COURT FILE NO.: CV-21-016-00ES (Owen Sound) DATE: 2024-12-16 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ESTATE OF THE LATE JOHN DUNCAN MALTMAN Applicant
-and-
JACQUELYNE PLAYTER Respondent
Erroll G. Treslan, for the applicant Robert Scriven, for the respondent
Heard: December 3 and 4, 2024
SPROAT J.
REASONS FOR DECISION
Introduction
[1] This is a trial of issues raised in a Motion for Directions brought by the Estate of the Late John Maltman, the (“Estate”), against John’s daughter, Jacquelyne Playter (“Jackie”). The parties agree that the issues to be determined on this trial are as follows:
Whether Jackie must disgorge the proceeds of a nonregistered TD investment account (the “Joint TD Investment Account”) to the Estate;
What amount Jackie must disgorge to the Estate from TD Bank account #0502811 (the “Joint TD Chequing Account”), being the account jointly held by the deceased and Jackie at the date of death of the deceased; and
Costs.
[2] The Estate filed affidavits from Joanne Maltman, Deborah Maltman and the estate solicitor, Paul Beyer, and they were cross-examined. Joanne and Deborah also testified at the hearing. Jackie filed an affidavit and was cross-examined. She also testified at the hearing. Jackie also relied on an affidavit from David Clark, at one time John’s investment advisor, and he testified at the hearing. It was agreed that I could rely on all of this evidence in reaching my decision.
[3] The parties also entered into an extensive Agreed Statement of Facts which was, to a large extent, based on a review of the evidence in an endorsement of McGee J. on a motion for directions. This captures almost all of the relevant evidence in the affidavits and cross-examinations, and so I will make little reference to them. As did the parties, for ease of reference I will refer to individuals by their first names.
The Agreed Facts
[4] The parties agreed to the facts as follows:
John Duncan Maltman (“John”), a retired police officer, and his wife had five biological children, and they adopted a sixth child. In order of birth, their five biological children are Jackie, Susan Howard (“Susan”), Deborah Maltman (“Deborah”), Joanne Maltman (“Joanne”), and John Maltman Jr. (“John Jr.”). Their sixth child is Joanne’s oldest daughter, Jody, whom they adopted at birth.
John was predeceased by his wife, who died on April 27, 2018, and from whom he had been separated. Jackie was the named executor for her mother, and she administered her mother’s estate.
Joh prepared three known Wills. The first Will was executed in 2002, and provided that all five biological children would inherit equally. Jackie was also the named executor on that Will. The second Will, executed in 2009, carried forward the same terms, but for a change in the alternative executor. In none of the Wills did Jody inherit separately from her mother.
The third and final Will, dated April 28, 2020, was a significant departure from the earlier testaments. The adult children did not inherit equally and there was a change in executor. John Jr. received a $150,000 bequest in addition to receiving, by right of survivorship, a cottage registered in joint names with his father. Susan was entirely left out of the April 28, 2020 Will “because she is well off.” Jody remained out of the Will, but the document stipulates that it is because “she has estranged herself from me.” Despite having a number of grandchildren, only Joanne’s other daughter was named on John’s $25,000 life insurance policy.
John also changed his executor. Instead of Jackie, he named Joanne and her husband, Shawn White, as the executors.
On the same day that he signed a new Will, John completed new Powers of Attorney for Property naming Joanne and Shawn. He did so with his new counsel, Mr. Paul Beyer, who had met with him five times from May 3, 2019 to April 28, 2020. Jackie was not aware that her father had met with new counsel, or that he signed a new Will and Power of Attorney until after they were executed.
On March 17, 2020, John instructed Mr. Beyer to write to Jackie, asking that she acknowledge that title to his Meaford home was beneficially owned by him alone, even though title was jointly held between them. Mr. Beyer sent that letter on March 31, 2020, and Jackie immediately advised that she was prepared to do so. By the end of April, transfer documents were signed, and John’s residence was placed into his sole name.
On April 17, 2020, John instructed Mr. Beyer to prepare a new Will and to replace Jackie as his executor.
Mr. Beyer prepared an estate inventory during that same meeting. The inventory included the three properties that he owned: his Meaford home, the Florida home, and the cottage owned jointly with John Jr. The inventory did not include the TD Investment Account held jointly with Jackie, a promissory note owed to him by John Jr., or the life insurance policy of $25,000 payable to Joanne’s daughter.
John died on July 10, 2020.
Joanne and Shawn were granted a Certificate of Estate Trustee on February 18, 2021, to administer John’s Will dated April 28, 2020. The request was uncontested. No person has contested the validity of John’s April 28, 2020 Will.
Jackie is a retired legal secretary. It is common ground that over the years, and with Jackie’s assistance, John organized his financial affairs in a manner that would avoid probate fees, protect him from a claim by a former common-law spouse, and make certain that his bills would be paid. The firm with whom Jackie was employed were the solicitors for the earlier 2002 and 2009 Wills.
It was not uncommon for John to hold properties jointly with an adult child. His cottage was owned with John Jr., and his Meaford home was jointly held with Jackie.
Jackie was the beneficiary of a TD RRIF owned by John and received payment in the sum of $13,721.20 from this investment following John’s death. The Estate initially requested that Jackie disgorge the proceeds of the RRIF but has withdrawn that request as a result of the directions given by Justice McGee at paragraphs 18-26 of Her Honour’s endorsement arising from the January 25, 2023 hearing of the Motion for Directions.
John was the sole beneficiary of the estate of his sister, Selma Heckadon (“Aunt Sammy”). At the time of Aunt Sammy’s death, Jackie and John were named jointly, along with Aunt Sammy, on Aunt Sammy’s RBC account #5146444. On or about October 5, 2005, John decided to invest $193,000 from Aunt Sammy’s RBC account (which, at the time, had a balance of $232,199.42) with BMO Nesbitt Burns. An RBC statement from November 2005 shows the account in John and Jackie’s joint names, and $193,000 from that account being used to purchase an investment with BMO Nesbitt Burns.
The BMO Nesbitt Burns investment account was jointly owned by John and Jackie, with a specific, initialled provision at paragraph 17 of the Joint Account Agreement, giving each owner of the account a right of survivorship. Jackie then traces those funds forward to a 2012 transfer of the funds to the Joint TD Investment Account, again, held and maintained jointly between her and John, and with a right of survivorship.
Jackie received, by right of survivorship, the proceeds of the Joint TD Investment Account in the amount of $121,762.59. The Joint TD Investment Account and its predecessor Investment contain contractual rights of survivorship. The Estate has paid the capital gains tax on the account (an amount agreed to be $3,435), as it is required to pay when an account passes to a non-spouse by right of survivorship.
The Estate claims that the Joint TD Investment Account proceeds are being held by Jackie in trust for the Estate. They ask that the funds be paid back and argue that John never intended Jackie to receive any money other than her one-fourth share of the residue. The Estate intends to rely on the affidavits sworn by Paul Beyer, Joanne and Deborah in this regard, and viva voce evidence to be presented by Joanne and Deborah. Mr. Beyer has been cross-examined and the Estate will not be introducing any additional viva voce testimony from him. It has been agreed by the parties that Mr. Beyer will not be required to attend the trial, and that Jackie may rely on the transcript from his cross-examination (if desired).
Jackie claims that John intended her to receive the proceeds of the Joint TD Investment Account. Jackie’s position is that the money was never intended to form part of John’s estate. She considered the money from her Aunt Sammy (which funded the investment which preceded the Joint TD Investment Account) to be a gift to her and her father, but that if her father needed it, he could use it. She took no monies from the account while her father was alive. She did not deposit any monies to the account. Jackie intends to rely on affidavits sworn by her and David Clark in this regard, and her own viva voce testimony. It has been agreed by the parties that Mr. Clark will be made available for cross-examination virtually by Zoom.
Jackie agrees that the Joint TD Chequing Account was beneficially owned by John, despite it being held jointly with her. She never deposited monies to the account or took money from the account. She deposes that she only used the account to pay his bills and she agrees that, upon her father’s passing, the remainder of any monies in this account belongs to the Estate.
After Joanne was made a Power of Attorney, John took $23,806 from the Joint TD Chequing Account and placed it in an account in his name alone. As a result, Joanne could not access that money to pay her father’s bills. On June 23, 2020, Joanne, acting as her father’s attorney for property, transferred $22,118.86 from John’s sole account back to the Joint TD Chequing Account.
On August 4, 2023, Jackie withdrew $36,655 from the Joint TD Chequing Account. Since that time, she has repaid the sum of $4,918.62 to the Estate, and the Estate has agreed not to seek $163.88 in NSF charges from Jackie. The Estate requests that Jackie disgorge the remaining $31,572.50. Jackie claims that she is entitled to deduct the sum of $9,923.13 from this amount. The only issue to be determined relating to the Joint TD Chequing Account is whether Jackie is entitled to deduct the sum of $9,923.13 to pay an alleged May 29, 2020 account of her husband, Norm Playter, for preparing the Meaford home for sale, from the amount which the Estate has requested be disgorged (i.e. whether Jackie should pay the Estate $31,572.50 or $21,649.00). The parties will rely on their respective affidavits, transcripts and viva voce testimony in relation to this issue.
Viva Voce Evidence and Other Affidavit Evidence
[5] The BMO October 11, 2005 Client Account Agreement signed by John had a “right of survivorship” provision which required a choice between:
(a) The surviving customer not being entitled to continue dealing with the account without the authority of the Estate of the deceased customer; OR
(b) Upon the death of a customer, all of that customer’s interest in the account passing to the surviving customer, who may then deal with the funds.
[6] John chose (b), evidencing clearly that his intent was that Jackie, on his death, be entitled to the investment account to the exclusion of the Estate.
[7] Mr. Clark was the BMO investment advisor at the time. Jackie and her husband were clients of his, and that is how it came about that he was introduced to John. Mr. Clark testified that John wanted Jackie to have the funds he inherited from Aunt Sammy, as Jackie was particularly close to her. Mr. Clark asked John if he might need the funds, and Jackie expressed concern that the funds should be available to John if he needed money. This discussion concluded that it made sense to have the account in joint names with a right of survivorship. This would allow John to access the funds during his lifetime, with the remaining funds going to Jackie on his death.
[8] Mr. Clark had health issues and retired in 2012. John transferred the investment account to TD, pursuant to an agreement dated November 2, 2012. The TD agreement provided that “ownership” of the account was “joint with right of survivorship.” Mr. Clark testified that he returned to the industry in 2017, and now leads a team at TD that has over one billion dollars in client investments.
[9] Mr. Beyer stated in his affidavit, and in his cross-examination, that John never mentioned the investment account to him. While John may not have used the words “investment account,” his May 3, 2019 note lists as an asset:
$130,000-RIF_bene? (Jason Bowman) John will check *get back to me.
This is clearly a reference to the TD Investment Account, as $130,000 was the approximate amount in the investment account and “Jason Bouwman” was the TD investment advisor listed in the 2012 account agreement.
[10] Mr. Beyer’s April 17, 2020 note of his meeting with John states:
As to his RIF, he was not sure who was the beneficiary. He indicated that he would handle it though.
[11] The siblings were, at one time, close. Deborah and Jackie have not spoken since soon after their mother’s death in April 2018. Joanne and Jackie had a falling out after Joanne advised Jackie that John had named Joanne’s daughter, Christine, as the sole beneficiary of his life insurance policy.
[12] In Joanne’s affidavit, she states that, “…both Dad and Jacquelyne told me, on several occasions before Dad passed away, that the only reason why Dad added Jacquelyne’s name to his assets was because Jacquelyne told him that would reduce the estate’s probate expenses.” In her testimony, Joanne stated that she knew about the investment account. Jackie never told her that the investment account was to be hers, given her relationship with Aunt Sammy. Joanne testified that Jackie told her that what was left in the investment account was to be split equally among the children, but that at the rate John was spending the money, there might not be anything left.
[13] Deborah’s affidavit indicated that Jackie told her “years back” that she wanted John to put her name on accounts to save probate fees, and that this is what had been done with their mother’s accounts. Deborah testified that in or about 2012, Jackie explained that her name was on accounts to avoid probate fees, as had been done with their mother. In cross-examination, she agreed that she had never discussed the accounts with her father, and that the discussion with Jackie was general in nature, without referring to the names or numbers of accounts.
[14] Jackie denied telling her sisters that the reason why any accounts or properties were in joint names was to reduce probate fees.
The Law
[15] Both sides relied upon the legal principles as set out in Calmusky v. Calmusky, 2020 ONSC 1506, in which, Lococo J. provided a helpful summary of the legal principles as follows:
[27] It is common ground between the parties that the legal principles set out by the Supreme Court of Canada in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, and Madsen Estate v. Saylor, 2007 SCC 18, [2007] 1 S.C.R. 838, apply to the analysis in this case relating to the joint bank accounts. In Pecore, at para. 36, and Madsen, at para. 17, the Supreme Court confirms that where there is a gratuitous transfer of assets from a parent to an adult child (including a transfer of the parent’s funds into a joint account with the adult child), there is a presumption of resulting trust, that is, a presumption that the transferee holds the assets as trustee for the transferor. In doing so, the court settled the question raised in previous decisions of whether the applicable presumption in these circumstances was the presumption of advancement (gift) or the presumption of resulting trust.
[28] Since the correct presumption is resulting trust, a transferee claiming beneficial ownership of the property (in this case Gary) has the onus of showing, on a balance of probabilities, [2] that the transferor (Henry) intended the transfer to be a gift to the transferee. As well, in Pecore, at paras. 45-53, the Supreme Court indicates that it would also be open to the trial court to find, after weighing the evidence, that the transferor intended to retain exclusive control of the jointly-held funds until his or her death, at which time the transferee would be beneficially entitled to the remaining funds by survivorship. At para. 47, the court observes that there may be a number of reasons why the transferor would transfer the funds with that intention, including (i) to obtain the assistance of the transferee with management of funds during the transferor’s lifetime, and (ii) to avoid probate fees upon the transferor’s death.
[29] In Pecore, at para. 55, the court also indicates that after determining the correct presumption (in this case resulting trust), the trial judge must weigh the evidence relating to the actual intention of the transferor in order to determine whether the presumption has been rebutted. At para. 56, the court notes the traditional rule that evidence adduced to show the intention of the transferor at the time of the transfer ought to be contemporaneous (or nearly so) to the transaction. The court then adds the caveat that evidence of the transferor’s intention that arises subsequent to a transfer should not automatically be excluded, but the trial judge “must assess the reliability of this evidence and determine what weight it should be given, guarding against evidence that is self-serving or that tends to reflect a change in intention”: Pecore, at para. 59.
[30] The Supreme Court then goes on to discuss particular types of evidence that courts have considered to determine the transferor’s intention, including bank documents that set up a joint account (Pecore, at paras. 60-61), the control and use of the funds in the account (at paras. 62-66), the granting of a power of attorney (at paras. 67-68), and the tax treatment of the joint accounts (at paras. 69-70).
[31] With respect to bank documents that set up a joint account, the Supreme Court (at para. 60) refers to previous cases where courts held that bank documents relating to a joint account “are an agreement between the account holders and the bank about legal title; they are not evidence of an agreement between the account holders as to beneficial title”. At para. 61, the Supreme Court then goes on to indicate that courts should not be automatically barred from considering bank documents to assist in determining the transferor’s intention regarding beneficial interest, stating as follows:
While I agree that bank documents do not necessarily set out equitable interests in joint accounts, banking documents in modern times may be detailed enough that they provide strong evidence of the intentions of the transferor regarding how the balance in the account should be treated on his or her death …. Therefore, if there is anything in the bank documents that specifically suggests the transferor's intent regarding the beneficial interest in the account, I do not think that courts should be barred from considering it. Indeed, the clearer the evidence in the bank documents in question, the more weight that evidence should carry. [Citation omitted.]
[32] In Pecore, at para. 5, the Supreme Court also recognizes that there are evidentiary challenges when a transfer of funds into joint names is disputed by a third party after the transferor’s death. At para. 26, the court indicates that there is additional justification for placing the burden of proof on the transferee in these circumstances, since the transferee is better placed than the disputing party to bring evidence about the circumstances of the transfer.
[64] In addition, in this case, there is an issue about the Mother’s mental capacity and whether she had the mental capacity to understand substantially the nature and effect of the “alleged donation”. See para. 11 of Pandke Estate.
[65] Finally, in considering the issues raised in this matter, consideration must be given to s. 13 of the Evidence Act, RSO 1990 c. E.23, which provides that in an action by or against the heirs or exectuors of a deceased person an opposite or interested party shall not obtain a verdict or judgment on his or her own evidence in respect of any matter occurring before the death of the deceased unless such evidence is corroborated by some other material evidence.
[66] In the present case I have concluded that the defendant has failed to rebut the presumption of a resulting trust. When the securities account was transferred to Kenny, a resulting trust was created whereby Kenny held the funds in trust for his Mother and subsequently her estate. My reasons for this conclusion are as follows.
Analysis and Conclusion
The Investment Account
[16] In Pecore, the Supreme Court of Canada recognized that the court could find, “after weighing the evidence that the transferor intended to retain exclusive control over the jointly-held funds until his or her death, at which time the transferee would be beneficially entitled to the remaining funds by survivorship” (paras. 45-53). The court also noted, “the traditional rule that evidence adduced to show the intention of the transferor at the time of the transfer ought to be contemporaneous (or nearly so) to the transaction” (para. 55). Finally, the court noted banking documents may provide strong evidence of the intentions of the transferor if the documents contain specific language suggesting the transferor’s intent regarding the beneficial interest in the account (para. 61).
[17] Animosity and the passage of time can significantly affect the perception and recollection of events. I, therefore, start with evidence that I consider to be relatively independent and highly reliable.
[18] John was a retired OPP officer. John met with his lawyer, Paul Beyer, five times from May 3, 2019 to April 28, 2020. Mr. Beyer confirmed that John was sharp, cogent, had capacity, and understood the nature of his assets and liabilities. I accept that evidence.
[19] The BMO investment account agreement entered into in 2005 clearly indicates that John’s intent was that Jackie, and not his Estate, receive the funds on his death. The conclusion that this was his intent is supported by the evidence of Mr. Clark that John wanted Jackie to have the beneficial interest. To Mr. Clark, Jackie is a relatively small client he has not dealt with in the past 12 years. He had no reason to tailor his evidence one way or the other, and I accept his evidence. The TD investment account agreement in 2012 evidences that John continued to have the same intent.
[20] Tracking the language in Pecore, the banking documents supported by the evidence of Mr. Clark provide very strong evidence of John’s intention that Jackie would be beneficially entitled to the remaining funds in the investment account on his death. This clear and contemporaneous evidence must be given much greater weight than somewhat vague statements by John, made at uncertain times, as referred to in the evidence of Joanne. I, therefore, find as a fact that on November 2, 2012 when the TD account was opened, John’s intention was the same as it had been on October 11, 2005, when the BMO account was signed, that Jackie be beneficially entitled to the balance in the investment account on his death.
[21] I would also accept Mr. Beyer’s evidence that, as of April 17, 2020, John advised him that he intended that Jackie receive the same amount of money as the other residuary beneficiaries. His note of that meeting, however, also makes clear that John was not sure who was the beneficiary on an account which Mr. Beyer referred to as his “RIF.” Recall also that on May 3, 2019, Mr. Beyer noted “$130,000-RIF_bene?” I find that John was, on April 17, 2020, referring to the investment account and indicating, in essence, that he would ascertain who was the beneficiary and “handle it.”
[22] The execution of the Will on April 20, 2020, could not and did not alter the transfer John made on November 2, 2012, as evidenced by the TD banking documents. If John’s intention as related to Mr. Beyer on April 17, 2020 continued, then he did not “handle it” by changing the beneficiary designation prior to his death on July 10, 2020. Jackie is, therefore, entitled to the funds in the TD investment account.
Compensation for Work Performed by Jackie’s Husband
[23] Jackie acknowledges that she owes the Estate money that was in a TD chequing account when John died. The only issue is whether she is entitled to deduct some, or all, of the $9,923.18 that her husband Norm charged for his services in preparing the Meaford home for sale.
[24] Jackie’s evidence was that there was an “overwhelming” number of items on the property that needed to be sorted, cleaned, made ready for sale at auction, or recycled. This evidence was not contradicted or otherwise challenged. The Estate does not take issue with the $621.13 in disbursements that Norm charged but submits that others in the family provided assistance to John and did not expect or receive compensation. While that is correct, the evidence did indicate that some family members provided assistance to John at reduced rates.
[25] Jackie’s affidavit indicates that Norm had, for many years, had a business that involved helping people downsizing or moving to sell or dispose of property, and that he charged only two-thirds of what he would have charged a non-family member. He charged for his labour at $30 per hour.
[26] The Estate did not take issue with the fact that Norm did a lot of work. Norm did not file an affidavit or testify, so while his notes indicate the type of work he did, it is difficult to make an assessment as to whether the hours spent are reasonable. As a result, and while I acknowledge it is a rough and ready assessment given the paucity of evidence, I find that it is fair that Norm be paid $5,000 plus the agreed disbursements for his work.
[27] Jackie shall, therefore, pay to the Estate, the balance in the TD chequing account less $5,621.13.
Conclusion
[28] These findings should allow the parties to agree as to the form and content of a judgment. I will, however, remain seized to deal with any outstanding issues.
[29] If the parties cannot agree on costs and interest, the Estate is to make written submissions within 20 days. Jackie is to respond within ten days of receipt of the Estate’s submissions. Reply, if any, within a further five days.
Sproat J.
Released: December 16, 2024