Weidenfeld v. Parikh-Shah, 2016 ONSC 7330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Robert Weidenfeld
Applicant
– and –
Sejal Parikh-Shah as Executor of the Will and Trustee of the Estate of Hana Weidenfeld, Deceased
Nathalie Weidenfeld
Joel Weidenfeld
Respondents
Robert Weidenfeld, in person by teleconference
Allen Gerstl, for the Respondents
HEARD: November 10, 2016
REASONS FOR DECISION
Nature of Proceedings
1This proceeding is styled as an Application for Directions pursuant to Rule 75.06 of the Rules of Civil Procedure. That rule provides:
75.06 (1) Any person who appears to have a financial interest in an estate may apply for directions, or move for directions in another proceeding under this rule, as to the procedure for bringing any matter before the court.
2Rule 75.06(3) sets out the directions a court may give under this rule:
(3) On an application or motion for directions, the court may direct,
(a) the issues to be decided;
(b) who are parties, who is plaintiff and defendant and who is submitting rights to the court;
(c) who shall be served with the order for directions, and the method and times of service;
(d) procedures for bringing the matter before the court in a summary fashion, where appropriate;
(e) that the plaintiff file and serve a statement of claim (Form 75.7);
(f) that an estate trustee be appointed during litigation, and file such security as the court directs;
(g) such other procedures as are just.
Facts
3The applicant, Robert Weidenfeld (Robert), lives in the City of Lethbridge, Alberta. He is the former husband of the deceased, Hana Weidenfeld (Hana).
4Robert and Hana married in October 1991 and divorced in March 1995. They had two children who are also named as respondents in this proceeding. The children are now 26 and 24 years of age.
5Hana died on May 22, 2016. In her will, which was dated April 7, 2016, she appointed her friend and colleague Sejal Parikh-Shah as the Trustee and Executor of her estate. Sejal Parikh-Shah obtained a Certificate of Appointment of Estate Trustee with a Will on June 1, 2016.
6The two adult children are the sole beneficiaries of the estate under Hana’s will. Robert is estranged from both children.
7Robert commenced three different legal proceedings against Hana in April 1996, January 1998 and February 2006. A fourth proceeding was commenced against her estate in September 2016. None of the lawsuits has reached the trial phase, but Robert takes the position that they are all outstanding and active.
8The February 2006 lawsuit filed in Superior Court in Newmarket claims a constructive, resulting or implied trust in Hana’s house at 156 Bristol Road (the house) in Newmarket Ontario. Hana was the sole registered owner of the house at that time. That claim has been inactive since 2008.
9The September 2016 lawsuit relates to Hana’s transfer of the house from her name to a joint tenancy with her two adult children, who are the children of her marriage with Robert. Robert alleges that the house was illegally conveyed to the children and the transfer is void as against him.
10On September 15, 2016, Robert obtained a Certificate of Pending Litigation against the house on an ex parte motion under Rule 42.01.
Procedure on this motion
11Robert participated in this motion by way of telephone conference call. He did not file an Application Record, but did serve and file an Amended Notice of Application for Directions and a supporting Affidavit dated September 14, 2016.
12As I understand his application for directions he is seeking an order that he be appointed the Trustee and Executor of Hana’s estate, and that he be granted exclusive possession of the house for four weeks in order to supervise the work of hired contractors or carry out the work himself in order to prepare the house for sale. He seeks an order that the house be listed for sale immediately after he has done these repairs, and that the proceeds of the sale be paid into court pending the resolution of his other court claims against Hana. He also seeks various information from the estate trustee and/or third parties relating Hana’s finances and healthcare records from 2013 to her death in 2016.
13His affidavit did not include a copy of Hana’s will or a copy of any previous will.
Position of the Parties
14Robert’s affidavit takes the position that his adult children lack the skills necessary to sell the house at fair market value. He claims that the housing market in Newmarket is at its peak and that the house must be sold immediately to maximize its price. He states: “I believe that if the House could be sold in the month of November, 2016, before the Christmas season, it could still be reasonably possible to obtain a high selling value in a real estate market that might have peaked and it becomes increasingly sensitive to a potentially significant downturn”. He states: “I am the best person qualified to conclude the necessary house repairs and its staging for sale, expeditiously and efficiently” and that he would “ensure that the House is sold at its true market value”.
15Finally, he states “In addition to the House repairs, I believe I am also the best person qualified to handle and bring order to all of Hana’s financial affairs”.
16Mr. Gerstl, counsel for the respondents, takes the position that Robert does not have standing to bring this application under Rule 75.06 because he is not a “person who appears to have a financial interest” in the estate as required by that rule. In the alternative, he argues that the relief requested by Robert is without merit and his application should be dismissed.
Analysis
17The term “appears to have a financial interest in an estate” is found in both Rules 74 (Estates – Non-Contentious Proceedings) and 75 (Estates – Contentious Proceedings), but is not defined. The term has, however, been the subject of judicial interpretation.
18In HSBC Bank Canada v. Capponi Estate, 2007 CanLII 37889 (ON SC) the Court, relying on Belz v. Mernick Estate (2000), 42 C.P.C. (4th) 357, held that this term does not include persons who are creditors of estate beneficiaries or persons who have separate law suits against the estate.
19In the Capponi case, the deceased had signed a guarantee in favour of the Bank with respect to the indebtedness of two corporations. The Bank brought an action in the Superior Court of Justice against the estate seeking payment of the guarantee. The Bank also brought an application under Rules 74 and 75 for various relief including the removal of the estate trustee and the appointment of an estate trustee during litigation. While the Bank had commenced an action on the guarantee the Bank did not have judgment against the deceased or his estate. The court held that the financial interest had not crystallized and therefore was not “a financial interest” within the meaning of Rule 74 and 75, and so the Bank did not have standing under these rules. Rule 74 and 75 were not intended to be used by creditors to secure recovery of assets within an estate or secure the assets of a deceased’s estate in advance of obtaining a judgment. See also: Polten & Associates v. Resch, 2015 ONSC 3930 at para. 58.
20In the book MacDonnell Sheard and Hull Probate Practice, Fifth Edition, the authors state (at p. 38):
Rule 75.06(2) requires that the application for directions and the motion for directions must be served on all persons appearing to have a financial interest in the estate or as the court directs…It would seem that unless the court otherwise directs, “persons having a financial interest in the estate” would be those persons named as beneficiaries in the will in question and all previous wills and those entitled on an intestacy.
21Robert is not named as a beneficiary in the will. While a financial interest includes an interest in the event of intestacy where there is a challenge to the will (McLaughlin v. McLaughlin, 2015 ONSC 3491 at para. 27), since Robert and Hana were divorced in 1995, he does not have any interest even in the event of intestacy. Even if Robert was a beneficiary under a will before the divorce in 1995 (and there is no evidence before me that he was) a bequest to a former spouse is revoked upon divorce (Succession Law Reform Act, R.S.O. 1990, c. S.26, s.17(2)). Robert’s claim to a financial interest appears to be based exclusively on his several outstanding legal claims against Hana and her estate. Accordingly, as in the Capponi case, Robert’s financial interest has not crystallized, and he does not qualify as a person with a financial interest within the meaning of Rule 75.06.
22This conclusion is supported by the decision of the Divisional Court in the case of Smith v. Vance (1997), 12 C.P.C. (4th) 391 (Div. Ct.). In that case the court considered the phrase “appears to have a financial interest in the property affected by the will” in Rules 74 and 75 as well as the slightly different phrase “having or pretending to have an interest” which appears in s. 23 of the Estates Act, R.S.O. 1990, c.E-21. Section 23 provides:
Where a proceeding is commenced for proving a will in solemn form or for revoking the probate of a will on the ground of the invalidity thereof or where in any other contentious cause or matter the validity of a will is disputed, all persons having or pretending to have an interest in the property affected by the will may, subject to this Act and to the rules of court, be summoned to see the proceeding and may be permitted to become parties, subject to such rules and to the discretion of the court.(emphasis added).
23The Divisional Court stated:
With respect to both Rule 75.03(1) and s. 23 of the Estates Act, where the stated interest is clear and obvious (for example, the claimant is a named beneficiary), there should be no difficulty recognizing the status of that person as a party. Different considerations apply where the claimant is one who pretends to have an interest. The word pretend is not to be interpreted as claiming or professing falsely or deceptively but rather as alleging or laying claim to an interest in law. One who pretends to have an interest is not required to prove that he or she has a financial interest before being permitted to become a party under s. 23 of the Estates Act. If such were the case, the inclusion, within s. 23 of entitlement of those persons pretending to have an interest would be redundant and superfluous.
However, claimants must do more than simply assert an interest. They must present sufficient evidence of a genuine interest and meet a threshold test to justify inclusion as a party. It need not be conclusive evidence at that stage but must be evidence capable of supporting an inference that the claim is one that should be heard.
24In my view the phrase “appears to have a financial interest” in Rules 74 and 75 establishes at least as high a threshold as the phrase “pretending to have an interest” in s. 23 of the Estates Act. The phrase “appears to have an interest” indicates that it must appear to the court that the person has an interest, a standard that can be satisfied if the claim has a “clear and obvious” legal foundation (as in a beneficiary or contingent beneficiary) or evidence to support it. In order to meet this test, an applicant must present a strong prima facie case that he has an interest. The fact that the applicant has commenced a legal proceeding does not, by itself, satisfy this requirement under Rule 75.06.
25As indicated above, Robert has no legal claim that he is a beneficiary (vested or contingent) whether the April 2016 will is valid or invalid. He has provided insufficient evidence capable of supporting an inference that his claim to be a person with a financial interest in the estate is one that should be heard (Jafari v. Attar-Jafari, 2008 CanLII 37212 (ON SC), at para. 13). Accordingly, he does not have standing to proceed with an Application for Directions pursuant to Rule 75.06, and his application must be dismissed.
26Even if the applicant did have standing I am of the view that his application is misguided. First of all, as a plaintiff involved in litigation against the estate and the two beneficiaries of the estate, he is obviously in a conflict of interest and should not be appointed as Trustee of Hana’s estate, particularly over the objection of the named beneficiaries, see: Forbes v. Gauthier Estate, 2008 CanLII 41574 (ON SC) at paras. 18–19, relying on Re Bazos (1964), 1964 CanLII 258 (ON CA), 2 O.R 236 (Ont. C.A.). In any event, he has provided no evidence to warrant the removal of the Estate Trustee, Sejal Parikh-Shah, in accordance with the principles outlined in Rose v. Rose (2006), 2006 CanLII 20856 (ON SC), 81 OR (3d) 349 at para. 70
27For the same reason I would decline to grant the applicant’s claim for exclusive possession of the house for any period of time (assuming, without deciding, that such relief falls within Rule75.06(3)). In addition, the evidence in his affidavit regarding the Newmarket housing market is opinion evidence and is inadmissible unless presented by an independent expert pursuant to Rule 53.03(2.1).
28Finally, if the applicant requires disclosure of documents in relation to his outstanding civil claims against the estate he should move for disclosure in the context of those claims. If he requires disclosure of medical or financial records from third parties he must move under Rule 31.01 with proper notice to those third parties.
Conclusion
29The application is dismissed. The respondents are presumptively entitled to costs of this application. If the parties are unable to agree on costs the respondents may file written submissions of not more than 3 pages, excluding a costs outline and any offers to settle, within 20 days of the release of this decision, and the applicant may file reply submissions on the same terms within 10 days thereafter.
Justice R.E. Charney
Released: November 25, 2016
CITATION: Weidenfeld v. Parikh-Shah, 2016 ONSC 7330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Robert Weidenfeld
Applicant
– and –
Sejal Parikh-Shah as Executor of the Will and Trustee of the Estate of Hana Weidenfeld, Deceased
Nathalie Weidenfeld
Joel Weidenfeld
Respondents
REASONS FOR DECISION
Justice R.E. Charney
Released: November 25, 2016