SUPERIOR COURT OF JUSTICE - ONTARIO
RE: WILLIAM SNITZLER, Applicant
AND:
GUILLERMO SNITZLER and SUSIE SNITZLER, Respondents
APPLICATION UNDER Rules 14.05(3), 74.15 and 75.06 of the Rules of Civil Procedure and Sections 57-79 (Part V) of the Succession Law Reform Act, R.S.O. 1990, c. S-26 as amended
BEFORE: Sean F. Dunphy J.
COUNSEL: Moira Visoiu, for the Applicant
Jeffrey Larry and Alysha Shore, for the Respondents
HEARD: April 14, 2015
ENDORSEMENT
1Can real property by transferred prior to death in such a fashion as to remove it from the scope of s. 72 of the Succession Law Reform Act, R.S.O. 1990, c. S-26 (“SLRA”)?
(a) Facts
2This application is brought by William Snitzler, the adult son of the deceased Maria Snitzler.
3The deceased had been sole owner of the family home at 49 Crang Avenue in Toronto. At the time of her death in 2011, the deceased lived in the home with her husband Guillermo (then 62) and her son William (then 21). Her daughter Susie (then 43) was married and lived on her own. Maria Snitzler had purchased the home in 1987.
4In May, 2011, Maria Snitzler was diagnosed with terminal liver cancer. On September 9, 2011, she made a will leaving her estate in equal shares to her husband, her daughter Susie and her son William. Paragraph 4 of the will indicated that:
“If not transferred prior to my death, to hold whatever property I may own and be using as a home at the time of my death…as a home for my husband during his lifetime or such shorter period of time as my husband desires, and such property is to be transferred to my husband, Guillermo Snitzler, and my children Susi Snitzler and William Snitzler on a joint tenancy basis”.
5On September 16, 2011, the deceased transferred the family home to her husband and two children as joint tenants. This transfer of the family home was consented to by her husband as spouse. The consideration was $2 plus the assumption of a mortgage (amount outstanding $40,143.81).
6Maria Snitzler passed away on October 14, 2011.
7Although an adult, William claims to be entitled to support as a dependent. That support claim is not before me at this time. The record contains indications that he had been living at home with his father, was forcibly removed from it by police in late 2011 after an incident and was ultimately released under a peace bond requiring him to stay away from the house and his father. Thereafter, William lived on social assistance.
8An earlier application (the “Partition Application”) had been brought before Mew J. in 2014. That application arose when Guillermo and Susie sought to sell the family home under the Partition Act, R.S.O. 1990, c. P-4 while William sought support under Part V of the SLRA. Ultimately, the matter was provisionally settled to permit the sale of the home and a distribution of a portion of the proceeds with the balance being held in trust pending disposition of this application. The house was sold for approximately $850,000 with $200,000 in proceeds being distributed to each of the three joint tenants while the balance continues to be held in a solicitor’s trust account.
9Mew J. remains seized of the Partition Application and will ultimately determine the allocation of the proceeds of sale not already distributed and the claim of William to support under Part V of the SLRA. The house proceeds are the principal but not only asset to which William seeks to look in pursuing his claim for support.
(b) Issues
10The only issue before me today is whether the family home – or its proceeds – form part of the assets of the Estate of Maria pursuant to s. 72(1)(a) of the SLRA. That section provides as follows:
“72(1) Subject to section 71, for the purposes of this Part, the capital value of the following transactions effected by a deceased before his or her death, whether benefitting his or her dependent or any other person, shall be included as testamentary dispositions as of the date of the death of the deceased and shall be deemed to be part of his or her net estate for purposes of ascertaining the value of his or her estate, and being available to be charged for payment by an order under clause 62(2)(f),
(a) Gifts mortis causa;”
11The remaining clauses of s. 72(1) of the SLRA concern other types of property and transfer, none of which are directly applicable to this case.
(c) Analysis
12I fully accept the applicant’s contention that s. 72 of the SLRA is remedial legislation which is to be given a broad and purposive interpretation. In interpreting the statute, however, I must confine myself to what the Legislature has provided with the words and phrases it actually employed, not what I think it may have wished to provide if it had considered this or that matter the subsequent experience or the circumstances of a case might recommend. I am bound by the language actually enacted.
13In including as property subject to an order under Part V of the SLRA “gifts mortis causa” the Legislature selected a very specific term of legal art. Latin is not frequently employed in our statutes, but when the Legislature does so, it is generally a signal that the drafter is seeking to incorporate by reference the concept or principles of law represented by that phrase.
14Donatio Mortis Causa is an old and well established principle of the common law. Robertson C.J.O. summarized the law in this fashion in the case of Brown v. Rotenberg et al. 1946 101 (ON CA), [1946] O.R. 363 (at para. 7):
It has been said that “for an effectual donation mortis causa three things must combine: first, the gift or donation must have been made in contemplation, though not necessarily in expectation, of death; secondly, there must have been delivery to the donee of the subject-matter of the gift; and thirdly, the gift must be under such circumstances as shew that the thing is to revert to the doner in case he should recover” (emphasis added)
15In considering the third of those conditions, he went on to find (at para. 18):
“Was the gift to the respondents made in such circumstances as show that the property was to revert to the donor in case he should recover? This question may be put in other language as follows: Was it intended that the gift should be effective only in the event of the death of the donor? It is not necessary that the donor should expressly state that term or condition at the time the gift is made. The inference may be drawn that the gift was intended to be absolute but only in case of death”.
16The issue of in this case is quite narrowly focused on the third condition. There is little doubt that the property was transferred (a formal transfer of title having been registered under the Land Titles Act, R.S.O. 1990, c. L-5, hereafter the “LTA”)) and that the transfer occurred in contemplation of the death of the transferor who had been diagnosed with a terminal illness four months previous and had made her final will only days prior. The only question in this case is the third condition of the doctrine which calls for the court to consider the degree to which the transfer was conditional upon the death of the transferor1.
17On behalf of the applicant, Ms. Visoiu strongly submitted that that I should simply infer the existence of the third condition even in the absence of explicit evidence. She submits that where, as here, the eventuality of death is so probable and imminent as to render any discussion of the impact on the transaction of death being avoided purely hypothetical, the court ought to be prepared to presume that the gift was in fact conditional in order to give effect to the remedial intent of Part V of the SLRA. While there is no evidence that the deceased did turn her mind to what would occur in the event of a miraculous recovery, if she had done, I am urged, there is little doubt she would have intended to restore the prior state of title. Failing to make this assumption would permit the remedial purposes of s. 72 and Part V of the SLRA to be defeated in this case and I am reminded that Part V of the SLRA was intended to limit the testamentary freedom of the deceased in order to ensure that certain dependency claims are given appropriate priority.
18For the respondents it is submitted that the third condition cannot be read out of the doctrine. The very essence of the doctrine of gifts mortis causa is that they are a peculiar form of conditional transfer where the gift is completed not by transfer but by the death of the transferor such that, in the event of the death not occurring, the transfer is deemed incomplete and the property will not have passed. In this case, the transfer has been fully and completely performed with a registration under the LTA and the assumption by the transferees of the mortgage. There was no right in the transferor to demand a return of the property the next day in the event of a recovery, however improbable. Further, the respondents submit, the law of Ontario is that the doctrine of gift mortis causa has no application to conveyances of real estate.
19I am inclined to accept the respondents’ submissions for three reasons.
20Firstly, I find that the effect of Ms. Visoiu’s submission would be virtually to read the third condition of the gift mortis causa doctrine out of the statute. When the Legislature employed the phrase “gift mortis causa” it must have intended to incorporate by reference the doctrine as it was then known to Ontario law and as it has consistently been interpreted in Ontario. While Part V of the SLRA limits the testamentary freedom of the deceased, s. 72(1)(a) borrowed a common law concept which, whether by accident or by design, depends in part at least upon the express or implied intention of the donor/testator. The conclusion may be anomalous and seemingly contrary to the thrust of s. 72 and Part V, but it seems to me to be inescapable from the language used. The doctrine and its components have been repeated in cases time and again for more than a century.
21If I consider the intention of the donor to be a necessary condition of finding such a conditional gift, I am faced with the fact that there is no evidence whatsoever that the testatrix gave any thought whatsoever to her possible recovery. Her death was imminent and known by her as such. She was making her final disposition in anticipation of its imminent occurrence.
22Many of the older cases have been willing to infer a conditional intent because of the nature of the gifts and the nature of the relationship between the parties. The applicant points out that little if any consideration is given to the intention of the donor in those cases. That may be so, but each of the cases produced to the court by both parties involved instances where there was either some evidence or cases where the circumstances readily lent themselves to inferring such an intent.
23Virtually all of the cases shown to me where a conditional gift mortis causa has been found involved gifts of some sort of personal property. In the present case, the gift was of real estate that was also the matrimonial home. The matrimonial home resides in a matrix of legal relationships that make it a somewhat unique asset. Most property can be transferred more or less at will by the owner. Not so the matrimonial home where the consent of the spouse is required. In cases of matrimonial breakdown the home may be occupied by one or the other spouse regardless of title or it may be directed to be sold despite the wishes of the title-holder and its proceeds credited in a division of family assets. The title to the matrimonial home may have been placed – or remained – in the name of one or the other spouse over the course of a marriage for any number of reasons. The inference that a transfer to, among others, the spouse, of the matrimonial home in contemplation of death necessarily carries with it an expectation, let alone a right, to a re-conveyance of the land in the event of recovery does not strike me as a necessary or even obvious inference. It is equally likely, in my view, that a donor/testatrix making an unexpected recovery, might decide to revisit where the couple consider title to the home should best reside in the circumstances then existing rather than those that prevailed when title was first taken. With this type of asset, at least, I can find no basis for an automatic or presumptive inference of a conditional intent on the part of a spouse-donor amounting to a right to return of an asset once transferred.
24Had the Legislature wished to provide that any gratuitous transfer of property made in contemplation of death is subject to SLRA obligations under s. 72, it could have so provided. There may well be valid policy reasons for doing so. The Legislature did not, however, choose to do so. Instead, the Legislature resorted to an established common law doctrine that has always had a requirement of establishing the conditional intent of the donor. I cannot, in these circumstances, ignore that long-standing requirement nor can I artificially infer the intent in the absence of a shred of evidence and given the equally probable intent that she may have had something else in mind altogether.
25I note as well that the solicitor who arranged the transfer was not examined despite the fact that the respondents waived any privilege. Had there been any “what if” discussions that were helpful to the applicant, I infer that I would have heard of them. It is not at all plain or obvious that she would have seen any reason to re-visit the disposition made by her had she in fact recovered and I decline to assume she had such an intent in the absence of evidence.
26Secondly, I cannot ignore the line of cases which suggests that the entire doctrine of gifts mortis causa is of no application to real estate. In the case of Sorenson’s Estate v Sorenson, (1977) 1977 1648 (AB CA), 90 D.L.R. (3d) 26 the Alberta Court of Appeal concluded that to be the case (at para. 40). In this province, Cumming J. in Danicki v Danicki, [1995] O.J. 3995 (S.C.J.) also concluded that the doctrine is restricted to personal property (at para. 38). None of the cases shown to me where donatio mortis causa was invoked by the courts involved real estate and the Sorenson and Danicki cases seem to suggest that that is no accident. Personal property is generally transferred with a minimum of ceremony by mere delivery and parties seldom do so through the intermediary of solicitors. Real estate, on the other hand, is subject to registration requirements, land transfer tax obligations and the like and is almost invariably subject to considerable formality and the intervention of a solicitor. In such transactions, any conditional intent can be both ascertained and recorded in an enforceable way. This last consideration leads directly to my third reason for accepting the respondents’ reasons.
27Thirdly, and related to the second point, the transfer made in this instance was not in fact conditional but was in form and substance absolute. In order for a gift to be considered “donatio mortis causa”, the court must conclude that the transfer conferred only conditional rights upon the transferee. It follows that the gift is legally conditional at the time it is made in the sense that the donor retains enforceable legal rights in the property and the donee’s rights are subject to them.
28In this case, Mrs. Snitzler changed her dispositions somewhat between the time of the will and the transfer to her family in that the husband’s life interest (as provided in the will) was no longer expressly provided for. Instead, a simple and on its face absolute transfer of an interest under the LTA was effected. There was no deed of trust provided for although this would have been simple to arrange with a solicitor looking after the transfer.
29The day following the transfer, I know of no basis by which the donor could have required the transferees to re-transfer property back to her. They acquired unconditional, certified, complete legal title under the LTA upon the transfer being registered and no condition in the event of recovery was provided. The proverbial transferor of a necklace or other piece of jewelry on her way to the hospital for a dangerous operation may readily be presumed to expect the transferee to return the goods if the skill of the surgeon restores her to health and cannot necessarily be faulted for having failed to take the time to draft a conditional deed of transfer. The same is not to be said for a transfer of real estate arranged through a solicitor where such a condition could easily be recorded and made enforceable.
30The transfer in this case was complete and absolute. No form of trust in favour of the donor in the event of recovery was expressed when the gift was made and the mortgage was assumed and I cannot simply create one out of whole cloth at the instance of the son who wishes to have a larger target for his Part V application than is otherwise available to him.
(d) Disposition
31In the result, I would order that the home at 49 Crang Avenue was not transferred by the deceased as a gift mortis causa as that term is used in s. 72(1)(a) of the SLRA and the proceeds of its sale are not accordingly to be deemed part of the estate of Maria Snitzler for purposes of the application for support under Part V of the SLRA by the applicant William Snitzler.
32The respondents shall be entitled to their costs of this application which I direct to be payable out of the proceeds of the sale of the home otherwise allocated to the applicant William Snitzler. I have reviewed the outline of costs submitted and the submissions of both parties in relation thereto. Certain of the matters claimed relate primarily to the application pending before Mew J. for partition and sale which I believe ought properly to be dealt with before him. I have allowed costs associated with this application of $9,300 and disbursements of $700 (total of $10,000 inclusive of HST) from the outline provided on a partial indemnity basis. The remainder of the claimed costs are reserved to Mew J. for later disposition.
Sean F. Dunphy J.
Date: April 21, 2015
Footnotes
- The parties did not raise the question of whether, in light of the assumed mortgage, this transfer was a gift at all. It may well have been a transfer at undervalue and certainly fits within the layperson’s understanding of a “gift” since the property was certainly worth more than the value of the mortgage assumed. Nevertheless, there was consideration and it was therefore not a gratuitous transfer. In light of my other findings, I do not need to decide this point.