[1]           On appeal from a judgment rendered on January 23, 2018 by the Superior Court, District of Montreal (the Honourable Justice Paul Mayer), maintaining Respondent (Applicant’s) amended motion for a declaratory judgment of his rights as trustee of the R & G Trust in the Estate of the late Abraham Gold and dismissing Appellant’s Cross-Demand.

[2]           For the reasons of Justice Schrager, J.A., with which Justices Chamberland and Rancourt, JJ.A., concur, THE COURT:

[3]           DISMISSES the appeal with legal costs.

I.             INTRODUCTION

[4]           Before the Superior Court, the Respondent sought a declaration of his rights as trustee of the R & G Trust in the Estate of the late Abraham Gold. In essence, Justice Mayer, J.S.C., was called upon to determine the rights of the Estate of the late Harriet Ressler (“Estate Harriet”) in the Estate of the late Abraham Gold, her husband of 25 years.

[5]           We are tasked with a review of the judge’s conclusions[1] that the recourse for the division of the family patrimony that existed between Mr. Gold and Mrs. Ressler was prescribed. As well, a novel issue of private international law arises concerning the joint ownership by the couple of certain property.

II.           FACTS

[6]           The judge provided a detailed presentation of the facts which is, in certain respects, scathing with regard to the Appellant. I have attempted to restrict this summary to that which is essential to my treatment of the issues raised in appeal.

[7]           Abraham Gold (“Abe”) and Harriet Ressler (“Harriet”) were married in December 1982 in the Bahamas. Harriet died on March 14, 2006. No children were born of the marriage, but they each had issue from previous marriages. The Appellant and his deceased sister are Harriet’s children.

[8]           On the day of the marriage and until 1991, Abe and Harriet resided in the Bahamas and then moved to Florida, where they purchased a condominium apartment. In October 1992, they transferred the ownership of that property to a Bahamian corporation in respect of which they held the shares jointly. Following Harriet’s death, Abe had the joint share certificates cancelled and new ones issued in his name alone.

[9]           In 2001, Abe and Harriet moved to Montreal. On July 8, 2002, the R & G Trust was created. Abe and Harriet were sole beneficiaries until the date of the last to die, at which time the trust property was to be distributed to Abe’s two children.

[10]        On July 15, 2002, the R & G Trust purchased a condominium apartment in Westmount, Quebec, where the couple resided. Throughout, they kept the Florida condominium, which they used as a residence in the winter months.

[11]        Shortly after Harriet’s death in 2006, Mtre Alan M. Stein, a Montreal attorney, contacted the Appellant to inform him that his firm was in possession of a will executed by Harriet. The Appellant was told he was the sole surviving person named in the will as a liquidator.

[12]        Under the will, the Appellant and the children of his deceased sister (the Intervenors) would now be Harriet’s heirs.

[13]        The Appellant testified that he informed Abe of the existence of the will. They told no one else. Estate Harriet was wound up under the ab intestate rules of the C.C.Q. so that each of Abe, the Appellant and the children of his late sister received one third of the assets consisting of cash in a bank account.

[14]        Abe died on August 23, 2013. The universal legatees under his will consisted of his children and grandchildren. The Appellant was not a beneficiary under Abe’s will.

[15]        Both the Westmount and Florida condominiums have been sold and the Respondent is in possession of the net cash proceeds.

[16]        Faced with competing claims to the funds now constituting the R & G Trust property, the Respondent moved for declaratory relief before the Superior Court with a view to resolving those claims and ultimately distributing the trust funds to their rightful beneficiaries.

[17]        The judge ruled that any claims that the Appellant could have to the condominiums (or corresponding cash proceeds) were prescribed. The judge was of the view that the Appellant’s claim as liquidator of the Estate Harriet to one half of the value of the family patrimony that existed between Abe and Harriet—and which crystallized on the latter’s death—could have been exercised in 2006, when the Appellant had learnt of the will and his appointment thereunder as liquidator. He had been fully aware that the couple owned two condominium apartments and a car. As such, any potential claim to the family patrimony was barred by prescription in 2009, such that the Appellant’s cross-demand filed in 2014 was prescribed. The judge was not swayed by the Appellant’s argument that it was impossible for him to act sooner since he had no understanding of the concept of family patrimony; ignorance of the law does not amount to an impossibility to act. In fact, the Appellant did not act because it was not in his interest to do so, given that Abe continued to generously subsidize the Appellant’s lifestyle with a Florida condominium and golf membership and Abe had promised the Appellant a bequest of 1 million dollars in his will (though in 2012 when Abe’s fortunes changed, he wrote a new will which did not include the Appellant as a beneficiary, which was confirmed to the Appellant in the weeks following Abe’s death).

[18]        The judge concluded that the Interveners’ claims were also prescribed, since they too had been apprised of the facts giving rise to their contended rights in 2006. Moreover, they were beneficiaries under her will and would have no recourse independent of the Appellant as estate liquidator.

III.          ISSUES

[19]        The Appellant raises two issues in appeal:

a)     The judge committed palpable and overwriting errors in concluding that the Estate Harriet’s recourse to the partition of the family patrimony was prescribed; and

b)     The judge erred in law in concluding that the Estate Harriet had no claim to one half the proceeds from the sale of the Florida condominium.

[20]        Although the answer to the second point may be subsumed in the first, since it necessitates the treatment of a private international law question of potentially broader application, it merits discussion.

IV.         STANDARD OF REVIEW

[21]        The consideration of prescription and specifically the impossibility to act raises issues of fact or mixed fact and law.[2] This Court will only intervene in such matters when faced with palpable and overriding errors; deference is the order of the day.[3]

[22]        The second issue in appeal requires the characterization of the right of survivorship for private international law purposes. While there are factual elements involved (such as the proof of foreign law), the question raises, for the most part, legal issues, which give rise to a standard of correctness.[4] Where (as is the case here), there is a legal question which cannot be extricated from a factual issue, it is appropriate to apply a standard of correctness on appeal.[5] In any event, in the present case, the standard of review appropriate for this issue is inconsequential since the judge did not consider the application of any foreign law or otherwise treat this question, such that considerations of deference do not arise.

V.          DISCUSSION

Prescription

The Appellant’s position

[23]        As indicated above, the Appellant considers that it was impossible for him to act, given his layman’s ignorance of (a) the legal institution of the family patrimony; and (b) the assets forming part of that patrimony - i.e. the Florida condominium or, rather, the shares which Abe had transferred to his name alone. The Appellant also contends that the judge was overly influenced by evidence of the Appellant’s behaviour regarding the concealment of Harriet’s will and his failure to perform his duties as liquidator of her estate, such that the judge did not give proper effect to Abe’s behaviour concerning the Florida condominium.

Analysis

[24]        The right to the partition of family patrimony is transmissible to one’s heirs.[6] The exercise of the right is subject to the general prescriptive period of three years applicable to all personal rights.[7]

[25]        Prescription begins to run on the day the right of action arises.[8] However, prescription does not run against persons who are faced with an impossibility to act,[9] which is the Appellant’s contention.

[26]        While ignorance of the relevant facts can constitute an impossibility to act under Article 2904 C.C.Q., the person involved must have acted diligently.[10] Voluntarily abstaining from acting will impede a successful plea of impossibility to act.[11]

[27]        Ignorance of the law is not equivalent to ignorance of the facts giving rise to the recourse. Only the latter will substantiate a claim of impossibility to act.[12]

[28]        These principles are an obstacle to the Appellant’s arguments to rebut the judge’s conclusion that the Appellant’s claim to one half of the family patrimony arising from Harriet and Abe’s marriage was prescribed.

[29]        The Appellant’s ignorance of the law concerning family patrimony is not an impossibility to act. Moreover, the judge questioned whether the Appellant was in fact unaware of the notion, given that he opted out of his own family patrimony by notarial deed in 1990.

[30]        The Appellant was fully aware of his mother sharing a residence in Florida (as well as the Montreal residence) with Abe, albeit he might not have known about the legal details of the modalities of the ownership or about Abe having had new share certificates issued following Harriet’s death.

[31]        However, the judge correctly pointed out that the liquidator of the succession is obliged to take an inventory of the property in the estate, collect amounts due and pay the debts.[13] The Appellant did none of this, choosing to conceal the existence of the will (which could render him unworthy to inherit),[14] apparently with the expectation, at the time, of a million dollar bequest to be received from Abe under the latter’s will. Had the Appellant performed his duty as estate liquidator, he likely would have learnt the details of the property comprising the family patrimony assuming that this was not already the case. As such, and as indicated above, a claim that it was impossible for the Appellant to act fails, because he did not act diligently.

[32]        Similarly, the Appellant’s argument that the judge focused on his behaviour while ignoring Abe’s cannot succeed. Had the Appellant performed his duties, it is not unreasonable to surmise that he would have seen that title to the Florida condominium was held by a Bahamian company and thereafter discovered the replacement of the share certificates, again assuming that he was not otherwise aware thereof.

[33]        In the end, the Appellant has not established that the judge committed a reviewable error in concluding that his recourse for the division of the family patrimony is prescribed. As such, it is not necessary to address the Appellant’s arguments that the fact that title to the Westmount condo was held in a trust (or that of the Florida condo in a corporation) would not constitute a bar to the residence forming part of the family patrimony.[15]

The Florida Condominium

The parties’ position

[34]        The Appellant contends that the Estate Harriet has a right to half the value of the Florida condominium aside from any recourse to a share in the family patrimony. The Appellant contends that the Estate Harriet’s ownership interest was never sold or transferred and “persists to this day and cannot be defeated by prescription”. As such, the Appellant refutes the Respondent’s position that the shares, held jointly by Abe and Harriet, are subject to a right of survivorship recognized by the Common Law applicable in the Bahamas in virtue of which, upon Harriet’s death, her 50% interest in the shares would have passed to Abe.

[35]        The Respondent invokes Article 3108.2 C.C.Q. in support of his contention that Bahamian law applies since that is the legal system under which the issuer of the shares was constituted.

[36]        The Respondent further contends that the right of survivorship is not a “pacte sur une succession future”, which is prohibited in Quebec.

Analysis

[37]        I disagree with the Respondent that the right of survivorship is applicable, so that, in my view, one half of the shares in the Bahamian company would belong to the Estate Harriet. Nevertheless, I believe that the Appellant’s recourse to recover that 50% interest is prescribed. As such, albeit arrived at by different reasoning, the judge’s ultimate conclusion is correct.

[38]        The expert evidence of Bahamian law introduced by each of the parties is not fundamentally contradictory. Upon the death of a joint owner of personal property (such as the shares in the Bahamian company which held title to the Florida condominium) ownership passes by operation of law to the surviving co-owner unless there is evidence that the common intention of the parties was not to hold the property as joint owners. Accordingly, the property interest having passed directly to the surviving joint owner, it would not fall into the estate of the deceased co-owner.

[39]        Although regard may be had to the foreign legal system, characterization is performed upon application of the principles of Quebec law.[16] As such, any characterization of the right of survivorship in another legal system as something other than pertaining to the law of successions is not binding.[17] The Appellant points out that the Respondent’s expert mentions that under Bahamian conflict of law rules, it is the law of the domicile of the deceased which would apply to the devolution of the shares, which is the same solution as under Quebec law.

[40]        Though sparse in Quebec doctrine, consideration of the right of survivorship by contemporary authors publishing in private international law favours the qualification of the right as pertaining to the law of successions. The few reported cases also adopt this solution.

[41]        Professor Talpis emphasizes that legal institutions providing for the transfer of property upon death by a means other than wills or ab intestate rules (e.g. the right of survivorship) fundamentally pertain to the law of successions, because they provide for the devolution of property upon death.[18] Qualifying the right as pertaining to successions has the advantage of one system of law (i.e. that of the deceased’s domicile) applying to the estate and as such providing the certainty that best protects the interests of both heirs and creditors. This characterization is supported by other contemporary Quebec authors.[19]

[42]        The few reported cases in Quebec have applied Quebec law (where the deceased was domiciled) to determine the right to funds held in joint bank or brokerage accounts in the United States.[20]

[43]        In Pouliot v. Cloutier,[21] the Supreme Court qualified New Hampshire’s legislation providing that a surviving spouse had a right to one third of the deceased’s property irrespective of the content of any will. Quoting Falconbridge, the Court stated:

The prevailing view would seem to be that a statute of this kind, in the absence of any clear indication of the legislature's intention, is to be characterized as being in effect a limitation on the testator's disposing power, and therefore as being testamentary law, applicable to immoveable property situated within the territory of the enacting legislature and to moveable property wherever situated of a testator domiciled in that territory.[22]

While the Common Law right of survivorship as such was not in issue, I consider the case as authority for the characterization of the right of survivorship under the Common Law, as recognized in the Bahamas, as pertaining to the law of successions. Accordingly, and given that Harriet was domiciled in Quebec at the time of death, the law of Quebec applies to the transfer of her 50% shareholding interest in the Bahamian company that held title to the Florida condominium.[23]

[44]        The triggering event of the transfer of ownership is death. The Respondent’s argument that the property never fell into the estate, such that Quebec successions law cannot apply does not escape this reality. To accept such reasoning, the validity of gifts mortis causa would be accepted in Quebec Civil Law rather than prohibited.[24] However, Quebec Civil Law views transmission of property on death as a function of either testamentary or ab intestate rules, both of which pertain to successions and not to the law of property.

[45]        It is noteworthy that in an old will, Abe expressed the intention that should he predecease Harriet, any bequests to her be conditional on her renunciation of any survivorship rights. This would indicate an intention not to hold the shares subject to a right of survivorship, which intention the Common Law (as explained by the experts) recognizes as a repudiation of the right of survivorship. As such, even if one were to apply Bahamian law, the case for the transmission of the shares by way of the right of survivorship would be weak.

[46]        As a final word on this matter, Article 3108.2 C.C.Q., which deals with the law applicable to securities, is of no assistance to the Respondent’s position for the application of Bahamian law. These provisions deal with rights and obligations of the issuer of securities (in this case the Bahamian company) and not competing beneficial ownership claims pertaining to the shares, such as those in the present case.[25]

[47]        Accordingly, Quebec law applies; the right of survivorship in Bahamian law does not. The interest in the shares fell into the Estate Harriet upon her death in March 2006, which is when Abe appropriated them by having the existing, joint share certificates cancelled and replaced with new ones in his name alone. The proceedings before the Superior Court were instituted in 2013. The Appellant raised his right to the shares in the instant litigation by contestation and cross-demand in 2014, although there was no formal assertion of a right of revendication.[26]

[48]        Article 626 C.C.Q. provides as follows:

[49]        However, the recourse here is that of the Estate Harriet to recover property over which it claims seizin or ownership (Art. 625 C.C.Q.). There is no issue of the recognition of the Appellant or the Interveners as heirs or legatees of the Estate Harriet. Indeed, they were recognized as such in 2006 when they received a share of the cash in Harriet’s bank account.

[50]        In view of the foregoing, the general period of extinctive prescription of three years under Article 2925 C.C.Q. applies.[27] For the same reasons given by the judge and the undersigned above, there was no impossibility to act arising from any ignorance of the law or the relevant facts, such that the Appellant’s claim (personal or as estate liquidator) to the shares is prescribed.

[51]        The Appellant submits that a right of ownership is not susceptible of extinction through prescription because the right of ownership is perpetual. Rather, it must be shown here that Abe acquired Harriet’s 50% interest in the shares by way of acquisitive prescription.[28]

[52]        While the Appellant’s basic legal premise is correct, I disagree with the outcome of his reasoning because of a nuance in the facts. Abe had the certificates reflecting Harriet’s joint ownership of the shares cancelled. He then caused new certificates to be issued. He did not simply continue to hold the old certificates which reflected the joint ownership. Abe’s overt action of exchanging the share certificates was evidently an assertion of the survivorship right arising from the death of his co-owner, Harriet. Such transfer or appropriation started the clock regarding extinctive prescription for the Appellant’s potential right to revendicate the shareholding interest of Harriet.

[53]        Moreover, and by the same action, Abe’s possession of Harriet’s 50% interest started the clock for the acquisition of ownership by acquisitive prescription:

Based on the record (particularly, the expert opinions on Bahamian law), Abe caused the issuance of share certificates reflecting 100% ownership in order to give effect to the right of survivorship in Bahamian law. This indicates his good faith in such matter, which, in any event, is presumed in Quebec civil law.[29]

[54]        The record indicates that the Respondent, through his then attorney sent a formal demand in 2014 referring to the transfer as “totally illegal and in fraud of the rights” of the Estate Harriet. However, no legal proceedings to revendicate the ownership in the shares were ever instituted. The right was manifested in the proceedings in the lower court in 2014, but that was eight years after the cancellation of the share certificates. Again, the Appellant has not demonstrated an impossibility to act that would suspend prescription from running against him and the Estate Harriet.

[55]        The Appellant points to the Respondents’ pleadings which contain a recognition that the Estate Harriet continued to be a shareholder of the Bahamian company in 2015. However, and contrary to the Appellant’s assertion, there is no proof negating Abe’s animus as owner of the shares that would impede his acquiring ownership by prescription. The statement in the pleadings was made after Abe’s death and not by his attorney. It cannot be indicative of Abe’s state of mind nine years prior regarding his ownership interest in the shares vis-à-vis the Estate Harriet. Rather the record indicates that the cancellation and issuance of share certificates was done to give effect to the right of survivorship.

[56]        In view of the foregoing, I am of the opinion that the Appellant’s recourse to the shares as part owner thereof is prescribed.

[57]        Consequently, for all of the foregoing reasons, I propose that the appeal be dismissed with legal costs.