All About Estates

ETDL Appeal is to the Divisional Court – not the Court of Appeal

What appellate court is the proper forum for an appeal regarding the payment of an estate trustee during litigation’s fees (an “ETDL”)? In Gefen v. Gaertner, 2019 ONCA 233, the Court of Appeal held it was the Divisional Court and not the Court of Appeal.

The Gefen Estate (the “Estate”) was embroiled in litigation. The deceased and others had a beneficial interest in various properties which were legally owned by a bare trustee corporation. There was a dispute as to whether the deceased’s interest in these properties (the “Property Interest”) had passed to the Estate or to certain beneficiaries.

The ETDL of the Gefen Estate sought that his fees could be paid not only from Estate assets but also from the Property Interest. On motion, Justice Penny found that the ETDL could look to the Property Interest for payment of fees and disbursements. His Honour thus granted a charge to the ETDL on the Property Interest. However, as there were other beneficial owners of the underlying properties, his Honour would not grant a charge on the properties themselves.

Two beneficiaries appealed Justice Penny’s decision to the Court of Appeal. The ETDL moved to quash the appeal as section 10 of the Estates Act mandated that proceedings under that act are to be appealed to the Divisional Court. The ETDL argued that the appeal was a proceeding under the Estates Act because it was governed by section 28 of that act. This section gives the court authority to appoint ETDLs and to direct them to “receive out of the property of the deceased such reasonable remuneration as the court considers proper.”

The beneficiaries responded that the appointment of the ETDL was not made under section 28 but under the Rules of Civil Procedure. Additionally, because section 28 concerns matters that “touch on the validity of the will” and the litigation concerned a constructive trust, section 28 was not engaged.

The Court of Appeal did not read section 28 this narrowly. Applying a purposive approach, it found that constructive trust allegations “touch” on the validity of wills. As such, it found that Justice Penny’s order was made pursuant to the Estates Act and the appeal should be quashed.

This case demonstrates that the Court of Appeal can be skeptical of technical arguments regarding a narrow reading of section 28 of the Estates Act. Counsel should always be vigilant in ensuring that appeals are brought to the correct appellate court.

About Jacob Kaufman
Jacob Kaufman is a lawyer with de VRIES LITIGATION LLP. Jacob assists clients with will challenges, dependant support claims, guardianship applications, power of attorney disputes and other estate and trust litigation matters. He has appeared before various levels of court, including the Superior Court of Justice and the Court of Appeal for Ontario. Jacob obtained his law degree from the University of Western Ontario (with distinction) after completing an Honours Bachelor of Arts degree from Queen’s University in history (with distinction). He has written articles for the International Law Office, Legal Alert and the OBA’s Deadbeat. Email: jkaufman@devrieslitigation.com

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