Stewart Estate v. Stewart

Stewart Estate v. Stewart Collection Decisions of the Court of Appeal Date 2025-07-30 Neutral citation 2025 ONCA 575 Docket numbers COA-25-CV-0533, COA-25-CV-0593, M56133, M56136 Judges Lauwers, Peter D. Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Stewart Estate v. Stewart, 2025 ONCA 575 DATE: 20250730 DOCKET: M56133 (COA-25-CV-0593) & M56136 (COA-25-CV-0533) Lauwers J.A. (Motions Judge) DOCKET: M56133 (COA-25-CV-0593) IN THE MATTER OF the Estate of William Archibald Stewart AND IN THE MATTER OF the Estate of Edith Marie Stewart BETWEEN June Hale in her capacity as Estate Trustee of the Estate of William Archibald Stewart and in her capacity as Estate Trustee of the Estate of Edith Marie Stewart, and Edward Murray Stewart in his capacity as Estate Trustee of the Estate of Edith Marie Stewart Applicants (Respondents/Responding Parties) and Lynn Stewart*, Winfield Clayton Stewart**, William Archibald Stewart, James Douglas Stewart, Norman Andrew Stewart, Grant Leslie Stewart, Marion Andrews, Barbara Koehler, Shirley Hayles, Pearl Cromwell, Mildred Stewart, June Hale in her personal capacity, Edward Murray Stewart in his personal capacity, and Robert Wayne Stewart by his Estate Trustee Respondents (Appellant/Moving Party* Respondent/Responding Party**) DOCKET: M56136 (COA-25-CV-0533) IN THE MATTER OF the Estate of William Archibald Stewart AND IN THE MATTER OF the Estate of Edith Marie Stewart AND BETWEEN June Hale in her capacity as Estate Trustee of the Estate of William Archibald Stewart and in her capacity as Estate Trustee of the Estate of Edith Marie Stewart, and Edward Murray Stewart in his capacity as Estate Trustee of the Estate of Edith Marie Stewart Applicants (Respondents/Responding Parties) and Lynn Stewart*, Winfield Clayton Stewart**, William Archibald Stewart, James Douglas Stewart, Norman Andrew Stewart, Grant Leslie Stewart, Marion Andrews, Barbara Koehler, Shirley Hayles, Pearl Cromwell, Mildred Stewart, June Hale in her personal capacity, Edward Murray Stewart in his personal capacity, and Robert Wayne Stewart by his Estate Trustee Respondents (Respondent/Responding Party* Appellant/Moving Party**) Julia M. Fischer, for the moving party (M56133) and the responding party (M56136), Lynn Stewart Robert W. Scriven, for the moving party (M56136) and the responding party (M56133), Winfield Clayton Stewart David Lobl and Anna Chen, for the responding parties (M56133 & M56136), June Hale in her capacity as Estate Trustee of the Estate of William Archibald Stewart and in her capacity as Estate Trustee of the Estate of Edith Marie Stewart, and Edward Murray Stewart in his capacity as Estate Trustee of the Estate of Edith Marie Stewart Heard: July 17, 2025 ENDORSEMENT [1] Lynn Stewart and Winfield Clayton Stewart each independently move for a stay of the order of Chown J. interpreting the Will of William Archibald Stewart and outlining the powers of the estate trustee to sell two farm properties that formed part of William’s estate. [2] The application judge dealt with three applications in a consolidated set of reasons reported at Hale v. Stewart, 2025 ONSC 2275. He sets the factual context at para. 1: When William Archibald Stewart died on February 18, 1994, he was survived by his wife, Edith Marie Stewart, and their 13 children. In these proceedings, I am asked to interpret William’s will, dated February 20, 1989. His will gave a life estate to Edith, after which two farm properties William owned were to go to two of his sons, Robert and Winfield. These gifts were subject to the sons paying specified amounts for their respective farm properties. William died five years after preparing his will. Edith lived another 24 1/2 years. By then, the values of the two farms dwarfed the specified amounts Robert and Winfield were required by the will to pay for the farms and dwarfed the gifts to William’s other children. [3] Lynn Stewart is Robert’s widow and heir. [4] For ease of understanding, the application judge used the first names of the interested parties. He also called the farm to be conveyed to Robert, the “Robert Farm”, and the farm to be conveyed to Winfield, the “Winfield Farm”. I will continue his usage. The parties use the term “gift” in referring to the bequest, but the Will required Robert to exercise an option to purchase by paying $50,000 and Winfield to pay $90,000. The salient point, as the application judge noted at para. 21, is that the value of each farm has “skyrocketed”, so that by the date of Edith’s death, “the Winfield farm was worth $1,120,000 and the Robert Farm was worth $617,500.” [5] There are significant tax liabilities associated with the disposition of each farm that were triggered on Edith’s death, now about $600,000. The farms have been liened by the Canada Revenue Agency and a per diem interest rate continues to operate. The CRA notified the estate that, should the liabilities continue unpaid, it “may start to seize and sell some of [the] lands, goods, and assets to pay [the] debt.” [6] The application judge authorized the estate trustee to sell the farms and use the proceeds to pay the debts of the estate, the most significant of which is the CRA debt. [7] Lynn and Winfield oppose the sales of the farms, taking the position that selling would “void” the gifts. [8] The application judge made two rulings of particular pertinence to this motion. First, the application judge held, in Appendix A, at para. 4: If Winfield exercises the option to purchase the Winfield Farm pursuant to clause 3(c)(iii), what rights does the estate trustee of William’s estate have in respect of the Winfield Farm to satisfy the debts of William’s estate? The trustee has a discretion to sell, mortgage, or otherwise raise funds from the farms or to enter into an arrangement with Robert’s estate or Winfield (or both of them) that allows them to receive the farms but also allows the estate to pay all its debts. See paragraphs [70] to [74] above. [Emphasis in original.] [9] Second, he held, in Appendix A, at para. 5(a): Following the sale (if any) of the Winfield Farm and/or the Robert Farm, and after the payment of debts of William’s estate including the Tax Liability and the Estate Trustee Loan, to whom are the remaining proceeds of sale (if any) payable? To Winfield and to Robert’s Estate, respectively. See paragraph [81] to [84] above. [Emphasis in original.] [10] The estate trustee argues that the moving parties have failed to meet the test for a stay under r. 63.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, set in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, [1994] S.C.J. No. 17, at para. 43. The test requires the court to determine whether a stay is in the interests of justice considering the following three factors: (1) a preliminary assessment of the merits to ensure that there is a serious question to be tried; (2) whether the applicant would suffer irreparable harm if the application were refused; and (3) an assessment of the balance of inconvenience as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. [11] I am somewhat impaired in my assessment of the first factor because neither moving party filed a factum on the motions, and neither had perfected their appeal. (1) The serious question to be determined [12] The estate trustee has attempted to distill the issue: “it appears (in respect to the Farm Properties and related issues), both appeals assert that the Robert Estate and Winfield must be given the option to purchase the Farm Properties for the amounts in William’s Will without consideration of the liabilities of William’s Estate.” The estate trustee responds to this assertion: The purchase prices as set out in William’s Will was $50,000 for the Robert Farm and $90,000 for the Winfield Farm. The purchase prices are insufficient to pay the Tax Liability (and other liabilities of William’s Estate), and thus as a result, if the William Estate Trustee accepts the purchase prices without a clearance certificate (which the William Estate Trustee cannot obtain because of the Tax Liability) and transfers the Farm Properties to Lynn and Winfield, the William Estate Trustee would be personally liable. [13] On the question of tax liability, the application judge noted, at para. 70: In the agreed statement of issues, questions 3(a) and 4 ask whether the estate is obliged to accept a $50,000 offer to purchase the Robert Farm from Robert’s estate and what the estate’s rights are regarding the Winfield Farm if Winfield exercises the option to purchase it for $90,000. In oral submissions, Winfield said he would be prepared to pay the tax liability attributable to the Winfield Farm as part of a purchase, although he submitted that there was no grounds for executor compensation. Lynn may take a similar position regarding the Robert Farm. [Emphasis added.] [14] My understanding of the oral submissions is that Lynn and Winfield want the trustee to exercise her discretion not to sell both properties outright, but instead to enter into arrangements described by the application judge at paras. 73-74: I find that the trustee may determine the value of either or both farms by appraisal or through selling one or both of the farms on the open market. ... However, the estate has the power under clause 4(5) to “fix the value of the estate, or any part thereof, for the purpose of making any division, setting aside or payment of any share or interest therein” [emphasis added]. It is therefore open to the estate to sell only one farm on the open market and to determine the value the other farm by appraisal, and then to transfer that farm in exchange equivalent value (such as payment by the transferee of some or all of the estate’s liabilities as contemplated in the with prejudice offer dated July 6, 2022). The trustee may raise funds to pay the estate’s debts through other arrangements that yield the appraised value of the farms. For example, the trustee may mortgage the farms or make other arrangements with beneficiaries. …At the same time, the trustee has the discretion to enter arrangements with Lynn and/or Winfield that allows for them to receive the properties but also allows the estate to pay all its debts…. [Emphasis in original.] [15] It seems that Lynn and Winfield believe they can best jockey for that outcome if the estate trustee remains in possession of the farms and they are in a position to exercise their options under the Will. But they do not articulate a serious question to be determined on appeal for which a stay is required. (2) Irreparable harm [16] The estate trustee argues that the moving parties have failed to establish the second ground for a stay – irreparable harm. The moving parties’ bald assertions of irreparable harm do not overcome the facts that both farms are rented to third parties. The farms are not, on the facts, “unique”. The issues appear to be all financial, leading to the conclusion that there is no irreparable harm. (3) Balance of convenience [17] The third ground is the balance of convenience. Lynn argues in favour of maintaining the status quo, noting that the estate “would not suffer material harm by waiting for the appeal to be adjudicated”. The estate trustee takes the opposite view: “A further delay only risks further expenses for William’s Estate and a further risk that the CRA will seize the Farm Properties altogether to satisfy the Tax Liability, and will not be in the parties’ interest.” In my view, the balance of convenience favours the estate trustee’s position. [18] There is no serious question to be decided for which a stay is required; the ground of irreparable harm has not been established; and the balance of convenience favours the estate trustee’s position. On this basis I dismiss the motion for a stay pending appeal. [19] I award costs in favour of the estate trustee fixed at $20,000, all-inclusive, payable half by each moving party. “P. Lauwers J.A.”