Case information

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Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

As a result of a car accident, the Appellant Michael Pecore suffered from quadriplegia, for which he was awarded compensation. After receiving that award, Michael hired the Respondent, Paula Pecore as his caregiver and within a short time they were married and Michael adopted Paula’s two children, the Respondent Shawn Pecore and Tammie. Edwin Hughes, Paula’s father successfully managed his investments and accumulated about $950,000 in investments. As a result, he was in a financial position to help Paula and her family and Hughes took specific steps to plan for Paula’s financial security. First, he designated Paula as the beneficiary of both his Registered Retirement Savings Plan and of his life insurance, which had a combined value of $277,167.68. Those designations are not challenged. Second, he opened a mutual fund account in joint ownership with Paula. Third, over time and on different occasions, Hughes transferred investments that he had held jointly with his ill wife first into his name and then into joint ownership with Paula. About two years before he died, Hughes transferred the bulk of his investments into joint ownership with Paula.

Hughes learned that transferring his investments to his daughter could trigger a deemed disposition resulting in capital gains consequences. To avoid those consequences, he wrote the financial institutions telling them not to adjust the cost bases for the investments because he retained 100% ownership and explained that the joint ownership with Paula was for probate purposes only. After completing the transfer of all his investments, Hughes rewrote his will to name Paula as sole executrix; remove his other two daughters as beneficiaries; leave specific bequests of items, and name Paula and Michael as his residuary beneficiaries. When he executed his will, Hughes specifically told his lawyer that his investments would devolve to Paula outside his estate. As Hughes’ health deteriorated, he moved in with Paula and Michael. A few months later, and all within a five-month span, Hughes’ wife died, Michael moved into a long-term care facility because Paula could no longer care for him, and Hughes died. After this, Paula redeemed the joint investments. Two years later, Paula and Michael’s marriage permanently broke down and Michael started divorce proceedings against Paula in which he claimed spousal support and a division of assets. During discoveries in that proceeding, Michael claimed that he first learned that he was a residuary beneficiary under the Hughes will and amended his petition to seek a declaration that the investments formed part of the residue of the Hughes’ estate. Paula bases her claim on a right of survivorship arising from Hughes’ transfer of his investments, which totalled $949,674.87, into joint ownership with Paula in the years before his death. Michael bases his claim on his position as one of the two joint residuary beneficiaries under Hughes’ will; Paula was the other joint residuary beneficiary. The Ontario Superior Court of Justice dismissed Michael’s claim against the estate. The Court of Appeal dismissed the appeal.