SUPERIOR COURT OF JUSTICE – ONTARIO

ESTATES LIST

COURT FILE NO.: 03-104/14

DATE: 20150708

IN THE MATTER OF THE POWERS OF ATTORNEY OF ELSA FUSS AND

THE SUBSTITUTE DECISIONS ACT, 1992

RE: Teresa Glickman

Applicant

- and -

ELSA FUSS, ROSIE SCHWARTZ in her capacity as attorney under a Continuing Power of Attorney for Property and Power of Attorney for Personal Care for Elsa Fuss, DAVID FUSS in his capacity as an attorney under a Continuing Power of Attorney for Property for Elsa Fuss, MIRIAM ABBOU and THE PUBLIC GUARDIAN AND TRUSTEE

Respondents

BEFORE: L. A. Pattillo J.

COUNSEL:
Kimberly A. Whaley and Lionel J. Tupman, for the Applicant, Teresa Glickman

Micheal Simaan and Alexander Minkin, for the Respondent, Rosie Schwartz

Milton A. Davis and Martine S.W. Garland, for the Respondent, David Fuss

HEARD: July 7, 2015

ENDORSEMENT

[1]

Introduction

There are two motions before the Court concerning the funding of the ongoing care and maintenance of the respondent Elsa Fuss (“Elsa”). Her children agree that Elsa’s care and maintenance is the paramount consideration. They do not agree on how her assets should be used to accomplish that objective.

2Elsa is 95 years of age. She has advanced dementia. She is immobile and frail and lives in her Toronto condominium with 24 hour care. Her monthly living expenses are approximately $15,000 per month.

3Elsa has two real assets. Her Toronto condominium and a condominium in Florida. On January 9, 2015, Justice Penny ordered that an $90,000 line of credit be obtained on the security of the Toronto condominium to look after Elsa’s care and maintenance for six months pending return of the applications. That money has been almost exhausted. Elsa has only enough money left to cover another month of expenses.

4Elsa and her late husband, Julius had four children, Rosie Swartz (“Rosie”), David Fuss (“David”), Teresa Glickman (“Teresa”) and Miriam Abbou (“Miriam”). Rosie brings one of the motions. Teresa and David bring the other.

5Rosie’s motion seeks to extend an existing $90,000 line of credit on the Toronto condominium to $350,000 to fund Elsa’s living costs for the next two years.

6Teresa and David oppose Rosie’s motion to increase the line of credit and jointly move for an order to sell the Florida condominium. They submit that in order to obtain funds in the interim while the Florida condominium is being sold, a mortgage should be placed on the Florida condominium. Rosie opposes the sale of the Florida condominium or any mortgage on it.

7Miriam and Scotia Trust, Elsa’s interim guardian of property pursuant to the order of Conway J. dated April 29, 2015, take no position on either motion.

[8]

Background and Positions of the Parties

In his endorsement on January 9, 2015, Justice Penny’s noted that the parties could return for further directions on the issue of extension or amendment of the line of credit. The line of credit is secured against the Toronto condominium and Rosie and her husband guarantee it. Rosie’s evidence is that the line of credit can be increased up to $350,000. David’s evidence is that all the bank has approved is $250,000.

9The Florida condominium is currently in the names of Rosie and Elsa as joint tenants. The transfer by Elsa to joint tenancy took place in August 2004. Earlier in September 2003, Elsa executed a codicil to her will giving Rosie the first right to purchase the Florida condominium for $75,000, payable $25,000 each to David, Teresa and Miriam. Elsa’s earlier will gave Rosie the first right to purchase the Florida condominium at market value, paying ¾ of the purchase price divided equally between David, Teresa and Miriam.

10Teresa and David have challenged the events surrounding both the codicil and the transfer to joint tenancy. They submit that Elsa did not have the capacity or sufficient understanding to enter into such documents and that the result is against her wishes. They accuse Rosie of undue influence.

11Elsa and Julius purchased the Florida condominium in May, 1987 for $103,145 U.S. They spent winters there together. After Julius died in 1998, Elsa continued to use the condominium until approximately 2008 when her health would not allow her to go south any longer. Rosie, her husband and children have continued to use the Florida condominium. Rosie says that since 2009, she has spent over $140,000 U.S. in repairs, maintenance fees, property tax, insurance and service contracts in respect of the Florida condominium. To date she has produced no documents to support that claim.

12Scotia Trust has obtained a valuation for the Florida condominium of between $225,000 and $300,000 U.S. Rosie says the value is $350,000 U.S.

13Rosie submits that the best and most expeditious course to ensure Elsa’s continued care is to increase the line of credit on the Toronto condominium. She and her husband are prepared to guarantee any increase. Rosie opposes the sale of the Florida condominium for the following reasons:

1. Delay;
2. Uncertainty of sale price;
3. Uncertainty of the net amount Elsa would receive given that Rosie would be entitled to repayment of the cost of the renovation improvements;
4. Uncertainty as to the taxes that Elsa would be required to pay on the sale;
5. Uncertainty of the ownership issue.

14Teresa and David submit that the best course for Elsa is to sell the Florida condominium. In their view, extending the line of credit on the Toronto condominium is not a “wise property management” decision for the following reasons:

1. It contradicts Elsa’s express prior capable wishes;
2. It is “cruel’ to force Elsa to incur debt to fund her care when she has assets (once liquidated) to pay for it;
3. Encumbering the Toronto condominium first creates uncertainty as to the monies available from the Florida condominium once the Toronto condominium monies are exhausted;
4. It ignores the first principle of the Substitute Decisions Act, 1992, SO 1992, c. 30 (the “SDA”) by subordinating Elsa’s interests to those of Rosie.

15The provisions of the SDA make it clear that the priority is the maintenance and care of the incapable person.

16There is no issue between the parties that a guardian of property has the power to do anything on the incapable person’s behalf that the incapable could do if capable, escept make a will. That includes selling or charging property. SDA s. 31(1). See too: Fiacco v. Lombardi, 2009 46170 (SCJ) at paras. 21 , 33. In this case, and because of the acrimony between the siblings, Scotia Trust is not prepared to exercise that power. I do not blame it.

17Given the urgent nature of the need for funds to continue Elsa’s care and maintenance, it is necessary, in my view, to extend the existing line of credit on the Toronto condominium. The evidence indicates that it can be done quickly and that Rosie and her husband will guarantee the increase.

18Teresa and David’s submission that short term financing be obtained by a mortgage on the Florida condominium is not realistic. They have provided no evidence as whether such a mortgage can be obtained, if so from whom or the timing for completion. There is also the fact that Rosie is a joint owner on title.

19In my view, a determination of whether the Florida condominium should be sold is premature. If it is Elsa’s asset alone, I would have no hesitation in ordering that it be sold immediately. Elsa is no longer able to use the Florida condominium and hasn’t since 2008. On the other hand she lives full time in the Toronto condominium. Of the two assets, the Florida condominium is the obvious one to sell to fund her continued care and maintenance. It makes little sense to borrow money and pay interest when the funds can be provided by liquidating an asset that is not being used.

20But there is an issue between the siblings as to the ownership of the Florida condominium. Rosie submits that she is a joint owner. She further submits that she was gifted the property by Elsa in the codicil to her will. Finally she submits that she has paid a substantial amount for renovations and for the maintenance and taxes over the years. Teresa and David dispute Rosie’s interest in the property. They say Elsa is the sole owner the Florida condominium. They submit that they have not seen any documents to establish the alleged expenses. They also raise the issue of occupation rent because Rosie and her family used the Florida condominium exclusively from 2008. Finally, both sides acknowledge there are the tax issues which will arise on any sale on which there is no evidence in the record.

[21]

Bifurcated Hearing and Timetable

I agree with Mr. Simaan that ordering the Florida condominium to be sold at this time without a proper resolution of the issues surrounding that step would be unfair to both Elsa and Rosie. Accordingly, I advised counsel that I would direct a bifurcated hearing (affidavit evidence and brief viva-voce cross-examination). In my view, the hearing should encompass the following issues:

1. What is the fair market value of the Florida condominium?
2. Does Elsa’s 2003 codicil gift the Florida condominium to Rosie such that s. 35.1 of the SDA applies?
3. Is the 2004 transfer of the Florida condominium by Elsa to joint tenancy valid?
4. What are the amounts that Rosie has spent on renovations to the Florida condominium, when and why?
5. What amounts has Rosie spent on maintenance, taxes and other items for the Florida condominium since 2008?
6. Should Rosie be charged for occupation rent, and if so, how much and for what period?
7. What taxes will be due and owing by Elsa if the Florida condominium is sold?

22The following timetable shall apply to address the above issues:

1. All parties to deliver any further affidavits by July 31, 2015;
2. All parties to deliver any rely affidavits by August 17, 2015;
3. Cross-examinations, if any, to be held by August 31, 2015;
4. Counsel shall attend at 9:00 a.m. appointment before me on September 8, 2015 to discuss any hearing management issues (1 hour);
5. The hearing will be held before me on September 17 and 18, 2015 (date confirmed).

23The above timetable will permit the issue of whether the Florida condominium should be sold and if so on what basis to be determined so that, if required, it can be listed for sale prior to the start of the 2015/16 winter season.

[24]

Disposition

As noted, the line of credit on the Toronto condominium must be extended to ensure that Elsa’s maintenance and care is continued without interruption. I order that it be expanded to $250,000 at this point on the understanding that any monies utilized pursuant to it will only attract interest when drawn down and that such interest will be paid from the line of credit. The further $160,000 should be sufficient to enable a determination of the Florida condominium issues and the subsequent sale of it if required. A further increase may be sought if necessary.

25The motions are otherwise adjourned to September 17 and 18, 2015. Costs of the day reserved to the hearing of the motions.