BARRIE COURT FILE NO.: CV-21-684 DATE: 20220107
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: In the Matter of the Estate of Robert Dickson Blackmore, deceased.
Robert Thomas Miller in his personal capacity and in his capacity as Estate Trustee for the Estate of Robert Dickson Blackmore also known as Robert Dickson Blackmore Jr., Applicant
AND:
Raymond Dickson Blackmore and Deborah Jean Quinlan, Respondents
BEFORE: The Honourable Mr. Justice C.F. de Sa
COUNSEL: Quinn Giordano, Counsel for the Applicant Cassandra Martino and Amelia Yiu, Counsel for the Respondents
HEARD: October 5, 2021
Reasons for Decision
Overview
1This case concerns the Estate of Robert Blackmore Jr. (the “Deceased” or “Robert Jr.”). The Applicant, Robert Miller, the Deceased’s husband and Estate Trustee, seeks an Order authorizing the transfer of the property at 175 Ridge Road West (“175”) to himself pursuant to the terms of his late husband’s Last Will and Testament (the “Will”).
2According to the Applicant, the Deceased’s Will contemplates this transfer by stating, “if my spouse becomes entitled to receive an interest in my net family property as defined in the Family Law Act, R.S.O. 1990, c. F. 3, or its successor Act” the “Estate Trustee shall in the exercise of an absolute discretion determine which of my properties shall be transferred and delivered to my spouse or sold for the purpose of satisfying any Judgment, Order, or Settlement in favour of my spouse under the Family Law Act or its successor Act.”
3The Applicant argues that his exercise of his rights pursuant to the Family Law Act, R.S.O. 1990, c. F. 3 (“FLA”) triggers the provision in paragraph XI of the Will, and therefore entitles him, as the Estate Trustee, to transfer 175 to himself.
4The Respondents, the Deceased’s two siblings, take the position that by taking under the Will, the Applicant continues to be entitled to any assets flowing by beneficiary designation, including the pension. Under the Will, through the residuary gifts, the Applicant would also receive 201 Ridge Road West (“201”).
5However, the Respondents argue that by taking under the Will, the Applicant has not elected to proceed with a claim under the FLA. Accordingly, he has no ability to exercise any rights under Paragraph XI of the Will which would contemplate a potential transfer of 175 to the Applicant.
6Further, the Respondents take the position that an FLA claim for 175 would place the Applicant in a conflict as Estate Trustee. The 175 Property has been left to the Respondents under the Will.
7I agree with the Respondents that the Applicant here is not entitled to rely on Paragraph XI of the Will. In my view, this provision is directed at allowing the Estate Trustee to allocate assets to satisfy claims made by a spouse under the FLA. The Applicant has made no such claim.
8I also agree that awarding himself 175 in his capacity as Estate Trustee would place the Applicant in a clear conflict of interest. Given that the Respondents have been left 175 under the terms of the Will, and wish to retain it, the Applicant in his capacity as Estate Trustee should not be the one to make the choice between the properties.
9In the circumstances, I am not prepared to grant the Applicant’s request to transfer 175 to himself. However, I am prepared to extend the time for the Applicant to make a FLA claim.
10The reasons for my decision are outlined below.
Background
11The Applicant was married to Robert Jr. on May 27, 2007. The Applicant and the Deceased moved to Oro Station and built 175 as their matrimonial home next to 201.
12The Applicant and the Deceased lived at 175 from December 19, 2018 until the Deceased died unexpectedly on August 9, 2020.
13At the time of his death, Robert Jr. was holding 201 in trust for the Estate of Robert Blackmore Sr., his father. Under the Last Will and Testament of Robert Sr., 201 is gifted to Robert Jr., who did not complete the administration of his father’s estate prior to his own passing.
14The Respondents, Deborah Jean Quinlan (“Deborah”) and Raymond Dickson Blackmore (“Ray”), are the siblings of Robert Jr. Deborah has applied and been granted a Certificate of Appointment of Succeeding Estate Trustee for the Estate of Robert Sr. dated March 3, 2021. She is waiting on a determination of this Application to take steps to administer the Estate of Robert Sr., which consists mostly of 201.
The Will of Robert Jr.
15Robert Jr. died with a Last Will and Testament dated May 31, 2012 to which there is no challenge. The Applicant is the named Estate Trustee under the Will.
16Robert Jr. was survived by the Applicant, his surviving spouse, and the Respondents, his siblings.
17The title to 175 Ridge Road West was registered in the name of the Deceased alone.
18In the Will, 175 is gifted to Deborah and Ray, with the Applicant as the residuary beneficiary of the Estate of Robert Jr. Effectively, 201 and any residuary belongings from both Robert Sr. and Robert Jr.’s respective Estates are gifted to the Applicant as the residuary beneficiary.
19The two largest known assets of the Estate of Robert Jr. are 175 and 201. While the Applicant and the Deceased held bank accounts together jointly, the most significant and valuable asset was the matrimonial home at 175 Ridge Road West.
20The Applicant had appraisals conducted on 175 and 201 in November 2020: 175 was valued at $1,100,000 and 201 was valued at $620,000 as of November 6, 2020.
Analysis
Application of Paragraph XI of the Will
21Paragraph XI of the Will reads as follows:
SELECTION OF PROPERTY IN SATISFACTION OF CLAIM
If my spouse becomes entitled to receive an interest in my net family property as defined in the Family Law Act, R.S.O. 1990, c. F. 3, or its successor Act, my Estate Trustee shall in the exercise of an absolute discretion determine which of my properties shall be transferred and delivered to my spouse or sold for the purpose of satisfying any Judgment, Order, or Settlement in favour of my spouse under the Family Law Act or its successor Act.
22The discretion outlined in paragraph XI of the Will is available if and when a spouse becomes entitled to an interest in net family property under the FLA.
23Section 6(1) and 6(8) of the FLA provides:
6 (1) When a spouse dies leaving a will, the surviving spouse shall elect to take under the will or to receive the entitlement under section 5. R.S.O. 1990, c. F.3, s. 6 (1).
(8) When a surviving spouse elects to receive the entitlement under section 5, the gifts made to him or her in the deceased spouse’s will are revoked and the will shall be interpreted as if the surviving spouse had died before the other, unless the will expressly provides that the gifts are in addition to the entitlement under section 5. R.S.O. 1990, c. F.3, s. 6 (8).
24A spouse’s entitlement under section 5 has priority over the gifts made in the deceased spouse’s will, except if those gifts are made by way of contract in exchange for valuable consideration.
25For a spouse to be entitled under the FLA in respect of an Estate, however, 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).
26An election under the FLA revokes any gifts under the Will unless the Will expressly provides that the gifts are in addition to the entitlement under section 5.
27Six months after the date of death, the surviving spouse is deemed to have taken under the Will and/or on intestacy if they have not filed their election in the prescribed manner: Family Law Act, R.S.O. 1990, c. F.3 ss. 6(10) - 6(11).
28In this case, the Applicant has not elected under the FLA and he is deemed to be taking under the Will. Indeed, it is in that capacity in which he is acting as the Estate Trustee.
29The Applicant, in his position as Estate Trustee, owes a fiduciary duty to the beneficiary Respondents. As such, the Applicant has a duty not to prefer his interests over the interests of the beneficiaries or deal with the assets in a manner detrimental to their interests: The Estate of Ingrid Loveman, Deceased, 2016 ONSC 2687.
30In fact, if a spouse does elect under the FLA, he/she would be in a conflict of interest and is not entitled to act as Estate Trustee: Weatherdon-Oliver v. Oliver Estate, 2010 ONSC 5600; Martin Reid v. Reid and Reid v. Martin Reid.
31The terms of the Will clearly contemplate 175 being given to the Respondents. Seeking to transfer 175 to himself in the face of a clear statement in the Will that 175 is to be left to the Respondents is contrary to the terms of the Will and clearly places the Applicant in a conflict of interest.
32As such, I agree with the Respondents that the Applicant is not entitled to rely on paragraph XI in his position as the Estate Trustee and then settle, with himself, as the surviving spouse.
Extension of FLA Election
33If he could not receive a transfer of 175, the Applicant has requested an Order extending the statutory deadline for filing a spousal election and making Application for equalization of net family property as he has exceeded the six-month time limit for an extension.
34The Respondents oppose the extension.
35As outlined above, the FLA instructs that when a spouse dies leaving a will, the surviving spouse shall elect to take under the Will or to receive the entitlement under FLA s. 5. [1]
36While a surviving spouse’s election must be filed in the office of the Estate Registrar for Ontario within six months after the first spouse’s death, [2] the Court has broad discretion under the FLA to extend a time limit if it is satisfied that there are apparent grounds for relief, relief is unavailable because of a delay incurred in good faith, and no person will suffer substantial prejudice by reason of the delay. [3]
37In the case of Aquilina v. Aquilina, 2018 ONSC 3607, Justice Dunphy considered these criteria in detail. Justice Dunphy discussed the six-months as being chosen by the Legislature in a balancing act between this need of the surviving spouse, and the expectations of executors to administer the estate within an “executor’s year”. At paras. 22-23, he explained:
… [T]he spouse is intended to have a period of time to consider his or her election. This is required not only because of the period of grief that naturally follows as traumatic an event as the death of a spouse but also because it takes time to gather information and be in a position to make an informed election in his or her best interest.
…[T]he requirement that the election be made within six months recognizes that a balancing of interests is required as between the imperative of ensuring that the surviving spouse is able to make the choice that is in his or her best interests on the one hand and the imperative of allowing an estate to be properly administered on the other. The spouse is an important stakeholder in the estate administration process, but not the only one.
38Justice Dunphy concluded that there would be grounds for relief when “the electing spouse has not been able to assemble a reasonable knowledge base from which an informed choice might fairly be expected to be made”: Aquilina v. Aquilina, at para. 26.
39In this case, the Respondents submit that there is a lack of good faith, and a clear ulterior motive. The Respondents take the position that the Applicant was trying to maximize his benefit using his position as Estate Trustee. The delay has caused significant prejudice to the Respondents. Deborah is the Succeeding Estate Trustee for the Estate of Robert Sr. and has been unable to administer the Estate while waiting for a determination of the Application. It is also unclear who will be appointed as Estate Trustee should the Applicant elect under the FLA. The Respondents have been given very little information about assets other than 175 and 201. In the circumstances, the Respondents submit that the request for an extension should be refused.
40I recognize that there have been delays in the administration of the Estate caused by the Applicant’s failure to elect within the statutory period. However, in my view, the Applicant’s inaction has flowed from his misunderstanding of Paragraph XI of the Will.
41In my view, it would not be right to deprive him of the opportunity to make an “informed” decision with respect to the election.
42Accordingly, I will extend the statutory deadline for filing a spousal election and making Application for equalization of net family property for a period of 6 months from the date of this judgment.
43I consider the Respondents to be the successful parties on the motion. I will receive cost submissions from the Respondents within 3 weeks of this decision. The Applicant will have 1 week thereafter to respond.
Justice C.F. de Sa Date: January 7, 2022
[1] Family Law Act, RSO 1990, c F.3, s. 6(1). [2] Family Law Act, RSO 1990, c F.3, s. 6(10). [3] Family Law Act, RSO 1990, c F.3, s. 2(8); Aguonie v. Galion Solid Waste Material Inc.; Scherer v. Scherer, at paras. 16-17.