COURT FILE NO.: 929/16 DATE: 2016/10/04 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Rebekka Weigand and Jonathan Weigand Applicants – and – Phimphone Mohammed, in her capacity as the Estate Trustee for the Estate of Peter Weigand, deceased Respondent
Counsel: Cassandra Ball, for the Applicants Donald Kilpatrick, for the Respondent
HEARD: September 9, 2016
GEORGE J.
Nature of Motion
[1] Leave is sought to bring an application under the Succession Law Reform Act, R.S.O. 1990, c. S.26 (SLRA). As dependents, the applicants want to claim adequate provision from their father’s estate. To do so, they require an extension of the limitation period.
Legislative Framework & Statement of the Issue
[2] If permitted, the application would be brought under Part V of the SLRA.
[3] Section 57 defines a dependent as any of the spouse, parent, or sibling of a deceased, and to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.
[4] Section 58 provides that:
Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
[5] The limitation period is set out in s. 61(1):
Subject to (2), no application for an order under section 58 may be made after six months from the grant of letters probate of the will or of letters of administration.
[6] The limitation period does not begin to run at any time during which the person with the claim is a minor.
[7] My jurisdiction to grant an extension derives from (2):
The court, if it considers it proper, may allow an application to be made at any time as to any portion of the estate remaining undistributed at the date of the application.
[8] The issue is whether it would be, in these circumstances, proper to grant leave?
Affidavit Evidence
[9] Peter Weigand (deceased) passed away on May 5, 2013. He was 49 years old. At the time of death he had a common law partner, the respondent Phimphone Mohammed. He is survived by three children - Emma Weigand (Emma), Jonathan Weigand (Jonathan), and Rebekka Weigand (Rebekka). At the time of death, Rebekka was 16, Jonathan 19, and Emma 20 years old. Emma was not a dependent at the time of death.
[10] The deceased had a Will, which provides that the entire residue of his estate go to the respondent. She is the sole beneficiary. On November 5, 2013 the respondent was issued a Certificate of Appointment of Estate Trustee with a Will. We are now past the limitation period for a dependents claim.
[11] The applicants provide a reason for not filing within the prescribed time, alleging they were misled by the respondent. The deceased owned property in Dorchester, Ontario (home), known municipally as 15 Linwood Drive. Their affidavits claim this home was purchased by their grandfather Udo Weigand, specifically for the deceased “and his family”. Udo Weigand filed an affidavit explaining this arrangement.
[12] After death, Udo deposes that the respondent reached out to him, promising to sell the home and then equally distribute the sale proceeds to all three children. Jonathan deposes that he attended the home to assist the respondent in getting it ready for sale, at which time she reiterated the promise.
[13] As time went on, and as the home still had not been listed for sale, Jonathan made further inquiries. On one occasion, the respondent assured him the home would indeed be sold, but that further repairs had to be done. In January, 2016 he says he approached her once again asking her when she intended to sell. The home was never listed for sale.
[14] The home has been transferred into the respondent’s name.
[15] They claim the respondent, despite her representations and repeated promises to make provisions for them by selling the home, ultimately reneged. They say this is why they did not commence an action earlier. They relied on her promise.
[16] The respondent filed an affidavit, disputing most of this account. She says no promise was made, stating this at para. 38:
It is not true that I ever told the applicant Jonathan Weigand or his paternal grandfather, Udo Weigand, that I was going to sell the home at 15 Linwood Drive in Dorchester and give the sale proceeds to the applicants and their sister Emma Weigand.
[17] The respondent points out that Rebekka, while she was a minor at the time of death, did not bring this application until 16 months after the limitation period expired. In Jonathan’s case, it was 23 months. The applicants dispute this calculation and argue, relying upon the courts comments in B(JDD) (Litigation Guardian of) v. G(JE), and given the provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, that the limitation period for both would not have expired until six months from the date Rebekka turned 18, that being November 30, 2014. On this point I agree with the applicants.
[18] There are two key components to the respondent’s objection.
[19] First, her basic argument is that it wouldn’t be reasonable to grant leave as, in the intervening period, Jonathan and Rebekka did little to assert their claim of dependency. They did not even seek legal advice until 2016. The respondent argues that for this to be a proper case for leave, the applicants must show they were diligent in addressing their concerns and issues with her, and that they demonstrated an intention to seek relief when they became dissatisfied with her position. They did nothing. She has essentially been blindsided by this.
[20] Second, in June 2014 the estate paid to the applicant’s mother Heather Hopper, $30,702.27 which, she says, forecloses any further support claim.
[21] The deceased and Heather Hopper, the children’s mother, were granted a divorce on May 15, 2001. He was ordered to pay child support for the benefit of the children. Paragraph 7 of the order provides that:
…the husband owns or has an interest in a policy of insurance in the face amount of $25,000 through Great West Life bearing group policy number 218601. The husband will designate the children with the wife as trustee as the sole beneficiaries under this policy and file the designation with Great West Life as provided by the Insurance Act. The husband will maintain the children with the wife as trustee as beneficiaries under the policy as long as he is required to support the children.
[22] This policy was made available to him through his business. A complication arose in that when he sold the business the coverage came to an end. The respondent deposes she did not learn this until after his death.
[23] As a result of the terminated coverage, and given the deceased’s obligation, the respondent paid to the mother what otherwise would have been the insurance proceeds. She was able to raise the money, plus interests and costs, ultimately paying to Ms. Hopper $30,702.27. There is proof this payment was made, and in any case the applicants do not dispute it.
[24] The respondent agrees she considered selling the home, but only because of the child support obligation, for which she had to borrow in order to satisfy, and because of other liabilities including an $80,000 home equity loan registered against title. In other words, she did contemplate a sale, but not for the reasons the applicants’ suggest. It was one option to raise the funds to meet those obligations.
[25] The respondent details the settling of the estate. The assets were fully distributed 11 months before this application was issued. Two promissory notes were transferred to her personally, as was the real property, including the home. The lease of another building was assigned to her, and his personal bank account was closed on June 16, 2015. As of May 2015 the remaining balance to the credit of the estate was $9,261.71, from which $3,322.95 was paid to the estate’s solicitor and $5938.86 to the respondent as sole beneficiary.
The Law & Assessment
[26] In B(JDD) the court provides some guidance on how to apply and interpret s. 61(2) of the Act. I am to do so judicially and in a broad and liberal manner. I must consider the delay, the reasons for delay, and whether there would be prejudice to the estate’s ability to defend the proposed claim.
[27] The question is does this situation bear review of whether the testator made adequate provision in his will for dependents? Not whether he has in fact done so, but is there a sufficient basis for a review. This requires a consideration of what is equitable, and whether or not the respondent acted “honestly, reasonably, and fairly”.
[28] This is the applicant’s position in a nut shell. The respondent caused the delay through her misrepresentation, and has not acted honestly. They suggest there would be no prejudice to the estate as the respondent is the only beneficiary. No innocent third party beneficiaries would be put at risk.
[29] The respondent relies upon the decisions in each of Re Assaf Estate; Blatchford v. Gardiner; and Su v. Lem, 2012 ONSC 1448, all Superior Court decisions. She claims that granting an extension would bring an injustice upon her, and in any event the assets have already been distributed.
[30] She agrees the test is whether the situation bears review of the adequacy of provisions. She, however, stresses that this is a fact-dependent exercise, and that in these circumstances, a review is not warranted.
[31] The easy thing to do would be to simply say there is a conflict in the evidence, which I cannot resolve at this stage, and therefore the broadest and most liberal thing to do would be to grant the extension and allow the application to go forward. This would, however, suggest an extension should be automatically granted. It is not that simple.
[32] While it is true the reason for delay is a factor to consider, a request for an extension is not grounded solely in “good cause” being shown for the delay. The discretion to extend (or refuse) is a question of what is equitable between the parties, in all the circumstances. The respondent argues that the payment to the mother is the equitable outcome. The children have been provided for, and beyond that a testator can distribute their assets as they see fit.
[33] What are the circumstances? First, there was a delay. The limitation period has passed. There is some dispute as to how long the delay was but that is of little consequence. Second, there is a conflict in the evidence as to the reason for delay, which I cannot resolve. In this respect there are essentially cross-allegations of bad faith. It is said the respondent lied when she promised to sell the home and distribute proceeds to the children. It has been suggested the applicant’s attempted to mislead the court by not mentioning the funds received by their mother. Third, and further to that last point, I accept the respondent paid to the applicant’s mother, specifically for child support and in order to comply with the divorce judgment, approximately $30,702.27. It is worth nothing that the mother released the respondent from any further claims upon receipt of the funds. Fourth, I accept the respondent’s accounting, and accept that the estate has for the most part been distributed. Fifth, the deceased had an obligation to pay child support at the time of death.
[34] It would be wrong to allow the respondent to rely on the fact she has distributed the estate as a basis to not grant an extension. If the applicant’s version of events is true, and the respondent did indeed promise to sell the home and distribute the funds to them, than it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period. If this is true, the respondent would be estopped from relying on the limitation period, as it would be open to the court to find that the applicants relied on that representation to their detriment.
[35] As I only have untested affidavits, I am unable to resolve the conflicts in the evidence. This weighs in favour of an extension.
[36] That leaves these two questions. First, what is the import of the $30,702.27 payment to the applicants’ mother? And second, should the lack of information respecting whether Jonathan and Rebekka are presently dependents, make a difference? Jonathan appears to be independent and self-sufficient, while I have no information respecting Rebekka.
[37] The respondent points out that the applicants make no mention of the payment to their mother in their materials. The implication is they are attempting to mislead. This is a reasonable inference, which could well be true; but I cannot find it as a fact at this stage. I know with certainty that the applicants are now aware of the payment, as it’s described in the respondent’s affidavit. Beyond that I don’t know when they became aware.
[38] Whether they knew about the payment before that, and whether it was actually held and used for their benefit, are considerations for the trial judge. I would add this - even if they have always known, the whole question of whether the payment amounts to adequate provision, would be the main issue on the application. That it’s potentially adequate, meaning the estate has no further obligation, would be an issue in the main action, which minimizes the import of the payment on this motion. Of course the court would take that payment into account in assessing whether adequate provision had been made, and deduct it from the total amount if it is not, but it is not a determinative factor here.
[39] Maybe that payment alone was enough; maybe it was not; maybe it was more than enough. Who knows at this point? Despite the respondent’s allegation of a nefarious omission, it doesn’t alter what should be my focus, which is to look at why the applicants did not bring the application before the limitation period expired, and determine whether it would be proper to allow them to do so now.
[40] While the applicant’s would have to establish an equitable interest in the home, the question better framed is to ask whether adequate provision had been made for them. The home is central to this issue because of what the applicants and Udo Weigand outline as the history surrounding its purchase; the alleged promise and how that impacted the decision to not bring a claim earlier; and because it is the estate’s main asset.
[41] On the second point - whether Jonathan and Rebekka are presently dependents - I conclude that, while relevant, given everything I have outlined so far, including the fact they received nothing from the estate, this is not determinative. The critical issue is whether they were dependents at the time of death.
[42] The part of s. 61(2) that does give me pause is the reference to “any portion of the estate remaining undistributed at the date of the application”. This raises an interesting question. In the normal course, and some of the case law speaks to this, if the estate has been fully distributed an extension should not be granted. This makes sense. It would make the discretionary extension of the limitation period a pointless exercise. There is nothing left to distribute. However, in our instance, a misrepresentation by the executor is being alleged, who is also the sole beneficiary, who also happens to be in current possession of the estate’s main asset, the very asset which was the subject of the misrepresentation. It is inconceivable that the inclusion of this language was intended to shield administrators who engage in such behaviour. I am not saying this is what happened, but a trial judge could come to this conclusion on the evidence before me.
[43] The applicants must realize that, in allowing the application to proceed, significant scrutiny of the $30,702.27 payment will ensue. This will place a spotlight on their mother, their relationship with their mother since the payment, and what was done with that money.
[44] At the end of the day, there is a difference between the SLRA and the Family Law Act’s support provisions, and for good for reason. This will be highlighted on the application, as the question will be whether the support order, in particular the life insurance term, amounts to adequate provision. In other words, the SLRA does not call for an examination of whether a term within a child support order was adequate, but whether there is adequate provision for dependents going forward from the date of death.
[45] The applicant’s say they were deceived by the respondent. This is supported by Udo Weigand. Even though the respondent gives a different version, I am unable to reject that explanation. In circumstances like these, to refuse leave and not grant an extension, I would have to conclude that the prejudicial effect of an extension upon the respondent would outweigh the need to engage in a review and determine entitlement to support under s. 58. I can’t reach that conclusion.
Order(s)
[46] I make an order extending the limitation period for a support application pursuant to s. 61(2) of the SLRA. The applicants are granted leave to pursue their claim under Part V.
[47] Costs can be addressed in brief written submissions. The applicants have until the end of the day on October 28, 2016 to file. The respondent until November 4, 2016.
“Justice Jonathon C. George” Justice Jonathon C. George Released: October 4, 2016
COURT FILE NO.: 929/16 DATE: 2016/10/04 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Rebekka Weigand and Jonathan Weigand Applicants – and – Phimphone Mohammed, in her capacity as the Estate Trustee for the Estate of Peter Weigand, deceased Respondent REASONS FOR DECISION George J. Released: October 4, 2016