MacDonald v. Estate of James Pouliot, 2017 ONSC 3629

CITATION: MacDonald v. Estate of James Pouliot, 2017 ONSC 3629

COURT FILE NO.: 16-59458 (HAM)

DATE: 2017/06/19

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Mary MacDonald, Applicant

AND:

Estate of James Pouliot, Respondent

BEFORE: The Honourable Mr. Justice R. J. Nightingale

COUNSEL: C. Vandeputte, Counsel for the Applicant

K. Millikin, Counsel for the Respondent

HEARD: April 10 and June 2, 2017

ENDORSEMENT

[1] The applicant brings this application for order declaring that she has an equal interest in the home occupied by her and her late spouse James Pouliot by way of constructive or resulting trust.

[2] She also brings an application for support payable by his estate under the Succession Law Reform Act.

[3] The estate represented by the surviving son of Mr. Pouliot, Kyle Haney as estate trustee, opposes both claims. He also takes the position that the SLRA application is barred by the six-month limitation period under that Act and the provisions of Section 9 of the Estates Administration Act.

Factual Background

[4] This matter proceeded by way of application. The parties filed affidavits but no cross-examinations on them were held. The parties have agreed that they wish to have this matter heard by way of application given that their affidavits do not appear to disclose any significant issues of credibility of the parties and given the modest value of the only significant asset being the home in question. The respondent essentially took the position that the evidence of the applicant is not sufficient to establish her claims.

[5] As confirmed in the affidavit of the applicant, James Pouliot died intestate on September 10, 2013. He is survived by the applicant, his common-law spouse of 22 years and also his son Kyle Haney.

[6] The applicant and the deceased began cohabitation in 1994. At that time they rented a modest two-bedroom apartment and did not marry.

[7] In or around 1999, the couple decided, after looking at different properties, to purchase a house at 92 Belmont Avenue, Hamilton. They had talked and agreed upon a long-term plan of buying a house together, paying off the mortgage after 10 to 15 years, selling the house and using the proceeds to retire together in Nova Scotia. A deposit was paid for that purchase with her uncontested evidence that each of the applicant and deceased contributed to half of the cost. The applicant stated they shared the $5,000 amount necessary to close the transaction.

[8] That amount may not be totally accurate given the $80,000 purchase price and $78,850 institutional mortgage noted in the title documents. However, the applicant’s evidence that she contributed 50% of closing costs is simply denied by the respondent. Those costs and funds due on closing would have included legal fees and disbursements and land transfer tax fees and other incidental expenses on closing.

[9] Her evidence was that the title to the home was taken in the name of the deceased alone in August 1999 only because of the applicant’s recent bankruptcy at the time. She explained that if she had taken title to the home, they may not have qualified for their institutional mortgage. She also explained that the house was not eventually transferred into their joint names because neither of them saved the funds necessary to do so believing they had time to make the change and the legal title being changed had not become a priority as it was seemingly an unnecessary expense.

[10] Since 1999, the applicant and the deceased shared all of the expenses of the home including groceries and maintenance and upkeep costs. They conducted all of their affairs in a manner consistent with their joint ownership of the home. It was their intention from the time they purchased the home until Mr. Pouliot passed away that they should both benefit from the home. Their financial arrangement, by way of their agreement, was that they would share everything regarding the ownership of the house, the costs of the house and the proceeds of the sale of the house in their retirement.

[11] Her evidence was not contradicted that she contributed half of the mortgage payments and half of the property taxes since the house was purchased in 1999. There was no formal accounting other than she would regularly transfer her share of the expenses from her bank account into a household account held under his name alone which account was then used to pay for the mortgage and all expenses relating to the property including the including utilities.

[12] She provided some of her bank documents from April 2011 to September 2013, the month of Mr Pouliot’s death, which confirmed that she had indeed transferred funds from her own bank account regularly each month into the deceased’s bank account. These regular payments totaled no less than $800 per month.

[13] The amounts paid by the applicant into her late spouse’s account are quite significant as both spouses shared a very frugal lifestyle together. Mr. Pouliot’s only source of income was from benefits payable to him under the Ontario Disability Support Plan and it appears he had no other significant assets.

[14] The applicant’s monthly income was from a small pension and benefits from Ontario Works and she only recently received CPP disability benefits. Her present monthly income is only $2,100. She is presently 61 years of age.

[15] Given the modest house in which they lived as spouses and their minimum incomes, those significantly monthly payments are consistent with her evidence that they were actually sharing the costs of the house equally between them rather than her simply paying rent to him. She clearly denied that she was leasing or renting space from him and no evidence was provided by the respondent that she was. There were no restrictions on her enjoyment of the property and they both treated the property as if it were hers too. As well the property was always referred to as “our home” or “our house.”

[16] Since the death of her spouse, the applicant has continued to remain in the house and has made all of the monthly mortgage payments on the house. The mortgage balance which was $26,750 at the date of her spouse’s death because of her making all of the payments since then will be paid off in August 2017. The house was appraised at $90,000 as of the date of his death but has increased to $150,000 as of May 2016. The house is old and in a poor state of repair.

[17] Mr. Haney admits that he only lived in the house on an on-off basis until 2006 and that he and his father grew apart which he states was because of his father’s mental health deteriorating. He admitted that he and the applicant did not get along. The applicant’s evidence was that her late spouse and his son had been estranged for years at the time of his death which appears to be the case on the evidence.

[18] The applicant’s evidence with respect to her arrangements and agreement between her and her late spouse are not contradicted by any evidence from the respondent Mr. Haney. He did not make any payments towards the house after the death of his father other than paying for roof repairs of $4,500 in February 2017. He does not dispute the applicant has paid the mortgage payments for the property since his father’s death of $549 monthly as well as taxes and insurance premiums although there may be some arrears taxes owing.

Applicant’s Interest in 92 Belmont Avenue Hamilton

[19] In my view, the evidence clearly establishes the entitlement of the applicant to an equal interest in the house she and her late spouse occupied for 14 of their 22 years of cohabitation until Mr. Pouliot’s death in September 2013.

[20] She made significant and regular financial contributions towards the payment of half of the mortgage, taxes, maintenance and insurance payments and utility costs for that house during their cohabitation until the deceased’s death and, as well, she made payment of half of the initial deposit costs on the purchase.

[21] The spouses’ agreement was that they would share equally in the proceeds of the sale of the property so that they could enjoy the proceeds in their retirement together.

[22] Although the applicant has not provided documentation back to 1999 confirming her payments, she did provide her banking documents from 2011, 2012 and 2013, before and after the date of Mr. Pouliot’s death, which in my view is sufficient corroboration of her otherwise uncontradicted evidence under oath regarding the financial contribution she made.

[23] The applicant’s making significant and regular financial contributions towards his expenses since 1999 has established the enrichment of the deceased by her doing so and the corresponding detriment to the applicant by reason of those payments. There is no juristic reason for the enrichment to be allowed to the estate as by doing so would be contradictory to the actual agreement and financial arrangements made by the applicant and her deceased spouse. There is no evidence that the payments made by the applicant were in any way intended to be gifts to her late spouse or for rent.

[24] The applicant’s significant contributions were directly related to the acquisition of the property including the initial deposit and the mortgage payments, taxes, insurance, utilities and maintenance of the house because of the spouses’ agreement. In addition to her significant monetary contributions, the applicant provided nursing care for her husband during the last period of his life because of his terminal medical condition.

[25] In addition, she has paid the mortgage payments and other expenses for the house since the date of Mr. Pouliot’s death which is even more reason that she should be entitled to share in the increase in the value of the property since that time.

[26] Accordingly, it is appropriate that she be declared to be a half interest owner in the house including its present value rather than simply be entitled to a monetary amount for her contributions. Pettkus v. Becker [1982] 2 S.C.R.834; Sorochan v. Sorochon 1986 23 (SCC), [1986] 2 S.C. R. 38.

[27] I do not agree with the respondent that she should be required to account for her occupation rent for the use of the estate’s share of the house since Mr. Pouliot’s death in 2013. The applicant’s continuing to make mortgage payments on the house as well as the other costs has benefited the respondent significantly as well given the increase in value of the property.

[28] In any event, the significant contributions made by the applicant for the house expenses since the date of her late spouse’s death are more than sufficient to offset any claim to occupation rent by Mr. Haney who has not established he has been financially compromised by not being able to live in the house since his father’s death. Fray v. Evans 2017 ONSC 1528, [2017] O.J. No. 1307.

[29] The applicant arranged for the installation of a furnace in the property. The furnace supplier registered a lien against the property in the amount of $7,900. Both parties have benefited from the installation of the furnace and should be equally liable for that debt incurred. When the property is sold, that debt is to be borne equally by the parties from the proceeds of the sale.

[30] Similarly, the applicant should be responsible for half the respondent’s cost of $4,500 to repair the roof. On the sale of the property, the appropriate credit will provided to the respondent for that amount of the applicant’s obligation to him.

SLRA Claim and Limitation Period

[31] The respondent states that the applicant’s claim for dependency support is barred by the six-month limitation period under that statute.

[32] Section 61(1) of the SLRA states that no application may be made against the estate after six months from the grant of letters of administration.

[33] Those letters were granted to the respondent on June 8, 2015. The applicant commenced this application on November 10, 2016, seventeen months after that date. Her claim would accordingly be barred unless the limitation period can be extended.

[34] Section 61(2) states that 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.

[35] The applicant’s claim for dependency support payable by the estate are restricted to the house which is the only significant asset of the estate. There are no other assets of the estate.

[36] The respondent takes the position that the house in law effectively has been distributed to him and accordingly even if the limitation period was extended, no claim for dependency support is allowed with respect to the house as an estate asset.

[37] This is because of Section 9 of the Estates Administration Act R.S.O.1990 Chapter E.22. That section states that real property that has not been distributed among the persons beneficially entitled thereto by the personal representative within three years after the date of the death is at the expiration of that period, whether letters of administration have or not been taken thenceforth, vested in the persons beneficially entitled upon the intestacy. He submits that the property vested as a matter of law on September 10, 2016 in Mr. Haney, two months before this application was commenced and accordingly is no longer subject to the dependency support claim of the applicant. Re Dolan (1983) 1983 1728 (ON SC), 43 O.R. (2d) 677. (Div. Ct.); Fray v. Evans, above.

[38] In my view, based on those authorities and the combination of that section and Section 61(2) of the SLRA, the applicant’s SLRA claim in this proceeding is barred as it relates to the only property of the estate that has already vested in the respondent Mr. Haney. That would include any claim for dependency support on a periodic or lump sum basis or to a claim for possession of the house for an extended period of time. The vesting of the property in the respondent’s name has been made subject to the unjust enrichment/constructive trust claim by the applicant as ordered by this Court, but that does not mean that it is subject to a barred SLRA dependency support claim of the applicant.

[39] The fact that the parties had been negotiating a potential settlement of the plaintiff’s claims and Mr. Haney as estate trustee had constructive notice of the plaintiff’s SLRA claim would not have been enough to impose an obligation on him not to formally distribute and vest the house to himself had he done so in this case before the plaintiff’s application was commenced and served on him. Schwartz Estate v. Schwartz [1998] Carswell Ont 302; Daye v. Holmes Estate [1987] Carswell Ont 4094. The same rationale should apply here where the vesting of the property in the respondent’s name had already occurred by reason of the statutory provision under the Estates Administration Act before the plaintiff’s application was commenced and served on him.

[40] But for that required result of the dismissal of the applicant’s dependency support claim, it may have been appropriate for this Court to consider exercising its discretion to extend the limitation period having regard to what is equitable between the parties in all of the circumstances of this case. However, similar to the facts in Su v. Lamb [2012] ONSC 2023, there are no assets in the respondent estate against which an order for support in favour of the plaintiff might be made. I agree with Stinson, J’s reasoning in that case that the absence of any such assets make the discretionary extension of the six-month limitation period under section 61(2) of the SLRA a pointless and academic exercise. I similarly have declined to extend the limitation period.

Respondent’s Claim for Enforcement of Accepted Settlement Offer

[41] The respondent also states that the applicant’s claims are barred by reason of his accepting the applicant’s offer to settle of March 29, 2016. The parties and their lawyers, since the date of the death of Mr. Pouliot in September 2013, were actively negotiating a potential settlement of all the outstanding issues between the parties including the applicant’s claim to an interest in the house at 92 Belmont Avenue and her claims for dependency support under the SLRA.

[42] The respondent took the position during this application that the applicant’s claims were all settled by the parties on July 21, 2016 when he purported to accept an offer of settlement made by the applicant of March 29, 2016.

[43] However, in my view, he was not entitled to accept that offer of the applicant as he admitted he had rejected it and by making a counter offer of his own on June 1, 2016. The applicant’s March 29, 2016 offer was not a Rule 49 offer to settle as there was no proceeding instituted at the time. Accordingly, her offer was automatically withdrawn by operation of law on the respondent rejecting it and making his counteroffer. There was no settlement reached.

Conclusion

[44] Accordingly, an order shall issue declaring that the applicant is entitled to an equal interest in the property located at 92 Belmont Avenue, Hamilton. The parties shall be equally responsible for the payment of the balance owing on the debt to the furnace supplier lien registered against the property on the sale or other disposition of the property. The applicant shall also be responsible for payment of half of the respondent’s costs of $4,500 incurred by him to repair the roof.

[45] On the sale or other disposition of the property, the appropriate credits will be provided to each party for these respective amounts owing by each party to the other.

[46] The applicant’s claim for support under the Succession Law Reform Act payable by the respondent estate is dismissed.

[47] If the parties cannot agree on the issue of costs of this application, the applicant can make submissions of no more than three pages in length plus a bill of costs within 20 days from the date of this order. The respondent shall similarly be entitled to respond within 10 days thereafter.

The Honourable Mr. Justice R. J. Nightingale

Date: June 19, 2017