Court File and Parties
Court File No.: CV-24-014 (Picton) Date: 2024-06-24 Superior Court of Justice - Ontario
Re: The Estate of Gary Frederick Sheffield by the Estate Trustee, Katherine Markolefas, Applicant And: Bradley Frederick Sheffield, Respondent
Before: Mew J.
Counsel: Peter Hackenbeck, for the Applicant William Procter, for the Respondent
Heard: 21 June 2024, at Belleville
Endorsement
1Katherine Markolefas and Bradley Frederick Sheffield are brother and sister and are the only surviving children of Gary Frederick Sheffield and Donna Jean Sheffield.
2Gary Sheffield owned the land municipally known as 2610 County Road 5, Picton, Ontario (the “Property”) in his own name.
3Gary Sheffield died on 25 November 2020.
4Ms. Markolefas is the Estate Trustee named in the will of Gary Sheffield.
5Pursuant to provisions in his Will, Gary Sheffield's widow, Donna Jean Sheffield was granted the right to live at the Property for “as long as she is able” and during that time she was “to be responsible for the taxes, utilities and insurance”.
6After Gary Sheffield’s death, Donna Sheffield and Bradley Sheffield both resided at the Property.
7Donna Sheffield died on 29 September 2023.
8The Will provided that upon the death of Donna Sheffield, the Property was to be given to Katherine Markolefas and Bradley Sheffield “in equal shares per capita”.
9Gary Sheffield continues to live in the Property.
10The principal issue in this application is whether the house can be sold by the Estate, or whether title must be transferred to Katherine Markolefas and Bradley Sheffield.
11Katherine Markolefas has no wish to jointly own the Property with her brother. She alleges that during the term of her late mother’s life tenancy, her mother and her brother were unable or unwilling to conduct necessary repairs and maintenance of the Property, and that they denied Ms. Markolefas reasonable access to conduct necessary repairs and maintenance, with the result being that the condition of the Property deteriorated. Furthermore, the Property was not insured and Ms. Markolefas alleges that both before and since her mother’s death, her efforts to respond to a Compliance Notice issued by Prince Edward County requiring her, as registered owner, to complete remedial work at the Property, have been obstructed by the occupants of the Property.
12The application also seeks orders requiring Bradley Sheffield to vacate the Property, and restraining him from removing Estate assets from the Property.
Can The Applicant Sell the Property?
13There is no disagreement that Ms. Markolefas and her brother are entitled to a share in the Property now that their mother has died. They disagree on the question of whether the will conferred a right to possession and, as Mr. Sheffield would have it, occupancy of the Property?
14As the registered owner of the Property, albeit in her capacity as the Estate Trustee named in her father’s will, Ms. Markolefas takes the position that she is entitled to liquidate all assets of the estate, including the Property, and distribute them in cash. She argues that the will does not require her to retain the Property for her brother's benefit, require her to distribute his share of the Property to him in kind, or empower him to demand to receive his share of the Property in kind.
15By contrast, Bradley Sheffield argues that his (and his sister’s) interest in the Property vested on his father’s death, including a right to possession of the Property subject to their mother’s life tenancy, and that their entitlement to possession of the Property crystallised at the time of Donna Sheffield’s death.
16Mr. Sheffield relies on a line of cases including Browne v. Moody, [1936] O.R. 422 (J.C.P.C.), Re Smoke, [1973] 3 O.R. 100 (H.C.J.), and Re Oswell (1982), 38 O.R. (2d) 71 (H.C.J.). All of these cases provide that where the payment of a fund is postponed until the death of a life tenant, the ultimate legatees takes a vested interest in the fund at the time of the death of the testator, unless there are indications in the will that such presumption be displaced (I would observe that Browne v. Moody dealt with division of the capital of an estate after the conclusion of a life interest to receive the income produced by the capital, rather than with the gift of a specific piece of real property made subject to a life tenancy).
17Early in the opinion of the Judicial Committee of the Privy Council in Browne v. Moody, Lord Macmillan recognised that the “the golden rule in interpreting wills is to give effect to the testator's intention as ascertained from the language which he has used.”
18The will gave Ms. Markolefas discretion to liquidate all assets of the estate and distribute them in cash, subject to Donna Sheffield’s life interest in occupancy of the Property, which came to an end when she died.
19However, with respect to the Property, the testator’s exact words, after conferring a life tenancy in favour of his wife, continued:
On her [Donna Sheffield’s] death or leaving, I give said residence [the Property] to my children, KATHERINE MARKOLEFAS and BRADLEY FREDERICK SHEFFIELD in equal shares per capita.
20The Will did not prescribe how the gift of the Property contained in the will was to be effected.
21Nor did the will prescribe how title to the Property would pass on the testator’s death. As a matter of law, however, it is clear (and not disputed) that following the death of Gary Sheffield, Ms. Markolefas, in her capacity as Estate Trustee, became the registered owner of the Property pursuant to sections 121 and 63 of the Land Titles Act, R.S.O. 1990, c. L.5; 1998, c. 18, Sched. E, s. 126 and, as such, held the Property subject to the same rights and interests as her father had.
22Section 63 of the Land Titles Act provides:
Any person registered in the place of a deceased owner or to whom a patent is issued as executor administrator or estate trustee or in any representative capacity shall hold the land or charge, in respect of which the person is registered, upon the trusts and for the purposes to which the same is applicable by law and subject to any unregistered estates, rights, interests or equities subject to which the deceased owner held the same, but otherwise in all respects, and in particular as respects any registered dealings with such land or charge, the person shall be in the same position as if the person had taken the land or charge under a transfer for a valuable consideration.
23To similar effect, section 2(1) of the Estates Administration Act, R.S.O. 1990, c. E.2, provides:
All real and personal property that is vested in a person without a right in any other person to take by survivorship, on the person's death, whether testate or intestate and despite any testamentary disposition, devolves to and becomes vested in his or her personal representative from time to time as trustee for the persons by law beneficially entitled thereto, and, subject to the payment of the person's debts and so far as such property is not disposed of by deed, will, contract or other effectual disposition, it shall be administered, dealt with and distributed as if it were personal property not so disposed of.
24By contrast, at the time of his father’s death, Bradley Sheffield would have had no enforceable interest in the Property itself. His situation would have been similar to that of the fictional person entitled in remainder expectant on a life interest referred to in Dodd v. Cattell, [1914] 2 Ch. 1, as cited in Morrison v. Morrison (1917), 34 D.L.R. 677 (Ont. S.C. (A.D.)), per Meredith C.J.C.P. at p. 681.
25Even if the will did confer a possessory right on Bradley Sheffield following his mother’s death, it would be as a tenant in common with Ms. Markolefas. As a practical matter she would be entitled to apply for partition and sale of the property (albeit likely at her own expense, rather than as an expense incurred by the Estate). Nothing in the will would preclude or prevent that.
26One way or the other, it seems likely that the Property will soon be sold. If Mr. Sheffield wants to continue living there, he will have to buy his sister out.
27When the express language of the testator is read in the context of the will as a whole, as well as the statutory scheme providing for the administration of estates and the transfer of title from a deceased person to the personal representative(s) of his or her estate, it should be read as permitting, but not mandating, the transfer of the Property from the Estate to Ms. Markolefas and Mr. Sheffield.
28I am therefore of the view that it is up to the applicant, as the Estate Trustee, to determine how best to give effect to the gift of the Property, and that if she so chooses, she is empowered to sell the Property, subject to the usual fiduciary responsibilities she would owe to the Estate and to the respondent as a beneficiary of the Estate.
Should the Respondent Vacate the Property?
29There also is a dispute about whether Estate assets have been removed by Mr. Sheffield and a concern has been expressed by Mr. Markolefas that if he remains in occupancy, further assets may be removed.
30Further, Ms. Markolefas expresses a concern that unless and until her brother is made to vacate the Property, its deterioration will continue, she will be unable to comply with the Compliance Order, and she will be prevented from putting the Property into a marketable condition so that it can be sold, and their father's affairs finally settled.
31I agree that Bradley Sheffield’s continued occupancy of the Property is an impediment to Ms. Markolefas discharging her responsibilities as Estate Trustee to ensure the Property is in a state of good repair and optimally marketable. However, given the duration of Mr. Sheffield’s residence at the Property it would be inappropriate to order him to immediately vacate. Instead, the court’s order is, unless the parties agree otherwise, that Mr. Sheffield must vacate the Property no more than 60 days from today.
32It of course remains open to the parties to negotiate a different arrangement.
Other Assets of the Estate
33In the meantime, Mr. Sheffield must return any Estate assets that he has, or has caused or permitted to be, removed from the Property, and is enjoined from removing any Estate assets from the Property from the date of this order, unless authorised in writing by the applicant. An inventory should be taken at this time of all remaining contents of the Property, with a view to providing an evidentiary foundation in the event that a dispute arises over whether Estate assets have been improperly removed by Mr. Sheffield. If the parties cannot agree on how and by whom such an inventory should be taken, I can be spoken to.
Costs
34While Mr. Sheffield has unreasonably thwarted the Estate’s efforts to put the Property in good order, I accept that he held a bona fide belief that he would be entitled to possession of the Property, and to stay there after his mother’s death. I do not think it would serve the interests of the Estate (and, hence, its two beneficiaries) to further fan the flames of conflict between the parties by ordering Mr. Sheffield to pay the Estate’s costs of this application personally. Those costs should be payable from the Estate. Mr. Sheffield should, however, bear his own costs. Counsel for the Estate should deliver a costs summary and a written submission on costs, not exceeding three pages in length within 10 business days of the release of this endorsement. If the respondent objects to the costs sought, he may within 10 business days following the receipt of the applicant’s submissions, deliver a responding submission not exceeding three pages.
35If there are any other issues arising from the implementation of this endorsement, I will provide such further directions as may be required.
Mew J.
Date: 24 June 2024