Bowman v. Radford Estate, 2012 ABQB 722

Court of Queen ’ s Bench of Alberta Citation: Bowman v. Radford Estate, 2012 ABQB 722 Date: 20121123 Docket: 1204 00396 Registry: Grande Prairie Between: Gary Bowman Plaintiff - and - Estate of Julianita Radford, Susan Brooks and Remedios Graunke Defendants _______________________________________________________ Memorandum of Decision of W. S. Schlosser, Master in Chambers _______________________________________________________ [ 1 ] This application has to do with the power of an executor to sell land belonging to an estate. [ 2 ] Julianita Radford died under tragic circumstances in the winter of 2009.

Her Will appointed the Defendant, Remedios Graunke, Executor. [ 3 ] The estate consisted primarily of two quarter sections of land; one with a house on it. Ms. Graunke apparently spent some

time and expense cleaning up the house to get it ready for sale. [4] Title to this property was transferred from the name of the deceased into the name of the executor. It was listed for salewith a Realtor and sold to the Plaintiff. [5] The sale proceeds were used to pay expenses and the specific bequests in the Will. Then, four things happened. First, Ms.Graunke asked the estate lawyers to pay her expenses. She was surprised at the cost of administering the estate. [6] When the lawyers balked at paying her expenses, Ms. Graunke approached Mr. Bowman directly about selling the secondquarter of land.

They agreed on a sale price of $50,000.00, which appears to have been market value at the time. Mr. Bowman wrote upan offer which was signed by the two of them. Mr. Bowman could not pay for the land all at once so he made payments over time. Thefinal payment was in December, 2010. That was the second thing that happened. [7] Title was not transferred into Mr. Bowman’s name. Ms. Graunke moved to Edmonton. [8] Susan Brooks, Meluna Tindoy, Potenciana Tindoy, Tornas Tindoy and Estelita Tindoy were the residuary beneficiaries ofthe estate.

They were to be entitled to what was left over after the estate was administered. The first quarter

section of land with the houseon it sold for $120,000.00. After paying out the expenses and the specific bequests, there was $49,000.00 left over, in addition to thesecond quarter

section of land. [9] Ms. Brooks and the other residuary beneficiaries quarrelled about the proper

interpretation of the Will and the properallocation of the remainder of the estate. This was resolved by agreement in December of 2010. Ms. Brooks then applied to have Ms.Graunke provide a report and an accounting, failing which Ms. Brooks was to be appointed Trustee in her place. The accounting wasnever provided so Ms. Brooks became the Trustee. She did not know that the other quarter had been sold. That was the third thing. [10] Ms. Brooks then sold the land to Wilf and Lana Lehners. Title was transferred into their names. That was the fourth thing thathappend. The Lehners are not parties to this lawsuit.

Apparently the sale proceeds from the Lehner sale are being held in trust. [11] The Plaintiff knew someone in the Land Titles Office who told him that the quarter that he had purchased was beingtransferred into the name of Ms. Brooks, so he filed a Caveat (which has now lapsed) and then a Lis Pendens. The timing was close. Titlewent into Ms. Brooks’ name February 1, 2012. The Caveat was registered February 15. Title transferred to the Lehners April 2, 2012.They took subject to the Caveat. [12] The Plaintiff brought the land but so did the Lehners. The Lehners are on title. That takes us to Ms.

Graunke’s power to sell.The particular issue for this application is whether the matter is clear enough that the pleadings should be struck against Ms. Brooks, orthat the action be summarily dismissed against her and the estate. [13] The Devolution of the Real Property Act, RSA 2000, c. D-12, is at the centre of this. There is not much judicial considerationof the Act. [14] Mr. Justice McDermid says in Kissinger Petroleums Ltd. v. Keith McLean Oil Properties Ltd. et al, (1984) 1984 ABCA 239, 33 Alta. LR (2d) 1 at 9: Originally the heirs-at-law received real estate directly and executors were not involved.

This was changed by the predecessor Acts to theDevolution of Real Property Act so that real property was vested in the personal representative of a deceased and treated as personalproperty.

The Kissinger Petroleums case was about the power of a personal representative to grant a lease. [ 15 ] The Act makes the personal representative a qualified or limited Trustee of the land in the estate (section 3). One of the qualifications is found in

section 9 which provides: Powers of sale 9 The personal representative may sell the real property for the purpose not only of paying debts, but also of distributing the estate among the persons beneficially entitled to it, whether there are or are not debts, and it is not necessary for the persons beneficially entitled to concur in any sale except when it is made for the purpose of distribution only. A sale for “ distribution only ” requires concurrence of the beneficiaries (section 10). [ 16 ] The mechanism for the transfer of estate land is set out in

section 116 of the Land Titles Act , RSA 2000, c. L-4: Transmission of title on death 116(1) When the owner of land for which a certificate of title has been granted dies, the land, subject to this Act, vests in the personal representative of the deceased owner.

(2) The personal representative before dealing with the land shall apply in writing, executed by the personal representative or the personal representative ’ s solicitor, to the Registrar to be registered as owner and shall produce to and leave with the Registrar the probate of the will of the deceased owner, or letters of administration, or order of the court authorizing the personal representative to administer the estate of the deceased owner, or a certified copy of the probate, letters of administration or order, as the case may be.

(3) For the purposes of this Act, the probate of a will or letters of administration, or other legal document purporting to be of the same nature, granted by the proper court of any province or territory of Canada, or of the United Kingdom of Great Britain, or of Northern Ireland, or of any other British dominion or possession, or an exemplification of it is deemed sufficient if it has been resealed with the seal of the court in Alberta having jurisdiction in those matters.

(4) On the registration of the application, (

a) the Registrar shall cancel the certificate of title that is in the name of the deceased owner and grant to the executor or administrator, in the capacity as the executor or administrator, a new certificate of title, and (

b) the executor or administrator, as the case may be, is deemed to be the owner of the land.

(5) For the purposes of

section 120 only, the Registrar shall, in issuing a certificate of title to an executor, administrator or Trustee under a will, describe the owner as the executor, administrator or trustee.

(6) The title of the executor or administrator to the land relates back and takes effect from the date of the death of the deceased owner. (emphasis added) [ 17 ] That did not happen here. Ms. Graunke dealt with the second quarter before title was put into her name. The first quarter was transferred in accordance with

section 116 but the second quarter was not.

[18] Mr. Justice Waite in the Kissinger Petroleums case (at first instance), considered s. 116 of the Land Titles Act saying: The provisions of s. 116 are administrative only. Their effect is simply that the executrix, notwithstanding that in law she is the owner ofthe land, cannot deal with the actual title by conveyance or encumbrance until she becomes registered owner by securing thetransmission of title to her in the manner prescribed by the section. Kissinger Petroleums Ltd. v. Grover et al (1983) (AB KB), 26 Alta. LR (2d) 378 at 387. (emphasis added) [19] It was open for Ms. Graunke to sell the land (subject to what follows) but

section 116 of the Land Titles Act would have to befollowed in order to convey title.

Section 116 of the Land Titles Act apparently provides a mechanism for the personal representativeexercising the power granted by the Devolution of Real Property Act to transfer title to the purchaser. It doesn’t mean that they can’t sell. [20] Ms. Graunke was the personal representative when she purported to sell the second quarter to the Plaintiff. She may not havehad title in her name but this did not prevent her from dealing with it. I expect that Mr. Bowman took some consolation from the fact thathe had dealt with Ms. Graunke for the first sale, even though the formalities may have been absent here.

There is no evidence of anycollusion between the Plaintiff and Ms. Graunke or any evidence of knowing participation in a breach of trust. McShane v. Eusanio,2011 BCSC 553. [21] Ms. Graunke did not file an Affidavit. However, her position is explained in the Statement of Defence she filed before theapplication but after the briefs were filed. She explained her position as follows: 7. Three people in the Will passed away Fred Winward, Estelita Tindoy and Potenciana Tindoy. So where will the money goes tothe lawyers again? How about my friend will and wishes. I Approached Mr.

Gary Bowman again for the other quarter it is the fastestway for me to get my money the lawyer refused to pay me and at least I will do a thing my friend wanted to do all her life put up a littlestore I invested the money I got from Gary I operated the store for Julie’s memory. . . . . 9.

I did what I did after I lost trust in my lawyers and after I did my math and became hopeless I wanted the Estate to survive as longas I live not end up with all the lawyer’s bills. [22] The Devolution of Real Property Act tells us that if the sale were for “distribution only”, it would not be valid without theagreement of the beneficiaries. There is no evidence of any express wishes of the beneficiaries with respect to this land. [23] In order for the Applicant’s

summary dismissal application to succeed, it must be ‘plain and obvious’ or ‘beyond doubt’ thatthere is no merit to Mr. Bowman’s claim. The Applicant would have to show that the sale was made solely for the purpose ofdistribution, and that the beneficiaries are opposed to it. [24] I appreciate that Ms. Graunke’s Statement of Defence is not evidence - even though some of it may constitute formaladmissions. But even without it, it is clear on the evidence that the estate was not, and is not, fully administered. The specific bequestsmay have been paid but there were some other payments outstanding; including Ms.

Graunke’s accounts and expenses at the time of thesale to Bowman, before the balance of the estate could be divided among the residuary beneficiaries. This is true even though Ms.Graunke’s, claim for expenses has now been extinguished by paragraph 2 of the Order appointing Ms. Brooks as Trustee. [25] It could not be said that it is plain and obvious or beyond doubt that the sale of the second quarter was for distribution to thebeneficiaries only and that their lack of concurrence barred the sale to the Plaintiff. This, at least, appears to be a triable issue. [26] Further,

section 15 of the Devolution of Real Property Act provides:

Real property sold or distributed 15(1) A Person purchasing real property in good faith and for value from the personal representative, or from a person beneficiallyentitled to it to whom it has been conveyed by the personal representative, holds it freed and discharged from any debts or liabilities ofthe deceased owner except any that are specifically charged on it otherwise than by the deceased owner’s will and, when the purchase isfrom the personal representative, freed and discharged from all claims of the persons beneficially interested. [27] There is no doubt that an Executor holds estate property for the benefit of the beneficiaries and no doubt that an impropertransfer can be set aside.

Staub v. Staub Estate, 2003 ABCA 122. However, Bowman has at least an arguable case . Defects in the Statement of Claim [28] A portion of the application has to do with striking parts of the claim for serious defects. The Defendant argued that thefollowing paragraph should be struck: 9. The Defendant Estate and Brooks and Graunke, either individually or as a group, have profited from the payments made by thePlaintiff under the contract and the Plaintiff has suffered damages.

The Plaintiff states that all Defendants are jointly and severally liableto him for his damages. emphasis added [29] I take this to mean that the Plaintiff is seeking to make the beneficiaries personally liable. [30] There is nothing in the evidence or in the allegations that would attract Ms. Brooks personal liability. Her only involvement isin a representative capacity as (now) Trustee of the estate of Julianita Radford. Rule 2.1 makes naming a beneficiary of a trustunnecessary. This part of the application is justified.

Style of Cause [31] The Style of Cause names: “[The] Estate of Julianita Radford, Susan Brooks and Remedios Graunke”. [32] An “Estate” is not a legal entity. A deceased person is not a legal entity. In a manner of speaking, only naming the Estatecould prove to be fatal. Now it is a curable irregularity. Bailey Estate v. Melanson, (2010) (AB KB), 265 AR 186per Nation J. [33] The allegations against Ms. Brooks personally are struck. The style of cause is to be corrected to show Ms. Brooks in herrepresentative capacity as Trustee of the Estate.

The Statement of Claim is to be amended, filed and served within thirty days of the dateof the Order that follows this decision. [34] There is mixed success so costs will be in the cause. The Applicant succeeded in having portions of the pleadings struck oramended, but the

summary dismissal application failed on the merits. Heard on the 1st day of November, 2012.

Dated at the City of Grande Prairie, Alberta this 23 rd day of November, 2012. W. S. Schlosser M.C.C.Q.B.A. Appearances: Michael Wheaton Dobko & Wheaton for the Plaintiff Andrea Chrenek Lewis & Chrenek for the Defendants