Law Times

Law timeS • September 14, 2009 Minister trots out worn scare tactic week with the spectre of crim- inals taking over the country. Speaking in Halifax, he said an election would kill crime bills the Conservatives want adopted. P This is the fourth election in a row the Conservatives have cranked up crime as an is- sue. That's because crime really scares people. Nobody wants to be a crime victim. Van Loan warned about Conservative legislation "tack- ling the crime front" being "at risk." I bet you didn't know there was such a thing as a crime front in Canada. Is that like a cold front on the weather map? Or like the eastern front in the Sec- ond World War? Are we fighting a "war against crime?" Sounds scary! At least Van Loan didn't say, "If we have an election, we'll all be dead in our beds." Van Loan says his legislation will tighten rules for parole. That means keeping people in jail longer. His bill to fight "major drug crimes" would land somebody in prison for up to six months for having a joint of marijua- na. That's a lot tougher than a $25 fine. I'm sure that will stop "major drug crimes." So if the government crime bills are so important, why did Prime Minister Stephen Harp- er's government leave them on the order paper instead of putting the legislation through the Commons when it had a chance earlier this year? And why did Harper can the legislation a year ago so he could call an election in hopes of getting a majority? Was he going soft on crime? Still, the crime-scare strategy is a good one because there's a real possibility his government will be dumped in the Com- mons in October. Harper doesn't want an elec- tion. It's not that he isn't ready. He's got tons of money, a great organization, and almost all of his candidates picked. He's ahead in the polls, for what that's worth come voting day. Right now, Harper is the front-runner, although don't you go betting on a majority. The problem is the econ- omy. It's still in the dumps. Harper knows it's no time to take a chance at the polls. There's a saying in politics: people with empty stomachs don't vote for the government. Ask Richard Bennett. Ask Kim Campbell in 1993. So he has to tell the good folks out there that something bad will hap- pen to them if his government bites the dust next month. Trying to scare people with the economy won't work. They know it will get better on its own, no matter who's in power. That's why crime is a good strategy. ublic Safety Minister Peter Van Loan was scaring us again last The Hill By Richard Cleroux Remember the Willie Hor- ton TV ad that destroyed Dem- ocratic presidential candidate Michael Dukakis in 1988? Horton, a convicted mur- derer, was out on a weekend pass when he stabbed a man to death and repeatedly raped his girlfriend. At the time, Dukakis was gov- ernor of Massachusetts, not the jailer. The Republicans blamed it on Dukakis. People feared be- ing stabbed and raped. It was the end of Dukakis. George Bush Sr. became president. Conservative cousins north of the border never forgot the story. Since then, "tough on crime" has become a sacred oath for them. "Build the jails; fill the cells." Throw the book at those you catch. That will teach them a lesson and scare off the others. There is a problem. Lon- ger jail terms do not prevent crimes. They make prison con- tractors happy but they don't prevent crimes. Criminals don't look up the Criminal Code before they commit crimes. In fact, studies show most of them figure they won't be caught, and if they are, they'll just find a smart lawyer who will get them off. The problem is compound- ed. Violent crime has been de- clining in Canada for the past 20 years. So how can Van Loan and the Conservatives keep saying crime has gone up when statistics show just the opposite? It's because Conservatives count the total number of crimes committed instead of the crimes per capita. Since the Canadian population has gone from 20 million to 30 million, the total number of crimes has increased. It's the proportion you have to watch. In fact, crime rates per hun- dred thousand of population have gone down in almost every category over the past 20 years. There are a lot of things the Conservatives could do if they were serious about control- ling crime. Reducing poverty, better education, less unem- ployment, and preventing the growth of ghetto lifestyles might be a good start. And what about guns? Is it reasonable for the Con- servatives to pretend to be tough on crime when they are not will- ing to put limits on the total number of guns? That's called living in a fan- tasy world. LT Richard Cleroux is a freelance reporter and columnist on Parlia- ment Hill. His e-mail address is richardcleroux@rogers.com. www.lawtimesnews.com COMMENT PAGE 7 Can you create an economic disincentive to litigation from beyond the grave? BY CLARE E. BURNS, JOHN O'SULLIVAN & MANDY L. SEIDENBERG For Law Times I n assessing whether to pursue estate litigation, parties must always consider who will pay the resulting legal costs. Traditionally, in estate litigation involving the interpretation or validity of a will, costs were pay- able on a full indemnity basis from the estate. More recently, the trend has been to award costs to the successful litigants on a partial indemnity basis. Neither approach has been wholly satisfactory. Two recent Superior Court decisions address this issue and also whether more sophisticated estate plans, involving multiple wills and Henson trusts, effectively limit the source available within estates to pay cost awards. In Kaptyn Estate (Re), the deceased left a pri- mary and a secondary will. The secondary will had a codicil, the validity of which was at issue in the litigation. The court considered whether costs should be paid on a full indemnity scale to the estate trustees and whether costs should be paid from the primary or secondary estate. Reasoning that the trustees were not before the court by choice (a family mem- ber had challenged the validity of the codicil), the court concluded the litigation arose because of the "actions, omissions, instructions, and decisions of the testator" and awarded full indemnity costs. Although the dispute related to the second- ary will codicil, the court concluded that the entire estate plan was in issue because if the codi- cil failed, it would affect the overall distribution plan. It went on to order costs payable from the primary estate in order to preserve the testator's intent, evidenced in the secondary will, that cer- tain real property should devolve without debt attached. This suggests that, in situations with multiple wills, preservation of a testator's intent is now a factor to be considered when deciding which source should pay a costs award. In the second case, Bigelow Estate (Re), the trust- ee (who was also the deceased's power of attorney), applied to pass the estate accounts. One of the de- ceased's four children objected. He suffered from anxiety and depression. Under the terms of the will, this child's bequest of one-third of the residue was payable to a Henson trust. After a two-day hearing, the court concluded the trustee had provided an accurate accounting of the estate's finances from the date of death to the passing of accounts and for the deceased's financial affairs throughout the period of the power of at- torney. The estate was awarded its costs from the capital of the estate on a full indemnity basis. The trustee then sought costs against the objector given the unreasonable character of the objections and the written warning the estate had given him. In response, the court held that the objector and his Henson trust should bear at least some respon- sibility for the estate's costs. As such, it ordered that the remaining estate assets payable to the objector's Henson trust be forfeit and paid to the estate. Given the objector's depression and limited means, and "to shield him from the full conse- quences of his actions," the judge ordered an addi- tional $5,000 contribution from the Henson trust Speaker's Corner towards the estate's costs. These cost payments were to supplement the balance in the estate, which the court stipulated was then to be distributed among the residuary beneficiaries other than the objector. It's worth asking, therefore, whether a Henson trust no longer safeguards funds from a costs award. These cases also raise an interesting question as to whether testators can now do indirectly through their wills what they could not do di- rectly through the use of an in terrorem clause. In the past, testators wanting to prevent liti- gation included a provision stating that any ben- eficiary who challenged the will would be deemed to forfeit his or her inheritance. However, if this provision did not contain an effective gift over, expressly vesting the gift in another benefi- ciary or including it in the residue, the clause was found to be in terrorem, or a mere threat. In ter- rorem clauses are void and thus unenforceable. To be found in terrorem, a clause had to meet the following three criteria: (1) the legacy was of personal property or a blend of personal and real property; (2) the condition was a restraint on mar- riage or a prohibition against the beneficiary chal- lenging the will; and (3) the condition was a mere threat and was imposed for the sole pur- pose of preventing the beneficiary from taking one of the actions noted above. The lack of a gift over attached to a condition in a will generally sufficed to have a clause declared in terrorem. The decisions in Kaptyn and Bigelow suggest that a testator may effectively realize the same result as that intended by an in terrorem clause through a costs clause without a gift over. In Kaptyn, the testator's intention respecting which assets he wanted to pass free from encum- brance guided the court to order costs be paid from property under the primary will. As a result, only certain beneficiaries were responsible for the costs as opposed to the old rules under which all of them tended to share the burden equally. In Bigelow, meanwhile, the objector was ordered to bear a por- tion of the costs from his own share of the estate. Based on these decisions, in a situation where the testator is clear that he or she does not want a beneficiary to challenge the will, and yet such a challenge is brought with little or no merit, the court may order costs to be paid from the challeng- ing donee's portion of the estate if there is a clause indicating that this is the testator's intent. The impact of such statements would obvious- ly depend on the beneficiary's assessment of the risk of a costs order (both in terms of liability and quantum) and the size of his or her inheritance. However, the risk could easily be so significant that it would amount to a legally effective eco- nomic in terrorem clause. Such a clause might also dissuade counsel working on contingency from taking cases of questionable merit. Whether such clauses would succeed is unclear. However, what is clear is that the consideration of who will pay the legal costs in the event of a will challenge is an issue that must be carefully consid- ered as counsel advise clients in the pursuit of post- mortem litigation. LT Clare E. Burns and John O'Sullivan are partners, while Mandy L. Seidenberg is an associate at Weir- Foulds LLP in Toronto.

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