Saskatchewan Estate Litigation Update: Martin v Martin, 2022 SKCA 79

The recent Saskatchewan Queen’s Bench decision in Peters (Estate) (Re), 2022 SKQB 186 prohibits the practice of altering an affidavit without actually re-swearing it.

Factual background:

The background facts in Peters can be described as follows:

  1. Antonia Peters died on March 1, 2022;
  2. She left a Will dated September 17, 2007. In that Will she named her husband, S. Frederick Peters, as executor and sole beneficiary of her estate;
  3. The Will provided that should her husband predecease Antonia, then two of her children (Edie Louise Nelson and Wally David Peters) would act as her executors;
  4. Her estate was then given to her children and grandchildren as well as two charities. There is nothing controversial about the Will itself;
  5. The initial application for grant of probate was filed on June 2, 2022;
  6. By fiat dated June 15, 2022, the Court rejected the application. The Court noted that the Will had named the testatrix’s husband as executor and that if he had predeceased her, then proof of the husband’s death was required under Rule 16-10 of The Queen’s Bench Rules;
  7. As well, what should be paragraph 4 of the probate application originally filed, had stated all beneficiaries named in the Will but did not list the husband as a beneficiary. The Court noted that it appeared that the husband had predeceased the testatrix. This reality required revision to the material;
  8. On July 25, 2022, a representative of the office of the executors’ solicitor removed the application, affidavits and Will to have the material corrected. Subsequently, revised and additional material was filed;
  9. The application and supporting affidavits were later refiled. A change was made only to the application form to read that all named beneficiaries had survived the deceased “except for S. Frederick Peters, who passed away on January 20, 2016”. Previously, on the initial filing, paragraph 4 had read that all named beneficiaries had survived the deceased;
  10. The Court found it problematic, however, that the executors’ affidavits were not re-sworn. What appeared to have occurred was that a new page containing a revised paragraph 4 was “slip-sheeted” into the material;
  11. That is, instead of the entire affidavit (and all of its pages) being re-sworn, the single erroneous page was revised and replaced after the affidavit had already been sworn before the deponents;
  12. Thus, the Court observed that the lack of a re-sworn affidavit meant that neither executor has verified under oath the revised, current content of the probate application.
Guidance offered by Peters:

The Court in Peters noted that the practice of slip-sheeting was being used more and more. However, such a practice was not consistent with the purpose of requiring a sworn affidavit from an executor who applies for probate.

Such an affidavit is not just a procedural hoop through which an applicant must leap. Rather, it verifies under oath the truth of the contents filed by the executor. The Court relies on these contents to be true, and the affidavit is the mechanism to verify that truth (as otherwise, a false sworn affidavit can lead to legal consequences, which incentivizes the deponent to be accurate).

The affidavit essentially takes the place of the deponent showing up in court, being affirmed or sworn, and testifying to the veracity of the application documents.

The “slip-sheeting” process entirely defeats the purpose of the affidavits. The two deponents of the affidavits in Peters could not have verified under oath the ultimate contents of the application (in its present form) when they first swore the affidavit in April.  This is because at the very moment that they had first sworn the original affidavits, the later slip sheeted pages were of course not yet in the affidavits.

Conclusion:

Ultimately in Peters, the court did not grant the application in the current form. The Court required that the executors refile fully sworn new affidavits.

Peters thus reminds us that affidavit exhibits need someone to identify and vouch for them. If a lawyer wants to change the content of an already sworn affidavit, the lawyer must have the client re-swear the affidavit in its final form.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Saskatchewan Estate Litigation Update: Martin v Martin, 2022 SKCA 79

The recent Saskatchewan Court of Appeal decision in Martin v Martin, 2022 SKCA 79 offers a reminder of the litigation which can ensue when a person puts another family member on title, and a dispute later arises as to whether that person holds beneficial title, or, instead is merely on title as a trustee.

Martin reminds us that such disputes can be best avoided if all parties first sign a written agreement, at the time of the transfer, to document the parties’ intentions.

Overview:

Here, Richard Martin, the son of Martha Martin and Kenneth Martin, transferred title to his home into joint title with his parents, with rights of survivorship. For various reasons, Richard’s parents grew estranged from Richard, and they later applied for partition and sale of the property. Partition means that the property would be sold, and each person on title would be given a share of the sale proceeds (generally an equal division, unless there is a basis to order unequal division).

Richard argued in effect that his parents were on title as mere trustees, and Richard was the sole beneficial owner of the land. Thus, a trial was required to determine which side was correct.

Following a three-day trial, a Court of Queen’s Bench judge made an order directing the sale of the property, against Richard’s protests: Martin v Martin2020 SKQB 272.

Richard chose to appeal from that decision. Richard said that the trial judge committed errors in his fact-finding and placed too much weight on his mother’s evidence, which, he argues, was patently unreliable.

Factual background:

The factual background can be summarized below:

  1. In 1997, Richard purchased property located 20 km northwest of Saskatoon. Title to that property was initially registered in his sole name, but, two years later, he added his wife to the title and moved an old Eaton’s house onto the property;
  2. Richard intended to make renovations to the house. Richard began his renovation project in 2000, aided by his father, Kenneth, who was a skilled carpenter;
  3. Richard and his wife separated in 2001. When his wife assigned into bankruptcy shortly thereafter, the Credit Union demanded repayment of the construction loan. The Credit Union was prepared to reinstate the mortgage, provided Richard’s parents agreed to assume it and to replace Richard’s wife on the title;
  4. To achieve that end, and as part of Richard’s divorce settlement with his wife, Kenneth and Martha signed a loan agreement with the Credit Union, advanced $8,000 to Richard to enable him to settle his family property claim, and agreed to a transfer of title to their names and Richard’s as joint owners;
  5. The mortgage balance at the time of this transfer was $160,249, with the property (including the house) valued at $190,000. While the parties agreed that Richard had received $8,000 from his mother, they differed on the source of those funds, with Richard maintaining the funds were generated from the sale of some of his equipment;
  6. No agreement or memorandum was prepared at the time of the transfer to document the parties’ intentions or, contrary to Richard’s assertion at trial, to reflect that his parents only held legal title in trust for him;
  7. There was evidence from Bruce McDonald, who was Richard’s lawyer at the time of transfer. Mr. McDonald testified that title was transferred from Richard and his ex-wife’s names into the joint names of Richard and his parents because Richard had expressed concerns over the possibility that he would be required to divide the equity in the property with any future spouse in the event of his remarriage;
  8. Richard however testified that he had instructed his lawyer to transfer the property into joint names for estate planning purposes;
  9. As noted, renovations to the house commenced in 2000. It was undisputed at trial that Kenneth had provided considerable assistance to Richard over the years in connection with the renovation project. While the parties differed on how much time Kenneth had devoted to the project, Richard was prepared to concede that it was around 3,000 hours;
  10. The relationship between Richard and his parents broke down in or around 2010 over a financial dispute relating to a family-run towing business;
  11. Kenneth passed away in 2012. Martha is the executor of his  Shortly before Kenneth’s death, he and Martha had commenced an action against Richard alleging “a joint investment in the Land and a business” in which they had made substantial payments towards the cost, upkeep and renovations to Richard’s house;
  12. By way of relief, Kenneth and Martha sought an order for the sale of the property and a division of the proceeds “according to their respective interests” or, alternatively, for partition of the property;
  13. Richard filed a statement of defence in which he denied that:
  1. Martha and Kenneth had obtained title to the property for investment purposes;
  2. Martha and Kenneth had paid for the materials for the property;
  3. Kenneth had worked on his house to the extent asserted in the statement of claim (approximately 13,000 hours); and
  4. His parents had made payments towards the mortgage, utilities or taxes. According to Richard, all of those payments came from a joint bank account that he held with his mother, and the deposits into that account had been generated from income derived from his business
Handwritten ledgers maintained by Martha:

Martha testified on her own behalf at trial and in her capacity as the executor of Kenneth’s estate. She tendered five handwritten ledgers as evidence of how she had documented the various advances she and Kenneth made to Richard over the years, along with expenses they had personally incurred on his behalf. The ledgers included items such as mortgage payments, but also referenced payments related to Richard’s tow-truck business. However, the trial judge found the ledgers to be unclear with regard to how much money Richard allegedly owed his parents. The trial judge remarked on how Martha was uncertain about many of the entries.

Richard in turn argued that he had put approximately $450,000 of his own money into the property. However, the trial judge rejected Richard’s testimony about his alleged financial contributions to the property. However, the trial judge went on to find that it was “impossible from the evidence presented to determine the absolute or relative financial contribution made by Richard on the one hand and Kenneth and Martha on the other to the Land” (at para 24 of the trial decision).

Decision of the Court of Queen’s Bench:

The trial judge ruled against Richard, and found that the circumstances all pointed to an intention on Richard’s part to convey a beneficial interest in the property to his parents. Thus, his parents were entitled to seek partition.

While the trial judge accepted that the sale of the property would cause Richard an inconvenience, particularly if he were forced to move, he nonetheless found this reason was not one recognized at law as a basis to refuse an application for partition or sale. He concluded by saying that “[t]here is nothing in the factual situation of this case that overrides the direction of the Court that a partition shall be ordered” (at para 33).

The trial judge also addressed the issue of the quantification of Richard’s and Martha’s respective interests in the property following Kenneth’s death. The trial judge noted that Kenneth’s share would devolve equally in Martha and Richard, “resulting in them each owning a one-half interest in the property …” (at para 43). That said, the trial judge determined that where a party commences legal proceedings for partition prior to death, the joint tenancy is severed on the commencement of that action, and the estate is entitled to proceed with that action after the death of the party. The trial judge concluded, as such, Kenneth’s estate in its own right, but also Martha and Richard, were each determined to be the owner of an undivided one-third interest in the Land (at para 43).

Based on these findings, the trial judge ordered severance of the joint tenancy. In the event Richard did not purchase the remaining two-thirds interest held by Martha and the estate on an agreed upon or court-ordered price, the property would be listed for sale.

Issues on appeal:

Richard did not ground his appeal in an error of law, nor did he take issue with the trial judge’s crucial findings that:

  1. A trust was not created;
  2. Legal and beneficial title vested in all three parties;
  3. The joint tenancy was severed at the commencement of his parents’ legal proceedings;
  4. His parents were not motivated by a malicious or a vexatious intent designed to oppress him; and
  5. There was no equitable reason to depart from dividing the sale proceeds in proportion to ownership.

Instead, Richard’s grounds of appeal, could be distilled to the following:

  1. Was Martha an unreliable witness and, if so, did the trial judge err in accepting her evidence about financial contributions to the property as alleged in her statement of claim?
  2. Did the trial judge err in rejecting Richard’s evidence in that regard?
  3. Did the trial judge err in not dividing the sale proceeds unequally in Richard’s favour?
Decision of the Court of Appeal:

The Court of Appeal dismissed Richard’s appeal. Its reasons can be distilled to the below.

First, Richard’s core arguments directly challenged the trial judge’s credibility and reliability findings and, most pointedly, took aim at the reliability of Martha’s testimony, the weight assigned to her evidence, and the rejection of his evidence in the face of an alleged patently unreliable witness.

However, credibility and reliability findings are findings of fact. For that reason, the standard of appellate review for such matters is highly deferential. A determination of the weight to be assigned to the evidence is also a matter for the trier of fact: “it is not the role of appellate courts to second-guess the weight to be assigned to the various items of evidence”.

Moreover, the trial judge was entitled to rely on some of Martha’s evidence, but not rely on other parts of it. It was true that the trial judge concluded he could not put any weight on Martha’s ledgers and notebooks or on her testimony about the specific entries in them to determine the quantificationof the amount of money she and Kenneth had put into the property and Richard’s house.

That determination, however, did not preclude him from finding that Martha’s evidence was sufficiently reliable with regard to her overall assertion that she and Kenneth had made financial contributions toward the renovations and upkeep of Richard’s house. The fact that the trial judge found he could not rely on her documentary evidence to quantifythe precise contributions they had made over the years did not mean that he had to reject her evidence outright.

Put another way, the trial judge was satisfied that Martha’s core allegation – that she and Kenneth had financially assisted Richard with the renovations to his house and to its upkeep – was reliable. 

For Richard to succeed on his appeal, he had to do more than simply disagree with the trial judge’s credibility and reliability findings. Richard had to point to the mishandling of specific parts of the evidence that reveal a palpable error and then show how that error affected the outcome. Richard did not do that.

The judge’s failure to order unequal distribution:

Richard also appealed on the basis that the trial judge had wrongly failed to order an unequal division of the sale proceeds.

The Court of Appeal however agreed with the decision of the trial judge. Martha and Kenneth were on title as co-owners in joint tenancy. On the face of it, they were entitled to apply for partition and sale, regardless of whether they had made financial or in-kind labour contributions.

Moreover, as per the facts found by the trial judge, Richard had not demonstrated any basis for an unequal division of the sale proceeds in his favour. Richard had not shown any overriding error in these factual conclusions by the trial judge.

Conclusion:

As the Court in Martin v Martin, 2022 SKCA 79 observed, Saskatchewan case law is replete with situations where a parent gratuitously transfers real property into joint title with an adult child but later changes their mind about the arrangement. The reality is that such a decision is legally difficult to undo.

Martin reminds us that any person who puts anyone else on title, without receiving value in exchange, should take care to speak first with a lawyer about the consequences of doing so. Any such person should anticipate what would happen if they later have a falling out with the person who is going on title. A lawyer can help first advise as to what paperwork should be executed by all sides before the transfer, to later prove what the real intention is behind the transfer, and who is the true beneficial owner.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Saskatchewan Estate Litigation Update: Kaushik v Kaushik, 2022 SKQB 135

The recent Saskatchewan Queen’s Bench decision in Kaushik v Kaushik, 2022 SKQB 135, offers an overview of a situation in which multiple persons concurrently seek to be appointed as the sole administrator of an Estate. 

Overview:
  1. Sadhna Kaushik applied for appointment as the administratrix of the estate of Daya Chand Kaushik [Daya], her late father;
  2. Daya died on June 7, 2019;
  3. Daya’s last will and testament dated September 22, 1987, named his wife, Vimla Devi Kauchik [Vimla] as executrix. It directed further that in the event she predeceased him, Rakesh Kaushik [Rakesh], Sadhna’s brother, and one of the respondents on this application, should serve as executor of his estate;
  4. Vimla predeceased Daya;
  5. To date, no application to have Daya’s will probated had been made, as the original will had been lost;
  6. Rakesh, brother of Sadhna, argued that he himself should be appointed as administrator. Rakesh relied on the below facts:
  1. On or about August 30, 2016, Daya executed an Enduring Power of Attorney naming Rakesh as his personal and property attorney. Rakesh acted in this capacity until Daya’s death in 2019;
  2. However, on or about September 20, 2016, Daya purportedly executed a Revocation of Enduring Power of Attorney setting aside the previous document. However, Rakesh only learned of this after Daya’s death;
  1. The six beneficiaries were divided as to their choice of the appropriate administrator of Daya’s estate. Three beneficiaries, Douglas, Sheila, and Hazel signalled their support of Rakesh, and each formally renounced her right to letters of administration in favour of Rakesh.
  2. The last two beneficiaries – Elizabeth and Neil – adamantly reject the appointment of either Sadhna or Rakesh to be administrator of Daya’s estate. Instead, they proposed that the parties be directed to attend mediation in an attempt to resolve this dispute.
  1. Elizabeth and Neil opposed appointing Sadhna because she allegedly mismanaged the affairs of Vimla’s estate when Sadhna served as her mother’s executrix; and
  2. Elizabeth and Neil opposed appointing Rakesh because of his alleged continuing failure to account adequately for monies transferred from Daya’s accounts during the latter years of Daya’s life, even in the face of an order of the court dated August 13, 2020.
  1. As for Sadhna, only Sadhna supports an order appointing herself to be the administratrix of Daya’s estate.
Who had priority to apply to administer?

Subsection 13(1) of the Administration of Estates Act stipulated that no letters of administration shall be granted to any person unless:

  1. all persons with a prior or equal right have renounced their right to administration; or

  2. a judge has made an order dispensing with the requirement to obtain the renunciation of the right to administration of persons mentioned in clause (a)

In the context of this application, this meant Sadhna was not entitled to be appointed administratrix because Rakesh has not renounced his right to administration, and vice versa. Thus, the court had to intervene to break the deadlock between the two siblings.  

The court ultimately appointed Rakesh as administrator:

As the only surviving children of Daya and Vimla, both Sadhna and Rakesh were potentially entitled to apply to be appointed as administrator of Daya’s estate. The question was which of them, if either, is the most appropriate person to serve in that capacity.

The court ultimately found that Rakesh was the preferable person to administer the Estate. The three main factors could be summarized below:

  1. Reason 1: First, Daya decided in 1987 to appoint Rakesh as the alternate executor of his estate should Vimla predecease him. Despite Vimla’s death in 2016, at no time prior to his death in 2019 is there any evidence to show that Daya revised his will, let alone executed a new one. This consideration weighed heavily in favour of appointing Rakesh as administrator, by showing the intention of Daya as to who would administer his estate;
  2. Reason 2: Rakesh was opposed by some beneficiaries, but he ultimately did have the consent of a majority of the beneficiaries. In addition to himself, Rakesh had the consent of Sheila, Hazel, Douglas, all of whom have formally renounced their rights;
  3. Reason 3: The evidence discloses that Rakesh maintained a closer relationship with Daya than did Sadhna;
  4. Reason 4: Rakesh purported to act as Daya’s attorney pursuant to the terms of an Enduring Power of Attorney dated August 30, 2016. It is true that there is evidence that Daya revoked this, but no one appeared to learn of this until after Daya’s death. The fact that Rakesh did look after Daya’s affairs for a time, would support a finding that Rakesh was well placed to “convert [Daya’s estate] to the advantage of those who have claims against it, either by paying the creditors or by making the appropriate necessary distributions”.

The one aspect which gave the court pause, was about the allegation that Rakesh had refused to provide an accounting of his handling of Daya’s estate from September 1, 2016 – the approximate date when the enduring power of attorney took effect – to June 7, 2019, the date of Daya’s death.

However, the court found that Rakesh in his affidavit had spoken to the steps he took to comply with the order to account. The court took comfort from the fact that Rakesh had retained local counsel, who would direct Rakesh on how to carry out his responsibilities as administrator in an appropriate and lawful manner.  

Moreover, the court found that, while Rakesh has been slow to provide an accounting of his management of Daya’s affairs, he had now provided one in the requisite form prescribed by The Queen’s Bench Rules. Additionally, his affidavit provides further information respecting his dealings with Daya’s estate while he acted as his father’s attorney.

Moreover, the court was not ultimately swayed by  two findings of profession misconduct made against Rakesh by the discipline committee of his professional regulatory body, the Chartered Professional Accountants of Saskatchewan. While these were stain on a professional’s reputation, they were not enough on its own to disqualify him or her from acting as the administrator or testator of a deceased’s estate.

Outcome and costs order:

The court in Kaushik ultimately appointed Rakesh as administrator, but did require that he obtain a bond. Interestingly, despite the success of Rakesh in this application, the court ordered that each side bear its own costs:

63      I am satisfied that considering all the circumstances, this application was necessary in order to settle the question of who should be appointed administrator of Daya’s estate. A stalemate had occurred between the two people legally authorized to apply for letters of administration. It so happens that it was Sadhna who initiated the application. In my view in the unusual circumstances of this case Daya’s estate should not be burdened with the costs of this application. Rather, I have determined that each party should bear his or her own costs of this application, and I so order.

The reasoning above – that “Daya’s estate should not be burdened with the costs of this application”  – is unusual.

In this situation, the Estate benefited from the clarity of this court order, which finally appointed someone to administer the Estate, and which took the estate out of the administrative limbo it had fallen into. Thus, it would have been entirely customary for the Estate to bear some or all of the legal costs incurred by a newly appointed administrator in his successful application.

Lessons learned:

Kaushik reminds us of the some of the factors which a court will rely on, in a situation of competing applicants for administrator. These factors include:

  1. Are there any clues, showing whom the deceased themself had wanted to appoint?
  2. Was there a majority among the beneficiaries, as to whom they want to administer the Estate?
  3. Had one of the potential applicants ever acted as attorney for the deceased before, thus placing them in a better position to now convert the estate to the advantage of the beneficiaries?

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Saskatchewan Estate Litigation Update: Choquette v Viczko, 2021 SKQB 167

The recent decision in Choquette v Viczko, 2021 SKQB 167, offers a new interpretation of s. 50.5 of the Administration of Estates Act (“Act”).

Background:

Under s. 50.5 of the Act, if an executor sells land to which a beneficiary is beneficially entitled, the executor requires the consent of that beneficiary. The provision reads as follows:

50.5(1) The executor or administrator shall not sell real property for the sole purpose of distributing the estate among the persons beneficially entitled to it unless those persons concur in the sale.

Facts in Choquette v Viczko

The factual background in Choquette may be summarized as follows:

  1. Joseph Viczko died on September 10, 2011. Joseph had three children, namely, Ms. Choquette, Donna Boots and David Viczko;
  2. Joseph had been a farmer. His will directed that it was his “intention to sell the W1/2 12‑39‑27 W2, or any other farm land that [he owned] while I am living and distribute the proceeds of sale equally between my daughters”. The will further provided that if, at his death, Joseph had not sold the farmland, then it “shall be sold by my Trustee and the proceeds divided equally between my daughters”;
  3. At the time of his death, Joseph had not sold the west half of section 12, and so it was left to be distributed in accordance with his will. Ms. Boots was named as executor under the will;
  4. In 2012, she sold the land to her brother, David Viczko, and his spouse, Jennifer Viczko;
  5. In 2013, Ms. Choquette commenced an action seeking to set aside the sale and transfer. In her statement of claim she identified two grounds. Among her objections, was the assertion that her consent to the sale was required because of s. 50.5(1) of the Administration of Estates Act.
Queen’s Bench Ruling in Choquette v Viczko:

One issue that Choquette considered was this: who qualifies as a  beneficiary whose consent to the sale of the land is required under s. 50.5 of the Act?

Choquette clarified that not every sale of estate land will trigger the need for s. 50.5 consents from Estate beneficiaries.

For example, Choquette said that if the Will is such that the beneficiaries of the Estate are only left the proceeds of the sale of the land (but not given a right to go on title to the land itself), then the executors need not obtain consent.

The Court in Choquette reasoned as follows:

23      This operation of s. 50.4 is consistent with the overall approach of the Legislature to wills and estates. That approach is to accommodate, where possible, the implementation of a testator’s final testamentary wishes. Reading “the persons beneficially entitled to it” to mean “the persons beneficially entitled to the real property” is consistent with that approach. I conclude that “the persons beneficially entitled to it” in s. 50.5(1) means “the persons beneficially entitled to the real property”.

24      Therefore, s. 50.5(1) refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the sale of the real property. Therefore, the answer to this question is “no”. Ms. Choquette is not a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act.

This has practical implications for many executors. Many wills say that the Estate is to be sold (liquidated) and the proceeds divided between the beneficiaries. In such case, the names of beneficiaries are not actually going on title to the land. Rather, the beneficiaries will later get a sum of cash (representing the sale proceeds).

Choquette also declared that where is a direction in the Will to sell land, and distribute the proceeds, s. 50.5 simply does not apply to that situation. That is because the terms of the Will already provide sufficient authority for the Executor to sell Estate land:

27             Put another way, s. 50.5 is an enabling provision, not a restricting provision. It enables an executor to sell real estate where the executor is not otherwise empowered to do so. Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for authority to do so.

36      The question that I am considering here asks whether the specific direction given in the will of the deceased, to sell the land and distribute the proceeds thereof, is paramount to the provisions of the Act (specifically s. 50.5). The answer effectively is “yes”, but the more precise answer is that, because of the specific direction given in the will, the provisions of s. 50.5 have no application. It is not that both the will and s. 50.5 apply to the circumstances, with the direction in the will being paramount. Rather, because of the direction in the will s. 50.5 of the Act does not apply to the circumstances at all.

The court has the ability to retroactively approve a sale:

Choquette also affirmed that the court has the ability to retroactively approve a sale which occurred without beneficiary approval. The court will look at whether the sale was appropriate (i.e. is there evidence it was sold for fair market value? Would it serve no purpose to re-open the sale, causing delay or expense).

If the sale was appropriate, then the court can “cure” the prior lack of beneficiary consent.

We find the below in Choquette:

39      Section 50.5(4)(b) refers to court approval of a sale where a beneficiary does not concur in the proposed sale. Here, the sale occurred years ago. The sale to the Viczkos is not a proposed sale. What is sought is retroactive approval of the sale. In the circumstances of this matter, it is appropriate to approve the sale retroactively. In so saying, I have reference to the guidance provided to the court, in s. 50.5(5), when considering a request to approve a sale:

(5) On application pursuant to subsection (4), the court may make an order approving the sale of the real property if the court is satisfied that it is in the interest and to the advantage of the estate of the deceased and the persons beneficially interested in it.

(emphasis added)

Leave to appeal:

The unsuccessful party in Choquette sought  an order extending the time within which to appeal the Queen’s Bench decision. The Court of Appeal did not give her permission to appeal. In large part, the Court of Appeal found that there was no error with the underlying conclusion that the sale should be approved as reasonable, in any event.

However, the Court of Appeal did suggest that Choquette’s interpretation of s. 50.5 may one day be revisited (and thus is not yet cemented in stone):

[36]           If the Chambers judge’s decision to dismiss Ms. Choquette’s claim rested solely on his analysis in relation to these three questions, I would have found that there was an arguable issue raised by her appeal and would also have been inclined to grant Ms. Choquette an extension of time to appeal, even in the face of her significant delay in making her application. The conclusions reached by the Chambers judge involve determinations of questions of law, largely turning on the proper interpretation of the Act. In the course of his analysis, he acknowledged the existence of ambiguity in the meaning of several of the key provisions. On several key issues, the Chambers judge referred only to decisions of judges of the Court of Queen’s Bench. In this regard, on the question as to whether s. 50.5(1) is applicable when a will gives an executor a right of appeal was raised, but left undecided, in Viczko CA. Moreover, although the Chambers judge supported his conclusion with reference to several decisions from the Court of Queen’s Bench, he was required to distinguish Tomochko Estate v Wilchuk2017 SKQB 381, 34 ETR (4th) 283, and Holter v Holter2019 SKQB 102. Regardless of whether the distinctions he offered are sound, it is at least arguable that s. 50.5(1) should be interpreted as applying even when a will provides for a right of sale.

Choquette v Viczko, 2022 SKCA 11

Thus, it is very possible that the proper interpretation of s. 50.5 may continue to be litigated in Saskatchewan court, until the Court of Appeal addresses this specific issue.

The law in light of Choquette

For now, as Choquette was not overturned on appeal, the law of Saskatchewan is currently set out below:

  1. Where a person is merely beneficially entitled to a portion of the proceeds of the saleof the real property, but not the land itself, s. 50.5 does not apply (Choquette at para 24);
  2. Where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to  50.5for authority to do so” (Choquette at para 27).

Thus, some executors may find their task simplified, when they go to sell Estate land.

However, executors should still, if possible, attempt to obtain beneficiary approval to sales of Estate land. While this consent may not be strictly legally required under s. 50.5, getting advance consent can reduce headaches later. That is, a beneficiary could still later complain that land (in whose proceeds they have an interest) was sold for undervalue. Getting prior approval from beneficiaries, is a means to avoid any later complaints.

 

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Feedback Request – Proposed Amendments to Wills Act

CBASK wishes to advise of a proposal brought forward by CBASK member David Ukrainetz, McKercher LLP for the enactment of franchise legislation. The proposed legislation would provide a general scheme of protections for franchise businesses in Saskatchewan. CBASK is in support of the proposal, as it would harmonize Saskatchewan law with other jurisdictions, and provide needed protection to franchisees. A copy of the letter sent to the Minister of Justice may be found HERE.

Feedback is sought on whether s. 19(1) of the Wills Act should be amended. Namely, s. 19(1) would be expanded to also invalidate a devise or bequest to a spouse, provided the below situation had arisen before the testator’s death:

  1. The testator had served a Petition against his or her spouse (or had one served by their spouse against himself or herself), seeking relief relating to the breakdown of their spousal relationship, and
  2. At the time of the testator’s death, the testator and his spouse were living separately and apart as a result of the breakdown of their spousal relationship.

Feedback should be provided to James Steele at [email protected] by May 20, 2022

If as a CBA member you have Saskatchewan legislation you would like to be considered, or issues you would like CBA Saskatchewan to advocate, please contact James Steele, Legislation & Law Reform Director [email protected].

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Exemptions when Dividing Family Property: What You Need to Know

Many twists and turns are involved when dividing family property following a separation. There are special rules for dividing the family home, equitable claims that can be made, and many issues to consider. One such issue which can add complexity is exemption claims.

Exemptions can be claimed for items owned before marriage or before you became common-law spouses. Section 23 of The Family Property Act (Saskatchewan) provides for this. If you are eligible to claim an exemption, it will mean the value of that property is not subject to division (i.e. you will not have to share the value of that property with your spouse upon separation).

Here are six things you need to know about exemption claims:

  1. The definition of family property is broad under the Act. Examples of family property include items such as investments, bank accounts, land, personal property, etc. Generally, family property can be claimed as exempt if owned before the relationship.
  2. There are certain items that cannot be claimed as exempt. These include the family home and household goods which, generally, refers to property that is used for transportation (vehicles), household use (furniture, appliances, décor, etc.), and recreational use, but does not include antiques, artwork, jewelry, or anything used in a business or hobby.
  1. This means that if you owned a house prior to the relationship which your spouse moved into, in the vast majority of cases, you will be unable to claim an exemption for the house and it is presumptively equally divisible.
  2. Likewise, if you owned furniture before the relationship which you moved into your spouse’s house, you cannot claim it as exempt since it would be considered household goods.
  1. The value which can be claimed as exempt is limited to the fair market value of the property at the start of the relationship (the value at the date you are married or become common-law spouses). This means that, if the property grows in value over the course of the relationship, your spouse is, generally, entitled to share in that growth of value.  There are certain exceptions to this rule which will not be covered in this article.
  1. For example, if you owned an investment at the date of marriage and it grows by $50,000 over the course of the marriage, your spouse is entitled to share in that $50,000 growth in value.
  1. The exemption claim can be traced through the property.
  1. For example, if you were to cash in an investment worth $50,000 at the date of marriage and purchased artwork with it, the value of the artwork would be exempt up to the $50,000. Any increases in value over $50,000 over the course of the relationship would be shareable. 
  2. If you instead purchased a vehicle used for everyday driving, you would lose the exemption since that vehicle would be considered a household good.
  1. The fair market value of shares in a corporation as of the date of marriage/common-law is exempt. Any increase in value of the shares over the course of the relationship is, generally, shareable by your spouse.
  2. There are circumstances where an exemption claim will not be allowed if the Court finds that allowing the exemption would be unfair and inequitable. For example, if the property declines in value over the course of the relationship, it is generally unfair to allow the full amount of the exemption.

This article is intended to provide legal information only, not legal advice.  Dividing family property can be quite complicated. It is recommended that you seek the advice of a lawyer when considering the division of family property.

For further information, please contact:

Curtis P. Clavelle
Direct: 306-933-1341
Email: [email protected]

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Area of ExpertiseWills, Estates, Trusts, Health Care Directives and Powers of Attorney