Ian Mulgrew: Home is more than where the heart is
Credit to Author: Ian Mulgrew| Date: Fri, 21 Feb 2020 23:17:41 +0000
Home may be where the heart is, but ask a lawyer and you’ll get a complicated answer and a six-figure bill.
Still, a B.C. Court of Appeal registrar, Tim Outerbridge, slashed Helen Sato’s legal bill by 30 per cent — rolling back her legal costs to about $89,000 from $135,000 in a dispute about where her late brother Hiroyuki considered home.
In his assessment of the invoices, Outerbridge said Helen Sato was overcharged in the appeal of a five-day inheritance trial that turned only on the question of where her brother Hiroyuki Sato was “domiciled” when he died.
“In making this reduction, I recognize that this was an appeal of significant importance and accept that it was appropriate for the appellant to deploy significant resources given its high-stakes nature,” Outerbridge wrote. “However, at its core, this appeal had a narrow focus on the facts and law, a modest record, and very little procedural difficulty.”
At one point, though, he said six lawyers worked a total of 225.6 hours at an effective hourly rate of $450 an hour on the issues — and Helen Sato lost.
Although her brother Hiroyuki lived with his wife, worked and had friends in Luxembourg, and hadn’t lived in Canada since 1999, the courts concluded he was “domiciled” in B.C. and his sisters and their children were disinherited.
This meant his estate of about $2 million went to his Japanese wife, Makiko.
The case drew legal attention because the applicable provincial law at the time held that Sato’s 2013 marriage revoked his 2011 will. Under Luxembourg law, the will would have remained valid.
B.C. law has since been changed and, after the Wills, Estates and Succession Act came into effect on March 31, 2014, a marriage no longer revokes a will.
Hiroyuki “Rex” Sato, who immigrated from Japan in 1969, was a global banker whose career saw him working and living in Toronto, Vancouver, the Cayman Islands, Tokyo and Guernsey.
He moved to Luxembourg in 2009 and, for income tax purposes, the Canada Revenue Agency had considered Sato a non-resident since 1999.
During a visit to family in B.C. in May 2011, he wrote a will leaving the bulk of his estate to his two sisters, naming Helen as executrix, and their children. He apparently never returned to the province.
In April 2013, he married Makiko in Luxembourg, where he kept his personal effects, filed taxes and had inquired into whether he would be eligible for an old age pension.
But in 2014 he was diagnosed with cancer. Sato died in Japan in 2015 while receiving medical treatment.
Still, B.C. Supreme Court Justice Gordon Funt concluded Sato was “domiciled” in B.C. at the time of his marriage because he asserted to the CRA when he left the country that he would return and intended to retire here.
Funt was bound by a 1959 case in which the Supreme Court of Canada said a person’s “domicile” was determined by a two-pronged test: Did Sato reside in Luxembourg and did he intend to make it his permanent home indefinitely?
While Sato lived in Luxembourg, Funt said he did not intend to make it his permanent home.
He called the “Key Document” a CRA tax-residency-determination form filed by Sato when he moved to the Caymans in which he stated he planned to retire in Canada.
Helen appealed, saying Funt interpreted and applied the high bench’s test too narrowly and “in a manner incompatible with fairness, public policy, and modern conceptions of a person’s intention to settle.”
But the Court of Appeal agreed with Funt — the will was invalid under the old provincial law.
“(T)he deceased was not particularly fluent in French, which was the principal language in Luxembourg. He also found that the fact that the plaintiff was Japanese, and not from Luxembourg, militated against finding that the deceased intended to retire there. … There was no written document reflecting an intention to change his previously expressed intention to retire in Canada. … While the deceased had made several statements in the past about a desire to retire in Japan, those did not support the proposition that the deceased intended to reside in Luxembourg permanently.”
The appeal was heard in a day and involved limited factual disputes, no transcript evidence, and no interlocutory applications, Outerbridge noted in his ruling.
“(Mark) Weintraub, Q.C. (of Clark Wilson LLP) had primary carriage of this appeal and is experienced in the field of estates and trusts, having been called to the bar in 1983,” the registrar added.
“He was not counsel at trial and worked with three other partners on this file, ranging in years of call from 1997 to 2010 and hourly rates from $385 to $575. He employed one associate, called to the bar in 2017, with a rate of between $240 and $295. A sixth outside counsel argued the appeal, called to the bar in 1986, who billed 28.3 hours of time for preparation and attendance at a rate of $550 per hour, eventually reducing his invoice to $15,000, exclusive of taxes.
“I accept Makiko Sato’s argument that the use of six counsel resulted in some duplication of effort. … While I agree it may have been reasonable to involve additional counsel for some aspects of the appeal, particularly to provide an impartial view of the issues, I am unable to agree that the level of responsibility justifies the full amount of time billed.”
The Court of Appeal ordered costs borne by Sato’s estate, blaming the litigation on his failure to clarify his will after being diagnosed with cancer.