Trezzi v. Trezzi

Indexed as: Trezzi v. Trezzi

Ontario Reports: 150 O.R. (3d) 663

Court of Appeal for Ontario

Sharpe, Houigan and Jamal JJ.A.

December 13, 2019

2019 ONCA 978

Case Summary

Wills, estates and trusts law — Wills — Construction and interpretation

Appeal by deceased's spouse and children from determinations made by an application judge regarding the will dismissed. Application judge did not err in concluding that deceased could effectively bequeath assets held by Trezzi Construction of which he was the sole shareholder. Wife did not establish that she owned 50 per cent of the shares of ACC. Application judge's discretionary decision to grant wife an extension of time under to elect whether to file a surviving spouse's election was entitled to substantial deference and there was no basis for interfering with it.

Appeal by deceased's spouse and children from determinations made by an application judge. The deceased operated a successful construction business through ACC and Trezzi Construction. He was the sole shareholder of Trezzi Construction. The decease had two daughters with his wife G. He had a son from a previous marriage. The daughters appealed the determination that the deceased could bequeath assets held by Trezzi Construction to the son. The daughter and the wife had challenged these bequests on the basis that the deceased did not own those assets, as they were owned by Trezzi Construction, and therefore Peter could not give what he did not own. The wife appealed from the determination that she had not established that she owned 50 per cent of the shares of ACC. The son appealed the determination that the wife was entitled to an extension of time to file a surviving spouse's election under the Family Law Act in order to choose whether to receive her bequests under the will or under her statutory entitlement as a surviving spouse. Because of the ongoing litigation as to the wife's entitlements under the will, the application judge ruled that it would be fair to grant her this extension to allow her to make an informed decision regarding her election.

Held: Appeals dismissed.

The application judge did not err in concluding that the deceased could effectively bequeath assets held by Trezzi Construction of which he was the sole shareholder. His actual or subjective intention was to give all of the assets owned by Trezzi Construction to his wife and children, such that Trezzi Construction would be left without assets of any kind, which indicated that he intended Trezzi Construction to be wound-up. The application judge correctly held that the executors of the will had two independent sources of authority to implement his intention to wind-up Trezzi Construction - their general powers under corporate law and their powers under the will. The application judge did not err in finding that the wife did not establish that she owned 50 per cent of the shares of ACC. It was open to the application judge to determine the nature and scope of the issues that he was prepared to address at this stage regarding ownership of the shares. Given the application judge's factual finding that no shares had been issued by ACC in registered form, he did not err in concluding that the "Shareholders' Register" did not qualify as a securities register and consequently that the statutory presumption under s. 266(3) of the Business Corporations Act did not apply. The application judge's discretionary decision to grant the wife an extension of time under to elect whether to file a surviving spouse's election was entitled to substantial deference. As a surviving spouse, she clearly had a right to elect for an equalization payment. She had therefore met her burden of showing "apparent" grounds for the relief sought for which she sought an extension of time. The judge's factual findings that the delay was incurred by the wife in good faith were available to the application judge given the evidence. It was again entirely open to the application judge to find that no person would suffer substantial prejudice by reason of the delay.

Cases Referred To

Statutes Referred To

Authorities Referred To

Halsbury's Laws of Canada, "Wills and Estates" (Toronto: LexisNexis, 2016 reissue)
Law Society of Ontario, The Annotated Will 2019 (January 16, 2019)

Appeal

APPEAL from the orders of Wilton-Siegel J., 2018 ONSC 4710, 42 E.T.R. (4th) 322 and [2018] O.J. No. 4620, 2018 ONSC 5180.

Counsel:

Craig Ross and Krystyne Rusek, for Emily Trezzi and Bianca Trezzi.

Danielle R. Joel and Ewa Krajewska, for Alfrida Gina Trezzi.

Symon Zucker and Laney Paddock, for Albert Trezzi.

The judgment of the court was delivered by

JAMAL J.A.:

I. Introduction

[1] These three related appeals arise in connection with the will of the late Peter Trezzi, who died on January 8, 2016.

[2] Peter and Gina Trezzi were married for 25 years. They had two daughters together, Bianca and Emily Trezzi. Peter also had a son from a previous marriage, Albert Trezzi, who was 13 years old when Peter and Gina married.

[3] Peter operated a successful construction business through two Ontario corporations, Across Canada Construction Ltd. ("ACC") and Trezzi Construction Ltd. ("Trezzi Construction").

[4] There is no dispute that Peter was the sole shareholder of Trezzi Construction. But there is a dispute as to whether Gina owned half of the shares of ACC, and also as to other issues under Peter's will. On one side of the dispute is Albert; on the other side are Gina, Bianca and Emily.

[5] For present purposes, the relevant aspects of Peter's will are as follows:

Gina and Albert were named as joint executors and trustees of Peter's will.
Albert was gifted (i) all of Peter's interest in ACC; (ii) real property located at 220 Regina Road, Woodbridge (which was owned by Trezzi Construction); and (iii) all the equipment and chattels owned by Trezzi Construction.
Gina, Albert, Emily and Bianca were each gifted equal shares of (i) all other real property owned by Peter; (ii) all other assets owned by Trezzi Construction; and (iii) the residue of Peter's estate.

[6] In two comprehensive endorsements, the application judge concluded that:

(1) Peter could bequeath assets held by Trezzi Construction to Albert. Gina, Bianca and Emily had challenged these bequests on the basis that Peter did not own those assets, as they were owned by Trezzi Construction, and therefore Peter could not give what he did not own.

(2) Gina had not established that she owned 50 per cent of the shares of ACC. The application judge left for a future determination whether Peter owned any shares of ACC.

(3) Gina was entitled to an extension of time to file a surviving spouse's election under s. 6(1) of the Family Law Act, R.S.O. 1990, c. F.3 ("FLA") in order to choose whether to receive her bequests under the will or under her statutory entitlement as a surviving spouse pursuant to s. 5(2) of the FLA. Because of the ongoing litigation as to Gina's entitlements under the will, the application judge ruled that it would be fair to grant Gina this extension to allow her to make an informed decision regarding her election.

[7] Bianca and Emily, with Gina's support, now appeal the first conclusion; Gina appeals the second conclusion; and Albert appeals the third conclusion.

[8] For the reasons that follow, I would dismiss all three appeals.

II. Analysis

(1) Did the application judge err in concluding that Peter Trezzi could effectively bequeath corporate assets held by his construction company, Trezzi Construction Ltd.?

[9] The first issue is whether the application judge erred in concluding that Peter could effectively bequeath assets held by his construction company, Trezzi Construction, of which he was the sole shareholder.

[10] The clauses of Peter's will that are impugned by Gina, Bianca and Emily are as follows:

Clause 3(d), which gave Albert "[a]ll equipment and chattels owned by Trezzi Construction Ltd.".
Clause 3(e), which gave Albert "[t]he real property municipally known as 220 Regina Road, Woodbridge", which was owned by Trezzi Construction.
Clause 3(m), which gave "[a]ll other assets owned by Trezzi Construction Ltd." in equal shares to Gina, Albert, Emily and Bianca.

[11] Gina, Bianca and Emily assert that these gifts are invalid because a shareholder of a corporation owns only the shares of that corporation (which the shareholder can bequeath), but does not own the corporation's assets (which the shareholder cannot bequeath). They claim that upholding these gifts would involve disregarding the separate corporate personality of Trezzi Construction, and that because these gifts are invalid, they fall into the residue of the estate.

[12] I disagree. I conclude that Peter did effectively bequeath the assets of Trezzi Construction.

[13] I agree with the application judge that the court's task in interpreting a will is to determine the testator's actual or subjective intention as to how he intended to dispose of his property. This involves construing the will in light of all the surrounding circumstances to determine the testator's true intention and the court placing itself in the position of the testator at the time that the will was made: see Burke (Re), [1960] O.R. 26, at p. 30 O.R.; Kaptyn Estate (Re), at paras. 30-38; and Halsbury's Laws of Canada, "Wills and Estates" (Toronto: LexisNexis, 2016 reissue), at HWE 63.

[14] In this case, the application judge concluded that Peter's actual or subjective intention was to give all of the assets owned by Trezzi Construction to Gina, Albert, Emily and Bianca, such that Trezzi Construction would be left without assets of any kind, and that this in turn indicated that Peter intended Trezzi Construction to be wound-up. As the application judge found: "the testator has made provision for all of the assets of Trezzi [Construction], not merely the assets to go to Albert. In my view, this indicates that the testator effectively turned his mind to, and directed, a winding-up of Trezzi and an in specie distribution of the assets" as set out in clauses 3(d), 3(e) and 3(m) of the will. The in specie or in kind distribution of assets of Trezzi Construction to Peter's beneficiaries would, of course, be subject to Trezzi Construction's liabilities to any creditors.

[15] These findings of the application judge interpreting Peter's will to determine his subjective intention in light of all the surrounding circumstances are findings of fact and of mixed fact and law that are entitled to appellate deference. Just as the interpretation of a contract in light of its surrounding circumstances is now subject to review (absent an extricable error of law) only for palpable and overriding error, in my view, the same is true for the interpretation of a will in light of its surrounding circumstances: see Hicklin Estate v. Hicklin, 2019 ABCA 136, 46 E.T.R. (4th) 1 (C.A.), at paras. 10, 94-95; Zindler v. Salvation Army, 2015 MBCA 33, 6 E.T.R. (4th) 34 (C.A.), at para. 10; and Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, 2014 SCC 53, at para. 50.

[16] In my view, there is no palpable and overriding error in the findings of the application judge to justify this court's intervention.

[17] Nor are those findings infected by any extricable error of law. In my view, the application judge correctly held that the executors of Peter's will have two independent sources of authority to implement his intention to wind-up Trezzi Construction: (a) their general powers under corporate law; and (b) their powers under clause 3(a) of the will.

[18] With respect to the executors' general powers under corporate law, s. 193(1) of the Business Corporations Act, R.S.O. 1990, c. B.16 provides that "[t]he shareholders of a corporation may, by special resolution, require the corporation to be wound up voluntarily". Section 67(2)(a) of the Business Corporations Act provides that an executor or estate trustee of the estate of a deceased security holder may exercise all the rights that the deceased security holder had before their death. Thus, while he was alive Peter had the corporate authority, as the sole shareholder of Trezzi Construction, to wind-up the corporation. Upon his death, that authority devolved to his executors or estate trustees. As a result, under Ontario corporate law Peter's executors have the power to implement his intention to wind-up Trezzi Construction.

[19] With respect to the executors' powers under the will, the application judge found that clause 3(a) of Peter's will also provides the executors with the necessary powers to implement Peter's wish to have Trezzi Construction wound up. Clause 3(a) states, in relevant part:

I GIVE, DEVISE AND BEQUEATH all my property of every nature and kind wheresoever situate, including any property over which I may have a general power of appointment, to my said Trustees upon the following trusts, namely:

(a) To use their discretion in the realization of my estate, with the power to my Trustees to sell, call in and convert into money any part of my estate not consisting of money at such time or times, in such manner and upon such terms, and either for cash or credit or for part cash and part credit as my said Trustees may in their uncontrolled discretion decide upon[.]

[20] While this clause does not refer expressly to a power to wind-up Trezzi Construction, but rather refers only to converting the estate's assets into money, I conclude that the gifts do not fail on this basis. As the application judge correctly noted, the executors' power to wind-up the corporation already exists under corporate law. I also agree with him that the executors implicitly have this authority in their discretionary power to convert the estate's assets into money. Because Peter's shares in Trezzi Construction were part of his estate "not consisting of money", clause 3(a) of his will authorizes his executors to take any steps that may be needed to sell, call in and convert those shares into money. This would include winding-up the corporation. As such, I agree with the application judge that Peter's will conferred on his executors the authority to wind-up Trezzi Construction.

[21] Because of these two independent sources of authority for Peter's executors to wind-up Trezzi Construction, I would reject Gina's contentions that the gifts of the assets of Trezzi Construction fail because Peter did not directly own those assets and that upholding these gifts would disregard Trezzi Construction's separate corporate personality. While it is true that Peter, as the sole shareholder of Trezzi Construction, did not directly own the corporation's assets, that does not complete the analysis. In substance, Peter's shares in Trezzi Construction became part of the estate, and Peter effectively directed his executors to wind-up the company and to distribute its assets in accordance with his will, even though he did not own those assets directly. As already noted, the key question thus boils down to whether this was indeed Peter's subjective intention in his will: see Kaptyn Estate (Re), at paras. 126-44. For the reasons stated above, I conclude that the application judge did not err in concluding that this was Peter's intention.

[22] It follows that I also do not agree with the conclusions reached in the Saskatchewan and Alberta cases relied on by Gina, Bianca and Emily, to the extent that those cases can be read as holding that a sole shareholder of a corporation can never effectively gift corporate assets because they are owned by the corporation: see Thornton Estate (Re), [1990] S.J. No. 233, 85 Sask. R. 34 (Surr. Ct.), at paras. 4-5; Wilhelm v. Hickson, [2000] S.J. No. 45, 2000 SKCA 1, 183 D.L.R. (4th) 45 (C.A.), at para. 12, leave to appeal to S.C.C. refused [2000] S.C.C.A. No. 124; Meier Estate (Re), [2004] A.J. No. 1088, 2004 ABQB 352, 366 A.R. 299 (Q.B.), at paras. 16-22; and Oryshchuk Estate, [2009] A.J. No. 1301, 2009 ABQB 688, 485 A.R. 379 (Q.B.), at para. 35. As noted, the principle of corporate separateness does not complete the analysis of whether a testator who is the sole shareholder of a corporation can effectively gift corporate assets. The court must go on to consider whether that authority exists under corporate law or under the terms of the relevant will. I agree with the application judge that because both sources of authority are present in this case, Peter could effectively bequeath assets held by Trezzi Construction.

[23] I acknowledge that it would have been preferable had Peter's will been more explicit in referring to the trustees' authority to deal with his corporation's property. In this regard, the Law Society of Ontario's The Annotated Will 2019 (January 16, 2019), at p. 1-79, provides the following helpful model language that would further clarify an executor's power to deal with the assets of a corporation in which a testator is the sole shareholder:

If at any time my Trustees hold in my estate any investment in or in connection with any company or corporation, my Trustees may join in or take any action in connection with this investment or exercise any rights, powers and privileges that at any time may exist or arise in connection with this investment to the same extent as I could if I were living and the sole owner of this investment.

[24] For these reasons, I conclude that the application judge did not err in concluding that Peter could effectively gift corporate assets held by his construction company.

(2) Did the application judge err in finding that Gina Trezzi did not own 50 per cent of the shares of Across Canada Construction Ltd.?

[25] The second issue is whether the application judge erred in finding that Gina did not establish that she owned 50 per cent of the shares of ACC.

[26] As the application judge correctly noted, this issue raises "essentially a factual matter". It turns on the application judge's evaluation of the evidence that Gina had adduced to establish her claimed ownership of 50 per cent of ACC's shares. The application judge correctly noted that, in order to establish this, "Gina has the onus of proof on a balance of probabilities."

[27] The evidence that Gina adduced to support her claim included the following:

First, organizational documentation in the minute book of ACC prepared in 1993 showed two shareholders, namely, Peter and Gina, each owning 50 shares. Two share certificates, apparently created at the same time, also reflected Peter and Gina's ownership of shares. A reporting letter dated September 14, 1993 from Peter's lawyer, Enzo Zeppieri ("Zeppieri"), stated that Peter and Gina were shareholders of ACC.
Second, in 2011 Peter engaged a solicitor, Cosimo Crupi ("Crupi"), to implement a reorganization of the business carried on under the name "Across Canada Construction & Paving". In 2012, Crupi's law clerk advised Gina that she was a 50 per cent shareholder of ACC. However, the reorganization was ultimately aborted.
Third, Gina relied on a letter dated July 12, 2017 from Zeppieri to her legal counsel advising that Gina and Peter were each 50 per cent shareholders of ACC.
Fourth, Gina claimed that she and Peter ran the business "Across Canada Construction" as equal business partners for 27 years.

[28] Albert countered with other evidence that suggested that Gina never owned any shares in ACC. The application judge found as follows:

First, none of the corporate documentation prepared in 1993 or 2011 purportedly supporting the claim that Peter and Gina were equal shareholders of ACC was ever executed. Nor was Gina ever given a share certificate evidencing her claimed shareholding.
Second, the evidence of Crupi and his law clerk "falls short of establishing that shares were allotted and issued to Gina". Crupi's evidence was to the effect that he and his law clerk would have relied on documents and information provided to them by others. Crupi acknowledged that "he did not focus on the question of whether Gina was a shareholder until this litigation".
Third, Zeppieri's reporting letter of September 14, 1993 did no more than report on the preparation of organizational documentation that appears to have never been executed. Zeppieri's letter of July 12, 2017 merely repeated what appeared earlier in the minute book. In any event, these letters were contradicted by the declarations of Gina made on October 16, 2015 (while Peter was alive) and Zeppieri made on July 19, 2016 (shortly after Peter's death), which confirmed that Peter was the only shareholder, officer and director of ACC. These declarations were delivered in connection with union certification proceedings involving ACC before the Ontario Labour Relations Board.
Fourth, Gina's claimed involvement in the business of ACC did not on its own constitute evidence of her 50 per cent shareholding interest. The application judge noted that arguments based on unjust enrichment were beyond the scope of the present proceeding.

[29] Based on his evaluation of all the evidence, the application judge concluded that Gina had not met her onus of showing that she owned 50 per cent of ACC's shares. He summarized his conclusions as follows:

In summary, there is unsigned documentation in the ACC minute book that, if executed, and if consideration had been paid for the shares, would have constituted each of Gina and Peter the holders of fifty common shares of ACC. At its highest, such documentation may reflect Peter's consideration at the time of incorporation of ACC of an equal shareholding arrangement. However, there is no evidence that Peter ever implemented such a shareholding arrangement, that is, there is no evidence that the shares were ever issued. There is also some evidence that suggests that they were not issued and that Peter ultimately decided to carry on as the sole shareholder. Ultimately, Gina's case rests on an alleged presumption in her favour which, in my view, is not available in the present circumstances. Based on the foregoing, I conclude that Gina has failed to establish, on a balance of probabilities, that she is the owner of any common shares of ACC.

[30] These are conclusions of fact and mixed fact and law that are owed substantial deference by this court and may be set aside only by showing palpable and overriding error. In my view, based on the evidence that was before the application judge, Gina has shown no such error.

[31] In addition, Gina asserts that the application judge erred in law in three respects.

[32] First, she asserts that the application judge decided an issue that was never pleaded. She says that the issue to be determined was whether she and Peter each owned 50 common shares of ACC, not whether ACC had ever issued any shares. She says that neither she nor Albert ever pleaded that ACC had not issued any shares.

[33] I disagree with this submission. Gina placed squarely before the application judge the issue of whether she owned 50 per cent of the shares of ACC, and he determined that issue against her. It was entirely open to the application judge to make ancillary factual findings in the course of addressing this question.

[34] Second, Gina claims that the application judge has left the corporate status of ACC in limbo and that he improperly bifurcated this proceeding by declining to address whether any shares were issued to Peter.

[35] I also disagree with this submission. The application judge emphasized that the only issue before him was "the evidence and law regarding Gina's alleged ownership of shares in ACC". He immediately added that "[i]t does not necessarily follow from [this determination] that Peter owned the shares of ACC". In my view, it was open to the application judge to determine the nature and scope of the issues that he was prepared to address at this stage, in view of the discrete issues that were scheduled to be heard before him, the relief that Gina had sought, and the evidence adduced.

[36] I appreciate that this means that further proceedings will likely be required before the issues arising under Peter's will are resolved. However, in my view, this does not provide a basis for this court to intervene with the application judge's findings. Moreover, the parties should be able to resolve the remaining issues without resorting again to litigation.

[37] Finally, Gina claims that the application judge erred in his treatment of the statutory presumption created by s. 266(3) of the Business Corporations Act. Gina argued that an unexecuted "Shareholders' Register" listing her as a shareholder in ACC was presumptive proof of her share ownership pursuant to s. 266(3), which provides as follows:

266(3) An entry in a securities register of, or a security certificate issued by, a corporation is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered or whose name appears on the certificate is the owner of the securities described in the register or in the certificate, as the case may be.

[38] The application judge rejected this argument. He found that the unexecuted "Shareholders' Register" did not qualify as a "securities register" for purposes of s. 266(3) because it did not meet the requirements for a "securities register" under s. 141(1) of the Business Corporations Act. Section 141(1) requires a corporation to prepare and maintain at its registered office, or at any place in Ontario designated by the directors, a "securities register in which it records the securities issued by it in registered form". The application judge found that Gina had not established that ACC had issued any securities in "registered form" under s. 141(1) because he concluded that "the unexecuted share certificates in the minute book in the names of Gina and Peter are not securities issued in registered form". Rather, the application judge found that proving that securities had been issued in registered form would require "properly issued executed share certificates of ACC and evidence of the actual issuance of shares".

[39] In my view, given the application judge's factual finding that no shares had been issued by ACC in registered form, he did not err in concluding that the "Shareholders' Register" did not qualify as a "securities register" under s. 141(1), and consequently that the statutory presumption under s. 266(3) did not apply. While the statutory presumption might be relied upon to evince share ownership in the absence of an executed share certificate, in my view it must first be established that the document presented as a "securities register" is truly such. In this case, there was insufficient evidence that this document was a record of shares that had been issued in registered form. As a result, I conclude that the application judge's findings are owed substantial deference by this court.

[40] For these reasons, in my view the application judge did not err in finding that Gina did not own 50 per cent of ACC's shares.

(3) Did the application judge err in exercising his discretion to provide Gina Trezzi an extension of time to file a surviving spouse's election under s. 6(1) of the Family Law Act?

[41] The third and final issue is whether the application judge erred in exercising his discretion to provide Gina with an extension of time to file a surviving spouse's election under s. 6(1) of the FLA until after the estate's assets are valued, in order to allow Gina to make an informed decision regarding that election. Albert appeals the decision of the application judge to grant the extension.

[42] The relevant statutory provisions are as follows:

Section 5(2) of the FLA provides that when a spouse dies, if the net family property of the deceased spouse exceeds the net family property of the surviving spouse, the surviving spouse is entitled to one-half the difference between them.
However, s. 6(1) of the FLA provides that when a spouse dies leaving a will, the surviving spouse shall elect to take under the will or to receive the entitlement under s. 5.
Section 6(10) of the FLA requires the surviving spouse's election to be in a prescribed form and filed with the Estate Registrar for Ontario within six months after their spouse's death.

[43] Peter died on January 8, 2016, and therefore the six-month filing deadline prescribed by s. 6(10) of the FLA expired on July 8, 2016. Gina applied for an extension on December 22, 2017, about 18 months after the deadline had expired for her to file a surviving spouse's election.

[44] Section 2(8) of the FLA provides that the court may extend the time for filing a surviving spouse's election if it is satisfied that (a) there are apparent grounds for relief; (b) relief is unavailable because of delay that has been incurred in good faith; and (c) no person will suffer substantial prejudice by reason of the delay.

[45] The application judge readily granted Gina an extension because he found that she met the statutory test. He concluded that (a) Gina has a right to elect for an equalization payment under the FLA, but it is not possible to determine the amount (if any) of that payment until the court determines the entitlement and valuation issues under the will. It would therefore be unfair to require Gina to make an election before these critical ownership and valuation issues are resolved; (b) any delay had been incurred by Gina in good faith; and (c) nobody would be prejudiced by the delay.

[46] In his costs ruling, the application judge added that "[t]here was no legal basis for Albert's opposition to this motion": Trezzi v. Trezzi, [2019] O.J. No. 2964, 2019 ONSC 3464, 47 E.T.R. (4th) 288 (S.C.J.), at para. 28.

[47] The application judge's discretionary decision to grant Gina an extension of time under s. 2(8) of the FLA in order to elect whether to file a surviving spouse's election is entitled to substantial deference: Katz v. Nimelman, [2009] O.J. No. 2159, 2009 ONCA 445, 73 R.F.L. (6th) 288 (C.A.), at para. 3. The party seeking to challenge such a decision must show an error in the application of the principles relevant to the exercise of the discretion: Hutchinson v. Hutchinson, [2011] O.J. No. 54, 11 R.F.L. (5th) 297 (C.A.), at para. 6.

[48] In seeking to meet this burden, Albert argues that the application judge made numerous legal and factual errors in granting Gina the extension.

[49] First, Albert contends that the application judge erred in finding apparent grounds for relief. He claims that s. 2(8) of the FLA requires Gina to establish that she is entitled to receive an equalization payment of net family property.

[50] I do not agree. The "relief" in issue for purposes of s. 2(8) of the FLA is not the right to the equalization payment itself, but rather the right to elect for an equalization of net family property: see Scherer v. Scherer (2002), 59 O.R. (3d) 393, [2002] O.J. No. 1661 (C.A.), at para. 16. To require a surviving spouse to prove a right to an equalization payment in order to obtain an extension under s. 2(8) to make an election would defeat the remedial purpose of the FLA: it would deprive a surviving spouse of the right to choose the more favourable financial outcome as between a will and under the FLA simply because they lack information necessary to make an informed choice between the two.

[51] Here, as a surviving spouse, Gina clearly has a right to elect for an equalization payment. She has therefore met her burden of showing "apparent" grounds for the relief sought for which she seeks an extension of time.

[52] Nor do I accept Albert's argument that the application judge "improperly determined that an extension should be granted in all circumstances where a will is contested". The application judge's ruling was not so sweeping. Rather, it was rooted firmly in the circumstances of this case. He simply ruled that Gina had an apparent right to elect for an equalization payment, and that in the context of this ongoing litigation it was not possible for her to make an informed choice regarding her surviving spouse's election because of the current state of information regarding the estate's assets and her entitlements under the will.

[53] I therefore see no error in principle in the application judge's decision on the first prong for the discretion to extend under s. 2(8) of the FLA.

[54] Second, Albert contends that the delay in issue was not incurred by Gina in good faith. The application judge rejected this argument, as would I.

[55] The "good faith" requirement in s. 2(8) of the FLA merely requires the applicant for an extension to show that they acted "honestly and with no ulterior motive": Hart v. Hart, [1990] O.J. No. 1498, 27 R.F.L. (3d) 419 (U.F.Ct.), at p. 432 R.F.L., cited in Scherer, at para. 24.

[56] Here, the application judge found that Gina met this threshold. He found that there was no evidence that Gina was aware, or reasonably ought to have been aware, of her rights before May 2017, when she consulted with a family law lawyer. This was not a reversal of the onus to prove good faith. The application judge was simply satisfied on the record before him that Gina did not know about her rights before May 2017.

[57] The application judge also accepted Gina's evidence that she initially refrained from applying for an extension while her counsel obtained information that would allow her to make an informed choice, but she then did so when it became clear that issues involving the estate would not be resolved consensually. The delay incurred was between May 2017 (when Gina became aware of her rights) and December 22, 2017 (when Gina applied for the extension). The application judge found that this delay was not unreasonable, especially because Gina's counsel had communicated to Albert's counsel her intention to apply for an extension in the future, if appropriate. He also found that Gina was not required to apply immediately to the court for an extension of time simply to protect her right to file an election, because she might never need to exercise that right.

[58] These factual findings were available to the application judge given the evidence. I see no basis for this court to intervene.

[59] Third, Albert contends that the application judge erred in finding that no person will suffer substantial prejudice by reason of the delay. The application judge rejected this argument because (a) there had been limited administration of the estate to date, largely because of the acrimony between Albert and Gina, for which he found both parties responsible; (b) the estate would not be in a position to make a distribution until the ownership and valuation issues are resolved; and (c) of the four equal residual beneficiaries, only Albert opposed the extension request. Further, the application judge found that while Albert claimed that he was prejudiced by the delay in obtaining a judicial declaration regarding the issues involving the estate, any such prejudice was not because of the delay in Gina's application for an extension of time to make an election under the FLA.

[60] It was again entirely open to the application judge to reach these conclusions on the evidence before him. Once again, I see no basis for this court to intervene.

[61] I would therefore dismiss Albert's appeal from the application judge's decision to grant Gina an extension to file an election under s. 6(1) of the FLA.

III. Costs

[62] In my view, two considerations are relevant to costs for these appeals.

[63] First, success was divided: Albert succeeded on the first and second issues, while Gina succeeded on the third issue.

[64] Second, I have concluded that this is not an appropriate case for costs to be paid from the estate. The modern approach to costs in estate litigation provides that "the court is to carefully scrutinize the litigation and, unless it finds that one or more of the relevant public policy considerations apply, it shall follow the costs rules that apply in civil litigation": Sawdon Estate v. Watch Tower Bible and Tract Society of Canada (2014), 119 O.R. (3d) 81, [2014] O.J. No. 573, 2014 ONCA 101 (C.A.), at paras. 84-86. The relevant public policy considerations are: (1) the need to give effect to valid wills that reflect the intention of competent testators; and (2) the need to ensure that estates are properly administered. These considerations apply to costs awards made on appeal: see Sawdon, at paras. 101-107.

[65] On appeal, the parties were litigating in their personal capacities as beneficiaries, not in their capacities as trustees concerned with the proper administration of the estate. And whatever might have been said about any public policy considerations at first instance, I conclude that they were largely absent on appeal. In my view, allowing costs for these appeals to be paid from the estate would give rise to a danger that the estate "would be unreasonably depleted because of unwarranted or needlessly protracted litigation": Sawdon Estate, at para. 84.

[66] Having regard to these considerations, I have concluded that all parties should bear their own costs of the appeals.

IV. Disposition

[67] I would dismiss the appeals without costs.

Appeals dismissed.

End of Document

Trezzi v. Trezzi, 2019 ONCA 978

Case Summary

Trezzi v. Trezzi

Case Summary

Cases Referred To

Statutes Referred To

Authorities Referred To

Appeal

I. Introduction

II. Analysis

(1) Did the application judge err in concluding that Peter Trezzi could effectively bequeath corporate assets held by his construction company, Trezzi Construction Ltd.?

(2) Did the application judge err in finding that Gina Trezzi did not own 50 per cent of the shares of Across Canada Construction Ltd.?

(3) Did the application judge err in exercising his discretion to provide Gina Trezzi an extension of time to file a surviving spouse's election under s. 6(1) of the Family Law Act?

III. Costs

IV. Disposition

Cited By (13 cases)

Drumonde v. Spellay, 2025 ONSC 3221

Dyjack v. Shaw, 2025 ONSC 1937

Devonport v. Devonport, 2024 ONSC 6764

Zarrin-Mehr v. Shokrai, 2024 ONSC 1754

Kurt v. Kurt and Sullivan, 2023 ONSC 6599

Cambareri v. Sorrenti, 2023 ONSC 4918

Friends of Nellie Lunn et al. v. Township of Wollaston, 2023 ONSC 1327

Jonas v. Jonas, 2022 ONCA 845

VanSickle Estate v. VanSickle, 2022 ONCA 643

Walters v. Walters, 2022 ONCA 38

Judges

Counsel

Parties

Areas of Law