I previously blogged about Roulston v McKenny et al, 2016 ONSC 2377, as a classic example of chutzpah. The deceased’s ex-wife had a claim against his estate if a life insurance policy lapsed. Even though the estate trustee knew that the policy had lapsed, she withheld this information from the ex-wife – and then argued the ex-wife’s claim was brought out of time.
The application judge found that the ex-wife’s claim would be statute-barred under the Trustee Act, as it was commenced more than two years after the deceased’s death. However, the application judge tolled the limitation period (i.e. stopped the clock) under the doctrine of fraudulent concealment.
The estate trustee’s appealed to the Court of Appeal. Writing for a unanimous panel, Justice Doherty rejected the appeal in Roulston v. McKenny, 2017 ONCA 9.
On appeal, the estate trustee argued that two of the branches of the test for fraudulent concealment were not met as the application judge erred in his conclusions:
- there was a special relationship between the estate trustee and the ex-wife; and
- that the estate trustee’s conduct was unconscionable.
Justice Doherty dismissed both arguments.
1. Special Relationship
One of the fundamental duties of an estate trustee is to ascertain the estate’s debts and liabilities and pay them. Furthermore, the ex-wife attempted to obtain information regarding insurance from the insurer directly and the insurer advised it could only provide information to the estate trustee. As such, there was no error in the application judge holding that the estate trustee had exclusive possession of knowledge and information as to whether the ex-wife’s claim existed.
2. Unconscionable Conduct
The estate trustee argued that the application judge ignored a May 15, 2013 letter where the ex-wife’s lawyer stated: “I wish to put the estate on notice that the insurance was not in place as required by the terms of the Separation Agreement.” The estate trustee believed this showed that the ex-wife had knowledge she had a claim. However, Justice Doherty held that the mere absence of any reference to a piece of evidence in reasons for judgment did not establish the application judge failed to consider that evidence: a party has to point to something in the trial record which would justify this allegation (it did not appear that the estate trustee did so).
Correspondence after May 15, 2013 demonstrated uncertainty as to whether the insurance policy was in place. It was therefore open for the application judge to conclude that the estate trustee’s conduct was unconscionable.
Justice Doherty thus saw no basis to interfere with the application judge’s conclusions and dismissed the appeal with costs of $7,500.00.