Charles v Junior And Estate: Interim Support and the Importance of Financial Disclosure
Charles v. Junior and Estate, 2018 ONSC 7327 http://canlii.ca/t/hwhv6
As a result of an increase in blended families, remarriages, and other types of spousal relationships, it goes without saying that estate practitioners are seeing an increase in the number of dependent support claims being brought against estates. These claims are not being commenced just by spouses of a deceased person, but by their combined children, extended family and other dependants as well. Where a deceased person fails to adhere to their statutory obligations, surviving spouses and/or dependants may seek to enforce on their legal rights as against their deceased spouse’s estate pursuant to the Family Law Act and the the Succession Law Reform Act[1] (“SLRA”), or, if access to the provincial legislation is denied or provides an inadequate remedy, a variety of equitable claims can be made pursuant to the common law.
Due to the often contentious and emotionally charged parties involved in a dependant support claim a final determination of an opposed Application for dependant support can take months (or even years) before being resolved. This in turn may leave the Applicant struggling financially in the interim.[2] Fortunately, where an Application is made under Part V of the SLRA, and the Applicant is in need of (and entitled to) support but any or all of the matters referred to in section 62 or 63 have not been ascertained by the court, the court may grant an interim support order. On a motion for interim dependant support, the onus lies on the Applicant to establish some degree of entitlement to, and the need for, interim support. Accordingly, the Applicant must: make a prima facie case that they are entitled to support; demonstrate that they were a dependant of the deceased; and demonstrate the deceased was either supporting them or had a legal obligation to support them immediately before their death. Once these factors are established, the Applicant must also then demonstrate that the Deceased did not make adequate provision for their support and show that they are in need.
Experienced estate practitioners are cognizant that the provision of interim dependant support by the court is an extraordinary remedy which is not granted blithely. Often members of the bench will be left considering the opposing party’s rebutting evidence in determining the overall strength of the applicant’s claim and where the opposing party directly disputes the Applicant’s entitlement, they may decline to award interim support.[3] In that vein, courts in Ontario have also long held that it is not enough to simply establish impecuniosity and as such Applicants would be wise to put forth as strong an evidentiary record as possible at a motion for interim support in order to advance their claim for dependant’s support. This notion was echoed in a recent case before the Ontario Superior Court of Justice in Brampton, where the Honourable Justice Emery was tasked with determining a motion for interim relief that was brought forth by the widow of the deceased due to certain property transactions made by the deceased shortly before his death which substantially reduced the value of the assets in the estate.
Facts
In Charles v. Junior and Estate, Mr. Lennard Charles (“Mr. Charles” or the “Deceased”) was diagnosed with stage 4 pancreatic cancer and died five weeks later, on October 8, 2017. At time of his death, Mr. Charles was married to his second wife of 22 years, Mrs. Charlene Charles (“Charlene”) and was survived by his two adult children from a first marriage, namely his son Lennard Charles Junior (“Lennard” or the “Estate Trustee”), and his daughter Ruth-Ann Charles (“Ruth”). In the fifteen days leading up to his death, Mr. Charles executed a new will (the “September Will”). In the September Will, Mr. Charles changed the bequests that Charlene would have received under a previous will. Mr. Charles also severed a joint tenancy with Charlene on one or more properties, liquidated certain RRSP’s worth $500,000 and drew down $130,000 on a line of credit secured against the matrimonial home. Mr. Charles then proceeded to deposit those funds into an account in his name alone. Additionally, Mr. Charles made certain transfers of title to properties having an estimated value of $2.5 million to his son, Lennard. These transactions had the net effect of reducing a possible value of the assets in the Estate from approximately $3.3 million to $460,000. Pursuant to the September Will, Charlene would receive one half of the one half interest Mr. Charles held in the matrimonial home, for a value of approximately $87,500, and the residue of the estate would then go to his two children, Lennard and Ruth, in equal shares. As a result, Charlene commenced an Application for, inter alia, support as a dependant under the SLRA and to set aside the transfer of certain properties made prior to her husband’s death. Within that Application, Charlene brought forth a motion seeking an order for interim support in the amount of $1,225 per month from the Estate as a dependant. The Estate Trustee took the position that Charlene had no need for interim support from the Estate and that the Deceased and Charlene were separated prior to Mr. Charles’ death.
On the motion before the Honourable Justice Emery, the Estate Trustee conceded that Charlene was a dependant as she was the spouse of Mr. Charles immediately preceding his death. Charlene therefore qualified as a dependant as that term is defined under s. 57(1) of the SLRA. Nevertheless, the motion for interim support was opposed by the Estate Trustee on two primary grounds. First, the Estate Trustee argued that Charlene consistently earned approximately $70,000 a year from her own employment prior to the death of Mr. Charles, and continued to do so. In contrast, the Deceased earned a lesser income since his retirement in 2014. Second, the Estate Trustee submitted that the transfer of the two properties from Mr. Charles to Lennard were actually transfers from Mr. Charles as a bare trustee to his son as the beneficial owner. The Estate Trustee also asserted that the transfer of those properties, the severance of Mr. Charles’ interest in the matrimonial home from Carlene as joint tenants, and the execution of the September Will were all acts taken by Mr. Charles to organize his personal affairs in view of his separation from Carlene.
Finding and Key Takeaways
In his Judgment, the Honourable Justice Emery determined that Charlene’s perception of entitlement to interim dependant support had been conflated with her property based claims, and that there was an insufficient basis to award interim dependant support on the grounds she was attempting to advance. The Honourable Justice Emery was satisfied that the evidence put forth before the court at the motion by the Estate Trustee had established that Charlene earned a greater income than her husband for the last three years of his life. Charlene also failed to provide any evidence that her economic circumstances worsened to any significant extent since Mr. Charles’ death with respect to income and expenses. On cross-examination, Charlene admitted that she purchased the groceries and household items for herself and Mr. Charles before his death. As such, the Honourable Justice Emery found that Charlene was the primary provider for the household, dismissed the motion and determined that an assessment of proper allocation of responsibilities to pay household expenses was better left for trial.
With adequate financial disclosure, the Court may order interim costs for impecunious applicants under the SLRA, however, experienced estate practitioners should be cognizant of the important role financial disclosure and a fulsome evidentiary record plays in meeting this threshold. As demonstrated in Charles v. Junior and Estate, although the onus is on the moving party to provide the necessary information upon which the Court can decide to exercise their discretion to award interim dependant support, the court will assess both parties’ evidence in determining the overall strength of the claim put forth. The type of information a court expects to see from an Applicant in order to make a prima facie case for interim dependant support, includes statements of income and expenses for the years before and after the passing of the deceased, verified and supported by relevant documents, including income tax returns and pay stubs to demonstrate employment income, as well as net worth statements for that period of time.[4] The financial statements published under Rule 13 of the Family Law Rules provide useful guides for organizing and presenting this type of evidence.[5]
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[1] Succession Law Reform Act, R.S.O. 1990, c. S.26.
[2] Carol Craig (2018) Interim Orders for Dependant Support: A Primer. Retrieved from https://store.lsuc.on.ca/Content/pdf/2018/CLE18-00502/CLE18-00502-pub.pdf
[3] Ibid.
[4] Romero v. Naglic Estate, 2009 CarswellOnt 3193, (Ont. S.C.J.).
[5] Ibid.
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Written by: Alexander Swabuk
Posted on: January 29, 2019
Categories: Commentary, WEL Newsletter
Charles v. Junior and Estate, 2018 ONSC 7327 http://canlii.ca/t/hwhv6
As a result of an increase in blended families, remarriages, and other types of spousal relationships, it goes without saying that estate practitioners are seeing an increase in the number of dependent support claims being brought against estates. These claims are not being commenced just by spouses of a deceased person, but by their combined children, extended family and other dependants as well. Where a deceased person fails to adhere to their statutory obligations, surviving spouses and/or dependants may seek to enforce on their legal rights as against their deceased spouse’s estate pursuant to the Family Law Act and the the Succession Law Reform Act[1] (“SLRA”), or, if access to the provincial legislation is denied or provides an inadequate remedy, a variety of equitable claims can be made pursuant to the common law.
Due to the often contentious and emotionally charged parties involved in a dependant support claim a final determination of an opposed Application for dependant support can take months (or even years) before being resolved. This in turn may leave the Applicant struggling financially in the interim.[2] Fortunately, where an Application is made under Part V of the SLRA, and the Applicant is in need of (and entitled to) support but any or all of the matters referred to in section 62 or 63 have not been ascertained by the court, the court may grant an interim support order. On a motion for interim dependant support, the onus lies on the Applicant to establish some degree of entitlement to, and the need for, interim support. Accordingly, the Applicant must: make a prima facie case that they are entitled to support; demonstrate that they were a dependant of the deceased; and demonstrate the deceased was either supporting them or had a legal obligation to support them immediately before their death. Once these factors are established, the Applicant must also then demonstrate that the Deceased did not make adequate provision for their support and show that they are in need.
Experienced estate practitioners are cognizant that the provision of interim dependant support by the court is an extraordinary remedy which is not granted blithely. Often members of the bench will be left considering the opposing party’s rebutting evidence in determining the overall strength of the applicant’s claim and where the opposing party directly disputes the Applicant’s entitlement, they may decline to award interim support.[3] In that vein, courts in Ontario have also long held that it is not enough to simply establish impecuniosity and as such Applicants would be wise to put forth as strong an evidentiary record as possible at a motion for interim support in order to advance their claim for dependant’s support. This notion was echoed in a recent case before the Ontario Superior Court of Justice in Brampton, where the Honourable Justice Emery was tasked with determining a motion for interim relief that was brought forth by the widow of the deceased due to certain property transactions made by the deceased shortly before his death which substantially reduced the value of the assets in the estate.
Facts
In Charles v. Junior and Estate, Mr. Lennard Charles (“Mr. Charles” or the “Deceased”) was diagnosed with stage 4 pancreatic cancer and died five weeks later, on October 8, 2017. At time of his death, Mr. Charles was married to his second wife of 22 years, Mrs. Charlene Charles (“Charlene”) and was survived by his two adult children from a first marriage, namely his son Lennard Charles Junior (“Lennard” or the “Estate Trustee”), and his daughter Ruth-Ann Charles (“Ruth”). In the fifteen days leading up to his death, Mr. Charles executed a new will (the “September Will”). In the September Will, Mr. Charles changed the bequests that Charlene would have received under a previous will. Mr. Charles also severed a joint tenancy with Charlene on one or more properties, liquidated certain RRSP’s worth $500,000 and drew down $130,000 on a line of credit secured against the matrimonial home. Mr. Charles then proceeded to deposit those funds into an account in his name alone. Additionally, Mr. Charles made certain transfers of title to properties having an estimated value of $2.5 million to his son, Lennard. These transactions had the net effect of reducing a possible value of the assets in the Estate from approximately $3.3 million to $460,000. Pursuant to the September Will, Charlene would receive one half of the one half interest Mr. Charles held in the matrimonial home, for a value of approximately $87,500, and the residue of the estate would then go to his two children, Lennard and Ruth, in equal shares. As a result, Charlene commenced an Application for, inter alia, support as a dependant under the SLRA and to set aside the transfer of certain properties made prior to her husband’s death. Within that Application, Charlene brought forth a motion seeking an order for interim support in the amount of $1,225 per month from the Estate as a dependant. The Estate Trustee took the position that Charlene had no need for interim support from the Estate and that the Deceased and Charlene were separated prior to Mr. Charles’ death.
On the motion before the Honourable Justice Emery, the Estate Trustee conceded that Charlene was a dependant as she was the spouse of Mr. Charles immediately preceding his death. Charlene therefore qualified as a dependant as that term is defined under s. 57(1) of the SLRA. Nevertheless, the motion for interim support was opposed by the Estate Trustee on two primary grounds. First, the Estate Trustee argued that Charlene consistently earned approximately $70,000 a year from her own employment prior to the death of Mr. Charles, and continued to do so. In contrast, the Deceased earned a lesser income since his retirement in 2014. Second, the Estate Trustee submitted that the transfer of the two properties from Mr. Charles to Lennard were actually transfers from Mr. Charles as a bare trustee to his son as the beneficial owner. The Estate Trustee also asserted that the transfer of those properties, the severance of Mr. Charles’ interest in the matrimonial home from Carlene as joint tenants, and the execution of the September Will were all acts taken by Mr. Charles to organize his personal affairs in view of his separation from Carlene.
Finding and Key Takeaways
In his Judgment, the Honourable Justice Emery determined that Charlene’s perception of entitlement to interim dependant support had been conflated with her property based claims, and that there was an insufficient basis to award interim dependant support on the grounds she was attempting to advance. The Honourable Justice Emery was satisfied that the evidence put forth before the court at the motion by the Estate Trustee had established that Charlene earned a greater income than her husband for the last three years of his life. Charlene also failed to provide any evidence that her economic circumstances worsened to any significant extent since Mr. Charles’ death with respect to income and expenses. On cross-examination, Charlene admitted that she purchased the groceries and household items for herself and Mr. Charles before his death. As such, the Honourable Justice Emery found that Charlene was the primary provider for the household, dismissed the motion and determined that an assessment of proper allocation of responsibilities to pay household expenses was better left for trial.
With adequate financial disclosure, the Court may order interim costs for impecunious applicants under the SLRA, however, experienced estate practitioners should be cognizant of the important role financial disclosure and a fulsome evidentiary record plays in meeting this threshold. As demonstrated in Charles v. Junior and Estate, although the onus is on the moving party to provide the necessary information upon which the Court can decide to exercise their discretion to award interim dependant support, the court will assess both parties’ evidence in determining the overall strength of the claim put forth. The type of information a court expects to see from an Applicant in order to make a prima facie case for interim dependant support, includes statements of income and expenses for the years before and after the passing of the deceased, verified and supported by relevant documents, including income tax returns and pay stubs to demonstrate employment income, as well as net worth statements for that period of time.[4] The financial statements published under Rule 13 of the Family Law Rules provide useful guides for organizing and presenting this type of evidence.[5]
—
[1] Succession Law Reform Act, R.S.O. 1990, c. S.26.
[2] Carol Craig (2018) Interim Orders for Dependant Support: A Primer. Retrieved from https://store.lsuc.on.ca/Content/pdf/2018/CLE18-00502/CLE18-00502-pub.pdf
[3] Ibid.
[4] Romero v. Naglic Estate, 2009 CarswellOnt 3193, (Ont. S.C.J.).
[5] Ibid.
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