Milavsky v. Milavsky, 2011 ABQB 342

Court of Queen ’ s Bench of Alberta Citation: Milavsky v. Milavsky, 2011 ABQB 342 Date: 20110526 Docket: FL01 10034 Registry: Calgary Between: Marilyn Theresa Milavsky Plaintiff - and - Harold Philip Milavsky, 353396 Alberta Inc., Harold Milavsky Family Trust, Harold Milavsky Grandchildren ’ s Trust and the Harold Milavsky Descendants Trust Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice G.C.

Hawco _______________________________________________________ [ 1 ] This is an application by the Defendants to strike out the Plaintiff’s claims as against 353396 Alberta Inc., Harold Milavsky Family Trust (“Family Trust”), Harold Milavsky Grandchildren’s Trust (“Grandchildren’s Trust”) and the Harold Milavsky Descendants Trust (“Descendants Trust”) and any claims against Mr. Milavsky personally based against the trusts. [ 2 ] The Plaintiff argues that such an application is to be successful only where there is clearly not a trialable issue.

The Defendants argue that most of the claims, other than the claims against the Descendants Trust, should be struck because of the limitation period set forth in the Limitations Act , R.S.A. 2000, c. L-12.

Facts [3] The parties were married on February 14, 1999, after having co-habitated for some nine years before that date, beginningsometime in 1990. They separated on February 25, 2009. There were no children of that relationship. [4] Mr. Milavsky had been married previously. On September 30, 1980, he settled the Family Trust. Advances in an amountexceeding $6 million were made to that trust between September 30, 1980 and January 1, 1994. Mr. Milavsky had and has no entitlementto the capital or income of that trust. [5] Mr. Milavsky owned and has lived in a condominium in Eau Claire since 1986.

That condominium was acquired in 1986 by353396 Alberta Inc. (“353”) as a bare trustee. In 1992, the condominium, as well as all of Mr. Milavsky’s household effects andfurniture were transferred to the Harold Milavsky Residential Trust (“Residential Trust”). [6] On September 25, 2001, the Grandchildren’s Trust was settled. The assets it acquired were the assets of the Family Trust.The beneficiaries were the same. This was basically a roll-over for tax purposes. The settlor of that trust was Mrs. Milavsky. [7] On August 6, 2004, the Descendants Trust was settled. The beneficiaries were again his grandchildren.

Between August 10,2004 and November 27, 2007, Mr. Milavsky donated a net amount of just under a million dollars to the Descendants Trust. [8] The Statement of Claim in relation to all of these trusts and to the claim against Mr. Milavsky was issued on May 10, 2010.It claims that Mr. Milavsky set up the trusts and advanced property to them for the purpose of defeating the Plaintiff’s claim to propertyarising out of their relationship. Arguments [9] The Defendants claim that Mrs. Milavsky was aware of all of the trusts from the time she started living with Mr.

Milavsky.She was aware of the Residential Trust since 1999. She was the settlor of the Grandchildren’s Trust in 2001. She knew what the assets ofthe trusts were and where they came from. [10] The Statement of Claim was issued sixteen years after the last gift to the Family Trust. The Defendants argue that the claim isbarred by virtue of the ten-year “drop dead” rule in our Limitations Act. [11] The transfer of the condominium and contents took place eighteen years prior to the issuance of the Statement of Claim.

TheDefendants say that should also be caught by the ten-year rule. [12] With respect to the Grandchildren’s Trust, it was nine years after the trust had been established that the Statement of Claimwas issued. Since Mrs.

Milavsky was the settlor, she obviously knew about it and, it is argued, the claim should be barred by the two-year limitation period. [13] The Defendants acknowledge that there could be a claim against the Descendants Trust and concede, not that there is anylegitimacy to it but that any claim against that trust is not statute barred. [14] The Plaintiff argues that because this is a marital conflict, the rules relating to a commercial contract should not be applicable.She bases this argument primarily upon the two decisions of the Supreme Court of Canada, Miglin v.

Miglin, 2003 SCC 24 ,[2003] 1 S.C.R. 303 and Rick v. Brandsema, 2009 SCC 10 , [2009] 1 S.C.R. 295. In both of those cases, the Court wasspeaking about contracts made between married couples and the danger of applying too rigid a rule of construction when one of theparties may have been very vulnerable.

[15] It is further argued by the Plaintiff that no person should be able to so arrange his financial affairs that his wife or childrenare treated unfairly. The Plaintiff points to two decisions, the Ontario Court of Appeal decision in Wildman v. Wildman (2006), (ON CA), 273 D.L.R. (4th) 37 and the decision of Justice Veit of this Court in B.V.M. v. W.W.M. (1994), (AB KB), 156 A.R. 392. [16] The Plaintiff says that that is exactly what has happened here: that Mr. Milavsky has expended his experience, time andefforts on generating an income and assets for the trusts, to the detriment of the Plaintiff.

The efforts and consequent benefit to the trustsconstitute an on-going course of conduct such that the limitation periods do not expire until the conduct stops, which has not occurred. Decisions Family Trust [17] This Trust was settled in 19980. All advances were completed by 1994. There is no suggestion of fraudulent concealment orunconscionable conduct which was present in Ambrozic v. Burchevski (2008), 2008 ABCA 194 , 90 Alta.L.R. (4th) 247. I agreewith the Defendants that the drop-dead rule under s.3(1)(

b) applies in this situation. As stated by our Court of Appeal in Bowes v.Edmonton (City), 2007 ABCA 347 at para. 151: That paragraph is plain. It says that the time under the alternative absolute period starts to run from the negligent or wrongful act oromission itself. Therefore, one should not wait until the harm occurs. Where the Legislature adopts a specific event to start time running,that displaces the former discoverability rule: Ryan v. Moore ... The claim against the Family Trust is therefore struck. Residential Trust [18] The condominium was acquired in 1986 by 353 as a trustee.

A transfer was made to the Residential Trust in 1992. ThePlaintiff knew about the transfer, knew that the condominium was held by a trust since 1992. There is no issue of discoverability. Thetwo-year limitation from when any claim might have arisen has passed. The claim against the Residential Trust or 353 is struck. Grandchildren’s Trust [19] There have been no contributions from Mr. Milavsky since 2001 when this trust was settled.

The Plaintiff argues thatalthough she was the settlor, she really did not appreciate what she was doing when she signed off on this Trust. [20] There can be no doubt that the Plaintiff knew the effect of the Grandchildren’s Trust was that Mr. Milavsky would receivenothing from it, and that she would receive nothing from it. The contributions had come prior to 1994. There is no issue ofdiscoverability. The claim is barred by virtue of the two-year limitation period. The claim is struck as against the Grandchildren’s Trust.

Descendants Trust [21] As stated, it is acknowledged by the Defendants that an argument may be made with respect to this Trust. The claim againstthis trust will remain. [22] The result of the above is that the pertinent paragraphs of the Statement of Claim relating to claims as against 353, the FamilyTrust and the Grandchildren’s Trust are struck. Consolidation of Actions [23] If I have not already done so, this action is consolidated with the prior matrimonial property and divorce action for thepurposes of trial.

[ 24 ] Defendants have been successful in their application to strike, other than for the Descendants Trust, for which they acknowledged the matter should proceed to trial. They are entitled to their costs. Normally, costs are payable forthwith. However, costs shall be in any event of the cause, but shall not be payable until the conclusion of the trial. Heard on the 20 th day of April, 2011. Dated at the City of Calgary, Alberta this 26 th day of May, 2011. G.C. Hawco J.C.Q.B.A. Appearances: Laurie E. Allen Allen Hryniuk for the Plaintiff J. Patrick Peacock, Q.C. Peacock Linder & Halt LLP for the Defendant Glenda F. Graham, Q.C. Macleod Dixon LLP for Harold Philip Milavsky