A Recent Review of Conflict of Laws in the Estates Context
A recent Ontario Supreme Court of Justice – Ontario Divisional Court decision, Park v. Myong, 2015 ONSC 2287, presents an interesting review and discussion of law of jurisdiction and conflict of laws in the Estates law context. In this motion for leave to appeal, the applicant, Jung Mi Park was seeking to appeal an order of Justice Penny staying her application pending the determination of a related proceeding in the state of California. The facts of this case are set out below.
The deceased, Jung Myong, died on April 30, 2013, while living in California. She had four adult children, all living in the United States, with whom she had not had contact for twenty years. The deceased’s Will was prepared and executed in California. She held significant assets, including real estate, both in California and Ontario. The applicant, Ms. Park, was the named executor pursuant to the deceased’s Will and lives in Ontario with her two children. The deceased’s Will makes two specific bequests to Ms. Park’s children; there are no other bequests and no residue clause.
During October of 2013, Ms. Park and the children obtained probate of the deceased’s Will in California, appointing the son of the deceased, Charles Myong, as the administrator of the estate. During January 2014, Mr. Myong filed a petition in California to determine entitlement to estate distribution, asserting that due to the absence of a residue clause, the residue passed on intestacy to the deceased’s children. Ms. Park filed a statement of interest in response to the petition, which (i) opposed the relief sought by Mr. Myong, (ii) asserted that the absence of a residue clause was an error of the drafting solicitor, and (iii) sought rectification of the Will so as to leave the residue to her. Ms. Park’s position is supported by the drafting solicitor who deposed that she had been instructed by the deceased to name Ms. Park as the residuary beneficiary but that the residue clause was left out of the Will due to a clerical error.
In March of 2014, Ms. Park commenced an application in Ontario seeking (i) a declaration that Mr. Myong, as administrator, holds the assets present in Ontario in resulting trust for her, and (ii) an order that the Will be rectified by naming her as the sole beneficiary. Mr. Myong responded by filing a cross-application seeking a stay of the Ontario application until his petition in California is determined or finally settled. Ms. Park then commenced proceedings in California in September 2014 against Mr. Myong in his capacity as administrator, claiming that the estate assets were all held for her either by way of contract or resulting trust. Finally, on October 23, 2014, Justice Penny stayed the Ontario application pending the decision or settlement of the California petition.
In deciding against granting the applicant leave to appeal Justice Penny’s order, Justice Lederer reviewed the test for when such leave should be granted:
The test on a motion for leave to appeal is well-known. It is found in r. 62.02(4) of the Rules of Civil Procedure. One of two tests, each of which includes two requirements, must be satisfied. Leave to appeal will be granted if there is a conflicting decision and, in the opinion of the judge hearing the motion, it is desirable that leave be granted. In the alternative, leave to appeal will be granted where there is good reason to doubt the correctness of the order and that the proposed appeal involves matters of such importance that, in the opinion of the judge, leave to appeal should be granted. (para 18)
In the case at hand, Justice Lederer found that there were two issues to be determined in the stayed Ontario application: (i) the intentions of the testator and identification of the beneficiaries, and (ii) ownership of the real estate located in Ontario. With respect to having these issues determined, he found that Justice Penny’s order did not prejudice Ms. Park since the first issue is captured by Ms. Park’s request for rectification in California, which will determine the residuary beneficiaries, and the second issue can be recommenced in Ontario if the first issue is not found in Ms. Park’s favour.
For the determination of the first issue, Justice Penny concluded that convenience and cost favoured California as the convenient forum since the Will was drafted in California, the drafting solicitor (a critical witness) resides in California, the residuary beneficiaries on intestacy reside in California and the Will was probated in California. Justice Lederer agreed with this determination. Furthermore, since the outcome of the first issue determines whether it is even necessary for Ms. Park to pursue the second issue regarding ownership of real estate in Ontario, Justice Lederer agreed with Justice Penny that the rectification issue is the key issue in this litigation and should be determined first. Consequently, Justice Lederer found that Justice Penny’s decision to stay the application pending the outcome of the rectification issue in California was the correct decision in the circumstances.
For a more indepth review of Justice Lederer’s decision, including his consideration of Ms. Park’s counsel’s argument that the issues involved the question of title to real estate in Canada, and should be dealt with in the jurisdiction where the land is located, you can review his full decision here. Otherwise, congratulations for getting through a blog posting on question of jurisdiction and conflict of laws on a Friday!
Thank you for reading.