On a recent motion, the Superior Court of Justice denied the applicant’s request for a vesting order to satisfy the equalization of net family property owed to her.
In Leith v. Eccles, 2024 ONSC 4769, the applicant, Ms. Leith, sought an equalization payment from the estate of her deceased husband, Mr. Leith, and proposed using this payment to acquire the matrimonial home from the estate. Mr. Leith’s Will directed that his wife receives half of the amounts from his bank accounts, pension, and RRSP accounts. Additionally, he bequeathed property to each of his children and stipulated that the remainder of the estate be divided equally among them.
The matrimonial home, a farm property, was valued higher than the equalization payment due to Ms. Leith. She proposed paying the balance directly to the estate to avoid incurring commission fees and HST, which would exceed $120,000 if the property were sold. However, the deceased’s children argued that calculating the equalization payment owed to Ms. Leith was premature before the properties were sold. They contended that to ensure fairness among all beneficiaries, the estate’s properties should first be sold, and the estate’s debts, including Ms. Leith’s equalization payment, should be settled accordingly.
Ms. Leith relied on Section 7(1) of the Family Law Act, which allows the court to determine a spouse’s entitlement and provides for orders, including property transfer or vesting. She further relied on Section 100 of the Courts of Justice Act, which grants the court broad powers to issue vesting orders.
The court agreed with the children’s position that the estate’s assets should be sold to determine Ms. Leith’s entitlement under the equalized net family property. The court noted that although there is limited case law on vesting orders against estates, the Ontario Court of Appeal’s decision in Thibodeau v. Thibodeau, 2011 ONCA 110 provides guidance on the criteria for granting such orders:
“The onus is on the party seeking the order, and generally, the court will exercise discretion in favor of a s. 9(1) order only if it is established that the equalization payment order will likely not be complied with without additional, more intrusive provisions.”
Accordingly, the court found that the testator’s wishes—specifically his decision not to bequeath the farm property or other properties to his spouse—could not be disregarded. The court also noted that vesting the farm property in Ms. Leith was not the only way to fulfill her entitlement. Instead, the estate’s properties could be sold to generate sufficient funds to cover the equalization payment, ensuring Ms. Leith receives the amount owed to her without requiring the vesting of the property.
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