In the Matter of the Estate of John Lawrence, Deceased

Court of Appeal for Ontario

Date: September 13, 2019

Docket: C66546

Panel: Strathy C.J.O., MacPherson and Tulloch JJ.A.

Parties

Between

Victoria Lawrence, in her capacity as Estate Trustee of the Estate of John Lawrence Applicant/Respondent

and

Julie Lawrence and Andrew Lawrence Respondents/Appellant

Counsel

Paul Marshall, for the appellant

Brent K. Harasym and Sarah J. Draper, for the respondent

Heard: September 6, 2019

Appeal Information

On appeal from the order of Justice James Ramsay of the Superior Court of Justice, dated January 15, 2019, with reasons reported at 2019 ONSC 373.

On appeal from the order of Justice James Ramsay of the Superior Court of Justice dated January 30, 2019, with reasons reported at 2019 ONSC 785.

Reasons for Decision

[1] The appellant, Julie Lawrence, appeals the order of Ramsay J. in regards to the disposition of the estate of her late father, Mr. John Lawrence. The appellant contests the ruling that the estate is liable to pay for a debt owed to TD Canada Trust ("TD"), rather than the deceased father's second wife, who inherited the matrimonial home. The appellant also alleges that the motion judge made remarks at the motion hearing that demonstrated a reasonable apprehension of bias towards the appellant and improperly refused to grant an adjournment.

[2] We dismiss the appeal. The motion judge made no palpable and overriding errors in his findings of fact that the estate is liable for the debt owed to TD. His comments did not demonstrate a reasonable apprehension of bias towards the appellant at the motion hearing. His refusal to grant the adjournment was a reasonable exercise of discretion.

Facts

[3] The motion judge found the following uncontested facts. The deceased Mr. Lawrence was married for many years and had two children, the appellant Julie and her brother, Andrew Lawrence. Following the death of his first wife, the deceased withdrew from his children and spent much of his time on the Internet. He met the respondent, Victoria Lawrence, online in 2012. She was a Philippine national who lived in Dubai at the time. In 2013, the deceased went to Dubai and married the respondent, when he was 77 and she was 50 years old. She arrived in Canada in 2015. Sometime during the marriage, the deceased transferred the ownership of his residence from himself alone to the two of them as joint tenants. The deceased also executed a will naming the respondent as estate trustee and divided the residue of his estate in three parts to be divided up among the respondent and his two children, with 40 shares to the respondent and 30 shares each to his two children.

[4] Mr. Lawrence died on March 6, 2017, resulting in the matrimonial home passing to the respondent by right of survivorship. Upon the death of Mr. Lawrence, the assets of the estate consisted of an investment account worth approximately $80,000 after the payment of most debts. In addition, there was a $50,000 TD line of credit which Mr. Lawrence had taken out prior to his marriage to the respondent.

[5] The $50,000 loan became an issue of major contention between the respondent, as estate trustee, and the deceased's two children. The appellant, Julie Lawrence, contends that the $50,000 loan was a debt secured against the matrimonial home and therefore not a liability attributed to the estate, whereas the respondent's position is that the loan was unsecured and therefore attached as a liability to the estate. This was the main issue before the motion judge.

[6] The motion judge found that Mr. Lawrence was the principal and sole debtor, and his estate is liable for the loan following his death. The appellant contests this finding and argues that the respondent is responsible for the debt.

Issues and Analysis

(1) The Debt to TD

[7] The motion judge's conclusion that Mr. Lawrence was solely responsible for the debt to TD, and that his estate is now liable, is a finding of fact which is reviewable on a standard of palpable and overriding error.

[8] In our view, the motion judge made no palpable and overriding error in his factual finding, and as such, his decision should be accorded deference.

[9] The TD line of credit was taken out prior to the deceased's marriage to the respondent. The respondent has submitted materials from TD outlining the bank's position that the estate is solely responsible for the debt. There are sufficient assets in the estate to enable it to discharge the debt. The appellant's references to the Land Transfer Tax Act, R.S.O. 1990, c. L.6, Mortgages Act, R.S.O. 1990, c. M.40, and Execution Act, R.S.O. 1990, c. E.24, on this appeal do not support the position that the respondent became liable for this separate debt because she now owns the matrimonial home. There is no basis on which to interfere with the motion judge's finding that the estate is liable for this debt to TD.

(2) The Motion Judge Did Not Demonstrate a Reasonable Apprehension of Bias

[10] The appellant alleges that the motion judge's comments at the motion hearing regarding her self-represented status gave rise to a reasonable apprehension of bias. We do not agree. There is a presumption of impartiality on the part of a judge, which may be rebutted by evidence of a reasonable apprehension of bias. Although the comments were sharp, they did not demonstrate that the judge had closed his mind to the merits of the appellant's case.

[11] The judge's failure to grant an adjournment also did not demonstrate bias or amount to a denial of natural justice by itself. The judge was acting within his discretion, as the interest on the debt mounted with further delays.

(3) The Motion Judge Did Not Err in Awarding Costs to the Respondent

[12] The appellant argues that the motion judge improperly awarded to the respondent partial indemnity costs that were too high and practically amounted to full indemnity. We do not give effect to this submission. Costs are discretionary. The motion judge noted that he found no suspicious circumstances and there were no policy considerations militating against the award of costs. The appellant's motion had wasted much of what was left of the estate's money in drawing out interest payments and she should compensate the estate and the respondent.

Disposition

[13] The appeal is dismissed. Costs are awarded to the respondent on a partial indemnity basis, fixed in the amount of $9,000.

"G.R. Strathy C.J.O."

"J.C. MacPherson J.A."

"M. Tulloch J.A."