



COURT OF APPEAL FOR ONTARIO

CITATION: Froud v. Froud, 2022 ONCA 59

DATE: 20220124

DOCKET: C68134

Strathy C.J.O., Harvison Young
    and Zarnett JJ.A.

BETWEEN

Richard
    Froud

Plaintiff
(Appellant)



and

Susan Mary Froud and the Estate
    of Mollie Froud

Defendants
(Respondents)

Jerry W. Switzer, for the appellant

David Harris-Lowe, for the respondent,
    Susan Mary Froud

No one appearing for the respondent,
    the Estate of Mollie Froud

Heard: January 20, 2022 by video conference

On appeal from the order of Justice
    Annette Casullo of the Superior Court of Justice, dated February 3, 2020.

REASONS FOR DECISION

[1]

At the conclusion of oral submissions, we
    dismissed the appeal with reasons to follow. These are our reasons.

[2]

The appellant Richard Froud (Richard)
[1]
claimed at trial that he was
    entitled to one-half of the proceeds of a life insurance policy in the amount
    of $1 million (the Policy) on the life of his late mother, Mollie Froud
    (Mollie). The Policy was owned by Mollie and initially named as beneficiaries
    the appellant and his sister, the respondent Susan Froud (Susan).

[3]

As a result of estate planning arrangements made
    by Mollie after discussions with her two children, the Policy was amended to
    name Susan as the sole beneficiary. At the same time, Mollie gifted a house
    worth approximately $450,000 to Richard, in exchange for a payment of $155,000.

[4]

The sole issue at trial was a factual one: what
    were the terms of the agreement made between Mollie and her two children
    concerning the apportionment of her assets between Richard and Susan prior to
    her death?

[5]

Richards position at trial was that the parties
    agreed that the benefit under the Policy would be reduced to $500,000 and that
    his payment of $155,000 would go towards pre-paying the remaining premiums on
    the policy. Richard argued that it had always been Mollies intention to treat
    her children equally and that by maintaining the policy at $1 million, Susan
    had obtained a benefit to which she was not entitled and she was required to
    disgorge an equal share to Richard.

[6]

The trial judge rejected Richards argument. She
    found as a fact that the agreement was contained in a document entitled Preliminary
    Inheritance and that other documents exchanged between the parties supported
    that conclusion. She found that the family dynamics had changed by the time the
    agreement was made, and equal treatment of her children was no longer a
    priority for Mollie. Richard had received significant advantages by living for
    13 years, rent-free, in a house owned by Mollie, Mollie was in financial
    difficulty and had serious health challenges and Susan had been helping her out
    with transportation and other needs.

[7]

The trial judge also found that Susan did not
    breach the tripartite agreement. There was no agreement that the Policy was to
    be reduced to $500,000. In coming to these conclusions, the trial judge
    rejected Richards evidence that he did not receive the document in which the
    structure of the agreement had been set out. Even if she had accepted Richards
    evidence, the trial judge found that Richard, Mollie and Susan had signed an
    acknowledgment that Mollie would execute a Change in Beneficiary Designation Form
    naming Susan as the sole beneficiary of the Policy and said nothing about
    reducing the amount of the Policy.

[8]

While there had been discussions about reducing
    the Policy to $500,000 and using Richards $155,000 payment to pre-pay the
    remaining premiums, the trial judge did not find a binding agreement to do so.
    It was one option, among several, that had been discussed.

[9]

The trial judge found that under the terms of
    the agreement, Richard got a bird in the hand  he paid $155,000 in order to
    obtain title to a house worth $455,000, thereby receiving his inheritance
    before Mollies death. He subsequently sold the house for $678,000, making a
    profit of $523,000. Mollie was expected to live for many years and even after
    applying the $155,000 received from Richard to pre-pay the premiums on the
    Policy for several years, it was quite possible that Susan would have to
    continue paying premiums in order to maintain the policy in force. Unlike
    Richard, Susan would have to wait for her inheritance and if she wished to maintain
    the Policy at $1 million she might be responsible for paying substantial annual
    premiums in order to do so.

[10]

In sum, the trial judge not only rejected
    Richards argument that there had been a breach of the agreement, she found
    that there was nothing inequitable about the outcome, which was consistent with
    Mollies wishes.

[11]

Appellants
    counsel acknowledged that the standard of review is palpable and overriding
    error. He submitted that the trial judge made a palpable and overriding error
    in finding that Richard was a party to the Preliminary Inheritance agreement
    when he denied receiving the document and there was no evidence that Susan had
    sent it to him by email.

[12]

We
    do not accept this submission. The trial judge referred to Susans evidence
    that she had given a copy of the document to Mollie and Richard. She noted
    Richards claim that he had not received the document, but she also noted that
    in cross-examination, Richard was unable to say whether he had received and
    reviewed the document during the financial discussions. We agree with the
    respondent that the trial judge was entitled to accept Susans evidence, as she
    obviously did.

[13]

We
    also reject the submission that, even accepting the agreement was as the trial
    judge found, Susan had a duty to inform Richard of her decision to exercise an
    option to keep the policy in force at $1 million. No such duty is expressed
    in the agreement and there is no basis to imply it. Richard had no
    responsibility for payment of premiums under the policy and Susan was its sole
    beneficiary. It was for her and Mollie to decide whether to keep paying the
    premiums and maintain the policy at $1 million or reduce it to $500,000.

[14]

The trial judges findings of fact were based on
    her assessment of the evidence as a whole and are entitled to deference. The
    appellant has identified no palpable and overriding error in those findings and
    the appeal is dismissed, with costs payable to the respondent in the amount of
    $30,000, inclusive of disbursements and all applicable taxes, as agreed between
    the parties.

G.R.
    Strathy C.J.O.

A.
    Harvison Young J.A.

B.
    Zarnett J.A.





[1]
The parties first names have been used in these reasons, as they
    were in the trial judges reasons and in the factums of both parties.


