Court of Appeal for Ontario

Date: 2024-11-27 Docket: M55526 & COA-24-OM-0330

Before: Roberts J.A. (Motions Judge)

Between:

Linda May Leith Applicant (Appellant/ Moving Party/Responding Party by way of cross-motion)

and

Larry Eccles, Executor of the Estate of William Gordon Alexander Leith, John Scott Alexander Leith, Jason William Craig Leith and Melissa Margaret May Leith* Respondents (Respondents/ Responding Parties/Moving Party by way of cross-motion*)

Counsel: Tetyana Ivanina, for the moving party/responding party by way of cross-motion, Linda May Leith Ross H. Thomson, for the responding party/moving party by way of cross-motion, Jason William Craig Leith Corwin Leifso, for the responding party, Larry Eccles, Executor of the Estate of William Gordon Alexander Leith

Heard: November 13, 2024

Endorsement

[1] There are two motions for determination. The appellant, Linda May Leith, brings a motion for an extension of time to file a notice of appeal from the trial judgment. The respondent, Jason William Craig Leith, seeks the sale of the testator’s assets as ordered by the trial judge. In response, Ms. Leith seeks a stay of the sale of those assets.

[2] These motions arise out of estate proceedings. The testator, William Gordon Alexander Leith (“the testator”), did not make adequate provision in his last will and testament for his wife, Ms. Leith. She elected under ss. 5, 6 and 7 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) to take an equalization payment. There is no dispute that she is owed the equalization payment.

[3] The trial judge noted that the parties did not dispute that Ms. Leith was entitled to an equalization payment. She rejected Ms. Leith’s claim for a constructive trust over the family home. She ordered that all properties and equipment owned by the estate be listed for sale so that the amount of the equalization payment could be determined, and the proceeds distributed.

[4] The principal question on appeal is whether the trial judge erred in her choice of the valuation date with respect to the calculation of the equalization payment owed to Ms. Leith. It is Ms. Leith’s position that the trial judge erred in failing to calculate her equalization payment in accordance with the provisions of the FLA that define the valuation date of the parties’ net family property as the day before the death of the spouse and not the date of sale of the property.

[5] With that brief background, I start with Ms. Leith’s extension motion. I advised the parties at the hearing of the extension motion that it was granted for reasons to follow. These are those reasons. The one business-day delay in serving and filing the notice of appeal stems from an inadvertent calculation error of the appeal period over an intervening weekend. This is a clear case where the justice of the case calls for an extension of time. The evidence establishes that Ms. Leith had the requisite intention to appeal within the deadline. There is also no question that the appeal raises more than arguable issues relating to Ms. Leith’s clear entitlement to an equalization payment and the valuation date for determining that payment. And there is absolutely no prejudice to anyone but Ms. Leith if the extension is not granted. I advised the parties that the time for the filing of the notice of appeal was extended to November 29, 2024. If Ms. Leith has encountered any difficulty in filing her notice of appeal without these reasons, the time for filing is further extended to December 6, 2024. To facilitate filing, this part of my order is effective without further formality.

[6] With respect to Mr. Leith’s motion, the notice of motion states that the motion is for: “An Order lifting the automatic stay of the sale of the real properties and equipment together with any other assets of the Estate of William Gordon Alexander Leith, Deceased, in the event leave is granted to permit the late filing of the Notice of Appeal.” However, in his oral submissions, Mr. Leith’s counsel reframed the motion, arguing that there was no automatic stay of the term of the order providing for the sale of the remaining properties, equipment [1] and assets of the estate (“the remaining estate assets”) and that this was a motion for directions about the sale of the remaining estate assets.

[7] It is well-settled principle that a legal proceeding is framed by its pleadings. One of the main reasons for this principle is fairness to the court and the other parties. The court can only adjudicate on what is joined in issue between the parties and the opposing party is entitled to know the case to be met. This principle applies to motions as well as actions and other proceedings.

[8] Ms. Leith did not have notice that Mr. Leith’s motion would be reframed into a motion for directions, requiring her to justify that a stay of the sale of the remaining estate assets was warranted. Although Ms. Leith was not given the opportunity to file formal motion materials for a stay, she asks that a stay be granted. She consents to the sale of the other estate assets, except for the home farm, provided that the parties agree on the valuation date as the day before the testator died. In the circumstances, it is only fair that she be permitted to request a stay. Mr. Leith agrees that this should be heard as part of his reframed motion for directions.

[9] Based on the materials before me and subject to clarification from counsel on whether the scheduled sale of the equipment has taken place and the parties agree on the sale of the remaining properties, I am of the view that it is in the interests of justice to impose a stay on the sale of the remaining estate assets.

[10] First, there is a serious issue to be tried with respect to the trial judge’s error in relying on the date of sale of the remaining estate assets rather than the day before the testator’s death as the valuation date. The “valuation date” in the case of a spouse’s death is clearly defined in the FLA in s. 4(1) as the day before the spouse’s death and there is no provision in the FLA that permits a court to deviate from that date for the purpose of valuating net family property.

[11] Second, Ms. Leith would suffer irreparable harm if she is forced to leave the home farm, her family home of 46 years, before the amount of her equalization payment is determined. She is 80 years old. She lives with her daughter and her family. Her only assets are the monies or assets she will receive from her late husband’s estate through an equalization payment. While she has received a prepayment of about $500,000, there is no evidence, because of the last-minute change in the nature of Mr. Leith’s motion at the hearing of the appeal, that she, her daughter and their family are able to move to another property. Moreover, unless there is agreement that the valuation date should be the day before her spouse’s death, there is uncertainty about what Ms. Leith’s equalization payment will be and her appeal could be rendered effectively moot if the remaining estate assets are sold without the determination of the correct valuation date.

[12] Finally, the balance of convenience favours Ms. Leith for the reasons explained with respect to the irreparable harm she will suffer if a stay is not granted. There is no evidence of prejudice to Mr. Leith or the estate if the remaining estate assets, in particular, the home farm, are not immediately sold.

Disposition

[13] Accordingly, I order a stay of the sale of the remaining estate assets, subject to clarification by a joint letter from all parties as to which estate assets remain to be sold and which of them they agree to be sold, and pending the disposition of the appeal, further court order or further agreement by the parties. The parties shall provide me with their joint letter within 10 days of the release of these reasons.

[14] Ms. Leith was successful on both motions. She is entitled to her costs in the amount of $6,921.25 from Mr. Leith personally or from his share of the estate of the testator. This is not a case where the costs should be borne by the estate. The estate did not oppose Ms. Leith’s motions for an extension and a stay, nor did it bring a motion to sell the properties.

“L.B. Roberts J.A.”

Footnotes

[1] While the notice of motion contains this request for relief, in his supporting affidavit, sworn October 29, 2024, Mr. Leith deposes that on the consent of all parties, the equipment was scheduled for sale by auction on November 2, 2024. No evidence confirming the sale was filed.