Tag: sorkos

18 Sep

UPDATE: Cowderoy v. Sorkos Estate Revisited Revisited

Hull & Hull LLP Estate & Trust, Hull on Estate and Succession Planning Tags: , , , , , 0 Comments

On September 7, 2012, we blogged on the trial decision of Cowderoy v. Sorkos EstateAt trial, the court found that the deceased had repeatedly promised his step-grandchildren his farm and two cottage properties.  Applying the doctrine of proprietary estoppel, the trial judge ordered that the promised properties be conveyed to the grandchildren. This had an effect on a separate proceeding, being a claim for dependant’s support by the deceased’s spouse.  There, the trial judge considered the size of the estate, excluding the farm and cottage properties.  He also, without explanation, reduced a bequest to the spouse from $250,000 to $150,000.  The trial judge had also denied a request to have the two proceedings tried together.

The decisions were appealed, and the appeal decision was released on September 3, 2014.

The Court of Appeal received fresh evidence to the effect that the transfer of the properties to the step-grandchildren would leave the estate without sufficient assets to satisfy the spouse’s dependant support claim. 

With respect to the issue of consolidation, the Court of Appeal held that the judge erred in not consolidating the claims. 

With respect to the proprietary estoppel claim of the step-grandchildren, the Court of Appeal upheld the finding of proprietary estoppel. However, the Court of Appeal held that the promise was to bequeath the properties upon the deceased’s death, not to convey the properties. This had an impact on the appropriate remedy.  The properties were to be deemed to have been bequeathed to the step-grandchildren. The upshot of this is that the properties remained in the estate, and may be subject to the dependant support claim of the spouse.

I say that the properties “may be” subject to the dependant support claim because of the impact of s. 71 of the Succession Law Reform Act.  This section provides that where a deceased has entered into a contract to bequeath property, the property is not liable to a dependant support order, “except to the extent that the value of the property exceeds the consideration therefor”.  This would require that the value of the consideration for the properties, being the value of the services provided by the step-grandchildren to the deceased, be determined, along with the values of the properties.  If the values of the properties exceeded the consideration, then this amount would be available to be charged with the dependant support order.

In the end, the Court of Appeal ordered a new trial of the spouse’s dependant support claim, taking into account the value of the properties, and to determine the extent, if any, to which the properties are to be attached to secure any dependant’s relief order.

Thank you for reading.

Paul Trudelle

20 Jun

Structuring Dependant Support

Hull & Hull LLP Litigation, Support After Death Tags: , , , , , , ,

In making an award of dependant support, the court has a broad discretion under s. 58(1) and 63(2) of the Succession Law Reform Act.

Once a determination is made that a claimant is a dependant, and has not been adequately provided for by the deceased, the court has broad powers when ordering that provision for the dependant be made out of the estate. In addition to an expanded definition of the “estate” under s. 72, the court may make orders for lump sum payments, annual payments or otherwise, for a limited or indefinite period, or lump sum payments in addition to periodic payments, in addition to other powers.

A good example of the creative power of the court is demonstrated in Sorkos v. Sorkos Estate, 2012 ONSC 3196 (CanLII). There, the deceased died having an estate of approximately $2.6m. The claimant and the deceased appear to have been married for less than 10 years. The claimant was 69 years old, did not speak English, and was unable to work for medical reasons. The deceased had no other dependants.

In his Will, the deceased left the claimant $250,000. He also named her as the beneficiary of his RRIF, having a value of $287,000, and paying the claimant $1,200 per month. The residue of the deceased’s estate passed to the deceased’s siblings.

The court found that the claimant was a dependant, and that the deceased did not provide adequate support for her. In so finding, the court noted that it was not to undertake a strictly needs-based economic analysis. Further, the assessment of proper support was to be measured over the course of the dependant’s anticipated lifetime.

In making its award, the court reduced the bequest to the claimant from $250,000 to $150,000. However, the court awarded the claimant support of $3,000 per month ($36,000 per year) for the rest of the claimant’s life. As security, the estate was to purchase an annuity, payable to the Applicant, with a reversionary interest to the estate.

Thank you for reading.

Paul Trudelle – Click here for more information on Paul Trudelle

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