The case centred on a dispute over estate asset distribution between the wife and common-law partner
The Ontario Court of Appeal overturned a previous ruling on an estate distribution due to the absence of a formal estate representative, concluding that no valid trust claims could proceed on behalf of the estate until an authorized representative is appointed.
At the time of his death, Radwan Darwish Abutaa remained legally married to Basma Rizeq Beirat, although the two had been separated for years. Despite this, his divorce proceedings with Beirat had not been finalized.
Meanwhile, Abutaa had entered into a common-law relationship with Manal Khiyal, with whom he shared a home, a child, and various financial assets. Following Abutaa’s death, both Beirat and Khiyal submitted applications to claim rights over his estate, resulting in two conflicting legal actions. Beirat sought to continue her claims from the divorce proceedings, arguing she was entitled to an unequal division of family assets and spousal support. Additionally, she alleged that certain transfers to Khiyal, including her majority interest in a condominium, were fraudulent.
Khiyal countered by claiming that she was the sole beneficiary under a will executed in 2018, and that certain assets—including a $135,000 refund from a property deposit, insurance proceeds for a jointly financed vehicle, and an Audi Q7 she had purchased—were not estate assets.
In the original decision, the motion judge determined that these assets, including Khiyal’s 49 percent interest in the condominium, were held in trust for Abutaa’s estate. This conclusion rested on the judge’s interpretation that Abutaa and Khiyal saw themselves as a single “economic unit,” which suggested shared ownership. However, the Ontario Court of Appeal found several errors in this ruling, especially concerning the handling of asset ownership under trust principles and joint family ventures.
The appellate court determined that the motion judge lacked the authority to decide on estate assets without a formal estate representative appointed. Under Ontario law, only a valid estate representative may bring forward trust claims on behalf of an estate, and Beirat did not hold this position. The court further observed that if Khiyal was the legitimate trustee under Abutaa’s 2018 will, Beirat would not have legal standing to assert claims on behalf of his estate.
Additionally, the Court of Appeal found that the judge’s reliance on the concept of an “economic unit” between Abutaa and Khiyal improperly led to the presumption of equal ownership. According to the Supreme Court’s ruling in Kerr v. Baranow, such arrangements should be evaluated based on each party’s actual financial contributions, not assumed equality.
Another point raised on appeal was the judge’s findings about Khiyal’s credibility. The judge had described her testimony as vague and unconvincing, despite Khiyal not being subject to cross-examination, a procedural oversight that the appellate court viewed as a significant error. Ultimately, the court concluded that the original decision could not stand. It ordered a new hearing, emphasizing that a new evidentiary record, potentially including oral testimony, is required to clarify disputed issues.
