A Further Appeal to the Supreme Court of Canada on a Joint Accounts Case
As we talked about yesterday, there are 2 important decisions of the Ontario Court of Appeal that have recently been granted leave to appeal to the Supreme Court of Canada. On November 1, 2005, the Court of Appeal again considered the question in Saylor v. Madsen Estate. In this case, the Court of Appeal held that, while the deceased's intention was clear from the evidence, the presumption of resulting trust did not need to be considered. The Court confirmed the approach set out in Pecore v. Pecore and held that:
Reliance on the presumptions has diminished because the Courts are now first examining all of the evidence to determine the transferor's intent. That is to say, Courts are tending to examine the evidence in its entirely and base findings regarding intention on all the facts. It will only be where the evidence itself is unclear that reliance on the presumptions becomes necessary.
This approach will reflect what I believe to be a sensible and modern approach to an analysis of the presumptions. ...there is no reason to resort to the presumptions where evidence of intention is clear. This approach is both contemporary and reasonable since the overall purpose is, after all, to ascertain the transferor's intention."
Eugene Meehan's cite reports this second important decision (trial decision) as follows:
WILLS: PRESUMPTION OF ADVANCEMENT, RESULTING TRUSTS, JOINT OWNERSHIP
The Respondents, Mary Elizabeth Saylor and William Anthony Madsen were the sister and brother of the Applicant, Patricia Ann Brooks who was named executor by their late father. Litigation was commenced by Saylor and Madsen by way of application in September 2001 and Brooks was named in the application as Respondent in her capacity of estate trustee only. In that application, they sought an order requiring Brooks to account for the property of their deceased father; for division of the property in accordance with the will; and for an injunction requiring her to pay all estate monies into court. Brooks issued a counter application in February 2002, solely in her capacity as estate trustee seeking an order for directions from the court. The parties entered into a consent order in which Brooks was required to pay the amount in the estate account, $365,000.00, to her lawyer, Mr. Ackerman, who was to hold such funds pursuant to a handwritten undertaking agreed to by the parties.
It was also ordered that the application was to be converted to an action. The statement of claim was issued in August 2002, and Brooks was named as defendant both in her personal capacity and as estate trustee. The late father had transferred all of his bank accounts and investments into the joint names of himself and Brooks approximately seven and one half years before he died. At the time of his death he owned his interest in these joint accounts, a life insurance policy and real property.
Additionally, Brooks as estate trustee, alleged that the Respondent sister owed the estate $35,900.00 and the Respondent brother owed $26,360.00 to the estate, which they had borrowed from their late father and sought an order for payment. The trial judge gave judgment allowing the claim that the funds contained in the bank account and certain investments held jointly by Brooks and her late father formed part of the estate. The trial judge also found that Brooks had breached her fiduciary duty by failing to include the joint accounts in the estate, but did not award damages; rather, Brooks was required to make restitution to the estate. Brooks' compensation as estate trustee was fixed. The trial judge dismissed the counter-claim and held that the sum paid by the estate to Mr. Ackerman for Brooks' legal fees was to be repaid to the estate, either by Brooks or by Mr. Ackerman. A determination of costs was then made in May 2005, and Brooks was, in her personal capacity, ordered to pay the Respondents' costs fixed in the amount of $120,000.00.
The Court of Appeal dismissed the appeal. Patricia Ann Brooks, Estate Trustee v. Mary Elizabeth Saylor, et al. (Ont. C.A., November 1, 2005) (31262) "The application for an extension of time to file a revised notice of application for leave to appeal is granted and the application for leave to appeal...is granted with costs to the Applicant in any event of the cause."
It is going to be an interesting time over the next short while, as we wait for the final word from the Supreme Court of Canada, and an even more interesting time when their decisions are rendered on this important Estate Planning technique.
All the best, Suzana and Ian. --------
