Broken Promises: An Adventure in Estate Mediation

Wednesday, June 21, 2023

6:30 p.m. to 9:00 p.m.

Via ZOOM

Guest Coach: Charles B. Ticker

There are many reported cases where a sibling is not happy with an equal division of the estate because the parent, before he had died, had promised to give that sibling a particular asset or gift. A recent decision in Ontario dealt with a broken promise made by a father to his son to leave him the family farm. This case involved a dispute between a brother and a sister that arose after their father had died.

Gary and Louanne Mountain were the son and daughter of the late John “Jack” Mountain and his wife, Helen. Jack and Helen owned and operated a dairy farm. The farm had been in the Mountain family since 1830. Gary worked the farm as his full-time occupation together with his late father for 24 years. He was the fifth generation of Mountains to operate the farm. Gary contended that he had an oral agreement with his parents that if he stayed on the farm and farmed with them, and if farming was his main occupation, he would receive the farmland and its assets after his parents stopped farming.

Jack suddenly died of cancer on November 28, 2001. While he always mentioned that the farm and most of the farm assets would be transferred to his son Gary, he did not make specific provisions for this in his will.

Jack and Helen had identical wills. Each left all of his or her estate to the other, or if there was no surviving spouse, the estate would go to Gary and Louanne to share equally. Gary and Louanne were also named as co-executors under both wills. But Gary did not view an equal division as fair because he was promised the farm by his late father.

After Jack died, his estate including the farm property and dairy business went to his spouse, Helen. Gary commenced a lawsuit seeking a Court Declaration that would confirm he was beneficially entitled to the farm property and the dairy farm business. He sued his father’s estate, his mother and his sister.

The action came up for trial in May 2010, almost nine years after Jack died. The trial took 11 days. The trial judge ruled against Gary and found that he had not proven his oral contract with his father. Louanne was awarded costs in the amount of $275,000.00, payable by Gary personally and not by the estate. This amount did not include the amount of legal fees that Gary had to pay to his own lawyer.

The Ontario Court of Appeal heard the appeal some two years later and released its reasons almost 11 years after Jack’s death. The appellate judges disagreed with the trial judge. They ruled that the trial judge did not properly consider the evidence that could support Gary’s contention that there was a legally binding oral agreement between Gary and his father.

The Appellate Court ordered that the trial judge’s decision be set aside and that fixed costs in the amount of $40,000.00 be paid to Gary. The Chief Justice who wrote the decision stressed that a new trial was in neither side’s interest. He made an unusual order of requiring that the parties go to mediation before commencing any new trial.

But that was not the end of the matter…

Guest Coach, Charles B. Ticker, will give us a flavour for an estate mediation with both an educational piece and a role-play based on the above facts. We will find out how this litigation actually ended, but only after we try to see if we can bring some resolution during our role-play. Sign up is available for the roles of Gary and Louanne, along with their respective lawyers, and also for the role of mediator.

Charles B. Ticker