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By Daniel Paperny
Magnotta v Magnotta,
What constitutes a "Financial Interest" in an Estate for the purpose of Rule 75.03? When is it appropriate to file a Notice of Objection? Who has administrative priority in the event of an Intestacy? How does it effect funeral arrangements; where a deceased's remains are interred; and other administrative concerns?
Madam Justice Dietrich's January 2020 decision in Magnotta v Magnotta provides judicial clarity on these points and sheds some light on the 'Who-What-When-Where-Why-and-How' of estate administration law.
Background
The deceased, Joseph Magnotta ("Joseph"), sadly passed away at the young age of 36, unexpectedly from cancer. Given his young age and the sudden nature of his death, Joseph died intestate, without a will. He was predeceased by his father and survived by his wife of 6 years, Melissa Magnotta ("Melissa"), and his mother, Rosanna Magnotta (Rosanna"). He had no children/issue.
Melissa and Joseph were high school sweethearts, they had been married for 6 years and had been together as "life partners" for 15 years before Joseph's tragic passing.
As Joseph's surviving spouse, and since Joseph had no children, Melissa was the sole heir of Joseph's estate (the "Estate") pursuant to the rules of intestacy.
Family Feud
After Joseph's funeral and his interment in the Magnotta Family Crypt, a feud erupted between Joseph's widow, Melissa, and his mother, Rosanna, regarding the costs of the funeral, and Rosanna's perception that Melissa intended to exhume Joseph's remains from the Magnotta Family Crypt.
Following the funeral, when Melissa had discovered that, when she died, she would not be interred in the Magnotta Family Crypt (which was owned by Rosanna and Joseph's sister) she inquired with the funeral home about exhuming Joseph's remains and moving them to another cemetery so that she and Joseph might be interred together. Melissa was told that she would have to speak directly with the cemetery to discuss this, however, she never did reach out to the cemetery to address this.
When Rosanna caught wind that Melissa was inquiring about removing Joseph's remains from the Magnotta Family Crypt, conflict erupted between Melissa and her mother-in-law which spilled into the Estate Administration process.
Application and Objection
Melissa made an Application for a Certificate of Appointment of Estate Trustee without a Will in Joseph's Estate. Melissa's Application contained a statement that all of the Estate's debts had been satisfied. Rosanna filed a Form 75.1 Notice of Objection to a Certificate issuing to Melissa. In the Notice of Objection, Rosanna indicated that she had a financial interest in the Estate because she had paid approximately $45,000 in funeral expenses for Joseph which were not repaid by the Estate.
In correspondence between the parties' lawyers, Rosanna's counsel indicated that she would seek the appointment of a third-party estate trustee in light of the perceived threat that Melissa would exhume Joseph's remains. At cross-examinations, Rosanna learned that Melissa had given sworn evidence that she did not intend to exhume Joseph's remains. However, Rosanna still refused to withdraw her Notice of Objection and testified that Melissa should not be appointed as Estate Trustee because Melissa had arranged for an article to run in City Life Magazine about Melissa and Joseph as a couple. Rosanna did not approve of the article because she found it disrespectful to Joseph and his privacy.
Positions of the Parties
Melissa sought an Order setting aside Rosanna's Objection and an Order appointing Melissa as the Estate Trustee without the need for an administration bond.
Initially, Rosanna sought the appointment of a third-party neutral estate trustee and objected to the appointment of Melissa. However, after multiple hours of argument during the Application hearing, Rosanna advised she would withdraw her Objection and allow a Certificate to issue to Melissa. However, Rosanna sought her costs of the Application, payable by Melissa or the Estate.
Ruling
Justice Dietrich ordered that Rosanna was not entitled to any costs in the application; a Certificate of Appointment should issue to Melissa; and, Rosanna was to pay Melissa's costs of the Application in the amount of $20,000.
In determining whether to award costs, Justice Dietrich considered whether the conduct of the parties, specifically Rosanna's conduct in filing her Objection, had been reasonable.
Section 29(1) of the Estates Act[1] sets out that, in the event of an intestacy, the Deceased's surviving spouse and next-of-kin both have equal right to apply to be Estate Trustee. This means that if Rosanna and Melissa had both applied for a Certificate of Appointment, a court would have to determine in its discretion who is most appropriate in the circumstances, as the legislation does not prioritize between a spouse and next-of-kin in this regard.
However, in this case, since Joseph died intestate, without issue, Melissa as his surviving spouse was entitled to his entire estate pursuant to section 44 of the Succession Law Reform Act.[2] In such circumstances, Justice Dietrich noted, unless it could be shown that Melissa was somehow in a conflict of interest, there could be no reasonable expectation that a court would award a Certificate of Appointment to anyone other than Melissa.
The Court cited a 2016 decision of Catto v McKay which confirmed that, where a deceased dies intestate leaving a surviving spouse and no issue, and the surviving spouse does not hold any adverse interest to the estate, "the surviving spouse is the person to whom the administration of the estate should be granted".[3]
Therefore, the court found that it was not reasonable for Rosanna to object to a Certificate issuing to Melissa because, as the sole intestate heir of the Estate, Melissa was the most appropriate person to be appointed.
It was further determined that Rosanna's objection on the grounds of the perceived threat that Melissa would exhume Joseph's remains was not reasonable either, since it was clear that (while Melissa had raised inquiries in this regard with the funeral home) she never contacted the cemetery and gave sworn evidence that it was not her intention to remove the remains.
Finally, the Court ruled that it was not reasonable for Rosanna to file a Notice of Objection under Rule 75.03(1) of the Rules of Civil Procedure[4] which reads:
(1) At any time before a certificate of appointment of estate trustee has been issued, any person who appears to have a financial interest in the estate may give notice of an objection by filing with the registrar or the Estate Registrar for Ontario a notice of objection (Form 75.1), signed by the person or the person's lawyer, stating the nature of the interest and of the objection.
Rosanna claimed that she had a financial interest in Joseph's Estate because she was owed $45,000 in funeral costs which she was not reimbursed for and was, therefore, a creditor of Joseph's Estate.
Justice Dietrich rejected this argument, citing another 2016 decision in Weidenfield v Weidenfield Estate[5] which held that a "person who appears to have a financial interest in the estate" is limited to beneficiaries under a deceased's will, beneficiaries under a prior will of the deceased or beneficiaries of the deceased on an intestacy. This does not include creditors. Dietrich notes in her decision that "Rule 75 is not intended to be used by creditors to secure recovery of assets within an estate", as this would complicate estate proceedings unnecessarily.
The Court ordered that a Certificate of Appointment should issue to Melissa without the posting of an administration bond, and Rosanna was to pay Melissa's costs in the amount of $20,000, because it was not reasonable for Rosanna to file her Notice of Objection, as this hindered Melissa's legitimate Application for a Certificate.
Key Takeaways
The decision in Magnotta provides some valuable clarity on the Who-What-When-Where-Why-and-How of certain estate administration issues.
Firstly, the case confirms that under s. 29 of the Estates Act in the event of an intestacy both the surviving spouse and next-of-kin have an equal right to apply for a Certificate of Appointment as Estate Trustee. And in cases where both a surviving spouse and next-of-kin have competing applications in this regard, a court will have to exercise its discretion to determine who is most appropriate to act in the circumstances.
However, in circumstances where the surviving spouse is the sole intestate heir, that person will almost always be the most appropriate for probate to be granted to.
As was the case in both the Catto and Magnotta decisions, this finding could have an impact on funeral planning or control over the deceased's remains (a task which falls to the estate administrator) as the surviving spouse of an intestate deceased will have priority over the next-of-kin in this regard.
Secondly, Justice Dietrich's ruling in Magnotta provides valuable clarity on who is deemed to have a "financial interest" in an estate under Rule 75.03. This Rule can only be engaged by beneficiaries or potential beneficiaries of an estate and is not intended for creditors of an estate.
The case is also an important cautionary tale for those considering whether to file a Notice of Objection under Rule 75, as doing so without good reason or without standing (i.e. Without an apparent financial interest in an estate) can result in a cost award levied against the objector, as it did against Rosanna.
Finally, as with so many estate litigation cases, the case of Magnotta is another stark reminder of how important it is for us all to have estate plans and updated wills in place, no matter how young we are or how far-off death may seem. If Joseph had a will and an estate plan in place that set out how he wished to be buried/interred and who he wished to administer his estate, this legal battle between his spouse and his mother may have been avoided.
[1] Estates Act, R.S.O. 1990, c. E.21
[2] Succession Law Reform Act, R.S.O. 1990, c. S.26
[4] Rules of Civil Procedure, R.R.O. 1990, Reg. 194
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