Westover Estate v. Jolicouer
Westover Estate v. Jolicouer, 2024 ONCA 81 https://canlii.ca/t/k2mt1
This week the Ontario Court of Appeal upheld a Superior Court of Justice decision by Justice F. Bruce Fitzpatrick dismissing the appeal in the case of Westover Estate v. Jolicouer.[1]
Facts
In 1997, Milton Westover (“Mr. Westover”) with the assistance of Mr. Westover’s accountant and a lawyer, authorized the transfer of his farm and house property to the respondents, Joanie Marie Jolicouer and her husband, Joseph Allen Jolicoeur (the “Jolicoeurs”).
In Mr. Westover’s 2015 Will, he acknowledged that the transfer of the house property into joint tenancy was for estate planning purposes.
In 2017, Mr. Westover commenced the within action concerning the impugned transfer of Mr. Westover’s farm and house property to his daughter and son-in-law as aided by his other daughter, Debra Westover-Morriseau (“Ms. Westover-Morriseau”). Unfortunately, Mr. Westover passed away in 2018.
Betty Scheibler (“Appeallant”), who is the administrator of the Estate of Mr. Westover, continued with the action. She alleged that the respondents used Mr. Westover’s power of attorney to carry out the transfers without her father’s authority or knowledge.[2]
Dismissal of the Action
The outcome of the trial turned on the trial judge’s findings that Mr. Westover knew about and authorized the transfer of his property to the respondents in 1997, from which he considerably benefitted, and that there was no evidence given at the trial that supported the allegations of conspiracy and fraud.[3]
In particular, the trial judge accepted Ms. Westover-Morriseau’s evidence, including that Mr. Westover instructed her to transfer his property. The trial judge also found that the transfer was done for valuable consideration, despite the discrepancy between the agreement price and the amount paid, and that it was carried out openly with the assistance of Mr. Westover’s accountant and a lawyer.[4]
The trial judge found no evidence that the transfer was done for consideration below fair market value. Mr. Westover was an elderly widower and mostly retired from farming. The Jolicouers were the only family members interested in continuing to farm the property.
Ontario Court of Appeal
The Court of Appeal confirmed that there was no basis to interfere with the trial judge’s conclusion.
The Court of Appeal also rejected that the trial judge was biased, as there was no merit to the allegation.[5]
Costs Appeal
The appellant sought leave to appeal the trial judge’s costs award that she was to pay 67% and the estate 33% of the respondents’ substantial indemnity costs.[6]
The appellant sought leave to appeal on the narrow issue that the trial judge’s costs order is plainly wrong because he erred in principle in ordering that the appellant, as the estate administrator, pay the respondents’ costs personally, when there was no basis for such an award.[7]
The Court of Appeal confirmed that estate trustees are generally “entitled to be indemnified for all reasonably incurred costs in the administration of an estate”. However, this is not an absolute rule. A court may order otherwise if an estate trustee has acted unreasonably or in substance for their own benefit, rather than for the benefit of the estate. That is this case.[8]
The trial judge made explicit findings that the appellant unduly influenced Mr. Westover to make the claims he made in this action. The trial judge also found that the appellant’s continuation of the action was primarily to benefit herself and Mr. Westover’s other beneficiaries, rather than her father, who died shortly after the litigation was commenced, or his estate. As a result, the trial judge found that the appellant’s testimony to further the action and the unsubstantiated allegations of fraud and conspiracy was self-serving.[9]
The trial judge properly accounted for the portion of the costs attributable to the appellant’s unreasonable decision to continue the litigation.[10]
As a result, the Court of Appeal dismissed the appeal as meritless and of no benefit to the estate. The respondents were entitled to their costs on a substantial indemnity basis from the appellant personally.[11]
Commentary
The Court of Appeal made it clear in this case that when an estate trustee acts unreasonably and depletes the assets of the estate with unnecessary litigation costs, the Court has the authority to award costs to be paid personally. This decision reiterates the legal obligations of an estate trustee to act in the best interests of the estate’s beneficiaries and to manage the estate with care, diligence, and honesty.
—
[1] Westover Estate v. Jolicouer, 2024 ONCA 81 (CanLII)
[2] Ibid at para 2
[3] Ibid at para 5
[4] Ibid at para 5
[5] Ibid at para 8
[6] Ibid at para 9
[7] Ibid at para 10
[8] Ibid at para 14
[9] Ibid at para 15
[10] Ibid at para 16
[11] Ibid at para 20
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Written by: WEL Partners
Posted on: February 14, 2024
Categories: Commentary, WEL Newsletter
Westover Estate v. Jolicouer, 2024 ONCA 81 https://canlii.ca/t/k2mt1
This week the Ontario Court of Appeal upheld a Superior Court of Justice decision by Justice F. Bruce Fitzpatrick dismissing the appeal in the case of Westover Estate v. Jolicouer.[1]
Facts
In 1997, Milton Westover (“Mr. Westover”) with the assistance of Mr. Westover’s accountant and a lawyer, authorized the transfer of his farm and house property to the respondents, Joanie Marie Jolicouer and her husband, Joseph Allen Jolicoeur (the “Jolicoeurs”).
In Mr. Westover’s 2015 Will, he acknowledged that the transfer of the house property into joint tenancy was for estate planning purposes.
In 2017, Mr. Westover commenced the within action concerning the impugned transfer of Mr. Westover’s farm and house property to his daughter and son-in-law as aided by his other daughter, Debra Westover-Morriseau (“Ms. Westover-Morriseau”). Unfortunately, Mr. Westover passed away in 2018.
Betty Scheibler (“Appeallant”), who is the administrator of the Estate of Mr. Westover, continued with the action. She alleged that the respondents used Mr. Westover’s power of attorney to carry out the transfers without her father’s authority or knowledge.[2]
Dismissal of the Action
The outcome of the trial turned on the trial judge’s findings that Mr. Westover knew about and authorized the transfer of his property to the respondents in 1997, from which he considerably benefitted, and that there was no evidence given at the trial that supported the allegations of conspiracy and fraud.[3]
In particular, the trial judge accepted Ms. Westover-Morriseau’s evidence, including that Mr. Westover instructed her to transfer his property. The trial judge also found that the transfer was done for valuable consideration, despite the discrepancy between the agreement price and the amount paid, and that it was carried out openly with the assistance of Mr. Westover’s accountant and a lawyer.[4]
The trial judge found no evidence that the transfer was done for consideration below fair market value. Mr. Westover was an elderly widower and mostly retired from farming. The Jolicouers were the only family members interested in continuing to farm the property.
Ontario Court of Appeal
The Court of Appeal confirmed that there was no basis to interfere with the trial judge’s conclusion.
The Court of Appeal also rejected that the trial judge was biased, as there was no merit to the allegation.[5]
Costs Appeal
The appellant sought leave to appeal the trial judge’s costs award that she was to pay 67% and the estate 33% of the respondents’ substantial indemnity costs.[6]
The appellant sought leave to appeal on the narrow issue that the trial judge’s costs order is plainly wrong because he erred in principle in ordering that the appellant, as the estate administrator, pay the respondents’ costs personally, when there was no basis for such an award.[7]
The Court of Appeal confirmed that estate trustees are generally “entitled to be indemnified for all reasonably incurred costs in the administration of an estate”. However, this is not an absolute rule. A court may order otherwise if an estate trustee has acted unreasonably or in substance for their own benefit, rather than for the benefit of the estate. That is this case.[8]
The trial judge made explicit findings that the appellant unduly influenced Mr. Westover to make the claims he made in this action. The trial judge also found that the appellant’s continuation of the action was primarily to benefit herself and Mr. Westover’s other beneficiaries, rather than her father, who died shortly after the litigation was commenced, or his estate. As a result, the trial judge found that the appellant’s testimony to further the action and the unsubstantiated allegations of fraud and conspiracy was self-serving.[9]
The trial judge properly accounted for the portion of the costs attributable to the appellant’s unreasonable decision to continue the litigation.[10]
As a result, the Court of Appeal dismissed the appeal as meritless and of no benefit to the estate. The respondents were entitled to their costs on a substantial indemnity basis from the appellant personally.[11]
Commentary
The Court of Appeal made it clear in this case that when an estate trustee acts unreasonably and depletes the assets of the estate with unnecessary litigation costs, the Court has the authority to award costs to be paid personally. This decision reiterates the legal obligations of an estate trustee to act in the best interests of the estate’s beneficiaries and to manage the estate with care, diligence, and honesty.
—
[1] Westover Estate v. Jolicouer, 2024 ONCA 81 (CanLII)
[2] Ibid at para 2
[3] Ibid at para 5
[4] Ibid at para 5
[5] Ibid at para 8
[6] Ibid at para 9
[7] Ibid at para 10
[8] Ibid at para 14
[9] Ibid at para 15
[10] Ibid at para 16
[11] Ibid at para 20
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