Applications for Dependants’ Relief benefit from a potentially generous limitation period. However, a question that may arise is whether assets remain available to satisfy a support claim. One such question relates to the interplay between the provisions of Part V of the Succession Law Reform Act (“SLRA”) and s. 9 of the Estates Administration Act (“EAA”).
Section 61(1) of the SLRA sets a six-month limitation period on dependant support claims which begins to run upon the issuance of a Certificate of Appointment of Estate Trustee.
However, if the application is commenced after the limitation period expires, the court has discretion under section 61(2) of the SLRA to allow support from “any portion of the estate remaining undistributed at the date of the application”.
Section 67 of the SLRA provides that where a personal representative is given notice of a support claim, they may not make distributions from the estate until the disposition of the application, and if they do, they will be held personally liable.
Section 9 of the EAA provides that:“Real property not disposed of, conveyed to, divided or distributed among the persons beneficially entitled thereto… within three years after the death of the deceased is…at the expiration of that period, whether probate or letters of administration have or have not been taken, thenceforth vested in the persons beneficially entitled thereto under the will or upon the intestacy…”
Now, if an executor is inhibited from making distributions until the expiry of the limitation period where there is the possibility of a support claim, then it would seem intuitive that section 9 of the EAA should be similarly inhibited.
To wit: should the effect of section 9 EAA be delayed until the expiry of the six-month limitation period under section 61(1) SLRA?
As the Court of Appeal in 909403 Ontario Ltd v DiMichele, 2014 ONCA 261 made certain (at para. 98),
“[s]ection 9 [EAA] (and its predecessors) was not enacted to limit the powers given to an estate trustee under a will. Rather, it was intended to give estate trustees additional powers, but only to the extent that the additional powers do not conflict with the provisions of the will. The intention of the deceased in his or her will, is always paramount”.
This interpretation of section 9 is confirmed by section 10 EAA, which states that nothing in section 9 derogates from any right possessed by a trustee under the will. Section 10, therefore, allows the court to interpret the will of the deceased to determine whether the deceased intended (for a power of sale clause) to oust the triggering of section 9 upon three years from death. If such an intention is clear, section 9 will not then limit the scope of the trustee’s power of sale by requiring that the property vest after 3 years (Re Proudfoot Estate, [1994] O.J. No. 704 at paras 8, 11 and 12, varied on other grounds by C.A. in [1997] O.J. No. 2409).
We are not aware of any reported decisions which contemplate the application of s 9 EAA to testate estates under which a dependant support application is possible. This is likely because it is commonly understood that s 9 EAA nearly always had no application to testate estates (power of sale clauses should almost always oust s 9 EAA, unless there are strings attached). Further, no other province (except New Brunswick) has statutory automatic vesting provisions akin to the EAA, and the law is therefore sparse in this area.
However, a few arguments can be made in support of the proposition that the vesting effect of section 9 EAA should be delayed until the expiry of the six-month limitation period under section 61(1) SLRA:
Firstly, the additional vesting power granted to an estate trustee under section 9 EAA would otherwise conflict with a support order. If a Property vests, and the court later gives the Property to the support claimant, there would clearly be a conflict with the executor’s power to distribute property in accordance with the will. Section 10 EAA indicates that in such circumstances of conflict, the additional power under section 9 EAA will not be granted.
Secondly, if the effect of section 9 EAA were delayed until the expiry of the limitation period for bringing a support claim, this would appear to align with the policy rationale of the SLRA, including the purpose of sections 61 and 67, as well as the intent of s 9 EAA. The balance sought by the SLRA would be maintained, i.e., between testamentary freedom and the principle of providing for dependants.
Finally, it is submitted that unconscionable results would arise if section 9 EAA acted to vest Property three years from death and a support claim is thereafter successful against the same Property.
Thanks for reading
David Morgan Smith and Jordyn Sanford (student-at-law)