Tag: home owners
Paul Zigomanis (“Paul”) died on April 20, 2015 as a result of an explosion that destroyed the home he lived in for 24 years (the “Brimley House”). At the time of Paul’s death, title to the Brimley House was in the name of Paul’s parents, John Zigomanis (“John”) and Mary Zigomanis (“Mary”).
A passerby who was driving by the Brimley House at the time of the explosion, and impacted by it, brought an action for negligence and under the Occupiers’ Liability Act as against Paul’s Estate and John’s Estate (Zambri v Cooperman, 2018 ONSC 7679). A motion was brought by the Estate Trustee During Litigation of Paul’s Estate, Jonathan Cooperman, (the “ETDL”) to determine whether the Brimley House was an asset of Paul’s Estate or John’s Estate, as this was an important issue that had to be determined before the litigation could proceed (Zigomanis Estate, 2017 ONSC 6855).
As there were more assets in John’s Estate, than in Paul’s Estate, the interested parties in the litigation would suffer an adverse consequence were it determined that the Brimley House properly belonged in Paul’s Estate.
The primary position of the ETDL was that a trust relationship was established between Paul’s parents and Paul, whereby a resulting trust arose between John and Mary and Paul and that title to the Brimley House “resulted back” to Paul upon John’s death on December 31, 2014.
On December 31, 1990, John and Mary took title as joint tenants to the property where the Brimley House was eventually built on, for $270,000.00, as joint owners. In May, 1991, Mary and John signed a deed transferring the Brimley House to Paul for “natural love and affection”. The Court found that Paul ultimately paid John and Mary $140,000.00 for the Brimley House. It was further held by the Court that the family understood that John and Mary were always going to help Paul to purchase a home.
After moving into the Brimley House, Paul developed a drug addiction. Thereafter, on August 1, 1996, Paul transferred the Brimley House to Mary and John for $2.00. Mary and John put all the insurance, taxes and utility bills into their names and had the bills sent to their own home, however, Paul would transfer $500.00 per month to them for the payment of these expenses. It was understood by the family that this was done in order to protect the Brimley House from the potential repercussion of Paul’s substance abuse problems.
Mary died on March 23, 2013, leaving her Estate to John, who at the time suffered from dementia. Shortly thereafter, Gail MacDonald (“Gail”) and Violet Cooper (“Violet”), Paul’s sisters, who were managing John’s affairs, realized that Paul stopped making regular payments to their parents towards the Brimley House and offered to have the Brimley House transferred to Paul, immediately. Importantly, this letter was written well before the explosion giving rise to the litigation, took place.
John died on December 31, 2014, leaving his Estate to Gail, Violet and Paul, equally. Gail was named as the Estate Trustee of John’s Estate. Before Paul’s death, Gail, through her counsel, and Paul, through his counsel, were engaged in settlement negotiations with respect to the Brimley House. The draft minutes of settlement exchanged included the following: “AND WHEREAS Mr. Zigomanis asserts that the Brimley Road property was transferred to the Deceased to be held in trust for the benefit of Mr. Zigomanis”. The Court held that this particular piece of evidence was indicative of the fact that it was always understood by the family that Paul was the beneficial owner of the Brimley House.
Paul died intestate and he did not have a spouse or any children. His beneficiaries were Gail and Violet, and the sole beneficiaries of his Estate.
Analysis and Decision
The Court was satisfied that, on a balance of probabilities, and in considering all of the evidence, John and Mary transferred both legal and beneficial title to the Brimley House to Paul in 1991, for valuable consideration. As such, no presumption of a resulting trust applied to this transaction.
The Court further held that the nominal consideration for which Paul transferred the Brimley House to John and Mary triggered the presumption of a resulting trust, such that the Court had to determine what Paul intended at the time of the 1996 transfer.
Based on the evidence considered, the Court found that the presumption of a resulting trust could not be rebutted, such that Paul was the true owner of the Brimley House, because John and Mary intended to transfer the legal title back to Paul, once they were reassured in his ability to control ownership. As a result, the Brimley House was ordered to be returned to the trustee of Paul’s Estate, effective January 1, 2015, being the following day after the death of John.
John’s Estate’s Liability in the Litigation Related to the Explosion
Following the Court’s finding regarding the ownership of the Brimley House, Gail, as trustee of John’s Estate brought a motion for an order that John’s Estate did not owe a duty of care to the Plaintiff and was not liable under the Occupiers’ Liability Act.
The Court held that a relationship between the Plaintiff, a passerby, and John’s Estate, a non-owner of property, is not one in which a duty of care had previously been recognized. The Court further held that although John had some involvement with the Brimley House, it would not be a sufficient basis to find a relationship of proximity with the Plaintiff that would give rise to a duty of care.
Based on the above findings, the Court held that John’s Estate did not owe a duty of care to the Plaintiff and there was no other legal or equitable basis to find that John’s Estate had an obligation to manage the Brimley House on behalf of or to supervise Paul’s behaviour, including any liability under the Occupiers’ Liability Act.
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High net worth individuals typically have more than enough money to live their desired lifestyle. But there’s an important element that even the wealthiest amongst us may be lacking – protection. According to recent research by Chubb, more than 50% of high net worth individuals worry that they are underinsured, and less than 30% look for insurers who are specialists in providing coverage for the affluent: https://www.canadianunderwriter.ca/personal-lines/insurance-providers-need-go-understand-needs-high-net-worth-individuals-chubb-1004110295/.
The simple fact is that those who have more, have more to lose. And they have assets and protection needs that go far beyond what an off-the-shelf property and liability policy can provide. Uncovered losses not only have day-to-day lifestyle implications, they could also impact estate values down the road.
Here are some of the coverages available in the Canadian market that high net worth individuals should consider.
- Coverage for high-end homes – As technology advances, home systems have become more sophisticated, and higher-end homes even more so. Assets and equipment that need protection can include state-of-the-art electrical and mechanical systems. back-up generators, pools, home theatres, climate-controlled wine systems, walk-in humidors, and showcase garages. These homes may also have unique architectural detailing that requires special protection.
- Personal security breach protection – Wealth and a higher public profile comes with its own risks – home invasions, stalking, violent threats, even kidnapping. Specialty insurance packages cover expenses related to these events, from loss of income to professional counselling, to additional security services.
- Protection for collectibles and leisure vehicles – An affluent lifestyle often includes vehicles that go beyond basic transportation needs. These can include antique, classic and collector cars, airplanes, speed boats, houseboats and yachts, and other recreational vehicles.
- Increased liability protection – The higher your public or professional profile, the greater the risk of liability claims, with libel, slander or defamation claims being an obvious example. Higher-end insurance policies often include worldwide umbrella liability coverage that extends the range of liability protection available.
This recent Globe and Mail article highlights some other protections that those with an affluent lifestyle might consider: https://beta.theglobeandmail.com/globe-investor/globe-wealth/high-net-worth-lifestyle-brings-liability-tripwires/article34019994/?ref=http://www.theglobeandmail.com&.
Many insurance companies in Canada – such as Aviva and Chubb – offer exclusive protections and services for the high net worth market. An insurance broker can be invaluable in helping you find the right solution.
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The topic of home ownership, and, particularly, the ability of young adults to buy their first home is a trending topic lately. According to a Globe and Mail article on whether millennials are being pushed “into a financial abyss of home ownership”, Manulife Bank has conducted a survey which revealed that 45% of millennial home buyers received a gift of money or loan from family, and that one-third of these lucky youngsters received more than $25,000.00.
Regardless of whether prospective first time home buyers are wasting money on delicious, but expensive, avocado toast as Tim Gurner may have controversially implied, home buyers with mortgages should give consideration to how they would want the mortgages on their properties to be satisfied upon their death.
Pursuant to section 32 of the Succession Law Reform Act, a mortgage on an estate property shall be proportionately satisfied through the interest of the beneficiaries of that property, if the deceased has not, by will, deed, or other document, signified a contrary or other intention. For each beneficiary of a property, “every part of the interest, according to its value, bears a proportionate part of the mortgage debt on the whole interest”. The Act is also clear that a general direction for the payment of all debts from the residue of the Estate does not suffice to rebut the application of section 32 unless “he or she further signifies that intention by words expressly or by necessary implication referring to all or some part of the mortgage debt”.
Regardless of the foregoing, nothing in section 32 of the Act shall affect the mortgagee’s right “to obtain payment or satisfaction either out of the other assets of the deceased or otherwise”.
Just for fun, here is a link to a CNBC article on some statistics related to millennials, their spending habits, and the average price of a single avocado.
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