Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20230711 DOCKET: COA-22-CV-0300 & COA-22-CV-0296

Feldman, Benotto and Roberts JJ.A.

BETWEEN

Lisa Grady, Estate Trustee Applicant (Respondent)

and

Tracey Ann Grady, Estate Trustee Respondent (Appellant)

AND BETWEEN

Tracey Ann Grady, Estate Trustee Applicant (Appellant)

and

Lisa Grady, Estate Trustee Respondent (Respondent)

Counsel: Hari Nesathurai and Glen M. Perinot, for the appellant William Melnychuk, for the respondent

Heard: July 4, 2023

On appeal from the judgment of Justice James A. Ramsay of the Superior Court of Justice, dated October 7, 2022.

Reasons for Decision

[1] This appeal arises out of acrimonious estate proceedings between two sisters concerning their deceased mother’s modest estate.

[2] The late Margaret Grady left her estate, comprised mostly of her residence, equally to her daughters, Lisa Grady and Tracey Ann Grady, and appointed them as joint executrixes and trustees of her estate. The main point of contention is Tracey Ann Grady’s allegation that their late father, Michael Grady, had severed before his death the joint tenancy that he held in the matrimonial home with Margaret Grady, who survived him, by leaving all his estate to Tracey Ann Grady. Tracey Ann Grady therefore claims three quarters of her mother’s estate. The sisters were unable to co-operatively administer the estate. Lisa Grady brought an application for directions; Tracey Ann Grady countered with her own application and a motion to adjourn her sister’s application and appoint a third-party executor and trustee of their mother’s estate.

[3] Tracey Ann Grady argues that the application judge erred: i) in dismissing her motion to adjourn her sister’s application; ii) in appointing Lisa Grady as the sole executrix and trustee of their mother’s estate; and iii) in finally determining the issue of whether their late father had severed the joint tenancy in the matrimonial home before his and their mother’s deaths.

[4] We see no error in the application judge’s decision.

[5] The application judge did exactly as he was required to do in order to “secure the just, most expeditious and least expensive determination” of these proceedings that was “proportionate to the importance and complexity of the issues, and to the amount involved” here: see rr. 1.04(1) and (1.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”). In keeping with the shift in culture prescribed by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 2 S.C.R. 87, the application judge fairly and justly adjudicated the issues before him without causing the further unnecessary expense and delay that Tracey Ann Grady’s requested adjournment would have occasioned.

[6] We are not persuaded that Tracey Ann Grady was taken by surprise or prejudiced by the manner in which the application judge dealt with the issues before him. Indeed, the parties’ facta and other materials that were filed before the application judge demonstrate that the issues he determined were squarely before him. Moreover, Tracey Ann Grady’s evidence and position on the issues were thoroughly set out in her application materials and addressed by the application judge in his reasons. There is no basis to suggest that Tracey Ann Grady would have filed any further evidence or made any other submissions that would have affected the outcome if the adjournment she requested had been granted.

[7] It was clearly within the reasonable exercise of the application judge’s discretion in the circumstances of this case to appoint Lisa Grady as the sole executrix and trustee of the estate of the parties’ late mother, dismiss Tracey Ann Grady’s motion to adjourn both applications, and adjourn the remainder of Tracey Ann Grady’s application that was not determined by the application judge. There is no reason to interfere with the exercise of his discretion.

[8] The application judge was required to determine the threshold issue of whether, before his death, Michael Grady had severed the joint tenancy in the matrimonial home that he held with his wife, Margaret Grady, who survived him. This was the key contentious issue that prevented the appointment of an executor and the orderly administration of Margaret Grady’s estate. In determining that Michael Grady had not severed the joint tenancy, the application judge properly considered and applied the governing principles set out in Hansen Estate v. Hansen, 2012 ONCA 112, 109 O.R. (3d) 421, particularly that “a testamentary disposition cannot, in itself, sever a joint tenancy”: at para. 63.

[9] The application judge concluded, correctly in our view, that in the circumstances of this case, Michael Grady’s testamentary disposition to leave his entire estate to only Tracey Ann Grady was not sufficient to sever the joint tenancy with Margaret Grady. The onus was on Tracey Ann Grady to provide evidence to demonstrate the severance of the joint tenancy: see Re McKee and National Trust Co. Ltd. et al. (1975), 7 O.R. (2d) 614, at p. 620. Contrary to her argument that the third method of severance under Hansen Estate applied, Tracey Ann Grady did not provide evidence of “any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common”: Hansen Estate, at para. 32. More importantly, Michael Grady’s purported intention to sever is belied by the uncontradicted evidence of his happy, long marriage to Margaret Grady and the absence of any evidence that he communicated any intention to sever to her or that they mutually treated the property interest as a tenancy in common. We do not accept Tracey Ann Grady’s argument that Margaret Grady’s residence in a care home suggested a severance of the joint tenancy in the matrimonial home. Indeed, it seems to us that her residence in a care home because of her potentially diminished capacity would, rather, give rise to a heightened requirement for Michael Grady to clearly communicate his alleged intention to sever to ensure protection of her rights.

[10] The appeal is therefore dismissed.

[11] Although the parties agreed that the successful party would be entitled to costs in the amount of $10,000, payable from the estate, it was not clear whether their agreement meant that the costs would be payable from the losing party’s portion of the estate or the estate itself. We note that in estate proceedings, generally, costs are payable by the losing party or from the losing party’s share of the estate. We therefore ask that the parties clarify their positions and make submissions of no more than 1 page as to why the costs should not be payable from Tracey Ann Grady’s portion of the estate within 7 days of the release of these reasons.

“K. Feldman J.A.” “M.L. Benotto J.A.” “L.B. Roberts J.A.”