COURT FILE NO.: CV-19-00005266-00ES
DATE: 2021-10-04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RE: IN THE ESTATE OF JACK MCMANUS, deceased:
ANGELICA MCMANUS, DANIEL MCMANUS, KATRINA MCMANUS, MATTHEW MCMANUS and NICHOLAS MCMANUS Applicants
– and –
HELEN ARGIRO Respondent
Counsel: Adam Marchioni, for the Applicants Nooruddin Waliani, for Respondent
HEARD: August 12, 2021
KOEHNEN J.
REASONS FOR JUDGMENT
Overview
[1] Jack McManus[^1] died suddenly on July 4, 2019 of an unexpected stroke. He was 68 years old. No will has been found.
[2] Jack’s unexpected death has led to the present dispute between five of Jack’s six adult children on the one hand and the respondent, Helen Argiro, on the other. Ms. Argiro met Jack in either 2012 or 2014. She married him in 2016 or 2017.[^2]
[3] The dispute before me centres around ownership of two real estate properties, several safety deposit boxes and bank accounts, as well as two storage lockers. One real estate property was registered in Ms. Argiro’s name. The other was held by Jack and Ms. Argiro as joint tenants. The safety deposit boxes, bank accounts, and storage lockers were also held jointly by Jack and Ms. Argiro. Altogether, the property has a value of approximately $7,000,000.00.
[4] Without anything more, all of the property would belong to Ms. Argiro, either because it was registered in her name alone or because it passed to her as the surviving joint tenant on Jack’s death. This would allow Ms. Argiro to receive $7,000,000.00 in cash or property by virtue of being married to Jack for 2-3 years. This would also leave his children with nothing.
[5] The applicants argue that this was not Jack’s intention because he was close to his children and provided for them generously.
[6] The applicants submit that the assets at issue are impressed with a resulting trust in Jack’s favour. If this is correct, the assets would pass to Jack’s estate and would be shared between Jack’s six children and Ms. Argiro according to the laws of intestacy.
[7] By contrast, Ms. Argiro says the assets should pass to her because the real estate property registered in her name was purchased using her money, the real estate held in joint tenancy was purchased using funds from both Jack and Ms. Argiro, and because she contributed to the expenses of the properties and bank accounts.
[8] For the reasons set out below, I find that the assets in dispute belong to the estate, not to Ms. Argiro. Jack did not intend to give Ms. Argiro any of the property but, instead, intended for her to hold the property in trust for him. This was part of a longer standing practice employed by Jack whereby others would hold onto his assets to avoid creditors. Ms. Argiro has never suggested that the assets were gifted to her out of love and affection or otherwise. Instead, she bases her claim to the assets on the allegation that they were acquired with her own funds or that she contributed to their acquisition. Ms. Argiro has failed to make out that allegation. On the contrary, she has acted in breach of court orders, compliance with which would have allowed her to demonstrate that the assets were acquired with her own funds or that she contributed to their acquisition. Given the new state of affairs arising from this ruling, I will allow Ms. Argiro an additional 90 days from the release of these reasons to choose whether she wants to have her rights to succession determined under the Family Law Act[^3] (the “FLA”) or under the Succession Law Reform Act[^4] (the “SLRA”).
A. The Law of Resulting Trust in Ontario
[9] It has long been recognized that a trust may exist in favour of someone who has contributed money to purchase property but who has not taken legal title to it.[^5] In those circumstances the law generally presumes a resulting trust in favour of the person who made the financial contribution.[^6] This places the burden of proof on the titleholder to rebut the presumption by demonstrating that the person who made the financial contribution intended to make a gift to the title holder.[^7] This is so because, as the Supreme Court of Canada noted in Pecore v. Pecore, equity presumes bargains, not gifts.[^8]
[10] More recently, the Court of Appeal for Ontario offered guidance on the application of resulting trusts in Holtby v. Draper, where it explained:
In Pecore v. Pecore, [2007] 1 S.C.R. 795, [2007] S.C.J. No. 17, 2007 SCC 17, at para. 44, Rothstein J. explained that the trial judge must commence his or her inquiry with the applicable presumption and weigh all the evidence in an attempt to ascertain, on a balance of probabilities, the transferor's actual intention. When a gratuitous transfer is made, the transferee has the onus to demonstrate a gift was intended, to rebut the presumption of resulting trust: Pecore, at para. 24. The presumption of resulting trust applies to married spouses, except that where property is held in joint ownership, the presumption is that they intended to each own one half, in the absence of evidence to the contrary: Family Law Act, s. 14. The transferor's intention at the time of the transfer is the critical consideration: Nishi v. Rascal Trucking Ltd., [2013] 2 S.C.R. 438, [2013] S.C.J. No. 33, 2013 SCC 33, at paras. 2, 30 and 41. Evidence of intention that arises subsequent to a transfer must be relevant to the intention of the transferor at the time of the transfer. Its reliability must be assessed to determine weight, guarding against evidence that is self-serving or reflects a change in intention: Pecore, at para. 59; Andrade v. Andrade, 2016 ONCA 368, 131 O.R. (3d) 532, at para. 63.[^9]
[11] As noted in the foregoing quotation, s. 14(a) of the FLA, stipulates that the presumption of resulting trust applies between married spouses, unless the spouses hold the property as joint tenants. In that case, there is a presumption in favour of joint tenancy,[^10] which the party challenging joint ownership bears the burden of rebutting.
[12] If the evidence allows the court to conclude that a spouse’s interest as a joint tenant is the result of a gratuitous transfer without consideration, as opposed to a gift, then the presumption in favour of joint tenancy has been rebutted.[^11] At the heart of this all is the intention of the transferor. In cases involving spouses, there is usually no explicit agreement one way or the other and so intention must be inferred from the circumstances.[^12]
B. Evidence Concerning Jack
[13] Based on the evidence before me, Jack appears to have been a man of some means who preferred to operate off the financial radar as much as possible. He appears to have made his money gambling on sports events in respect of which he also sometimes served as a bookie. According to Matthew, he made bets as large as $200,000.00.
[14] Jack appears to have had a close relationship with his children. He spoke with Matthew daily. Jack assured Matthew and his other children that he would always support them and that he would ensure they were provided for financially when he died.
[15] Jack provided significant support for his adult children and gave them lavish gifts such as Rolex watches worth $20,000.00. This caused tensions with Ms. Argiro, who had a different view of parenting. Some of these tensions were evident in an email that Ms. Argiro sent to Jack on May 11, 2016. In that email, Ms. Argiro complained that Jack’s first priorities were his six children, whom Ms. Argiro listed in the order in which she perceived that Jack preferred them, followed by his material possessions, followed by whoever he was speaking to at the moment, followed by Ms. Argiro in ninth place. She expressed the view that Jack’s adult children were taking advantage of him continuously.
[16] According to Matthew, Jack took title to assets jointly or in the name of Ms. Argiro for the purpose of insulating those assets from prospective creditors. Matthew says that Jack had done this before with a woman with whom he lived in a common-law relationship and with whom he had his sixth child, MacKenzie (not an applicant in this proceeding).
[17] According to Matthew, Jack was aware that his gambling activities could take a turn for the worse and leave him with substantial debts. In Jack’s view, putting property into the name of a spouse insulated those assets from creditors, including the Canada Revenue Agency (the “CRA”). Jack had conflicts with the CRA previously, which led to a settlement in which Jack was required to pay the CRA $800,000.00.
[18] Matthew’s evidence is corroborated by other evidence discussed later in these reasons. For example, Jack gave at least $767,550.00 to his brother, Bill, who then transferred it to Ms. Argiro in a series of 11 cheques. This supports a practice on Jack’s part of keeping assets outside of his own hands without an intention of gifting those assets to the person in possession.
[19] Ms. Argiro also corroborated Matthew’s evidence about Jack’s use of cash. She stated in her affidavit that Jack did not have a bank account in Florida (as Matthew alleges) but that when she and Jack travelled to Florida, Jack “brought cash with him, which he duly declared at customs.” Travelling with an amount of cash that is required to be declared at customs is fairly unusual in this day and age when almost everything is payable by credit or debit cards and is suggestive of someone who wanted to operate either off, or very low on, the financial radar.
[20] The foregoing evidence indicates that Jack prioritized his children over Ms. Argiro to a sufficient extent that it caused tensions between the two of them. He assured his children that he would provide for them after his death. The evidence also indicates that Jack took active steps to keep assets out of his hands and to have others hold assets in trust for him. The combination of his devotion to his children and his practice of having others hold property in trust for him makes it seem less likely, in the absence of any other evidence, that Jack intended to have all of his assets pass to Ms. Argiro on his death or that he intended for his children to receive nothing.
C. Is There a Resulting Trust on the Donnybrook Property?
[21] The property at 416 Donnybrook Road in Oakville, Ontario (the “Donnybrook Property”) was purchased on September 30, 2016. It was registered in Ms. Argiro’s name.
[22] Since the purchase occurred before Jack and Ms. Argiro were married,[^13] a resulting trust in favour of Jack is presumed to exist if it can be established that Jack provided the funds for the property.
[23] On October 27, 2017, a mortgage was registered against the Donnybrook Property in favour of the National Bank of Canada for $3,350,000.00. Ms. Argiro denies that a mortgage in that amount was advanced and says the amount advanced was approximately $800,000.00. She says that this $800,000.00 was originally taken out when the property was purchased but was later re-financed with National Bank in October 2017.
[24] The applicants submit that Ms. Argiro did not contribute any funds to either the purchase of the Donnybrook Property or the repayment of its mortgage. Ms. Argiro says she purchased the Donnybrook Property with her own money and took the mortgage out herself. She claims to have sold other properties to help fund the Donnybrook Property purchase. She also claims to have had two additional sources of wealth – namely, ownership of two companies and a beneficial interest in a family trust.
[25] On the record before me, I am unable to find that Ms. Argiro purchased the Donnybrook Property with her own funds. Instead, I find that it was purchased using funds belonging to Jack.
[26] The email in which Ms. Argiro complained of Jack’s commitment to his children also reveals financial tensions between Jack and herself. In that email, Ms. Argiro complains that Jack is constantly telling her that she should get “a real job.” It appears that Ms. Argiro was doing freelance work as a writer and editor. She admitted in her email that she did not earn as much from writing and editing as she did when she was going to work every day.
[27] Ms. Argiro’s lack of financial independence is further demonstrated by a text message that Jack sent to his ex-wife on April 9, 2019 in which he stated:
I never thought that I would admit it to you, but I know Helen is with me only for the money -- Helen and I are on borrowed time…[^14]
[28] It is also clear that Ms. Argiro’s ability to purchase either the Donnybrook Property or the Shangri-La Property (discussed below) has been a principal issue in this application from the outset. It therefore behooved Ms. Argiro to produce evidence of her financial wherewithal. She failed to produce any evidence in this regard voluntarily. Several court orders were issued compelling her to produce information.
[29] After being ordered to do so, Ms. Argiro produced tax returns for 2014 to 2018. They disclosed annual income during those years of between $8,000.00 and $12,000.00. It is self-evident that income of that level cannot support the purchase of the Donnybrook Property, nor can it support the mortgage of even the lower amount of $800,000.00 that Ms. Argiro says was taken out.
[30] Ms. Argiro was also ordered to produce information about the family trust which she suggests provided her with the wherewithal to purchase the Donnybrook Property. She was, among other things, ordered to produce the entire family trust document. Instead, Ms. Argiro produced one half of the first page of the trust document. What she produced provides no evidence of any financial wherewithal on her (or anyone else’s) part.
[31] Ms. Argiro has also provided no evidence of any of the alleged “other properties” which she says she sold to acquire the Donnybrook Property. Indeed, she has not produced any financial records which demonstrate that she had the financial wherewithal to make the purchase on her own, apart from bald assertions to that effect.
[32] On cross-examination, Ms. Argiro asserted that the funds for the Donnybrook Property purchase came from her bank account. She did not recall which account. Nor did she recall if Jack put any money into that account before the closing to pay for the property.
[33] Ms. Argiro was ordered to produce bank statements from 2014 to the present. She ultimately produced redacted bank statements for some, but not all, of that time frame.
[34] The redacted bank statements that Ms. Argiro produced show a withdrawal of $2,051,624.60 for a bank draft for the Donnybrook Property purchase. That same bank statement also shows a deposit of a slightly larger amount on the same day as the withdrawal. Ms. Argiro has redacted the source of the deposit.
[35] In response to the production of redacted bank statements, the applicants obtained a court order compelling Ms. Argiro to produce unredacted bank statements. She refused to do so.
[36] This was only one of Ms. Argiro’s several breaches of court orders. The breaches were so serious that the applicants brought a motion to strike Ms. Argiro’s materials in defence to this application.
[37] During that motion, Ms. Argiro’s counsel asked me not to strike her defence materials but rather suggested that I draw an adverse inference against her on the merits hearing if I felt it appropriate. This is recorded in my endorsement of April 16, 2021. I adopted counsel’s suggestion, did not strike out Ms. Argiro’s materials, and indicated that I would draw an adverse inference against her for failing to produce information which she was ordered to produce. Despite that clear warning, Ms. Argiro did not remedy her breaches of court orders.
[38] As noted, the withdrawal of funds from Ms. Argiro’s account to pay for the Donnybrook Property was preceded by a larger deposit into the account, the source of which was redacted. Had the source of the deposit demonstrated that the funds came from Ms. Argiro’s own resources, I assume she would have disclosed that information. Instead, she acted in express breach of a court order, refused to disclose the source of the deposit, and invited me to draw an adverse inference against her for refusing disclosure. I accept that invitation here, draw an adverse inference against Ms. Argiro, and infer that the funds for the Donnybrook Property came from Jack.
[39] In oral argument, counsel for Ms. Argiro submitted that I should not draw such an inference because Ms. Argiro was the mortgagee on the National Bank mortgage and would have had to show income to satisfy the bank that she could support the mortgage.
[40] That is not necessarily the case. A bank may be quite prepared to extend a mortgage to a low-income earner if, for example, there is sufficient equity in the property or if the mortgage is guaranteed by someone of more substantial means. Ms. Argiro has failed to produce the National Bank file which might, for example, have disclosed whether Jack guaranteed the mortgage.
[41] Ms. Argiro’s counsel also urged me to ignore the reported income on Ms. Argiro’s tax returns because, in his submission, people could not be counted on to accurately declare their income on tax returns.
[42] While I accept that not everyone accurately discloses income on their tax returns, that does not make it acceptable. Tax returns require a declaration as to the truth of the contents of the return. Moreover, Ms. Argiro’s affidavit in this proceeding states that she has “duly filed accurate income tax returns every year of my adult life.”
[43] If Ms. Argiro has in fact failed to accurately declare income on tax returns or, alternatively, has failed to otherwise explain the discrepancy between her declared income and the financial wherewithal required to purchase the Donnybrook Property, she must bear the consequences of those choices. The natural consequence is that, on the evidence before me, I must infer that Ms. Argiro did not have sufficient income to acquire, or indeed make any material contributions to, the Donnybrook Property.
[44] At this point in the analysis, we have the acquisition of the Donnybrook Property with monies furnished by Jack and title taken in the name of Ms. Argiro when Jack and Ms. Argiro were not married. A resulting trust in favour of Jack is therefore presumed.
[45] I must, however, still inquire into Jack’s intentions. As in most matrimonial cases, intention is often implied from the circumstances rather than gleaned from express evidence.
[46] I accept Matthew’s evidence that Jack placed property in the names of others to avoid creditors. He had a particular incentive to do so given the highly risky nature of his gambling and the real possibility that his wealth could disappear with the result that he could be indebted for significant amounts in very short order.
[47] In light of the presumption of a resulting trust, the evidence of Jack’s desire to have others hold property in his name, and his desire to support his children, it falls on Ms. Argiro to rebut the presumption of a resulting trust. This would usually be done by demonstrating that Jack intended to gift her the property.
[48] As the Supreme Court of Canada noted in Pecore, where the transferor is deceased, it is the transferee who is better placed to bring evidence about the circumstances of the transfer.[^15]
[49] Apart from alleging that she paid for the property herself, Ms. Argiro has not introduced any evidence about the circumstances that led to title being registered in her name. Ms. Argiro introduced no evidence to suggest that the property was a gift from Jack to herself and did not even argue that point before me. Instead, Ms. Argiro’s sole defence was that she purchased the property with her own funds. I do not accept that allegation and find on the record before me that Jack paid for the Donnybrook Property. A resulting trust therefore applies and the Donnybrook Property must be considered an asset of Jack’s estate.
[50] The Donnybrook Property has been sold since this application was commenced. The proceeds of sale are being held in trust. The resulting trust associated with the Donnybrook Property in favour of Jack also extends to the proceeds of sale. Those funds shall continue to be held in trust until an estate trustee has been appointed, at which time they should be transferred to such account as the estate trustee directs.
D. Is There a Resulting Trust Over the Shangri-La Property?
[51] The Shangri-La condominium (the “Shangri-Law Property”) was acquired on July 20, 2018. Title was registered in the names of Jack and Ms. Argiro as joint tenants. Since they were married at the time of the purchase, a rebuttable presumption in favour of the joint tenancy arises by virtue of s. 14(a) of the FLA.
[52] The issue, then, is whether the applicants have, on the record before me, rebutted the presumption in favour of joint ownership in the Shangri-La Property. In my view, they have.
[53] As noted earlier, I must begin my analysis with the presumption, then weigh the evidence and determine the deceased’s intention on a balance of probabilities. Intention in circumstances like these is more often inferred from the circumstances and the transferee usually has better evidence of intention than third parties such as the applicants.
[54] The purchase price of $1,690,000.00 was paid in full on closing. No mortgage was taken against the property. The applicants say that Jack contributed all the funds required to acquire the Shangri-La Property. Ms. Argiro says she contributed about one half of the purchase price and that this explains why title was taken jointly.
[55] The general evidence referred to earlier about Jack’s practice of having others hold property for him is as relevant to the Shangri-La Property as it is to other assets. I will not repeat it here.
[56] In addition, the applicants have produced 11 cheques from Jack’s brother Bill in favour of Ms. Argiro in the total amount of $767,550.00, most of which were issued shortly before the purchase of the Shangri-La Property. Ms. Argiro says she does not recall getting the cheques from Bill. It is clear, however, that she did. Ms. Argiro’s counsel conceded in argument that the money Ms. Argiro received from Bill was actually Jack’s money. This reveals that Jack went through some inconvenience to funnel money to Ms. Argiro in a way that would make it more difficult to trace the funds back to him. This is consistent with the applicants’ description of Jack as arranging his affairs so as to have others hold property for him, effectively in trust.
[57] The combination of Jack’s practice of having others hold property for him to avoid creditors and the funneling of Jack’s money through Bill to Ms. Argiro shortly before the condominium purchase is at least enough evidence to warrant a response from Ms. Argiro.
[58] Her response is that title was taken jointly because she contributed to the purchase price.
[59] Mr. Waliani, on behalf of Ms. Argiro, took me to bank statements which show a payment of $100,000.00 out of Ms. Argiro’s bank account on June 8, 2018 and a further payment of $1,000,000.00 on July 9, 2018. According to Ms. Argiro, these payments were for the purchase of the Shangri-La Property.
[60] Both payments, however, were preceded by deposits into Ms. Argiro’s account, the amount and source of which Ms. Argiro has redacted.
[61] Although Ms. Argiro submits that she paid many of the expenses for the condominium out of her bank account, including monthly maintenance fees, those payments are also usually preceded by deposit entries on her bank statement which she has redacted. It is therefore impossible to know how much was deposited into the account or by whom. The applicants say that those redacted deposit entries reflect deposits by Jack.
[62] Ms. Argiro had it within her power to demonstrate that the funds for the condominium did in fact come from her own financial resources. As with the Donnybrook Property, she has failed to do this. Indeed, she has failed to provide any evidence of independent financial resources apart from a bald allegation to that effect. She has failed to demonstrate income to support a contribution to the purchase price. She has also failed to produce unredacted bank statements that would help her prove her point. As with the Donnybrook Property, I draw an adverse inference against Ms. Argiro for those failures and find that Jack deposited money into her bank account so as to permit her to contribute to the purchase price and pay the monthly expenses for the condominium.[^16]
[63] Ms. Argiro’s sole reason for taking title as joint tenants is her submission that she and Jack both contributed to the purchase price of the condominium. She did not suggest that there was any gift out of love or affection. She has failed to demonstrate any contribution to the purchase price.
[64] On my weighing of the evidence, it demonstrates a greater probability that Jack intended the condominium to be held in trust for him than a desire to establish a true joint tenancy that would deprive his children of any interest in the Shangri-La Property.
[65] In the foregoing circumstances, I find that the applicants have rebutted the presumption in favour of joint tenancy.
E. Resulting Trust Over Safety Deposit Boxes, Bank Accounts, and Storage Lockers
[66] The safety deposit boxes and storage lockers were all held jointly by Jack and Ms. Argiro. By operation of s. 14(a) of the FLA, a rebuttable presumption arises in favour of a joint tenancy.
[67] The applicants submit that they have rebutted this presumption.
[68] In his affidavit of October 1, 2019, Matthew McManus swears as follows:
(a) Jack told Matthew that the safety deposit boxes and storage lockers contained approximately $3 million cash. Matthew also drove Jack to the safety deposit boxes or storage lockers and became aware of their contents on those visits.
(b) Jack sent Ms. Argiro to deposit money into or remove money from the safety deposit boxes from time to time.
(c) Jack told Matthew that none of the $3 million in cash in the safety deposit boxes belonged to Ms. Argiro although she was aware that it was there.
(d) Jack would often discuss his business and would provide regular updates to Matthew about the state of his financial holdings.
(e) In the weeks preceding his death, Jack told Matthew that he had deposited $500,000 into a Bank of Montreal account in Oakville.
(f) A TD bank account in Florida contained approximately $200,000-$300,000 that Jack used to cover his business activities in the United States.
(g) Any contributions made by Helen to the accounts were minor.
[69] Matthew also testified that, in April 2019, Jack told him that he transferred his $3,000,000.00 in cash to the TD Bank safety deposit box.
[70] Ms. Argiro was cross-examined 7 months after Jack’s death. During that cross-examination, she said she could not recall when she last accessed the TD safety deposit box or whether she accessed it after Jack died.
[71] When TD’s access records were later produced pursuant to my order of March 14, 2020, it was discovered that Ms. Argiro had in fact accessed the TD safety deposit box on July 5, 2019, the day after Jack died.
[72] On July 12, 2019 the parties reached an agreement that precluded access to the safety deposit boxes unless both parties were present. Ms. Argiro unilaterally accessed the BMO safety deposit boxes on July 27, 2019, in breach of the agreement between the parties.
[73] When the applicants ultimately received access to the safety deposit boxes pursuant to a further court order, the BMO safety deposit boxes were empty. The TD safety deposit box contained $40,000.00 U.S.D. and $50,000.00 C.A.D. (all in $100 bills).
[74] No one else gained access to the TD safety deposit box between Ms. Argiro’s access on July 5, 2019 and the parties’ inspection on June 16, 2020.
[75] Ms. Argiro has never explained why she accessed the TD or BMO safety deposit boxes after Jack’s death and has never explained what she removed from those boxes after Jack’s death. This is a telling omission in light of the allegation that she removed $3,000,000.00 from them.
[76] What Ms. Argiro may have removed from the safety deposit boxes brings me back to her failure to comply with court orders respecting the production of bank records. I issued orders requiring Ms. Argiro to produce bank statements from 2014 to present. While she produced some redacted bank statements, she has produced no bank statements from Jack’s death onward.
[77] In addition, Associate Judge Jolley ordered Ms. Argiro to produce a sworn statutory declaration listing all bank accounts held by Ms. Argiro since 2014. Although Ms. Argiro swore a statutory declaration, it did not comply with the order of Associate Judge Jolley. Instead, the statutory declaration lists three banks at which Ms. Argiro states she did not have bank accounts and says that she has produced bank statements for all her active accounts that she held between 2014 and the date of Mr. McManus’s death.
[78] The differences between the requirements of the orders and what Ms. Argiro actually produced are telling. The allegation against her is that she took $3,000,000.00 from safety deposit boxes. Bank statements that showed large deposits following Jack’s death would tend to corroborate that allegation. Similarly, bank statements without large deposits following Jack’s death would take some of the sting out of the allegation.[^17]
[79] Ms. Argiro failed to produce any bank statements for the period following Jack’s death and has failed to provide a listing of all bank accounts that she held between 2014 and the time Associate Judge Jolley issued her order in January 2021. These deficiencies were drawn to Ms. Argiro’s attention in my endorsement of April 16, 2021, which arose out of the applicants’ motion to strike Ms. Argiro’s defence materials. That is the same motion in which Ms. Argiro invited me to draw an adverse inference against her for her failure to comply with court orders. Although the issue was drawn specifically to her attention, she continued to act in breach of production orders. The only inference I can draw from that conduct is that production of complete bank records would have disclosed the deposit of large sums of money, probably something close to $3,000,000.00, after Jack’s death.
[80] On the record before me, I can only conclude that the TD safety deposit box contained approximately $3,000,000.00 in cash and that Ms. Argiro removed $2,910,000.00 in cash from the TD safety deposit boxes on July 5, 2019 and removed whatever remaining cash or other valuables were in the BMO safety deposit box on July 27, 2019.
[81] Ms. Argiro also refused to produce access records to the storage lockers. When those storage lockers were inspected by the parties pursuant to a court order, no valuables were found in them, although they did contain several boxes for Rolex watches which were empty.
[82] For purposes of calculating entitlements to distributions from the estate, Ms. Argiro should be deemed to have received $2,910,000.00 already. That may also entitle the estate to a repayment of excess distributions from Ms. Argiro.
[83] There appear to be several bank accounts of which Jack and Ms. Argiro were joint holders. Ms. Argiro has not argued that Jack intended to gift her an interest in the bank accounts. Again, she takes the position that she is entitled to a survivor’s joint tenancy interest because she contributed to these accounts.
[84] Ms. Argiro has refused to produce bank statements and other documents which show the source and amount of funds deposited into the joint accounts, despite having been ordered to do so several times.
[85] I draw a negative inference from her failure to produce bank statements and conclude that any joint accounts were funded by Jack.
[86] For the same reasons that apply to the Shangri-La Property and the Donnybrook Property, I also find that it was not Jack’s intention to deprive his estate of the contents of the safety deposit boxes, bank accounts, and storage lockers. The presumption of joint tenancy of these assets has therefore been rebutted and the safety deposit boxes, bank accounts, and storage lockers should be deemed to be subject to a resulting trust in favour of Jack’s estate.
F. Credibility Issues
[87] This matter proceeded on a paper record. One could view the record as creating issues of credibility. This arises because Ms. Argiro’s materials contain wholesale denials of the applicants’ allegations. I nevertheless feel it is appropriate to resolve those credibility issues on a paper record. In those cases where Ms. Argiro’s version of events conflicts with that of the applicants’, I prefer the applicants’ version of events.
[88] A credibility issue need not be resolved with viva voce evidence every time a party simply denies an allegation of an opposing party. A party denying an allegation must do more than deny – rather, they must produce actual evidence to support their denial to raise a genuine issue of credibility. In my view, courts should only refuse to address an issue on a paper record in circumstances where viva voce evidence is truly necessary.
[89] Ms. Argiro has failed to produce evidence to support her allegations. Her failure to produce unredacted bank records to demonstrate that she purchased both the Donnybrook Property and Shangri-La Property with her own funds stand out in this regard. Similarly, a blanket denial that she removed $3,000,000.00 from the safety deposit boxes does not create a credibility issue when the evidence clearly discloses that she accessed the boxes after Jack’s death and has failed to explain why she accessed them or what she removed from them.
[90] In other cases, Ms. Argiro took the positions that defied common sense or regulatory requirements without explaining the disconnect. By way of example, she took the position that certain bank statements were no longer available because the account had been closed. She produced a letter from BMO that contained almost those same words. I do not accept that evidence. Banks statements are generally available even for recently closed accounts (although it may involve a fee and extra time to obtain them). The blanket assertion that statements are no longer available because the account has been closed is too broad. Although a customer lose may immediate access to certain documents, such as electronic account statements, upon the closing of an account, as a general rule, banks are required to maintain accounts statements for at least five years, including after an account has been closed.[^18]
[91] Finally, Ms. Argiro’s refusal to comply with court orders to produce evidence leads me to doubt her version of events in the absence of something more than bald allegations.
G. Appointment of Estate Trustee
[92] The applicants ask that Matthew be appointed as estate trustee. I do not think he is an appropriate choice as estate trustee for two reasons. First, the nature of the relationship between Jack’s children and Ms. Argiro makes it desirable to have a neutral estate trustee. Second, there are serious historical tensions between Matthew and one other sibling. In such circumstances, it would not be advisable for the court to force Mathew and that sibling to have contact; nor would it be advisable for Matthew to be making decisions affecting that sibling. The applicants do not oppose the appointment of a neutral trustee.
[93] If the parties cannot agree on a neutral estate trustee within 14 days of the release of these reasons, I propose that each side give me a list of three potential candidates in confidence, together with a link to the biographies of those candidates as listed on their respective organizations’ websites. The communication and the biography should contain no argument. It should be nothing more than a name and a link to a professional biography.
[94] I ask that the names and biographies be delivered to me in confidence in the hopes of improving the chances that the two lists will contain at least one overlapping name. I am concerned that if the parties exchange lists in advance, one side may not list the name the other has listed or may otherwise choose names tactically rather than limiting their choices to individuals that they feel are the best candidates. Within one day of receiving the communication of names from the parties, I will circulate each side’s proposal to the other. Following that, each party will have 5 days to advise me if they agree to a candidate on the other side’s list. Communication of that agreement should also be made to me in confidence without any explanation or argument.
H. Further Election by Ms. Argiro
[95] When a spouse dies intestate, the surviving spouse generally has the right to an election. The surviving spouse can choose to equalize net family property under s. 5 of the FLA or elect to receive the entitlement provided by Part II of the SLRA.
[96] Section 5(2) of the FLA provides that, when a spouse dies, if the net family property of the deceased spouse exceeds the net family property of the surviving spouse, the surviving spouse is entitled to one half the difference between them. That provision operates to equalize net family property. Part II of the SLRA gives a spouse a preferential share ($200,000.00 at the time of Jack’s death) of the estate, following which the estate is divided according to a scheme contained in the SLRA.
[97] Section 6(10) of the FLA requires the surviving spouse to make an election within six months after the deceased spouse’s death. Section 6(11) of the FLA provides that if a spouse has not made an election within that time, he or she will be deemed to receive the entitlement under the SLRA unless a court orders otherwise.
[98] Those provisions could redound to the detriment of Ms. Argiro. She has presumably been operating under the assumption that the proceeds of the Donnybrook Property were hers and that the remaining material assets of Jack were owned jointly. As a result, she has made no election. Given that these reasons alter the assumptions under which Ms. Argiro was operating, she should have the right to elect between the provisions of the FLA and the SLRA. Pursuant to s. 6(11) of the FLA, I thus grant Ms. Argiro 90 days from the release of these reasons to make an election. For the purposes of the election, the $2,910,000.00 that I have found to have been removed from the TD safety deposit box will count as an asset of Jack’s. However, as noted earlier, for the purposes of any distribution to, or claim against, Ms. Argiro, she will be deemed to have taken $2,910,000.00 of estate assets.
[99] Ms. Argiro submits that she has been the sole financial provider for Jack’s youngest daughter, MacKenzie. Apart from that bald allegation, she has provided little evidence of such support.[^19] The issue of support for MacKenzie was not a live issue on this application. As a result, to the extent that Ms. Argiro has provided support for MacKenzie which needs to be equalized either for equitable reasons or because MacKenzie had a support claim against the estate, the parties remain free to engage in that exercise, including, if necessary by having those issues resolved by the court.
I. Disposition and Costs
[100] For the reasons set out above I dispose of the application as follows:
(i) A declaration shall issue that the Donnybrook Property and its proceeds of sale, the Shangri-La Property, and the contents of the safety deposit boxes, storage lockers, and bank accounts held in the joint names of Jack and Ms. Argiro are impressed with a resulting trust in favour of Jack’s estate.
(ii) All title and interest in the proceeds of sale of the Donnybrook Property shall be vested in the estate of Jack McManus.
(iii) The proceeds of the sale of the Donnybrook Property shall be paid to counsel for the estate of Jack McManus in trust.
(iv) All title and interest in the Shangri-La Property shall be vested in the estate of Jack McManus.
(v) The applicants have leave to register a certificate of pending litigation against the Shangri-La Property for so long as necessary to ensure that Ms. Argiro does not transfer it.
(vi) Ms. Argiro is restrained from dealing in any way with the Shangri-La Property or any assets she has removed from the safety deposit boxes or the storage lockers without consent of the applicants or further order of this court.
(vii) All title and interest of Ms. Argiro in the bank accounts, safety deposit boxes, and storage lockers shall be vested in the estate of Jack McManus.
(viii) If the parties cannot agree on a neutral estate trustee within 14 days of the release of these reasons, counsel for the applicants and the respondents shall each provide me, by email and in confidence, the names of three potential candidates together with a link to the biography of each candidate as listed on the candidate’s professional website. I will choose one of the candidates in accordance with the procedure set out in paragraph 94, above.
(ix) For purposes of any further distributions from the estate, or of any claims against Ms. Argiro, she shall be deemed to have already received $2,910,000.00 as a distribution from the estate of Jack McManus.
[101] I have received a cost outline from applicants’ counsel. The respondent will have 14 days from the release of these reasons to provide submissions in response to the applicants’ cost outline.
Koehnen J.
Released: 2021-10-04
COURT FILE NO.: CV-19-00005266-00ES
DATE: 2021-10-04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RE: IN THE ESTATE OF JACK MCMANUS, deceased:
ANGELICA MCMANUS, DANIEL MCMANUS, KATRINA MCMANUS, MATTHEW MCMANUS and NICHOLAS MCMANUS Applicants
– and –
HELEN ARGIRO Respondent
REASONS FOR JUDGMENT
Koehnen J.
Released: 2021-10-04
[^1]: Given the reference later in these reasons to Jack’s eldest son, Matthew McManus, I will refer to both by their first names to avoid confusion. I mean no disrespect to either in doing so. [^2]: The evidence differs between the parties on this point. The applicants say Jack and Ms. Argiro were married in Las Vegas on July 16, 2017. Ms. Argiro says they were married on November 6, 2016. [^3]: R.S.O. 1990, c. F.3. [^4]: R.S.O. 1990, c. S.26. [^5]: Dyer v. Dyer (1788), 2 Cox 92 (Ch.). [^6]: Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 17, 25. [^7]: Jama v. Basdeo, 2020 ONSC 2922, at para. 45; Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 24; Kerr, at para. 19. [^8]: Pecore, at para 24. [^9]: 2017 ONCA 932, 138 O.R. (3d) 481, at para. 32. [^10]: Jama, at para. 47. [^11]: Bouffard v. Bouffard, 2020 ONSC 3079, at paras. 137-138, 169. [^12]: Nussbaum v. Nussbaum et al. (2004), 9 R.F.L. (4th) 455, at para. 19 (Ont. S.C.). [^13]: On either side’s evidence (see fn. 2, above). [^14]: I use that text only as evidence relevant to Ms. Argiro’s financial means. Although it suggests that Jack may have foreseen a breakdown in the relationship, that evidence is irrelevant to Jack's intention at the time the Donnybrook Property was purchased. [^15]: Pecore, at para. 26. [^16]: Ms. Argiro made similar submissions with respect to monthly payments on the Donnybrook Property mortgage which I reject for the same reason. [^17]: I say “some of the sting” because Ms. Argiro could still have taken the cash and put it into a different safety deposit box in her name. [^18]: Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, S.O.R./2002-184, ss. 12(i), 148(1)(c). [^19]: Ms. Argiro has asserted that she has supported MacKenzie and has pointed to transfers in bank statements that she says were to Mackenzie’s guardian.