CITATION: Rehel Estate v. Methot, 2017 ONSC 7529
COURT FILE NO.: 17-71325
DATE: 2017-12-15
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ronald Rehel, Estate Trustee of the Estate of William George Elliot Rehel, deceased
Applicant
– and –
Sharon Methot
Respondent
COUNSEL:
Neil Milton for the Applicant
Aaron Heard for the Respondent
HEARD: December 4, 2017
BEFORE: JUSTICE SALLY GOMERY
[1] William Rehel took his own life on April 2, 2015. At the time, he and Sharon Methot were married but no longer living together.
[2] Mr. Rehel wrote a Will the day before he died. He named his brother Ronald Rehel as the trustee of his Estate.[^1] The estate trustee has applied to the Court to resolve two questions arising from directions in Mr. Rehel’s Will that affect Ms. Methot.
[3] The first question involves who is entitled to money in Mr. Rehel’s Life Income Fund Account #44965494 (the “Account”) at a Scotiabank in Barrie, Ontario. When Mr. Rehel opened the Account in 2013, he named Ms. Methot as the beneficiary. In his Will, however, he said that the money in the Account should be used by the estate trustee to pay off any debts owing at his death. The estate trustee thinks that the designation in the Will replaces Mr. Rehel’s original designation. Ms. Methot disagrees.
[4] The second question is whether Ms. Methot owes money to the Estate for rent and expenses. In October 2013, Mr. Rehel bought a house in Barrie. Ms. Methot was living there on April 2, 2015. Mr. Rehel’s Will said that she had to pay one half of the mortgage as well as utilities and other expenses if she continued to live in the house after his death. Ms. Methot moved out on July 7, 2015. The estate trustee has asked Ms. Methot to pay $6,478.62 in rent and living expenses. Ms. Methot argues that, in the circumstances, she should not have to pay anything.
Who is entitled to the money in the Account?
Is Ms. Rehel automatically entitled to the Account as a surviving spouse?
[5] Mr. Rehel and Ms. Methot married in Quebec in 2005. They moved to Ontario in 2008. On February 15, 2013, Mr. Rehel opened the Account. The money in the Account was from a Quebec pension plan that he had converted years earlier.
[6] The source of the money in the Account is important because funds from pension plans are governed by provincial legislation. Under section 48(1) of the Ontario Pension Benefits Act, if a person entitled to receive the proceeds of a deferred pension plan dies before receiving any benefits, that person’s spouse is entitled to the proceeds.[^2] This rule applies even if the deceased named somebody other than his spouse as the beneficiary of the proceeds. But the rule is subject to an exception under section 48(3). If the person and his spouse were “living separate and apart” at the time of death, the spouse is not automatically entitled to the proceeds. In that case, the funds would go to whomever the deceased person named as a beneficiary.
[7] The estate trustee argues that section 48(3) applies in this case. In his two affidavits in support of the application, he produces documents that show that Mr. Rehel and Ms. Methot separated in October or November 2014. These documents include a February 19, 2015 letter from Mr. Rehel’s divorce lawyer to Ms. Methot on the terms of a separation agreement, an unsigned letter prepared by Mr. Rehel that he gave to his lawyer before his death, and texts and e-mails exchanged between Mr. Rehel and Ms. Methot over several months.
[8] Ms. Methot filed an affidavit in response to the application, which at that point included only the first affidavit from the estate trustee. In her affidavit, she says that she and Mr. Rehel had discussed the possibility of separation before his death, but that he had never acted on those discussions. She denies getting a letter from his divorce lawyer, and says that she and Mr. Rehel were still living together on April 2, 2015, even though he had a temporary job in British Columbia.
[9] After Ms. Methot submitted this affidavit, the estate trustee filed his second affidavit attaching the texts and e-mails between her and Mr. Rehel. They show, beyond any doubt, that their marriage had broken down and that they were actively negotiating the terms of their separation. Mr. Rehel put the house in Barrie up for sale in November 2014 and left for a job in British Columbia on January 1st, 2015, instructing the post office to hold his mail. He and Ms. Methot corresponded about how to divide up the furniture and other assets of the marriage. In an e-mail dated March 19, 2015, she refers to discussions “since we separated”.
[10] I conclude that Ms. Methot’s evidence is not reliable. Based on the estate trustee’s evidence, I find that Mr. Rehel and Ms. Methot were separated under Ontario law at the time of his death. As a result, Ms. Methot is not automatically entitled to the funds in the Account under section 48(1) of the Ontario Pension Benefits Act.
Does the situation change if Quebec law applies?
[11] The application form completed when Mr. Rehel opened the Account in 2013 includes the notation: “Pension governed by the laws of Quebec”. Ms. Methot argues that Quebec rather than Ontario law applies to the question of whether she is entitled, as a spouse, to the Account proceeds and that, under Quebec law, they had not legally separated when he died. The estate trustee acknowledges that Quebec law may govern the situation but says it makes no difference.
[12] According to an affidavit from Sylvain Marcotte, a Quebec lawyer consulted by the estate trustee, Quebec pension plans are governed by that province’s Supplemental Pension Plans Act.[^3] Under section 89 of the Quebec Act, “the right of a member’s spouse to benefits … is terminated by separation from bed and board”.
[13] Ms. Methot says that “separation from bed and board” means something different than “living separate and apart”. She contends that, under Quebec law, “separation from bed and board” can only occur if a spouse obtains a decision from a court stating that it has. Since Mr. Rehel did not apply for a formal declaration of separation prior to his death, Ms. Methot says that she remained his spouse under the definition set out in the Quebec Supplemental Pensions Plans Act, and so is entitled to the proceeds of the Account.
[14] The law of another province is foreign law. Foreign law must be proved.[^4] Even if the language of a foreign statute seems straightforward or foreign case law seems to indicate how a particular provision should be read, a court cannot assume to understand what it means without an opinion from an expert in the law of the other jurisdiction. In the words of Justice Coleridge more than 160 years ago, an expert is required “not to tell us what the written law states, but, generally, what the law is”.[^5]
[15] In the absence of proof of foreign law, I must assume that it is the same as Ontario law.[^6]
[16] I make no finding as to whether the funds in the Account are subject to Quebec law rather than Ontario law. But even assuming that Quebec law applies, there is no evidence before the Court on the meaning of “separation from bed and board” or the effect of section 89 of the Quebec Supplemental Pensions Plans Act. Mr. Marcotte sets out the provision in his affidavit but does not explain what it means. As a result, I must assume that “separation from bed and board” has the same meaning as “living separate and apart”, the term used in the Ontario legislation.
[17] I have already concluded that Mr. Rehel and Ms. Methot had separated under Ontario law. It follows that, whether the applicable law is the Ontario Pension Benefits Act or the Quebec Supplemental Pensions Plans Act, Ms. Methot is not automatically entitled to the proceeds of the Account. She is only entitled to the funds if Mr. Rehel had designated her as the beneficiary at the time of his death.
Did Mr. Rehel’s instructions in the will over-ride the earlier designation of Ms. Methot as the beneficiary of the Account?
[18] Mr. Rehel designated Ms. Methot as his beneficiary when he opened the Account in 2013. At paragraph 5(d) of his Will, however, he provided the following instructions:
I DIRECT my Trustees to cash in my Locked in Retirement Account and RRSP accounts with ScotiaBank in Barrie, Ontario and use the proceeds to pay off the debts owing by my Estate.
[19] Ms. Methot argues that these instructions do not meet the requirements of sections 51 and 52 of the Succession Law Reform Act and therefore do not over-ride Mr. Rehel’s 2013 designation.
[20] Section 51 of the Succession Law Reform Act sets out how a participant in a pension plan may designate a beneficiary:
51 (1) A participant may designate a person to receive a benefit payable under a plan on the participant’s death,
(a) by an instrument signed by him or her…; or
(b) by Will,
and may revoke the designation by either of those methods.
(2) A designation in a Will is effective only if it relates expressly to a plan, either generally or specifically.[^7]
[21] Section 52 set out further rules applicable to designations in Wills. It states:
52 (1) A revocation in a Will is effective to revoke a designation made by instrument only if the revocation relates expressly to the designation, either generally or specifically.
(2) Despite section 15, a later designation revokes an earlier designation, to the extent of any inconsistency.
[22] Ms. Methot argues that the instructions at paragraph 5(d) of Mr. Rehel’s Will are not an effective revocation under section 52(1) of the Succession Law Reform Act. She says that his direction is ineffective because it does not mention the earlier designation of her as the beneficiary of the Account. The estate trustee disagrees. He contends that paragraph 5(d) does not have to meet the requirements in section 52(1), so long as it complies with section 51(2) and 52(2).
[23] Both parties rely on the Court of Appeal’s decision in Laczova Estate v. Madonna House.[^8] In that case, Olga Laczova purchased two registered savings plans or RSPs. She designated various family members as beneficiaries when she opened each one. Shortly before she died, she executed a holograph Will. In the will, she listed types of accounts at two banks, including the RSPs, and their total value. She then listed bequests to 22 beneficiaries.
[24] The estate trustee in Laczova argued that the references in the Will to the RSP accounts constituted designations under section 51(2), and that they revoked the earlier designations in favour of her family members under section 52(2). The Court of Appeal rejected this argument because Ms. Laczova failed to designate any particular person or entity as a beneficiary of the two RSPs in her Will.[^9] As pointed out by Justice Catzman, it would be impossible for a bank representative, reading Ms. Laczova’s Will, to determine to whom they should pay the funds in the RSPs.[^10]
[25] Despite the result in Laczova, it supports the applicant’s position in this case.
[26] First, even though the Court of Appeal held that Ms. Laczova had not revoked her earlier designations in her Will, it did not reject the logic underlying her estate trustee’s argument with respect to the operation of sections 51(2) and 52(2) of Succession Law Reform Act. This is the same argument advanced by the estate trustee here.
[27] Second, the Court’s reasoning suggests that the rationale for section 51(2) is to give estate trustees, and financial institutions holding accounts opened by the deceased, sufficient information to act on the directions in a Will. On that rationale, Mr. Rehel’s instructions at paragraph 5(2) of his Will meet the requirements of section 51(2). He directs the estate trustee to use the funds in the Account to pay off the debts he owes at the time of his death. There is no ambiguity about what he wants the trustee or the bank to do.
[28] In oral argument, Ms. Methot suggested that the designation in the Will was too vague because it was not clear what account Mr. Rehel was referring to when he gave instructions in relation to “my Locked in Retirement Account … with ScotiaBank in Barrie, Ontario”. I disagree. There is no evidence that Mr. Rehel had more than one “Locked in Retirement Account”. The Scotiabank in Barrie has refused to release the funds in the account to the estate trustee on the basis that Ms. Methot, as Mr. Rehel’s spouse, is absolutely entitled to the proceeds.[^11] The bank has never indicated that it does not understand what account Mr. Rehel was referring to in his Will, or to whom he directed that the funds be paid.
[29] I accordingly find that, in his April 1st, 2015 Will, Mr. Rehel revoked his earlier designation of Ms. Methot as the beneficiary of the proceeds of the Account, and designated that the funds be paid to his estate trustee for the purpose of paying the estate’s debts.
Does Ms. Methot have to pay the estate for rent and expenses and, if so, how much?
[30] The estate trustee claims that Ms. Methot owes the Estate for a portion of mortgage payments, utilities and other expenses incurred while she lived in Mr. Rehel’s house in Barrie for 96 days after his death.
[31] In his Will, Mr. Rehel directs his estate trustee to sell the house and to use the proceeds to pay off the mortgage and any debts owed by his Estate. If any proceeds remain after debts are paid, he directs that they be split between Ms. Methot and his brother Ronald. He also instructs that:
If my wife, Sharon Methot, is living in the Barrie Property at the time of my death, she must pay one-half of the monthly mortgage payment to my Trustees and pay for all utility bills including television and internet service, and heating and light service, and any other bills associated with the residency of the Barrie Property, until such time as the Barrie Property is sold.
[32] The estate trustee has listed expenses totalling $6,478.62 for the period between April 2 and July 7, 2015. They include mortgage payments, utilities and internet costs, municipal taxes, home and car insurance premiums.
[33] Under section 26(2) of the Family Law Act, if a spouse who does not own the matrimonial home is nevertheless occupying it when the other spouse dies, they may remain in the house for another sixty days rent free.[^12] A court may however order the occupying spouse to pay “for all or part of the repair and maintenance … and of other liabilities arising in respect of it”.[^13] In applying these provisions, the Court should determine what amount is “sensible in the totality of the circumstances of the case”.[^14]
[34] The estate trustee concedes that, in light of section 26(2), Ms. Methot does not have to reimburse the Estate for mortgage payments for the first 60 days after Mr. Rehel’s death. He argues however that she should pay the other expenses, in accordance with Mr. Rehel’s Will, and half of the mortgage in the last 36 days.
[35] Ms. Methot argues that some expenses, such as utilities, fall under the definition of rent, and so are not payable for the first 60 days under section 26(2) of the Family Law Act. She further suggests that it would not really be fair to make her pay any of the expenses, since there is no evidence that the estate could have rented the house to someone else if she had not been there, and she moved out reasonably quickly after Mr. Rehel’s death.
[36] I agree that the expenses, with the exception of car insurance premiums, reasonably fall under the definition of rent. As such, the Estate may only claim them for the last 36 days of Ms. Methot’s occupancy of the Barrie house.
[37] On the other hand, there are no circumstances weighing in favour of any discount of its claim for expenses from Ms. Methot after the first 60 days. Ms. Methot knew that Mr. Rehel was selling the house as of November 2014 and that the marriage had ended. She had ample time to make other living arrangements. The evidence also shows that the Estate’s debts outweigh its assets. In Ms. Methot’s affidavit, she accuses the Estate of forcing her to waive her rights under the Family Law Act and of failing to disclose information to her. Based on the information and documents in the estate trustee’s second affidavit, these accusations are untrue. The equities favour the Estate.
[38] The Estate is therefore entitled to one half of the mortgage payments (roughly $500), and all of its other expenses ($1,380), for the period from June 1st to July 7, 2015. Ms. Methot must also repay car insurance premiums incurred while she remained at the house in Barrie ($280). This brings the Estate’s claim to $2,160.
Conclusions
[39] The Court declares that the Estate of William George Elliot Rehel is the designated beneficiary of his Scotiabank Life Income Fund account #44965494. It orders Sharon Methot to pay $2,160 to the Estate for occupational rent and expenses arising from her occupancy of Mr. Rehel’s house after his death.
[40] If the parties are unable to agree on costs, the applicant may make submissions in writing within 20 days of receipt of this decision. The respondent may make submissions within the 20 days that follow. The submissions may not exceed three pages exclusive of a cost outline.
Justice Sally Gomery
Released: December 15, 2017
CITATION: Rehel Estate v. Methot, 2017 ONSC 7529
COURT FILE NO.: 17-71325
DATE: 20171215
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ronald Rehel, Estate Trustee of the Estate of William George Elliot Rehel, deceased
Applicant
– and –
Sharon Methot
Respondent
REASONS FOR JUDGMENT
Gomery, J.
Released: 2017/12/15
[^1]: To avoid confusion, I will refer to William Rehel as “Mr. Rehel” and Ronald Rehel as “the estate trustee”. [^2]: R.S.O. 1990, c. P.8, s. 48. [^3]: R-15.1. [^4]: Re Low, 1933 CanLII 162; [1933] OR 393; [1933] 2 DLR 608; 59 CCC 346 (ON CA). [^5]: Baron de Bode's case (1845), 8 Q.B. 208 at p. 265. [^6]: Key v. Key (1930), 1930 CanLII 387 (ON CA), 65 O.L.R. 232, [1930] 3 D.L.R. 327 [^7]: R.S.O. 1990, c. S.26. [^8]: 2001 CanLII 27939 (ON CA), 2001 CarswellOnt 4438. [^9]: Laczova at para. 19. [^10]: Laczova at para. 21. [^11]: In a letter dated November 6, 2015 to counsel to the estate trustee, a Scotiabank representative took the position that “the surviving spouse of the deceased is entitled to receive the death benefits” under the Quebec Supplemental Pension Plans Act, and it “is not possible for the instructions in the will to override the provisions”. [^12]: R.S.O. 1990, c. F.3, section 18(1). [^13]: Section 24(1). [^14]: McColl v. McColl (1995), 1995 CanLII 7343 (ON SC), 13 R.F.L. (4th) 449 (Ont.Gen.Div.) at paras. 51 and 55; Szuflita v. Szuflita Estate, 2000 CanLII 22556 (ON SC).