COURT OF APPEAL FOR ONTARIO

CITATION: Buttar v. Buttar, 2013 ONCA 517

DATE: 20130815

DOCKET: C55491

Rosenberg, Goudge and Tulloch JJ.A.

BETWEEN

Doris Marion Buttar

Applicant  (Respondent)

and

Bruce Edgar Buttar

Respondent (Appellant)

Aaron M. Franks and Michael Zalev, for the Appellant

Donald R. Good, for the Respondent

Heard: April 30, 2013

On appeal from the judgment of Justice Mary J. Hatton of
    the Superior Court of Justice, dated April 18, 2012 and the costs order dated
    September 19, 2012.

Rosenberg
    J.A.:

[1]

This appeal arises out of a judgment by Hatton J. resolving a number of
    issues following the parties separation after a 36-year marriage. During most
    of that time, the appellant husband and the respondent wife were engaged in a
    dairy farming operation and accumulated a number of properties for that
    purpose. The appellant raises issues concerning the calculation of Net Family
    Property (NFP) and spousal support. However, the principal issue involves the
    application judges order dividing the six jointly-owned farm properties
    between the appellant and the respondent in satisfaction of the equalization
    and spousal support payments. .

[2]

For the following reasons, I would allow the appeal in part, and set
    aside the order distributing the properties between the parties. I would allow
    the appellant to deduct his disposition costs from his NFP, but I would dismiss
    his appeal as it relates to the exclusion of the milk quota from his NFP and the
    payment of spousal support.

A.

THE FACTS

[3]

The following summary sets out this familys history and the history of
    the acquisition of the jointly held properties.

[4]

The appellant and respondent married in 1972 and separated in 2008. They
    have three adult children. The appellants parents were farmers. After the
    parties, who had met in college, graduated, the appellant began to work on the
    farm with his father, although he also held another job. The respondent worked
    as a teacher. In 1973, the parties built a house on the Donaldson Road property
    that was owned by the appellants parents. In 1976, the appellant started
    farming full-time. Two years later, the appellants parents gave the parties
    the Donaldson Road property.

[5]

In 1979, the appellants parents transferred ownership and control of
    their farming business to their son and his wife. As part of the transaction,
    the Home/Main farm, including its properties, was gifted to the appellant and
    the respondent jointly. 5,970 kg of milk quota and equipment were gifted to the
    appellant alone. The livestock was sold to the appellant for $55,000. The
    transfer was structured so as to minimize income tax consequences. Particularly,
    by structuring the milk quota part of the disposition of the farm as a gift to his
    son, the appellants father was able to avoid tax consequences in accordance
    with    s. 73 of the
Income Tax Act
, R.S.C. 1985, c. 1 (5th Supp). The
    Dairy Farmers of Ontario confirmed that there was no selling price listed on
    the application to transfer the quota.

[6]

In 1980, the appellant started farming with his cousin David. He and
    David purchased the Watt farm. The joint farming operation continued until
    1988. At that time, the appellant and David divided their milk quota and the
    appellant purchased some of Davids quota, leaving the appellant with 8,785 kg.
    of quota. In the meantime, the parties and their children had moved into the
    Home/Main Farm and the appellants parents had moved into the Donaldson Road
    Property.

[7]

In 2002, the parties purchased another farm, the Blezard Farm. In 2004,
    they purchased Davids interest in the Watt farm. In 2007, they purchased
    Davids Farm. Finally, at some point the parties also purchased the School
    Farm.

[8]

Thus, at the time of separation, the parties jointly owned six properties:

·

The Home\Main Farm;

·

The Donaldson Road property, which is comprised of two severed
    lots;

·

The Watt Farm;

·

The Blezard Farm, which is also comprised of two lots;

·

Davids Farm, and

·

The School Farm

[9]

The parties also jointly held a time-share interest in a Collingwood
    property, which was also transferred as part of the trial judges order.

[10]

In
    the 1990s, the parties began a series of improvements to the family farm
    business and borrowed heavily from Farm Credit Canada to finance the
    improvements. At the date of separation, the gross value of the farm properties
    was $2,330,000 and the jointly owed debt to Farm Credit Canada was $1,411,574.00.
     The appellant also owned 27,561 kg of milk quota with a value of $1,867,572.30
    (before capital gains tax) and farm equipment and cattle with a value of
    $370,072.12 (before capital gains tax). The parties had other assets as
    follows: the appellant, $74,269.16; the respondent $56,594.

[11]

After
    the separation, the parties and their children conducted some negotiations about
    what to do with the dairy operation. The parties have different views as to why
    those negotiations failed. In the event, the appellant sold the dairy quota in
    two lots in early 2010 for $1,867,572.30, which he used to pay off the FCC
    debt. The balance of $358,253.46 was paid into the respondents lawyers trust
    account. These funds were eventually disbursed by agreement between the
    parties. Later in 2010, the appellant sold the dairy herd and farm equipment.
    He used some of this money to purchase other equipment, including farm
    machinery and a tractor trailer. As a result of the various sales, the
    appellant incurred $280,000 in capital gains taxes after using his $750,000
    lifetime capital gains exemption.

[12]

At
    the time of application, the respondent was 65 years of age and the appellant
    was 62 years of age. During the marriage, the respondent held a number of jobs
    to supplement the farm income. She also assisted with the dairy operation until
    it was sold in early 2010. During the last years of the marriage, the
    respondent had only sporadic employment with a local service club. Thus, from
    2007 to 2009, she earned less than $3,000 a year. In 1989, the respondent was
    diagnosed with breast cancer. A second cancer diagnosis was made in 2006. As a
    result of the cancer and subsequent treatment the respondent has difficulty
    with heavy manual labour.

[13]

The
    farm business was successful. The income was reported on the appellants tax
    return and reached almost $900,000 in 2010. After the dairy operation ended,
    the appellant derived income from various jobs. He expected his annual income
    to be less than $20,000. The appellant paid spousal support of $2,000 per month
    from the date of separation to February 2010, when the dairy operation ceased.
    He had not paid any spousal support since that time.

B.

THE ISSUES

[14]

By
    the time of the application, many financial issues had been settled. The
    application judge dealt with six issues, four of which remain issues on this
    appeal as follows:

1. Whether the appellant can deduct from
    his NFP the present value of the disposition costs, and in particular the
    capital gains tax, that he will incur upon sale of the properties.

2. Whether the appellant can exclude
    from his NFP the milk quota his father gave him in 1979.

3. How much spousal support is owed to
    the respondent.

4. Whether, and if so how, the jointly-owned properties should
    be distributed.

ISSUE 1: DISPOSITION COSTS

(1)

The Reasons of the
    Application Judge

[15]

The
    appellant claimed that, in calculating his NFP, he was entitled to claim as a
    debt any capital gains he would incur after using his $750,000 lifetime
    exemption. The application judge allowed the appellant to claim as a debt the
    capital gains already incurred at the time of the application. She did not,
    however, allow him to claim the expected capital gains tax liability that would
    arise from the proposed sale of all the farm properties. The appellant sought
    to claim $270,000.

[16]

The
    application judge concluded that the sale of the properties was not inevitable.
    Her reasoning was related to her ultimate conclusion that each party would be
    given specific property as a result of the judgment in this case. She
    speculated that the parties, in deciding what to do with the properties
    respectively allotted to them, might choose to retain the properties or
    transfer them to their children. She therefore held that neither party would be
    given a capital gains deduction for the future sale of any property, and that
    each would individually bear the costs of any capital gains tax incurred on
    future dispositions. It should be pointed out that this would not be a serious
    hardship for the respondent, since she still had her lifetime capital gains tax
    exemption available to her.

(2)

Analysis

[17]

In
    my view, the application judge erred in not permitting the appellant to treat
    as a debt under s. 4(1) of the
Family Law Act
, R.S.O. 1990, c. F.3
    (the Act) the capital gains taxes he would incur on the proposed sale of the
    properties. There are a couple of reasons for this, including, as will be
    discussed below, that the appropriate order in this case would have been to
    order the sale of the properties in question. Once sold, the disposition costs
    would be inevitable.

[18]

Quite
    apart from the appropriateness of an order for sale in this case, the
    application judge erred in law in refusing to allow the capital gains tax as a
    cost of disposition.

[19]

The
    test for deducting disposition costs from NFP as set out in
Sengmueller v.
    Sengueller
(1994), 17 O.R. (3d) 208 (C.A.), at pp. 213, is as follows:

In my view, it is equally appropriate to take such costs into
    account in determining net family property under the
Family Law Act

if
    there is satisfactory evidence of a likely disposition date and if it is clear
    that such costs will be inevitable when the owner disposes of the assets or is
    deemed to have disposed of them
. In my view, for the purposes of
    determining net family property, any asset is worth (in money terms) only the
    amount which can be obtained on its realization, regardless of whether the
    accounting is done as a reduction in the value of the asset, or as deduction of
    a liability: the result is the same. While these costs are not liabilities in
    the balance sheet sense of the word, they are amounts which the owner will be
    obliged to satisfy at the time of disposition, and hence, are ultimate
    liabilities inextricably attached to the assets themselves. This is consistent
    with McPherson but goes beyond it. [Emphasis added.]

[20]

This
    court had, in the earlier case of
Starkman v. Starkman
(1990), 75 O.R.
    (2d) 19 at pp. 23 and 26, adopted the approach from
McPherson v. McPherson
(1988), 63 O.R. 2(d) 641, as set out in the following passage from
McPherson
,
    at p. 647:

... an allowance should be made in the case where there is
    evidence that the disposition will involve a sale or transfer of property that
    attracts tax consequences, and it should not be made in the case where it is
    not clear when, if ever, a sale or transfer of property will be made and
thus
    the tax consequences of such an occurrence are so speculative that they can
    safely be ignored
. [Emphasis added.]

[21]

The
    test used by the application judge is stricter than the tests in
Sengmueller
and
McPherson
. The application judge looked to whether the
    disposition of the assets was inevitable. Instead, she should have determined
    whether it was more likely than not that the assets would be sold, at which
    point disposition costs would inevitably be incurred.

[22]

Quite
    apart from the appropriateness of ordering the properties sold, the evidence
    established that the appellant would have to sell some of his property
    interests in order to pay the taxes he owed on the sale of equipment and to pay
    the costs order. At that point, the appellant would inevitably incur capital
    gains tax, inasmuch as he had already used up his lifetime exemption.

[23]

The
    NFP of the parties must be adjusted accordingly. Of course, the respondent will
    also be entitled to deduct her costs of disposition.

ISSUE 2:  THE 1979 MILK QUOTA

(1)

The Reasons of the
    Application Judge

[24]

At
    the application, the appellant sought to exclude from his NFP the value of the
    milk quota provided to him by his father in 1979 on the basis that it was a
    gift within the meaning of s. 4(2) of the Act, which provides as follows:

4(2)    The value of the following property that a spouse owns
    on the valuation date does not form part of the spouse's net family property:

1. Property, other than a matrimonial home, that was
    acquired by gift or inheritance from a third person after the date of the
    marriage.

[25]

The
    application judge found that the milk quota was transferred in 1979 as part of
    a larger transaction involving the transfer of the family farm from the
    appellants parents to the parties. She found that the transfer was structured so
    as to minimize tax consequences. As a result of this transaction, both parties
    assumed all the liabilities associated with the transfer. The respondent shared
    equally in assuming the liabilities and paying the expenses of all the assets,
    including the milk quota.

[26]

The
    application judge found that the transfer of the milk quota was not a gift
    because there was consideration for the transfer. This consideration took the
    form of a life interest given to the appellants parents in the family farm.
    The father lived on the farm until his death, while the mother remained until
    she moved to a retirement home. As the application judge said:

[The appellants parents] were both financially provided for by
    the parties for the rest of their lives from income generated by all the
    transferred assets, including the milk quota. The wife cared for both the
    husbands parents until their deaths.

[27]

The
    application judge found that, in any event, the appellant had not shown that
    the quota that was transferred in 1979 was still in the appellants possession
    at the time of separation. The application judge referred to a history of sales
    and purchases of quotas over the years, and concluded that the quota ultimately
    sold in 2010 had been acquired through the combined efforts of both of the
    parties.

(2)

Analysis

[28]

The
    term gift is not defined in the Act. In
McNamee v. McNamee
, 2011
    ONCA 533, 106 O.R. (3d) 401, this court set out the elements of a gift in the
    following way, at para. 24:

The essential ingredients of a legally valid gift are not in
    dispute. There must be (1) an intention to make a gift on the part of the
    donor, without consideration or expectation of remuneration, (2) an acceptance
    of the gift by the done, and (3) a sufficient act of delivery or transfer of
    the property to complete the transaction:
Cochrane v. Moore
, (1890),
    25 Q.B.D. 57 (C.A.), at pp. 72-73 Q.B.D.; Mossman and Flanagan,
supra
,
    at p. 441, Bruce Ziff,
Principles of Property Law
, 5th ed. (Toronto:
    Carswell, 2010), at p. 157.

[29]

In
Peter v. Beblow
, [1993] 1 S.C.R. 980, at pp. 991-92, McLachlin J.
    referred to giving without expectation of remuneration as the central element
    of a gift at law. The only element in dispute in this case is whether the
    appellants father intended to make a gift of the milk quota without
    consideration or expectation of remuneration.

[30]

In
    support of his argument that there was no consideration for the transfer, the
    appellant points to the following pieces of evidence, among others: that the
    appellants father followed the advice of his accountant to gift the quota at a
    deemed valued of Nil to minimize income tax consequences at the time of the
    transfer; that the Dairy Farmers of Ontario confirmed there was no selling
    price listed on the quota transfer application, and that the appellant
    testified that he did not pay anything for [the quota].  The appellant also relies
    upon this courts decision in
McNamee
and submits that the application
    judge focused on the motive for the transfer (deferring taxes) instead of the
    nature of the transaction
.

[31]

In
McNamee
, the father executed a Declaration of Gift at the time he
    issued common shares to his sons, which included the appellant husband, as part
    of an estate freeze. The husband was not aware of the details of the estate
    freeze transaction. This court held that the trial judge in
McNamee
erred in finding that the transfer of the shares was not a gift. With respect
    to the trial judges finding that there was consideration for the transfer, this
    court explained, at para. 29, that consideration is the value that flows from
    a promisee to a promisor as a result of a bargain. There can be no
    consideration, however, when there has been no bargain. The court continued:

[C]onsideration cannot flow from a promisee who does not know
    he or she is negotiating, much less passing value to a promisor in an exchange
    he or she doesn't know exists.

[32]

In
    that case, this court held that the share transfer was unilateral on the part
    of the appellants father, and that the sons had no meaningful input with
    respect to it. This court also held that the fact that the appellants father
    was able to accomplish his corporate planning goals did not amount to
    consideration flowing from his son to him.

[33]

The
    application judges statement that this case can be distinguished from
McNamee
because this was not an estate freeze is less helpful than her ultimate
    conclusion that the transfer was not a true gift to the husband as there was
    consideration provided by both the husband and the wife. That consideration
    consisted of the life interest in the family farm, the fact that the parents
    continued to live on the farm, that they were both financially provided for
    from income generated by the transferred assets, including the milk quota, and that
    the respondent cared for the parents until their death.

[34]

The
    application judges conclusion that the transfer of the milk quota to the
    appellant was not a true gift is based on findings of fact that are entitled to
    deference. The appellant is required to identify a palpable and overriding
    error:
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at
    para. 10.

[35]

I
    have not been persuaded that the application judge erred. The application
    judges findings as to the nature of the arrangement between the parties and
    the appellants parents are supported by the evidence. The evidence shows that
    this appellant, unlike the husband in
McNamee,
was involved in the
    transaction. The milk quota was part of a much larger transaction for which
    there was consideration. The items identified by the application judge are
    capable of constituting consideration when the transfer of the milk quota
    transaction is placed within the context of the entire transaction and this
    familys history. The application judge also did not improperly focus on the
    motive for the transaction. The application judges reasons show that she was
    properly concerned with the question whether or not there was any consideration
    for the 1979 transfer of the milk quota.

[36]

Finally,
    the appellant has not demonstrated that the fact the transaction may have been
    driven by tax advice was a basis for finding a gift. As the respondent points
    out the tax treatment of family farms is complex and it is not clear that this
    transaction was contrary to the public policy underlying the tax treatment of
    such farms. I would not give effect to this ground of appeal.

ISSUE 3: SPOUSAL SUPPORT

(1)

The Reasons of the
    Application Judge

[37]

There
    was no dispute about the respondents entitlement to spousal support, although her
    need for it was disputed. At the application, the most contentious issues were the
    appellants actual income and the amount that should be imputed to him.

[38]

The
    appellant took the position that he was entitled to retire from farming and to
    work less for less money. The application judge found the appellants evidence
    as to his inability to earn a greater income to be questionable. He was an
    experienced farmer and had purchased farm machinery and a tractor trailer to
    generate income. He had no health problems and continued to incur substantial
    personal expenses. The application judge found that the appellants claimed drastic
    income reduction from an inferred income of between $60,000 to $80,000 to less
    than $20,000 annually was neither reasonable nor credible. The application
    judge imputed to the appellant an annual income of $40,000.

[39]

The
    application judge also considered the respondents circumstances. This was a
    long-term marriage where the respondent was in a very vulnerable position
    because of her health and her limited ability to earn an income. While the
    appellant had paid other expenses, he had paid no spousal support since
    February 2010. On the other hand, the application judge stated that the
    respondent would have some income, either from the sale of the properties or by
    renting them out. This last appears to relate to the application judges
    ultimate decision to divide the jointly-held properties between the parties.

[40]

The
    application judge determined that the respondent would be entitled to
    indefinite spousal support, given her age and the fact that this was a
    long-term marriage, but instead ordered a lump sum payment. She considered the
Spousal
    Support Advisory Guidelines
and made an award around the midpoint. The
    application judge ordered the appellant to make a lump sum payment of $160,000
    for spousal support. The application judge did not expressly state why the
    spousal support should be a lump sum rather than periodic payments.

(2)

Analysis

[41]

The
    appellant does not contest the application judges decision to order a lump sum
    spousal support award. He does, however, take issue with the amount awarded. He
    submits that the application judge erred in failing to consider the
    respondents significant capital base, erred in imputing an excessive amount of
    employment income and erred in calculating the lump sum on the basis of
    indefinite support. I would not give effect to these submissions.

[42]

A
    decision as to the amount and duration of support is entitled to considerable
    deference, especially where, as here, the decision is based in part on findings
    of credibility:
Hickey v. Hickey
, [1999] 2 S.C.R. 518 at paras. 11-12.
    In view of the length of the marriage and the respondents vulnerable position,
    as identified by the application judge, it was open to the application judge to
    make an order for indefinite support. Given the appellants investment in
    income-earning property and his experience, imputing $40,000 in annual income
    to him is, in my view, a relatively modest order. The application judge did
    take into account the respondents ability to earn income from any property
    settlement.

[43]

I
    would not give effect to this ground of appeal.

ISSUE 4: DISTRIBUTION OF PROPERTIES

(1)

The Reasons of the
    Application Judge

[44]

The
    appellants position at the application was that the jointly-owned properties should
    be sold, with him in control of the sale. The respondent proposed that the eight
    properties be divided between the parties pursuant to the
Partition Act
,
    R.S.O. 1990, c. P.4.

[45]

The
    application judge accepted the respondents proposal, holding that such a
    division would resolve all property and support issues between the parties. She
    found that this was a high-conflict case in which it was better that the issues
    between the parties be resolved as soon as possible. The wifes proposal would
    allow her to remain in the family home close to her family and friends. In the
    application judges view, the appellants proposal would likely result in
    longstanding issues between the parties because of the difficulty of selling
    the properties.

[46]

The
    application judge attached a schedule to her reasons in which she set out her
    calculation of the net equalization payment owed by the appellant to the
    respondent. She held that each party was entitled to half of the properties and
    the time share. She added together the equalization payment of $112,986.69 owed
    by the appellant to the respondent, the value of the properties, and the
    lump-sum spousal award, and calculated that the appellant owed the respondent
    $1,441,486.69 in total. The application judge then assigned to each of the properties
    the value they had on the date of separation, and distributed the properties
    between the parties to give effect to a value transfer from the appellant to
    the respondent of $1,441,486.69. I have attached the application judges
    Schedule to these reasons to show how she arrived at the distribution of
    property.

(2)

Analysis

[47]

The
    appellant submits that the
Family Law Act
does not give any
    jurisdiction to divide property
in specie
. He also submits that if the
    application judge made her order under the
Partition Act,
and it is
    not clear that she did, that Act does not permit a court to effect the sale of
    properties between the parties at a set price under the guise of
    partitioning. The appellant submits that an ordered sale of the properties on
    the open market was more appropriate in this case. The respondent submits in
    this appeal that the application judge had jurisdiction to make the order
    transferring the jointly-held properties pursuant to either s. 9(1) of the
Family
    Law Act
or under the
Partition Act
.

[48]

While
    the application judge had valid reasons for seeking a quick resolution of the
    issues between the parties, in my view, she had no jurisdiction to make the
    order she did. The application judge referred to the
Partition Act
as
    the basis for the respondents proposal, but did not identify how that Act authorized
    the division of properties that she made. In my view, neither the
Family
    Law Act
nor the
Partition Act
supports the order made by the
    application judge in this case.

(a)

The
Family Law
    Act

[49]

The
    relevant sections of the
Family Law Act
are ss. 5(1), 7(1) and
    9(1)(d), which provide as follows:

5. (1)  When a divorce is granted or a marriage is declared a
    nullity, or when the spouses are separated and there is no reasonable prospect
    that they will resume cohabitation, the spouse whose net family property is the
    lesser of the two net family properties is entitled to one-half the difference
    between them.

7. (1)  The
    court may, on the application of a spouse, former spouse or deceased spouse's
    personal representative, determine any matter respecting the spouses'
    entitlement under section 5.

9. (1)  In an application under section 7, the court
    may order,

(d) that, if appropriate to satisfy an obligation imposed by
    the order,

(i) property be transferred to
    or in trust for or vested in a spouse, whether absolutely, for life or for a
    term of years, or

(ii) any property be partitioned
    or sold.

[50]

In
    1986, soon after the
Family Law Act
came into force, Galligan J.
    described the legislative scheme in
Skrlj v. Skrlj
(1986), 2 R.F.L.
    (3d) 305 (Ont. H.C.J.) at p. 310, in these terms:

The scheme of the Act, insofar as it relates to property, is to
    determine the value of each spouse's net family property as at the valuation
    date as defined in the Act.  Once the value of each spouse's net family
    property is determined, the spouse with the lesser value is entitled to one half
    of the difference, subject to any adjustment if unconscionability, as set out
    in s. 5(6) of the Act, is proved.

[51]

Earlier
    in that case, Galligan J. dealt with the proposal that properties could be
    distributed. He rejected this approach, in emphatic terms, at p. 309:

In this case certain suggestions were put to the court about
    how this dispute could be resolved by transferring assets to discharge
    corresponding liabilities. In my view, that is the stuff of settlement.
    Separating spouses can settle their differences as they see fit but if they do
    not settle them and decide to come to trial, they are entitled to, and should
    expect to get adjudication, not mediation.

[52]

Justice
    Galligan returned to this issue as a judge of this court, in
Berdette v.
    Berdette
(1991), 3 O.R. (3d) 513 (C.A.) at p. 524:

The intent of this legislation is to establish partnership and
    equal sharing of property accumulated during marriage. That intent is not
    effected, however, by the sharing of the assets themselves as was done under
    the
Family Law Reform Act
, R.S.O. 1980, c. 152, which preceded the
FLA
.
    It is done by the sharing of the
value
of the assets. The distinction
    is crucial and is one that is not infrequently overlooked. For example, in his
    "Annotation to
Rawluk v. Rawluk
" (1990), 23 R.F.L. (3d) 338,
    at p. 345, Professor James G. McLeod speaks of "a statute that, by its
    terms, provides for the equitable distribution of property". In my view,
    the definition of "net family property" contained in s. 4(1), the
    opening words of s. 4(2), s. 5(1) and s. 5(6) all show that the
FLA
does not provide for the distribution of property. Rather, it provides for the
    payment of money when the net family property of one spouse is less than that
    of the other.

I make particular reference to s. 4(1), which defines
    "net family property" as the
value
of all property which a
    spouse owns on valuation day. In this way, net family property is distinct in
    nature from "property" in the statutory sense found in s. 4(1) and
    from the word "property" in its ordinary sense.

[53]

I
    agree with Justice Galligan. The scheme of the Act does not support the
    proposition that an application judge can simply redistribute properties among
    the parties. To interpret the Act in this way would be inconsistent with its
    overall scheme, which gives a judge only a very limited power to distribute
    properties in the circumstances set out in s. 9. That is, section 9 gives the
    court the power to transfer properties only if appropriate to satisfy an
    obligation imposed by the order [for the equalization of net family properties].
    In other words, the transfer power under section 9 is
specifically
connected to the satisfaction of the order for the equalization of net family
    properties rather than a
general
transfer power for the settlement of
    disputes arising from marital breakdown.

[54]

To
    a similar effect is the recent decision of this court in
Thibodeau v.
    Thibodeau
, 2011 ONCA 110, 104 O.R. (3d) 161. In that case, Blair J.A.
    endorsed this interpretation of the legislative scheme of the
Family Law
    Act
, albeit in the context of a bankruptcy proceeding. As explained by
    Blair J.A. at para. 37, [s]eparating spouses are not entitled to receive a
    division of property.  An equalization
payment
is the chosen
    legislative default position. He continued, at paras. 39 and 40, by observing
    that the enhanced remedies available under s. 9(1) can give rise to proprietary
    rights if the record justifies such an exception in the equalization payment
    regime, but only if a real need is shown.

[55]

Trial
    courts have consistently adopted this interpretation. One example is
Zadegan
    v. Zadegan
, [2002] O.J. No. 2190 (S.C.J.), in which, after referring to
    the fact that the parties had provided her with proposals as to how their real
    properties might be distributed, J. Mackinnon J. held as follows, at paras. 90-92:

90

In this way, both parties have, in
    effect, asked the court to redistribute their assets, in order to achieve what
    each of them regards as the proper outcome. In my view, this is not the type of
    order that the court can make under the Family Law Act. That Act does not
    direct the court to redistribute assets in order to make an equal distribution.
    See Berdette v. Berdette (1991), 3 O.R. (3d) 513 (C.A.). Rather, it directs the
    court to determine the net family property of each spouse. Then, if one
    spouse's net family property is less than that of the other, s. 5(1) provides
    for equalization.  [T]he powers of the court to give effect to the
    equalization are set out in s. 9(1):

91
Thus, while s. 9(1)(d) permits
    the court to transfer property in order to satisfy an obligation imposed by the
    order, this is not the same thing as rearranging ownership of assets.

92

Accordingly,
    the court could order the transfer of an asset between the parties in order to
    satisfy an equalization payment, or part of it, but cannot order the transfer
    of various assets between the parties in order to bring about an equitable
    distribution of assets.

[56]

Speaking
    to when an order under s. 9 may be required, Whalen J. held in
Colquhoun v.
    Colquhoun
, [2007] O.J. No. 9, 2007 CarswellOnt 18 (S.C.), at para. 168,
    that there would need to be a proven concern that [the equalization payment]
    will not be honoured.

[57]

The
    record in this case does not suggest that an order under s. 9 was needed in
    order to enforce the equalization payment. In any event, the equalization
    payment calculated by the application judge was just over $100,000. The effect
    of the application judges order was the compulsory transfer of ownership
    interests in excess of one million dollars, which is far in excess of the
    equalization payment amount.

[58]

To
    conclude, the order made by the application judge in this case cannot be
    supported by the
Family Law Act
. I turn now to the
Partition Act
.

(b)

The
Partition Act

[59]

I
    would make this preliminary comment about the application of the
Partition
    Act
to this case. In
Silva v. Silva
(1990), 1 O.R. (3d) 436, this
    court accepted that the
Partition Act
is not ousted by the
Family
    Law Act
, but stated that the
Family Law Act
should be the
    statute of first resort in matrimonial disputes. Accordingly, it would be an
    unusual result if the
Partition Act
, which deals generally with
    jointly-owned property, could be applied so as to effect a result that is
    inconsistent with the specific provisions and the legislative policy of the
Family
    Law Act
.

[60]

The
    governing provisions of the
Partition Act
, with unnecessary terms
    removed are as follows:

2.

All joint tenants,
    tenants in common,  may be compelled to make or suffer partition or sale of the land, or any part thereof, whether
    the estate is legal and equitable or equitable only.

3.

(1) Any person interested
    in land in Ontario   may bring an action or make an application for the partition of such land or for the sale
    thereof under the directions of the court if such sale is considered by the
    court to be more advantageous to the parties interested.

[61]

Each
    of the properties in question in this case was originally registered as a joint
    tenancy. In August 2010, the parties agreed to sever the joint tenancies and
    the parties now hold the properties as tenants in common.

[62]

The
    application judges order in this case raises two issues. First, does the
Partition
    Act
permit, not the partition of individual jointly-owned properties, but a
    wholesale distribution of several previously jointly-held properties between
    the parties. Second, even if partition could encompass such a distribution, was
    an order of that type appropriate in this case. In my view, this case can be
    resolved on the basis of the second question. However, since the distribution issue
    was fully argued, and the matter appears to be one of first impression in this
    court, I will make some brief comments on that issue as well.

[63]

To
    start with the question of the appropriateness of the order, the fundamental
    problem with the judges order in this case was that it took away the
    appellants right to the highest price for his interest in the properties. The
    values used by the application judge in redistributing the properties were the
    valuations as at the date of separation, and as fixed by the parties for the
    purposes of calculating the equalization payment at trial. There was no
    evidence that those values represented the market value of the properties as at
    the time of the application or that they represented the highest price. As
    Granger J. said in
Batler v. Batler
(1989), 67 O.R. (2d) 355 (H.C.J.)
    at 356:

A joint tenant is entitled to the highest price for his or her
    interest which may be more than the appraised value of the property. In today's
    real estate market, the appraised value of the property may not reflect the fair
    market value. The true test of the fair market value is to sell the property in
    an open market. Unless the parties agree to a transfer of the property at an
    agreed price, the property should be listed for sale and sold, to ensure that
    fair market value is obtained.

[64]

This
    court has jealously guarded the rights of joint owners to the best price for
    jointly-owned property.
Martin v. Martin
(1992), 8 O.R. (3d) 41 (C.A.)
    provides an example of this principle in a slightly different context. In that
    case, this court explained the rationale behind the rule that one party cannot
    be given a right of first refusal with respect to matrimonial property ordered
    sold. As Osborne J.A. explained in
Martin
at p. 48:

A right of first refusal will most often work to discourage
    other interested buyers. If a spouse is granted a right of first refusal, the
    effect of it is to remove that spouse from the competitive market for the
    matrimonial home.

Both Dr. and Mrs. Martin have a right to buy the matrimonial
    home. If Dr. Martin wants to exercise that right he should be in a position of
    having to compete with any other interested purchaser. It is only in that way
    that Mrs. Martin's interest in the property will be fairly and justly
    quantified.

[65]

The
    order of the application judge was, in effect, a forced sale of the
    jointly-owned properties between the parties, without the benefit of fair
    market value. That is not an appropriate use of the
Partition Act
: see
Miller v. Hawryn
, 2010 ONSC 6094, at para. 25.

[66]

For
    that reason, even if the division of the farm properties were permissible
    generally under the
Partition Act
, it would not have been an
    appropriate order in this case.

[67]

Given
    this conclusion, it is not strictly necessary to consider whether the
    application judge had jurisdiction to make the order that she did. I offer,
    however, these brief additional comments. Partition is the physical division of
    land among co-owners such that each is entitled individually to a separate
    parcel: Jeffrey W. Lem and Rosemary Bocska,
Halsburys Laws of Canada
    Real Property
, 1st ed. (Markham, Ont: LexisNexis Canada, 2012), at HRP-46.
    There is virtually no authority supporting the respondents submission that the
    order that was made could be characterized as a partition, even if it were
    clear that this was the basis on which the application judge made her order. The
    distribution of different properties between joint owners as was done in this
    case is simply not partition; rather, it is an enforced sale between two
    parties at a set price. And, as I have said, it is fundamentally inconsistent
    with the scheme of the dominant legislation, the
Family Law Act
.

[68]

The
    application judge did not refer to any authority to support the order made. On
    appeal, we were referred to only one case in support of the argument that the
Partition
    Act
could be used to distribute separate properties between joint owners: see
Suddick v. Schwenger
(2007), 52 R.P.R. (4th) 306 (Ont. S.C.J.).

[69]

The
    facts of
Suddick
are somewhat complicated. In short, the case involved
    a cottage property in Eastern Ontario (Lot 3). The parties to the dispute
    were three siblings, the children of Charles and Elena Schwenger. In 1966,
    Charles Schwenger obtained Lot 3 from his father. In 1982, he severed Lot 3
    into two lots, the West Lot and the East Lot, and transferred the East Lot to
    his wife, Elena. After Charles Schwenger died, the West Lot passed to Elena such
    that she owned all of Lot 3. She died in 2006 leaving Lot 3 to her three
    children as tenants in common.

[70]

After
    many years of disputes amongst the siblings, the parties made an application
    under the
Partition Act
. The application judge was satisfied that
    there must be partition or sale. He decided that the appropriate remedy was
    partition, with one of the siblings getting the West Lot and the other two
    siblings getting the East Lot. The sibling getting the West Lot was to
    compensate the other two siblings for the difference in value between the two
    lots.

[71]

The
    application judge in
Suddick
held that the parties were the joint
    owners of the entire property of Lot 3. That was the land in question,
    referring to sections 2 and 3 of the
Partition Act
. The fact that, for
    planning purposes, the two parcels could be separately conveyed without further
    approvals had no bearing on that conclusion. As can be seen, this case is not
    authority for the
in specie
division of separate properties, as took
    place in this case, under the
Partition Act
, but was a proper
    partition. It is only in a notional sense that the
Partition Act
was
    used in this case to distribute separate properties. Finally, detracting from
    the cases value as a precedent is that an appeal was taken and allowed, see
    (2009), 69 R.P.R. (4th) 318 (Ont. Div. Ct.), apparently on consent in
    accordance with minutes of settlement.

[72]

In
    my view, the
Partition Act
cannot be used to support the
in specie
distribution of properties, as was done in this case. The application
    judge should have ordered the sale of the properties. Obviously, it would be
    open to the parties to bid on any of the properties.

C.

DISPOSITION

[73]

Accordingly,
    I would allow the appeal and vary the order of the application judge in
    accordance with these reasons, varying paragraph 1 of the Order (the
    equalization payment) to take into account the parties claims for disposition
    costs; and paragraph 3 of the Order (distributing the properties) and ordering
    that the properties be listed for sale, sold and the net proceeds divided
    equally between the parties, subject to necessary adjustments. The appeal is
    dismissed as it relates to the payment of spousal support and the 1979 milk
    quota.

[74]

As
    to costs, if the parties cannot agree, they may make brief written submission.
    The appellant shall make submissions within 15 days of release of the decision;
    the respondent will have 15 days to respond.

Released: MR August 15, 2013

M. Rosenberg J.A.

I agree. S.T. Goudge
    J.A.

I agree. M.H.
    Tulloch J.A.

Appendix A

Schedule B

Determination of Division of Property

a)       each
    party is entitled to half of the eight farm lots and the time share, therefore
    each party received $1,168,500.00 in property.

b)       the husband owes to the wife a net equalization
    payment of $112,986.69.

c)       the
    husband owes to the wife lump sum spousal support, retroactive to March 1,
    2010, in the amount of $160,000.00

d)       the total of a), b) and c) above, owed to the wife,
    is $1,441,486.69

e) wife to receive

main farm

$700,000.00

Blezard farm, Lot 1

240,000.00

Lot 2

150,000.00

Donaldson Road

270,000.00

with lot

80,000.00

_________________________________

Total

1,440,000.00

f) husband to receive

Davids farm

370,000.00

School farm

120,000.00

Watt farm

400,000.00

Time share

7,000.00

_________________________________

Total

897,000.00

g)      Husband owes wife $1,486.69 at the time of the
    property transfers set out in e) and f) above.


COURT OF APPEAL FOR ONTARIO

CITATION: Chambers Estate v. Chambers, 2013
    ONCA 511

DATE: 20130812

DOCKET: C56024 & C56025

Gillese, Epstein and Lauwers JJ.A.

In the Estate of Herbert Washington Chambers,
    deceased

And in the Matter of an Application for a
    Certificate of Appointment of Estate Trustee with a Will

BETWEEN

Violet Agatha Chambers

Applicant (Respondent)

and

Michael Chambers
,
    Clive Oliver Chambers, Marva Chambers, Velma Timol, Mazie May Thomas, Collette
    Harrison, Jennifer Chang (also known as Jennifer Chong), Natasha Chambers,
    Christopher Chambers, Andrea Chambers, Adrian Chang, Shara Chang, Michael Nassies
    Chambers Jr., Rayon Recardo Chambers, Claire Eden Elizabeth Chambers, Lisa
    Chambers, Rochelle Antonette Fraser, Kimora Chomas (also known as Kimora Camela
    Thomas) and The Office of the Childrens Lawyer

Respondents (
Appellant
)

A. Sean Graham and Christopher M. B. Graham, for the
    appellant

Michael Kerr, for the respondent Violet Agatha Chambers

David Lobl, for the Bank of Nova Scotia Trust Company

Heard: April 26, 2013

On appeal from the judgments of Justice Anne Mullins of
    the Superior Court of Justice, dated August 21, 2012.

Gillese J.A.
:

[1]

These two appeals arise from applications brought in respect of Herbert
    Washington Chambers (Mr. Chambers) personal and corporate estates (the
    Estate).  To resolve the appeals, this court must distinguish among a number
    of related concepts respecting estate trustees
[1]
:
    renunciation, resignation, removal, and passing over.

[2]

Because the appeals arise from the same set of facts, this single set of
    reasons disposes of them both.

OVERVIEW

[3]

On April 8, 2008, Mr. Chambers executed two wills.  In the first will
    (the Primary Will), Mr. Chambers disposed of all of his assets, except shares
    in private corporations that he owned at the time of his death.  In the second
    will (the Corporate Will), he disposed of those shares (the Corporate
    Assets).

[4]

Michael Chambers (Michael Chambers or the appellant) is Mr.
    Chambers son.  He brought an application asking that he and a trust company be
    named as co-estate trustees of both wills.

[5]

Agatha Violet Chambers (Mrs. Chambers) is the deceaseds widow.  After
    her husbands death, she acted as the estate trustee under both wills.  She
    brought an application asking to be removed, or permitted to resign, as the estate
    trustee under both wills, and seeking to have a trust company named as sole
    succeeding estate trustee.

[6]

The two applications were heard together.  By two judgments dated August
    21, 2012 (the Judgments), the applications judge ordered:

-

Mrs.
    Chambers be removed as the estate trustee of both wills;

-

Michael
    Chambers be removed or passed over as estate trustee; and,

-

the
    Bank of Nova Scotia Trust Company (the Bank) be the sole succeeding estate trustee
    in Mrs. Chambers stead.

[7]

Michael Chambers appeals.

[8]

For the reasons that follow, I would dismiss the appeals.

the background facts

The Primary Will

[9]

In the Primary Will, Mr. Chambers appointed two trustees: Mrs. Chambers
    and his daughter, Collette Harrison.  He did not name any alternate trustees.

[10]

Under
    the Primary Will, Mrs. Chambers was to receive Mr. Chambers personal effects,
    and his interest in the furniture and furnishings in the matrimonial home.  Apart
    from that, the estate was bequeathed to his children, including Michael
    Chambers, grandchildren, relatives, and friends.

Pansy Miller

[11]

In
    the Primary Will, Mr. Chambers directed his trustees to give Pansy Miller the
    option to purchase his interest in 7 Elderwood Drive, Richmond Hill (the
    Elderwood property), within one year of his death, at fair market value less
    6 per cent,  the commission payable if sold on the open market.  The
    Elderwood property was registered in the joint names of Mr. Chambers and Ms. Miller.
    In the Primary Will, Mr. Chambers also made a bequest of $75,000 to Ms. Miller.

[12]

Ms.
    Miller had been an employee of Fairview Nursing Home Limited (Fairview), a
    108-bed nursing home in Toronto that Mr. Chambers and Mrs. Chambers had founded.

[13]

She
    brought a wrongful dismissal lawsuit against Fairview.  Judgment in the matter
    was issued, on consent, on June 7, 2012, requiring Fairview to pay her
    $113,952.52.

The Corporate Will

[14]

In
    the Corporate Will, Mr. Chambers again named Mrs. Chambers and Collette
    Harrison as his estate trustees.  However, he provided that if Mrs. Chambers
    predeceased him or was, at any time, unable or unwilling to act or continue as estate
    trustee, Michael Chambers was to serve as estate trustee, together with
    Collette Harrison.

[15]

In
    the Corporate Will, Mr. Chambers directed his trustees to distribute the net
    proceeds of the Corporate Assets equally among his seven named children, one of
    whom is Michael Chambers.

[16]

Mr.
    Chambers shares in Fairview are the most significant of the Corporate Assets.
    He owned 50 per cent of the shares in Fairview and served as an officer and
    director of the company.  Mrs. Chambers owns the other 50 per cent of
    Fairviews shares and continues to serve as an officer and director.

Administration of the Estate before the Applications

[17]

Mr.
    Chambers died on October 3, 2011.  His Estate is worth millions of dollars.  As
    will become evident over the course of these reasons, the Estate is complex and
    its administration is rife with problems.

[18]

On
    December 13, 2011, Collette Harrison renounced her right to serve as estate trustee
    under both of his wills.  She did not carry out any estate duties prior to renouncing,
    other than to attend at the bank with her mother in an attempt to learn about
    the bank accounts.

[19]

Mrs.
    Chambers, on the other hand, assumed her role as estate trustee upon her
    husbands death, and began performing under both wills.

The Renunciation Order

[20]

In
    March of 2012, Ms. Miller served Mrs. Chambers and Collette Harrison with
    motion material in which they were named as respondents.  Through the motion,
    Ms. Miller sought to require Mrs. Chambers and Collette Harrison to file an
    application for a certificate of appointment as estate trustee with a will and produce
    all of Mr. Chambers testamentary documents.  As well, she sought an order
    permitting her to sell the Elderwood property and retain 25 per cent of the
    sale proceeds.

[21]

On
    the advice of her then-solicitor, Mrs. Chambers did not respond to the motion.
    He told her it was not necessary.

[22]

When
    Ms. Millers motion was heard, no one appeared for the respondents.

[23]

On
    April 4, 2012, the motion judge issued three orders.

[24]

In
    the first order of that date (the Renunciation Order), Mrs. Chambers and Collette
    Harrison were required to file an application for a certificate of appointment
    of estate trustee with a will within 30 days, failing which they shall be
    deemed to have renounced [their] right to be appointed.

[25]

In
    the second order, Mrs. Chambers and Collette Harrison were ordered to produce
    all of Mr. Chambers testamentary documents in their possession or under their
    control, within 30 days of the date of service of the order.

[26]

The
    third order gave Ms. Miller the unilateral right to sell the Elderwood property
    and retain one quarter of the sale proceeds.

After the Renunciation Order

[27]

Neither
    Mrs. Chalmers nor Collette Harrison filed an application for certificate of
    appointment as estate trustee, as required by the Renunciation Order.

[28]

Mrs.
    Chambers attempted to comply with the deadline established by the second order
    but could not locate the original wills until May 31, 2012.  On June 4, 2012,
    she presented the wills to the Registrar.

[29]

The
    third order led to the Elderwood property being sold for $1,540,000 on May 31,
    2012.

Michael Chambers

[30]

Michael
    Chambers  formerly Michael Christie  is Mr. Chambers son.  He is 56 years of
    age and now a Canadian citizen.  He is a discharged bankrupt.

[31]

Under
    an arrangement with his father, Michael Chambers lived rent free at a farm property
    located on the Guelph Line in Milton (the Guelph property).  Mr. Chambers and
    Mrs. Chambers jointly owned the Guelph property.  They purchased it in 2008 for
    $2,650,000.

[32]

Michael
    Chambers worked for his father from 2004 onwards.  He primarily worked at the
    Guelph property but, from time to time, he also did maintenance work for
    Fairview.

[33]

Mr.
    Chambers paid Michael Chambers $1,000 a month to look after the Guelph property.
    While Mr. Chambers and Michael Chambers were managing the horse operation on
    the Guelph property, the employees made numerous successful complaints to the
    Ministry of Labour.

[34]

After
    his fathers death, Michael Chambers continued to live on the Guelph property.
    Mrs. Chambers eventually advised him that the arrangement he had with his
    father was ended and that she intended to sell the Guelph property.  She told
    him that he had to vacate.

[35]

Michael
    Chambers did not accept that Mrs. Chambers had the right to require him to
    vacate the Guelph property.  He interfered with the real estate agents
    attempts to market the property to prospective purchasers.  After he left the property,
    Mrs. Chambers and the real estate agent discovered that the keypad for the
    security system had been torn out of the wall and the house was in a complete mess.

[36]

Michael
    Chambers accused Mrs. Chambers (and her daughter Lisa Chambers and her husband)
    of breaking into his residence on the Guelph property, and taking documents and
    $1,150 in cash.  He made the accusation repeatedly, including to the Ontario
    Provincial Police.  The authorities investigated and chose to not act on the
    accusation.

[37]

Further,
    Michael Chambers did not accept that Mrs. Chambers was the estate trustee.  His
    lawyer sent Mrs. Chambers lawyer a notice of objection to the issuance of a
    certificate of appointment of estate trustee to her, dated May 8, 2012.

Mrs. Chambers

[38]

At
    the time the applications were brought, Mrs. Chambers was 81 years of age,
    partially deaf and suffering from significant mobility problems.  She is not in
    the best of health.  She has been devastated by the death of her husband and from
    discovering some of his undisclosed personal life.  While she had attempted
    to administer the Estate, she deposed that the nature and extent of the issues
    arising on his death have overwhelmed [her]. She was unable and unwilling to
    continue to act as estate trustee.  Further, she had been advised by her
    solicitor that she had claims against the Estate and was, therefore, in a position
    of conflict of interest.

[39]

The
    conflict of interest arose, in part, from events relating to Fairview.

[40]

After
    Mrs. Chambers partially retired from Fairview in 1996, Mr. Chambers mismanaged
    it.  As a result, in 2008, the Ministry of Health put Fairview into
    enforcement.  In order to continue operating the business, Mr. Chambers was
    obliged to agree to retain professional managers.  The Ministry of Health took
    the position that Fairview owed it $800,000 and deducted $35,000 per month from
    its operating payments to Fairview.

[41]

While
    serving as estate trustee of her late husbands estate, Mrs. Chambers learned that
    he had diverted Fairview funds to his own benefit and to the benefit of others,
    without her knowledge and approval.  For example, for many years the dividends
    on the Fairview shares had been paid to Mr. Chambers and her on a 65/35 basis,
    instead of the 50/50 basis required because they each owned 50 per cent of the
    shares.  There were also tax arrears claimed in respect of Fairview and various
    lawsuits filed against it.

[42]

On
    August 7, 2012, the Toronto Dominion Bank made a demand on Fairview for the
    immediate payment of its loans of $1,160,914.88.  It asserted that Mr. Chambers
    had personally guaranteed the debt.  Mrs. Chambers advanced $115,000 of her own
    money to forestall a receivership.

[43]

Mrs.
    Chambers is also exposed to liabilities that her late husband incurred, for
    which she will seek indemnity from the Estate.

[44]

Mrs.
    Chambers has a poor relationship with Michael Chambers and wishes to have no
    contact with him.

Michael Chambers Application

[45]

In
    June 2012, Michael Chambers brought an application in which he sought an order
    appointing him and a trust company as co-estate trustees of both the Primary Will
    and the Corporate Will.  He swore an affidavit, dated June 19, 2012, in support
    of the application.

[46]

Certain
    factual aspects of Michael Chambers affidavit are worthy of note.  First, in
    it, he repeated his accusation that Mrs. Chambers broke into his home at the
    Guelph property, after which he discovered documents and cash were missing.  He
    said that [a]pparently [Mrs. Chambers] felt entitled to [break into his home]
    because she and [Mr. Chambers] were joint owners.  He acknowledged that the
    Guelph property passed to Mrs. Chambers by right of survivorship, but deposed
    that her conduct underscores that it may be to the Estates benefit that [Mrs.
    Chambers and Collette Harrison] renounced.  Second, he also accused Mrs.
    Chambers of having given away or sold horses that had been housed on the Guelph
    property, and of having kept the sale proceeds, despite the fact that the money
    belonged to the Estate, not her.

[47]

In
    his affidavit, Michael Chambers also set out his belief as to the legal foundation
    for his application.  He deposed that as a result of non-compliance with the
    Renunciation Order, both Mrs. Chambers and Collette Harrison had renounced
    their appointments as estate trustees, and he was therefore the estate trustee
    under the Corporate Will, having accepted his appointment under that will.

[48]

Michael
    Chambers further deposed that he believed it was in the Estates best interests
    that a trust company be appointed to act as his co-estate trustee.  In his
    view,

a co-estate trustee arrangement respects [Mr. Chambers]
    testamentary wish that I be estate trustee of his Corporate Will while ensuring
    the highest level of administrative expertise, especially when it comes to
    helping me fulfill my duties to administer [Mr. Chambers] shares.

[49]

Finally,
    on the basis that Mrs. Chambers and Collette Harrison had renounced under the
    Primary Will and no substitute trustee was in place, he deposed that it would
    be more efficient for him and the trust company to act as co-estate trustees in
    respect of the Primary Will, as well as the Corporate Will.

Mrs. Chambers Application

[50]

By
    the time that Michael Chambers served his application, Mrs. Chambers had
    decided to resign as estate trustee and seek to have an institutional trustee
    appointed in her stead.  She brought an application asking to be removed, or
    permitted to resign, as estate trustee.  Her affidavit filed in support was
    sworn on June 27, 2012.

[51]

Mrs.
    Chambers deposed that she supported the appointment of an institutional trustee
    because the Estate is large, complex and in some disarray, and the appointment
    of a professional trustee would be in the best interests of all beneficiaries.

[52]

Mrs.
    Chambers does not view Michael Chambers as suitable or qualified to assist in
    the administration of the Estate.

[53]

Two
    of the Chambers children opposed Michael Chambers appointment as the co-estate
    trustee.  All consented to the Banks appointment as succeeding estate
    trustee.

The decision below

[54]

The
    applications judge described the Estates assets and debts as follows.  The
    assets of the primary estate are approximately $3,000,000, against which there
    are debts for unknown income tax and known tax liabilities of approximately
    $420,000.  The assets in the corporate estate were estimated to be worth about $1,000,000
    and the debts at approximately $240,000.  In addition, Fairview might be worth
    as much as $5,000,000, against which there are registered mortgages of
    $3,200,000.

[55]

The
    applications judge noted that Mrs. Chambers might make claims against the
    Estate in relation to: real property held solely in Mr. Chambers name at 98
    Concorde Avenue, Toronto; income distributions made from Fairview: and, liabilities
    incurred by her late husband for which Mrs. Chambers stands exposed and for
    which she will seek indemnity from the Estate.

[56]

The
    applications judge identified concerns about the administration of the Estate,
    most notably the preservation of the Fairview asset, adding that: (1) to forestall
    a receivership, Mrs. Chambers advanced $115,000 of her own money; (2) the mortgagee
    had delivered a notice to enforce security; and (3) historically, Mr. Chambers
    management of Fairview was problematic.

[57]

The
    applications judge set out Michael Chambers position: Mrs. Chambers and
    Collette Harrison were deemed to have renounced, as a result of the
    Renunciation Order; he had accepted the appointment as estate trustee of the
    Corporate Will; and, as estate trustee, he could be removed only in exceptional
    circumstances, which did not exist.

[58]

The
    applications judge acknowledged that the appointment of an estate trustee under
    a will ought not to be lightly interfered with but noted that Michael Chambers was
    a named alternate trustee under only one of the two wills, that two of the
    beneficiaries did not consent to his appointment, and that all beneficiaries consented
    to the appointment of the Bank as succeeding estate trustee.

[59]

The
    applications judge also commented on the complexities of the Estate, adversity
    of interest between Mrs. Chambers and the Estate, and the need for Fairviews proper
    management and disposition so that the best value would be realised for the beneficiaries
    and the burden on Mrs. Chambers, as the owner of the other 50 per cent of
    Fairviews shares, would be eased.

[60]

The
    applications judge concluded that the welfare of the beneficiaries would be
    best served if a trust company acted as sole estate trustee given its expertise
    and credibility, and the economies associated with having a single estate trustee
    for both wills.

The issues

[61]

Michael
    Chambers submits that Mrs. Chambers application should have been dismissed.
    He contends that she could not be removed because she had already been deemed
    to have renounced.  Furthermore, he says, there was no basis on which to remove
    him as the estate trustee of the Corporate Will or pass him over.  He does not
    appeal the appointment of the Bank as the sole estate trustee under the Primary
    Will.

[62]

Specifically,
    the appellant submits that the applications judge erred in failing to:

(1)

find that Mrs. Chambers had
    renounced;

(2)

interpret the wills in light of
    the purported renunciation;

(3)

apply the proper test for his removal;
    and

(4)

apply the proper test for his passing
    over.

renunciation

[63]

Michael
    Chambers application to be named the estate trustee (in conjunction with a
    corporate trustee) was based, in part, on his submission that the Renunciation
    Order deemed Mrs. Chambers to have renounced and that order had never been
    overturned or varied.  He complains that while the applications judge noted
    this submission, she did not address it.  He renews this submission on appeal,
    saying that Mrs. Chambers must be found to have renounced and suffer the
    statutory consequences of renunciation dictated by ss. 25 and 34 of the
Estates
    Act
, R.S.O. 1990, c. E.21.

[64]

I
    acknowledge that the applications judge did not expressly deal with this
    submission.  Nonetheless, I would not give effect to this ground of appeal.

[65]

Renunciation
    is defined as [t]he formal act whereby an executor entitled to a grant of
    probate (or person having the right to a grant of administration) renounces
    such right: James MacKenzie,
Halsburys Laws of Canada, Wills and Estates
,
1st ed. (Reissue) (Markham: LexisNexis Canada
    Inc., 2012), at p. 537; James MacKenzie,

Feeneys Canadian
    Law of Wills
, loose-leaf, 4th ed. (Markham: LexisNexis
    Canada Inc., 2000), at para. 7.26; and
MacDonald v. MacIsaac
(1983), 58 N.S.R. (2d) 199 (C.A.), at para. 22.

[66]

Renunciation is generally not available if a party has already intermeddled
    with the estate.  Intermeddling is the term used to describe the acts of a
    person who deals with an estate without having been formally recognized as the
    estate trustee.  As Kennedy J. explained, while executors may renounce at any
    time, (a right which is usually exercised before applying to probate) the
    courts have been reluctant to allow an executor to renounce after having intermeddled
    in the estate, or after having applied for probate:
Stordy v.
    McGregor
(1986), 42 Man. R. (2d) 237 (Q.B.), at para. 9.
    Even a slight act of intermeddling with a deceaseds assets may preclude an
    executor from afterwards renouncing: see
Cummins v. Cummins
(1845), 8 I. Eq. R. 723 (Ch.), at pp. 737-38.  However, this rule has
    been applied with some flexibility: see e.g.
Holder v. Holder
, [1968] Ch. 353 (C.A.).

[67]

In
Waters Law of Trusts in Canada
,
[2]
the authors explain:

Once a trustee has accepted the office, he cannot
    refuse, or to use the correct terminology, disclaim it.  He can then only
    resign, his acts between acceptance and resignation being those of a duly
    appointed trustee.  Disclaimer is available to all those who have been
    appointed trustees, whether as original trustees, new trustees, or additional
    trustees, but who have not expressly accepted and who have done no act which is
    deemed implied acceptance.

[68]

In
    respect of Collette Harrison, there is no question that she renounced.  She did
    so expressly on December 13, 2011, without having carried out any estate
    duties.  Her renunciation was effective when made.  The Renunciation Order, in
    deeming Collette Harrison to have renounced, changed nothing.

[69]

What
    then is Mrs. Chambers position as a result of the Renunciation Order?  At the
    time that the Renunciation Order was made, Mrs. Chambers was already administering
    the Estate under both wills.  It is self-evident that she could not renounce, given
    that renunciation can take place only prior to any act of administration having
    been performed.

[70]

However,
    for the purpose of deciding this issue and in light of the collateral attack
    doctrine, I will assume that the Renunciation Order had effect and Mrs.
    Chambers is deemed to have renounced.  On that assumption, what are the
    consequences?

[71]

In
    my view, pursuant to s. 25 of the
Estates Act
, Mrs. Chambers right to
    serve as the named estate trustee would have ceased, but because of her
    continued administration of the Estate, the role of estate trustee would nonetheless
    have devolved to her on the basis of intermeddling, or the trustee
de son
    tort
principle.

[72]

Section
    25 reads as follows:

25.  When an executor survives the testator, but dies
    without having taken probate, and
when an executor is summoned to take
    probate, and does not appear, the executors right in respect of the
    executorship wholly ceases
, and the representation to the testator, and
    the
administration of the testators property
, without any further
    renunciation,
goes, devolves, and is committed in like manner as if such
    person had not been appointed executor.
[Emphasis added.]

[73]

The
    Renunciation Order required Mrs. Chambers to make an application for a
    certificate of appointment with a will  in effect, she was summoned to take
    probate.  She did not appear, within the meaning of s. 25, in that she did not
    make the application.  Consequently, s. 25 provides, her right to serve as
    estate trustee ceased.

[74]

However,
    s. 25 goes on to provide, administration of the Estate goes, devolves and is
    committed as if Mrs. Chambers had not been appointed executor.  To whom does
    it devolve?  In my view, it would devolve on Mrs. Chambers.  Why?  Because Mrs.
    Chambers alone continued to administer the Estate, the intermeddling or trustee
de son tort
principle would apply, with the result that the office would
    devolve to her.  Consequently, and contrary to the appellants submission, she could
    be relieved of that role only through following the appropriate process for removal
    or resignation.

[75]

Under
    the trustee
de son tort
principle, a person who is not appointed a
    trustee, but who take[s] upon [himself or herself] to act as such and to
    possess and administer trust property may nonetheless be treated as one:
United
    Rubber Estates, Ltd. v. Cradock (No. 3)
, [1968] 2 All E.R. 1073 (Ch.), at
    p. 1095; see e.g.
Coleman v. Ryan
(1923), 55 O.L.R. 182 (H.C.);
Pickering
    v. Thompson
(1911), 24 O.L.R. 378 (Div. Ct.); and
Charles J. Ellison
    Ltd. v. Murray
, [1949] O.W.N. 398 (C.A.).

[76]

As
    Rutherford J. explained in
Re
OReilly (No. 2)
(1980), 28 O.R. (2d)
    481 (H.C.), at p. 486, affd 33 O.R. (2d) 352 (C.A.):

[i]t is
    trite law that a person not lawfully appointed an executor or administrator may
    by reason of his intrusion upon the affairs of the deceased be treated for some
    purposes as having assumed the executorship, as having constituted himself an
    executor
de son tort.

[77]

In
    this case, Mrs. Chambers continued administration of the Estate is
indicative of an intention to usurp the functions or authority
    of a trustee, and the trustee
de son tort
principle applies:
Re OReilly (No. 2)
, at
    p. 486.  Consequently, as I have said, as a result of Mrs. Chambers
    intermeddling after the deemed renunciation, the administration of the Estate
    would have devolved to her pursuant to s. 25.

[78]

A
    consideration of s. 34 of the
Estates Act
leads to a similar analysis
    and conclusion.  Section 34 reads as follows:

34.
Where a person renounces probate
of the
    will of which the person is appointed an executor,
the persons rights in
    respect of the executorship wholly cease
, and the representation to the
    testator and
the administration of the testators property
, without
    any further renunciation,
goes, devolves and is committed in like manner as
    if such person had not been appointed executor.
[Emphasis added.]

[79]

On
    a plain reading of s. 34, assuming that the Renunciation Order is treated as
    having the effect of a renunciation of probate, Mrs. Chambers right to
    administer the Estate by virtue of being the named estate trustee ceased.
    Administration of the Estate would devolve as if she had not been appointed
    executor.  However, after the Renunciation Order, Mrs. Chambers alone continued
    to carry out the duties of the estate trustee.  Therefore, under s. 34, in the
    circumstances of this case, administration of the Estate devolved to her,
    pursuant to the intermeddling or trustee
de son tort
principle.

[80]

This
    ends the analysis of renunciation in respect of the Primary Will.  An additional
    question remains in respect of the Corporate Will, however.  Does the fact that
    Michael Chambers was named as an alternate estate trustee in the Corporate Will
    affect the foregoing analysis?  In my view, it does not.

[81]

By
    the express terms of the Corporate Will, Michael Chambers is named as alternate
    estate trustee in the event that Mrs. Chambers is unable or unwilling to act or
    continue to act.  However, that condition precedent to Michael Chambers
    appointment was not met until Mrs. Chambers brought her application.  The
    deemed renunciation, assuming it could operate, did not render Mrs. Chambers
    unable to act  it simply caused her right to administer the Estate, based on
    having been the named estate trustee, to cease.  And, Mrs. Chambers only became
    unwilling to act at the time that she brought her application.

[82]

Thus,
    although Michael Chambers purported to accept an appointment as the estate
    trustee under the Corporate Will, prior to the hearing of the applications, he was
    not able to because the condition precedent to his appointment had not been met.

[83]

Moreover,
    and contrary to the appellants assertion, the applications judge committed no
    error in deciding Mrs. Chambers application.  It was necessary for Mrs.
    Chambers to bring such an application in order to be relieved of the role of
    estate trustee.

InterpretATION OF the will

[84]

Michael
    Chambers submits that ss. 25 and 34 of the
Estates Act

required
    the applications judge to interpret the wills as if neither Mrs. Chambers nor
    Collette Harrison had been named as the estate trustees.  Thus, he says, he is
    the only named trustee in the Corporate Will and there was no named trustee in
    the Primary Will at all.

[85]

I
    see nothing in this submission.  Neither ss. 25 nor 34 says anything about the
    interpretation of the will.  There is no basis for reading into the legislation
    the requirement that if a court finds that either provision applies, the will
    in question must be interpreted as if the named estate trustee had never been
    named.

[86]

This
    ground of appeal must fail.

REMOVal

[87]

Michael
    Chambers complains that the applications judge did not distinguish between
    removal and passing over, and that it is unclear on what basis she refused to
    appoint him as the estate trustee under the Corporate Will.  He submits that
    the most accurate characterization is that he was removed as the estate
    trustee.

[88]

I
    accept that the applications judge does not explain whether she removed Michael
    Chambers as the estate trustee or passed him over.  This is evident from para.
    5 of the Judgment rendered in Michael Chambers application, which reads as
    follows:

THIS COURT ORDERS
that the relief sought to have Michael
    Chambers removed or passed over however it might best be expressed, is
    hereby granted.

[89]

In
    my view, properly understood, the applications judge passed over Michael
    Chambers as estate trustee under the Corporate Will.

[90]

An
    estate trustee is removed after he or she has received a certificate of
    appointment, whereas an executor is passed over before the issuance of such a
    certificate: see
Windsor v. Mako Estate

(2008), 43 E.T.R. (3d)
    255 (Ont. S.C.), at para. 35.  Put another way, a person is removed as estate
    trustee after he or she has assumed authority to administer the estate, whereas
    a person is passed over as estate trustee prior to having assumed authority to
    administer the estate.

[91]

At
    the time the applications were heard, Michael Chambers was not the estate
    trustee and, therefore, could not have been removed.  He had not received a
    certificate of appointment nor had he been acting as estate trustee.  Although
    he purported to have accepted an appointment as the named alternate estate
    trustee under the Corporate Will on the basis that Mrs. Chambers was unable or
    unwilling to act, as I have explained, he could not accept such an appointment
    as, prior to the applications, Mrs. Chambers was neither unable nor unwilling
    to act as the estate trustee.

[92]

Accordingly,
    the question of Michael Chambers removal does not arise and this ground of
    appeal fails.

PASSING OVER

[93]

Michael
    Chambers submits that if the applications judge passed him over as the estate
    trustee under the Corporate Will, she did so in error and without considering
    or applying the proper legal test.

[94]

I
    do not accept this submission.

[95]

The
    applications judge was fully alive to the legal principle that the court should
    not lightly interfere with a testators choice of the person to act as his or
    her estate trustee:
Re Weil
, [1961] O.R. 888 (C.A.), at p. 889.  Just
    as a court should remove an estate trustee only on the clearest of evidence,
    so too they should be reluctant to pass over a named executor
unless
    there is no other course to follow:
Windsor
, at
    para. 41, citing
Crawford v. Jardine
(1997), 20
    E.T.R. (2d) 182 (Ont. C.J. (Gen. Div.)), at para. 18.  As Wright L.J.
    explained, passing over of an executor and granting administration to other
    parties is an unusual and extreme course, though it is within the discretion of
    the Probate Court:
Re Leguia (No. 2)
(1936), 155
    L.T.R. 270 (C.A.), at p. 276.

[96]

Thus, the wishes of the testator will generally be honoured, even if
    the person chosen is of bad character:
Carmichael Estate (Re)

(2000), 46 O.R. (3d) 630 (S.C.), at para. 17.  In fact, an
    executor named in a will should not be passed over simply because he or she is
    of bad character or bankrupt, or there is likely to be friction between
    co-executors: see
Harris v. Gallimore
(1925), 57
    O.L.R. 673 (C.A.), at p. 678;
Re Agnew
, [1941] 4
    D.L.R. 653 (Sask. C.A.), at p. 657;
Re Wolfe
(1957), 7 D.L.R. (2d) 215 (B.C.C.A.), at p. 221; and
Crompton v.
    Williams
, [1938] O.R. 543 (H.C.), at pp. 586-87.  That being
    said, courts have passed over an executor because he was in a conflict of
    interest with the estate (e.g.
Re Becker
(1986),
    57 O.R. (2d) 495 (Surr. Ct.), at pp. 498-99;
Thomasson Estate (Re)
, 2011 BCSC 481, [2011] B.C.W.L.D. 4763, at paras. 29-30) or because
    she had a conflict and was in poor health (e.g.
Re Bowerman
(1978), 20 O.R. (2d) 374 (Surr. Ct.), at p. 377).

[97]

In
    this case, Michael Chambers is correct when he says that the applications judge
    failed to implement the provisions of the Corporate Will appointing him as the
    alternate estate trustee.  And, I accept that Mr. Chambers knew that Michael
    Chambers was a discharged bankrupt at the time he made his wills.  Nonetheless,
    in my view, the applications judge made no error in passing Michael Chambers
    over as the estate trustee under the Corporate Will.

[98]

It
    is clear from the record that Michael Chambers holds a strong animosity towards
    Mrs. Chambers.  I need not repeat the facts around the allegations he has made
    in respect of Mrs. Chambers to justify this statement.  His animosity rises
    above mere friction and satisfies me that due administration of the corporate estate
    would be compromised were he to be appointed a co-estate trustee with the Bank
    as he wishes.

[99]

It
    is trite law that trustees must act jointly.  The central task of the estate
    trustee in respect of the Corporate Will is to ensure that Fairview is properly
    managed and sold.  Given that Mrs. Chambers owns 50 per cent of Fairviews
    shares and the Estate owns the other 50 per cent, there is every reason to
    believe that Michael Chambers strong animosity towards Mrs. Chambers would
    create a deadlock in relation to the management and sale of Fairview if he were
    appointed a co-estate trustee with the Bank.  His decisions in respect of
    Fairview could not fail to be coloured by his overriding animosity towards Mrs.
    Chambers.

[100]

Mrs. Chambers is
    a founder and one-half shareholder of Fairview.  She has injected personal
    funds to stave off receivership.  These are not irrelevant considerations, as
    the appellant would have it.  They are very much tied up with Fairviews proper
    management and disposition.  Decisions regarding the preservation and sale of
    Fairview must be made with care and dispatch.  The risk of deadlock between
    Michael Chambers and the Bank is real.  For this reason, and having regard to
    the beneficiaries best interests, the applications judge, in my view, made no
    error in passing over Michael Chambers.

CONCLUSION

[101]

Despite the
    Renunciation Order, because Mrs. Chambers continued to administer the Estate, she
    required a court order in order to be released from the position of estate
    trustee.  Sections 5 and 37 of the
Trustee Act
, R.S.O. 1990, c. T.23
    give the court the authority to remove a trustee and appoint another trustee in
    his or her place.
[3]
In addition, the court has an inherent power of appointment and removal: see
Evans
    v. Gonder
, 2010 ONCA 172, 259 O.A.C. 295, para. 42.  Therefore, when
    deciding Mrs. Chambers application, the applications judge had the power both
    to remove her as estate trustee and to appoint her successor.

[102]

I see nothing in
    Michael Chambers contention that Mrs. Chambers sought to resign conditionally
    on the appointment of her chosen successor, as in
Re Moorhouse
, [1946]
    4 D.L.R. 542 (Ont. H.C.J.), at p. 544.  Her wish to be removed was
    unconditional.  She did not attempt to dictate whom the court should appoint as
    her successor.  Rather, she offered her views on the needs of the Estate and
    the qualities her successor should possess.

[103]

It was clear
    from Mrs. Chambers application that she sought to have Michael Chambers passed
    over.  Thus, there is also nothing in the appellants submission that the
    applications judge gave relief that had not been sought and was not properly in
    issue.

[104]

As I have
    already noted, the applications judge was fully alive to the legal principle
    that a court ought not to lightly interfere with a testators choice of estate
    trustee.  However, she concluded that the welfare of the beneficiaries would be
    best served if a trust company were appointed the successor estate trustee
    because of its expertise and credibility, and the economies associated with a
    single trustee for both wills. She considered the complexity of the Estate
    administration, including the problems associated with Fairview, which all
    parties acknowledged.  She also considered Michael Chambers suitability before
    arriving at this conclusion.

[105]

Importantly,
    although the applications judge did not allude to this, as I have already
    explained, there is the very real possibility that the appellants appointment
    as co-estate trustee with the Bank would have led to a deadlock situation.  In
    order to avoid that, as well as for the reasons articulated by the applications
    judge, I see no error in her conclusion that the Bank alone should be appointed
    as the successor estate trustee.

disposition

[106]

Accordingly, I
    would dismiss the appeals with costs to the respondent payable from the Estate,
    fixed in the amount of $10,000, all inclusive.

Released:

AUG 12 2013                                   E.E.
    Gillese J.A.

EEG                                                I
    agree Gloria Epstein J.A.

I
    agree P. Lauwers J.A.

APPENDIX A

Trustee Act
, R.S.O. 1990, c. T.23

Power of court to appoint new trustees

5.       (1) The Superior Court of Justice may make an order for the
    appointment of a new trustee or new trustees, either in substitution for or in
    addition to any existing trustee or trustees, or although there is no existing
    trustee. R.S.O. 1990, c. T.23, s. 5 (1); 2000, c. 26, Sched. A, s. 15 (2).

Limitation of effect of order

(2) An order
    under this section and any consequential vesting order or conveyance does not
    operate as a discharge from liability for the acts or omissions of the former
    or continuing trustees. R.S.O. 1990, c. T.23, s. 5 (2).

Removal of personal
    representatives

37.     (1) The Superior Court of Justice may remove a personal
    representative upon any ground upon which the court may remove any other
    trustee, and may appoint some other proper person or persons to act in the
    place of the executor or administrator so removed. R.S.O. 1990, c. T.23, s. 37
    (1); 2000, c. 26, Sched. A, s. 15 (2).

Security by person appointed

(2) Every
    person so appointed shall, unless the court otherwise orders, give such
    security as would be required to be given if letters of administration were
    granted to the person under the Estates Act. R.S.O. 1990, c. T.23, s. 37 (2).

Who may apply

(3) The order
    may be made upon the application of any executor or administrator desiring to
    be relieved from the duties of the office, or of any executor or administrator
    complaining of the conduct of a co-executor or co-administrator, or of any
    person interested in the estate of the deceased. R.S.O. 1990, c. T.23, s. 37
    (3).

When new appointment
    unnecessary

(4) Where the
    executor or administrator removed is not a sole executor or administrator, the
    court need not, unless it sees fit, appoint any person to act in the place of
    the person removed, and if no such appointment is made the rights and estate of
    the executor or administrator removed passes to the remaining executor or
    administrator as if the person so removed had died. R.S.O. 1990, c. T.23, s. 37
    (4).

Chain of representation

(5) The
    executor of any person appointed an executor under this section shall not by
    virtue of such executorship be an executor of the estate of which his or her
    testator was appointed executor under this section, whether such person acted
    alone or was the last survivor of several executors. R.S.O. 1990, c. T.23, s.
    37 (5).

Copy of order to be filed

(6) A
    certified copy of the order of removal shall be filed with the Estate Registrar
    for Ontario and another copy with the local registrar of the Superior Court of
    Justice, and such officers shall, at or upon the entry of the grant in the
    registers of their respective offices, make in red ink a short note giving the
    date and effect of the order, and shall also make a reference thereto in the
    index of the register at the place where the grant is indexed. R.S.O. 1990, c.
    T.23, s. 37 (6); 2000, c. 26, Sched. A, s. 15 (2).

Endorsement

(7) The date
    of the grant shall be endorsed on the copy of the order filed with the Estate
    Registrar for Ontario. R.S.O. 1990, c. T.23, s. 37 (7).

[1]
Different terms are used to describe the person who administers an estate:
    executor, executrix, trustee, and estate trustee, to name but a few.  For ease
    of reference, the term estate trustee is used in these reasons.

[2]
Donovan W.M. Waters, Mark R. Gillen & Lionel D. Smith,
Waters Law of
    Trusts in Canada
,
4th ed. (Toronto: Thomson Reuters Canada Limited,
    2012), at p. 884.

[3]
The full text of ss. 5 and 37 is included in Appendix A to these reasons.


COURT OF APPEAL FOR ONTARIO

CITATION: Demin (Re), 2013 ONCA 529

DATE: 20130823

DOCKET: C56922

Goudge, Watt and Pepall JJ.A.

IN THE MATTER OF:  RAFIK DEMIN

AN APPEAL UNDER PART XX.1 OF THE
CODE

Rafik Demin, appearing in person

Howard L. Krongold,
amicus curiae

Matthew Asma, for the respondent

Janice Blackburn, for the Person in Charge of Centre for
    Addiction and Mental Health

Heard: August 22, 2013

On appeal against the disposition of the Ontario Review
    Board dated, April 3, 2013.

APPEAL BOOK ENDORSEMENT

[1]

In our view the appeal must be dismissed.

[2]

The majority of the Board concluded that the appellant remained a
    significant threat.  A fair reading of their decision is that they did so
    because they concluded that if he were absolutely discharged at that point,
    there was a significant risk he would go off his meds since he had not fully internalized
    his need to continue to take them.  There was a clear evidentiary basis for
    them to reach that conclusion and we view it to be a reasonable one.

[3]

While the majority expresses a wish to be informed in the future of a
    placement plan that would allow them to better assess the risk the appellant
    poses they are at that point speaking about the future.  Implicit in that seems
    to be their hope that a satisfactory plan can and will be developed.  Indeed
    that appears to be why they decided this case should be brought back early for
    consideration in six months.  That is now what is unfolding.

[4]

The appeal is dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION: Fantl v. Transamerica Life
    Canada, 2013 ONCA 507

DATE: 20130802

DOCKET: M42716 (C57067)

Lauwers J.A. (In Chambers)

BETWEEN

Joseph Fantl

Plaintiff (Appellant/
    Responding Party)

and

Transamerica Life Canada

Defendant
    (Respondent/
    Moving Party)

Proceeding under the Class
    Proceedings Act 1992, S.O. 1992, c. 6

Mary Jane Stitt, for the moving party

David F. O'Connor and J. Adam Dewar, for the responding
    party

Heard: August 1, 2013

On a motion for directions respecting an appeal from the order
    of Justice Paul Perell of the Superior Court of Justice, dated April 18, 2013,
    with reasons reported at 2013 ONSC 2298.

ENDORSEMENT

[1]

The moving party/respondent seeks directions in this class action appeal.

[2]

As the result of this courts decision in
Cavanaugh v. Grenville
    Christian College
, [2013] O.J. No. 1007, the appellant launched two
    appeals, one to this court and the other to the Divisional Court under s. 30 of
    the
Class Proceedings Act
.   The appeal to this court in respect of
    paragraph 1 of the order is set to be argued on September 16, 2013. The
    Divisional Court motion for leave to appeal with respect to the balance of the
    order is set to be argued on September 25, 2013.

The Appeal to this Court

[3]

The motion judge certified the class action on a much more limited basis
    than was sought by the appellant.  The first paragraph of his order provides:

This court orders that the claims and the causes of action for
    breach of implied terms of contract and breach of collateral warranty or
    collateral contract set out in the second fresh as amended statement of claim
    (claim) are hereby struck and dismissed.

[4]

The motion judge held that the listed claims were untenable at law and
    therefore did not meet the test in s. 5(1)(a) of the
Class Proceedings Act
.
    The appellant appeals this dismissal decision to this court.

[5]

The appellant challenges the motion judges decision that the
    information folder is not part of the insurance contract between class
    members and the respondent Transamerica.  The information folder provides that:
    The goal of the Can-Am fund is to replicate, on a best-efforts basis, the
    performance of the S&P 500 Total Return Index.  That was the provision on
    which part the appellant wishes to rely as an express contractual term, or as
    an implied term, a term of a collateral contract or a collateral warranty. The
    underperformance of the fund appears to be the basis for the damages claim. The
    appellant also wants to refer to supportive extrinsic evidence that was before
    the motion judge.

[6]

The extrinsic evidence to which appellant wishes to refer in argument
    consists of marketing manuals used by sales agents for the respondent that
    purported to define the relevant contract as: the combination of the IMS II
    application form, the Summary Information Folder, Policy Form and Notice of
    Confirmation making up the IMS II contract.  The appellant also wishes to
    refer to the description of the Can-Am Fund in a document entitled An
    Explanation of How the Funds Operate, which states that:

The Can-Am Fund delivers S&P 500 performance in Canadian
    dollars.  Whatever happens to the S&P 500 Index will happen in the Can-Am
    Fund.  This is what the investor is purchasing.

The Motion for Directions

[7]

The moving party/respondent has two complaints on which directions are sought.
    First, the appeal materials filed by the appellant, without consultation with
    the respondent or compliance with r. 61.05 of the
Rules of Civil Procedure
,
    do not include a number of documents referred to in the Second Fresh as Amended
    Statement of Claim to which the respondent intends to refer on the appeal.  No
    exhibit book has yet been filed.  The respondent agrees that the filings have
    been deficient and agrees to comply with the rules, so no direction is
    required.

[8]

The moving partys second complaint is that the appeal book and
    compendium include the extrinsic evidence, to which the appellants factum refers.
    The moving party seeks an order excluding this extrinsic evidence from the
    record even though it was in the record before the motion judge, on the basis
    that on the narrow appeal before this court the evidence is inadmissible. The
    motion judges decision under section 5 (1)(a) of the CPA is analogous to a
    decision under r. 21.01 (1)(b)  on which no evidence is admissible except for
    documents referred to and incorporated by reference into the pleading.

[9]

In response, the appellant refers to two paragraphs of the motion judges
    decision, which he argues are contradictory on the issue of the admissibility
    of extrinsic evidence:

[123]     The case at bar is not one of those cases where it is
    necessary or preferable to decide whether the plaintiff has a cause of action
    based on a full evidentiary trial record. This court or any appellate court has
    all it needs to decide whether Mr. Fantl's claims based on implied terms or
    collateral contracts are legally tenable.

[156]    A statement will be considered to be a collateral
    warranty only where the evidence discloses that the parties intended or must be
    taken to have intended that the representation was to form part of the basis of
    the contractual relations between them: [Citations omitted.]

[10]

The
    appellant argues that the motion judge erred by making [a] final determination
    regarding contractual termsthat was properly reserved to the common issues
    trial judge, which amounts to deciding unsettled issues of law and mixed fact
    and law. This argument does not strike me as implausible.

[11]

In
    my view, in the circumstances of this case, it would be preferable for the
    panel hearing this appeal to have before it all of the same material as the
    motion judge, as is customary. Needless to say, before the panel the parties
    are free to dispute the admissibility of the evidence in the record. I do not
    expect that any additional time would be required for the argument of the
    appeal. I therefore decline to make the order requested.

P. Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Israel v. Wright, 2013 ONCA 522

DATE: 20130821

DOCKET: C56814

Goudge, Watt and Pepall JJ.A.

BETWEEN

Michael Israel

Plaintiff (Appellant)

and

Michelle Wright

Defendant (Respondent)

Michael Israel, appearing in person

Michelle Wright, appearing in person

Heard: August 21, 2013

On appeal from the judgment of Justice Craig Perkins of
    the Superior Court of Justice, dated March 21, 2013.

APPEAL BOOK ENDORSEMENT

[1]

We see no error in the order of Perkins J.

[2]

The appeal is dismissed.  Costs to the respondent fixed at $750.