St. Onge Estate v. Breau,

• Jurisdiction: New Brunswick
• Judge: Daigle, Robertson and Quigg, JJ.A.
• Neutral Citation: 2009 NBCA 36
• Citation: 2009 NBCA 36,(2009), 345 N.B.R.(2d) 101 (CA),345 NBR (2d) 101,48 ETR (3d) 162,[2009] NBJ No 177 (QL),345 N.B.R.(2d) 101,[2009] N.B.J. No 177 (QL),345 NBR(2d) 101,(2009), 345 NBR(2d) 101 (CA)
• Date: 12 February 2009
• Court: Court of Appeal (New Brunswick)

St. Onge Estate v. Breau (2009), 345 N.B.R.(2d) 101 (CA);

    345 R.N.-B.(2e) 101; 889 A.P.R. 101

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Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2009] N.B.R.(2d) TBEd. JN.027

Renvoi temp.: [2009] N.B.R.(2d) TBEd. JN.027

David Breau (defendant/appellant) v. The Estate of Ernest St. Onge, Deceased, Cecile St. Onge, Jacqueline Morrison, and Elaine Woodcock, Administrators of the Estate of Ernest St. Onge (plaintiffs/respondents)

(42-08-CA; 2009 NBCA 36)

Indexed As: St. Onge Estate v. Breau

Répertorié: St. Onge Estate v. Breau

New Brunswick Court of Appeal

Daigle, Robertson and Quigg, JJ.A.

June 11, 2009.

Summary:

Résumé:

The administrators of an estate (deceased's three daughters) sought a declaration that the deceased's joint bank accounts plus tools and other personal items held by the defendant were estate assets. The defendant argued that he was entitled to the bank accounts as the surviving joint owner and that the other items were gifts from the deceased.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at 328 N.B.R.(2d) 346; 841 A.P.R. 346, granted the declaration. The deceased's true intention was to put the defendant "on his accounts" for convenience, not to give him a beneficial interest in the accounts. The deceased was confused and did not have the capacity or intention to give his tools or personal items to the defendant. The defendant appealed.

The New Brunswick Court of Appeal dismissed the appeal.

Banks and Banking - Topic 2723

Bank accounts - Joint accounts - Title - The administrators of an estate (deceased's three daughters) sought a declaration that the deceased's joint bank accounts held by the defendant were estate assets - The defendant argued that he was entitled to the bank accounts as the surviving joint owner - The trial judge found that the deceased's true intention was to put the defendant "on his accounts" at the bank for convenience, not to give him a beneficial interest in those accounts - The New Brunswick Court of Appeal dismissed the defendant's appeal - The presumption of resulting trust in favour of the grantor was the general rule that applied to gratuitous transfers - As equity presumed bargains and not gifts, this rule presumed that the transferor intended to retain the beneficial ownership of the property - The rule also placed the legal burden on the transferee to prove that a gift was intended - The rule was particularly apt in cases where the transferor was deceased - The defendant failed to rebut the presumption that he held the funds in the joint bank account in trust for the benefit of the deceased's estate - See paragraphs 36 to 51.

Banks and Banking - Topic 2731

Bank accounts - Joint accounts - Title to account - Death of one depositor - [See Banks and Banking - Topic 2723 ].

Banks and Banking - Topic 2733

Bank accounts - Joint accounts - Title to account - Resulting trust in favour of original owner of funds - [See Banks and Banking - Topic 2723 ].

Executors and Administrators - Topic 5548

Actions by and against representatives - Costs - Where payable out of estate - An appellant argued that, while the general rule was that costs followed the event, this rule was inapplicable in cases involving estate litigation - Instead, he argued that the general rule in terms of all parties, including the unsuccessful ones, being prima facie entitled to reimbursement, out of the estate, on a solicitor-client basis - He also argued that only in exceptional circumstances was the unsuccessful party to be denied solicitor-client costs - The New Brunswick Court of Appeal rejected these arguments - The court stated that "[f]ollowing the lead of Alberta, British Columbia, Manitoba, Ontario and Prince Edward Island, we believe the general rule that 'costs follow the event' should apply in estate litigation. Moreover, the general rule envisages costs on a party-and-party basis (partial indemnification). Of course, the general rule is subject to an exceptional category which mirrors and builds upon the policy reasons cited in the jurisprudence. In exceptional cases, the probate court may exercise its discretion to depart from the general rule and award costs to an unsuccessful litigant (partial or full). Of course, the exercise of discretion must be effected on a principled basis and, hence, in accordance with the case law discussed above." - See paragraphs 2, 3 and 69.

Executors and Administrators - Topic 5548

Actions by and against representatives - Costs - Where payable out of estate - The administrators of an estate sought a declaration that the deceased's joint bank account and personal items held by the defendant were estate assets - The defendant argued that he was entitled to the bank accounts as the surviving joint owner and that the other items were gifts from the deceased - The trial judge granted the declaration and awarded the estate party and party costs of $8,875 - The defendant appealed the costs award - The New Brunswick Court of Appeal held that the trial judge did not err in exercising his discretion to award party and party costs against the defendant - The defendant was subject to the general rule that costs followed the event - This case did not fall within one of the recognized exceptions to the general rule - Further, the law should not recognize an exceptional category to the general costs rule in cases involving joint bank accounts where the presumption of a resulting trust in favour of the estate was applicable - At most, the party alleging a gift respecting a joint bank account, who was successful at trial, was entitled to ask for full indemnification out of the estate - Whether such costs were awarded remained at the discretion of the trial judge - Those who were unsuccessful were subject to the general costs rule - However, the trial judge retained the discretion to deny the successful party its costs in the appropriate case - Alternatively, it could not be said that the defendant had reasonable grounds for pursuing or defending the litigation or that the litigation was reasonably necessary for the proper administration of the estate - See paragraphs 70 to 77.

Gifts - Topic 301

Capacity to make and receive gifts - Incompetence of donor - The administrators of an estate (deceased's three daughters) sought a declaration that the deceased's tools and other personal items held by the defendant were estate assets - The defendant argued that items were gifts from the deceased - The trial judge granted the declaration - The deceased was confused and did not have the capacity or intention to give his tools or personal items to the defendant - The New Brunswick Court of Appeal dismissed the defendant's appeal - The defendant, not the estate, bore the burden of proving a legal gift - That included proving that the deceased had the necessary donative intention - There was evidence from which the judge could conclude that the deceased lacked the required mental capacity to form an intent to gift certain personal property to the defendant - The trial judge's alleged failure to explain why the deceased lacked the necessary intent to make a gift was not a palpable and overriding error - Given that mental capacity and intention were inextricably linked, his conclusion regarding the former would effectively be determinative of the latter - See paragraphs 24 to 32.

Gifts - Topic 305

Capacity to make and receive gifts - Proof of - The administrators of an estate (deceased's three daughters) sought a declaration that the deceased's tools and other personal items held by the defendant were estate assets - The defendant argued that items were gifts from the deceased - The trial judge granted the declaration - The deceased was confused and did not have the capacity or intention to give his tools or personal items to the defendant - The defendant appealed, arguing that lack of capacity was not pled - The New Brunswick Court of Appeal rejected the argument - While it was true that the plaintiffs did not plead a lack of capacity, the defendant pled that the deceased had capacity - When the plaintiffs allowed the pleadings to close without filing a reply, by operation of rule 27.07(2) of the Rules of Court, this allegation was deemed to have been denied by the plaintiffs and, thus, was a live issue at trial - Therefore, the issue of the deceased's capacity was included in the pleadings, and, thus, properly considered by the trial judge - See paragraphs 33 to 35.

Gifts - Topic 502

Gifts inter vivos - General principles - Intention required - [See Gifts - Topic 301 ].

Gifts - Topic 527

Gifts inter vivos - Presumption against gift - Resulting trust - Rebuttal of presumption - [See Banks and Banking - Topic 2723 ].

Gifts - Topic 578

Gifts inter vivos - Transfer by donor to donee and donor jointly - Intention - [See Banks and Banking - Topic 2723 ].

Gifts - Topic 953

Gifts inter vivos - Evidence and proof - Donor's intention - [See Gifts - Topic 301 ].

Gifts - Topic 955

Gifts inter vivos - Evidence and proof - Burden of proof - [See Gifts - Topic 301 ].

Practice - Topic 1706

Pleadings - Reply and subsequent pleadings - Effect of failure to deny allegations in statement of defence - [See Gifts - Topic 305 ].

Practice - Topic 7032.1

Costs - Party and party costs - Entitlement to - Estate matters - [See both Executors and Administrators - Topic 5548 ].

Practice - Topic 7455

Costs - Solicitor and client costs - Entitlement to - Estates - [See both Executors and Administrators - Topic 5548 ].

Banques et opérations bancaires - Cote 2723

Comptes de banque - Comptes conjoints - Titre - [Voir Banks and Banking - Topic 2723 ].

Banques et opérations bancaires - Cote 2731

Comptes de banque - Comptes conjoints - Titre de propriété d'un compte - Mort d'un déposant - [Voir Banks and Banking - Topic 2731 ].

Banques et opérations bancaires - Cote 2733

Comptes de banque - Comptes conjoints - Titre de propriété d'un compte - Fiducie résultoire en faveur du propriétaire initial des fonds - [Voir Banks and Banking - Topic 2733 ].

Donations - Cote 301

Capacité de faire et de recevoir des donations - Incapacité du donateur - [Voir Gifts - Topic 301 ].

Donations - Cote 305

Capacité de faire et de reçevoir des donations - Preuve - [Voir Gifts - Topic 305 ].

Donations - Cote 502

Donations entre vifs - Principes généraux - Intention requise - [Voir Gifts - Topic 502 ].

Donations - Cote 527

Donations entre vifs - Présomption contre donation - Fiducie résultoire - Réfutation d'une présomption - [Voir Gifts - Topic 527 ].

Donations - Cote 578

Donations entre vifs - Transfert par le donateur au donataire et au donateur conjointement - Intention - [Voir Gifts - Topic 578 ].

Donations - Cote 953

Donations entre vifs - Preuve - Intention du donateur - [Voir Gifts - Topic 953 ].

Donations - Cote 955

Donations entre vifs - Preuve - Fardeau de la preuve - [Voir Gifts - Topic 955 ].

Exécuteurs testamentaires et administrateurs - Cote 5548

Actions par et contre les représentants - Dépens - Cas où ils sont à la charge de la succession - [Voir Executors and Administrators - Topic 5548 ].

Procédure - Cote 1706

Plaidoiries - Répliques et autres plaidoiries - Effet du défaut de nier des allégations dans l'exposé de la défense - [Voir Practice - Topic 1706 ].

Procédure - Cote 7032.1

Dépens - Dépens entre parties - Droit aux dépens entre parties - Recours contre la succession - [Voir Practice - Topic 7032.1 ].

Procédure - Cote 7455

Dépens - Frais entre avocat et client - Droit aux frais entre avocat et client - Successions - [Voir Practice - Topic 7455 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 16].

J.A.M. v. D.L.M. (2008), 326 N.B.R.(2d) 111; 838 A.P.R. 111; 2008 NBCA 2, refd to. [para. 17].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), refd to. [para. 17].

Kibsey Estate v. Stutsky (1990), 63 Man.R.(2d) 34 (C.A.), refd to. [para. 26].

Doiron v. Kerr Estate (1998), 195 N.B.R.(2d) 323; 499 A.P.R. 323 (C.A.), refd to. [para. 26].

Pecore v. Pecore et al., [2007] 1 S.C.R. 795; 361 N.R. 1; 224 O.A.C. 330; 2007 SCC 17, refd to. [para. 26].

Royal Trust Co. v. Diamant, [1953] 3 D.L.R. 102 (B.C.S.C.), refd to. [para. 29].

Fairchild v. Mitchell and Mattatall (1959), 19 D.L.R.(2d) 521 (N.S.S.C.), refd to. [para. 30].

Cooke Estate, Re (2005), 212 B.C.A.C. 222; 350 W.A.C. 222; 48 B.C.L.R.(4th) 110; 2005 BCCA 263, refd to. [para. 42].

Lawrence v. Lawrence (1990), 113 N.B.R.(2d) 129; 285 A.P.R. 129 (C.A.), refd to. [para. 44].

Comeau v. Gregoire - see Scott Estate, Re.

Scott Estate, Re, [2007] N.S.R.(2d) Uned. 93; 2007 NSCA 73, refd to. [para. 48].

Vokey v. Vokey Estate (1994), 123 Nfld. & P.E.I.R. 59; 382 A.P.R. 59 (Nfld. T.D.), refd to. [para. 49].

Masse v. Gagnon - see Masse-Gagnon Estate v. Gagnon.

Masse-Gagnon Estate v. Gagnon, [2004] B.C.T.C. 1436; 12 E.T.R.(3d) 136; 2004 BCSC 1436, refd to. [para. 50].

Mitchell v. Gard (1863), 164 E.R. 1280, refd to. [para. 55].

Logan et al. v. Herring et al. (1900), 19 P.R. 168 (Ont. H.C.), refd to. [para. 57].

Billings Estate, Re (2001), 236 N.B.R.(2d) 192; 611 A.P.R. 192; 2001 NBCA 31, refd to. [para. 59].

McDougald Estate v. Gooderham - see McDougald Estate, Re.

McDougald Estate, Re (2005), 199 O.A.C. 203 (C.A.), refd to. [para. 61].

Bjorninen v. Mercredi (1984), 27 Man.R.(2d) 67 (C.A.), refd to. [para. 63].

Balan Estate, Re (1992), 76 Man.R.(2d) 241; 10 W.A.C. 241 (C.A.), refd to. [para. 63].

Clark Estate, Re (1992), 83 Man.R.(2d) 21; 36 W.A.C. 21 (C.A.), refd to. [para. 63].

Jumelle v. Soloway Estate et al. (1999), 142 Man.R.(2d) 119; 212 W.A.C. 119 (C.A.), refd to. [para. 63].

McCullough Estate v. Ayer - see McCullough Estate, Re.

McCullough Estate, Re (1998), 212 A.R. 74; 168 W.A.C. 74; 1998 ABCA 38, refd to. [para. 64].

Dool Estate, Re (2007), 413 A.R. 222; 2007 ABQB 12, refd to. [para. 65].

Vielbig v. Waterland Estate et al. (1995), 54 B.C.A.C. 219; 88 W.A.C. 219; 1 B.C.L.R.(3d) 76 (C.A.), refd to. [para. 66].

Lee v. Lee Estate et al., [1993] B.C.T.C. Uned. A96; 84 B.C.L.R.(2d) 341 (S.C. Master), refd to. [para. 66].

Collett Estate, Re (2005), 212 B.C.A.C. 304; 350 W.A.C. 304; 2005 BCCA 291, refd to. [para. 66].

Goldman v. Kanee Estate et al. (1992), 15 B.C.A.C. 60; 27 W.A.C. 60; 69 B.C.L.R.(2d) 89 (C.A.), refd to. [para. 66].

Dagle v. Dagle Estate et al. (1990), 81 Nfld. & P.E.I.R. 245; 255 A.P.R. 245 (P.E.I.C.A.), refd to. [para. 67].

Dolan Estate, Re (1947), 21 M.P.R. 213 (N.B.S.C. Ch. Div.), refd to. [para. 73].

Alldritt (Albert W.) Estate v. Everett (1956), 2 N.B.R.(2d) 256 (S.C. Ch. Div.), refd to. [para. 73].

Slater Estate v. Bartlett et al. (1986), 73 N.B.R.(2d) 119; 184 A.P.R. 119 (T.D.), refd to. [para. 73].

McIntosh Estate v. Kenny (1989), 101 N.B.R.(2d) 100; 254 A.P.R. 100 (T.D.), refd to. [para. 73].

Statutes Noticed:

Rules of Court (N.B.), rule 27.07(2) [para. 34].

Authors and Works Noticed:

Feeney, Thomas G., The Canadian Law of Wills (2001 Looseleaf Update), § 1.72 [para. 36].

Halsbury's Laws of England (2000) (4th Ed. - Reissue), vol. 17(2), pp. 182, 183, para. 327 [para. 55].

Hull, Ian M., Costs in Estate Litigation (1998), 18 E.T.R.(2d) 218, para. 47 [para. 65].

Schnurr, Brian A., Estate Litigation -- Who Pays the Costs? (1991), 11 E. & T.J. 52, pp. 52, 53 [para. 54].

Counsel:

Avocats:

Brian D. Delaney, for the appellant;

Donald F. Cullinan, for the respondents.

This appeal was heard on February 12, 2009, by Daigle, Robertson and Quigg, JJ.A., of the New Brunswick Court of Appeal. The following reasons for judgment of the court were delivered in both official languages on June 11, 2009, by Robertson and Quigg, JJ.A.