Court of Appeal for Ontario

Date: 2024-10-29 Docket: COA-24-CV-0142

Before: Simmons, Coroza and Sossin JJ.A.

In the Estate of: Radwan Darwish Abutaa, deceased

Between:

Basma Rizeq Beirat Applicant (Respondent)

And:

Manal Khiyal, also known as Manal Khyial, also known as Manal Khayal, and also known as Manal Adnan, personally and in her capacity as Estate Trustee of the Estate of Radwan Darwish Abutaa, and Darwish Radwan Abutaa, a minor, Amira Radwish Abutaa and Noorah Abutaa Respondents (Appellant)

Counsel: Lia Boritz, for the appellant Areta Lloyd, for the respondent

Heard: October 7, 2024

On appeal from the order of Justice Jamie K. Trimble of the Superior Court of Justice, dated January 15, 2024.

Reasons for Decision

[1] The deceased, Radwan Darwish Abutaa, died on May 6, 2022. The issues on appeal relate to an order (the “Order”) determining the assets of his estate at the time of his death.

[2] As of May 6, 2022, the deceased remained legally married to the respondent, Basma Rizeq Beirat, from whom he had been separated for many years. [1] The two had a long-term marriage and had two children together who were adults at the time of the deceased’s death. In September 2016, following their separation, the respondent and the deceased sold their jointly owned condominium and divided the proceeds of sale. Although the deceased commenced a divorce proceeding in January 2019, as of May 6, 2022, the respondent’s claims in that proceeding for equalization of net family properties, spousal support and retroactive child support had not been determined.

[3] At the time of the deceased’s death, he had been living in a common law relationship for several years with the appellant, Manal Khiyal. [2] The two had been cohabiting at least since entering an Islamic form of marriage in September 2017. They had a child together in January 2019. While cohabiting, in July 2018, they purchased a condominium (the “Condominium”) and registered it in both their names as joint tenants. Later, in September 2018, they transferred the Condominium to themselves as tenants in common, the appellant as to a 99% share and the deceased as to a 1% share.

[4] The Order was made on a motion brought in one of two competing applications for directions commenced in relation to the deceased’s estate. The first was the respondent’s application commenced in September 2022 and subsequently amended in June 2023. Among other things, the respondent sought a continuation of her claims in the divorce proceeding, an unequal division of net family properties, a declaration that she is a dependant of the deceased and a declaration that the transfer of the Condominium to the deceased and the appellant as tenants in common was a fraudulent conveyance.

[5] As part of her evidence on the respondent’s application, the appellant asserted that she provided the purchase money for the Condominium through a combination of paying the deposit and direct advances and prior loans to the deceased. She also claimed that she is the deceased's estate trustee and sole beneficiary under a will dated October 11, 2018. [3] Although she produced a signed copy of that will, she has been unable to find the original will. The respondent asserted that the deceased destroyed his will but provided no direct evidence of that assertion.

[6] The second application was commenced by the appellant in August 2023 and made returnable on the hearing date that had been set for the respondent’s application (for one day during the week of October 2023). In her application, among other things, the appellant sought orders that the copy of the deceased’s will she produced is the valid last will and testament of the deceased, and that the deceased’s 1% interest in the Condominium is held on a resulting trust for her. In the alternative to the latter order, she sought an order that the Condominium should be conveyed to her in partial satisfaction of debts owed to her by the deceased, or that the deceased’s estate was unjustly enriched by extra funds contributed by her towards the mortgage on the Condominium and other loans.

[7] On the June 2023 return date of her application, the respondent brought a motion within her application to, among other things, amend her application, and to have several issues determined, including whether the deceased died intestate, the appointment of the deceased’s adult daughter as estate trustee, whether the appellant held an interest in the Condominium on a resulting trust for the deceased and whether all or portions of certain other assets were assets of the estate.

[8] Subsequently, at a procedural conference on October 4, 2023, in an order styled in the respondent’s application, the presiding judge directed that “the issue to be decided will be limited to the determination of the assets of the estate at the date of death.” The presiding judge also directed that the judge “hearing this portion of the motion will not be seized to hear the balance of the application.”

[9] The evidence before the motion judge consisted of the affidavits that had been filed on the respondent’s application and the cross-examination of the respondent on her affidavits. The record was voluminous because of the many documentary exhibits attached to the affidavits.

[10] In his reasons for the Order, the motion judge noted that there were four disputed assets. He described the assets and the issues in dispute generally as follows:

i) the Condominium – whether the appellant holds 49% of its value in trust for the deceased’s estate; ii) a refund of $135,000 the appellant and the deceased paid in October 2021 toward the construction of a new home using funds from the joint line of credit secured on the Condominium – whether 50% of the refund is an asset of the deceased’s estate; iii) $67,400.48 on account of insurance proceeds paid out in October 2022 for an Audi A6, the purchase price for which was funded in part by a prior insurance payout and monies from the joint line of credit – whether these insurance proceeds should be an asset of the deceased’s estate; and iv) an Audi Q7 purchased by the appellant in June 2020 for $56,918.72 using funds from the joint line of credit which were eventually paid off by refinancing the mortgage on the Condominium – whether this automobile should be an asset of the deceased’s estate.

Since many of these assets were financed with funds from the joint line of credit secured against the Condominium, the motion judge noted that his decision about the four assets would also affect responsibility for the line of credit.

[11] The motion judge recognized that there were significant credibility issues relating to the disputed assets. While acknowledging that normally the existence of credibility issues would require the matter to proceed to an oral hearing, he concluded that he could resolve the issues on the written record. He noted that the motion was brought within an application, which normally proceeds on a written record. No one had requested an oral hearing. He also stated that “the record permit[ted] [him] to resolve the issues of credibility.” The motion judge found the respondent’s evidence credible and concluded that the appellant’s evidence was not. Among other things, he said that the appellant’s evidence “as contained in her affidavit and cross-examination, was vague, self serving, positional, defensive, unsupported or inadequately supported by objective evidence where there should have been corroborating evidence, and included hearsay and argument.”

[12] Relying on resulting trust principles and a finding that the parties at all times considered the Condominium “as jointly owned by each of them as joint tenants with equal interest”, the motion judge concluded that the appellant holds 49% of the net equity in the Condominium in trust for the deceased’s estate. He found that they changed the nature of their title holding in October 2018 to defeat the respondent’s claim for equalization and/or spousal support. He also found that 50% of the $135,000 refund the appellant received from the developer following the deceased’s death is an estate asset as is 50% of the payment from the insurer for the loss of the Audi A6. Further, he concluded that the Audi A7 was a joint family asset. Finally, based on a finding that the parties considered “the family as one economic unit”, he concluded that 50% of the line of credit, as it stood from the date of separation through to the date of the deceased’s death, must be accounted for by the deceased’s estate.

[13] In our view, this appeal must be allowed for several reasons.

[14] First, no determination was made whether the deceased died intestate or whether the respondent or the deceased’s adult daughter could act as the deceased’s estate representative. Without an estate representative advancing a trust claim against the appellant on behalf of the estate, the motion judge erred in relying on trust principles to conclude that the deceased's estate had an ownership interest in any asset then in the name of the appellant. Trust claims are personal to the individual. A non-titled spouse cannot assert a trust claim against a third party on behalf of a spouse for equalization purposes: Karatzoglou v. Commisso, 2023 ONCA 738, 488 D.L.R. (4th) 755, at paras. 22-25. Explained differently, if the October 2018 will is valid and the appellant is the deceased’s lawful estate trustee and heir, the respondent has no standing to advance a trust claim on his estate’s behalf against the appellant. [4]

[15] Second, to the extent that the motion judge concluded that the appellant and the deceased were equal owners of various of the assets based on findings that financially, they were "one economic unit", he erred in law: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. Even where there is a finding of a joint family venture, the remedy is a share of accumulated wealth proportionate to contributions. There is no presumption of equal sharing. Instead, the respective contributions of the parties must be considered in determining the claimant’s proportionate share: see Kerr v. Baranow, at paras. 62 and 102.

[16] Third, the motion judge’s findings concerning the appellant’s credibility are fundamentally flawed. He premised his finding that she was not credible in part on criticism of her evidence given on her cross-examination. It is undisputed on appeal that the appellant was not cross-examined. This is a significant error that undermines the motion judge’s conclusion and taints subsequent adverse credibility findings concerning the appellant’s evidence, e.g.: her evidence concerning the motivation for the October 2018 transfer of title, and her evidence concerning extra mortgage payments she made.

[17] Fourth, it is apparent even on a cursory review of the motion judge’s reasons and the record that the motion judge made conflicting findings of fact. For example, at para. 35(c)(iv), the motion judge stated that the documentation showed that each of the deceased and the appellant contributed approximately the same amount to the purchase of the condominium. However, although he found that the deceased contributed $66,500 to the downpayment for the Condominium and also paid $5,241 on account of legal fees and expenses for the purchase, he also accepted that the appellant contributed $66,500 to the downpayment, paid the $15,000 initial deposit and provided documentation to support $17,500 of the loan amounts she claimed she had previously advanced to the appellant. Even assuming the $5,241 payment should be treated as a contribution to the equity in the Condominium, $99,000 is a significantly larger amount than $71,741.

[18] Finally, in our view, the motion judge erred in making findings of fact in the face of many disputed issues based solely on an extensive written record without oral evidence and in the absence of the pending applications being joined. In fairness to the motion judge, given the volume of material filed and the conflicting allegations, he undertook a daunting task. Oral evidence would have assisted the process. Although neither party sought to call oral evidence, as stated in Trotter Estate, 2014 ONCA 841, 122 O.R. (3d) 625, at para. 55, “[i]t is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence … is required”.

[19] In the circumstances, the Order is set aside. Further, we direct that following a determination of whether there is a valid will or an intestacy and the appointment of an estate representative, the appellant and respondent’s applications should be consolidated and heard together on a proper evidentiary record.

[20] Costs of the appeal are fixed in the amount of $15,000 inclusive of disbursements and applicable taxes payable in the cause of the proceedings.

“Janet Simmons J.A.”

“S. Coroza J.A.”

“L. Sossin J.A.”

[1] There is conflicting evidence concerning when the deceased and the respondent separated, but it appears that it was no later than November 2015.

[2] There is conflicting evidence concerning whether the deceased separated from the appellant a few days prior to his death.

[3] The will also provides that in the event the appellant predeceased the deceased or died within 30 days of his death, the deceased’s interest in the Condominium would go to the appellant’s two sons from a prior marriage and their child to be born in equal shares.

[4] In written submissions made following the appeal hearing, the respondent points out that the question of standing was raised by the panel during oral submissions. The respondent notes that the original will has not been produced and asserts that the onus was on the appellant to overcome the presumption of destruction, failing which the de facto state of affairs is an intestacy. In our view, these submissions highlight the appellant’s claims of procedural unfairness and the need for the issue of whether the will is valid or the deceased died intestate to have been determined first and the proceedings consolidated as we direct below.