Estate Planning

The Requirement to Serve Financially-Interested Parties

By Hull and Hull LLP

The recent endorsement of Justice Annis in the case of Hedley v. Hayes Estate 2010 ONSC 4485 (CanLII) illustrates the fundamental requirement of serving financially-interested parties in estates proceedings.

Jeremy Hayes died without a Will.  His long-time unmarried spouse was granted a Certificate of Appointment of Estate Trustee with a Will (the "Estate Trustee").  As we all know, the intestacy provisions in Part II of Ontario's Succession Law Reform Act do not grant an interest to unmarried spouses, and the deceased had a number of relatives apparently with interests on any intestacy. 

The Estate Trustee brought an application for a declaration of a "Resulting/Constructive trust that Mr. Hayes' solely owned bank accounts and investments were held for Mrs. Hedley's benefit", apparently under the Family Law Rules' Rule 1(2)(c), and a motion to dispense with the need for a case conference under Family Law Rule 14(4.2).  The moving applicant Estate Trustee did not serve the relatives with either the application or the motion materials. 

The judge refused to grant the motion.  The failure to serve the relatives who may had interests on an intestacy meant that the "affected parties" (Family Law Rule 7(2)) had not been served.    The endorsement required service of these parties.  The parties could then consider whether this matter was better brought under Rule 75 of the Rules of Civil Procedure (Contested Estates matters), since this was not really a family law case and the issues related better to estates.  And as we all know, Rule 75 requires service of all persons "appearing to have a financial interest in the estate".  Finally, the judge also noted the inherent conflict of interest in the Estate Trustee bringing the proceeding in her personal capacity while being the only named respondent as Estate Trustee.

Thanks for reading,
Chris Graham

Full post as published by Toronto Estate Law Blog on September 15, 2010 (boomark / email).