Urgent Interim Dependant Support Motions

A Case Review and Comparison of Zavet v. Herzog and Naglic Estate v. Ricketts

Introduction

Part V of Ontario’s Succession Law Reform Act (“SLRA”)¹ sets out the circumstances where a Dependant, who was not provided adequate provision by a Deceased, can look to the Estate for support.²  But, sometimes Court cases take years and the Dependant needs money urgently.  It is for that reason that the SLRA provides the Dependent with the option to bring a Motion for interim support.

In this blog, I discuss the framework for Motions for interim Dependant support and compare and contrast two Court decisions to assist the reader to better understand under which circumstances a Court might be more likely to grant interim Dependant support.

Urgent Motions

In the Court decisions discussed below, there was no time sensitivity.  But, often an Order for interim support is the difference between a poor person being able to prosecute her/his Claim or having to forfeit his/her rights.  Sometimes, dire circumstances warrant the case being bumped up in the queue.

The Court advises that during the COVID-19 pandemic, Court hearings are limited to urgent matters.  Notwithstanding, we are advised that, at least, one interim Dependant support Motion was permitted to proceed because the Applicant’s financial situation was dire.³

The Court Decisions

Zavet v. Herzog

In Zavet v. Herzog, Sam was married to Dianne for 50 years.⁴  They never divorced.  Sometime, however, in 1995, Sam stopped living with Dianne and moved in with Alona until his death in 2017.  At the time of his death, Sam’s net worth was approximately $200 Million.  In his Wills, Sam appointed Dianne as his Executor and divided his Estate between Dianne and their two daughters.⁵  What about Alona?  Sam left her nothing.

Although the Estate permitted her to continue to reside in the condominium, Alona brought an Application for support under Part V of the SLRA.⁶ Alona was not prepared to wait for money until the final determination of her Application.  She claimed the need for interim Dependant support arguing that the Estate had lots of money and that she was entitled to continue to live the lifestyle that she says she and Sam were living before his illness and his death.

Alona submitted a Form 13 Financial Statement showing her monthly expenses in the sum of $93,773.56.⁷ The Court, however, did not accept the budget, which was supported by certain credit card statements and invoices, to be “… an accurate reflection of her actual monthly expenses.”⁸  The Court concluded as follows:

… the sum of $30,000 a month, net of taxes, is more than adequate to meet Alona’s needs pending return of the Application, particularly given that her accommodation is otherwise paid for.  Although I admit that $30,000 is somewhat arbitrary, it is based on the evidence that she received $4,500 a week ($18,000 a month) from Rockstone Investments; her credit card statements produced average around $5,000 a month in expenses and her evidence is that she also received cash amounts from Sam.  I have also allowed some money toward vacations.”⁹

Prior to her Motion, the Court ordered that Alona receive from the Estate an advance of $150,000.00 payable to her lawyer, in trust. On the return of her Motion, Alona sought an additional $750,000.00. The Court confirmed that it has the jurisdiction to award interim professional fees and disbursements on the following bases:

… both generally and pursuant to the discretion granted to the court by section 64 of the SLRA in circumstances where the applicant cannot afford to fund the application through to completion. See: British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371 at para. 36; Kraus v. Valentini Estate, [1993] O.J. No. 3276 (Ont. Gen. Div.).¹⁰

The exercise of such jurisdiction is an extraordinary exercise of power and is limited to very exceptional cases and narrowly applied: Kalman v. Pick, 2013 ONSC 304 at para. 5.

The Court did not award Alona her professional fees as she failed to produce, among others, redacted copies of her accounts, and failed to specify the legal costs incurred and the estimated costs to be incurred.

Naglic Estate v. Ricketts

In Naglic Estate v. Ricketts¹¹, Janko Naglic was apparently murdered.  He lived in a same-sex relationship with Ivan Romero.  Ivan was charged, but acquitted by a Jury, for the murder of Janko.  He commenced an Application for support under the SLRA and brought a Motion for interim Dependant support.  At the same time, the Estate commenced against Ivan a wrongful death action. The Estate was worth just over $2 Million.  Despite marrying Victoria Bunda, Ivan testified that he continued his relationship and cohabitation with Janko until Janko’s death.  In addition, Ivan worked with Janko and received a salary.

Ivan argued that he was Janko’s Dependant.  Ivan tendered a budget of living expenses and argued that he was entitled to interim Dependant support.  The Court concluded that Ivan was Janko’s Dependant.  It further concluded that Ivan failed to enter an adequate record on, among others, explaining why he was unable to obtain employment.  The Court found “… that the appropriate order to make under section 64 of the SLRA is to award some interim support to Mr. Romero, but only a modest amount. His lack of proper financial disclosure militates against making any other kind of order.”¹²

The Framework

Pursuant to section 64 of the SLRA, the Court may make an Order for the interim support of a Dependant.  It is not the determination of the ultimate entitlement, if any or at all.  It is the determination of whether the Applicant for interim support is “in need of and entitled to support” based on the Court’s consideration of the factors outlined in sections 62 and 63 of the SLRA.  The factors support an assessment that is broader than an objective needs-based economic analysis.

Specifically, section 64 of the SLRA states as follows:

Where an application is made under this Part and the applicant is in need of and entitled to support but any or all of the matters referred to in section 62 or 63 have not been ascertained by the court, the court may make such interim order under section 63 as it considers appropriate.

The Applicant bears the onus of establishing his/her entitlement to and need for interim support.¹³ The Court weighs the Applicant’s evidence and its pre-hearing testing (e.g., Cross-Examination).¹⁴

In Perkovic v. McClyment, the Court comments as follows on how strong the case should be when advanced by the Applicant:

The case law employs a variety of terms to describe the burden on the applicant: “a good, arguable case”: Sturgess v. Shaw, 2002 CanLII 2690 (ON SC), [2002] O.J. No. 3759 (S.C.J.), at para. 9; “a prima facie case” in the sense of “apparently credible evidence sufficient to entitle [the applicant] to support”: Burke v. Poste, [1996] O.J. No. 2725 (Gen. Div.); “substantial evidence to support a prima facie claim” and “not a frivolous application”: Re Burke, [1983] O.J. No. 3267 (Surr. Ct.), at para. 18; and, the existence of “a triable issue”: Kraus v. Valentini Estate, [1993] O.J. No. 3276 (Gen. Div.), at para. 4.

I take from these various tests, or labels, the following principles.  On a motion for interim support the onus is on the applicant to establish some degree of entitlement to, and the need for, interim support.  On an interim motion a court can weigh and assess the evidence, to the extent permitted by the nature of the evidence and any pre-hearing testing of it.  If, after such assessment, the motions court concludes that the record contains credible evidence from which one could rationally conclude that the applicant could establish his claim for support, then an order for interim support may issue.¹⁵

In making its determination for an Order for interim Dependant support, the Court considers, among others, the following questions:

1. Is the Applicant a Dependant of the Deceased?
2. What support did the Deceased make for the Dependant?
3. Has the Dependant demonstrated need?
4. What are the current circumstances of the Deceased’s Estate?

Is the Applicant a Dependant of the Deceased?

The first question to be determined by the Court is whether the Applicant is a Dependant of the Deceased within the meaning of section 57 of the SLRA.  Section 57(1) defines “Dependant” as follows:

(a) the spouse of the deceased,
(b) a parent of the deceased,
(c) a child of the deceased, or
(d) a brother or sister of the deceased,
to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death;

Section 57(1) further defines the following:

“child” means a child as defined in subsection 1 (1) and includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody;

…

“parent” includes a grandparent and a person who has demonstrated a settled intention to treat the deceased as a child of his or her family, except under an arrangement where the deceased was placed for valuable consideration in a foster home by a person having lawful custody;

“spouse” has the same meaning as in section 29 of the Family Law Act and in addition includes either of two persons who were married to each other by a marriage that was terminated by divorce.¹⁶

In evidencing the history of the relationship with the Deceased, the Applicant may deliver Affidavits of family, friends and acquaintances.¹⁷

What support did the Deceased make for the Dependant?

The second question to be determined by the Court is what support did the Deceased provide to the Dependant Applicant within the meaning of section 58()1 of the SLRA, which provides as follows:

Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

To qualify, therefore, as a Dependant of the Deceased, the  Applicant must adduce credible evidence that the Deceased provided support, or was under a legal obligation to provide support, to the Applicant immediately before the Deceased’s death.¹⁸  In Re Davies, the Court considered support to be “… not only furnishing food and sustenance and supplying the necessaries of life, but also the secondary meaning of giving physical or moral support.”¹⁹

In identifying “physical or moral support”, the Court may consider the following:

1. What legal obligations would have been imposed on the Deceased had the question of the provision arisen during his/her lifetime; and
2. What moral obligations arise between the Deceased and his/her Dependant as a result of society’s contemporary community standards and expectations of what a judicious person would do in the circumstances.²⁰

Based on the following case law, the Court has determined that support is to be defined in both economic and ethical terms as follows:

1. In Tataryn v. Tataryn Estate, despite changing his Will and disinheriting his son, the Deceased was found to provide support to his adult son by being resigned to his son residing with the Deceased in the Deceased’s apartment.²¹
2. In Cummings v. Cummings, the Deceased was found to provide support to his adult daughter as she was still in University and his adult son as he suffered from muscular dystrophy.²²
3. In Reid v. Reid, the Deceased was found to provide support to her adult daughter and her two children by always having them reside with her.²³
4. In Juffs v. Investors Group Financial Services Inc., the Deceased was found to provide support to her 18 year old daughter, over whom custody was granted to the father, because of the moral obligation to make support payments.²⁴
5. In Broderick v. Papathanasiou, the Deceased was found to provide support to his common law spouse by residing in the Deceased’s condominium and the moral obligation to provide spousal support.²⁵

It is important to note that the relevant date in determining whether adequate support was made is the date of death of the Deceased.

Has the Dependant demonstrated need?

The third question to be determined by the Court is has the Applicant Dependant demonstrated need.  In making its determination, the Court considers “all the circumstances of the application”, including the Applicant’s needs in comparison to the Applicant’s accustomed standard of living and his/her current and future means to maintain the standard of living.

“In Cummings v. Cummings (2004), 69 O.R. (3d) 398 (C.A.) the Court of Appeal described the factors listed in section 62()1 as ‘a mélange of criteria based not only on needs and means, but also on legal and moral or ethical claims’”.²⁶  In Naglic Estate v. Ricketts, the Court notes that “no one factor is determinative.”²⁷

The evidentiary onus of establishing the Dependant’s need is on the Dependant Applicant.  Based on the case law, the Applicant should include evidence of his/her financial means and resources for the years before and after the passing of the Deceased, including the following:

1. Statements of income, including:
   a. Notices of Assessment and Notices of Reassessment;
   b. Income Tax Returns; and
   c. Pay stubs.
2. Statements of expenses, including
   a. Credit card statements; and
   b. Invoices, receipts and accounts.
3. Net worth statements etc.

As noted by the Court in Naglic Estate v. Ricketts, “the financial statements published under Rule 13 of the Family Law Rules provide useful guides for organizing and presenting this type of evidence.”²⁸

The foregoing should be summarized and reflected in a detailed budget of living/lifestyle expenses supported by past and current financial evidence.  The budget assists the Court in ascertaining the monthly support payments being sought and the monthly support payments, which may be awarded.

Parenthetically, claims for unjust enrichment may be included in the Applicant’s budget. For example, in Perilli²⁹, the Deceased’s common law spouse provided the Deceased with full-time personal care resulting in her leaving her employment for approximately three years prior to his death.  The Court found that Deceased was unjustly enriched by his spouse’s contributions to his home and by her personal care. The Court further found that the Deceased owed his spouse economic support for life.

Furthermore, the legal right to other support should be included in the budget (e.g., pensions, equalization payments, spousal support payments, child support payments etc.).

As above, it is important to note that the Court’s determination of the adequacy of the support is to be determined as of the date of the Hearing by the Court.³⁰

What are the Circumstances of the Deceased’s Estate?

The fourth question to be determined by the Court is what are the circumstances of the Estate.  Ultimately, the question is whether the Estate has the resources to make the claimed support payments or what clawbacks are available to the Court to be ordered to ensure the making of the support payments.³¹   As such, the Court is to treat the Application as if brought on behalf of all of the Dependants.³²

In Naglic Estate v. Ricketts, the Estate Trustee filed significant information about the financial affairs of the Estate, including its assets, liabilities and net worth.  Among others, the Estate Trustee argued for the reduction in the Estate’s net worth based on the following:

1. Changes in assumptions about the ownership of certain assets that were jointly owned by Mr. Naglic and others;
2. Losses incurred in managing Estate property;
3. The decrease in value of corporations owned by the Estate; and,
4. The distribution of the deceased’s jewelry to beneficiaries.³³

In addition, the Estate Trustee disclosed evidence as to the Estate’s other beneficiaries, including the following:

1. Devised property in Costa Rica to a named beneficiary;
2. Estate Trustees to dispose of personal effects;
3. Provision for the payment of seven legacies totalling approximately $130,000.00; and
4. Residue to be divided equally between his brother and sister.³⁴

In sum, the Estate argued that it lacked the resources to make any support payments.  The Court, however, ordered the Estate to pay the Applicant a monthly interim Dependant support out of the income or capital of the Estate.

Conclusions

On a Motion for interim Dependant support, the Court is to consider “all the circumstances of the application”.³⁵

The Decisions

In Zavet v. Herzog, Alona’s Dependant’s claim was confirmed by the 12 to 19 year relationship (depending on the party’s perspective), the cohabitation and financial support through a corporation of the Deceased.  Despite entirely rejecting her budget, the Court awarded Alona interim Dependant support based on notice of her needs, in part, as tacitly accepted by the Estate, which permitted her to continue to reside in the condominium, paid the monthly property taxes, insurance and condominium fees, and as the Estate consented, on a without prejudice basis, to advance her $700,000.00 toward her claim for support and a further $150,000.00 payable to her lawyer, in trust, towards her professional fees.

In Naglic Estate v. Ricketts, Ivan’s Dependant’s claim was confirmed by the cohabitation for no less than three years in a same-sex relationship and the financial support through the Deceased’s businesses.  Despite claims of murder, changes to Jenko’s Wills and the Estate facing significant tax liabilities, the Court awarded Ivan interim Dependant support based on his “short-term” needs for the duration leading up to the hearing of his Application and the Estate’s wrongful death Claim as well as the payment of the life insurance proceeds to other beneficiaries.³⁶

The Evidence

Section 64 uses the phrase “and the applicant is in need”.  Does that mean that absolute entitlement must be established?  The case law suggests otherwise.  As long as the substantial evidence supports the claim, the Application for interim relief may succeed even if there are still questions as to the ultimate success of the Application.³⁷

Carol Craig at Nelligan O’Brien Payne LLP wrote that the strength of the case for interim support requires the following:³⁸

• “[C]redible evidence from which one could rationally conclude that the applicant could establish his claim for support”;
• “[T]he Plaintiff is not required to provide the court with definitive proof of the inadequacy of the provisions made for him in the will… What is clear, however, is that some evidence must be put forward to address this issue”;
• “[A] prima facie case”;
• “A good arguable case”; or
• The existence of a “triable issue.”

Importantly, Ms. Nelligan correctly adds later on in her paper states the following:

While applicants need only provide evidence of a prima facie case to entitlement, it is important to put forth as strong an evidentiary record as possible at the motion.  Since courts will assess both parties’ evidence in determining the overall strength of the claim, including contradictory evidence, a fulsome evidentiary record will help meet this threshold.  Courts are skeptical of applicants who fail to make full and fair disclosure, particularly as it relates to financial matters, so a detailed record may remove some of this hesitancy to grant an interim order. Further, if an applicant puts forth a strong case at the motion, this may assist in settling the case before it proceeds further through the full litigation process.³⁹

It behooves the Applicant for Dependant support to always remember that the onus remains on them to show that he or she is in need of and entitled to support.  Do not be lulled into any false sense of security by the phrase “prima facie”. ⁴⁰  As noted above, in Perkovic v. Marion Estate, Justice Brown commented that “… the record contains credible evidence from which one could rationally conclude that the applicant could establish his claim for support, then an order for interim support may issue.”⁴¹

To Be Considered

Due to the foregoing, on the return of a Motion for interim Dependant support, the Applicant is to establish the following:

1. The Applicant falls within one of the qualifying relationships set out in section 57 of the SLRA;
2. The Applicant was a Dependant of the Deceased;
3. The Deceased was providing support to the Applicant or was under a legal obligation to provide support to the Applicant, immediately before the Deceased’s death (i.e., section 57 of the SLRA);
4. The Deceased did not make adequate provisions for the Applicant’s proper support (i.e., section 58(1) of the SLRA); and
5. The Applicant is in need of support (i.e., section 64 of the SLRA).⁴²

Arguably, when bringing an Application for support, a Motion for interim Dependant support should be considered as it goes to the credibility of the Applicant.  Specifically, it goes to whether the Applicant is genuinely dependent on the estate for support.⁴³

In addition, when bringing a Motion for interim Dependant support, it may be prudent to contemplate the following “injunctions” to suspend the distribution of the Estate and enable the enforcement of Orders for interim Dependant support:

1. Pursuant to section 59 of the SLRA, an Order suspending, in whole or in part, the administration of the Deceased’s Estate.
2. Specifically, the section 59 Order may apply to section 72 assets.⁴⁴
3. Similarly, an Order based on the following may be sought:
   a) Pursuant to Rule 40 of the Rules of Civil Procedure, an interlocutory injunction.
   b) Pursuant to Rule 42  of the Rules of Civil Procedure, a Certificate Pending Litigation.,
   c) Pursuant to Rule 45 of the Rules of Civil Procedure, an Order for interim preservation of property.