The Ontario Court of Appeal’s decision in Beirat v. Khiyal 2024 ONCA 790 (“Beirat”) underscores the critical importance of standing in estate claims.
Put simply, Beirat serves as an important reminder that even though a person may be named as an estate trustee under a will, they do not inherently have standing to commence or defend a proceeding on behalf of the estate until probate has been granted.
The case involved a dispute over the estate of Mr. Abutaa (the “Deceased”), who died in 2022. The primary legal issue concerned the determination of the Deceased’s assets at the time of his death. The Deceased was legally married to the Respondent but had been living in a common-law relationship with the Appellant with whom he had a child.
The Respondent sought to continue her claims from a divorce proceeding, including equalization of net family properties and spousal support, and alleged that the transfer of the Deceased’s condominium was a fraudulent conveyance. The Appellant claimed that she provided the purchase money for the condominium and sought to have the Deceased’s 1% interest impressed with a resulting trust in her favour.
The Appellant also claimed that the Deceased executed a will, dated October 11, 2018, naming her as the Deceased’s estate trustee and sole beneficiary. The original will was not found but the Appellant had a signed copy. The Respondent asserted that the Deceased must have destroyed the will but provided no evidence to support that assertion. In effect, this left the door open for the motion judge to inquire as to whether there was a valid will or an intestacy.
The Respondent then brought a motion within her application to determine whether the Deceased died intestate and whether to appoint the Deceased and Respondent’s adult daughter as estate trustee.
The motion judge initially ruled in favor of the Respondent, finding her evidence credible and ordering that the Appellant held her 49% of the condominium in trust for the Deceased’s estate. However, the Court of Appeal set aside this order, concluding that the motion judge erred in several respects, including: (i) not addressing whether the Deceased died intestate or whether there was a valid will, and (ii) improperly relying on trust principles without a valid estate representative (the Respondent was a non-titled spouse under the will, and, therefore, she did not have standing to bring such trust claim on behalf of the Deceased’s estate.)
The Court of Appeal directed that the applications by the Appellant and Respondent be consolidated and heard together on a proper evidentiary record, following a determination of whether there is a valid will or intestacy and the appointment of an estate representative.
The issue of standing in Beirat arose because the Respondent attempted to assert a trust claim on behalf of the Deceased’s estate, despite not being a representative of the estate. As a non-titled spouse under the will, the Respondent had no standing to assert a trust claim against a third party on behalf of the Deceased’s estate.
The Court of Appeal found that the proceeding could not continue until a determination was made as to whether there is a valid will or whether the Deceased died intestate. Thereafter, a lawfully appointed estate representative or possibly a litigation administrator, under Rule 9 of the Rules of Civil Procedure, must be appointed to represent the estate, reconstitute the proceedings, and proceed accordingly. As the Court put it (at paragraph 14):
“…no determination was made whether the deceased died intestate or whether the respondent or the deceased’s adult daughter could act as the deceased’s estate representative. Without an estate representative advancing a trust claim against the appellant on behalf of the estate, the motion judge erred in relying on trust principles to conclude that the deceased’s estate had an ownership interest in any asset then in the name of the appellant. Trust claims are personal to the individual. A non-titled spouse cannot assert a trust claim against a third party on behalf of a spouse for equalization purposes: Karatzoglou v. Commisso, 2023 ONCA 738, 488 D.L.R. (4th) 755, at paras. 22-25. Explained differently, if the October 2018 will is valid and the appellant is the deceased’s lawful estate trustee and heir, the respondent has no standing to advance a trust claim on his estate’s behalf against the appellant.”
Beirat serves as a crucial reminder of the importance of standing in estate claims. As emphasized by the Court of Appeal, only a lawfully appointed estate representative or a litigation administrator has the authority to act on behalf of the deceased’s estate. For practitioners and individuals involved in estate disputes, understanding the requirements of standing and the application of Rule 9 is essential for ensuring that estate matters are handled properly and efficiently.
Thanks for reading!
David Morgan Smith and Keaton Pewter (student-at-law)