ONTARIO
SUPERIOR COURT OF JUSTICE
CITATION: Swiderski v. Walsh, 2015 ONSC 3443
COURT FILE NO.: 3707/14
DATE: 2015/06/01
BETWEEN:
Richard Swiderski
R. Jonathan McKinnon, for the Applicant
Applicant
- and -
Carol Walsh and The Estate of Stella Swiderski, by her Estate Trustee, Carol Walsh
Monique Rae Bennett, for the Respondents
Respondents
HEARD: May 27, 2015
RADY J.:
REASONS FOR JUDGMENT
Introduction
[1] The applicant seeks an order declaring that the proceeds in certain bank accounts are subject to a resulting trust in favour of the respondent Estate. The respondent Mrs. Walsh submits that the presumption of a resulting trust is rebutted on the facts of this case.
[2] Mr. Swiderski and Mrs. Walsh are siblings, the only children of the late Stella Swiderski who died in 2013 in her 91st year. She left a will from 1984, which named her daughter as executrix and left the residue of her estate to her issue alive at her death equally per stirpes.
[3] Mrs. Swiderski’s most significant asset was funds held in two bank accounts with the Royal Bank of Canada totaling approximately $160,000. The accounts were held jointly by Mrs. Swiderski and Mrs. Walsh. Consequently, on Mrs. Swiderski’s death, the account funds became Mrs. Walsh’s property by virtue of survivorship.
[4] Mr. Swiderski alleges that it was his mother’s intention that he and his sister be treated equally and she could not have intended for the bank accounts to pass outside the estate.
[5] Mrs. Walsh submits that Mrs. Swiderski carefully arranged her affairs and there is no reason to interfere with her manifest intention.
Preliminary Issue
[6] A preliminary evidentiary issue arose at the outset. Mrs. Walsh objected to certain passages in Mr. Swiderski’s affidavit and the affidavits of Mr. and Mrs. Schroeyens who were Mrs. Swiderski’s long time landlords. She objects to those parts of Mr. Swiderski’s affidavit (paras. 9, 12, 18, 19, 20 and 22) because they purport to speak to Mrs. Swiderski’s intention, which is impermissible direct extrinsic evidence.
[7] Mrs. Walsh seeks to strike the Schroeyens’ affidavits in their entirety on the basis that they are irrelevant, erroneous and do not shed light on Mrs. Swiderski’s intention. Mrs. Schroeyens’ affidavit contains information respecting her interactions with the deceased, her observations of Mr. Swiderski and Mrs. Walsh with their mother and statements allegedly made by the deceased to her respecting her money.
[8] Mr. Schroeyens’ affidavit adds nothing of any particular substance and primarily vouches for the truthfulness of his wife’s affidavit.
[9] As a general rule, indirect evidence of surrounding circumstances that sheds light on a testator’s intention is admissible. However, direct extrinsic evidence is not admissible where a will is unambiguous. See, for example, Rondel v. Robinson Estate (2011), 2011 ONCA 493, 106 O.R. (3d) 321 (C.A.).
[10] Mr. McKinnon, on behalf of his client, stresses that he does not allege that the will should be set aside. Rather, he is attempting to show that the testator could not have intended that her bank accounts would go to Mrs. Walsh in their entirety through the affidavit evidence of surrounding circumstances.
[11] I have concluded that the impugned affidavits should not be struck. They each contain some evidence, which is arguably relevant to the issue before the court. The question is the weight to be accorded to them.
[12] With respect to Mrs. Schroeyens’ affidavit, the alleged conversations with the deceased are very vague in detail and time. Several paragraphs of her affidavit have also been shown to be inaccurate or untrue. For example, the allegation respecting the funds paid to Mrs. Swiderski following her husband’s death is not accurate. Those monies were paid to Mrs. Walsh and Mr. Swiderski.
[13] Further, the allegations about the improper withdrawal of funds by Mrs. Walsh have been demonstrated to be untrue. Indeed, Mr. Swiderski has deposed that Mrs. Walsh did not act improperly with respect to the funds on deposit. Furthermore, Mrs. Schroeyens’ comment about how frequently Mrs. Walsh saw her mother is disputed in considerable detail by Mrs. Walsh. As already noted, Mr. Schroeyens’ affidavit really does not add anything to the evidentiary matrix.
[14] Nevertheless, I am not persuaded that the affidavits should be struck. Some of the paragraphs may be seen as corroborative of some of Mr. Swiderski’s evidence. Observations of Mrs. Swiderski’s interaction with her children may also be relevant. With respect to Mr. Swiderski’s affidavit, I have concluded that the affidavit should stand as evidence of what he may have believed.
[15] Overall, however, the affidavits are not particularly helpful to the issue before the court and their weight is accordingly diminished. I prefer the objective evidence and in particular, the documentary evidence.
The Facts
[16] Richard Swiderski and Carol Walsh are siblings. Mr. Swiderski is now 68 years old and Mrs. Walsh is nine years his junior. They are the children of Stella Swiderski who died on April 4, 2013. Mrs. Swiderski lived on her own until the time of her death, assisted from time to time in her later years by her children and the VON.
[17] Mrs. Swiderski left a will that had been prepared in 1984 with the assistance of a solicitor by the name of F. Brian Lee. The will names Mrs. Walsh as the executrix and trustee of the estate. Mrs. Walsh’s husband is named as the alternate executor. As noted earlier, the will provides that the residue of the estate is to be divided among Mrs. Swiderski’s issue alive at her death in equal shares per stirpes.
[18] The will also provides that the executrix could postpone the sale of any part of the estate at her discretion and that she could make any division of the estate and pay any such shares in her discretion.
[19] In May 1989, Mrs. Swiderski opened two bank accounts with the Royal Bank of Canada. Since the beginning, the accounts have been operated in the joint names of Mrs. Swiderski and Mrs. Walsh. No declarations of trust were ever executed.
[20] In August 1990, Mrs. Swiderski and her daughter made an appointment to attend John T. Donohue Funeral Home Limited. Mrs. Swiderski wanted to make arrangements for the pre-payment of her funeral expenses.
[21] In 1994, Mrs. Swiderski met again with Mr. Lee. He prepared and she signed a personal power of attorney over her health care matters in favour of Mrs. Walsh. Mr. Swiderski was named as the alternate. The power of attorney made no provision for the payment of compensation.
[22] In 1997, Mrs. Swiderski signed a Royal Bank Retirement Income Fund Investment and Payment form in which she named Mrs. Walsh as her sole beneficiary. Those funds were paid out in their entirety for Mrs. Swiderski’s benefit during her lifetime.
[23] Mr. Swiderski and Mrs. Walsh have been estranged for the last decade or so and they do not speak. Mrs. Walsh considers her brother to have been abusive to her and her mother. Mr. Swiderski acknowledges that he and his sister do not get along but he denies any allegations of abusive behaviour.
The Law
[24] The decision in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, is one of the leading cases in the area of disputes over gratuitous transfers. The Court confirmed that the common law presumptions of advancement and resulting trust continue to play a role in such disputes. However, the Court held that the presumption of advancement does not apply in respect of independent adult children. A rebuttable presumption of resulting trust arises in such cases. The burden of proof for rebuttal is on a balance of probabilities.
[25] The Court noted that the types of evidence that can be considered in ascertaining a transferor’s intent includes:
• the wording used in bank documents; • the control and use of funds in the account; • the granting of a power of attorney; • the tax treatment of the account; and • evidence subsequent to the transfer to the extent it is relevant to the transferor’s intention.
[26] The weight to be assigned to the evidence is for the trial judge to determine and care must be taken to “[guard] against evidence that is self-serving or that tends to reflect a change in intention”.
[27] I am mindful as well of the provisions of the Evidence Act, R.S.O. 1990, c. E.23 and in particular section 13, which provides as follows:
In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
Analysis
[28] In this case, the objective evidence is clear that Mrs. Swiderski had made arrangements with respect to her assets that remained undisturbed over many years and notwithstanding what may have been any challenges in her relationship with her son and daughter or between them. The initial arrangements (i.e. her will) were put in place at a time Mrs. Swiderski was in her late 50’s, working and living independently. There is no suggestion that she lacked capacity.
[29] Her will was prepared by a lawyer and executed in 1984. Mr. Swiderski is not explicitly named in it, although clearly he is entitled to 50% of the residue given its terms.
[30] Mrs. Walsh and her husband (and not Mr. Swiderski) are named as executrix and alternate. The executrix is granted broad discretion with respect to the treatment of the estate. This latter evidence tends to militate against the conclusion that Mrs. Swiderski intended to treat her children equally.
[31] The bank accounts were opened in 1989 and were operated in joint names until Mrs. Swiderski’s death, a period of almost 25 years. Even if mother and daughter had difficulties in their relationship as Mr. Swiderski and Mrs. Schroeyens allege, it is significant that Mrs. Swiderski did not make any changes to the ownership of the accounts at any time prior to her death. She certainly had ample time to do so.
[32] In August 1990, Mrs. Swiderski made arrangements to pre-pay her funeral expenses as evidenced by a letter from Donohue Funeral Home dated August 28, 1990. This supports the conclusion that Mrs. Swiderski was actively taking steps to arrange her financial affairs as she wished.
[33] In June 1994, she had her solicitor prepare a power of attorney for personal care in which Mrs. Walsh was appointed. Mr. Swiderski was named as the alternate. No provision is made for compensation to be taken by the attorney. Its terms might be interpreted as an example of equal treatment of her children, although had Mrs. Swiderski wished to do so, she could have named them jointly. In my view, the power of attorney is another example where Mrs. Swiderski treated her children differently.
[34] In September 1997, Mrs. Swiderski opened a Retirement Income Fund and named Mrs. Walsh as beneficiary. Mrs. Walsh has deposed that arrangements were made to transfer payments into one of the bank accounts in order to increase the level of her mother’s monthly income. I do not understand Mr. Swiderski to dispute this. The fund was paid out in its entirety during Mrs. Swiderski’s lifetime. Again, this demonstrates unequal treatment. Had any funds remained in the fund upon her death, they clearly would have belonged to Mrs. Walsh.
[35] In 2008, Mrs. Swiderski granted a power of attorney to her son with respect to one of her bank accounts. Mrs. Walsh’s evidence is that this account carried a smaller balance than the others. Mrs. Walsh has also deposed that when the balance exceeded $5000, her mother told her to transfer the excess to the other account. Mr. Swiderski disputes this evidence in his reply affidavit and suggests that his mother wanted a minimum of $20,000 in her chequing account. He says that “Carol was afraid that my mother would give my son…more money” and she “ordered” her not to do so. In my view, it is very unlikely that Mrs. Swiderski would wish to maintain $20,000 in a chequing account, which typically attracts a lower rate of interest. In any event, Mrs. Swiderski chose not to grant her son a power of attorney over both accounts.
[36] Mr. Swiderski has deposed that he and his sister were gifted $20,000 each when they married. Mrs. Walsh has deposed that in fact, an advance of $17,000 was made to her sometime after her marriage. It was a loan and was repaid over time. I do not believe Mr. Swiderski disputed this evidence in his responding affidavit, although he deposed that “the payment back was unknown to me”. Again, this demonstrates that the deceased treated her children differently.
[37] Finally, Mrs. Swiderski was aware that her children were estranged during the last ten years of her life. Nevertheless, she made no changes to the manner in which she ordered her affairs. There is no evidence that she was unable to do so because of incapacity or ill health.
[38] Having considered all of the evidence, I am satisfied that Mrs. Walsh has demonstrated, on a balance of probabilities, that there is no resulting trust in favour of the estate. Mr. Swiderski’s application is dismissed. If the parties are unable to agree, I will receive brief written submissions on costs first from the respondent by June 15 and the applicant by June 29, 2015.
“Justice H. A. Rady”
Justice H. A. Rady
Released: June 1, 2015
CITATION: Swiderski v. Walsh, 2015 ONSC 3443
COURT FILE NO.: 3707/14
DATE: 2015/06/01
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Swiderski
Applicant
- and -
Carol Walsh and The Estate of Stella Swiderski, by her Estate Trustee, Carol Walsh
Respondents
REASONS FOR JUDGMENT
RADY J.
Released: June 1, 2015