Author: Sanaya Mistry
Dependants and Their Entitlement to a Deceased’s Estate – A summary of Earl v. McAllister, 2021 ONSC 4050
In the recent decision of Earl v. McAllister, 2021 ONSC 4050, the Divisional Court ordered 100% of the net estate of the Deceased to be used for the benefit of the minor dependants, to the exclusion of the Deceased’s wife.
Leo McAllister (the “Deceased”) died on May 3, 2017. He is survived by his wife (Barbara McAllister) and his two minor sons (the “Sons”) from a previous relationship with Tammy Earl. When the Deceased learned he was dying, he started to put his affairs in order, including executing a Will and leaving his estate (the “Estate”) to his wife and signing consents required to transfer the designed beneficiaries on one of his pensions from Ms. McAllister to his Sons.
Ms. Earl brought an application on behalf of her Sons, for their support, pursuant to Part V of the Succession Law Reform Act. The Applicant argued that for the purposes of this application, the value of two pensions and a life insurance policy should be included in the value of the Estate of the Deceased, failing which, the Estate would have a shortfall of $12,926.82 due to the Estate’s liabilities. She also argued that the entirety of the Estate should be used for the benefit of her Sons, as they are both dependants of the Deceased.
The Application Judge agreed that one of the pensions and the life insurance proceeds should be included in the value of the Estate, valuing it at $167,062.52. The Application Judge ordered the net value of the Estate to be split in two halves, one to be used for the benefit of the Sons and one to be distributed to Ms. McAllister. The Application Judge also ordered $30,000 of the Sons’ half to be paid into Court, to be paid to the Sons when they turn 18.
Ms. Earl appealed this decision, arguing that both pensions should be included in the value of the Estate, the entirety of the Estate should be used for the benefit of her Sons and that the $30,000 which the Application Judge ordered to be paid into court should now be paid out to the Appellant, for the benefit of the Sons.
For the purposes of this article, we will focus on the Divisional Court’s decision in respect of the whether to include both pensions in the value of the Estate and the manner in which the Estate is to be distributed.
The Deceased had two pension plans. The first was from the Union’s Province of Ontario Pension Plan, the value of which was included in the Estate by the Application Judge. The second was the Union’s “Canada” Pension Plan (administered in the US), which provided for a pre-retirement surviving spouse benefit under which the Respondent, as a surviving spouse, was entitled to a lump sum payment of $88,117.40.
The Divisional Court found that it was not open to the Deceased to designate someone other than his spouse to receive the pre-retirement benefit under the second pension and while the Respondent could have waived her entitlement to the receipt of that benefit, she could not be deprived of that benefit without her agreement.
As a result, the second pension was not included in the value of the Estate.
Distribution of the Net Value of The Estate
The Divisional Court found that in determining the issues between the parties, the needs of the Sons in the balancing exercise should be paramount. The court weighed the financial circumstances of the Sons against the financial circumstances of the Respondent.
Particularly, the court noted that the Sons live in precarious financial circumstances and there is very little income to support them apart from public finances and loans. The Sons live in the home of their mother’s parents. The appellant’s affidavit contained information concerning monthly expenses and the loss of the Deceased’s group health benefits. The Applicant’s evidence was that her yearly expenses exceed her income. Further, the Deceased was active in his Sons’ lives and paid the Appellant $300 per week to support his Sons until his death.
In contrast, the Respondent was not financially dependant on the Deceased, had good income of approximately $100,000 annually, had no extraordinary expenses, owned a home (although with a mortgage) and had made some provisions for her own pension. The Respondent and the Deceased had been married for just over two years at the time of death. The Respondent was also to continue to receive the benefits from the second pension.
The Divisional Court cited Madore-Ogilvie v Ogilvie Estate (2008), 88 O.R. (3d) 481 (C.A.), noting the following:
“Where there are insufficient assets to adequately provide for any or all of a deceased’s dependants, the circumstances of the case may warrant the exercise of an application judge’s discretion to use the limited assets for the benefit only of the minor dependants, to the exclusion of his wife.”
The Divisional Court concluded that in the present case, the circumstances warranted the use of the limited assets for the benefit of the Sons only, to the exclusion of the Respondent.
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Further to our article “Small Estate” in Ontario now $150,000, as of April 1, 2021, for an estate valued at $150,000 or less, probate can be applied for through the small estate court process.
Applying for probate can be a complicating and overwhelming process, especially considering the fact that the steps that need to be taken or forms that need to be filled out can vary depending on the specific circumstances of the estate.
The Probate of a Small Estate webpage provides helpful information on some of the steps included in applying for probate of a “Small Estate”.
Please see below a brief overview of some of the important things to consider when applying for probate of a “Small Estate”.
Depending on the specific circumstances of the estate, different court forms may need to be completed and filed with the court.
As noted in Rule 74.1.03(1) of the Rules of Civil Procedure, “A person may seek a small estate certificate by filing an application for a small estate certificate (Form 74.1A) together with,
(a) a request to file an application for a small estate certificate or an amended small estate certificate (Form 74.1B);
(b) proof of death;
(c) a draft small estate certificate (Form 74.1C);
(d) if there is a will, the original of the will and of any codicils, together with the following evidence of due execution of the will and each codicil:
(i) if the will or codicil is not in holograph form,
(A) an affidavit of execution (Form 74.8) of the will or codicil,
(B) if the will or codicil contains an alteration, erasure, obliteration or interlineation that has not been attested, an affidavit as to the condition of the will or codicil at the time of execution (Form 74.10), or
(C) if each of the witnesses to the will or codicil has died or cannot be found, such other evidence of due execution as the court may require, or
(ii) if the will or codicil is in holograph form, an affidavit attesting that the handwriting and signature in the will or codicil are those of the deceased (Form 74.9);
(e) any security required by the Estates Act; and
(f) such additional or other material as the court directs.”
Estate Administration Tax
It is important to determine the value of the estate.
Estate Administration Tax is payable on the value of the estate of a deceased person as of the date of their death, for estates valued over $50,000.
For estates valued over $50,000, the Estate Administration Tax will be calculated as $15 for every $1,000 (or part thereof) of the value of the estate. Estate Administration Tax can be calculated using the calculator provided on this Ministry of the Attorney General webpage.
Service of Documents
Pursuant to Rule 74.1.03(3) of the Rules of Civil Procedure, “the applicant shall send or give the following documents to each person entitled to share in the distribution of the estate, including charities and contingent beneficiaries:
- A copy of the application for a small estate certificate (Form 74.1A) and of any attachments.
- If there is a will, a copy of the will and of any codicils.”
It’s important to note that pursuant to Rule 74.1.03(4) of the Rules of Civil Procedure, “if a person who is entitled to share in the distribution of the estate is less than 18 years of age, the documents listed in subrule (3) shall not be sent to the person but shall instead be sent or given to a parent or guardian and to the Children’s Lawyer.”
Further, a copy of the application and a copy of the will and codicil (if applicable) may need to be provided to Office of the Public Guardian and Trustee.
Detailed information in respect of “Small Estates” and the process of applying for probate of a “Small Estate” can be found in Rule 74 of the Rules of Civil Procedure.
Please note, the above-noted information has been provided for informational purposes only and is not legal advice. For more information, please reach out to one of our team members who will be happy to assist you.
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The practice of law has evolved greatly over the last few months, especially in the area of Estates.
One of the more recent changes comes with the revocation of O.Reg. 129/20: Signatures in Wills and Powers of Attorney and the amendments to the Substitute Decisions Act and the Succession Law Reform Act.
As of May 20, 2021, there is a requirement for the signatures and subscriptions on Wills or Powers of Attorney, executed using audio-visual communication technology, to be made contemporaneously. An acceptable manner of meeting this requirement is for the signatures and subscriptions to be made by signing or subscribing complete, identical copies of the Will or Power of Attorney in counterpart, which together constitute the entire document.
“Audio-visual communication technology” means any electronic method of communication in which participants are able to see, hear and communicate with one another in real time.
Under section 3.1(2) of the Substitute Decisions Act,
(2) A requirement under this Act that a power of attorney be executed in the presence of witnesses may be satisfied through the use of audio-visual communication technology, if,
(a) at least one person who is acting as a witness is a licensee within the meaning of the Law Society Act at the time;
(b) the signatures required by this Act are contemporaneously made; and
(c) the prescribed requirements, if any, are met.
Section 3.1(3) clarifies that SDA “for the purposes of clause (2)(b), the signatures required by this Act may, subject to any prescribed requirements, be made by signing complete, identical copies of the power of attorney in counterpart, which shall together constitute the power of attorney.”
Similarly, under section 4(2) of the Succession Law Reform Act,
(2) Subject to subsection (3) and to sections 5 and 6, a will is not valid unless,
(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;
(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and
(c) two or more of the attesting witnesses subscribe the will in the presence of the testator.
Section 4(3) clarifies that while the use of audio-visual communication technology is permitted to satisfy the requirement in section 4(2)(b) or (c), the following requirements must be met:
(a) at least one person who acts as a witness is a licensee within the meaning of the Law Society Act at the time;
(b) the making or acknowledgment of the signature and the subscribing of the will are contemporaneous; and
(c) the requirements specified by the regulations made under subsection (7), if any, are met.
Further, section 4(4) notes that “for the purposes of clause (3) (b), signatures and subscriptions required to be made under clause (2) (b) or (c) may, subject to any requirements specified by the regulations made under subsection (7), be made by signing or subscribing complete, identical copies of the will in counterpart, which shall together constitute the will.”
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In the recent decision of Carroll v Toronto-Dominion Bank, 2021 ONCA 38, the Ontario Court of Appeal dismissed the appeal of an applicant for lack of standing to bring the application, notwithstanding that the application related to an alleged breach of trust. Standing is required to sue for breaches of trust.
In this matter, the applicant, Marion Carroll, was formerly employed by Toronto-Dominion Bank (“TD Bank”), as a manager who was responsible for the compliance of a group of TD Bank’s subsidiaries relating to the management of mutual funds. Among other things, Ms. Carroll claimed to have exposed regulatory non-compliance and breaches of mutual funds trusts by TD Bank’s subsidiaries. In 2019, Ms. Carroll issued an application against TD Bank with respect to its role as Trustee of designated mutual funds.
The motion’s judge dismissed the application pursuant to Rule 21.01 of the Rules of Civil Procedure, finding that Ms. Carroll lacked standing to bring the application. Ms. Carroll appealed that ruling to the Ontario Court of Appeal.
While the Ontario Court of Appeal addressed other issues within this appeal, the focus of this article will be to highlight the Court’s finding that standing is required to sue for breaches of trust.
Ms. Carroll’s position was that once a court is informed of allegations of a potential breach of trust, the inherent jurisdiction of courts to administer trusts makes standing “subordinate, and largely irrelevant, where allegations of fraudulent or improper misconduct are made against a trustee,” thereby obliging the courts to resolve the litigation. Ms. Carroll also furthered the position that the courts of equity have removed the requirement of standing to protect the interests of incapacitated beneficiaries who cannot effectively sue to enforce trust obligations.
The Court rejected Ms. Carroll’s position stating that the claim that standing is subordinate or irrelevant “misconceives the true nature of the inherent jurisdiction of courts to supervise or administer trusts and is contrary to basic trust principles.” Although, the courts have previously extended access to the court’s inherent jurisdiction to creditors or contingent beneficiaries, the Court noted that the implications of Ms. Carroll’s position would result in strangers being able to enforce trust benefits that beneficiaries are entitled to, even if the beneficiaries choose not to enforce them, and that this would be contrary to the essential character of a trust.
The Courts are able to assist those with an interest in trusts by enforcing and compelling the performance of those trusts. Specifically, the Court noted that:
“the inherent jurisdiction to supervise and administer trusts exists to assist the parties to the trust relationship or those who are interested in the trusts. As such, the inherent jurisdiction of courts to supervise and administer trusts is not inconsistent with the imposition of standing requirements. To the contrary, it is entirely in keeping with the role inherent jurisdiction performs to ensure that those who seek to invoke the inherent jurisdiction to supervise or administer trusts have an interest in the trusts they seek to enforce.”
The Court of Appeal also discussed the following issues within this decision:
- Did the motion judge err by applying the wrong standing test?
- Did the motion judge err by finding that Ms. Carroll had not pleaded facts establishing a prima facie case of standing?
- Did the motion judge err by failing to consider all aspects of the relief sought when determining Ms. Carroll’s standing?
The Court concluded that the motion judge made none of the above-noted errors and dismissed the appeal.
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What is CaseLines?
As noted in the Supplementary Notice to the Profession and Litigants in Civil and Family Matters Regarding the Caselines Pilot, E-Filing, and Fee Payment, CaseLines is a user-friendly cloud-based document sharing e-hearing platform for remote and in-person court proceedings. It is being used to provide a platform for parties to upload electronic copies of their documents for review by all participants before and during a court hearing. It is important to note that parties are still required to file materials in accordance with the applicable rules of Court and Notices to the Profession.
Parties have new responsibilities when using CaseLines, including, among other things, adding their email addresses to all court documents, using a specific document naming method, and uploading each document to be marked as an exhibit during the hearing separately.
In addition, while there are many benefits to using CaseLines, some that are particularly helpful are that users can make private notes and highlight documents, terms can be searched in all uploaded documents, and parties can navigate documents and direct opposing counsel and the court to view specific sections. These features can increase efficiency and make it easier for all parties and the court to quickly navigate through specific documents during a hearing.
The pilot project began in August 2020 for select civil motions and pre-trial conferences in Toronto. The goal was to gradually expand to other practice areas and court locations.
In Toronto, CaseLines was expanded to select family matters in December 2020 and select criminal matters as of February 8, 2021. Effective March 1, 2021, CaseLines started being used for select civil, family and criminal proceedings in the East and Northwest Regions. It is anticipated that province-wide expansion of the CaseLines pilot will continue throughout the summer and that all judicial regions will be using CaseLines by the end of summer 2021.
Since the CaseLines pilot was launched in August 2020, there have been many helpful resources that have been published to assist parties in learning how to use this new process, some of which have been included below:
- A demonstration of CaseLines;
- An 18 Minute Tutorial on how to access, update, invite people and review evidence for cases;
- Frequently Asked Questions About Thomson Reuters CaseLines;
- CaseLine Hearings – Tips for Counsel and Self-Represented Parties; and
- Sydney Osmar’s article on MAG’s Pilot Project with CaseLines.
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The Consolidated Practice Direction Concerning the Estates List in the Toronto Region was established for the hearing of certain proceedings involving estate, trust and capacity law, applying to matters on the Estates List in the Toronto Region.
As of March 9, 2021, Part VII (Contested Matters – Estates) of this practice direction was amended to make reference to model orders prepared by the Estate List Users’ Committee.
Generally, parties are expected to take the time and care to prepare proposed orders giving directions for consideration by the court. If the parties are unable to agree upon an order giving directions and a contested motion for directions is required, each party must file a copy of the draft order giving directions it is seeking with its motion materials.
In addition to providing requirements for what orders giving directions should address, where applicable, this practice direction now includes the following model orders:
- Order Giving Directions – Appointment of Section 3 Counsel
- Order Giving Directions – Power of Attorney/Guardianship Disputes
- Order Giving Directions – Will Challenge
- Order Giving Directions – Dependant’s Support
- Order Giving Directions – Passing of Accounts
As noted in the practice direction, the preparation of draft orders for consideration by the court will greatly expedite the issuance of orders. Where the relevant model orders have been approved by the Estate List Users’ Committee, a copy of the draft order showing all variations sought from the model order must be filed.
The addition of model orders can greatly benefit the Estates List in the Toronto Region. Among other things, these model orders provide a baseline for all parties, such that it can significantly reduce drafting time and potential disagreements on wording among parties, which in turn can increase efficiency and reduce costs.
Many thanks to the Estate List Users’ Committee for their time and efforts in preparing these model orders!
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Consider the fact that a resulting trust will not apply just because you later change your mind.
In the recent decision of Hertendy v Gault, 2020 ONSC 7555, the Superior Court of Justice confirmed that in a situation where a parent transfers property to an adult child, the principles of a resulting trust do not apply in cases where the transfer is a true gift.
In this case, the mother, Ms. Hertendy, was seeking summary judgement against the daughter, Ms. Gault, to recover legal ownership of land in Smiths Falls (the “Property”). The Court found that the mother had agreed to and did transfer the Property as a gift to the daughter in April 2012, with the stipulation that the mother would retain a life interest in the Property and that the daughter and her husband would help pay for the on-going household expenses of the Property.
While the mother argued that there was no payment or consideration for this transfer (among other things), the daughter argued that the transfer was done for consideration, namely, the promise to help pay for the on-going expenses when requested to do so by the mother.
Among other things, the Court considered the fact that in the mother’s Will, dated 2011, the Property was to be transferred to the daughter after her death. In 2017, the mother removed her daughter from the Will and stated to Mr. Greenall (her other daughter) that she “changed her mind about transferring the home”.
The Court confirmed that the presumption of a resulting trust will apply to gratuitous transfers and where a transfer is made for no consideration, the onus is on the transferee to demonstrate that the gift was intended. Quoting Pecore v Pecore, 2007 SCC 17, the Court noted that “the focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer…The presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.”
As such, the issue in this case was whether, at the material time the mother intended the transfer. The Court considered whether any person would gift their home to someone (even family) in return for a vague pledge of assistance for payment of expenses. The Court found that in this case, the fact that the mother signed the transfer document, she intended to sign the document, she received a benefit from signing the document (even though the benefit was modest compared to the value of the Property), and she paid the lawyer for the transfer, was sufficient to uphold the gift. The court also pointed out that the mother made no complaints about the transfer until at least three years later and her explanation for doing so was that “in hindsight [she] should have asked more questions.”
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In July, my colleague Paul Trudelle discussed the Virtual Signing of Wills, noting that in response to the COVID-19 pandemic, the Ontario government introduced an Order in Council specifically dealing with the execution of Wills and Powers of Attorney.
On December 10, 2020, pursuant to Ontario Regulation 458/20: Extensions of Orders under the Reopening Ontario (A Flexible Response to COVID-19) Act, virtual signing of Wills and Powers of Attorney have been extended until January 20, 2021 in Ontario.
Ontario Regulation 129/20: Signatures in Wills and Powers of Attorney among other things, provides the following:
1. The requirement for a testator or witness to be present in each other’s presence for the making of a Will (or Power of Attorney) may be satisfied by means of audio-visual communication technology, with certain restrictions.
2. “Audio-visual communication technology” means any electronic method of communication in which participants are able to see, hear and communicate with one another in real time.
3. At least one person who is providing services as a witness must be a licensee within the meaning of the Law Society Act at the time of the execution of the Will (or Power of Attorney).
4. The signatures or subscriptions may be made by signing or subscribing complete, identical copies of the Will (or Power of Attorney) in counterpart, which together shall constitute the Will (or Power of Attorney).
5. For this purpose, copies of a Will (or Power of Attorney) will be considered identical even if there are minor, non-substantive differences in format or layout between the copies.
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Jennifer Philpott’s blog post on the Initial Recommendations from Ontario’s Long-Term Care COVID-19 Commission explains that the mandate of the Ontario Long-Term Care COVID-19 Commission (the “Commission”) is “to investigate how and why COVID-19 spread in long-term care (“LTC”) homes, what was done to prevent the spread, and the impact of key elements of the existing system on the spread.”
As noted in our previous blog post, Hull & Hull LLP recognizes and commends the Commission, led by the Honourable Justice Frank N. Marrocco, with John E. Callaghan and Kate McGrann as Commission Co-Lead Counsel, for their hard work and efforts towards protecting some of the most vulnerable citizens in our province.
Since the Commission’s First Interim Letter dated October 23, 2020, over 100 homes are experiencing an outbreak and more than 300 residents have died. On December 4, 2020, the Commission released their Second Interim Letter which focuses on resident care and on in-home leadership, and provides the Ministry of Long-Term Care (the “Ministry”) with various the following recommendations:
- Leadership and Accountability in Long-Term Care Homes
The Commission notes that the fundamental principle in the Long-Term Care Home Act states that
“A home is primarily the home of its residents and is to be operated so that it is a place where they may live with dignity and in security, safety, and comfort and have their physical, psychological, social, spiritual and cultural needs adequately met.”
The Commission emphasized that leadership matters. They found that in homes where leaders were visible and provided clarity around staff roles and responsibilities fared better than those where the leadership was less engaged.
Amongst other things, the Commission found that there was confusion around who was responsible for maintaining resident quality of care in LTC homes during the pandemic and that it was unclear as to whose responsibility it was in the LTC home’s leadership team of the Executive Director, Director of Nursing and Personal Care and Medical Director. The Commission also found that these leaders were not always accessible or on-site.
The Commission recommended that there should be a clear lead for quality of care amongst the leadership team of the Executive Director, Director of Nursing and Personal Care and Medical Care in each LTC home, and that this individual must be on-site each day in a full-time position and should be held accountable for resident quality of care. Further, the Commission noted that the Province should provide the financial resources necessary to effectively support the lead for quality of care in carrying of their role and responsibilities.
- Performance Indicators
The Commission recommended using performance indicators to assess each home’s readiness to prevent and manage COVID-19 outbreaks. Specifically, the Commission found that while the current six clinical indicators tracked in the LTC home performance reports are a good first step in advancing transparency and flagging issues in LTC homes, this data does not provide other important insight on the quality of care received by residents and their experience in the home.
The Commission noted that indicators in areas of staffing (such as staffing mix, ration of residents to staff and ration of residents to staff with clinical expertise, level of staff engagement, etc.), PPE supplies and resident and family satisfaction with care at the home should be monitored and publically reported.
The Commission recommended that the LTC home performance reports should include performance metrics such as resident and family satisfaction, staff engagement, staging levels, and supply of PPE, as well as recommended that the home performance reports be publically posted in a single and centralized location and be updated more frequently, so that the public and other homes can assess and compare homes to one another as well as search and access a comprehensive picture of each home’s performance.
The Commission also recommended focused inspections to assess compliance with measures known to reduce the impact of the virus. Specifically, several issues have surfaced that the Commission believes require urgent attention, including:
1. The discontinuance of Resident Quality Inspections (“RQIs”) in all LTC homes
Although in 2013, the Ministry of Labour, Training, Skills and Developed (“MLTSD”) recognized that comprehensive inspections would help identify systemic issues and committed to completing an RQI in every home by the end of 2014, in response to the Auditor General’s 2015 recommendation “to prioritize comprehensive inspections based on LTC homes’ complaints and critical incidents and other risk factors”, in order to clear a backlog of almost 3,000 complaints and critical incident inspections, the Ministry introduced a risk-based approach to inspection. Although all LTC homes were still to be inspected every year, 329 LTC homes received an RQI in 2018, 27 homes received an RQI in 2019 and from March 1 to October 15, 2020 only 11 LTC homes received a proactive inspection. This reduction in RQIs, which are intended to provide a holistic review of operations in the homes, left the Ministry with an incomplete picture of the state of Infection Prevention and Control (“IPAC”) and emergency preparedness.
The Commission recommended to reintroduce annual Resident Quality Inspections for all LTC homes and require all reactive inspections occurring during the pandemic to include an IPAC Program review. The Commission also recommended that the Ministry request an appropriate funding in the upcoming 2021 provincial budget to hire and train inspectors to implement annual RQIs.
The Commission was also concerned with the lack of enforcement and follow-up verification of compliance with Orders issued by the Ministry. From 2018 to 2020, Plan of Care has been identified as the top area of non-compliance identified from complaint inspections. The Commission noted that IPAC issues rarely made it to the list of the top ten areas of non-compliances, showing that it was rarely a focus of any inspections.
The Commission recommended that the Ministry improve enforcement by prioritizing timely responses to non-compliance with IPAC and Plan of Care Orders.
3. Coordination of Inspections
The commission noted that there was an absence of a cohesive approach to inspections completed by the MLTC, MLTSD and Public Health Units, which likely occurred because inspectors from all three organizations tend to carry out their duties independently. This disjointed approached proved detrimental for IPAC in LTC homes and with the near elimination of RQIs and minimal inspections initiated by IPAC complaints or critical incidents, LTC inspections provided little help in proactively identifying and dressing aps in infection control inside homes.
The Commission recommended that steps be taken to eliminate the siloed approach to MLTC, MLTSD and Public Health inspections through cross-training, the establishment of a centralized system of report sharing and inspector teams to address specific cross-cutting issues.
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Occupation rent is an equitable remedy available in cases of unjust enrichment. It is a rebuttable presumption that one party shall pay reasonable compensation to another for occupying a premises, which may be rebutted if there is evidence proving that no compensation was to be paid.
In the recent decision of Cormpilas v. Ioannidis, 2020 ONSC 4831, Justice Kurz ordered occupation rent to be payable by the beneficiary of an estate. In this case, Gregory and Barbara owned a home as tenants in common. When Barbara died in 2012, her half-interest in the home was transferred to her grandchildren, as the beneficiaries of her estate. At this time, John, Gregory and Barbara’s son (and the grandchildren’s uncle) moved into the home with his family to help Gregory. Gregory died in November 2017 and his half-interest in the home was transferred to John, as the beneficiary of his estate. John and his family continued living at the home until April 30, 2020.
Despite lengthy negotiations between the grandchildren and John, no agreement could be reached for John to buy out the grandchildren’s half-interest in the home, nor did John and his family move out. The Court found that John had exclusive use of the home from November, 2017 to April, 2020 and that although he paid some expenses as a co-owner, he received a far greater benefit in the exclusive, rent-free occupation of the home. Accordingly, Justice Kurz found that John was unjustly enriched at the grandchildren’s expense and that occupation rent for the period of John and his family’s occupation of the home, was an appropriate remedy in the circumstances.
Interestingly, although the Court found in the grandchildren’s favour, because there was no proper request for rent prior to the commencement of the underlying proceeding, the grandchildren were only entitled to occupation rent from February 1, 2019 to April 30, 2020.
The Court further determined that $1,500/month for the above-noted period was a reasonable award for occupation rent after considering the value of the home, John’s half-interest in the home, the term of its occupation by John and his family, the fact that John maintained the home by paying certain carrying charges (such as taxes and insurance) during the period in question, the fact that the home was not maintained in the best of conditions, and the fact that the home value increased significantly during the period of John’s sole possession.
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