Dependant Support – Automatic stay on distributions from the estate
The commencement of an Application for support as a dependant under Part V of the Succession Law Reform Act (the “SLRA”) can be an extremely stressful event for the Applicant. Not only is the Applicant likely commencing court proceedings against fellow family members and/or close friends of the deceased, but there may also be a sense of urgency to the Application to ensure that steps are taken before the estate has otherwise been administered and/or distributed to those who would be entitled to the estate but for the support Application. As a result of these concerns it is not uncommon for the Applicant in the early stages of the Application to seek some form of court intervention to stop and/or stay the administration of the estate until the Application has been adjudicated, thereby ensuring that there are assets remaining in the estate to satisfy any support award should it ultimately be made. But is such court intervention actually necessary?
Under section 67 of the SLRA, once an Estate Trustee has been served with an Application for support under Part V they are automatically required to cease all distributions from the estate unless certain conditions are met. Specifically, section 67(1) provides:
“Where an application is made and notice thereof is served on the personal representative of the deceased, he or she shall not, after service of the notice upon him or her, unless all persons entitled to apply consent or the court otherwise orders, proceed with the distribution of the estate until the court has disposed of the application.”
Section 67(3) provides that any Estate Trustee that makes a distribution in violation of section 67(1) once they have been served with an Application under Part V of the SLRA is personally liable to pay any shortfall should a support order ultimately be made. As a result, any distribution made by the Estate Trustee once an Application for support has been commenced would be at great potential personal liability, as they could personally be required to pay any support order.
Although section 67 of the SLRA automatically stops any external distributions being made once an Application for support has been commenced, it does not stop the internal administration of the estate itself. As a result, the Estate Trustee would, for example, still be at liberty to collect and/or liquidate any estate assets, including any real estate. They just could not distribute those funds to the beneficiaries once the assets had been liquidated. In the event the Applicant should seek a particular asset as part of their support order, such as the transfer and/or use of particular real property, additional steps would need to be taken by the Applicant to ensure that the Estate Trustee did not dispose of the asset while the Application remained before the court. These additional steps would likely be in the form of an order under section 59 of the SLRA, while allows the court to issue an order “suspending” the administration of the estate either in whole or in relation to a particular asset (i.e. the real estate) for such time as the court may decide.
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