COURT FILE NO.: CV-18-0168
DATE: 2018-10-23
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GEORGE EARL CAMPBELL
H. Gladstone, for the Moving Party
Moving Party
- and -
CLIFFORD VERNON CAMPBELL, Estate Trustee for the Estate of Miriam Irene Campbell and CLIFFORD VERNON
R. Clinker, for the Responding Party Clifford Vernon Campbell
CAMPBELL, in his personal capacity
T. Rhaintre, for Weiler, Maloney, Nelson
and P. Jasiura
S. Wojciechowski, for the City of Thunder
Bay
Responding Parties
HEARD: September 11, 2018,
at Thunder Bay, Ontario
Mr. Justice D. C. Shaw
Decision On Motions
[1] There are two motions concerning the estate of Miriam Irene Campbell (“Miriam”).
[2] The first is a motion for directions pursuant to rule 75.06 of the Rules of Civil Procedure. The second is a motion to set aside a preservation order granted by Pierce J. on April 13, 2018.
[3] Miriam died on February 17, 2017 in Thunder Bay. Her husband died in 1995. Miriam has two living children, George Earl Campbell (“George”) and Clifford Vernon Campbell (“Clifford”). Miriam and her husband had a third child who died in 1973, leaving no issue.
[4] On February 1, 2018 a Certificate of Appointment of Estate Trustee With a Will was issued by this court to Clifford with respect to a will of Miriam’s dated January 20, 2006.
[5] On April 13, 2013 George brought a motion without notice for an order that Clifford preserve all assets that he had received from Miriam and from Miriam’s estate, in his personal capacity and in his capacity as estate trustee for Miriam’s estate, that he preserve any assets he had received as a named beneficiary on any policy or account held by Miriam and that he preserve any assets that he had received as a surviving joint owner with Miriam. George also requested an order that Clifford not do anything to administer Miriam’s estate.
[6] In his motion, George alleged that the will in relation to which the Certificate of Appointment had been granted was not Miriam’s last will and testament because the will was executed when she lacked testamentary capacity, that she did not have knowledge nor approve of the contents of this will and that the will was procured by undue influence.
[7] On April 13, 2018, Pierce J. granted the preservation order requested by George and ordered that Clifford not administer Miriam’s estate.
[8] On May 15, 2018 George brought the within motion for directions, requesting directions on the procedure to be followed and asking for various production orders directed to Clifford and to third parties.
[9] On June 29, 2018, Clifford brought the within motion to set aside or vary the order of Pierce J.
[10] Both motions were heard on September 11, 2018. Counsel on behalf of the third party solicitors for Miriam, who had prepared the 2006 will, and counsel for the City of Thunder Bay, which was requested to provide records relating to Miriam’s stay in a City run long term care residence, attended to make brief submissions. They did not oppose the motion for directions. The remaining third parties named in the motion did not attend. Certain of them advised counsel for George that they would not be attending and would take no position. TD Canada Trust and Normaxx Financial did not respond to the motion.
Background
[11] On November 9, 1994, Miriam’s husband executed a will naming Miriam as the estate trustee and George and Clifford as alternate estate trustees. Miriam was named as the sole residuary beneficiary of the estate, with a giftover to George and Clifford, in equal shares, should Miriam predecease her husband.
[12] George deposes that Miriam executed a will at the same time and upon the same terms as her husband’s 1994 will, naming her husband as the sole beneficiary, with a giftover to George and Clifford in equal shares.
[13] When Miriam’s husband died in 1995, Miriam received the entirety of his estate as the sole beneficiary under his 1994 will. Miriam’s husband had been employed with Sun Life Financial in Thunder Bay. George deposes that Miriam told him that at the end of her husband’s career her husband was earning $500,000.00 per year and that as a result of his planning she was left with a monthly income of approximately $10,000.00.
[14] Between 1985 and 2005, Miriam owned and operated an antiques, collectables and second-hand store in Thunder Bay.
[15] In their respective affidavits filed on the motions, both George and Clifford relate that their parents provided them with financial support, although they differ on the amounts. Clifford deposes that he received $100,000.00 after his father’s death and $354,000.00 from Miriam in the fall of 2008 after her sister passed away. Clifford deposes that he also received a monthly amount from Miriam starting in 2000 to assist with his living expenses. This started as $1,000.00 per month but was increased by Miriam to $3,000.00 per month over the years.
[16] Clifford alleges that he was aware that George had received approximately $480,000.00 over the years and that in 2006, Miriam showed him her bank book which enabled him to identify at least another $650,000.00 being transferred to George between 1995 and 2005. He also deposes that Miriam told him that she continued to advance George money after 2005.
[17] George denies Clifford’s allegations. He deposes that he did not receive the $480,000.00 and $650,000.00 alleged in Clifford’s affidavit. He states that Miriam gave him some funds between 1995 and 2005, as relatively smaller gifts, not exceeding $30,000.00 in total.
[18] Clifford deposes that in 2006, Miriam told him that she was tired of George asking her for money and that she had made changes to her estate planning to reflect the amounts that had been given to George and told him that she wanted to even things out between the two brothers.
[19] George deposes that in August 2004, Miriam advised him that Clifford had begun bothering her every day to make changes to her estate plan to make up for what Clifford perceived as unequal financial support between the two of them. He states that towards the end of 2004, he noticed a drastic change in Miriam’s behaviour, that she became closed off and difficult to contact. George states that in 2005, Miriam moved into Clifford’s condominium, after which time he had great difficulty contacting her.
[20] George deposes that in 2005, Clifford had a 10 foot fence built around the family camp property, which had been transferred into Clifford’s name in 1994. George states that the fence prevented Miriam from visiting with adjacent neighbours, which she had done all her life. He also states that in 2005 a life-long friend of Miriam contacted him to express concerns over Clifford’s actions and how they were impacting Miriam’s wellbeing.
[21] Clifford responds that the fence around the camp was built in about 2008 because of difficulties with a neighbour and, in particular, that the neighbour was feeding bears, creating a safety issue. Clifford deposes that it was in late 2009 or early 2010 that he spoke to a family friend, who was a registered nurse, about his concerns with his mother’s memory. He attaches to his affidavit an unsworn letter from Barbara Baxter in which she states that it was in 2009 when Clifford talked to him about Miriam’s memory issues. She writes in positive terms about Clifford’s care of Miriam.
[22] Clifford deposes that in 2005, Miriam offered to purchase a condominium for him for $110,000.00. He states that she told him that this was not a loan but a way of evening things out between him and George.
[23] On January 20, 2006, Miriam signed a will, naming Clifford as sole beneficiary, and signed a continuing power of attorney for property in which Clifford was named as the sole attorney. Also on that day Sun Life Financial received instructions to remove George as an equal beneficiary on a $300,000.00 life insurance policy, with Clifford remaining as the sole beneficiary.
[24] Clifford deposes that in 2005 and 2006 Miriam was in good health and still working. He began to notice a change in her in 2008 as she became very quiet and started to have memory problems. In the fall of 2010, she was diagnosed with dementia.
[25] Clifford states that because Miriam was falling in her own house, she moved in with him at the end of 2010. She was placed in long term care in April 2012.
[26] Clifford deposes that he began assisting Miriam with her finances in the spring of 2011 through a power of attorney that Miriam had executed in 2006.
[27] Clifford had been added to the title to Miriam’s house, as a joint tenant with her, in 1995. Clifford deposes that when Miriam was admitted to long term care he sold the house and deposited the sale proceeds of $265,000.00 into a joint bank account that he held with Miriam. He states that the funds were then deposited into two Tax Free Savings Accounts, one in his name and one in Miriam’s name. He states that he was the beneficiary of Miriam’s Tax Free Savings Account which had a value of $56,072.72 at the time of her death. George deposes that as of 2012 when the home was sold, the contribution limit for Tax Free Savings Accounts was $40,000.00, which increased by 2017 to $52,000.00. He deposes that the maximum that could have been contributed to the two Tax Free Savings Accounts was therefore a total of $80,000.00 in 2012 and $104,000.00 in 2017.
[28] Clifford deposes that at the time of Miriam’s death, he was the named beneficiary of a life insurance policy that she owned, valued at $508,896.23. He states that Miriam changed the beneficiary designation on or about January 2006 to name only him as beneficiary, changing it from him and George.
[29] Clifford states that the value of Miriam’s estate is $61,324.75 of which $45,899.73 is comprised of bank accounts and the balance of personal effects and a boat and motor.
Motion for Directions
Submissions
[30] Clifford submits that the evidentiary threshold required for a motion for directions has not been met.
[31] He notes the discrepancies between what George alleges and what he, Clifford, deposes as to when Miriam’s memory issues began. George states that the memory issues began in 2004. Clifford responds that they began in 2009. Clifford submits that George does not respond to the statements in Ms. Baxter’s letter.
[32] Clifford points to the fact that George alleges that Miriam moved into Clifford’s condominium in 2005, whereas he, Clifford, states that she began residing in the condominium in 2010. Clifford states that George should have responded to this difference in dates in his supplementary affidavit.
[33] Clifford submits that George should also have responded in his supplementary affidavit to Clifford’s statement that the fence around the camp was built in 2008, not 2005, and that it was built to address a bear problem.
[34] George submits that he has met the minimum evidentiary threshold for an order for directions.
[35] George submits that Pierce J. would necessarily have determined that the evidentiary threshold had been met when she made her order of April 13, 2018.
[36] George submits that, in any event, the evidentiary threshold has been met. He states that there is a history of Miriam having treated him and Clifford equally until 2005 when there was a change in his relationship with Miriam and in her behaviour, when she made abrupt changes to her will, her power of attorney, her life insurance and ownership of property.
[37] George submits that the proceeds of sale of the home are not reflected in the assets of the estate. He points to the discrepancy between the contribution limits for the Tax Free Savings Accounts and Clifford’s statement that the net proceeds of $256,000.00 from the sale of the home were deposited into two Tax Free Savings Accounts.
Discussion
[38] Rule 75.06(1) provides:
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.
[39] In Neuberger v. York, 2016 ONCA 191, at para. 88, Gillese J.A. held that an interested person must meet some minimal evidentiary threshold before a court will grant a request that a will be proved. At para. 89 she elaborated:
In my view, an applicant or moving party under rule 75.06 must adduce, or point to, some evidence which, if accepted, would call into question the validity of the testamentary instrument that is being propounded. If the applicant or moving party fails in that regard or if the propounder of the testamentary instrument successfully answers the challenge, then the application or motion should be dismissed. If, on the other hand, the applicant or moving party adduces or points to evidence that calls into question the validity of the testamentary instrument which the propounder does not successfully answer, the court would generally order that the testamentary instrument be proved. In determining the manner in which the instrument be proved, the court would have recourse to the powers under rule 75.06(3).
[40] I am satisfied that in this case the minimal evidentiary threshold has been established.
[41] Justice Pierce was satisfied that an order should be made prohibiting Clifford from administering the estate. Rule 75.05(4) provides that where a party obtains an order under rule 75.05(1)(a), (to return the certificate of appointment where the moving party seeks a determination of the validity of the testamentary instrument for which the certificate was issued), the party shall move for directions within 30 days after the making of the order. Rule 75.05(2) provides that the motion for return of a certificate of appointment may be made without notice unless the court otherwise orders. In making her order of April 13, 2018, Pierce J. would have been satisfied that there was some evidence, which if accepted, would call into question Miriam’s 2006 will.
[42] Because the motion before Pierce J. was without notice, she did not have before her the evidence in Clifford’s affidavit. However, I am satisfied that even with Clifford’s affidavit there is some evidence, which if accepted, would call the validity of Miriam’s 2006 will into question.
[43] In 2006, Miriam changed her will, which appears to have significantly altered her will from 1994, terminating George’s interest in her estate, which heretofore had been an equal share with Clifford, and changed her life insurance to benefit Clifford alone.
[44] George deposes that Miriam began to have memory issues and that her behaviour changed beginning in 2004/2005. In his affidavit, Clifford acknowledges that Miriam had memory issues, albeit he states that they began in 2008. Miriam was diagnosed with dementia in 2010.
[45] Clifford acknowledges that in 2008, Miriam gifted him $354,000.00. This is when he, himself, deposes that he observed that she was having memory issues. Clifford, as a joint tenant with Miriam, sold the family home in 2010. The disposition of the sale proceeds of $256,000.00 does not appear to be consistent with the contribution limits of the Tax Free Savings Accounts. Clifford deposes that Miriam’s Tax Free Savings Account, of which he was the sole beneficiary, had a value of $56,072.72 at the time of her death. This leaves as a question, what became of the balance of her one half interest in the sale proceeds of the home.
[46] Clifford reports the assets of the estate to be $61,324.75. George alleges, without contradiction from Clifford, that on her husband’s death, Miriam was left with a monthly income of $10,000.00. One could reasonably ask whether the assets of the estate are consistent with Miriam’s income.
[47] In Seepa v. Seepa, 2017 ONSC 5368, at para. 35, Myers J. contrasts the minimal evidentiary basis for an order for directions with the necessity of showing a “genuine issue for trial” in the context of a summary judgment motion. He states:
At this preliminary stage, the issue is not whether the applicant has proven his or her case but whether he or she ought to be given tools, such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits. Normally a litigant must just plead facts that support a cause of action to become entitled to use the full panoply of fact-finding tools provided by the Rules. In estates cases, more is required. Some evidentiary basis to proceed is required in order to address the specific policy concerns addressed above.
[48] At this preliminary stage, even leaving aside the order of Pierce J., I am satisfied on the basis of the evidence pointed to by George, and as responded to by Clifford, that the court should give directions under rule 75.06(3).
[49] Counsel for George produced a draft order for directions. Counsel for Clifford had a number of objections to the draft. The objections focus on the fact that the draft order goes back to 1994, a time when Miriam’s memory is not in issue, that it deals with Miriam’s power of attorney that expired on her death, that it deals with the transfer in 1995 of the family home into the joint names of Miriam and Clifford, that it deals with the transfer of the family camp to Clifford in 1994 and that the terms relating to the question of whether Miriam had capacity or was unduly influenced to transfer “various assets,” is too broad.
[50] I accept, in large part, the validity of those objections. During the hearing of the motion, counsel were able to agree on many changes to the draft order as requested by counsel for Clifford.
[51] An order for directions shall issue pursuant to rule 75.06(1) in accordance with the draft order, as revised, attached as “Schedule A” to these Reasons.
Setting Aside or Varying the Preservation Order
[52] The preservation order of April 13, 2018 was made without notice to Clifford.
[53] On the hearing of the within motions, counsel for Clifford advised that although Clifford’s motion sought to set aside the preservation order and, in the alternative, to vary it, Clifford was now only seeking to vary the order, not to set it aside.
[54] Clifford submits that the motion before Pierce J. on April 13, 2018 should not have been made without notice. He states that there was no urgency for the motion because it was brought 14 months after Miriam’s death. He submits that George had prior knowledge of certain gifts and transfers from Miriam to Clifford, such as the camp and the condominium and the monthly payments to Clifford, but that he took no steps to object to them. Clifford submits that there was no evidence that he was dissipating the assets of the estate.
[55] Having made these submissions, however, Clifford’s concern, as expressed in the hearing of the motion to vary the preservation order, is that the terms of the preservation order are too broad.
[56] A copy of the preservation order is attached as “Schedule B” to these Reasons for ease of reference.
[57] Paragraph 1(i) of the order deals with assets transferred to or received by Clifford from Miriam from January 1, 1994 until her death on February 17, 2017. Clifford submits that the start date of 1994 is well before there were any issues with Miriam’s memory, which George says began in 2004/2005. Clifford submits that the order, in effect, operates as a Mareva injunction, tying up all of Clifford’s assets. Clifford notes that “assets” are not specified and that he would arguably be in violation of this paragraph of the order if he spent any of his money.
[58] With respect to paragraphs 1 (ii), (iii) and (iv) of the preservation order, Clifford submits that they should be limited to one-half the assets because only one-half of the assets received by Clifford from the estate, from the life insurance policy and as a joint owner with Miriam are in issue.
[59] Clifford is content that the camp which was transferred to him in 1994 be preserved in some manner and suggests a certificate of pending litigation.
[60] In response to Clifford’s submissions, George submits that because Clifford received significant monthly amounts over the years from Miriam, starting at $1,000.00 per month and increasing to $3,000.00 per month, paragraphs 1(ii), (iii) and (iv) of the preservation order should not be limited to one-half of the assets received from the estate, from the life insurance policy and as a joint owner with Miriam.
[61] George submits that paragraph 1(iv) be amended to provide:
(iv) any assets received by the Responding Party, Clifford Vernon Campbell, from any financial instrument or account held jointly with Miriam or under a power of attorney, from January 1, 2005 to February 17, 2017.
Discussion
[62] Rule 37.14 provides that where a party or other person is affected by an order obtained on motion without notice, they may move to set aside or vary the order and the court may set aside or vary the order on such terms as are just.
[63] The preservation order of April 13, 2018 was authorized by the provisions of rule 45.01(1):
The court may make an interim order for the custody or preservation of any property in question in a proceeding or relevant to an issue in a proceeding, and for that purpose may authorize entry on or into any property in the possession of a party or of a person not a party.
[64] The assets sought to be preserved in paragraphs 1 (ii), (iii), (iv) and (v) of the April 13, 2018 order fall within the terms of rule 45.01(1) in that they comprise the property in question in the proceeding to challenge the validity of Miriam’s will and are relevant to the issues in the proceeding. As noted in George’s Factum, a Mareva injunction has the purpose of freezing assets that are a means of satisfying a future judgment. Here, the assets sought to be preserved are the very subject matter of the dispute.
[65] In Meade v. Nelson Resources Ltd., 2005 Carswell Ont. (Ont. S.C.J.), at para. 26, Cumming J. set out the test for a preservation order under rule 45.01(1) and 45.02:
To obtain the requested preservation order the moving party must establish that: (1) the assets sought to be preserved constitute the very subject matter of the dispute; (2) there is a serious issue to be tried regarding the plaintiff’s claim to that asset; and (3) the balance of convenience favours granting the relief sought. (Citations omitted).
[66] I agree with Clifford’s submission that the provisions in paragraph 1(i) of the April 13, 2018 order are too broad. They do not meet the test set out above. I am satisfied, however, that the assets described in paragraphs 1 (ii), (iii) and (iv) of the April 13, 2018 order do meet the test. As noted, these assets are the subject matter of the dispute. There is a serious issue to be tried as to the validity of Miriam’s will and as to the gratuitous transfer to Clifford of assets that he held jointly with Miriam, giving rise to the issue of whether he held them under a resulting trust and whether they should constitute part of Miriam’s estate. The fact that the Certificate of Appointment shows that Miriam had financial assets of $45,899.73 on her death, viewed in the context of the assets and income that she had in the years prior to her death, raises a serious issue to be tried. In my view, the facts surrounding the issue of resulting trusts and the balance of Miriam’s estate on her death go to the question of balance of convenience which favours keeping the preservation order in place.
[67] If George wishes to preserve the camp, he can seek a certificate of pending litigation as Clifford suggests.
Conclusion
[68] For the reasons given, an order for directions shall issue in accordance with the draft order for directions at “Schedule A” of these Decisions. The preservation order of Pierce J. dated April 13, 2018 shall remain in effect, varied as follows:
Paragraph 1(i) of the order is deleted.
Paragraph 1(iv) of the order is deleted and the following substituted therefor:
“(iv) any assets received by the Responding Party, Clifford Vernon Campbell, from any financial instrument or account held jointly with Miriam Irene Campbell or under a power of attorney in the name of Miriam Irene Campbell, for the period January 1, 2005, until February 17, 2017.”
Costs
[69] The parties agree that the costs regarding the motion for directions should be determined by the trial judge on the disposition of the action.
[70] With respect to the costs relating to the motion to set aside or vary the preservation order of April 13, 2018, Clifford submits that he should receive some costs because of the amendment that deleted paragraph 1(i) of the order. George submits that costs should be reserved pending this decision on the motion.
[71] The motion regarding the preservation order began importantly as a motion to set aside the order. Variation of the order was sought only as an alternative. Significant time was spent preparing motion materials that dealt with setting aside the order. In my view, the deletion of paragraph 1(i) of the order, with the balance of the order remaining intact (other than the improvement in the wording of paragraph 1(iv) suggested by George) means that success was divided. There shall be no order of costs with respect to the motion to set aside or vary the preservation order of April 13, 2018.
[72] The parties agreed on the hearing of the motion that there should be no order of costs against Weiler, Maloney, Nelson and Mr. Paul Jasiura of that firm, and that there should be no costs against the City of Thunder Bay. It is so ordered. The parties also agreed that the party requesting the notes and records relating to Miriam’s stay in the long term care residence operated by the City of Thunder Bay would, in the first instance, pay the City’s copying costs of $.50 per page.
[73] Counsel for Weiler, Maloney, Nelson and Mr. Jasiura requested an order allowing the firm and Mr. Jasiura to release the productions ordered although the productions would have, in the first instance, been covered by solicitor-client privilege. It is so ordered.
“original signed by”
The Honourable Justice D. C. Shaw
Released: October 23, 2018
COURT FILE NO.: CV-18-0168
DATE: 2018-10-23
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
GEORGE EARL CAMPBELL
Moving Party
- and -
CLIFFORD VERNON CAMPBELL, Estate Trustee for the Estate of Miriam Irene Campbell and CLIFFORD VERNON
CAMPBELL, in his personal capacity
Responding Parties
DECISION ON MOTIONS
Shaw J.
Released: October 23, 2018
/sab