What happens when a legal claim is made against an estate that has no living beneficiaries or executors? A recent Ontario case answered that question.
Applicants Try to Locate Beneficiaries of Estate
In 1978, the two applicants, along with the husband of one of the applicants, bought a large parcel of land in Ontario as tenants in common. When they bought the 50 acres of land, it was, and remained, undeveloped.
When the applicant’s husband died, his interest in the property passed to her.
However, in 2019, the applicants discovered that their understanding of the location of the western boundary of their property was wrong. A strip of land, measuring 15 metres wide and 149 metres long, or about one-half acre, had been purchased by another individual in 1944 as part of a larger parcel of land. The ownership was evidenced by paper title. This came as a surprise to the applicants, who said that they had treated the subject property as their own since 1978.
The individual owner of the strip of land, however, had passed away.Additionally, the individual owner’s wife, who was the sole beneficiary of his estate, and his brother, who was the executor of his estate, had also both since passed away. The will made no reference to any children or other beneficiaries.
The applicants took several steps in an attempt to locate a party with a claim to the subject property, but were unable to do so.
As a result, when the applicants went to court to make their claim, it was heard ex parte, since the applicants had not been able to serve the individual owner’s estate, and had been unable to identify or locate any beneficiaries of the individual owner’s estate.
The applicants sought an order that they were the lawful owners of the subject property and an order vesting title to the subject property in their names, as tenants in common, in shares proportionate to their shares of their property. They claimed that they had maintained open, exclusive, continuous and peaceful possession of the subject property since 1978. It was their position that their adverse possession of the subject property entitled them to an order granting them legal title to it.
Court Rules in Favour of Applicants
At the outset, the court determined that the matter could proceed ex parte, stating:
“I find that the applicants exhausted all reasonable efforts to locate any party with a claim to the subject property. An order dispensing with the requirement of service of the notice of application upon the [estate] will be made.”
This meant that the case proceeded without anyone representing the individual owner’s estate.
The court then explained that to succeed in their claim for adverse possession, the applicants had to establish that their use of the subject property was “open, notorious, constant, continuous, peaceful and exclusive of the right of the true owner”, for any 10-year period prior to November 20, 2000, and that this use met the following well-established criteria:
- They had actual possession of the property in issue;
- They intended to exclude the true owner from possession of his property; and
- They effectively excluded the true owner from possession of his property.
After reviewing the evidence presented by the applicants, the court held that they had established possessory title by way of adverse possession.
As a result, the court issued an ordered extinguishing the individual owner’s estate’s rights and title to the subject property. Additionally, it ordered that 75% of the property vest in the applicant wife as a tenant in common interest and the other 25% to the second applicant.
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Deciding what will happen to your assets upon your death is critical in ensuring your family and loved ones are taken care of when you are gone, and that your assets are distributed in the way that you want them to be. A will is the best way to express your choices and preferences with respect to what should happen after your death. A well-drafted, up-to-date will should be the cornerstone of your entire estate plan.
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