BARRIE COURT FILE NO.: CV-18-1501
DATE: 2021-12-01
Superior Court of Justice - Ontario
BETWEEN:
Anne Elizabeth Fair
Plaintiff
– and –
BMO Nesbitt Burns Inc., Adam Raymond Fair, Ashley Christina Abbott, and Adam Raymond Fair and Ashley Christina Abbott, Estate Trustees on behalf of the Estate of the late Lloyd Fielder Fair
Defendants
COUNSEL:
Alfred Schorr, for the Plaintiff
Nicolette C. Holovaci, for the Defendant, BMO Nesbitt Burns Inc.
David Harris-Lowe, for the Defendants, The Estate of Lloyd Fielder Fair, Adam Raymond Fair and Ashley Christina Abbott
HEARD: July 2 and November 3, 2021
REASONS FOR DECISION
DE SA J.:
Overview
[1] The Defendants bring this summary judgment motion for an order dismissing the action in its entirety.
[2] The Plaintiff, Anne Elizabeth Fair, commenced a claim against the Defendants, Adam Raymond Fair (“Adam”) and Ashley Christina Abbott (“Ashley”), for monies they received as beneficiaries from investment accounts of the late Lloyd Fielder Fair (the “Deceased”) which he held with BMO Nesbitt Burns Inc.
[3] The Plaintiff was originally the beneficiary designated by the Deceased under these accounts. The Plaintiff challenges changes made by the Deceased on September 26, 2016, to the beneficiary designations asserting she had a remedial constructive trust in relation to these accounts.
[4] The Plaintiff has also made a claim against BMO Nesbitt Burns for failing to notify her of the changes to the beneficiary designations.
[5] The Defendant, BMO Nesbitt Burns, takes the position that it had no obligation to question the Deceased’s decision to change his beneficiary. The claim against them should accordingly be dismissed.
[6] Ashley and Adam take the position that they were designated beneficiaries under the policies and are rightfully entitled to the funds. There is no evidence of incapacity or undue influence. There is also no other lawful basis by which the Plaintiff has a claim to the monies. Accordingly, Ashley and Adam submit that the claim against them should be dismissed.
[7] I agree with the Defendants. The action as against all Defendants is dismissed.
[8] The reasons for my decision are outlined below.
Summary of Facts
Background
[9] The Plaintiff, Anne Elizabeth Fair, (“Anne”), and the Deceased, Lloyd Fielder Fair, (“Lloyd” or the “Deceased”), were married for approximately 10 years until Lloyd passed away unexpectedly on November 23, 2016. Anne and Lloyd started cohabiting in 2003, about 3 years prior to their marriage.
[10] The Defendants, Adam Raymond Fair (“Adam”) and Ashley Christina Abbott (“Ashley”), are Lloyd’s children by a former marriage and are the Estate Trustees of Lloyd’s Estate.
[11] The Defendant, BMO Nesbitt Burns Inc., is an investment company which provided investment services and advice to Lloyd and Anne.
[12] When Anne and Lloyd started living together in 2003, Anne owned a house, and other assets. Anne sold the house providing Lloyd $150,000 to pay down existing debts, to assist with construction of their home and to assist with his business “Dad ‘N Lad”.
[13] At or around the time they were living together in 2003, they began to invest money with the Defendant BMO Nesbitt Burns Inc. BMO Nesbitt Burns would provide reports containing details of all of the investments in one document. However, Anne and Lloyd each had their own investment accounts.
[14] In the spring of 2010, Lloyd suffered a serious motorcycle accident. He was unable to work. The Plaintiff was the couples’ principal source of income until Lloyd received settlement funds from his own insurer in late 2014 which he also invested with BMO Nesbitt Burns.
[15] From 2014, Anne and Lloyd were living off these settlement funds supplemented by other monies coming out of the various investment accounts with BMO Nesbitt Burns Inc.
The Change in Beneficiaries
[16] Up until the end of September 2016, Anne and Lloyd were beneficiaries on each other’s investments. Lloyd remained a beneficiary on Anne’s investments up until his death on the 23rd of November, 2016.
[17] According to Anne, she and Lloyd agreed that except for the monies Lloyd received from Hydro One (the LIF account), his previous employer, all other investments would pass to the other should one of them die. In line with this understanding, each was named as a beneficiary on the other’s investments held with BMO Nesbitt Burns Inc.
[18] Up until Lloyd’s death, monies were withdrawn from these investment accounts and were deposited by the Defendant BMO Nesbitt Burns Inc. into their joint bank account to assist with their ongoing expenses.
[19] Without Anne’s knowledge, Lloyd scheduled a meeting with Mr. McKinnon of BMO Nesbitt Burns in September, 2016, during which time he advised that he would like to change the beneficiaries on his investment/retirement accounts.
[20] As a result of that meeting, Lloyd executed documentation changing the beneficiary designation from Anne to Adam and Ashley for three accounts, including a RIF, a LIF, and a TFSA (the Accounts). It is these designations (the RIF and TFSA) which Anne alleges was a breach of her agreement with Lloyd, and which she claims are subject to a remedial constructive trust.[^1]
[21] When the Deceased signed the Beneficiary Designation Forms he was not intoxicated or incapacitated, nor was he subject to any coercion or undue influence.[^2]
[22] Monthly statements were mailed to the Deceased for his BMO accounts including Statements for the month of October, 2016 which showed that the beneficiaries on the Accounts were his children. Anne had access to these statements.
[23] After the Deceased died on November 23, 2016, his children, the named beneficiaries on the Accounts, requested payment of the proceeds of the Accounts and those funds were paid to them on December 29, 2016.
Allocations Under Lloyd’s Will
[24] During his relationship with Anne, Lloyd created three separate Wills. The first Will was prepared in August, 2007, the second in August, 2010, and his last in November, 2015.
[25] Lloyd signed the Last Will and Testament dated November 17th, 2015 (“the Will”) with the assistance of a lawyer, which named Adam and Ashley as the Estate Trustees and provided for the distribution of the residue of his Estate such that Anne received all of their chattels (except his 2013 Chevrolet Camaro) and Adam and Ashley received the residue of his Estate. The Will was probated.
[26] Ashley and Adam each received approximately $175,000 from their father’s Estate (net of expenses). Anne received substantially more.
[27] Anne elected to take the benefits provided to her under Lloyd’s Will, rather than an equalization of net family property. It is not disputed that under the Will, she received more than she would have received under the equalization of net family property.
[28] In total, Anne received approximately $1,000,000.00 in Canadian assets and $47,000.00 in United States assets. This includes a life insurance policy, joint accounts with the deceased, the matrimonial home, a trailer in Florida and various vehicles.
Analysis
[29] Pursuant to Rule 20.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial. Animating the interpretation of 20.04(1) is Rule 1.04 which requires that the rule be liberally construed to secure the just, most expeditious and least expensive determination of a proceeding on its merits having regard to the complexity of the issues and the amounts involved.
[30] The judge in deciding whether to grant summary judgment must ask: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of trial? A trial is not required if the judge on the motion can 1) achieve a fair and just adjudication; 2) make the necessary findings of fact; 3) apply the law to those facts; and 4) the motion is a proportionate, more expeditious and less expensive means to achieve a just result rather than going to trial.
[31] As the Supreme Court explained in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, at para. 50:
These principals are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principals so as to resolve the dispute. [Emphasis added.]
Claim against BMO Nesbitt Burns Inc.
[32] With respect to the disputed change in beneficiary designations made on September 26, 2016, the Plaintiff does not dispute that the documents were in fact executed by Lloyd. The Plaintiff confirms she is not disputing that Lloyd had the requisite capacity to make the decision he did.
[33] In this case, the Plaintiff has also admitted there is no evidence to substantiate an allegation of undue influence or incapacity.
[34] As such, the claim against BMO Nesbitt Burns is essentially a claim that BMO Nesbitt Burns should have informed the Plaintiff of the fact that Lloyd changed the beneficiary designations on his own personal investments. Given that she and Lloyd had been investing together, the Plaintiff argues that BMO Nesbitt Burns had an obligation to inform her of any changes that may affect her personal investment plan.
[35] In this case, the investment accounts were the personal accounts of the Deceased. These were not joint accounts. There is a duty of confidence in a bank-customer relationship which prohibits the disclosure of a customer’s personal information to others without their consent.: Personal Information Protection and Electronic Documents Act (S.C. 2000, c. 5).
[36] There is also no obligation either in statue or common law to notify third parties about an individual’s beneficiary choices. I agree with BMO Nesbitt Burns, that to impose such an obligation would be an absolute breach of that individual’s privacy and their right to dispose of assets as they choose.
[37] In any event, the Plaintiff received the October statements for the accounts which disclosed the beneficiary changes.
[38] I agree with the Defendant, BMO Nesbitt Burns, that the claim has no potential to succeed. Accordingly, the claim as against the Defendant, BMO Nesbitt Burns, is dismissed.
Claim against Estate: Agreement and Constructive Trust
[39] The Plaintiff takes the position that she and Lloyd agreed that their respective investments would pass to the other should one of them die. The Deceased remained a beneficiary on the Plaintiff’s investments up until his death on the 23rd of November, 2016. He received this benefit (to be named a beneficiary) in exchange for his commitment to make her the beneficiary of his accounts.
[40] The Plaintiff maintains that Lloyd’s change in beneficiaries on the investments was in complete contravention of their agreement/understanding.
[41] The Plaintiff places primary reliance on the case of Moore v. Sweet, 2018 SCC 52, 2018 3 S.C.R. 303.
[42] In Moore v. Sweet, the Plaintiff was the former wife of a deceased. The Defendant Sweet was the common law spouse of the deceased as at the date of his death. Long prior to his death, the deceased, while still married, purchased a term life insurance policy and designated the Plaintiff as a revocable beneficiary.
[43] They later separated and entered into an oral agreement whereby the Plaintiff would pay all of the policy premiums and in exchange the deceased would remain the Plaintiff’s beneficiary designation. Unbeknownst to the Plaintiff the deceased subsequently designated his new common law spouse (the Defendant Sweet) as the irrevocable beneficiary of the policy. When the deceased died the proceeds therefore became payable to Sweet and not to the former wife, Moore.
[44] The policy of insurance was for $250,000 and as at the date of his death the Plaintiff had paid some $7,000 in policy premiums since separation and prior to the deceased’s death.
[45] The Supreme Court held that the Plaintiff was entitled to the proceeds of the policy. The measure of deprivation was not limited to the Plaintiff’s out of pocket expenditures or to the benefit taken directly from him or her. Rather the concept of loss also captured a benefit that was never in the Plaintiff’s possession but would accrue to her had it not been received by the Defendant instead.
[46] The Plaintiff submits that the case at bar is virtually identical to that of Moore v. Sweet.
[47] I disagree. In Moore, while the agreement was oral, its existence was not in dispute. The link between the contributions (premiums paid) and the benefit claimed (proceeds of the policy) was also very clear.
[48] In this case, apart from the Plaintiff’s assertion, there is nothing that would support the existence of an actual “agreement”.[^3] There is no written agreement or domestic contract as contemplated in s. 55 of the FLA. Even the Plaintiff’s characterization of the agreement is itself unclear. The specific accounts and assets that were the subject matter of this “agreement” has changed.
[49] There is no evidence of any direct contribution made by the Plaintiff to the investment accounts that are the subject matter of the claim/trust.
[50] The Plaintiff points to various indirect contributions she made to the Deceased during the course of their relationship in support of her claim to the funds. For example, Anne references her contributions to the Deceased’s business, and the fact that she looked after him during his injury. She also points to the fact that he was the beneficiary on her accounts.
[51] There are several constructive trust cases which focus on the unpaid provision of services (including domestic services) or labour’, as constituting a ‘deprivation’ Kerr v. Baranow, 2011 SCC 10, at para. 51; Sorochan v. Sorochan, 1986 Can LII 23 (SCC); Pettkus v. Becker, 1980 CanLII 22 (SCC); Peter v. Beblow, 1993 CanLII 126 (SCC).
[52] In this case, however, Anne a) was always paid for her services to the company, Dad ‘N Lad; b) increased her net wealth significantly during the relationship; and c) is now walking away with a significant proportion of the family assets (more than half of Lloyd’s Estate). In other words, her contributions during the marriage have been more than adequately addressed by the Deceased through the provision of other assets.
[53] In fact, the majority of the Deceased’s assets (including his entire share of the matrimonial home) have been left to the Plaintiff. Under the Will, she received more than she would have received under the equalization of net family property. Notably, Anne elected to take the benefits provided to her under Lloyd’s Will, rather than an equalization of net family property.[^4]
[54] Anne has made no claim pursuant to section 58(1) of the Succession Law Reform Act, R.S.O. 1990, s.C.26 (the “SLRA”).
[55] In my view, in the absence of evidence of a more formalized agreement relating to the specific investments, the Plaintiff’s claim has no chance of success.
[56] The claim against the Defendants is accordingly dismissed.
[57] I will receive costs submissions from the Defendants within 3 weeks of this decision. The Plaintiff will have 2 weeks thereafter to provide a response.
Justice C.F. de Sa
Released: December 1, 2021
[^1]: In 2016, the RIF account contained $161,146 and the TFSA contained $31,347. The LIF (which contained $144,789 in 2016) has since been identified to be the “Hydro Account” and as such, the Plaintiff, through counsel, has acknowledged that those funds were always intended to be left to the Respondents.
[^2]: While initially pled by the Plaintiff in her Statement of Claim, the allegations of undue influence and intoxication have since been abandoned.
[^3]: Section 13 of the Evidence Act requires that there be corroboration of the material fact alleged by an opposite or adverse party of any matter occurring before the death of the deceased. This requirement exists and effectively acts to protect the deceased and address the obvious disadvantage faced by the dead as they cannot tell their side of the story or respond to the livings’ version of events: Burns Estate v. Mellon (2000), 2000 CanLII 5739 (ON CA), 48 O.R. (3d) 641 (C.A.).
[^4]: For a spouse to be entitled under the FLA in respect of an Estate, they must choose to elect under the FLA for an equalization under section 5, rather than to take under the Will.: Family Law Act, R.S.O. 1990, c. F.3 ss. 5, 6(1).