Steele v. Smith, 2018 ONSC 4601

Court File and Parties

COURT FILE NO.: 21355 ES DATE: 2018/07/27 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: James Mather Steele, Estate Trustee of the Estate of Harriet Charlotte Pleinis, deceased, Applicant AND: Heather Smith, Sandra Lees (also known as Sandra West), and the Estate of Harriet Charlotte Pleinis, deceased Respondents

BEFORE: Justice H.A. Rady

COUNSEL: Michael A. Menear, for the Applicant Charles W. Walters, for the Office of the Public Guardian and Trustee

HEARD: July 24, 2018

Endorsement

Introduction

1The applicant, the Estate Trustee and a long-time friend of the deceased brings this application seeking a “Benjamin Order”, which would permit him to distribute the residue of the Estate as if one of the named beneficiaries had predeceased the testator.

Facts

2The testator, Harriet Pleinis, was born on December 23, 1922 in Northern Ireland. She immigrated to Canada and became a Canadian citizen. She died on January 18, 2017. She left a will naming Mr. Steele and his late wife as executors. The residue of her Estate was to be divided as follows:

i. to pay or transfer TWENTY PERCENT (20%) of the residue of my estate to my niece, HEATHER SMITH;

to pay or transfer TWENTY PERCENT (20%) of the residue of my estate to my niece, SANDRA LEES.

PROVIDED THAT if either of my said nieces should predecease me and leave issue such shall take in equal shares per stirpes the share in the residue of my estate to which such deceased niece would have been entitled if living.

ii. to divide SIXTY PERCENT (60%) of the residue of my estate equally among the following;

(1) my brother, HUGHIE GRAHAM;

(2) my brother, THOMAS GRAHAM;

(3) my brother, WILLIAM GRAHAM.

PROVIDED that should any of my said brothers not then be living, the portion such deceased brother would have been entitled to, if living, shall be divided equally between my niece HEATHER SMITH and my niece SANDRA LEES, or the survivor of them.

3Hughie and Thomas Graham pre-deceased Harriet. William, who was born in 1925, has not been located notwithstanding Mr. Steele’s extensive efforts, including on-line searches; contacting family members; and employing a U.K. tracing company. Consequently, he seeks an order declaring that William predeceased Harriet so that he can finalize the administration of the Estate by dividing the residue between Heather Smith and Sandra Lees (now known as Sandra West) in accordance with the terms of the will.

4The Public Guardian and Trustee suggests that William’s share be paid into court while the executor takes further steps to ascertain William’s whereabouts. For example, William has a son, John, who was apparently conceived during an illicit affair between William and his sister-in-law, Maureen. He was given up for adoption after his birth. Mr. Walters suggested John or Maureen may be a source of information

5Mr. Menear points out that the evidence contained in the record reveals that contact was made with John’s half-brother, Alan who advised that his mother (Maureen) does not want to speak about William and that John has no further information about his father.

The “Benjamin Order”

6Mr. Steele asks for a Benjamin order, which will permit a distribution of the Estate as if William pre-deceased Harriet. The order derives from the Chancery decision in Neville v. Benjamin, [1902] 1 Ch. 723. In that case, the testator was survived by twelve children. A thirteenth, Philip, had disappeared while on vacation and after he was suspected of having defalcated monies from his employer. The court noted that the onus to provide that Philip survived was on his administration. The burden was not discharged. There was no reason why Philip would continue to absent himself in the circumstances. Accordingly, the order was made.

7Re Benjamin has been followed in other cases, for example, in Re: Green’s Will Trusts, [1985] 3 All E.R. 455. It has also been referred to in the literature. See for example, Graham Virgo, The Principles of Equity and Trusts (Oxford University Press, Oxford, 2012) who wrote as follows:

Whilst it is true that the effect of making a Benjamin order is simply to protect the trustee and to enable trust property to be distributed without having to wait until what might be unprovable can be proved, the order may sometimes have substantive effects on the beneficial interest; if a trustee does distribute trust property on the assumption that a beneficiary is dead and that beneficiary then comes forward, the beneficiary will not be able to recover the property if it has been dissipated or has been sold to a bona fide purchaser for value. In such circumstances, the beneficiary cannot sue the trustee for breach of trust, because he or she will be protected by the Benjamin order. The only hope will be to bring a personal claim against the recipient of the trust property [under the rule in Ministry of Health v. Simpson [1951] A.C. 51]. But the real advantage of the Benjamin order is that it allows trust property to be distributed whilst leaving open the possibility of the lost beneficiary coming forward and claiming what is rightfully his or hers if any property remains undistributed.

8The case has been followed in Canada, for example, in Re: Wieckoski Estate, 2013 SKQB 297, which refers to other Canadian authorities in Manitoba and British Columbia. In that case, the court considered that the sufficiency of inquiries made depends on the facts. The following questions may assist in determining the adequacy of those inquiries:

• Why is the question being asked? Is there specific evidence that there is or may be a missing beneficiary, or does the question arise… as a result of the circumstances?
• How much time has elapsed since the death of the testator?
• What are the specific steps that have been taken, and over what period of time, to answer the question?
• Who has conducted the enquiries? Were they appropriately qualified to investigate the matters at issue?
• Do the enquiries take due account of matters such as the possible location of the beneficiary or of potential evidence as to the matter at issue?
• It is possible that pursuing further avenues of enquiry, or deferring the decision, might result in a claim or generate further information? What is the cost and delay associated with pursuing those avenues, and what is the likelihood they may succeed?
• What is the amount at stake?

9This decision has been followed in Ontario in Kapousouzian Estate v. Spink, 2014 ONSC 2355.

Analysis

10I am satisfied that the order requested should be granted. Mr. Steele has gone to extensive lengths to determine William’s whereabouts. There is no reason now why he would choose not to be found. He may well have had a reason at one time (i.e. the discovery of his affair with Maureen by his brother Lesley who threatened him). However, Lesley died long ago.

11Eighteen months have passed since Harriet’s death. In my view, Mr. Steele has exhausted the available avenues of inquiry. There is no evidence that further efforts will yield positive results. Maureen is clearly unwilling to speak about William and John has no information about his father’s whereabouts. Accordingly, there is really no useful purpose to be served by paying the funds into court where it is highly unlikely they would be claimed.

12For these reasons, a Benjamin order shall issue as follows:

The Estate Trustee of the Estate of Harriet Charlotte Pleinis, deceased shall be at liberty to divide the share of the residue of her Estate to which William Graham may have been entitled under the last Will and Testament of Harriet Charlotte Pleinis dated July 6, 1994, equally between the nieces of Harriet Charlotte Pleinis, namely Heather Smith and Sandra Lees (also known as Sandra West), in accordance with paragraph 3.d.iii. of the said Will, on the basis that William Graham did not survive the said testator.