COURT FILE NO.: CV-20-0103 (Owen Sound)
DATE: 2025-04-14
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF WILLIAM ARCHIBALD STEWART AND IN THE MATTER OF THE ESTATE OF EDITH MARIE STEWART
Between:
JUNE HALE in her capacity as Estate Trustee of the Estate of William Archibald Stewart and in her capacity as Estate Trustee of the Estate of Edith Marie Stewart, and EDWARD MURRAY STEWART in his capacity as Estate Trustee of the Estate of Edith Marie Stewart
Applicants
-and-
LYNN STEWART, WINFIELD CLAYTON STEWART, WILLIAM ARCHIBALD STEWART, JAMES DOUGLAS STEWART, NORMAN ANDREW STEWART, GRANT LESLIE STEWART, MARION ANDREWS, BARBARA KOEHLER, SHIRLEY HAYLES, PEARL CROMWELL, MILDRED STEWART, JUNE HALE in her personal capacity, EDWARD MURRAY STEWART in his personal capacity, and ROBERT WAYNE STEWART by his Estate Trustee
Respondents
David Lobl and Brian Cohen, for the applicants
Julia Fischer, for Lynn Stewart
Robert Scriven, for Winfield Stewart
Heard: July 10 and 11, 2024
REASONS FOR DECISION
CONTENTS
Reasons for Decision .. 4
The Proceedings . 4
William’s Major Assets . 5
William’s Will 6
Five Complications that William Likely Did Not Foresee . 7
Mortgage Assigned to Edith .. 7
Robert Died Before Edith .. 7
Edith’s Will Did Not Forgive the Mortgage . 8
Edith Lived a Long Time . 9
Large Tax Liabilities Arose on Edith’s Death .. 9
The Current Assets and Liabilities of William’s Estate . 9
Assets . 9
Liabilities . 10
Net Value . 10
The Issues . 10
When did the gifts in clause 3(c) vest? . 11
The presumption of early vesting. 11
The gifts in clause 3(c) vested on William’s death. 12
The rule in Browne v. Moody. 13
Clause 3(c)(vi) 14
Did the gift to Robert of mortgage forgiveness fail because of the assignment of the mortgage? 15
William’s intention was to forgive the mortgage to Robert. 15
The mortgage was assigned with the consent of all beneficiaries. 16
The reason for the assignment has not been established. 17
Robert likely received assurances from Edith that her will would maintain the gift of mortgage cancellation. 17
The assignment is nevertheless valid. 18
Robert’s estate is responsible for satisfying the mortgage. 19
Did the gift to Robert of the Robert Farm fail? . 19
The gift of the Robert Farm has not failed based on the so-called “Survival Condition.” 19
The gift of the Robert Farm has not failed due to uncertainty. 19
Is the gift to Winfield of the conveyance of the Winfield Farm for $90,000 void for uncertainty? 20
How do the rules of abatement impact the gifts? . 20
Abatement Rules . 20
The gifts of the farms are devises of real property. 21
The gifts of the Robert Farm and the Winfield Farm abate rateably. 22
Can Robert’s estate and Winfield exercise their options to purchase in exchange for paying the tax liabilities? . 22
Are rent, taxes and insurance payable by Winfield? . 24
To whom must the net proceeds of sale be paid? . 25
Has William’s estate been unjustly enriched? . 26
Is June personally liable for increased tax liability? . 27
What costs are payable out of the estate? . 29
Appendix A – Agreed Statement of Issues (with Answers) 30
Appendix B – William’s Will 35
REASONS FOR DECISION
Justice R. Chown
[ 1 ] When William Archibald Stewart died on February 18, 1994, he was survived by his wife, Edith Marie Stewart, and their 13 children. In these proceedings, I am asked to interpret William’s will, dated February 20, 1989. His will gave a life estate to Edith, after which two farm properties William owned were to go to two of his sons, Robert and Winfield. These gifts were subject to the sons paying specified amounts for their respective farm properties. William died five years after preparing his will. Edith lived another 24½ years. By then, the values of the two farms dwarfed the specified amounts Robert and Winfield were required by the will to pay for the farms and dwarfed the gifts to William’s other children.
[ 2 ] Robert died before Edith. Robert was married but had no children. There is a question over whether William’s gifts vested at the time of William’s death (so that the gifts go to Robert’s widow) or the time of Edith’s death (so that the gifts fail and adeem).
[ 3 ] Money must be raised to cover the taxes triggered on Edith’s death. This could be done by selling one or both farms. This raises abatement issues.
[ 4 ] Undoubtedly, William did not anticipate the consequences of his will. He would consider the current circumstance a disaster. However, the court cannot re-write his will for him.
The Proceedings
[ 5 ] Three applications have been consolidated in this proceeding. The applicants in the applications are:
CV-20-0103
June Hale, William’s surviving trustee. June is one of William and Edith’s daughters. Edward Stewart is another applicant in this proceeding. He is one of William and Edith’s sons. He is a co‑trustee (with June) under Edith’s will.
CV-20-0095
Lynn Stewart, who is Robert’s widow.
CV-21-0129
Winfield Stewart.
[ 6 ] Given that many of the people involved have the same surname, I refer to all parties by only their first names. Edith Marie Stewart went by Marie, but as counsel and almost all the materials referred to her has Edith, I will do the same.
[ 7 ] The parties obtained a consent order from Fragomeni J. indicating that the issues to be “tried” in this application are those that are set out in an agreed statement of issues. The parties identify twenty-two questions grouped into nine categories.
William’s Major Assets
[ 8 ] The issues are focussed on three farm properties formerly owned by William. These properties are in the former Township of Egremont (now Southgate) in Grey County.
• William sold one of the properties, Lot 11 & 12, Concession 8 ( “the home farm” ) to his son, Robert, on December 7, 1987 for $200,000. He took back a mortgage of $185,000. (The parties refer to this as “the Robert Mortgage” but there is no possibility of confusion with any other mortgage, so it is not necessary to use a defined term.) In 2004, Robert transferred this property to himself and his wife, Lynn Stewart, as joint tenants.
• The second property was part of Lot 12, Concession 7. The parties referred to this property as “ the Robert Farm .”
• The third property was Lot 14 & 15, Concession 9. The parties referred to this property as “ the Winfield Farm .”
[ 9 ] At the time of William’s death in 1989, in addition to the mortgage, the Robert Farm, and the Winfield Farm, the estates main assets were:
• Cattle (estimated value $186,000).
• Farming implements ($40,000).
• A vehicle ($2,000).
William’s Will
[ 10 ] In his will, William appointed Robert and June as executors. The basic structure of the will is that it requires the executors to pay William’s just debts from his general estate and then to “hold the residue” of the estate “for the use and benefit” of Edith. It then provides that, on Edith’s death:
• If Robert was indebted to William on a mortgage, to cancel any balance of the mortgage and to provide a discharge of the mortgage to Robert (clause 3(c)(i)).
• To transfer William’s farm implements to Robert on the understanding that any of his other children who might be involved in farming were to be able to continue to use them (clause 3(c)(ii)).
• To give Robert the first right to purchase the Robert Farm for $50,000 (clause 3(c)(iv).
(Robert entitlements under William’s will are the above three gifts. He is not a residuary beneficiary under the will. As indicated, Robert was also an executor.)
• To convey the Winfield Farm to Winfield for $90,000 (clause 3(c)(iii)).
• To divide the residue of the estate into twenty-four shares, with each of his sons (other than Robert) getting three shares and each of his daughters getting one share (clause 3(c)(v)).
[ 11 ] William’s apparent logic was:
• During her lifetime, Edith would have income from Robert’s mortgage on the home farm. She could also demand incomes from the Robert Farm and the Winfield Farm if needed.
• Robert got the home farm (with mortgage forgiveness) so should receive none of the residue of William’s estate.
• Robert had to pay for the Robert Farm and Winfield had to pay for the Winfield Farm. I suspect that William thought the values he used in the will were the approximate values of the farms when he wrote his will. Thus the value of those two farms would go into the residue of William’s estate, representing a degree of fairness to his other children.
• The residue would then be divided among his children (other than Robert), with his male children receiving larger shares.
[ 12 ] The full text of William’s will is attached as Appendix B.
Five Complications that William Likely Did Not Foresee
- Mortgage Assigned to Edith
[ 13 ] In 1994, with the consent of all beneficiaries, William’s estate assigned the mortgage to Edith. Robert started paying the mortgage interest to his mother and not to William’s estate.
- Robert Died Before Edith
[ 14 ] Robert died intestate on January 21, 2018. Robert and Lynn had no children, so Lynn is Robert’s sole heir.
[ 15 ] On May 24, 2018, Lynn registered a survivorship application in respect of the home farm. A lawyer retained by Lynn wrote to Edith and June stating that Lynn was entitled to what Robert would have received under William’s will. Edith was surprised and appeared upset by the letter. About three weeks after this letter, Edith had Mr. Guilford Deverell prepare a new will. Edith executed it on June 13, 2018. This was Edith’s last will and it did not include any gift to Robert’s estate of mortgage forgiveness.
[ 16 ] Mr. Deverell also acted for William’s estate at that time. Mr. Deverell wrote back to Lynn’s lawyer on June 26, 2018. He took the position that because the mortgage had been assigned, there was no longer any mortgage owing to William’s estate. William’s forgiveness of the mortgage upon Edith’s death was no longer operative. The implication was that the mortgage was Edith’s would become an asset of Edith’s estate when Edith died.
- Edith’s Will Did Not Forgive the Mortgage
[ 17 ] Before Robert died, and before executing her last will, Edith had executed at least five wills after the assignment of the mortgage. In all five of these wills, Edith included a provision indicating that the principal and accrued interest owing on the mortgage at the time of her death would be cancelled. In the fifth will she specifically notes this was, “in accordance with the wishes of my late husband.”
[ 18 ] As indicated, Edith executed her final will on June 13, 2018. This was about six months after Robert had died and about three weeks after the letter from Lynn’s lawyer. Edith’s final will does not mention Robert or Lynn at all. It does not provide for Winfield but explains that this is because Winfield “is entitled to a substantial benefit” under the William’s will. It states that “no child of mine named as a beneficiary in this my Will is indebted to me for any amount of money as of the date of this my Will.”
[ 19 ] One might have expected Edith to mention the mortgage in her will in the circumstances. However, the absence of any mention of it cannot be considered an oversight. Mr. Deverell’s letter of June 26, 2018 to Lynn’s lawyer, prepared two weeks after he prepared Edith’s last will, states that the mortgage “remains outstanding and belongs to [Edith].”
[ 20 ] Edith’s final will equally divided almost all of her estate equally among her then‑living children, except for Winfield.
- Edith Lived a Long Time
[ 21 ] Edith died on August 20, 2018, two months after her last will, eight months after Robert died, 24½ years after William died, and 29½ years after William executed his will. The value of the three farm properties skyrocketed during those years. By the time of Edith’s death, the Winfield farm was worth $1,120,000 and the Robert Farm was worth $617,500.
- Large Tax Liabilities Arose on Edith’s Death
[ 22 ] As indicated, Edith's death triggered a tax liability. The outstanding tax liability as of June 2022 was about $462,000. The bulk of this liability arises because of the deemed disposition of the Robert Farm and the Winfield Farm.
The Current Assets and Liabilities of William’s Estate
Assets
[ 23 ] To summarize, at the time of Edith’s death, the Robert Farm was worth $617,500 and the Winfield Farm was worth $1,120,000. I was not provided precise current values but there is no doubt that the farms are worth substantially more than this now. The farm implements remain but have minimal value. The cattle and the vehicle mentioned in paragraph [9] above no longer exist. The mortgage was assigned to Edith.
[ 24 ] June maintains the position taken by Mr. Deverell that the mortgage became an asset of Edith when it was assigned in 1994 and after that it was no longer part of William’s estate. Lynn argues that the assignment is invalid in that the estate did not have the right to assign the mortgage, because Robert’s gift of mortgage forgiveness on Edith’s death vested at the time of William’s death. There is therefore an issue of whether the mortgage is a “cancelled asset” in William’s estate or an asset in Edith’s estate. According to June’s factum, the balance of the mortgage was $99,139 as of June 27, 2022.
Liabilities
[ 25 ] Edith's death triggered a tax liability. The outstanding CRA balance was about $462,000 as of June 2022, according to June’s factum. In addition, June has personally loaned the estate about $225,000 as of December 2022, to pay property taxes, the estate administration tax, and legal costs.
Net Positive Value
[ 26 ] William’s estate is not insolvent. However, it cannot pay its liabilities from the residue or even from the mortgage. To pay its liabilities, one or both of the Robert Farm or the Winfield Farm must be sold, or money must otherwise be raised against the value of these farms.
The Issues
[ 27 ] As indicated, the issues in this matter are the subject of a consent order. The twenty-two questions posed by the parties, and my answers, are set out in Appendix A. In the analysis that follows, I have grouped and simplified the issues in a way that reflects the arguments that have been advanced.
When did the gifts in clause 3(c) vest?
[ 28 ] Questions 2(b), 3 and 6 in the agreed statement of issues are all impacted by question of whether the gifts under clause 3(c) of William’s will vested at the time of William’s death or of Edith’s death.
[ 29 ] Clause 3 of William’s will states that he gives all his property to his trustees, “upon the following trusts…” Clause 3(c) says, “UPON the decease of my wife …, to divide the residue of my estate as follows.” It then lists the gifts I have described above in paragraph [10]. June’s factum refers to clause 3(c) as the “Survival Condition.” Under June’s analysis, only beneficiaries who outlive Edith pass the Survival Condition. June says that Winfield meets the Survival Condition because he survived Edith, but Robert did not meet the Survival Condition because he died before Edith. Therefore, June contends, the gift of mortgage forgiveness under clause 3(c)(i) and the gift of the Robert Farm under clause 3(c)(iv) both fail.
[ 30 ] June acknowledges that there is a presumption that a testator intends that testamentary bequests vest upon his death. She submits that in this case the presumption of early vesting does not apply because of the language in William’s will.
The presumption of early vesting.
[ 31 ] The authors of Feeney's Canadian Law of Wills, 4th Ed . (I. Hull and S. Popovic-Montag, Toronto: LexisNexis Canada Inc., Current to Release 118 (March 2025)) describe the law’s inclination for early vesting as follows:
The courts are inclined to hold a gift as vested rather than contingent wherever the particular words used, and the will as a whole, admit of a construction that will result, as is said, in “early vesting”. That inclination has always been said to be particularly strong where the property is land. It is accurate to refer to the tendency of courts to call gifts “vested” as a presumption to that effect, so it can be said that gifts are to be held to be vested unless there is a clear condition precedent.
Accordingly, a gift, whether a devise or a legacy, that makes no reference to the time of vesting should always be held to take effect at the testator’s death, unless that date of vesting would disturb provisions already made in the will, or unless the will, as a whole, evinces a clear intention that the gift operate contingently and at a later date.
The recent trend of jurisprudence has been to strive to establish and implement the actual intentions of the will-maker. Consequently, the presumption in favour of early vesting as well as any other “rules” of construction may be applied only if the courts have some doubt about the will-maker’s intention. [Section numbers and footnotes omitted.]
See also Albert H. Oosterhoff, Oosterhoff on Wills, 9th ed . (Toronto: Thomson Reuters, 2021), at p. 722.
[ 32 ] This presumption is sometimes referred to as the rule in Browne v. Moody , [1936] O.R. 422 (U.K.P.C.): Re Fraser , (1986), 55 O.R. (2d) 268 (Ont. H.C.J.) ; Howes v. Hartley (1986), [1987] 2 W.W.R. 749 (Sask. C.A.), at para. 10 ; Vea Estate v. Clemson , 2014 BCSC 1970 , at para. 25 ; Bradley Estate , 2023 BCSC 618 , at para. 23 .
The gifts in clause 3(c) vested on William’s death.
[ 33 ] June’s factum acknowledges the rule in Browne v. Moody but tries to distinguish it. June submits that the plain language in the will demonstrates an intention to postpone vesting until after Edith died. As noted above, June says the language of clause 3(c) (“UPON the decease of my wife”) suggests that no gift occurs until June dies.
[ 34 ] Lynn submits that the right to mortgage forgiveness vested upon William’s death, with the timing for forgiveness of the debt reserved until Edith’s death. She submits that the will does not contain language to suggest William intended to postpone vesting of the gifts to Robert.
[ 35 ] I agree with Lynn’s position on this point. The words plainly intend to grant a life estate to Edith. There is nothing specific in the will that would remove the gifts under clause 3(c) from the presumption of early vesting.
The rule in Browne v. Moody.
[ 36 ] June’s efforts distinguish this case from Browne v. Moody are not persuasive . Mrs. Browne granted a life interest for her son, William Browne, in the income from a $100,000 fund. Mrs. Browne’s will said the interest was to be paid to her son “during his lifetime.” The residuary beneficiaries of the life estate included Mrs. Browne’s granddaughter Enid. The Privy Council found that the gift to Enid vested at the time of Mrs. Browne’s death. The language in Mrs. Browne’s will (“On the death of my said son…”) is similar to the language used in William’s will (“UPON the decease of my wife…”).
[ 37 ] MacMillan L.J., speaking for the Privy Council, observed that under Mrs. Browne’s will the date that the capital in the fund was to be divided was a definitive date: the date of death of Mrs. Browne’s son. Although the specific date was unknown, William Browne’s death “in the course of nature must occur sooner or later.”
[ 38 ] The circumstances in Browne parallel the circumstances here. Edith’s death would eventually occur, and there were no possible events that might intervene to prevent the date of her death from eventually arriving. This is to be distinguished from, for example, a will that grants a gift when legatee reaches age 21. While that legatee’s 21st birthday would be a definitive date, there is some uncertainty on whether the date will ever arrive. If the legatee dies before reaching age 21, the gift will fail. Browne and other cases suggest that in that event, the gift would not vest until the legatee turned 21.
[ 39 ] MacMillan L.J. also noted that the reason behind the postponement of the gift to Enid and Mrs. Browne’s daughters was “obviously only in order that the son may during his lifetime enjoy the income. The mere postponement of distribution to enable an interposed life-rent to be enjoyed has never by itself been held to exclude vesting of the capital ” [emphasis added].
[ 40 ] June’s reply factum, at para. 15, attempts to distinguish this case from Browne on the basis that the residuary legatees in Browne all survived the life tenant (Mrs. Browne’s son), whereas in this case Robert died before the life tenant. June’s factum also notes that Mrs. Browne’s will had a gift-over clause that made the residuary legatee’s gifts contingent on them “leaving issue” if they predeceased Mrs. Browne or her son. The effect in Mrs. Browne’s will was to preclude the residuary legatees’ general estates from receiving a gift if they did not leave issue. However, unlike here, that clause included a reference to the life tenant (Mrs. Browne’s son) outliving the residuary legatees. Clause 3(c)(vi) in William’s will does not consider this possibility. Furthermore, the decision in Browne in fact appears to address the contingency of a residuary beneficiary dying before the life tenant. Although this is obiter , MacMillan LJ wrote, “A legatee predeceasing the son without leaving issue would not be affected by the clause and the interest of such a legatee would pass on her death to her representatives.” MacMillan LJ added, “This is in accordance with well-settled principles.” Multiple Canadian cases decided after Browne undermine June’s effort to distinguish Browne on this basis: Re Merritt (1945), [1945] O.W.N. 470 (Ont. H.C.); Re Rauckman (1969), 71 W.W.R. 73 (Sask. Q.B.); Howes v. Hartley ; McKeen Estate v. McKeen Estate (1993), 49 E.T.R. 54 (N.B. Q.B.); Re Schradi Estate , (2006), 2006 CarswellOnt 1765 (Ont. S.C.J.) ; and Vea Estate . In each of these cases, a residual legatee died before the life estate ended and it was held that the residual legatee’s estate was entitled to the gift because the residual gift vested upon the testator’s death.
Clause 3(c)(vi)
[ 41 ] June refers to clause 3(c)(vi) to support her argument. That clause says that if any child of William’s dies before William, and such child leaves issue surviving William, “such deceased child of mine shall be considered as alive” for the purpose of dividing the residue of his estate. June says this permits a “broad gift over” to Robert’s issue (of which he had none) but otherwise nothing to Robert’s estate. That is, nothing to Robert’s wife. This clause may suggest that William intended to prefer his direct descendants over others who might become his children’s heirs. However, this clause relates to William’s children dying before William . (“IF any child of mine shall die before the date of my death.”) It says nothing about William’s children dying after William but before Edith . It is not applicable in the circumstances.
[ 42 ] I note also that clause 3(v) of the will lists all of William’s children (other than Robert). It seems that clause 3(vi), which immediately follows clause 3(v), is primarily intended to add clarity to clause 3(v).
[ 43 ] In result, Robert did not have to survive Edith for the gifts in question to succeed. The answers to questions 3 and 6 are both “no.”
Did the gift to Robert of mortgage forgiveness fail because of the assignment of the mortgage?
[ 44 ] I turn now to June’s argument that the gift of mortgage forgiveness fails because the of the assignment of the mortgage. She says the estate lost the power to forgive the mortgage when it assigned the mortgage to Edith. From then, it was up to Edith to decide whether to forgive the mortgage, and Edith did not do so in her will.
[ 45 ] In response, Lynn argues that the gift of mortgage forgiveness was not affected by the assignment.
William’s intention was to forgive the mortgage to Robert.
[ 46 ] After William died, William’s co-trustees, June and Robert, along with Edith, had multiple meetings with Mr. Paul Grant, the lawyer for the estate. Mr. Grant had drafted William’s will. According to a memo prepared by Mr. Grant, they met on May 12, 1994, about three months after William died. One of the issues they discussed was the mortgage. The mortgage maturity date was October 5, 2002. William’s will did not specifically address whether the mortgage should be renewed. Mr. Grant advised that the mortgage “should be renewed since this was no doubt contemplated by Bill and his son Robert when the mortgage was set up and it was no doubt Bill's intention to let that mortgage sit until his wife died to provide her with the income from it but his intention was obviously to forgive the debt from his son Robert.” Mr. Grant also advised them that, “Robert having obvious conflict on the question, would have to leave the decision to June and I suggested to June the proper thing to do would be to renew the mortgage on its maturity in order to fit in with the intentions of her father.”
The mortgage was assigned with the consent of all beneficiaries.
[ 47 ] The assignment of the mortgage is not mentioned in the memo arising from the May 1994 meeting. In a memo dated August 8, 1994, Mr. Grant describes a call he had with June on July 7, 1994, and this appears to have been first documented mention of assigning he mortgage. The memo states, “They [ i.e ., June and Robert] propose to assign the mortgage from Robert to Mrs. Stewart (and Mrs. Stewart had mentioned this to me on July 5 ….” There is no mention of the rationale for the assignment, but Mr. Grant’s note suggests this was proposed by June, Robert and Edit. In letters dated September 1, 1994 from the estate’s former lawyer to each of the children (exhibit X to June Hales’ affidavit), Mr. Grant wrote:
[I]t has been proposed by June and Robert that this mortgage be transferred into your mother’s name so that she, rather than the estate, would own the mortgage. Since this would be a variation from the provisions of the will, they would like to have this approved by the whole family.
Eleven of the thirteen children signed the letters confirming agreement to this transaction. There is no letter from Robert or from Lynn, but they were apparently behind the move. Robert began making payments to Edith after the assignment. He must have agreed to the assignment.
The reason for the assignment has not been established.
[ 48 ] Lynn’s affidavit states that the mortgage was assigned from the estate to Edith “to avoid the practical necessity of holding the ‘estate open’ to file tax returns for the mortgage interest paid from time to time until Edith's passing under the life trust provisions of the Will.” That does not make sense because the estate would likely have to file returns throughout Edith. In her cross-examination, June resisted the suggestion that the mortgage was assigned for reasons of convenience, but she offered no other explanation. I cannot discern the reasoning behind the assignment.
Robert likely received assurances from Edith that her will would maintain the gift of mortgage cancellation.
[ 49 ] Lynn’s affidavit also states that the mortgage assignment to Edith “was made to provide some income to her during her lifetime on the understanding the balance of the mortgage would be forgiven on the death of Edith.” This evidence is challenged by June, who correctly notes that there was no need to assign the mortgage to ensure Edith would receive income. She would receive it anyway as part of her life estate.
[ 50 ] It is appropriate to infer that, at the time of the assignment, Robert received some sort of assurance from his mother that her will would continue the mortgage forgiveness. I say this because:
• It would be contrary to Robert’s own interests and to his estate’s interests for Robert to agree to the assignment. He risked losing this gift and losing the farm and his livelihood if Edith for some reason decided to enforce the mortgage.
• There is no evidence that Robert disclaimed the gift of mortgage forgiveness he had received from his father.
• In the fall of 2017, when he was very sick, Robert reassured Lynn things would stay the same after he died – Lynn “would still have to take care of the interest payments” – it was an interest only mortgage – but that was “only … as long as his mom was alive, and then the mortgage would be cancelled.”
• Edith executed five wills after the assignment that all contained this gift of mortgage forgiveness. Only in her last will, prepared after Robert’s death, did she remove this gift of mortgage forgiveness.
• Although Robert received advice about the mortgage assignment in his capacity as co-trustee, there is no evidence that Robert received independent legal advice with respect to the assignment of the mortgage.
[ 51 ] I conclude that Robert received some sort of assurance that his mother’s will would continue William’s gift of mortgage forgiveness. However, beyond this generality, the specifics of the assurance he likely received cannot be discerned from the evidence. I should add that no one has argued promissory estoppel or proprietary estoppel.
The assignment is nevertheless valid.
[ 52 ] I nevertheless agree with June argument in her reply factum that by agreeing to the assignment, Robert implicitly understood that the mortgage was no longer an asset of William’s estate and that William’s estate would therefore have no authority to deal with it. All beneficiaries under William’s will agreed to the assignment. The trustees had broad power under the will to “sell or otherwise dispose of” the estate’s assets. The phrase “otherwise dispose of” is sufficient to include “assign.” Robert and Lynn acted on the assignment by making payments to Edith directly. They continued to benefit from the interest-only aspect of the mortgage. Edith never demanded payment of the mortgage after it matured. The validity of the assignment went unchallenged for 26 years. In these circumstances, it would be wrong to now hold that the assignment was invalid.
[ 53 ] In result, in answer to question 2, I find that the gift of mortgage forgiveness does fail because of the assignment.
Robert’s estate is responsible for satisfying the mortgage.
[ 54 ] Question 2(a) asks whether Robert’s estate is liable for paying the mortgage. I conclude that Robert’s estate is liable to pay the mortgage to Edith’s estate because of the assignment.
Did the gift to Robert of the Robert Farm fail?
The gift of the Robert Farm has not failed based on the so-called “Survival Condition. ”
[ 55 ] Question 3 of the agreed statement of issues asks whether Robert needed to survive Edith to exercise the first right to purchase the Robert Farm for $50,000. For the same reasons I have given above, I find that the gift vested on William’s death. It was not necessary for Robert to survive Edith. The answer to question 3 is “no.”
The gift of the Robert Farm has not failed due to uncertainty.
[ 56 ] Although this issue is not raised in the agreed statement of issues, June argues that the gift of the Robert Farm is void for uncertainty. I do not accept this argument.
[ 57 ] Clause 3(c)(iv) instructs the trustees to give Robert the first right to purchase the farm at the price of $50,000 “upon such terms as may be mutually agreed between him and my trustees.” June submits that this phrase leaves terms and conditions to be determined by a future agreement and this is unenforceable. I do not agree. June does not identify any terms or conditions that might present a problem. The key factor – price – is determined by the will. Furthermore, there has been no failure to agree to terms after good faith efforts.
[ 58 ] June refers me to cases involving commercial leases with clauses that contemplate the parties coming to an agreement about rent on renewal of the lease. These cases do not assist June with her argument. For example, in Narwhal International Limited v. Teda International Realty Inc ., 2021 ONCA 659 , rent was the key factor, and the parties had made efforts to reach an agreement but could not agree on the rent.
Is the gift to Winfield of the conveyance of the Winfield Farm for $90,000 void for uncertainty?
[ 59 ] June also argued in her factum and in oral argument that the gift of the Winfield Farm is void for uncertainty. This issue is also not raised in the agreed statement of issues. Regardless, I reject this argument for the same reasons I have given above relating to the gift of the Robert Farm.
How do the rules of abatement impact the gifts?
[ 60 ] The rules of abatement impact questions 2(c), 3(b), 5, and 5(a) in the agreed statement of issues (to the extent that these questions need to be answered).
Abatement Rules
[ 61 ] Oosterhoff , at p. 575, describes abatement as follows:
If there are sufficient assets to pay the creditors, but insufficient to pay all the gifts made by the will, some or all of the gifts may have to abate. Abatement is the pro rata reduction of the amounts or quantities of testamentary gifts when the estate is insufficient to pay the debts and gifts in full. Absent a contrary direction in the will, the order in which assets are liable to pay debts is determined by well-defined rules. The term "debts" in this context includes debts and liabilities of the testator, as well as funeral, testamentary and administration expenses.
The common law order of abatement for testamentary gifts is: (1) residuary personalty; (2) residuary real property that is not specifically devised; (3) general legacies, including pecuniary legacies payable from residue; (4) demonstrative legacies; (5) specific bequests and legacies of personalty; and (6) specific devises of real property. Thus, the primary fund liable for debts is the residue. [Footnotes omitted.]
[ 62 ] William’s will is silent with respect to abatement priorities. None of the parties argued that the abatement priorities might differ from the common law priorities.
The gifts of the farms are devises of real property.
[ 63 ] I have considered whether the gifts of the Robert Farm and the Winfield Farm in clauses 3(c)(iii) and 3(c)(iv) of the will are both “specific devises of real property.”
[ 64 ] If clause 3(c)(iii) the will simply said, “I give my farm known as Lot 14 and 15, Concession 9, Egremont to Winfield,” there would be no question. That would plainly be a specific devise of real property. However, it instructs the executors to “convey” the farm to Winfield “for the consideration of NINETY-THOUSAND DOLLARS.” Is that a devise of real property?
[ 65 ] Clause 3(c)(iv) is perhaps more ambiguous. It does not simply say, “I give my farm known as Lot 12, Concession 7, Egremont to Robert.” That would plainly be a specific devise of real property. Instead, the language in clause 3(c)(iv) instructs the executors to give “a first right to purchase” the real property for $50,000. Is that a devise of real property?
[ 66 ] None of the parties submitted that the gifts were not devises of real property. I did not do any significant research of my own on this point. It does seem to me that the gift is a devise of real property. The devisee will end up with real property. The required payments seem to be William’s way of giving some credit to his estate and therefore to his other children for the value of the two farms.
[ 67 ] I find it difficult to understand why the will uses non-parallel language in these two clauses, but it is unlikely that the testator had in mind some difference that might have a bearing on this question. Both gifts require the legatee to pay the specified amount, and if the legatee does not pay that amount, the executors should not transfer title to the property.
The gifts of the Robert Farm and the Winfield Farm abate rateably.
[ 68 ] I have considered whether there is anything in the language of the will that would suggest the gifts of the farms should not abate rateably ( i.e ., proportionately, or pro rata ). I see nothing that would support such a position. I conclude that the Robert Farm and the Winfield Farm must abate rateably.
[ 69 ] The estate must raise the money to pay its debts. I would not order how the estate should do this. The estate trustee may exercise her discretion. I will return to this point.
Can Robert’s estate and Winfield exercise their options to purchase in exchange for paying the tax liabilities?
[ 70 ] In the agreed statement of issues, questions 3(a) and 4 ask whether the estate is obliged to accept a $50,000 offer to purchase the Robert Farm from Robert’s estate and what the estate’s rights are regarding the Winfield Farm if Winfield exercises the option to purchase it for $90,000. In oral submissions, Winfield said he would be prepared to pay the tax liability attributable to the Winfield Farm as part of a purchase, although he submitted that there was no grounds for executor compensation. Lynn may take a similar position regarding the Robert Farm.
[ 71 ] Questions 3(c), 3(c)(ii), 3(c)(ii) 4(a), and 4(b) all relate to the powers that the estate may exercise to pay the estates liabilities, and whether the estate may mortgage or sell the Robert Farm and/or the Winfield Farm.
[ 72 ] I find that it is for the estate to establish the value of the two farms. Clause 4(5) of William’s will gives his trustee the power “fix the value of my estate, or any part thereof.” Clause 4(1) of the will gives the trustee the power to sell assets and clause 3(a) of the will gives the trustee the responsibility to pay debts. There is an indisputable need to sell one or both farms or to otherwise raise money to pay the estate’s liabilities.
[ 73 ] I find that the trustee may determine the value of either or both farms by appraisal or through selling one or both of the farms on the open market. Selling the farms has the benefit of testing the market and not relying on an appraisal. However, the estate has the power under clause 4(5) to “fix the value of the estate, or any part thereof , for the purpose of making any division, setting aside or payment of any share or interest therein” [emphasis added]. It is therefore open to the estate to sell only one farm on the open market and to determine the value the other farm by appraisal, and then to transfer that farm in exchange equivalent value (such as payment by the transferee of some or all of the estate’s liabilities as contemplated in the with prejudice offer dated July 6, 2022). The trustee may raise funds to pay the estate’s debts through other arrangements that yield the appraised value of the farms. For example, the trustee may mortgage the farms or make other arrangements with beneficiaries.
[ 74 ] Thus, the answer to question 3(a) is “no,” and the answer to questions 3(c), 3(c)(ii), 3(c)(ii), 4, 4(a), and 4(b) is that the trustee has a discretion to sell, mortgage, or otherwise raise funds from the farms. At the same time, the trustee has the discretion to enter arrangements with Lynn and/or Winfield that allows for them to receive the properties but also allows the estate to pay all its debts. Having said that, given the obvious difficulty the parties have had in resolving this estate, June is free to list and sell the properties on the open market immediately without the need to take time in coming to arrangements with Lynn and Winfield directed at allowing them to receive the properties.
Are rent, taxes, and insurance payable by Winfield?
[ 75 ] Question 7 in the agreed statement of issues asks whether Winfield owes the estate for unpaid rent, property tax, and insurance and, if so, in what amount. Winfield has lived at the Winfield Farm since a few years prior to William’s death. Following William’s death, Winfield agreed to pay the estate rent of $250 per month. This income would be used to add to Edith’s life estate. Winfield also agreed to pay the property taxes and insurance associated with the Winfield Farm. He paid the rent until the end of February 1996, and none thereafter. He paid the insurance and property taxes up to the end of 1999. The estate started paying these expenses thereafter. William acknowledged the rent due in a document he signed on January 18, 2000 but did not pay it. He did not comply with a notice to vacate dated July 17, 2009. The estate has not forced him out. I was advised in oral submissions that the termination of insurance occurred because the buildings had fallen into disrepair and were no longer insurable. This is supported by exhibit O to June’s affidavit dated August 19, 2020, which says that the buildings were uninsurable and shows that no insurance has been paid by the estate since 2011.
[ 76 ] In the early-to-mid-2000s, the estate began renting the land for farming to a local farmer and later to Norman Stewart, one of William and Edith’s other sons.
[ 77 ] Winfield did not refute the calculations of property tax and insurance found at exhibit O. I accept these amounts. Winfield disputes liability for rent given that the land was rented out by the estate; however, he has not provided any evidence to refute that $250 per month is inappropriate rent payable in respect of the house.
[ 78 ] June submits that the estate is entitled to a “set off” for the amounts that Winfield owes to the estate. June relies on Cherry v. Boultbee (1839), 41 E.R. 171 (EWHC Ch) for her position that the estate may take into account the monies owed by a legatee before distributing a legacy.
[ 79 ] Feeney , at § 8.51, states: “ In general, an executor has a right to retain out of any gift to a beneficiary, a debt owed to the estate by the beneficiary. But a right of retainer cannot be applied against a specific legacy ” [emphasis added]. June acknowledged that an estate may not normally exercise a “set off” against a specific legacy, but relies on June Brayford v Brayford , 2015 SKQB 336 , at para. 27 and 34 for the proposition that debts to the estate that are closely connected with the gift may be deducted, especially where it would be “manifestly unjust” to allow the debtor to receive the gift without taking into account the debt. I agree that the gift and the debt are closely connected, and it would be manifestly unjust to allow Winfield to receive the gift without considering the debt. Winfield failed to pay his mother rent and failed to pay the expenses associated with the Winfield Farm, depriving her of income, and thereby diminishing the full effect of William’s intentions under the will Winfield now relies upon.
[ 80 ] That does not end the matter, however. Feeney also states, at § 8.51, that " since the assent of the executor to a specific legacy dates the gift back to the date of the testator, the specific legatee becomes liable for costs of maintenance and repair of the asset, from the date of death to the date of the assent, as well as being entitled to any profits accruing to the asset during the same period”: citing Saxer v. Saxer Estate , 2011 BCSC 584 . Applying this to the circumstances here, where there was a life estate, it could be argued that Winfield should be liable for the expenses associated with the farm, and entitled to the rent received for the farm, from the date of Edith’s death to current date. However, here the gift must abate. In addition, although the gift to Winfield vested on William’s death, Winfield’s receipt of the gift was contingent on him paying the $90,000, which he has not yet been paid. I acknowledge that Winfield has said he has arranged financing and can pay the $90,000. I nevertheless find that the equities are such that Winfield should be required to pay the expenses he agreed to pay and should not be entitled to the rent recovered since Edith’s death. I find that the estate is entitled to deduct against the gifts to Winfield the expenses set out in exhibit O, updated to current date.
To whom must the net proceeds of sale be paid?
[ 81 ] In the agreed statement of issues, question 5(a) asks to whom the remaining proceeds of sale will be payable after a sale of either farm. In argument, none of the parties took the position that the proceeds from such a sale would go into the residue of the estate. June’s factum, at para. 64, addresses what should happen with the proceeds of the sale of the Robert Farm if it is sold after the gift failed. June says, in that event, the net proceeds of the sale should be used to pay the estate’s liabilities and then be distributed pursuant to the residue clause. June’s factum does not address what should be done with the proceeds of a sale of the Robert Farm if the gift succeeds but abates.
[ 82 ] However, June’s factum, at para. 69, submits that the Winfield Farm must be sold to pay the liabilities of the estate, and that such a sale would be compliant with the common law rules of abatement. At para. 70 to 73, June addresses set off, but she submits that once the set off is addressed, the remaining proceeds of the sale should be distributed to Winfield. I infer that June agrees that a sale to address abatement is not the same as a complete failure of the gift. The sale proceeds do not become part of the residue. Rather, the abated sale proceeds are to be distributed to the legatee. I infer that June would take the same position regarding abatement of the Robert Farm.
[ 83 ] Regardless, I find that William’s estate is obliged to pay Robert’s estate the abated value of the Robert Farm (less $50,000) and is obliged to pay Winfield the abated value of the Winfield Farm (less $90,000 and the amounts to be “set off”, described above). The remaining proceeds do not go into the residue of the estate. I find support for this conclusion in Feeney , at §15.3, which states, “Any property which has to be sold to satisfy creditors is said to abate, rather than to adeem.”
[ 84 ] For clarity, the $50,000 and $90,000 amounts become part of the residue. However, the residue abates before the specific devises, so that may be of no consequence.
Has William’s estate been unjustly enriched?
[ 85 ] In his affidavit sworn August 9, 2021, Winfield says he worked on his parents' farm alongside his father for decades. He says, “I was paid very little, in fact, virtually nothing, in compensation.” He also says the Winfield Farm was promised to him as consideration for his efforts. This evidence is not enough to ground a claim of unjust enrichment.
[ 86 ] In oral submissions, it was submitted on Winfield’s behalf that he has a constructive trust claim, and it should be valued based on the current value of the farm. Winfield’s basis for determining the current value of the farm is not realistically supported in the evidence.
[ 87 ] In his factum, Winfield submits that the issue of whether Winfield has a constructive trust in the Winfield Farm ought to be considered in an action. However, it would be wrong to defer this issue to an action when it is part of the agreed statement of issues in this application and both Winfield and June have addressed it.
[ 88 ] June’s factum notes that clause 3(c)(iii) in William’s will expressly indicates that the price of the Winfield Farm was already reduced by William to allow for improvements made by Winfield during William’s lifetime. After William died, Winfield did not continue to farm the Winfield Farm for long, he permitted the buildings to become uninsurable, and he stopped paying rent after 1996 even though he continued to live there. The estate has not been enriched by William and he has not suffered a corresponding deprivation. He cannot succeed with his claim for unjust enrichment and thus is not entitled to a remedy of a constructive trust. This answers question 4(c) of the agreed statement of issues.
[ 89 ] It is not necessary to answer question 3(b), about the potential constructive trust that Robert’s estate may have in the Robert Farm because the gift of the Robert Farm has not failed, it is merely abated.
Is June personally liable for increased tax liability?
[ 90 ] In their factums, Lynn and Winfield assert that June should be held liable for the increased tax liability incurred by William’s estate caused by a failure to avoid tax. More accurately, Lynn and Winfield submit that by making different elections under the Income Tax Act , June could have acted to reduce the overall tax paid by William’s and Edith’s estate. Some of the tax liability could have been moved over to Edith’s estate, resulting in approximately $110,000 in liability for tax to Edith’s estate, and this would have resulted in tax savings of approximately $430,000 to William’s estate. This issue was also a focus of June’s cross-examination on behalf of both Lynn and Winfield.
[ 91 ] June’s position in her cross-examination was that it would have been wrong to move the tax liability over to Edith's estate when the beneficiaries in Edith’s will are different than those under William's will. Lynn and Winfield acknowledge that it would have required coordination between the two estates, but June did not approach either of them with a serious proposal to address this and benefit the beneficiaries of both estates collectively. They further assert that June personally benefited from this because she is a beneficiary under Edith’s estate. She receives a higher share of Edith’s estate than of William’s, and there may be no residue in William’s estate.
[ 92 ] It is not clear to me that Lynn and Winfield are correct about the tax issues. June relies on correspondence from Mr. Kurt Oelschlagel dated April 15, 2021 and July 14, 2021 (exhibits A and B to June’s affidavit dated February 17, 2022) that may answer Lynn and Winfield’s complaints. I have studied the letters in detail and, although it is not fully clear, the letters appear to undermine Lynn and Winfield’s position. Lynn and Winfield did not seek to examine Mr. Oelschlagel. They have not provided expert opinions of their own.
[ 93 ] Lynn and Winfield also complain that the value of the two farms for capital gains purposes was determined without reference to the options to purchase under the wills. They say no willing buyer would pay full value because of these options. June’s position on this point is that the Income Tax Act deems transactions between non-arm’s length parties to occur at fair market value at the time the taxpayer disposes of the asset. June’s position appears to be supported in the evidence by a letter from Mr. Oelschlagel dated December 7, 2021 (see exhibit C to June’s affidavit dated February 17, 2022).
[ 94 ] I decline to give an opinion on whether June is personally liable for increased tax liabilities because this question because is not in the agreed statement of issues June did not address it in her materials. The issue would turn on both an assessment of the tax question and an assessment of the standard of care the law would impose on June. Regarding the standard of care, in clause 4(7) of his will, William specifically exonerates his trustee “from any responsibility with respect to any … elections … which may result in liability to my estate … if they act in good faith in the exercise of such power.”
[ 95 ] Lynn acknowledged in oral argument that I cannot fully address this issue but submitted I should take her concern into consideration in answering the questions or when assessing June’s entitlement to executor compensation. With this submission, Lynn effectively asks me to conclude that her complaints against June are valid. I cannot come to any conclusion on this point, so I specifically decline to take into consideration any alleged wrongdoing by June.
[ 96 ] Regarding executor compensation, Lynn’s position is that the issue of executor compensation needs to be decided together with the issue of June’s alleged negligence. That may be, but the issue of executor compensation is not in the agreed statement of issues. The range of considerations is broad, and the evidentiary foundation and argument is not sufficient to adequately address this issue. I offer no opinion on executor compensation.
What costs are payable out of the estate?
[ 97 ] Questions 8 and 9 in the agreed statement of issues ask whether the represented parties are entitled to costs in the applications. The question of costs was not addressed in the hearing. If the parties cannot resolve this issue, I will receive written submissions on costs, on a schedule and with page limits to be determined by the parties. If the parties cannot agree, they may write me, and I will set a timetable.
Chown J.
Released: April 14, 2025
Appendix A
Agreed Statement of Issues (with Answers)
DEFINITIONS
A. “ Edith ” – Edith Marie Stewart, deceased. Edith was the surviving spouse of William (defined below). Edith died on August 20, 2018;
B. “ Edward ” – Edward Murray Stewart, who is one of thirteen children of Edith and William and co-estate trustee of Edith’s estate;
C. “ Estate Expenses ” - estate expenses, debts and liabilities, including, but not limited to, property taxes in respect of the Winfield Farm and the Robert Farm, income taxes, Estate Administration Tax , and legal and accounting fees and costs;
D. “ Estate Trustee Loan ” – the personal loan provided by the estate trustee of William’s estate to William’s estate to pay various estate expenses, debts and liabilities, including property taxes in respect of the Winfield Farm and the Robert Farm, 2019, 2020, 2021 and 2022 income taxes, estate administration tax, and legal and accounting fees and costs;
E. “ Farm Implements ” – farm implements owned by William as at his death, including a 1986 John Deere combine;
F. “ June ” – June Hale, who is one of thirteen children of Edith and William, the estate trustee of William’s estate and co-estate trustee of Edith’s estate;
G. “ Lynn ” – Lynn Stewart, who is the surviving spouse of Robert (defined below);
H. “ Robert ” – Robert Wayne Stewart, who was one of thirteen children of Edith and William and, before his death, the co-estate trustee of William’s estate. Robert died on January 21, 2018;
I. “ Robert Farm ” – Lot 12 in the 7th Concession of the Township of Egremont in the County of Grey;
J. “ Robert Mortgage ” – on December 7, 1987, Robert gave a first mortgage over certain property to William (defined below), in order to secure a loan, having a principal sum of
$185,000 and bearing interest at the rate of 5% per annum;
K. “ Tax Liability ” – taxes and interests owing by William’s estate;
L. “ William ” – William Archibald Stewart, deceased. William predeceased his spouse Edith. William died on February 18, 1994;
M. “ William’s Will ” – Last Will and Testament of William executed February 20, 1989;
N. “ Winfield ” – Winfield Clayton Stewart, who is one of thirteen children of Edith and William; and
O. “ Winfield Farm ” – Lots 14 and 15 in the 9th Concession of the Township of Egremont in the County of Grey.
BY CONSENT OR NON-OPPOSITION ISSUES
- With respect to paragraph 3(c)(v) of William’s Will, “Shirley Hale” shall be interpreted as “Shirley Hayles”.
OPPOSED ISSUES
The Robert Mortgage
- With respect to the Robert Mortgage, did the assignment of the Robert Mortgage from William’s estate to Edith cause the specific gift to Robert to cancel and discharge the Robert Mortgage pursuant to William’s Will to fail? Yes. See paragraphs [44] to [53] above .
(a) If yes to question 2, is Robert’s Estate responsible for paying the Robert Mortgage to Edith’s Estate? Yes. See paragraph [54] above.
(b) If no to question 2, did Robert need to survive Edith in order to receive the gift under William’s Will to have the Robert Mortgage cancelled and discharged? Answer not required because the answer to question 2 is yes.
(c) If no to questions 2 and 2(b), then does the law of abatement apply such that the Robert Mortgage is required to be repaid to William’s estate to satisfy the debts of William’s estate, including the Tax Liability and the Estate Trustee Loan? Answer not required because the answers to question 2 and 2(b) are yes.
(d) If yes to questions 2(b) or 2(c), what terms are to be imposed on the Robert Mortgage? Answer not required because the answers to question 2(b) and 2(c) are not yes.
The Robert Farm and the Winfield Farm
- With respect to the Robert Farm, did Robert need to survive Edith in order to exercise the first right to purchase the Robert Farm as provided to him under William’s Will for $50,000? No. See paragraphs [28] to [43] above.
(a) If no to question 3, and the estate trustee of Robert’s estate makes an offer to purchase the Robert Farm at $50,000, is the estate trustee of William’s Estate required to accept that offer and sell the Robert Farm to Robert’s estate? No. See paragraphs [70] to [74] above.
(b) If yes to question 3, does Robert’s estate have an interest in the Robert Farm on basis of constructive trust, and if so, how much is that interest and what are the appropriate steps to be taken to satisfy that interest? Answer not required because the answer to question 3 is not yes. See paragraph [89] above.
(c) If yes to question 3(a) and/or 3(b), what rights does the estate trustee of William’s estate have in respect of the Robert Farm to satisfy the debts of William’s estate? See 3(c)(i) and 3(c)(ii) below.
i) Is the estate trustee of William’s estate authorized to mortgage the Robert Farm to satisfy the debts of William’s estate, including the Tax Liability and the Estate Trustee Loan? Yes. See paragraphs [70] to [74] above.
ii) Is the estate trustee of William’s estate authorized to sell the Robert Farm to satisfy the debts of William’s estate, including the Tax Liability and the Estate Trustee Loan? Yes. See paragraphs [70] to [74] above.
- If Winfield exercises the option to purchase the Winfield Farm pursuant to clause 3(c)(iii), what rights does the estate trustee of William’s estate have in respect of the Winfield Farm to satisfy the debts of William’s estate? The trustee has a discretion to sell, mortgage, or otherwise raise funds from the farms or to enter into an arrangement with Robert’s estate or Winfield (or both of them) that allows them to receive the farms but also allows the estate to pay all its debts. See paragraphs [70] to [74] above.
(a) Is the estate trustee of William’s estate authorized to mortgage the Winfield Farm to satisfy the debts of William’s estate, including the Tax Liability and the Estate Trustee Loan? Yes. See paragraphs [70] to [74] above.
(b) Is the estate trustee of William’s estate authorized to sell the Winfield Farm to satisfy the debts of William’s estate, including the Tax Liability and the Estate Trustee Loan? Yes. See paragraphs [70] to [74] above.
(c) If yes to question 4(a) and/or 4(b), does Winfield have an interest in the Winfield Farm on the basis of constructive trust, and if so, how much is that interest, what are the appropriate steps to be taken to satisfy that interest and does that interest affect the estate trustee of William’s estate ability to mortgage and/or sell the Winfield Farm? No. See paragraphs [85] to [88] above.
- If the estate trustee of William’s estate is authorized to mortgage and/or sell both the Robert Farm and the Winfield Farm, does the estate trustee have to mortgage and/or sell one property in priority to the other, and if so, which property? No. See paragraph [73] above.
(a) Following the sale (if any) of the Winfield Farm and/or the Robert Farm, and after the payment of debts of William’s estate including the Tax Liability and the Estate Trustee Loan, to whom are the remaining proceeds of sale (if any) payable? To Winfield and to Robert’s Estate, respectively. See paragraph [81] to [84] above.
(b) Is the estate trustee permitted to holdback a certain amount (and if so, in what amount and for how long) of the funds generated from the mortgage and/or sale of either or both the Robert Farm and Winfield Farm to pay future Estate Expenses. These questions were not addressed in any party’s factum or in oral argument. However, my preliminary views would be: (1) yes, the estate is permitted to holdback an amount until a final CRA clearance certificate issues; and (2) the trustee has a discretion regarding the amount and duration. These comments are subject to further submissions if required. If these questions require an answer and the parties cannot agree, they may arrange a further hearing to address the issue.
Others
Is the gift of Farm Implements to Robert pursuant to paragraph 3(c)(ii) of William’s Will conditional such that the Farm Implements shall continue to be made available for use by William’s sons engaged in the operation of a farm practice? No. See paragraphs [28] to [43] above.
Does Winfield owe William’s estate any funds on account of unpaid rent, property tax, and/or insurance in respect to the Winfield Farm, and if so what is the quantum of same? Yes. See paragraphs [75] to [80] above.
Costs
Should June and Edward be reimbursed out of William’s estate and/or Edith’s estate on full indemnity basis of their costs of, and incidental to, the consolidated applications? If the parties cannot agree on the costs issues, this will need to be addressed in writing or in a further hearing. See paragraph [97] above.
Should Lynn and/or Winfield receive his/her costs of, and incidental to, the consolidated applications out of William’s estate? If so, in what amounts? If the parties cannot agree on the costs issues, this will need to be addressed in writing or in a further hearing. See paragraph [97] above.
Appendix B – William’s Will
