Cross Estate, 2016 ABQB 177

Court of Queen ’ s Bench of Alberta Citation: Cross Estate, 2016 ABQB 177 Date: 20160329 Docket: ES01 113912 Registry: Calgary Court File Number ES01 113912 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial Centre Calgary Estate Name Veronica Ann Cross Applicant Martin Gary Abbott Respondent BMO Trust Company, Veronica Michelle Abbott, Maureen Margaret Abbott, Patrick Douglas Abbott and George Marshall Abbott _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice G.C.

Hawco _______________________________________________________ Background [ 1 ] Ms. Veronica Ann Cross died in January of 2013. Her personal representative is BMO Trust Company, one of the

Respondents. The Applicant is Mr. Martin Gary Abbott, one of her five children and one of the five residual beneficiaries under her will. The Respondents, other than BMO, are her other four children. All of her children are adults. [ 2 ] Ms. Cross appointed BMO as her attorney under an Enduring Power of Attorney (“EPOA”) on July 3, 2007. That took immediate effect. Between 2007 and 2015 Ms. Cross, who was a wealthy woman, had made a number of inter vivos gifts of lands and other gifts to a number of her children.

All of her children have benefited from her generosity over the years, perhaps some more than others. [ 3 ] In her will, which was drafted by her counsel, Mr. Russell McKinnon, QC, her property was divided fairly evenly among her five children.

Provision was made for a “bringing back” into the residue pot, if you will, certain parcels of land and certain monies which had already been specifically given to a number of her children in order to be fair to all. [ 4 ] There was also the provision which stated that, other than the “hotchpot” provision, no child would have to bring into account any money or gift which he had given to him or to her prior to her death.

So, while it was clear that she intended to benefit her children equally, pursuant to clause 10 of the will, no one who had received any sum of money which she had already paid or transferred to the person prior to her death had to have it taken into account in determining their “fair share” under the will. [ 5 ] Ms. Cross was indeed generous. But she was also independent, determined, sometimes angry and vocal about what annoyed her.

And, it was quite clear through the numerous affidavits and examinations or questionings which took place during this process, that any number of her children, indeed, perhaps all of them, would have annoyed her at one time or another. As one of her children stated, she could be quite difficult and was known by her children to both give and to take, as in take back. [ 6 ] Ms. Cross began to suffer from some dementia sometime around 2006 to 2007. She was often forgetful and therefore repetitive.

She did not like to deal with financial matters but did so on occasion. [ 7 ] As stated, BMO was her attorney under the EPOA and Mr. McKinnon was her lawyer, who she very clearly trusted and whom she relied upon. [ 8 ] No objection was taken by any of the children to the application for probate. No one challenged the will in any manner. No litigation has been commenced by anyone with respect to any of the children pressuring Ms. Cross in any manner.

No challenge per se has been taken with respect to her mental health, other than two applications, both taken by Martin Abbott. [ 9 ] On July 7, 2014, Martin Abbott brought an application before this Court seeking an order for disclosure from BMO. He sought to have the BMO files and all transactions made since the company was appointed years ago disclosed to him and his siblings. He was the only sibling who sought that disclosure. [ 10 ] That matter proceeded before Madam Justice Erb in August, 2014.

On August 29, 2014, Justice Erb said this: This application is made independent of any issue arising from probate of Mrs. Cross’ will. There is no litigation contemplated, challenging the terms of Mrs. Cross’ will or her other arrangement. There is no issue raised about her capacity to make her will, or to instruct BMO. There is no issue raised about the legality – or appropriateness of the BMO Trust administrator’s decisions – decision making on behalf of Mrs. Cross, which commenced in 2007. … BMO advised this Court, and this is not disputed, that Mrs.

Cross did not want any of her children to have access to her financial and other dealings. She made this clear on numerous occasions throughout her lifetime, and appears to have gone to great lengths to retain privacy. It is not disputed that BMO Trust administrators were instructed by her not to make any such disclosures, either during or after her lifetime. Mr. Abbot raises concerns about certain inter vivos gifts made to Mrs. Cross’ children and grandchildren, and questions whether the funds and benefits were used for the designated purposes.

He makes vague suggestions about undue influence, but his counsel candidly advised the Court that the no litigation is contemplated, and there are no issues over probate. He simply asks this Court to apply its inherent jurisdiction, exercises discretions in all the circumstances, and to grant an order for disclosure. [ 11 ] Justice Erb dismissed the application, believing that Mr. Abbott was engaged in a fishing expedition. She also awarded costs against him on a solicitor client basis. Current Application [ 12 ] In this application Mr.

Abbott is seeking to have the financial information held by BMO produced to an independent investigator who would investigate whether Ms. Cross was unduly influenced with respect to various inter vivos gifts she would have made in the six years preceding her death and whether she had the requisite capacity to make such gifts. Parties’ Positions [ 13 ] The Respondents maintain that Mr.

Abbott is trying to pursue the same relief which he was denied in the earlier application before Justice Erb that he is prohibited from doing so under the principle of res judicata . [ 14 ] They argue that while this application may appear to be a legitimate objection being taken to the passing of accounts, Mr. Abbott is seeking yet again to review all of BMO’s records in order to determine what was paid to others prior to Ms. Cross’ death and

then to have some independent inspector determine whether Ms. Cross had the requisite degree of awareness and independence to make decisions such as the gifting of money or objects to anyone the last six years of her life. [ 15 ] The Applicant argues that the real, indeed the only issue before Justice Erb was whether BMO should have to disclose a list of all gifts and to whom they were made. [ 16 ] The Applicant maintains that the mental capacity of Ms. Cross was not in issue before her and that the duty owed by BMO to Ms. Cross was not in issue before her.

Issue [ 17 ] The issue for this Court to determine is whether this application should or should not be allowed because of the principle of res judicata . Decision [ 18 ] I am satisfied that the issue of disclosure – of having BMO’s files examined – has been dealt with by Justice Erb. That will not be the subject of another application. It is res judicata . [ 19 ] While that may well be enough to decide this application, I am also satisfied that Ms. Cross was not unduly influenced and that she had the requisite capacity to make the gifts which she made during the past six years of her life.

Reasoning [ 20 ] While Justice Erb did only appear to touch upon the issue of mental capacity, her primary decision revolved around the issue of disclosure. That might well have been because Justice Erb was quite satisfied that she had Mr. Abbott’s then counsel’s advice, if not assurance, that there was no litigation contemplated which would be with respect to Ms. Cross’ capacity or with respect to undue influence. [ 21 ] And yet, here we are. As stated, I am satisfied that the issue of disclosure – that is, the issue of whether BMO’s file should be turned over and examined, has been dealt with by Justice Erb.

The fact that Mr. Abbott now seeks to have this material provided to “an independent reviewer” does not make this a new application. It is res judicata . While that may well be enough to decide this application, in the event that I am wrong, I am going to deal with the issue of undue influence and capacity and the role of BMO. Undue Influence and Capacity [ 22 ] The person best suited to give any opinion with respect to Ms. Cross’ capacity is and was her own counsel, Russell McKinnon. Counsel for the respondent parties obtained evidence from Mr.

McKinnon by serving him with an appointment for questioning pursuant to Rule 6.8 of the Alberta Rules of Court . The purpose of doing so was to obtain directly from Mr. McKinnon his views on Ms. Cross’ legal capacity and her ability to manage her affairs. I intend to refer to a number of the facts and opinions attributed to Mr. McKinnon, and wish to point out that this information or evidence was not before Madam Justice Erb when she rendered her decision. [ 23 ] It is accepted that both the Applicant and his siblings knew that during the last six or so years before her death, Ms.

Cross suffered from mild dementia and had memory lapses, was occasionally confused and often changed her mind about many things. Mr. McKinnon’s evidence, particularly in view of a statement that Maureen Abbott made to the effect that he (Mr. McKinnon) was able to determine that Ms. Cross had periods of lucidity, is very important. The evidence from his questioning on December 4, 2015 a p 230 – 232 is captured by the following statement by Mr. McKinnon: Q But Maureen Stewart – sorry.

Maureen Abbott makes statements there about: (as read) There is a precedent for people with Alzheimer’s or dementia, that they have periods of lucidity when reasonable decisions can be made, and that is what Russ relies on, that he can determine those periods of lucidity. When you received this, is that – was that – did you consider that a fair description of how you were proceeding? Or did you – did you say, No, that’s not – that’s not how I’ve been dealing with it? She’s characterized your conduct in a certain way. A Yes.

I think this relates to part of the conversation we had last time, and that is that a person, particularly an older person, who is as part of the aging process in some kind of decline intellectually may still be capable of making decisions that would be legally valid, and that could extend to a change to an estate plan, depending on what it was. It could extend to a change in a personal directive as Mrs. Cross expressed clearly to me what she wanted to do, and I acted on that. So I think as legal advisors we try to be aware of the whole context.

We try to be aware of the capabilities of the person in the general sense, and we have to be particularly aware of the capability of a – of a person in a particular situation on a particular issue and what kind of capacity do they have to bring to that in order that it’s legally sound? So I think what Maureen is relating here is her formulation of that, and I agree with it – with that to the extent that I understand what she’s saying.

Q So it was your practice to – in particular instances where those types of changes to an estate plan or personal direction were being discussed between you and the client that you were going to do a critical assessment of her capacity and understanding of that particular decision at that particular time. Is that fair? A Well, a considered assessment. I don’t know quite what that would – would be, but, recall, we’ve spoken earlier today and maybe even last time about these – I’ll call them flashes of anger, expression about one of the children that she’s highly displeased about something.

And you asked me, I think, more than once today whether I’d read that as an instruction to prepare a change to her will. I think I’d need more – more than a flash of anger to act on that as an instruction. Q It’s part of that – I think you characterized it before – persistent or enduring – not persistent, but enduring intent? A Something consist – yeah, consist – consistently. Q Right. A Yeah. Consistently and purposefully. Yeah. [ 24 ] Mr. McKinnon’s evidence confirmed that despite periodic episodes of memory lapse, changes of mind, and anger, Ms.

Cross was still able to make her own decisions about her financial affairs. [ 25 ] Mr. McKinnon saw Ms. Cross frequently. He was her independent counsel. He prepared spread sheets for her on a regular basis. She knew what she had given and to whom. [ 26 ] Mr. McKinnon was quite satisfied that Ms. Cross was aware of what she was doing and was quite free to do as she wished. While she did, of course, have memory lapses and might have then occasionally been influenced by some of her children, Mr. McKinnon clearly had no concerns about her ability to do what she wanted to do at any given time. Ms.

Cross frequently met with her lawyer who was quite satisfied that she knew what she was doing. [ 27 ] On the whole, I am more than satisfied of Ms. Cross’ testamentary capacity and her capacity to make gifts to her children and her relatives. The evidence in that regard is, in my view, quite overwhelming. Role of BMO [ 28 ] BMO was appointed as Ms. Cross’ attorney under the enduring power of attorney executed on July 3, 2007.

However, as stated by Shawna Albornoz who was a trust administrator and vice president of BMO Trust Services, in her questioning which took place on June 23, 2014, BMO “never considered themselves to be working under her power of attorney because she had capacity”. Questioning June 23, 2014 p 9 l 16 – 19. At p 10 l 18 – 20 Ms. Albornoz confirmed that BMO did not consider themselves to be acting under the enduring power of attorney (EPO) because “she had capacity so she always provided direction to us on what to do on her accounts”. Again, the best evidence comes from Mr.

McKinnon who recalled, pursuant to his notes, a meeting that he had with Ms. Cross on December 2, 2011. At that meeting Mr. McKinnon recorded that Ms. Cross had “correctly” stated that she could make gifts of whatever she wants to whomever she wishes. Mr. McKinnon confirmed during questioning that he had no concerns about her capacity at that meeting. Throughout his questioning, it was clear that Mr. McKinnon did not have any concerns regarding whether Ms. Cross had capacity to instruct him or BMO regarding her affairs or whether she understood her affairs. As Mr.

McKinnon stated in his questioning on November 26 by Ms. Grosse, the EPOA was put in place to allow BMO to handle administrative matters since Ms. Cross was moving around at the time that it was executed. It was not put in place with the expectation that BMO would override or second guess the instructions of Ms. Cross. [ 29 ] It is to be noted that BMO did make an investigation with respect to Mr. Martin Abbott’s allegation of missing jewelry. BMO did determine that Ms. Maureen Abbott had some black pearls which had belonged to Ms. Cross. These were subsequently given by Ms.

Abbott to BMO. [ 30 ] There does not appear to have been, from BMO’s investigation, any jewelry taken by anybody else. Mr. Martin Abbott did allege in his affidavit that he believed his mother’s jewelry had a value of between $750,000 to $1,000,000; however no one was able to identify a list of jewelry known to be missing. Further, Ms. Cross 2012 insurance coverage of her jewelry was set at $20,000. BMO determined that no further action was required. [ 31 ] Another instance which involved BMO regarded the transfer of $5,000 by Ms. Cross to Maureen. This occurred while Maureen visited her mother on one occasion.

BMO was advised that some of the siblings had concerns about this and contacted Mr. McKinnon. Both BMO and Mr. McKinnon met with Ms. Cross and discussed a protocol with respect to any future transfers of monies.

[ 32 ] I am simply unable to see anything which would persuade me that BMO had done anything during their tenure as Ms. Cross’ attorney under the EPOA which would merit any criticism or concerns. It may be necessary to repeat that BMO did not consider that it was required to act under the EPO because it never had any question with respect to Ms. Cross’ ability to make her own decisions. This was not only their view but the view of Mr. McKinnon. [ 33 ] It is clear throughout Mr. McKinnon’s questioning that BMO liaised and consulted frequently with him to ascertain Ms.

Cross’ wishes and instructions and the best course of action in any number of circumstances. I find no substance to the allegations by the Applicant. [ 34 ] In the end result Mr. Martin Abbott’s application is denied. This is his second attempt to call into question the competence and experience of BMO. It is his second attempt to call into question Ms. Cross’ mental capacity. Justice Erb found no basis for any interference or disclosure in the first application. I am satisfied that there is no basis again. Justice Erb awarded costs on a solicitor client basis, as do I. Heard on the 25 th day of January, 2016.

Dated at the City of Calgary, Alberta this 29 th day of March, 2016. G.C. Hawco J.C.Q.B.A. Appearances: Blair R. Carbert for the Applicant, Martin Gary Abbott James L. Lebo, QC for the Respondents, Maureen Margaret Abbott and Veronica Michelle Abbott Nancy L. Golding, QC for the Respondent, Patrick Douglas Abbott Suzanne Porteous for the Respondent, George Marshall Abbott April D. Grosse for the Respondent, BMO Trust Company