Did the Superior Court expand the doctrine of donatio mortis causa to apply to real property?
Altman v. Nicholson Estate: 2017 ONSC 2566 (CanLII): http://canlii.ca/t/h3cn9
Altman v Nicholson Estate, 2017 ONSC 2566 is a decision of the Honourable Justice Tranmer on a motion to determine a question of law raised by the Plaintiffs’ Statement of Claim under Rule 21.01(1)(a)[1] with respect to a gift mortis causa.[2] The Defendants submitted that the Statement of Claim did not disclose a cause of action that would support the relief sought by the Plaintiffs.
The dispute at issue between the parties was related to the rightful ownership of cottage land that was held by the deceased. The Plaintiffs argued that pursuant to section 10 of the Statute of Frauds, the cottage property was rightfully theirs by virtue of the doctrines of proprietary estoppel, donatio mortis causa or constructive trust. The Defendants, on the other hand, held that the property at issue remained within the estate of the deceased, and in the absence of evidence in support of proprietary estoppel and constructive trust, and based on evidence in support of the absence of a gift mortis causa, the court ought to determine the issue of the property ownership before trial.
In his decision, Justice Tranmer agreed with the Defendants that the Statement of Claim did not plead trust, proprietary estoppel, unjust enrichment or detrimental reliance. With regards to the issue of whether the cottage was a gift mortis causa, the court found that the evidence which supported the Defendants’ contention was found in the Statement of Claim, which plead that the deceased decided that she could not or would not convey the property at issue because of a capital gains tax liability.
In order for a gift mortis causa to be valid, three requirements must be met.[3] First, the gift must be made in contemplation, but not necessarily in the expectation, of the donor’s death. Second, the gift must be delivered to the donee, although constructive delivery is permitted in appropriate circumstances. Finally, the gift is dependent on the donor’s death, and can thus be revoked by the donor at any time, while he or she is alive.
The Honourable Justice Tranmer found that, based on the fact that the deceased did not wish to convey the cottage property, the property was not the subject of a valid gift mortis causa. Justice Tranmer, therefore, concluded that it was plain, obvious and beyond doubt that the claim set out in the Statement of Claim could not succeed[4], and he thus granted the relief sought by the Defendants, pursuant to Rule 21.01(1)(a).
This case is particularly interesting in that it appears to diverge from the line of cases that suggest that the doctrine of donatio mortis causa does not apply in the context of real estate.[5] For example, in Snitzler v Snitzler, the court summarized the case law with respect to the doctrine and its application to real estate, and found that real property is not properly the subject of a gift mortis causa because any conditional intent can be both determined and recorded in an enforceable manner.[6] As Justice Tranmer’s only enumerated reason for determining that the cottage property was not the subject of a valid donatio mortis causa was that the deceased did not wish to convey the property for tax reasons, it is unclear whether Justice Tranmer was of the view that the doctrine applies to real property. Thus, it is uncertain if, in the future, this doctrine could be used to determine the validity of a gift consisting of real estate.
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[1] Rules of Civil Procedure, RRO 1990, Reg 194, r 21.01(1)(a): “A party may move before a judge, (a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs, and the judge may make an order or grant judgment accordingly.”
[2] A donatio mortis causa is gift in contemplation of death.
[3] Albert H Oosterhoff et al, Oosterhoff on Wills, 8th ed (Toronto: Thomson Reuters/Carswell, 2016), 166.
[4] Elbaum v York Condominium Corp No 67 2014 ONSC 1182 at para 14, 238 ACWS (3d) 1055.
[5] Snitzler v Snitzler, 2015 ONSC 2539, 254 ACWS (3d) 226; Sorenson’s Estate v Sorenson, 1977 CanLII 1648, 90 DLR (3d) 26 (Alta CA); Danicki v Danicki, [1995] OJ No 3995, 1995 CarswellOnt 3630 (Ont Ct J (Gen Div)).
[6] Snitzler v Snitzler, 2015 ONSC 2539 at para 26, 254 ACWS (3d) 226.
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Written by: WEL Partners
Posted on: July 30, 2017
Categories: Commentary, WEL Newsletter
Altman v. Nicholson Estate: 2017 ONSC 2566 (CanLII): http://canlii.ca/t/h3cn9
Altman v Nicholson Estate, 2017 ONSC 2566 is a decision of the Honourable Justice Tranmer on a motion to determine a question of law raised by the Plaintiffs’ Statement of Claim under Rule 21.01(1)(a)[1] with respect to a gift mortis causa.[2] The Defendants submitted that the Statement of Claim did not disclose a cause of action that would support the relief sought by the Plaintiffs.
The dispute at issue between the parties was related to the rightful ownership of cottage land that was held by the deceased. The Plaintiffs argued that pursuant to section 10 of the Statute of Frauds, the cottage property was rightfully theirs by virtue of the doctrines of proprietary estoppel, donatio mortis causa or constructive trust. The Defendants, on the other hand, held that the property at issue remained within the estate of the deceased, and in the absence of evidence in support of proprietary estoppel and constructive trust, and based on evidence in support of the absence of a gift mortis causa, the court ought to determine the issue of the property ownership before trial.
In his decision, Justice Tranmer agreed with the Defendants that the Statement of Claim did not plead trust, proprietary estoppel, unjust enrichment or detrimental reliance. With regards to the issue of whether the cottage was a gift mortis causa, the court found that the evidence which supported the Defendants’ contention was found in the Statement of Claim, which plead that the deceased decided that she could not or would not convey the property at issue because of a capital gains tax liability.
In order for a gift mortis causa to be valid, three requirements must be met.[3] First, the gift must be made in contemplation, but not necessarily in the expectation, of the donor’s death. Second, the gift must be delivered to the donee, although constructive delivery is permitted in appropriate circumstances. Finally, the gift is dependent on the donor’s death, and can thus be revoked by the donor at any time, while he or she is alive.
The Honourable Justice Tranmer found that, based on the fact that the deceased did not wish to convey the cottage property, the property was not the subject of a valid gift mortis causa. Justice Tranmer, therefore, concluded that it was plain, obvious and beyond doubt that the claim set out in the Statement of Claim could not succeed[4], and he thus granted the relief sought by the Defendants, pursuant to Rule 21.01(1)(a).
This case is particularly interesting in that it appears to diverge from the line of cases that suggest that the doctrine of donatio mortis causa does not apply in the context of real estate.[5] For example, in Snitzler v Snitzler, the court summarized the case law with respect to the doctrine and its application to real estate, and found that real property is not properly the subject of a gift mortis causa because any conditional intent can be both determined and recorded in an enforceable manner.[6] As Justice Tranmer’s only enumerated reason for determining that the cottage property was not the subject of a valid donatio mortis causa was that the deceased did not wish to convey the property for tax reasons, it is unclear whether Justice Tranmer was of the view that the doctrine applies to real property. Thus, it is uncertain if, in the future, this doctrine could be used to determine the validity of a gift consisting of real estate.
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[1] Rules of Civil Procedure, RRO 1990, Reg 194, r 21.01(1)(a): “A party may move before a judge, (a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs, and the judge may make an order or grant judgment accordingly.”
[2] A donatio mortis causa is gift in contemplation of death.
[3] Albert H Oosterhoff et al, Oosterhoff on Wills, 8th ed (Toronto: Thomson Reuters/Carswell, 2016), 166.
[4] Elbaum v York Condominium Corp No 67 2014 ONSC 1182 at para 14, 238 ACWS (3d) 1055.
[5] Snitzler v Snitzler, 2015 ONSC 2539, 254 ACWS (3d) 226; Sorenson’s Estate v Sorenson, 1977 CanLII 1648, 90 DLR (3d) 26 (Alta CA); Danicki v Danicki, [1995] OJ No 3995, 1995 CarswellOnt 3630 (Ont Ct J (Gen Div)).
[6] Snitzler v Snitzler, 2015 ONSC 2539 at para 26, 254 ACWS (3d) 226.
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