Reasons for Judgment
Court File No.: CV-24-86
Date: 2025-01-22
Ontario Superior Court of Justice
Between:
Mary Patricia Campbell in her personal capacity and as the Estate Trustee of the Estate of Donald Wayne Campbell (Applicant)
– and –
Hessie Kipfer (Respondent)
Appearances:
M. Paul Morrissey, for the Applicant
Philip B. Cornish, for the Respondent
Heard: December 4, 2024 by videoconference, virtually at Goderich
Introduction
1This application raises the following central issue: does a person who intends to make a claim against an estate for unjust enrichment, arising out of services rendered to the deceased, have standing to file a Notice of Objection to the granting of a Certificate of Appointment of the Estate Trustee under r. 75.03 of the Rules of Civil Procedure, and seek removal of the Estate Trustee named in the will?
Overview
2Donald Wayne Campbell (“Wayne”) was married to the applicant Mary Patricia Campbell (“Pat”) in 1981. They separated in 2009, but it was an amicable one. For the 14 years that followed the separation until Wayne’s death on September 21, 2023, they continued to co-own property and operated a business together. They co-parented their four children together. They never entered into a separation agreement, and never divorced.
3Wayne’s last known Will and Testament was executed by him in “January, 1994”. The will does not bear the day of the month of execution, but the Affidavit of Execution that accompanies it, sworn by one of the witnesses David Rowcliffe, states that it was executed on January 21, 1994.
4The will names Pat as the sole executor and sole beneficiary of his estate. There is no evidence that Wayne ever changed his will.
5The respondent (“Hessie”) was in a relationship with Wayne for approximately 6 years before his death. Six months prior to his death, she moved in to live with him at his home. Pat is still a co-owner of that home, along with Wayne.
6Hessie continued to live in the home following Wayne’s death. She would not agree to a departure date, so proceedings were commenced for a writ of possession. The parties settled this dispute and she agreed to move out in April, 2024, meaning that she was allowed to reside in the house for as long after Wayne’s death as before he died. Pat did not pursue costs of that application against Hessie.
7On August 8, 2024, Pat filed an Application for a Certificate of Appointment of Estate Trustee with the Superior Court in Goderich. The estate is estimated to have a value of around $16 million, and thus a cheque for $242,000 was submitted to the court to cover estate administration tax. However, the cheque has not yet been cashed, because administration of the estate has stalled as a result of a Notice of Objection that was filed by Hessie on September 20, 2023.
8The Notice of Objection was dated September 7, 2024, and filed pursuant to r. 75.03(1). In it, Hessie states that she objects to issuance of the certificate of appointment “on the basis that Patricia Campbell has a conflict of interest in acting in the capacity of Estate Trustee and also being a beneficiary of the Estate, because I am advancing a claim against the Estate based on constructive trust and unjust enrichment as the former common-law partner of the Deceased, Donald Wayne Campbell.”
9She continues: “As a beneficiary of the Estate of Donald Wayne Campbell, any interest in the Estate to which I am entitled represents a reduction in the entitlement of Patricia Campbell, and therefore it is impossible for her to objectively administer the Estate.”
10The Notice of Objection has interfered with the orderly administration of the estate. Because issuance of the Certificate of Appointment has been stalled, routine steps that need to be taken to administer the estate cannot be taken. For example, the estate’s first T3 estate return is due one year and ninety days after Wayne’s death, which is December 21, 2024. In that return, the estate trustee is required to make a Graduated Rate of Return election in order to obtain a lower tax rate. None of that has been done due to the filing of the Notice of Objection.
11Accordingly, Pat has brought this application for an order under r. 75.03(2) removing the Notice of Objection, on the basis that Hessie has no standing to file it, and that it has been filed for an improper reason.
12Hessie’s position is simple. She argues that she is entitled to file the Notice of Objection because she “appears to have a financial interest in the estate”, within the meaning of r. 75.03(1).
13Pat argues that the caselaw is clear that the category of persons having standing to file a Notice of Objection under r. 75.03(1) is limited to those whose claims turn upon the outcome of a challenge to the will or a challenge to the issuance of a certificate of appointment. Potential creditors of the estate, as someone bringing a quantum meruit claim against it for services rendered would be, have never been granted standing to interfere with the administration of the estate, or dictate who should or should not be the estate trustee. She points out that Hessie is quite free to bring an action against the estate to pursue her claim, and has encouraged her to do so, but submits that it is improper for her, or any creditor, to hold up the due administration of the estate.
14Furthermore, the Notice of Objection is based on the allegation that Pat is in a conflict of interest, as being the sole beneficiary as well as the estate trustee. Pat argues that the duty of an estate trustee is to maximize the assets of the estate for the benefit of the beneficiaries, and to scrutinize any claims made against the estate and put creditors to the strict proof thereof where necessary and advisable. The fact that she, as sole beneficiary, will be paying any successful claim made against the estate does not create a conflict of interest. Indeed, since any money paid will ultimately be coming out of her pocket, she has precisely the same interest in scrutinizing any claims made against the estate and ensuring they are supported by adequate proof as does the estate trustee.
Analysis
15The parts of r. 75.03 that are relevant for purposes of this application are subrules (1) and (2), which read as follows:
75.03 (1) At any time before a certificate of appointment of estate trustee has been issued, any person who appears to have a financial interest in the estate may give notice of an objection by filing with the court a notice of objection (Form 75.1), signed by the person or the person’s lawyer, stating the nature of the interest and of the objection.
(2) A notice of objection expires three years after it is filed and may be withdrawn by the person who filed it at any time before a hearing for directions under rule 75.06 in an application for the certificate or may be removed by order of the court.
16The applicant is seeking an order that the Notice of Objection be removed by order of the court, pursuant to subrule (2).
17Hessie argues that she has a “financial interest” in the estate because she intends to make a constructive trust claim against it, for services rendered to the Campbell farm operation. She attaches to her affidavit sworn December 3, 2024 a letter from her counsel, Mr. Cornish, dated October 5, 2024, which provides details of her claim. She claims to have done the following:
- Chopped corn stalks after harvest for 4 seasons;
- Painted and cleaned out chicken barns, along with feeding when she was there;
- Mowing the lawn;
- Sanding and painting some commercial containers;
- Painting the auger pipes of the corn dryer;
- Helping to erect and repair fencing, and spraying for weeds;
- Rock picking in the fields;
- Gardening and pool maintenance;
- Some interior house painting;
- General household cleaning chores; and,
- Pick up and delivery of parts, equipment and trucks for the business.
18She claims to have contributed 30 to 40 hours per week of unpaid work for nearly 5 years, which she values at between $150,000 and $200,000, and seeks compensation in the latter amount. This is a classic unjust enrichment claim arising from a common law relationship, as discussed in the leading case of Kerr v. Baranow, 2011 SCC 10, in which a spouse seeks a monetary award based on quantum meruit.
19She relies on Smith v. Vance, 1997 CarswellOnt 1554, [1997] O.J. No. 6534 (Ont. Gen. Div.(Div. Ct.)) in support of her position that the existence of her claim means that she appears to have a “financial interest” in the estate, and therefore has standing to file a Notice of Objection. In an often-quoted passage from that case, Sills J., speaking for the court, said the following, at paras. 9-11:
Financial interest is not defined in the Rules of Civil Procedure. In the absence of any limiting definition, those words must be taken in their natural meaning of an interest by way of money or property or other assets having monetary value. Blacks Law Dictionary (5th Edition) defines financial interest as:
An interest equated with money or its equivalent.
With respect to both Rule 75.03(1) and s. 23 of the Estates Act, where the stated interest is clear and obvious (for example, the claimant is a named beneficiary), there should be no difficulty recognizing the status of that person as a party. Different considerations apply where the claimant is one who pretends to have an interest. The word pretend is not to be interpreted as claiming or professing falsely or deceptively but rather as alleging or laying claim to an interest in law. One who pretends to have an interest is not required to prove that he or she has a financial interest before being permitted to become a party under s. 23 of the Estates Act. If such were the case, the inclusion, within s. 23 of entitlement of those persons pretending to have an interest would be redundant and superfluous.
However, claimants must do more than simply assert an interest. They must present sufficient evidence of a genuine interest and meet a threshold test to justify inclusion as a party. It need not be conclusive evidence at that stage but must be evidence capable of supporting an inference that the claim is one that should be heard.
If the evidence offered by an objector is capable of supporting an inference that the claim raises a genuine issue and thus is one that should be heard, the objector is entitled to standing and should be granted permission to be added as a party. Claimants passing that threshold test should not be denied status simply because they cannot produce a copy of the will under which they claim to be a beneficiary or because of the perceived difficulty of setting aside a will or series of wills on grounds of incapacity. The onus of proof on the issue of capacity is upon the persons propounding the will or wills in question and that onus passes to the objector only with respect to proof of a lost or destroyed will.
20It is important that this decision be read in context. The objectors were beneficiaries under an earlier will of the deceased, which was destroyed by one of the witnesses to the new will, on the instructions of the deceased. As the court pointed out at para. 4, “[i]t is through this earliest destroyed will that the appellants claim a financial interest in the estate.” The court’s decision focussed on the sufficiency of evidence that must be put before the court to be granted standing. They did not address what category of claimant would be entitled to seek standing, other than by noting that it would include a named beneficiary, or one who claims to be a beneficiary under a prior will, or whose entitlement depends on whether a will or a series of wills can be set aside on the grounds of incapacity.
21However, there is a strong line of authority that does squarely address this issue. In HSBC Bank Canada v. Capponi Estate, 2007 CarswellOnt 5822 (S.C.J.), Daley J. was dealing with an application by a creditor, the HSBC bank, that was seeking to recover on a guarantee that had been executed by the deceased. The bank attempted to use Rules 74 and 75 to, among other things, remove the Estate Trustee. In denying standing to the bank, Daley J. held that these rules were not intended to be used by creditors to secure recovery of assets within the estate.
22He relied on the decision of Haley J. in Belz v. Mernick Estate (2000), 42 C.P.C. (4th) 357 (Ont. S.C.J.) in arriving at that conclusion. He noted at the outset that these rules came into force on January 1, 1995 following the work of the Haley Committee, of which Haley J. was the chair. In Belz, judgment had been obtained by a creditor against the residuary beneficiary under a will. The judgment creditor instituted proceedings under Rules 74 and 75 for directions concerning the procedure for ascertaining entitlement of the residuary beneficiary under the will, and for directions requiring the executors to file information with the court.
23As to whether the judgment creditor had a “financial interest” in the estate so as to give them standing to bring proceedings under these rules, Daley J. quoted, at para. 17, the following passages from Belz:
While it is true that the applicant as a judgment creditor may have a “financial interest” in the estate of Belle Mernick I think that interest can be more precisely expressed as an interest in the beneficial interest which Stephen Mernick has in the estate of Belle Mernick. It is a derivative interest arising out of the judgment debt but is not an interest in the estate in any sense similar to the “financial interest” referred to in rule 75.06.(1).
When one examines the structure of Rule 74 and 75 which pertain to estates one sees that Rule 74 is concerned with application for probate of wills and estate administration where there is no will and to that end provides for a person having, or appearing to have, a financial interest in a estate to, inter alia, oblige an executor to probate or renounce probate of a will, produce information about estate assets and to account. There is nothing which allows the court to interfere and make directions about the administration of the estate until there is a passing of accounts. Rule 75 is directed at attacks on the validity of a will or a probate document put forward as a last will. It does not deal with the administration of the estate by the estate trustee. The issues which are referred to under rule 75.06 relate to issues concerning the validity of the will and not to determination of financial interests under the will.
As Mr. Schnurr points out to construe the kind of financial interest which the applicant has in Stephen Mernick’s share of the Mernick Estate to find the applicant is a person with a financial interest in the estate for the purposes of Rules 74 and 75 would introduce complexities, if not chaos, in the estate procedures never envisaged by those rules. He asks would a judgment creditor in the situation of the applicant have to be served with a Notice of Application for a Certificate of Appointment? with a motion giving directions regarding the validity of a will in order that he be bound by the judgment making that determination? How would the estate trustee ascertain who should be served? He points out that the judgment debtor in the applicant’s situation is not a creditor of the estate in the sense of a creditor who is given rights under the Estates Act to apply for probate in certain circumstances. The applicant is a creditor of a beneficiary and is not entitled to the rights accorded a cestui que trust to whom the estate trustee is in a fiduciary position.
24Daley J. noted at para. 18 that, in the case before him, the HSBC had a more “direct relationship” to the estate of Ronald Joseph Capponi than the claimant in the Belz decision, which I infer relates to the fact that the claim was against the deceased himself, and hence against his estate, as opposed to a claim against a beneficiary of the estate as in Belz. Nevertheless, he ruled that HSBC had no standing to make use of Rules 74 and 75. He also noted that Belz had been followed in W. (L.A.) v. Children’s Aid Society of Rainy River (District), [2005] O.J. No. 1446 (S.C.J.).
25This line of authority was extended by Charney J. in Weidenfeld v. Weidenfeld Estate, 2016 ONSC 7330. There, the claimant was the divorced former husband of the deceased Hana. Like the case at bar, his claim was one of constructive, resulting or implied trust relating to Hana’s house, of which she was the sole registered owner.
26Charney J. considered HSBC and Belz as standing for the proposition that a person who “appears to have a financial interest in an estate” within the meaning of Rules 74 and 75 “does not include persons who are creditors of estate beneficiaries or persons who have separate law suits against the estate.” (para. 18)
27He reasoned as follows, at paras. 20-21:
In the book MacDonnell Sheard and Hull Probate Practice, Fifth Edition, the authors state (at p. 38):
Rule 75.06(2) requires that the application for directions and the motion for directions must be served on all persons appearing to have a financial interest in the estate or as the court directs . . . It would seem that unless the court otherwise directs, “persons having a financial interest in the estate” would be those persons named as beneficiaries in the will in question and all previous wills and those entitled on an intestacy.
Robert is not named as a beneficiary in the will. While a financial interest includes an interest in the event of intestacy where there is a challenge to the will (McLaughlin v. McLaughlin, 2015 ONSC 3491 at para. 27), since Robert and Hana were divorced in 1995, he does not have any interest even in the event of intestacy. Even if Robert was a beneficiary under a will before the divorce in 1995 (and there is no evidence before me that he was) a bequest to a former spouse is revoked upon divorce (Succession Law Reform Act, R.S.O. 1990, c. S.26, s.17(2)). Robert’s claim to a financial interest appears to be based exclusively on his several outstanding legal claims against Hana and her estate. Accordingly, as in the Capponi case, Robert’s financial interest has not crystallized, and he does not qualify as a person with a financial interest within the meaning of Rule 75.06.
28Accordingly, Charney J. held that the claimant had no standing to proceed under Rule 75.
29If further authority were needed, it can be found in Moses v. Moses, 2021 ONSC 587, a decision of Cavanagh J. The claimant in that case was Reuben, the son of the deceased, who sued the estate claiming a propriety interest in the business and property of the deceased and his corporations. His claim was based on alleged promises given by his father that, upon his death, Reuben would own the entire business and 50% of the property. Rueben brought an application under r. 75.06 seeking a declaration that the 2019 will of the deceased was invalid. The Estate Trustee submitted that Reuben was not a person who “appeared to have a financial interest” in the estate and therefore lacked standing to challenge the will.
30After reviewing Smith v. Vance and other authorities, Cavanaugh J. considered a decision from the Saskatchewan Court of Appeal that dealt with the issue of standing, Adams Estate v. Wilson, 2020 SKCA 38. In that case, the applicant claimed he had orally agreed to work for the deceased’s ranching operation on a full-time, ongoing basis, and that the deceased agreed that he would inherit her ranching operation when she died. The deceased made a will, but did not leave her estate to the applicant. The applicant brought a motion to have the will declared invalid.
31While the judge at first instance granted standing to the applicant, this was reversed by the Saskatchewan Court of Appeal. That court explained that the concept of standing implies that a claimant who asserts standing has “something to gain” from the proceedings. At para. 25, Cavanaugh J. quoted para. 77 from Adams:
To conclude my analysis of the phrase who is or may be interested in Rule 16-46, this phrase properly interpreted requires that the interest or possible interest implicated by the Rule be one arising out of or be intrinsically connected to the estate and the devolution of the deceased’s property. The interest must be a legal or financial one. The person claiming standing must have a stake in, and be affected by, the outcome of any challenge to the will.
32At para. 26 he summarized the decision of the Court of Appeal as follows:
The Saskatchewan Court of Appeal in Adams Estate held that the applicant had nothing to gain by creating an intestacy and, as a result, he lacked standing to bring the application to challenge the deceased’s Will. The appeal was allowed.
33Cavanaugh J., at para. 44, similarly found that Reuben had nothing to gain by challenging the will, because if it turned out to be invalid, the prior will would prevail, which also disentitled him to any inheritance:
Reuben has not presented evidence that is capable of supporting an inference that the 1996 Will is not authentic or that it is invalid for any reason. If the 2019 Will were found to be invalid, the 1996 Will would apply and, under this Will, Aby also left his entire estate to Rosy. Reuben has failed to satisfy the low threshold of presenting sufficient evidence to support an inference that he appears to have a financial interest in Aby’s estate.
34Accordingly, he concluded that Reuben did not have standing to bring an application under r. 75.06(1).
35An appeal of that decision was dismissed by the Ontario Court of Appeal: 2021 ONCA 662. The court said the following, in part, at paras. 8 and 9:
The application judge also found that the appellant’s civil action based on proprietary estoppel did not give him standing to challenge the 2019 Will pursuant to s. 23 of the Estates Act, where he would otherwise have no standing to do so. The outcome of the civil action did not depend on the validity of the 2019 Will.
We see no error in the application judge’s reasons…
36Applied to the case at bar, I draw the conclusion that Hessie’s constructive trust claim does not give her standing to challenge the will nor to challenge the appointment of the Estate Trustee and seek her removal. She has nothing to gain by challenging the will, since she would not be a beneficiary on an intestacy. She also has nothing to gain or lose by the choice of the Estate Trustee, since it has no legal relevance to the validity of her constructive trust claim. It will stand or fall based upon the evidence to support it, and not upon whether Pat or someone else is the Estate Trustee.
37Counsel for Hessie has provided no authorities to challenge this analysis. Indeed, in every case relied upon by her, the entitlement to standing of the person filing the Notice of Objection was obvious, in that they all had a potential interest in the estate, either as a beneficiary under a former will who would benefit from a finding of invalidity of the current will, or a person who would be a beneficiary under an intestacy. None of those authorities stand for the proposition that a potential creditor has standing to file a Notice of Objection under r. 75.03.
38Indeed, one of the cases relied upon by Hessie actually supports the position taken by the Estate Trustee, above. In Liu v. Coptic Orthodox Patriarchate of Alexandria, 2022 ONSC 6750, the objector, Ms. Liu, was the common law spouse of the deceased, who sought to challenge a hand-written will he made. Given the fact that she was not married to the deceased, she would not have been a beneficiary on an intestacy. However, she claimed she had a financial interest in the estate in two ways: first, that she was contemplating a proprietary estoppel claim against the estate; and second, that she had incurred funeral expenses of almost $14,000 for the deceased, which had not been reimbursed.
39Bordin J. dismissed both of those arguments at paras. 59 and 61, finding that her likely proprietary estoppel claim was not sufficient to create standing, nor was the fact that she was owed money by the estate.
40The other cases relied upon by Hessie are as follows:
- Martin Estate v. Martin, 2018 ONSC 1840 (objector was a beneficiary under the will, alleging undue influence)
- Joma v. Palma Estate, 2019 ONSC 6788 (objector would have been a beneficiary on an intestacy and challenged the will based on testamentary capacity and undue influence)
- Tibbutt v. Dorrington, 2024 ONSC 522 (objectors challenged will on basis of testamentary capacity, and would have shared on an intestacy, since there was no prior will)
- Denny v. Denny, 2022 ONSC 3267 (objector is son of both deceased [his parents] challenging mother’s will for lack of testamentary capacity and undue influence by his brother)
41A court has jurisdiction to summarily remove a Notice of Objection pursuant to s. 75.03(2): Maloney v. Maloney, 2019 ONSC 5632 at para. 25.
42I find that Hessie is not a person who appears to have a financial interest in the estate, within the meaning of that phrase in r. 75.03, as interpreted by the applicable caselaw. Accordingly, she has no standing to file a Notice of Objection under that rule, and an order will go under r. 75.03(2) that it shall be removed.
43This does not leave Hessie without any remedy. She is fully entitled to commence a lawsuit against the estate and attempt to prove her unjust enrichment/constructive trust claim. It is puzzling why she has not done so to date. What she is not entitled to do, as a mere potential creditor of the estate, is interfere with the due administration of the estate, and attempt to dictate who will or will not be the Estate Trustee.
44Furthermore, even if Hessie had standing to file the Notice of Objection, it is plain and obvious that the grounds of her objection have no merit.
45The basis upon which Hessie objects to Pat receiving a Certificate of Appointment of Estate Trustee is that Pat is in an alleged “conflict of interest”. It is alleged that her duties as Estate Trustee are incompatible with her status as sole beneficiary, because any money that Hessie recovers will be coming out of funds that would otherwise go to Pat.
46A conflict of interest generally arises where a trustee cannot fulfill their duties as trustee to investigate and defend a claim against the estate because it is the trustee, in his or her personal capacity, who will be advancing the claim: [Kostiw Estate (Re), 2007); Re Lithwick et al. and Lithwick (1976); Thomasson Estate (Re), 2011 BCSC 481; Re Becker (1986).
47No such conflict arises here. The Estate Trustee has a duty to maximize the assets of the estate for the benefit of the beneficiaries, and to scrutinize any claims made against the estate. Where the validity of a claim against the estate is not clear, the Estate Trustee has the duty to challenge the claim and put the claimant to the strict proof thereof. The fact that Pat, as sole beneficiary, will be paying any successful claim made against the estate does not create a conflict of interest. Since any money paid will ultimately be coming out of her own pocket, she has precisely the same interest in scrutinizing any claims made against the estate and ensuring they are supported by adequate proof as does the Estate Trustee.
48Furthermore, it is common for the sole beneficiary in a will to also be appointed as the Estate Trustee, because it simplifies administration of the estate, and avoids having the beneficiary’s bequest being reduced by executor’s fees paid to a third party. If a creditor was entitled to demand the removal of an Estate Trustee anytime that same person was a residual beneficiary, our courts would quickly be overcome with such applications, with chaotic results.
49The Ontario Court of Appeal has made it clear that the court should not lightly interfere with a testator’s choice of the person to act as his or her estate trustee. They should be reluctant to pass over a named trustee unless “there is no other course to follow”: Chambers Estate v. Chambers, 2013 ONCA 511 at para. 95. Hessie’s claim of a conflict of interest comes nowhere near meeting that very high bar.
50I encourage the parties to resolve the issue of costs, as they have already been able to do regarding Hessie vacating the residence owned by Pat and the estate. If they are unable to do so, a costs outline has been filed by Mr. Morrissey on behalf of Pat, but Mr. Cornish has not done so on behalf of his client, nor have any submissions been made on the issue of costs. I will accept brief written submissions from Mr. Morrissey within 15 days, with Mr. Cornish’s response within 10 days thereafter, and any reply within 5 days thereafter. Failing that, the parties will be deemed to have resolved the issue of costs as between themselves.
T. A. Heeney
Released: January 22, 2025