Fawson Estate v. Deveau, 2016 NSCA 39

Nova Scotia Court of Appeal Citation: Fawson Estate v. Deveau , 2016 NSCA 39 Date: 20160519 Docket: CA 445146 Registry: Halifax Between: Francis John Fawson, as the Personal Representative of the Estate of Margaret Anne Fawson, Deceased Appellant v. Sandra Marie Deveau, Patrick Joseph Fawson, James Robert Fawson and James Robert Fawson as the Personal Representative of the Estate of Theresa Rose Fawson, Deceased Respondents Judge: The Honourable Justice David P.S. Farrar Appeal Heard: April 12, 2016, in Halifax, Nova Scotia Subject:

Summary Judgment. Issue Estoppel.

Summary: The appellant, as the personal representative of the Estate of Margaret Anne Fawson, commenced action against the respondents, Sandra Marie Deveau and Patrick Joseph Fawson, for return of monies paid to them by various institutions as a result of Margaret Fawson having designated them as beneficiaries of various accounts she held and a death benefit. The appellant then moved for

summary judgment, relying on a previous decision of Justice Suzanne M. Hood in Re: Fawson Estate , 2012 NSSC 55 . In that proceeding, Justice Hood found that Margaret Fawson did not have testamentary capacity at the time of the execution of her Will on April 23, 2004. She set aside the Will and revoked the grant of probate to Sandra Deveau. In moving for

summary judgment, the appellant’s argument was that if Margaret Fawson did not have testamentary capacity to execute a will, it followed that all of the beneficiary designations would be invalid as a result of the application of the principle of issue estoppel. Justice Richard Coughlan dismissed the motion concluding that there was a genuine issue of fact to be determined, that is, the requisite capacity of Margaret Fawson at the time of executing the beneficiary designations. The appellant sought leave to appeal and, if granted, appealed on the basis that the motions judge erred in the application of the test for

summary judgment. Issues:

(1) Should leave to appeal be granted?

(2) Did the motions judge improperly apply the test for

summary judgment? Result: Leave to appeal granted. Appeal dismissed. The motions judge properly identified and applied the law with respect to

summary judgment applications and the principle of issue estoppel. He concluded that there was a material issue of fact in dispute. In so finding he did not err. This information sheet does not form part of the court’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 8 pages. Nova Scotia Court of Appeal Citation: Fawson Estate v. Deveau , 2016 NSCA 39

Date: 20160519 Docket: CA 445146 Registry: Halifax Between: Francis John Fawson, as the Personal Representative of the Estate of Margaret Anne Fawson, Deceased Appellant v. Sandra Marie Deveau, Patrick Joseph Fawson, James Robert Fawson and James Robert Fawson as the Personal Representative of the Estate of Theresa Rose Fawson, Deceased Respondents Judges: Farrar, Scanlan and Bourgeois, JJ.A.

Appeal Heard: April 12, 2016, in Halifax, Nova Scotia Held: Appeal dismissed with costs to the respondent, Sandra Marie Deveau, in the amount of $2,000 inclusive of disbursements per reasons for judgment of Farrar, J.A.; Scanlan and Bourgeois, JJ.A. concurring. Counsel: Keith MacKay, for the appellant Kent Clarke, for the respondent Sandra Marie Deveau Respondent Patrick Joseph Fawson in person Respondent James Robert Fawson in person Reasons for judgment: Overview The appellant applied for leave to appeal from the order of Justice C. Richard Coughlan dated October 23, 2015.

The appeal was heard on April 12, 2016. At the conclusion of oral argument, we granted leave to appeal but dismissed the appeal with reasons to follow. These are those reasons. Background [ 1 ] On February 26, 2013, the appellant, Francis John Fawson as personal representative of the Estate of Margaret Anne Fawson, together with his brother James Robert Fawson personally, and as the personal representative of the Estate of Theresa Rose Fawson, (their mother) commenced action against Patrick Joseph Fawson and Sandra Marie Deveau.

They sought the return of monies paid to Patrick Fawson and Sandra Deveau by various institutions as a result of designations of beneficiary executed by Margaret Fawson, the sister of James Francis and Patrick, between 2002 and 2005. The designations of beneficiary are as follows: 1. Feb 28, 2002 – Patrick Fawson designated as beneficiary of a TD Waterhouse investment account ; 2. July 17, 2002 – Patrick Fawson designated as beneficiary of an RBC RRSP account; 3. August 9, 2002 – Patrick Fawson designated as beneficiary of a Working Ventures account through a Beacon Securities investment; 4.

March 19, 2003 – Patrick Fawson designated as beneficiary of an RBC RRSP account; 5. April 22, 2004 – Sandra Deveau designated beneficiary for Supplementary Death Benefit and PSAC insurance; and

6. February 22, 2005 – Patrick Fawson designated as beneficiary of Concentra Financial RRSP. [ 2 ] On April 7, 2015, Francis Fawson filed a Notice of Motion seeking

summary judgment. [ 3 ] The matter was heard before Justice Coughlan in September 2015. At the conclusion of the evidence Justice Coughlan rendered an oral decision dismissing the motion (now reported at 2015 NSSC 355 ). [ 4 ] In the hearing before Justice Coughlan, rather than adduce evidence of the circumstances surrounding the execution of the various designations of beneficiary, the appellant relied on the decision of Justice Suzanne M. Hood dated February 6, 2012 in Re: Fawson Estate , 2012 NSSC 55 .

That proceeding involved the proof in solemn form of the Last Will and Testament of Margaret Fawson dated April 23, 2004. Justice Hood found that Margaret Fawson did not have testamentary capacity at the time of execution of the Will, set aside the Will and revoked the grant of probate to Sandra Deveau. [ 5 ] The appellant asked Justice Coughlan to grant

summary judgment based on the findings in the application for proof in solemn form proceeding. The appellants’ argument, simply put, was that if Margaret Fawson did not have testamentary capacity to execute a will, it followed that all of the beneficiary designations would also be invalid as a result of the application of the principle of issue estoppel. [ 6 ] The motions judge disagreed. He found there was a genuine issue of fact to be determined – the capacity of Margaret Fawson at the time of executing the beneficiary designations. He dismissed the motion.

Issues [ 7 ] The Notice of Appeal sets out the following grounds of appeal: 1. The motions judge failed to apply the principle of issue estoppel correctly; and 2. The motions judge failed to apply the test for

summary judgment correctly. [ 8 ] In his factum the appellant expands the grounds of appeal to the following issues: 1. Should the Court grant leave to appeal; 2. Did the motions judge improperly instruct himself with respect to the application of the doctrine of issue estoppel; 3. Did the motions judge fail to apply the test for

summary judgment correctly by neglecting to consider whether or not the undisputed facts would strongly support inferences; 4. Do the undisputed facts strongly support the inference that delusions influenced Margaret Fawson’s beneficiary designations; and 5. Should the Court grant

summary judgment? [ 9 ] With respect, in my view, there are only two issues raised on this appeal: 1. Should leave to appeal be granted? 2. Did the motions judge improperly apply the test for

summary judgment? [ 10 ] Subsumed in the second issue is whether he properly considered the principle of issue estoppel. [ 11 ] I will address the standard of review when dealing with the individual issues. Issue #1 Should leave to appeal be granted? [ 12 ] Whether leave to appeal should to be granted is not subject to a standard of review. We are considering it in the first instance. The well-known and often cited test on a leave application is whether the appellant has raised an arguable issue that could result in the appeal being allowed (see Burton Canada Company v.

Coady , 2013 NSCA 95 , ¶18). [ 13 ] We were satisfied that the grounds of appeal raised arguable issues and granted leave to appeal. Issue #2 Did the motions judge improperly apply the test for

summary judgment? [ 14 ] The standard of review with respect to

summary judgment motions is well established. We will not intervene unless wrong principles of law were applied, or where the judge was exercising a discretion, a patent injustice would result ( Burton , ¶19). [ 15 ] There is no dispute on this appeal that the motions judge correctly identified the two-step analysis described in Burton (¶3 of the motions decision). The question, therefore, becomes whether he properly applied it. [ 16 ] In Nova Scotia v. Brill , 2010 NSCA 69 , the proper analytical framework when applying the

summary judgment test was described by Fichaud, J.A.: [173] … The applicant must show there is no genuine (or arguable) issue of material fact requiring trial. If the applicant does not show this, the application is dismissed. If the applicant shows this, then, to defeat the application, the responding party must show, on the undisputed facts, that his claim or defence has a real chance of success: [citations omitted]

[17] The motions judge is required to ask whether there is a disputed issue of material fact. If the answer is yes, the motion must bedismissed. [18] As the moving party, the appellant had the burden of establishing there was no material fact in dispute. The motions judge wasnot satisfied that Francis Fawson met this burden. [19] The appellants’ position before the motions judge was that Margaret Fawson did not have the capacity to make the designationsshe did.

As noted earlier, the only evidence before him which addressed Margaret Fawson’s capacity was the judgment of Hood, J. inRe: Fawson Estate. [20] The motions judge reviewed the decision of Justice Hood in some detail and noted the issue before Justice Hood was whetherthere were suspicious circumstances which displaced the presumption of testamentary capacity.

Suspicious circumstances are sufficientto shift the burden to the proponent of the Will to show, on a balance of probabilities, that Margaret Fawson had testamentary capacity. [21] Hood, J. found that there were suspicious circumstances existing at the time of the execution of the Will. She found that whenMargaret Fawson executed the Will she was suffering from delusions. The burden then shifted to Ms. Deveau and Justice Hood foundthat Ms.

Deveau had not satisfied her that Margaret Fawson had testamentary capacity at the time of the execution of the Will. [22] In rejecting the appellants’ argument on issue estoppel the motions judge relied on this Court’s decision in Behner v. Bank ofMontreal, 2010 NSCA 54 quoting Oland, J.A. as follows: [25] In Kameka v. Williams, 2009 NSCA 107, 282 N.S.R. (2d) 376 (CA), Beveridge, J.A. reviewed the law pertaining to thedoctrine of res judicata.

He stated: [13] Detailed statements can be found of the constituent elements necessary to establish that the doctrine of res judicata is applicable(see for example George Spencer Bower and Sir Alexander Turner, The Doctrine of Res Judicata, 2nd ed. (London: Butterworths,1969) at para. 19). These were compressed by the Alberta Court of Appeal in 420093 B.C. Ltd. v. Bank of Montreal, (AB CA), [1995] A.J. No. 862 where O'Leary J.A. wrote: [18] A prior judicial decision will not raise an estoppel by res judicata, either issue estoppel or cause of action estoppel, unless (

i) it wasa final decision pronounced by a court of competent jurisdiction over the parties and the subject-matter; (ii) the decision was, orinvolved, a determination of the same issue or cause of action as that sought to be controverted or advanced in the present litigation; and(iii) the parties to the prior judicial proceeding or their privies are the same persons as the parties to the present action or their privies. [23] The motions judge concluded issue estoppel did not apply for a number of reasons: 1. Whether a person had the capacity is a question of fact to be determined from all the circumstances; 2.

The time for determining capacity is the time of giving instructions for and executing the document in question; 3. There was no evidence before him of the instructions or execution of the beneficiary designations; 4. The issue of the beneficiary designations was not before Hood, J.; and 5. The issues in the two proceedings were different (¶8, 10). [24] We are of the view that Coughlan, J.’s findings are amply supported by the law and the facts of this case. He properly appliedthe law relating to

summary judgment as well as the principle of issue estoppel. Having found that issue estoppel did not apply, itfollowed that Margaret Fawson’s capacity to execute the beneficiary designations was still a live issue and, therefore,

summary judgmentwas not available. [25] Although not referenced in his decision, there was evidence before the motions judge that Margaret Fawson intended to benefitMs. Deveau as far back as 1990 by naming her as a beneficiary. Obviously, this was well in advance of the 2002-2005 time frame whenMargaret Fawson was said to be operating under delusions. [26] The affidavit of Kathleen Mitchell, who had known Margaret Fawson for over 35 years, said the following: 6. I remember a specific discussion with Margaret about designating beneficiaries under our federal superannuation program atwork.

Margaret informed me as she did not have a sister and Sandra was the sister that she would have loved to have had. Margaretinformed me that Sandra was always there for her and had always invited her to different family functions and that she felt at home and apart of the Deveau Family. Margaret informed me her intention was to make Sandra her beneficiary under the superannuation programand I believe the same to be true. [27] This supports the motions judge’s conclusion that there are material facts in dispute.

It is only after looking at the evidence inlight of all the circumstances can a court determine whether a party had the requisite capacity at the time of executing the instrument. [28] One other factor mentioned by Coughlan, J. – and discussed with appellants’ counsel during oral argument on this appeal – is the different burdens in the two proceedings. In Re Fawson Estate the burden was on the person challenging the Will to show suspiciouscircumstances.

Once suspicious circumstances were established the burden shifted to the proponent of the Will to show that MargaretFawson had testamentary capacity at the time of executing the Will. Appellate counsel in oral argument acknowledged that the burden inthis proceeding is different. The burden remains on Francis Fawson, throughout, to show that Margaret Fawson did not have thecapacity to execute the beneficiary designations.

Unlike in Re Fawson Estate, there is no shifting burden. [29] This is just another factor which a trial judge would have to turn his or her mind to in determining whether the beneficiarydesignations are valid.

Conclusion [ 30 ] The motions judge properly identified and applied the law with respect to

summary judgment applications and the principle of issue estoppel. He concluded that there was a material issue of fact in dispute. In so finding, he did not err. It is for these reasons that we dismissed the appeal. Costs [ 31 ] There are three respondents on this appeal: James Robert Fawson who was only a respondent by virtue of the fact that he is a party to the proceeding below. He was unrepresented and did not file a factum. At the oral hearing he spoke in support of the position of his brother Francis. [ 32 ] Patrick Fawson was also unrepresented and did not file a factum.

He appeared on the appeal in support of the position of Ms. Deveau and himself as a designated beneficiary. [ 33 ] The only respondent to file a factum was Sandra Marie Deveau. She was also represented by counsel. As a result, we would award costs to Ms. Deveau, only, in the amount of $2,000.00 inclusive of disbursements, payable by Francis Fawson personally and not out of the Estate of Margaret Fawson. Farrar, J.A. Concurred in: Scanlan, J.A. Bourgeois, J.A.