A preservation order in the context of a dependant’s relief claim is critical to ensure that there are funds to satisfy the dependant’s claim pending the outcome or resolution of the court application.
Various legislation recognize the above and provide for an automatic stay or preservation absent the consent of the dependant and/or order from the Court. For example;
Section 67(1) of the Succession Law Reform Act (“SLRA”) provides for an automatic stay of the distribution of an estate where an application for dependant’s relief is commenced and the representative of the Estate is served.
Section 59(1) of the Succession Law Reform Act (“SLRA”) provides that the court may make an order suspending the administration of an estate on application by or on behalf of Dependants.
Section 6(14) of the Family Law Act provides for an automatic stay of the administration of a deceased spouse’s estate within six months of the spouse’s death, unless the surviving spouse provides written consent or the court authorizes the distribution.
The case of Angeloni v. Angeloni, 2017 ONSC 7344 relates to an application made by a spouse of a deceased, who applied to the Court for directions and an Order inter alia prohibiting the dissipation of the Estate’s assets and that the Estate Trustee account for her actions of her management of the deceased’s property since the date of his death and pursuant to his will.
Justice Price in his reasons for decision in Angeloni v. Angeloni, 2017 ONSC 7344provides a comprehensive overview of the entitlement to various preservation and/or suspensory orders via the relevant legislation and also considers the application of Rule 45.01(1) of the Rules of Civil Procedure to dependant’s relief claims. Rule 45.01(1) of the Rules provides as follows:
Interim Order for Preservation or Sale
The Court may make an interim order for the custody or preservation of any property in question in a proceeding or relevant to an issue in a proceeding, and for that purpose may authorize entry on or into any property in the possession of a party or of a person not a party.
Where a deceased dies with a spouse and an estate trustee administers an estate during the initial 6 month period after the date of death absent the spouse’s consent or court order, the Court has found that a preservation order shall issue pending further Order from the Court or pending written agreement of the parties. This was confirmed by Justice Price in Angeloni v. Angeloni, 2017 ONSC 7344at para 47 and at para 48 citing Justice Greer’s reasons for decision in Slaven v. Williams et al.
The test for preservation of an estate’s assets under Rule 45.01 of the Rules is the same test for granting interim injunctive relief under Rule 45.02 and is set out in RJR MacDonald Inc. v. Canada (Attorney General), as follows;
- Serious Issue to be Tried: There must be a serious question to be tried. The claim must be more than frivolous, there is substance for what the party is alleging.
- Irreparable Harm: Whether the moving party would suffer irreparable harm if the order is not granted. The moving party must demonstrate that the failure of the granting of the order being granted will result in irreparable harm to the moving party. Generally speaking money is not irreparable; the Courts will look at the nature of the harm and possible the magnitude;
- Balance of Convenience: If the relief is granted will it cause more harm to the responding party or the moving party?
At paragraphs 50 and 51 in Angeloni v. Angeloni, 2017 ONSC 7344Justice Price found inter alia that a dependant’s relief claim and cost of future care needs are serious issues to be tried and that the balance of convenience favoured granting the preservation order.
Angeloni v. Angeloni, 2017 ONSC 7344 is just one example of the Court recognizing the importance of preserving assets of an estate in the context of a dependant’s relief claim.
However, contrary to the above, if the dependant is not a spouse and funds and/or assets are distributed prior to the initiation and service of the application, then the automatic stay provisions as outlined above do not assist the dependant who will have to seek an order tracing and/or preserving the assets already distributed to the beneficiaries under Rule 45.01(1) of the Rules or in some circumstances may even need to seek a Mareva Injunction which would seek that all the assets of a potential beneficiary or recipient of estate funds be frozen, sometimes on an ex parte (without notice) basis.
Preservation Orders in the context of dependant’s relief claims are a critical tool to ensure the funds to satisfy the claim are available and that there are assets available to ensure the dependant receives the much needed support he/she/they are entitled to.