Ontario Succession Law Reform Act

Ontario: Succession Law Reform Act limitations principles

Justice Lofchik’s decision in Habberfield v. Sciamonte et al. has a good summary of limitation principles under Part V of the Succession Law Reform Act:

[19]      The Applicant proposes that the application (for support), if permitted, would proceed under Part V of the Succession Law Reform Act (“SLRA”).  Section 57 ofSLRA defines a “dependent” as including a “spouse”, which includes a common law spouse (i.e. two persons who are not married to each other and have cohabited continuously for a period of not less than three years) to whom the Deceased was providing support or was under a legal obligation to provide support immediately before his death

[20]      Section 58 provides as follows: Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependents or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependents or any of them.

[21]      The limitation period is set out in section 61(1) of the SLRA:

(1)        Limitation Period- Subject to (2), no application for an order under section 58 may be made after six months from the grant of letters probate of the will or of letters of administration.

[22]      The court’s jurisdiction  to grant an extension derives from 61(2) of the SLRA:

(2)       Exception- The court, if it considers it proper, may allow an application to be made at any time as to any portion of the estate remaining undistributed at the date of the application.

[23]      The issue on this Application, therefore, is whether it would be, in these circumstances, proper to extend the limitation period.

[24]      The jurisprudence with respect to granting an extension – and Blatchford in particular – sets out the following principles in relation to an extension under section 61(2) of the SLRA:

(a) The Court has the discretion to allow the application to proceed at any time as to any portion of the estate remaining undistributed at the date of the application.

(b) The discretion of the Court under section 61(2) to allow an application to proceed although it is brought after the time limit has expired under theSLRA must be exercised judicially, with considerations of the delay involved, the reasons for the delay, and the extent of prejudice in the Estate’s defence of the claim.

(c) The Court’s discretion to extend the limitation period under section 61(2) is to be exercised in a broad and liberal manner.

(d) In deciding whether to grant the extension, the court must determine whether the situation bears review of whether or not the Deceased madeadequate provision in his Will for the proper maintenance and support of his dependents.

(e) The question is not whether the Deceased has in fact done so, but whether there is a sufficient basis for review.  This requires a consideration of what is equitable (in relation to the “proper” support of dependents as contemplated by the SLRA).

(f)  While delay (including the reason for delay) is a factor to consider, a request for an extension is not grounded solely in “good cause” being shown forthe delay. The discretion to extend or refuse is a question of what is equitable between the parties, in all the circumstances.

(g) In the absence of prejudice to the Estate, equity tends to favour granting an extension:

[…]

[26]      So far as granting an extension of the limitation period is concerned, the legislation was never intended to allow a court to rewrite the will of a testator in discharging its difficult task of correcting a breach of morality on a testator’s part.  The court must not, except in plain and definite cases, restrain a man’s right to dispose of his estate as he pleases.  But equally, it is fair to say that the legislation has by and large received a very liberal interpretation.  The attitude of the courts has been one of great flexibility.  Every case must of course be decided upon its own facts and circumstances.  Under the authority of the SLRA the court can and should take a look at the intentions of the testator who may have overlooked a legitimate interest and needs of a dependent.

Blatchford v. Gardiner supra at para 23

R. v. Barr et al. [1972] 2 W.W.R.A. 346

[27]      The discretion under s. 61(2) should be exercised judicially in a broad and liberal manner mandated by the statutory use of “may” in both s. 58(1) and 61(2) of theAct as well as the use of the term “proper”.  The word “proper” according to Black’s Law Dictionary, 6th Edition, means “fit, suitable, appropriate, adapted, correct”.  These words incorporate the concept of reasonableness which includes a determination of whether the testator acted as a morally responsible person in the circumstances.

[28]      In deciding whether to grant an extension the court must determine whether the situation bears review of whether or not the testator made adequate provision in his will for the proper maintenance and support of the dependents.

Blatchford, supra, para’s 22 and 23

The judge is thus given a  discretion to be exercised on the principle of promoting justice between those interested in the estate. It is clear that hemust refuse an application if the delay in applying would work an injustice. Further than that it would seem that he must find that justice, insofar as the principle of the Act defines the kind of justice that the Legislature had in mind, requires that the application should be heard.

Blatchford v. Gardiner, 1999 CanLII 15091 (ON SC), [1999] O.J. No. 3748 (S.C.J.)

Re Assaf, 2007 CanLII 50869 (ON SC), 2007 CanLII 50869 (S.C.J.)

Weigand v. Weigand Estate [2016] O.J. No. 5096 (S.C.J.)

In this case, Justice Lofchik granted the application:

[29]      The bulk of the estate (some $2 million in assets – the two properties) remains undistributed.  In fact, it cannot be distributed until such time as the Applicant dies, moves or desires to sell the properties or either of them.  Accordingly, while there has been a delay in bringing the application, I find there is no prejudice to the estate (or its beneficiaries) occasioned by the delay.  The situation is the same now as it was prior to the expiry of the limitation period.

[30]      I accept the Applicant’s position that this is a “situation which bears review of whether or not the deceased made adequate provision in his will for the proper maintenance and support of his dependents”, namely the Applicant.

[31]      I deem it proper in that it is suitable and correct, based upon all the circumstances to allow the application to be made now as to any portion of the estate remaining undistributed at the time of the application.  The application is not frivolous or vexatious and the case has been made to exercise my discretion to allow the application to proceed.  Order to go that the Applicant be allowed to proceed with this Application.

Ontario: Appointing a guardian of property doesn’t start the limitation period

 

In Shaw v. Barber, Justice McNamara held that the appointment of the Office of the Public Guardian and Trustee as guardian of property doesn’t cause a limitation period to commence:

[13]           […] Where [the parties] disagree completely is when the six month limitation period for a claim for support under Section 61(1) of the Succession Law Reform Actbegins to run.

[14]           The first point that needs to be made is that under the Limitations Act the six month limitation period under the Succession Law Reform Act is incorporated into the act by Section 19(1) of the Limitations Act. That section provides that any limitation period set out in or under another act applies as long as the provision establishing it is listed in the schedule to the Limitations Act. There is no issue that this particular limitation period is in that schedule.

[15]           It is also common ground that the limitation period in question does not run in the circumstances set forth in Section 7(1) of the Limitations Act.That section provides:

7 (1) the limitation period established by section 4 does not run during any time in which the person with the claim,

(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and

(b) is not represented by a litigation guardian in relation to the claim.  2002, c. 24, Sched. B, s. 7 (1).

[16]           The six month limitation, then, did not run while Ms. Shaw was incapable of commencing a proceeding because of a mental condition and was not represented by a litigation guardian in relation to the claim (emphasis added).

[17]           The Estate argues that after its appointment as Ms. Shaw’s statutory guardian of property the OPGT had the authority to act as litigation guardian and were then under an obligation to advance a claim within a six month period of their appointment.

[18]           That argument, in my view, is flawed.

[19]           There is no mechanism in the Limitations Act for the self-appointment of a litigation guardian. To do that, regard must be had to the Rules of Civil Procedure. A number of provisions are relevant.

[20]           First is Rule 7.01(1) which provides as follows:

7.01  (1)  Unless the court orders or a statute provides otherwise, a proceeding shall be commenced, continued or defended on behalf of a party under disability by a litigation guardian.  O. Reg. 69/95, s. 2.

A proceeding, then, which includes an application, must be commenced on behalf of a party under a disability by a litigation guardian.

[21]           Next Rules 7.02(1) and 1.1(a) which provide:

7.02 (1) Any person who is not under disability may act, without being appointed by the court, as litigation guardian for a plaintiff or applicant who is under disability, subject to subrule (1.1).  O. Reg. 69/95, s. 3 (1).

 

 

Mentally Incapable Person or Absentee

 

(1.1)  unless the court orders otherwise, where a plaintiff or applicant,

(a) is mentally incapable and has a guardian with authority to act as litigation guardian in the proceeding, the guardian shall act as litigation guardian;

[22]           It is important to note that while the above section directs that the guardian shall act as litigation guardian, it does not dictate when that authority is to be exercised. That, in my view, occurs once the guardian of property has determined there is a basis for exercising their authority as litigation guardian.

[23]           Surely that is appropriate. As the affidavit of counsel at the Office of the Public Guardian and Trustee discloses, once they are appointed statutory guardian of property in a factual situation such as existed here, they begin an investigation into the entire matter. That can be, as the affidavit discloses, a time consuming process because there are usually information gaps because of the client’s incapacity which require the OPGT to be reliant on third party information with a need to be verified. The initial investigation is done by a client representative and if the situation warrants it, the matter is then referred to counsel in the OPGT’s office which in this case occurred in October of 2015. According to the evidence, further investigation continued under counsel’s direction exploring options available. Outside counsel was formally retained by the OPGT on May 6, 2016. The application was brought in August.

[24]           Moving carefully and cautiously prior to commencing litigation at public expense would require a thorough investigation of the facts and legal options available. As counsel in his affidavit points out, the client they act for has little capacity to properly advise them of her circumstances, so they have to rely on third party information which may support or not support or be neutral towards the incapable person’s position. I agree with counsel that imposing a limitation period commencing as of the OPGT’s appointment as guardian of property is not only contrary the wording of the Limitations Act, but would also create impossible timelines thus creating the potential for injustice being done to vulnerable individuals.

Ontario: an overview of Succession Law Reform Act limits

In Weigand v. Mohammed, Justice George considered whether to extend the limitation period in s. 61(1) of the Succession Law Reform Act.  His decision sets out the statutory framework:

[2]               If permitted, the application would be brought under Part V of the SLRA.

[3]               Section 57 defines a dependent as any of the spouse, parent, or sibling of a deceased, and to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

[4]               Section 58 provides that:

Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

[5]               The limitation period is set out in s. 61(1):

Subject to (2), no application for an order under section 58 may be made after six months from the grant of letters probate of the will or of letters of administration.

[6]               The limitation period does not begin to run at any time during which the person with the claim is a minor.

[7]               My jurisdiction to grant an extension derives from (2):

The court, if it considers it proper, may allow an application to be made at any time as to any portion of the estate remaining undistributed at the date of the application.

The issue was whether in the circumstance of the case it would be proper to grant leave pursuant to s. 61(2).  These is Justice George’s analysis:

[26]           In B(JDD) the court provides some guidance on how to apply and interpret s. 61(2) of the Act.  I am to do so judicially and in a broad and liberal manner. I must consider the delay, the reasons for delay, and whether there would be prejudice to the estate’s ability to defend the proposed claim.

[27]           The question is does this situation bear review of whether the testator made adequate provision in his will for dependents?  Not whether he has in fact done so, but is there a sufficient basis for a review.  This requires a consideration of what is equitable, and whether or not the respondent acted “honestly, reasonably, and fairly”.

[28]           This is the applicant’s position in a nut shell.  The respondent caused the delay through her misrepresentation, and has not acted honestly.  They suggest there would be no prejudice to the estate as the respondent is the only beneficiary.  No innocent third party beneficiaries would be put at risk.

[29]           The respondent relies upon the decisions in each of Re Assaf Estate, [2007] OJ No 4579; Blatchford v. Gardiner,[1999] OJ No 3478; and Su v. Lem, [2012] OJ No 1448, all Superior Court decisions. She claims that granting an extension would bring an injustice upon her, and in any event the assets have already been distributed.

[30]           She agrees the test is whether the situation bears review of the adequacy of provisions. She, however, stresses that this is a fact-dependent exercise, and that in these circumstances, a review is not warranted.

[31]           The easy thing to do would be to simply say there is a conflict in the evidence, which I cannot resolve at this stage, and therefore the broadest and most liberal thing to do would be to grant the extension and allow the application to go forward.  This would, however, suggest an extension should be automatically granted.  It is not that simple.

[32]           While it is true the reason for delay is a factor to consider, a request for an extension is not grounded solely in “good cause” being shown for the delay.  The discretion to extend (or refuse) is a question of what is equitable between the parties, in all the circumstances. The respondent argues that the payment to the mother is the equitable outcome.  The children have been provided for, and beyond that a testator can distribute their assets as they see fit.

[33]           What are the circumstances?  First, there was a delay.  The limitation period has passed.  There is some dispute as to how long the delay was but that is of little consequence. Second, there is a conflict in the evidence as to the reason for delay, which I cannot resolve. In this respect there are essentially cross-allegations of bad faith.  It is said the respondent lied when she promised to sell the home and distribute proceeds to the children.  It has been suggested the applicant’s attempted to mislead the court by not mentioning the funds received by their mother.  Third, and further to that last point, I accept the respondent paid to the applicant’s mother, specifically for child support and in order to comply with the divorce judgment, approximately $30,702.27. It is worth nothing that the mother released the respondent from any further claims upon receipt of the funds.  Fourth, I accept the respondent’s accounting, and accept that the estate has for the most part been distributed.  Fifth, the deceased had an obligation to pay child support at the time of death.

[34]           It would be wrong to allow the respondent to rely on the fact she has distributed the estate as a basis to not grant an extension.  If the applicant’s version of events is true, and the respondent did indeed promise to sell the home and distribute the funds to them, than it would be unconscionable to allow her to defeat a claim by virtue of a passed limitation period.  If this is true, the respondent would be estopped from relying on the limitation period, as it would be open to the court to find that the applicants relied on that representation to their detriment.

[35]           As I only have untested affidavits, I am unable to resolve the conflicts in the evidence. This weighs in favour of an extension.

[…]

[42]           The part of s. 61(2) that does give me pause is the reference to “any portion of the estate remaining undistributed at the date of the application”.  This raises an interesting question.  In the normal course, and some of the case law speaks to this, if the estate has been fully distributed an extension should not be granted.  This makes sense.  It would make the discretionary extension of the limitation period a pointless exercise.  There is nothing left to distribute.  However, in our instance, a misrepresentation by the executor is being alleged, who is also the sole beneficiary, who also happens to be in current possession of the estate’s main asset, the very asset which was the subject of the misrepresentation.  It is inconceivable that the inclusion of this language was intended to shield administrators who engage in such behaviour.  I am not saying this is what happened, but a trial judge could come to this conclusion on the evidence before me.

[…]

[45]           The applicant’s say they were deceived by the respondent.  This is supported by Udo Weigand.  Even though the respondent gives a different version, I am unable to reject that explanation.  In circumstances like these, to refuse leave and not grant an extension, I would have to conclude that the prejudicial effect of an extension upon the respondent would outweigh the need to engage in a review and determine entitlement to support under s. 58.  I can’t reach that conclusion.