Addante v. Ruscica, 2022 ONSC 2148

Court File and Parties

COURT FILE NO.: CV-21-00656694-0000 DATE: 20220406 SUPERIOR COURT OF JUSTICE - ONTARIO

BETWEEN:

JOANNE ADDANTE Applicant

AND:

PHYLLIS RUSCICA Respondent

BEFORE: VELLA J.

COUNSEL: Domenic Saverino, for the Applicant Eli Karp, for the Respondent

HEARD: October 14, 2021

Endorsement

1This application is brought by Joanne Addante (Addante) for an order for partition and sale of the property municipally known as 226 Tavistock Road, North York, Ontario (the “Property”).

2The Property was the primary residence of her late mother, Rosa Addante (“Rosa”).

3Rosa Addante died on December 2, 2014.

4Rosa Addante left a Last Will and Testament dated November 14, 1994 (the “Will”). In it, the late Rosa designated (Joanne) Addante’s sister, the respondent Phyllis Ruscica (“Ruscica”), as the executrix and trustee of Rosa’s Estate.

5Prior to her death, Rosa conveyed the Property to Addante and Ruscica as joint trustees reserving a life estate to herself. On the Land Registry register, Addante and Ruscica are still the registered owners of the Property as Tenants in Common. However, the parties agree that their role as trustees ended upon Rosa’s death and the Property is part of Rosa’s Estate.

6The beneficiaries under s 3(c) and (d) of Rosa’s Will are her children (in equal parts per stirpes): Mary Del Grande (20%), Anna Marzano (20%), Phyllis Ruscica (20%), Joseph Addante (20%) and Joanne Addante (20%).

7The Property has yet to be sold. Ruscica continues to live in the Property, rent-free.

8Addante claims that the Property was supposed to be sold by the second anniversary of Rosa’s death, at the latest. Ruscica refuses to do so and relies on the terms of the Will as sustaining her position.

9The main issue to be decided on this application is whether Addante has standing to make an application for partition and sale under s. 3(1) of the Partition Act, R.S.O. 1990, c. P.4.

10For the reasons that follow the application is dismissed, but with a caveat.

Analysis

11Under s. 3(1) of the Partition Act, any person interested in land may make an application for partition or sale of land:

3(1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

12The Court of Appeal in Di Michele v. Di Michele, 2014 ONCA 262, at para. 79, confirmed that the phrase “any person interested in land” as found in section 3(1) of the Partition Act is interpreted as “permitting only those entitled to immediate possession of the property to apply for partition” (emphasis added).

13The Court further clarified that where an applicant’s interest in the land relates to property that forms the residue of an estate, and not a direct bequest of property, the applicant is not entitled to “immediate possession” and therefore has no standing to bring an application for partition and/or sale. The applicant’s right to possession of the property will not have crystallized as at the date of the application. In Di Michele the applicant did not have standing because he only had a right to a share in the residue of the estate as a beneficiary. There was no direct bequest to him of the property in question. This is the same situation as Joanne finds herself vis a vis the Property.

14In Di Michele, the Court of Appeal makes this clear at paras. 103 - 104:

Second, the beneficiaries’ entitlement under the Will did not amount to a property interest in the Property. The Will does not give the beneficiaries a specific bequest of the Property. Rather, it gives them a contingent interest in the residue of the estate. In this regard it will be recalled that the Will provided that the residue of the estate was to go to Mrs. Di Michele’s “issue alive at the date of distribution”. Accordingly, to become entitled, a beneficiary had to be alive on the date of distribution. Until distribution, the beneficiaries had only a contingent beneficial interest in the residue of the estate, as well as the personal right to compel the estate trustee to duly administer the estate.

A contingent beneficial interest in an estate does not give rise to a property interest in any specific asset of the estate, prior to or absent an appropriation of such asset to the beneficiary by the trustee. (Citations omitted)

Addante only has a contingent interest in the residue of the Estate, not a right to possession of the Property itself under Rosa’s Will.

15Addante also relies on s. 9(1) of the Estates Administration Act, R.S.O. 1990, c. E. 22 for the proposition that title of the Property vested in her and the other beneficiaries because it has remained unsold for over three years past Rosa’s death.

16Section 9(1) of the Estates Administration Act states:

Real property not disposed of, conveyed to, divided or distributed among the persons beneficially entitled thereto under section 17 by the personal representative within three years after the death of the deceased is, subject to the Land Titles Act in the case of land registered under that Act and subject to subsections 53(3) and (5) of the Registry Act, and subject as hereinafter provided, at the expiration of that period, whether probate or letters of administration have or have not been taken, thenceforth vested in the persons beneficially entitled thereto under the will or upon the intestacy or their assigns without any conveyance by the personal representative, unless such personal representative, if any, has signed and registered, in the proper land registry office, a caution in Form 1, and, if a caution is so registered, the real property mentioned there in does not so vest for three years from time from the time of the registration of the caution or of the last caution if more than one was registered.

17However, that section is tempered by section 10 of the Estates Administration Act:

Nothing in section 9 derogates from any right possessed by an executor or administrator with the will annexed under a will or under the Trustee Act or from any right possessed by a trustee under a will.

18As confirmed by the Court of Appeal in Di Michele, at para. 98, s. 9 does not limit the powers given to an estate trustee under a will:

Rather, s. 9 was intended to give estate trustees additional powers, and only to the extent that the additional powers do not conflict with the provisions of the will. The intention of the deceased, as expressed in his or her will, is always paramount.

19In Di Michele, the Court of Appeal observed, at para. 100, that:

The paramountcy of the testator’s intention is confirmed in the jurisprudence. Where a will gives the estate trustee a power to sell property at such time and in such manner as the estate truck trustee sees fit, s. 9 of the Estates Administration Act will not limit the scope of that power by requiring that the property vest after a specific period of time: Re Proudfoot Estate (1994), 3 ETR (2d) 283 (Ont. Gen. Div.), at paras. 8 and 11-12, var’d on other grounds (1997), 19 ETR (2d) 150 (Ont. C.A.).

20Addante relies on the decision rendered in Goff v. Goff, 2010 ONSC 2719, in support of her conclusion that s. 9 (1) of the Estates Administration Act automatically vests unsold property under an estate in the beneficiaries after the third-year anniversary of the testator’s death. However, Goff was decided before Di Michele and therefore no longer reflects the law in Ontario on this issue. Furthermore, in Goff there was no challenge to the standing of the applicant under s. 3(1) of the Partition Act, and no analysis on this issue. The focus of that case had to do with a contested passing of accounts.

21In Rosa’s Will, paragraph 4 set out clear parameters with respect to the use and disposition of the Property. The Property was clearly to form part of the residue of Rosa’s Estate. There was no specific bequest of the Property to any of the beneficiaries. However, Rosa’s intention, as reflected in the Will, reveals that Ruscica was to have rent free occupation of the Property for a maximum of two years from the date of death, after which it would form part of the residue of the Estate:

4. Notwithstanding any other provision in this my Last Will and Testament to the contrary, should my daughter, PHYLLIS RUSCICA survive me, then I hereby direct my Trustee to hold any principal residence (the “principal residence”) of which I may be the owner at the time of my death, together with furniture and furnishings owned by me and used in connection therewith at the time of my death (the “contents”) and to give to my said daughter the free use of the principal residence and the contents for a period of two (2) years or until she shall advise my Trustee in writing that she no longer wished to have the use of them, whatever shall first occur, when the principal residence shall be sold by my Trustee and the proceeds of the sale shall fall into and form part of the residue of my Estate.

Taxes, insurance, repairs and any other charges or amounts necessary for the general upkeep of the principal residence and the contents well my said daughter has the use of them shall be paid by my said daughter and not out of my general Estate.

At the time of execution of this my Last Will and Testament, the municipal address for my principal residence is 226 Tavistock Road, North York, Ontario.

22The Last Will and Testament also vests broad discretion in the Trustee (who is Ruscica) in terms of how to deal with the assets of Rosa’s Estate including when to sell real property. For example, s. 3(a) provides:

3. I GIVE all assets of my Estate, both real and personal, of whatsoever kind and wheresoever situate, including any property over which I may have a general power of appointment, to my Trustee, upon the following trusts, namely:

(a) To use her discretion in the realization of my estate, with power to my Trustee to sell, call in and convert into money at such time or times, and either for cash or credit or for part cash in part credit, as my trustee may in her absolute discretion decide upon, or to postpone such conversion of my estate or any part or parts thereof for such length of time as she may think best, and I hereby declare that my Trustee may retain any portion of my estate in the form in which it may be at my death (notwithstanding that it may not be in the form of an investment in which trustees are authorized to invest trust funds, and whether or not there is a liability attached to any such portion of my estate) for such length of time as my Trustee may in her absolute discretion deem advisable, and I HEREBY DECLARE that my Trustee when making investments for my estate shall not be limited to investments authorized by law for trustees, but may make any investments which in her absolute discretion she considers advisable…

23However, s. 3(a) and the other provisions of the Will vesting broad discretion in the Trustee, Ruscica, over the assets of Rosa’s Estate are subject to s. 4 with respect to the Property as made clear by first sentence of s. 4. The notwithstanding proviso of s. 4 means it prevails over every other section that may be contrary to the clear intention expressed by Rosa in that section; namely, that after two years from her death (at the latest) the Property must be sold and the proceeds of sale must revert to the residue of her Estate to be dealt with thereafter in accordance with the terms of the Will.

24This direction does not help Addante in the present application, however. The Property itself does not become part of the residue; the resulting sale proceeds do. Therefore s. 4 does not provide her with an entitlement to immediate possession of the Property. Rather, once the residue is distributed, in accordance with the terms of the Will, Addante will be entitled to a 20% share of the distribution. Since there is no specific bequest of the Property to Addante, but rather a provision that the sale proceeds from the Property will form part of the residue of Rosa’s Estate, s. 9 of the Estate Administration Act does not operate to vest ownership of the Property in Addante and her siblings’ names either.

25Accordingly, Addante does not have standing to bring this Application.

26However, based on the evidentiary record presented, it appears that Ruscica has not carried out the wishes of Rosa as clearly expressed in s. 4 of the Will. Ruscica has not listed the Property for sale and it is now well past the two-year period set out in s. 4 of the Will.

27At paras. 83 and 84 of Di Michele, the Court stated:

Section 37(1) of the Trustee Act R.S.O. 1990, c. T.23, empowers the court to remove a personal representative (which is another term for an estate trustee) and appoint “some other proper person”. Section 37(1) reads as follows:

The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee, and may appoint some other proper person or persons to act in the place of the executor or administrator so removed.

The court will remove an estate trustee only if doing so is clearly necessary to ensure the proper management of the trust. Situations in which removal may be justified include where the estate trustee has acted in a way that has endangered the trust property or otherwise shown a lack of honesty, proper capacity, or reasonable fidelity. (citations omitted)

28The Court, at para. 87, declined to appoint the proposed trustee in Di Michele (to replace the trustee under the Will who had encumbered estate property for personal reasons) because his “duties as a trustee would conflict with either his or her personal interests or duties which that person has undertaken apart from as trustee”.

29Addante has not sought relief under s. 37(1) of the Trustee Act to remove and replace Ruscica. Accordingly, I will not adjudicate on this issue.

30However, there are at least arguable grounds in the record suggesting that Ruscica’s personal interests in staying in the Property “rent free” beyond the two-year period stipulated by s. 4 of the Will are contrary to the expressed intention of Rosa as reflected in the Will, and may be in conflict with her duties as Trustee.

31Accordingly, this application is dismissed without prejudice to Addante, or any of the beneficiaries under the Will, to bring an application under s. 37(1) of the Trustee Act or similar relief.

32At the hearing of the application, the parties agreed that costs would be fixed on a partial indemnity basis in the sum of $8,000.00.

33I am inclined to order that costs be payable by the Estate of Rosa Addante to each of the parties in the circumstances of this application. However, if either party disagrees, the party so disagreeing shall provide written submissions within 10 days from the release of this decision. The responding party will then have 10 days thereafter to provide responding written submissions. The respective written submissions shall not exceed 3 pages double spaced and should be provided to my judicial assistant. If I receive no submissions, then I will proceed to fix costs accordingly.