COURT FILE NO.: CV-18-00037
DATE: 2018/06/26
COURT OF ONTARIO,
SUPERIOR COURT OF JUSTICE
RE: JOSEPH BRADLEY SULLIVAN, ESTATE TRUSTEE IN THE ESTATE OF EDMOND BOUDREAU and MARGARET MARY BOUDREAU, deceased,
Applicant
AND:
ROSEMARY DONNELLY, SOMMER LEE ANGELA BOUDREAU, KEITH BOUDREAU, GLORIA PICHETTE, BRENT SULLIVAN, JOSEPH BRADLEY SULLIVAN, PATRICIA SULLIVAN, PENELOPE FRANCOEUR, DOUGLAS SULLIVAN, “THE ESTATE OF YVONNE BOUDREAU, DECEASED” and FRANCINE BOUDREAU,
Respondents
BEFORE: Mr. Justice Calum MacLeod
APPEARANCES:
George W. LeConte, solicitor for the Applicant
Ronald H. Gervais, solicitor for Keith Boudreau and Rosemary Donnelly
Sommer Boudreau, appearing in person
No one appearing for the remaining respondents
HEARD: June 26, 2018
ENDORSEMENT
[1] The estate trustee brings this application for interpretation of the wills of the late Edmond and Margaret Boudreau, for direction regarding the sale of certain lands and for ancillary relief. I am satisfied that all interested parties were on notice. Only three of the beneficiaries of the estate appeared before the court. Ultimately there was agreement amongst the parties and they all consented to the form of judgment signed by me.
[2] Before signing the judgment, I reviewed the evidence and heard submissions. I am satisfied that the judgment is appropriate having regard to the applicable laws, the rights of the beneficiaries and the wishes of the testators. I indicated I would release brief reasons.
Effect of the Judgment
[3] The effect of the judgment is to clarify that all lands owned by the late Edmond Boudreau (including lands still registered in name of his father Joseph Boudreau) will remain vested in the estate trustee for Edmond and Margaret Boudreau.
[4] Pursuant to the judgment, the estate trustee is authorized to sell certain of the lands for the purpose of paying the debts of Edmond Boudreau and Margaret Boudreau (including tax debts) and the costs of administering the estates. In the event that additional lands must be sold for this purpose the estate trustee may return to court.
[5] Once all of the debts have been paid, any remaining proceeds of the sale of land and any parcels of land remaining in the hands of the estate will be transferred to the estate of Raymond Boudreau and after payment of his debts (two of which are known at this time) the funds or the lands may be distributed to his heirs (Sommer Beaudreau, Keith Boudreau, Rosemary Donnelly and Gloria Pichette).
Background and Issues
[6] The Boudreau family has owned land in the Mackay area since at least 1911. As sometimes occurs with gifts, transfers and bequests amongst members of a family, deeds and transfers have not always been registered in a timely fashion. For example I am told that some of the lands which were undoubtedly left to Edmond Boudreau (also known as Alfred Edmund Boudreau) are still registered in the name of his father, Joseph Boudreau.
[7] The matter before the court concerns the administration of the estates of Edmond and Margaret Boudreau who were husband and wife. Edmond made a will on October 10th, 1988 and Margaret did likewise. The wills were reciprocal insofar as each named the other as estate trustee and principal beneficiary and the residual bequests were for all intents identical.
[8] Both wills contained the provision that if their spouse predeceased them or did not survive the testator for 30 days, all other “lands and any farm machinery or other machinery, furniture or items of personal property” including automobiles were to be left to their son Raymond Boudreau whereas all “cash, monies in the bank and like” were to be divided equally between their 8 children including Raymond. Edmond’s will also contained a separate bequest of a parcel of land to their son, Terry.
[9] Of course both wills state that taxes and debts are a first charge against the estate. This is consistent with the legal regime established by the Administration of Estates Act. [^1] Under s. 2 of the Act, regardless of the gifts set out in a will, all real and personal property of the deceased vests in the estate trustee who then holds the property “as trustee for the persons by law beneficially entitled thereto, and, subject to the payment of the [deceased’s] debts”. The intention here is that a testator cannot leave property to a beneficiary and by so doing put it out of reach of creditors. Debts must be paid before the specific gifts under the will may be honoured.
[10] Edmond died in 1991. Under the terms of his will, one parcel of land would have gone to Terry and all of the rest would have passed to Margaret. Neither of these transfers were effected by the estate within the 3 years permitted by the Act.
[11] Terry died in 1993. He had no spouse and no children and was intestate. His nearest living relative was his mother Margaret who would therefore have inherited all of the property or property rights falling into his estate.[^2]
[12] Margaret died in 2006. Under the terms of her will, cash in the bank was distributed to her children. As noted, the will provided that all lands, machinery and personal property was to pass to Raymond. Raymond died in 2016. Under his will, his beneficiaries are his daughter Sommer and his three siblings, Keith, Rosemary and Gloria in equal shares.
[13] Both Edmond and Margaret had debts including tax debt. It has taken considerable time and effort to quantify those debts and to determine the extent of tax liability. Iona Sullivan was the alternative estate trustee under both wills but Iona had passed away in 2001. Her estate trustee is her son, Joseph Bradley Sullivan upon whom have devolved the duties of administering Edmond and Margaret’s estates.
[14] There is no doubt that in law, Edmond’s lands vested in his estate trustee. After payment of his debts any land that remained would have passed to Margaret. Similarly all of Margaret’s property and rights vested in her estate trustee and after payment of her debts any land would have passed to Raymond.
[15] Potential confusion exists because of s. 9 of the Estates Administration Act. That section provides for the automatic vesting of land left by will after 3 years unless the estate trustee registers a caution but the caution may be registered before or after the 3 years has expired and may also be subject to court order. Even if automatic vesting takes place, however, the beneficiaries cannot avoid responsibility for the debts of the testator’s estate. S. 21 (2) of the Act provides that the beneficiaries who receive such lands are liable for the testator’s debts to the value of the lands.
[16] Arguably the lands would have vested automatically in Margaret as of 1994 (but subject to Edmond’s debts) and would have vested in Raymond in 2009 (but subject to both Edmond’s and Margaret’s debts). What makes that less than clear is the fact that the lands are not clearly identified in the wills, that the section of the Act is also subject to the provisions of the Land Titles Act, and pursuant to s. 10 of the Act is subject to the rights of the “executor” and the provisions of the Trustees Act. Finally, s. 11 permits a court to authorize the registration of a caution and the retention of the lands in the estate where it is or may be necessary to sell the real property of the deceased even after the three years has expired.
[17] It is not necessary for me to untangle the legal status of the land or the precise effect of the statute because the parties have agreed to an order retaining the lands in the estate and authorizing a sale in order to pay the debts. This is both pragmatic and in the best interests of all concerned.
[18] I am satisfied on the evidence that the heirs of Raymond Boudreau are the only persons affected by the requested order. I am also satisfied that while they are therefore entitled to the lands owned by Edmond or Margaret or the value of those lands, they would only be entitled to receive them once the debts of the estates have been paid.
[19] I have determined that the consent order is appropriate, protects the interests of the creditors and the beneficiaries and carries out the wishes of the testators. The lands will remain in the estate until the debts have been paid and the estate properly administered. The lands or their value will then pass to Raymond’s estate and to his heirs once Raymond’s debts are paid.
[20] I have signed the judgment accordingly.
Next Steps
[21] The estate trustee is in the course of seeking a severance so that only one parcel of land need be sold. The request for a severance may or may not be successful and in any event the sale of one parcel of land may not be sufficient to raise the necessary funds.
[22] As requested, the court will remain seized of this matter. The estate trustee may return to court for additional authority to sell additional lands.
[23] I anticipate that once the administration of the estate is completed, the estate trustee will be seeking approval of his expenses and fees from the beneficiaries or will pass his accounts.
[24] It has been 27 years since Edmond passed away and 12 years since the death of Margaret. Raymond’s estate should not have to wait indefinitely. I will therefore require the estate trustee to provide a status report to the beneficiaries and the court by February 1st, 2019 and at six month intervals thereafter.
[25] Any of the estate trustee or the beneficiaries who were before the court may move for further directions should that be necessary.
Mr. Justice C. MacLeod
Date: June 26, 2018
[^1]: RSO 1990, c. E.22, as amended [^2]: S. 47 (3), Succession Law Reform Act, RSO 1990, c. S.26, as amended