of negotiated settlement. The Court ofKing's Bench has a process in place where the parties may request that a judge act as amediator to help the parties find common ground and perhaps settle the case without thenecessity of further court proceedings. This process is called Judicially Assisted DisputeResolution (JADR). Other times, private mediators assist the parties in reaching an out-of-court settlement.
What will this cost me?
Often, clients simply want to know the answer to the "how much" and "how long" questions. Howmuch will this cost? How much am I likely to receive from the estate? How long will this all take?
Unfortunately, estate disputes often prove to be expensive. That is because legal fees aredirectly related to the complexity of the issues more so than the value of the estate. Not surprisingly, the issues raised in manyestate litigation problems are factually complex and time-consuming to resolve.
Usually, after the affidavit materials have been filed, the "how much" and "how long" questionscan be more easily addressed. Each case, however, is different and unique.
Who pays?
Historically, the court often ordered the payment of everyone's legal fees, both those who brought the application and those who responded, out of the estate. This was based on the fact that, generally speaking, the parties found themselves before the court through no fault of their own but instead as a result of some flaw or issue thatarose during the taking of instruction to draft the Will or the actual execution of the Will.
However, more recently, the courts have begun to recognize that often, in these estate disputes,the "successful party" should see some of their costs from the losing side. Beyond the outcome, the court will sometimes order that a party found to have beenunreasonable, or to have caused extra delay or expense to an "innocent" or reasonable party, to pay in whole or in part out of their own resources the legal fees of the other side in addition to their own.
As a consequence, it is important that all parties involved in the estate dispute recognize thatthere may be serious cost consequences to them if they elect to take unreasonable positions with respect to the estate and its administration.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
