Estate litigation can be challenging for all involved. But what can make it more challenging is when a party abuses the process to the point that litigation is unnecessarily prolonged over several years. This can only bestow added hardship on those trying to cope after the passing of a loved one.
This scenario occurred recently in a case heard by the Ontario Court of Appeal, Appleyard v. Zealand. The Court posed the following question:
“[W]hether an alleged dependant should have an unlimited right to pursue claims and objections against an estate irrespective of procedural misconduct and delay that amount to an abuse of process.”
Deceased’s ex-wife took multiple unsuccessful steps in previous legal proceedings
The appellant, Ms. Appleyard, was the deceased’s ex-wife who had a history of misconduct in prior legal proceedings. During her divorce from the deceased, the judge found her to have engaged in “deliberate and outright fraud.” She did not bring supporting documentation to the hearing and completely depleted the assets she and the deceased jointly owned. The trial was concluded in the deceased’s favour, and Ms. Appleyard was unsuccessful in the subsequent appeal. The Court of Appeal noted, “we think that this litigation has gone on far too long and must be brought to an end.”
Shortly after the conclusion of the divorce proceedings, an action ensued between Ms. Appleyard and her family law lawyer. The Ontario Superior Court of Justice awarded her former lawyer $91,760 in legal fees. When her appeal was unsuccessful in this action, Ms. Appleyard filed for bankruptcy. Her interest in a farm owned by both her and the deceased was to be sold by her trustee in bankruptcy.
Ms. Appleyard did not appear in these proceedings but later unsuccessfully appealed the order and owed nearly $10,000 in costs. She was prohibited from bringing further actions until she complied with the costs order in the bankruptcy appeal and all other costs in relation to her bankruptcy. At the time of the estate litigation, Ms. Appleyard had not yet been discharged from bankruptcy.
Non-beneficiary ex-wife filed multiple objections and claims against executor and estate
The deceased, who died in 2013, divided his estate between his children (whom he had with Ms. Appleyard) and his common-law spouse. The respondent estate trustee and executor was not a beneficiary under the deceased’s Will but was a family friend.
Between 2013 and 2016, Ms. Appleyard filed two Notices of Objection and a “Claim Against Estate” against the estate trustee. Initially, she was seeking spousal support payments to be paid from the estate. When she was unsuccessful in that respect, she alleged impropriety on the part of the estate trustee and sought $980,000 in damages for unjust enrichment from the deceased’s farm property.
The Court then ordered that Ms. Appleyard was precluded from bringing further motions without leave of the Court, in accordance with the order that arose at the end of the bankruptcy proceedings. She unsuccessfully appealed this order and, in August 2017, was ordered to pay $5,000 in costs within 30 days. If she failed to do so, all of her claims against the deceased’s estate would be dismissed.
Claims dismissed for delay after failure to pay costs award
In May 2018, the estate trustee started an Application to Pass Accounts and to be removed as estate trustee. Ms. Appleyard served a Notice of Objection to the estate trustee’s accounts in June 2018 on the basis of her previous objections and claims.
The Court allowed Ms. Appleyard to participate in the Application to Pass Accounts as a potential creditor of the estate. The Court also ordered mediation, which occurred but did not resolve the litigation.
In January 2019, Ms. Appleyard appealed the order requiring her to seek leave of the Court before bringing any further claims against the estate. The Court of Appeal granted the appeal. Ms. Appleyard also unsuccessfully appealed the costs order of $5,000 (which stated that all claims would be dismissed if she failed to appeal within the 30-day timeline). Shortly after, the Court Registrar administratively dismissed her outstanding claims for delay.
Ex-wife appealed dismissal of additional motions which repeated earlier claims
At the end of January 2019, under the direction of the Court, the estate trustee brought a motion requiring Ms. Appleyard to bring any claim she wished to advance in the proper form. Ms. Appleyard brought a cross-motion in which she again claimed spousal support and requested the farm sale proceeds be paid into court. She also sought to be added as a party to the ongoing proceedings (as her previous proceedings had been dismissed). The matter was delayed for another nine months as Ms. Appleyard repeatedly sought adjournments to retain counsel.
Ms. Appleyard was ultimately unsuccessful in her claims and was ordered to pay $26,000 in costs to the estate trustee in October 2019. The order stated that if Ms. Appleyard wished to bring a claim for dependant support under the Succession Law Reform Act, she must do so within 90 days of October 1, 2019. If she failed to do so, she would be deemed to have abandoned her claims against the estate.
While Ms. Appleyard did not commence an application for dependant support within the 90-day timeline, she appealed the court’s order requiring her to do so on November 1, 2019. She was granted numerous extensions to perfect her appeal, which only occurred on July 16, 2021.
Court of Appeal: Ex-wife’s outstanding claims “moot, dismissed, or procedurally untenable”
At issue in the appeal was whether the motion judge was in error by dismissing her claims. The Court of Appeal held that there was no error made. The judge held that Ms. Appleyard “had no extant property or support claims – they were moot, dismissed, or procedurally untenable.” Her property claims had been dealt with in the divorce and bankruptcy proceedings and had thus been disposed of. Her participation as a potential creditor of the estate was applicable only to the estate trustee’s application on the passing of accounts. Moreover, none of the dismissed claims had been formally issued or commenced, and Ms. Appleyard had not provided the court with proof of the amounts she was claiming.
The Court of Appeal also found that Ms. Appleyard’s failure to pay the costs ordered throughout the litigation further justified the dismissal of her claims.
Court of Appeal denounced ex-wife’s vexatious conduct, barred her from bringing further claims
Beyond the failures of the claims themselves, the Court of Appeal denounced Ms. Appleyard’s conduct as “ vexatious” and “an abuse of process that justifies the dismissal of her proposed claim.” The Court stated that her conduct led to extensive delay and the consideration of issues that had already been determined in prior hearings.
At the hearing, the time limit for Ms. Appleyard to file a new application had already run out. The Court denied her request to extend the time to commence a new action, citing her conduct as the cause of the nine-year delay in the estate’s administration. It held that any further delay would be grossly unfair to the beneficiaries.
As a result, all of Ms. Appleyard’s claims were dismissed, and she was barred from bringing any further claims related to the estate. She was ordered to pay a further $15,000 in costs to the estate trustee. The Court also ordered that all outstanding costs owing by Ms. Appleyard be paid within 30 days of the release of the appeal reasons, failing which she would no longer receive notice of any step in the proceedings and could not participate in any way.
Derfel Estate Law Provides Skilled Advocacy in Contentious Estate Disputes
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