Mark Twain once said “Better a broken promise than none at all.”
Something tells me Mr. Twain’s legal counsel would have strongly disagreed…
In a recent case before the Ontario Superior Court of Justice in Milton, the Honourable Justice Trimble addressed “broken promises,” preservation orders, as well as the test to be applied in order to determine whether a fund will be ordered secured. In Darlington v. Bernard, the Respondent, Lina Bernard (“Ms. Bernard”) was the common law spouse of Allan Darlington (“Mr. Darlington”) for nine years prior to his death on January 15, 2017. Ms. Bernard stated that over the course of their relationship she nursed Mr. Darlington through a long illness, kept house for him, and provided personal support worker services. Ms. Bernard subsequently commenced an application against the Estate of Allan Darlington under Succession Law Reform Act (“SLRA”) based on the following:
- Breach of Contract: Mr. Darlington allegedly promised her: that the house would be hers after his death; that he would always keep a roof over her head; and that he would take care of her for her life.
- Quatum Meruit: Ms. Bernard allegedly provided nursing, housekeeping and personal support worker services to Mr. Darlington for their time together, the value of which she says exceed $500,000.
- Dependent Support: Bernard stated that she was dependent on Mr. Darlington, for whom he made no provision in his Will.
In her pleadings, Ms. Bernard did not claim a non-dissipation order under sections 12 or 40 of the Family Law Act or under section 59 of the SLRA, rather, Ms. Bernard’s claim for a non-dissipation order was advanced under Rules 45 and 75.06(3)(g) of the Rules of Civil Procedure, and the inherent jurisdiction of the Court.
On November 29, 2017, Ms. Bernard sought a preservation order over the assets of the Estate pending determination of her claims against the Estate. At the time, the main asset of the Estate was the value of the deceased’s condominium, which was for sale. By the date of the Motion, Ms. Bernard had vacated the property and had agreed to the sale of the condominium. In effect, Ms. Bernard gave up any possessory claim she may have had in satisfaction of the alleged promise by the deceased that he would always keep a roof over her head.
On January 2, 2018, Justice Trimble dismissed Ms. Bernard’s claim for a non-dissipation order and stated that the power of the Court to grant a non-dissipation order under rule 75.06(3)(g) of the Rules of Civil Procedure was a residual power not to be used where another rule more specifically applies. In this case, Justice Trimble noted that Rule 45 of the Rules of Civil Procedure specifically addressed interim preservation orders and was appropriate in the circumstances.
Rule 45.02 of the Rules of Civil Procedure applies to the preservation of a fund of money and provides the Court with wide jurisdiction to order that a specific fund, or any portion of a fund, be secured or paid into court where the right of a party to the fund is in question. The test to be applied to the question of whether a fund will be ordered secured, commonly referred to as the Moranis test, has three elements:
- The party must claim an interest in the specific fund (a claim for damages will not suffice);
- There is a serious issue to be tried; and
- The balance of convenience favors granting the order.
The Court of Appeal in Moranis stated that Rule 45.02 must be “construed as a limited exception to the law’s deep-seated aversion to providing a plaintiff with execution before trial because such an order interferes with a party’s legal disposition of assets and constitutes a serious interference with the defendant’s affairs.” In his decision, Justice Trimble noted that interference may be justified where the plaintiff’s right is specifically related to the asset in question. Where the plaintiff asserts a general claim and looks to the assets only as a means of satisfying a possible monetary judgment against the defendant, interference with the defendant’s assets is more difficult to justify. Ultimately, the fund will be secured where it is “earmarked to the litigation.”
The Moranis test is not met where a plaintiff’s claim is for damages. In Assante Financial Management Ltd. v. Dixon, the Honourable Justice Wilton-Siegel stated that “there is a subtle but important difference between an amount that may be owing to the plaintiff and a “right” of the plaintiff to a fund”. Where the Moranis test is met, the preservation order secures the specific fund claimed by the plaintiff pending the outcome of the litigation. It should be noted that a preservation order is distinguishable from a Mareva injunction (with its even stricter test), where the defendant is restrained from dealing with its own assets pending trial even though the plaintiff is not asserting a legal right to any of those assets.
After careful consideration, Justice Trimble determined that Ms. Bernard’s claim, to the extent that it was for breach of contract and quantum meruit, was a claim for damages, and therefore failed to meet the Moranis test. With respect to Ms. Bernard’s claim for support as a dependant, the Honourable Justice Trimble stated that the affidavit evidence put forth by Ms. Bernard was insufficient as to the value of her dependency claim and that Ms. Bernard did not adequately assist the court in determining how much was “earmarked to the litigation”. In his written decision, Justice Trimble also specifically stated that there was a clear prejudice to the beneficiaries in holding up the distribution of all of the Estate’s assets while Ms. Bernard’s claim was ongoing and that it was not appropriate to freeze the whole of the Estate’s assets unless it was abundantly clear that the whole of the Estate’s assets might be required to satisfy any obligation the Estate may have to Ms. Bernard.
Accordingly, Justice Trimble denied the entirety of the relief sought by Ms. Bernard…despite the promise made by Mr. Darlington.
 Darlington v. Bernard, 2018 CarswellOnt 27, 2018 ONSC 162, 287 A.C.W.S. (3d) 744.
 Moranis Realty Corp. v. 1667038 Ontario Inc., 2011 ONSC 671 (Ont. Div. Ct.), aff’d 2012 ONCA 475(Ont. C.A.) [“Moranis”].
 Supra note 1.
 Kelowna Flightcraft Air Charter Ltd. v. Kales Group BV2016 CarswellOnt 20104, 2016 ONSC 8015, 274 A.C.W.S. (3d) 743.