COURT FILE NO.: 05-009/2020 DATE: 20220323
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: STOJA SEKULOVSKI, Applicant
AND: MELANIE GEORGIOU, MICHAEL SEKULOVSKI and THE ESTATE TRUSTEE OF THE ESTATE OF JIM SEKULOVSKI, deceased, Respondents
COUNSEL: Benjamin Arkin for the Applicant Angela Casey and Adam Giancola for the Respondent Melanie Georgiou Michael Sekulovski, not represented by a lawyer
HEARD: February 18, 2022
CAVANAGH J.
REASONS FOR JUDGMENT
Introduction
[1] In this application, the applicant, Stoja Sekulovski (“Stoja”), applies for relief in relation to the estate of her late husband Jim Sekulovski (“Jim”).
[2] Jim died without a will on January 7, 2019. He is survived by his wife, Stoja, his adult son, Michael Sekulovski (“Michael”), and his adult daughter, Melanie Georgiou (“Melanie”). Melanie is the biological daughter of Stoja and Jim. Michael is Jim’s son from a previous marriage.
[3] Stoja seeks (i) an order for dependants’ support under the Succession Law Reform Act, RSO 1990, c. S. 26 (the “SLRA”); (ii) an order requiring the respondent, Michael, to account for and pay to the estate the amount of $251,537.50 representing Jim’s interest in the estate of his late mother, Maslina Sekulovski, that Michael asserts he received as a gift; and (iii) an order that registrations made by Michael under the Personal Property Security Act, RSO 1990, c. P.10 (the “PPSA”) against the estate and against Stoja be discharged, together with a statutory payment in the amount of $500 and payment of punitive damages.
[4] Michael opposes the application.
[5] Melanie supports the application.
[6] For the following reasons, I grant the application and make an order:
a. for dependant’s support for Stoja Sekulovski, with provision for payments to Melanie Georgiou and Michael Sekulovski out of the residue of the estate; b. requiring Michael Sekulovski to pay to the estate the amount he received from the estate of Maslina Sekulovski; and c. requiring Michael Sekulovski to discharge the PPSA registrations he made against the estate and against Stoja, and pay to Stoja Sekulovski (i) under s. 56(4) of the PPSA in the amount of $500, and (ii) punitive damages in the amount of $10,000.
Factual Background
[7] Stoja tendered three affidavits upon which she relies on this application.
[8] Rob Levesque, a lawyer, was appointed as the Estate Trustee During Litigation for the estate of Jim Sekulovski (“ETDL”) on January 6, 2020. Mr. Levesque swore an affidavit on January 28, 2022.
[9] Melanie affirmed affidavits on January 16, 2020, November 19, 2020, and February 11, 2022.
[10] Michael tendered an affidavit sworn on February 20, 2020 that was prepared when Michael was represented by a lawyer. Michael appeared at the hearing of this application unrepresented by counsel.
[11] Michael also relies on an affidavit entitled “Living Testimony in the Form of an Affidavit of Fact” sworn May 8, 2021, an affidavit entitled “Living Testimony in the Form of an Affidavit of Negative Averment” sworn February 3, 2022, and an affidavit entitled “Living Testimony in the Form of an Affidavit of Non Response and Rebuttal” sworn February 5, 2022. Michael also relies on affidavits from David Hristov (“David”), Michael’s first cousin, sworn May 8, 2021, Donka Hristov (“Donka”), Michael’s aunt, sworn May 8, 2021, and Blagoj Hristov (“Blagoj”), Michael’s uncle, sworn May 8, 2021.
[12] Melanie’s counsel scheduled cross-examinations of Donka, David and Blagoj to be held on August 12, 2021. Each failed to attend the cross-examination and Certificates of Non-Attendance were obtained.
[13] Melanie’s counsel scheduled a cross-examination of Michael on his affidavits sworn February 20, 2020 and May 8, 2021. In response to service of the Notice of Examination, Michael stated that he “had no obligation under the rules of Civil Procedure” as they do not apply to him. Michael failed to attend his scheduled cross-examination and a Certificate of Non-Attendance was obtained.
[14] The affidavits sworn by Michael, David Hristov, Donka Hristov, and Blagoj Hristov contain bald, declaratory assertions of how Jim wished his property to be distributed. I do not regard these statements to be probative of any facts in issue. Although the facts on this application are generally not contentious, where there is a conflict in the evidence between Stoja and Michael or Melanie and Michael, I prefer the evidence given by Stoja and Melanie.
Jim and Stoja’s life together
[15] Jim Sekulovski died of cancer and complications of alcoholism at the age of 67 on January 7, 2019.
[16] Stoja and Jim met through mutual friends in 1981. They were both immigrants from Macedonia and bonded over their shared values, culture, and language. Ten months after they met, they married. Stoja and Jim were married for 30 years until Jim’s death 2019.
[17] Stoja and Jim raised two children together: Jim’s son, Michael, from his prior marriage, was born in 1975, and their daughter Melanie was born in 1982. Michael was six years old when Jim and Stoja married. Jim gained full custody of Michal when he was seven years old, and they had no contact with his birth mother from that point on.
[18] Jim and Stoja had a traditional marriage. Jim was the main breadwinner, working as a carpet flooring installer. He worked long hours and travelled for his job. Stoja was a stay-at-home wife and mother. Her role was to keep house and be the primary caregiver for Michael and Melanie. Her household tasks included meal planning, grocery shopping, vacuuming, tidying, washing floors and windows, cleaning bathrooms, laundry, ironing, and mending clothes for Jim and the children. Jim contributed to the outdoor chores including gardening and mowing the lawn.
[19] Stoja’s responsibilities grew. In 1987, when the children were both in school, she began working night shifts in a factory earning $8 dollars per hour to bring in some money. In the morning, when her shift ended, she would come home to feed the children their breakfast and get them ready for school. Then she would attend to the household chores. Stoja estimates that she did 25-30 hours of household work on top of her hours employed outside the home every week at this time and throughout the marriage.
[20] Beginning with this factory job and throughout Stoja’s working life, her pay was deposited into her and Jim’s joint account.
[21] Stoja and Jim did not make a lot of money and could not afford to live lavishly. They did not take elaborate vacations or drive luxury cars. When the children were young, they bought a parcel of vacant land in Tiny, Ontario. Over the course of several years, they built the cottage together; Jim worked with his hands and Stoja contributed by minding the children, running errands, and preparing meals. They built a toolshed first and slept in it until the cottage was fit to move into.
[22] The idea to buy this particular lot came from Jim’s friend and co-worker, Norman Ilkos. Norman and his wife, Polly, had recently bought the lot that would ultimately be right across the street. Jim, Stoja, Norman and Polly became good friends together. Norman Ilkos and Polly Ilkos were each examined as witnesses for this application.
[23] For his entire adult life, Jim had struggled with alcoholism. However, his was a functioning alcoholism that had not fundamentally affected their lives. This changed in 2005 when Jim was arrested for impaired driving and his licence was suspended.
[24] Jim turned down his family’s and friends’ efforts to help him get treatment. He began drinking more. His mental and physical health deteriorated. He retired just a year later, at age 55, because he was unable to work.
[25] With Jim’s retirement, Stoja became the primary breadwinner.
[26] After his retirement, Jim began to spend more time at the cottage. Stoja chauffeured Jim to the cottage and back. She would spend time at the cottage herself every one or two weeks. When she could not be there, she would call Polly and Norman Ilkos every day to check on Jim.
[27] As Jim’s health continued to deteriorate, including from a serious head injury suffered in 2008, Stoja took on more and more of the couple’s responsibilities. She assumed Jim’s outside chores at home and at the cottage, including gardening and mowing the lawn.
Events leading to Jim’s death
[28] In November 2017, Jim was hospitalized for a week and diagnosed with complications of his alcohol abuse, including liver problems and a mass on his gallbladder that could become cancerous if left untreated. Jim left the hospital and did not follow up on treatment.
[29] In mid-December 2018, Jim’s health collapsed. He could no longer walk. He was incontinent. He was nauseous. He could not clean himself. Stoja became responsible for Jim’s personal care. She took a leave from her job to take care of him. Melanie pleaded with Jim to go to a hospital, and he agreed to do so on December 28, 2018. Ten days later, Jim died in the hospital in the presence of Stoja and Melanie.
Stoja’s circumstances today
[30] Stoja turned 66 years old on October 9, 2021. She is in good physical health, but she suffers from insomnia and stress. On April 29, 2021, she retired from her job in the sewing department of Keilhauer, a company that manufactures seating and tables for meeting rooms, offices, and hotel lobbies.
[31] Stoja’s current financial circumstances are set out in detail in her affidavit sworn January 15, 2022 and the attached Form 13.1 Financial Statement. The following is a summary of this information.
[32] Stoja net worth is approximately $380,000. This consists of an investment condominium ($505,000), the vacant lot next to the cottage ($80,000), and her savings ($95,000), less the mortgage on the condominium ($258,500), income taxes on disposition of RRSPs ($11,000), and the contingent costs of sale of the real properties ($33,000).
[33] Stoja has monthly income of $2,100 and monthly expenses of $7,696, leaving a shortfall of $5,532 per month (plus home insurance, which is not included in her financial statement now because the estate is currently paying). If her currently unleased condominium is leased for $2,500 per month, her shortfall would be $3,032 per month (or slightly more because of extra income tax she will pay on the net rent).
Stoja’s circumstances in the future
[34] Stoja hopes to continue owning and living in her home at 45 Greendowns Drive. She enjoys gardening and spends time at the house outside. She does not wish to have to move to a condominium with no yard.
[35] Stoja has no private health insurance. The financial statement does not include any buffer for the expenses of aging, including personal support care and nursing care, medications that are not covered by the Ontario Drug Benefit, rent and meals at a retirement home, modifications to the home, accessibility aids, occupational therapy, physical therapy etc.
Michael’s and Melanie’s circumstances
[36] Michael and Melanie are both independent adults and they support themselves.
[37] Michael is 46 years old. He has a college diploma and is qualified as an aircraft maintenance engineer. According to Michael’s February 2020 affidavit, he works for Air Canada as an aircraft maintenance engineer. He has owned his own home since 2003.
[38] Melanie is 39 years old. She works for TD Canada Trust as a senior manager in process engineering. She is married with two daughters ages 10 and seven. She and her husband are self-supporting.
Evidence related to Maslina Sekulovski’s estate
[39] In November 2016, Jim’s mother, Maslina, passed away.
[40] Maslina’s Last Will and Testament provides that the residue of her estate is to be split among her three children in equal shares: one share to her son, Boris Sekulovski, one share to Jim, and one share to her daughter, Donka Hristov. Maslina’s Will appoints Boris, Jim, and Donka as co-estate trustees.
[41] The main asset of Maslina’s Estate was a property at 4 Dunlop Avenue, Toronto. The house was sold in 2018 and the proceeds of sale of $742,734.82 were paid to Maslina’s Estate. The money was deposited to a bank account of the Estate at Canadian Imperial Bank of Commerce (“CIBC”).
[42] On December 28, 2018, as Jim’s health continued to worsen, he was taken to Scarborough General Hospital. By December 30, 2018, Jim had been transferred to the palliative care ward due to the severity of his condition.
[43] On January 3, 2019, two representatives of CIBC visited Jim at the hospital to witness his signature on documents opening an estate account for Maslina’s estate.
[44] On the morning of January 4, 2019, Michael entered Jim’s hospital room with his aunt Donka. Melanie was present. Donka had a piece of paper with her. Melanie’s evidence is that she saw Donka wake Jim from his sleep, prop him to an upright position and place a pen in his hand.
[45] Melanie’s evidence is that she was upset that Michael and Donka were putting a paper in front of her father to sign because she felt that he was not in a condition to sign documents. She argued with Michael about this and tried to prevent Jim from signing the document by physically placing her body between her father and Donka. Melanie’s evidence is that Michael grabbed her arm and forcefully pinned her against the wall while Donka got Jim to sign the document. Melanie’s evidence is that no one explained to Jim what he was signing, and no one said the word “will” to him. Melanie’s evidence is that Donka said only: “This is the last letter we need you to sign for the estate account. We need you to sign to settle Mom’s estate and house.”
[46] In his affidavit, Michael states that around 11 o’clock a.m., his aunt Donka arrived at the hospital, and he greeted her. She told him that she had some estate business to discuss with Michael’s father and he knew that it related to his grandmother’s estate but did not know the details. When Michael and Donka arrived at his Jim’s room, Melanie was there. Michael suggested that they both leave the room in order to give Jim and Donka some privacy. Melanie became very agitated and refused to leave. It was clear to Michael that this would not be a private meeting and he approached Jim who was awake and alert and raised the bed to a more upright position for him and told him that Donka had something urgent she wished to speak with him about. He then stepped away to the corner of the room so that Donka could talk to him.
[47] Donka showed the document to Jim and spoke to him about it. Michael did not hear exactly what she said, and he does not believe that Melanie did either. Michael’s evidence is that Donka handed Jim the document and the pen and, at this point, Melanie became hysterical and used her body to create a barrier between Donka and Jim. Michael’s evidence is that Jim was becoming frustrated by this behaviour and pleaded with Melanie to stop, but she refused to listen. Michael took Melanie’s arm and escorted her off to the side of the room. He denies that he forcefully pinned her against the wall or bruised her arm. Once Melanie was out of the way, Jim signed the document. After signing it, he returned it to Donka. Melanie was still very upset, and security came to the room.
[48] Michael’s former lawyer subsequently sent to Melanie’s lawyers a copy of the document Jim signed at the hospital entitled “Last Will and Testament”. The document is dated January 3, 2019 although it was signed on January 4, 2019. The document reads:
During my declining health and hospitalization, I, James (Jimmy, Dimce) herby (sic) testify, IN THE ESTATE OF MASLINA SEKULOVSKI, as my final will and testament to grant my CERTIFICATE OF APPOINTMENT OF ESTATE TRUSTEE WITH A WILL to the following recipient:
I am naming my heir Michael Sekulovski (Son) to be appointed to 100% of my inheritance upon my death.
I hereby certify this to be true and witnessedon (sic) this day January 3, 2019.
[49] When the document was sent to Melanie’s lawyer’s, Michael’s former lawyer took the position that the document evidences Jim’s intention to gift his share of Maslina’s estate to Michael which gift was perfected according to his instructions.
[50] Subsequently, Michael, Donka and Boris executed two documents. The first document dated January 4, 2019 states that Donka “here by want to give our brother’s James Jimmy Dimce …. the third of the estate of $251875.1 to Michael Sekulovski …”. The second document dated “Jan, /2019” reads:
In continuation to letter signed by Boris Sekulovski Donka Hristov to give a third of their mothers estate (ESTATE OF MASLINA SEKULOVSKI) TO THEIR NEPHEW Michael Sekulovski on behalf of their brother Executor AND the Beneficiary of the estate, the amount divided into three equal amounts of $251537.5 as per the Estate account 00432/2627531 balance of $754612.58
[51] Michael states that these documents were prepared by CIBC.
[52] On January 7, 2019, a cheque for $251,537.50 was issued to Michael from Maslina’s estate account.
[53] Melanie’s position is that the payment to Michael is not a valid gift, and this money needs to be returned to Jim’s estate. Michael’s position is that the payment is a valid gift.
Analysis
[54] There are three issues to be determined on this application. I address each in turn.
ISSUE 1: Is Jim’s one-third share of Malina’s estate an asset of his estate?
[55] Stoja and Melanie seek to have Jim’s $251,537.50 interest in the Estate of his mother, Maslina Sekulovski (“Maslina”) returned to Jim’s Estate. They submit that this interest was improperly transferred to Michael around the time of Jim’s death.
Is the transfer to Michael a valid gift?
[56] Melanie submits that the elements of a valid gift have not been satisfied. Stoja adopts and supports this submission.
[57] In McNamee v. McNamee, 2011 ONCA 533, the Court of Appeal, at para. 24, set out the essential ingredients of a legally valid gift. There must be: (1) an intention to make a gift on the part of the donor, without consideration or expectation of remuneration, (2) an acceptance of the gift by the donee and (3) a sufficient act of delivery or transfer of the property to complete the transaction.
[58] The onus is on the donee to establish the test stated in McNamee. The donee must show that the transaction was a gift by proving a clear and unmistakable intention on the part of the donor to make a gift to the donee. The evidence of intention must be such as to be inconsistent with any other intention or purpose. See Foley v. McIntyre, 2014 ONSC 194, at para. 143; aff’d 2015 ONCA 382.
[59] Melanie’s evidence is that no one explained to Jim what he was signing, and no one said the word “will” to him. Melanie overheard Donka say only: “This is the last letter we need you to sign for the estate account. We need you to sign to settle Mom’s estate and house.”
[60] Michael’s evidence is that he did not hear exactly what Donka said when she spoke with Jim about the document. He saw Jim sign the document and, although Jim was physically weak at the time, he did not require assistance to sign the document. Michael’s evidence is that Jim’s signature looks shaky because he did not have a solid surface to write on – only his hospital bed.
[61] Melanie’s evidence about what she heard is not challenged by Michael’s evidence or by cross-examination. I accept her evidence.
[62] In his first affidavit, Michael states that while his grandmother was alive, his father and his Aunt Donka told him that Jim promised his mother that he would give his share of the Dunlop house to Michael. This evidence is hearsay and is in respect of facts that are highly contentious. Under rule 39.01(5), evidence on information and belief should not be received on an application except with respect to facts that are not contentious. Further, this evidence could not be tested on cross-examination because Michael and Donka refused to attend to be cross-examined. I do not give any weight to this evidence.
[63] The document that Jim signed is entitled ‘LAST WILL AND TESTAMENT” and, although the text refers to the Estate of Maslina, it purports to be Jim’s final will and testament whereby he names Michael “to be appointed to 100% of my inheritance upon my death”. Michael does not take the position that this document has effect as a valid will but that it is evidence of Jim’s intention to make a gift to Michael of his interest in Maslina’s estate.
[64] Melanie’s evidence is that Jim was told by Donka that the letter is needed to settle his mother’s estate account. Given this evidence, the text of the document, and the circumstances in which it was signed, I find that Michael has failed to satisfy his onus of proving that by signing the document, Jim’s clear and unmistakable intention was to make a gift to Michael and that he did not sign it for any other purpose.
[65] Michael has also failed to show a sufficient act of delivery or transfer by Jim of a gift to Michael. Jim did not sign either of the two documents that were signed by Michael, Boris and Donka. These documents appear to have been provided to CIBC to authorize the issuance of a cheque to Michael. These documents appear to show their intention, but not Jim’s intention, to transfer Jim’s share of his mother’s estate to Michael. The third requirement for a valid gift is also not satisfied.
[66] Michael has failed to show that Jim made a valid gift to Michael of his interest in Maslina’s estate.
[67] I conclude that the purported gift by Jim to Michael of Jim’s one-third share of the estate of his mother is invalid.
[68] Given this conclusion, it is not necessary for me to decide whether the gift is voidable because of the application of the doctrine of undue influence.
ISSUE 2: Did Jim make adequate provision for the proper support of Stoja and, if not, what provision should be made for Stoja out of the assets of his estate?
[69] Stoja applies for dependants’ support under section 58 of the SLRA. Subsection 58(1) of the SLRA provides:
58(1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.
[70] The term “dependant” is defined in s. 57 of the SLRA to include a spouse of the deceased to whom deceased was providing support or was under a legal obligation to provide support immediately before his or her death. As a married spouse, Stoja is a dependant under this definition.
[71] Section 62(1) of the SLRA provides that in determining the amount and duration, if any, of support, the court shall consider all the circumstances of the application including a list of specified factors. In Cummings v. Cummings, 2004 ONCA 9339, the Court of Appeal, at para. 34, described these factors as “a mélange of criteria based not only on needs and means but also on legal and moral or ethical claims”.
[72] The legal obligations and moral obligations are to be applied in the context of considering the factors listed in s. 62(1) and the general direction to consider all the circumstances. See Cummings, at para. 46.
[73] Under s. 62(1), the court has broad authority to make an appropriate dependant’s support award, which may include the transfer of property in kind and the payment of a lump-sum.
[74] Under s. 63(3), the court may accept such evidence as it considers proper of the deceased’s reasons, so far as ascertainable, for making the dispositions in his or her will, or for not making adequate provision for a dependant.
[75] Stoja relies on evidence from Mr. Ilkos for why Jim did not make adequate provision for her support. When he was examined, Mr. Ilkos gave the following evidence:
69 Q. Did Jim ever talk to you about his will and his estate plan?
A. Jim didn’t - didn’t believe - you talk to me, but he didn’t believe in things like that.
70 Q. What do you mean he didn’t believe in things like that? What did he tell you about that?
A. “What for?” he says. Wife gonna kick you out? She get it. When I die, who cares?
71 Q. Did he ever tell you what he expected to happen with this property when he died?
A. He says it belongs to Stella, so what for I got to make - even Stella approaching him for - for a will, and he says, No. When I go, it’s yours.
163 Q. Did Jimmy ever say to you what he expected to happen to his property after he died?
A. After he died, Stella was said to make indeed, he says after I die is yours. Why you complaining?
(Reporter seeks clarification.)
THE WITNESS: Automatically is yours.
MS. CASEY: Who’s?
THE WITNESS: Stella’s.
BY MR. GIANCOLA:
164 Q. So Jimmy said to you, Automatically –
A. It’s hers.
165 Q. “Hers” being Stella’s?
A. Yes.
166 Q. So correct me if I’m wrong, so his understanding, according to you, is that if he did not make a will, Stella would get this property after he died?
A. Legally, that’s what he told me, legally it belongs to the wife. That’s why he didn’t want to spend the money and effort to make a will.
[76] Stoja relies on this evidence to explain why Jim did not make provision for Stoja’s support. She submits that Jim thought he made provision for Stella’s support, but he was mistaken. I accept this evidence.
Factors in s. 62(1)
[77] The factor in s. 62(1)(a) is the dependant’s current assets and means. Stoja has net assets of $380,000, consisting mainly of her condominium, a lot beside the cottage in Tiny Township, and some registered savings. Her monthly income is $2,614 (CPP and her survivor pension). If Stoja were to rent the condominium, the rents would be approximately $2,500 per month on a gross basis. Stoja has provided a sworn financial statement attesting to this information.
[78] The factor in s. 62(1)(b) is the assets and means that the dependant is likely to have in the future. Stoja would have $840,000 in net worth based on a distribution from the Estate ($380,000 plus $460,000 (the value of the distribution from the assets of the Estate, not including the disputed assets)). Stoja is retired and does not have private health insurance.
[79] The factor in s. 62(1)(c) is Stoja’s capacity to contribute to her own support. Stoja is able to contribute to her support based her current means, but she will be unable to contribute additional amounts in the future.
[80] The factor in s. 62(1)(d) is the dependant’s age and physical and mental health. Stoja is 66 years old. She is in good physical health, although she suffers from insomnia and stress. On the evidence, it is expected that she has many years to live.
[81] The factor in s. 62(1)(e) is the dependant’s needs, in determining which the court shall have regard to the dependant’s accustomed standard of living. Stoja has lived at 45 Greendowns Drive for 45 years, since 1981. The home has a yard, and Stoja likes to garden. Stoja and Jim had a cottage, and although the cottage was sold, Stoja’s accustomed standard of living included spending leisure time at the cottage. Stoja drives an older vehicle, a 2013 Mazda 3, which is starting to need expensive repairs. She will need a new vehicle and a replacement car every four to eight years as long as she is able to drive. Although Stoja has not travelled a great deal in the past, the cottage is now sold, and Stoja’s evidence is that she would like to travel to see her family in Macedonia and Australia and she would like, occasionally, to go on a vacation to somewhere warm, like an all-inclusive resort.
[82] The factor in s. 62(1)(f) is the measures available for Stoja to become able to provide for her own support and the length of time and cost involved to enable her to take those measures. Stoja has monthly expenses (based on her financial statement) of just under $7,700 per month, including expenses to maintain the house at 45 Greendowns Drive. Her monthly income is $2,614, resulting in a shortfall of about $5,500 monthly. If the condominium is rented, the shortfall would be $3,032 monthly. If Stoja lives to the age of eighty (20 years) she will need approximately $730,000 to fund her monthly budget (on a straight calculation). This does not include a provision for the expenses of aging.
[83] The factor in s. 62(1)(g) is the proximity and duration of Stoja’s relationship with Jim. Stoja had a very close and very long relationship with Jim over their 38-year marriage. They shared culture, language and values. They raised two children together. They were partners in managing their household and their finances were intertwined. Stoja supported Jim through his struggles with alcoholism.
[84] The factor in s. 62(1)(h) is the contributions made by Stoja to Jim’s welfare, including indirect and non-financial considerations. Stoja was a traditional housewife who worked 25-30 hours per week doing housework, even after she started working outside the home. In 2005, circumstances changed following Jim’s charge for impaired driving. He retired from his job, and he started to drink more. Stoja became the primary breadwinner and she continued to do the household work. Stoja would drive Jim to the cottage, and when she was not there, she checked in with the neighbours at the cottage and asked them to check on Jim. Beginning in 2008, after Jim suffered a serious head injury, Stoja had to contribute even more to the marriage. In the final days of Jim’s life, Stoja took on responsibility for Jim’s personal care.
[85] The factor in s. 62(1)(i) is the contributions made by Stoja to the acquisition, maintenance and improvement of Jim’s property. Stoja contributed her wages from work outside the home to their joint account, and she contributed to building the cottage.
[86] The factor in s. 62(1)(k) is whether Jim has a legal obligation to provide support for another person. Jim has no legal obligation to provide support for either of his children. As set out above, both Michael and Melanie are self-sufficient.
[87] Other factors in s. 62(1) are either inapplicable or overlap with factors already addressed.
Assets of the Estate
[88] The ETDL provided affidavit evidence for this application. As an exhibit to his affidavit, the ETDL provided an updated statement of assets and liabilities and accounting of the administration of the estate.
[89] Stoja’s position is that the estate has assets, including disputed assets, worth $1,424,578 for the purpose of her dependant’s support claim. This consists of:
a. undisputed assets in the ETDL’s hands with a value of $1,102,300 consisting of 45 Greendowns Drive with a value of $965,000, and the balance of $137,300 in trustee investments and cash; b. the disputed share of Jim’s late mother, Maslina Sekulovski’s, estate worth $251,875.10; c. the disputed funds held by Jim’s brother, Boris, in the amount of $38,562.40; and d. Jim’s Tangerine RRSP with a value of $31,840.83 of the date of his death, which was designated and paid out to Michael, but which is an asset deemed to be part of the estate for the purpose of Stoja’s dependant support claim, under s. 72(1)(g) of the SLRA.
[90] The estate’s outstanding liabilities are:
a. income taxes - The house is increased in value since the date of death. If the house is sold by the estate, they will be approximately $80,000 in income taxes payable on the capital gain. If the house is transferred to Stoja, it will be on a tax-deferred rollover basis. b. ETDL’s future compensation: the ETDL is compensated on an hourly rate. He has received his compensation up to December 21. c. Miscellaneous other liabilities: under $10,000.
[91] If the estate is administered in intestacy and with only the undisputed assets included, Stoja will receive a distribution of approximately $460,000 (that is, a preferential share of $200,000 plus one-third of the net residue of the estate).
[92] The ETDL has brought a separate application for directions regarding beneficial ownership of $38,562.40 held in trust by Boris and Helen Sekulovski. I do not address this issue on this application.
Valuation of Stoja’s claim for dependants’ support
[93] In Cummings, the Court of Appeal held, at para. 50, that when examining all of the circumstances of an application for dependants’ relief, the court must consider, (a) what legal obligations would have been imposed on the deceased had the question of provision arisen during his lifetime; and (b) what moral obligations arise between the deceased and his or her dependants as a result of society’s expectations of what a judicious person would do in the circumstances. The moral considerations are not to be contemplated in addition to, or in isolation from, the factors in s. 62(1).
[94] In Earl v. McAllister, 2021 ONSC 4050, the Divisional Court, citing Quinn v. Carrigan, 2014 ONSC 5682 (Div. Ct.) held, at para. 37, that where there are multiple claims to an interest in the estate, the appropriate analysis to be undertaken consists of the following steps: (i) identify all dependants who have a claim; (ii) tentatively value those claims by considering the factors set out in the legislation and the legal and moral obligations of the estate; (iii) identify the non-dependant persons who may have a legal or moral claim to the estate; and (iv) balance the competing claims by taking into account the size of the estate, the strength of the claims, and the intentions of the deceased.
[95] In Poitras Estate v. Poitras, 2016 ONSC 5049, an application was made by the spouse of the deceased for an order under s. 58 of the SLRA. The application judge explained the moral obligation of the deceased, prior to his death, to ensure that his spouse is properly cared for in the years following his death:
The moral obligation to care for a dependant following the death of the person who was providing support is said to be an obligation of high order (see Tataryn, supra, at paras. 30, 35). There is a wide discretion granted to the court under the SLRA to devise an adequate, just and equitable sharing of Gilles’ estate. Each case turns on its own facts but it would not be exceptional for the legal and moral claims of a surviving spouse, following a lengthy marriage, to consume the bulk of a modest, even moderate-size, estate. By comparison, the claims of independent, adult children are more tenuous but if the size of the estate permits, some provision for children ought to be made (Tataryn, supra, para. 31).
[96] In Tataryn v. Tataryn Estate, 1994 SCC 51, [1994] 2 S.C.R. 807, the Supreme Court of Canada addressed the moral claims on the testator in that case:
I turn next to the moral claims on the testator. The highest moral claim arises from the fact that Mrs. Tataryn has outlived her husband and must be provided for in the “extra years” which fate has accorded her. This is not a legal claim in the sense of a claim which the law would have enforced during the testator’s lifetime. It is, however, a moral claim of a high order on the facts of this case. Mr. and Mrs. Tataryn regarded their estate as being there to provide for their old age. It cannot be just and equitable to deprive Mrs. Tataryn of that benefit simply because her husband died first. To confine her to such sums as her son may see fit to give her, as the testator proposed, fails to recognize her deserved and desirable independence and constitutes inadequate recognition of her moral claim.
[97] Stoja is Jim’s only dependant. At the first stage of the analysis, only her claim is valued.
[98] At the second stage of the analysis, I consider the legal obligations that would have been imposed on Jim had the question of provision arisen during his lifetime together with his moral obligations as described in the jurisprudence, having regard to the factors in s. 62(1) of the SLRA.
[99] If the estate were administered as an intestacy, the house at 45 Greendowns Drive would have to be sold to make the distributions that are required. If the estate is administered in intestacy and with only the undisputed assets included, Stoja would receive about $460,000. She would be left with assets of approximately $840,000 to last for the rest of her life. Stoja would be unable to purchase a replacement house in Toronto. She would have no alternative but to live in her condominium or rent another place to live.
[100] Stoja’s reasonable expectation was that she would live in this house during her retirement years. To require Stoja to move from her home to rental accommodations, or to the condominium, would not be consistent with the lifestyle she enjoyed during her 38-year marriage.
[101] The circumstances of this case are similar to those in Tataryn, where the dependant and the testator were married for many years and through their joint efforts they amassed an estate held in the testator’s name at the time of his death, including the house in which they lived. The Supreme Court of Canada considered the legal and moral claims on the testator and held that it would not be just and equitable to deprive the dependant of her expected benefit of the assets of the testator’s estate that she had contributed to during their marriage simply because her husband died first. An order was made granting to the dependant title to the matrimonial home.
[102] When I consider the factors in s. 62(1) and the legal obligations that would have been imposed on Jim had the question of provision arisen during his lifetime together with his moral obligations, I conclude that it would be unfair and unjust to deprive Stoja of the right to live in her home during her retirement years simply because Jim died first. I am satisfied that Soja has a right to remain in the home at 45 Greendowns Drive. Title to this home should be vested in Stoja.
[103] Stoja has a need for monthly payments of $5,532. This obligation could be met by continuing the interim support order and increasing the amount from $4,317 to $5,532 (this amount would be reduced by the amount of rental income Stoja may receive from rental of the condominium). Payment of amounts to satisfy this obligation, to provide a buffer against future needs as she ages, and to provide Stoja with the freedom and independence that she and Jim planned to have in their retirement, would consume the entirety of Jim’s estate.
[104] As part of the balancing exercise, I take into consideration Stoja’s position with respect to Jim’s wishes. Stoja appreciates that Jim would have wanted to recognize his children and provide something for them too. Stoja accepts that Jim’s wishes in this regard would be recognized fairly by an order providing that the balance of the net estate after the transfer of her home to her and payment of the debts and expenses of the estate be split into three equal shares to be divided among herself, Melanie, and Michael. Stoja’s position is subject to the reservation that any amount payable to Michael out of the estate should be set off against any amounts he may be found to owe to the estate or Stoja, including Jim’s share of Maslina’s estate, damages, and costs. Stoja seeks an order for dependant’s support on this basis.
[105] Having regard to Stoja’s position concerning Jim’s wishes that provision be made for his children and the effect to be given to his wishes in the balancing exercise, and Stoja’s requested order for dependant’s support, I accept that an order for Stoja’s support should provide that the balance of the net estate after the transfer of her home to her and payment of the debts and expenses of the estate be divided into three equal shares among Stoja, Melanie, and Michael.
ISSUE 3 Should the registrations by Michael under the PPSA against Stoja and the Estate be discharged? If so, should statutory payments and/or punitive damages be ordered?
[106] Before June 22, 2020, Michael was represented by two different legal counsel with experience in estates litigation. On June 22, 2020 he gave notice that he had removed his lawyer as legal counsel. He advised that he is not a “legal person” nor “bound to an Estate Act’”. He purported to “remove my consent from this or ANY legal proceeding”.
[107] In his affidavit, Mr. Levesque, in his capacity as ETDL, provided evidence concerning Michael’s position on the ETDL’s authority after he had discharged his legal counsel.
[108] Mr. Levesque’s evidence is that Michael took steps to prevent him from administering the estate, including sending official-looking “Notices” to the realtor he had retained to sell the cottage property owned by the estate, advising that he was not authorized to sell the property.
[109] Mr. Levesque’s evidence is that, ultimately, Michael commenced an action for “trespass” against him, other counsel involved in this litigation, the proposed mediator, and two of the Justices who had made orders in this proceeding. On January 21, 2021, Michael’s trespass action was summarily dismissed under Rule 2.1.01(1) of the Rules of Civil Procedure. The Court held that Michael’s trespass action is on its face frivolous, vexatious and an abuse of the process of the court. The Court observed that the court filings include several legal and stylistic elements common to litigants described by Rooke A.C.J.Q.B.A. in Meads v. Meads, 2012 ABQB 571 as “Organized Pseudolegal Commercial Argument (or “OPCA”) litigants. See Sekulovski v. Arkin, 2021 ONSC 439.
[110] In the costs award made in Michael’s action on February 24, 2021, the Court found that Michael’s claims were frivolous, vexatious and an abuse of the process of the court and awarded substantial indemnity costs against Michael. In the Court’s reasons for the costs award, the Court specifically addressed the jurisprudence in relation to cases under the PPSA in which substantial indemnity costs were awarded: Sekulovski v. Arkin, 2021 ONSC 1401.
[111] Mr. Levesque’s evidence is that the dismissal of Michael’s trespass action has not dissuaded him from attempting to interfere with the administration of the estate. Mr. Levesque states that on January 21, 2022, Michael sent a letter by email and registered mail to the ETDL and to counsel for Stoja and counsel for Melanie. He wrote that “[a]s Son and blood heir of Dimce (Jim) Sekulovski, i possess inherent power of attorney and i write in the capacity as Grantor for the Estate and authorized Representative for RYS-TRUST, a proxy operating in the private who is the secured party and 1st lien holder of the Estate”. Michael attached a Registration Confirmation issued by ServiceOntario dated January 10, 2022 confirming registration of a PPSA Financing Statement. Michael demanded that “all legal process and court proceedings MUST STOP IMMEDIATELY” and that “[l]iens will be removed when an equitable settlement is reached”.
[112] On January 27, 2022, Michael sent a letter to a judge of this Court who had made an order for interim dependant’s support. Michael purported to give notice of a “superior security interest and the highest claim to the estate” and he states that “[e]ffective immediately RYS-TRUST will now administer all property of the Estate that exists in both substance and in form”. Mr. Levesque’s evidence is that he has no knowledge of the entity that Michael calls “RYS-TRUST” and no knowledge of any basis for Michael to register notice of a security interest against assets of the estate.
[113] In his January 27, 2022 letter, Michael made demands of the judge that she produce “authority to administer said Estate” and “evidence that establishes a superior claim and/or a security interest in said estate”. Michael again stated in his letter that “[l]iens will be removed when a equitable settlement is reached”. The letter attached copies of a Financing Change Statement registered under the PPSA against “Sekulovski, Dimce Jim” as debtor and a separate Financing Change Statement registered against Stoja Sekulovski as debtor as well as other Financing Change Statements the effects of which are unclear.
[114] By email dated January 28, 2022, counsel for Stoja demanded pursuant to s. 56 of the PPSA that Michael register a certificate of discharge with respect to all PPSA registrations he has made against Stoja Sekulovski, the estate of Jim Sekulovski, and any other party to the pending application in this application.
[115] In response, Michael sent a document named “LIVING TESTIMONY IN THE FORM OF AN AFFIDAVIT OF NON RESPONSE AND REBUTTAL”. Michael made reference in this document to the email from Stoja’s counsel and advised, among other statements in the document, “[a]s a consequence of his failure to respond to by (sic) conditional acceptance to his offer, I, hereby note Mr. Arkin in default”.
[116] Michael has not discharged the PPSA registrations against Stoja and against Jim’s Estate.
[117] Michael does not have a security agreement with Jim’s estate or with Stoja. He does not have a security interest against personal property of either of them. There is no basis for the registrations by Michael under the PPSA.
[118] Subsection 56(2) of the PPSA provides:
Where a financing statement or notice of security interest is registered under this Act and the person named in the financing statement or notice as the secured party has not acquired a security interest in the property to which the financing statement or notice relates, any person having an interest in the property may deliver a written notice to the person named as the secured party demanding registration of a financing change statement referred to in section 55 or a certificate of discharge referred to in subsection 54(4), or both, and the person named as the secured party shall register the financing change statement or the certificate of discharge, or both, as the case may be.
[119] Subsection 56(4) of the PPSA provides:
Where the secured party, without reasonable excuse, fails to register the financing change statement, or certificate of discharge or partial discharge, or all of them, as the case may be, required under subsection (1), (2), (2.1), (2.2), or (2.3) within 10 days after receiving a demand for it, the secured party shall pay $500 to the person making the demand and any damages resulting from the failure; the sum and damages are recoverable in any court of competent jurisdiction.
[120] Subsection 56(5) of the PPSA provides that upon application to the Superior Court of Justice, the court may order the registrar to amend the information recorded in the central file registration system to indicate that the registration of the financing statement has been discharged or partially discharged, as the case may be.
[121] In MBNA Canada Bank v. Luciani, 2011 ONSC 6347, the respondent registered a financing statement under the PPSA against the applicant bank claiming a security interest in respect of an obligation by the bank to him. The bank demanded that the respondent discharge the financing statement and the applicant responded saying that he would do so provided the bank extended a credit line to his wife and him. The bank refused and moved for an order discharging the financing statement registration.
[122] In his decision in MBNA, D.M. Brown J. (as he then was) described the registration as “a new twist on the Sovereign Man” scheme. Brown J. noted that the registered financing statement ‘combined a jumble of references to sections of the Uniform Commercial Code, with allusions to passages from the Old Testament and archaic legalese as part of the creation of the ‘agreement’”. Brown J. referred to other documents sent by the respondent including a statement demanding a response and stating that “silence, or failure to respond as prescribed, stands as your stipulation, consent, and tacit approval, … and will stand as final judgment in this matter”. Brown J. held, at para 16:
Mr. Luciani failed to provide a reasonable excuse for its failure to register a certificate of discharge. His reliance on the “Sovereign Man” scheme to justify his actions simply shows the extent of the mischief this pernicious scheme may cause. The Bank has requested an order that Mr. Luciani pay it the statutory amount of $500 prescribed by section 56(4) of the PPSA for his failure to register a discharge. The Bank is entitled to such amount, and I order Mr. Luciani to pay that $500 to the Bank within 10 days of the date of this order. The Bank has not sought any further damages.
[123] The Bank was awarded its full indemnity costs.
[124] In Myers v. Blackman, 2014 ONSC 5226, the respondents registered a financing statement under the PPSA without any legal right to do so and asserted a security interest in the applicants’ personal property. The applicants moved for an order under section 56(5) of the PPSA directing the registrar to discharge the financing statement and seeking payment of the sum of $500 as provided for by section 56(4) as well as damages for injurious falsehood and punitive damages, together with costs on a full indemnity basis. The applicants contended that the respondents are OPCA litigants. Mew J. noted that whether the respondents are OPCA litigants or not, a number of characteristics of such litigants, as described by Rooke A.C.J.Q.B.A. in Meads, were present. Mew J. stated that an often employed tactic of OPCA litigants is said to be the use of “foisted” obligations in various forms - with the recipient being given a limited amount of time to respond and disagree, failing which they are held to have agreed to the terms of a unilateral agreement.
[125] Mew J. addressed the claim in Myers for punitive damages, at paras. 30 and 33:
In Meads, the court said that punitive damages are warranted when a person files a spurious personal property claim on the basis of a foisted unilateral agreement (Meads at para. 525). In MBNA Canada Bank v. Luciani, 2011 ONSC 6347, D.M. Brown J. found that the conduct of the respondent in that case in registering a false financing statement constituted an abuse of the PPSA registration system and that the respondent’s attempted “shake down” of MBNA Canada Bank by demanding a line of credit in return for a discharge amounted to “reprehensible conduct” (see MBNA Bank at paras. 14-17).
In my view any award of punitive damages in this case will not, as a practical matter, achieve the objectives canvassed in the Whiten case. In so concluding I should not be taken as condoning any aspect of the respondents’ actions. Their conduct is highly reprehensible. As will be seen, in addition to the statutory damage award of $500, there will be a significant award of costs made in this case. While the object of costs is compensatory, not punitive, the willingness of courts to make substantial costs awards may deter some parties who might otherwise be tempted to emulate the conduct of the respondents in the present case.
[126] Stoja submits that Michael’s conduct has exhibited all of the hallmarks of an OPCA litigant who has engaged in an ongoing pattern of conduct with a view to undermining the court’s authority and obstructing the process of the court, including by commencing a legal action against judges of this Court, the ETDL, and counsel representing opposing parties, and by registering financing statements under the PPSA without any justification and refusing to discharge these registrations.
[127] Stoja submits, citing Whiten v. Pilot Insurance Co., 2002 SCC 18, at paras. 36 and 43, that an award of punitive damages is justified and necessary. Stoja submits that an award of $50,000 in punitive damages is proportionate to the amounts at issue and will serve as a satisfactory specific and general deterrent.
[128] In Whiten, the Supreme Court of Canada confirmed that punitive damages may be awarded against a defendant in exceptional cases for “malicious, oppressive and high-handed” misconduct that offends the court’s sense of decency. An award of punitive damages is limited to misconduct that represents a marked departure from ordinary standards of decent behaviour. The objective of an award of punitive damages is to punish a defendant rather than to compensate a plaintiff. The general objectives of an award of punitive damages are punishment (in the sense of retribution), deterrence of the wrongdoer and others, and denunciation (the means by which the judge or jury expresses its outrage at the egregious conduct). See Whiten, at paras. 36 and 68.
[129] On the evidence before me, I am satisfied that Michael’s actions in registering documents under the PPSA against Stoja and against Jim’s estate and in refusing to discharge the registrations (unless an “equitable settlement” is reached) qualify as thoroughly reprehensible conduct that was knowingly engaged in, without any colourable legal justification, for the purpose of showing contempt for the legal process of this application and to attempt to gain an unfair advantage. These registrations were made after Michael’s action against two judges of this Court, the ETDL, and opposing counsel was dismissed under rule 2.1.01 of the Rules of Civil Procedure as frivolous, vexatious and an abuse of the process of the court. In these circumstances, an award of punitive damages is justified and necessary to show the Court’s condemnation of the actions that Michael has taken by making registrations under the PPSA, to denounce this conduct, and to deter Michael and others who may consider engaging in such conduct from doing so.
[130] The statutory payment of $500 provided for by s. 56(4) of the PPSA is not, in the circumstances of this case, a sufficient deterrent. This amount reflects a minimum statutory payment to be made following a refusal to discharge a wrongful registration under the PPSA. In my view, however, the amount of punitive damages that Stoja seeks, $50,000, is more than would be proper and necessary on the facts of this case. An award of punitive damages of $10,000, in addition to the statutory payment of $500 under s. 56(4) of the PPSA, will show the Court’s denunciation of Michael’s conduct and, hopefully, will serve to deter him and others from engaging in this conduct in the future.
Disposition
[131] For these reasons, I make the following orders:
a. A declaration that Stoja Sekulovski is a dependant of Jim Sekulovski within the meaning of Part V of the SLRA; b. A declaration that Jim Sekulovski failed to make proper and adequate provision out of his estate and assets for the proper support of Stoja; c. An order that the ETDL is authorized to complete the administration of the estate; d. An order that the ETDL shall transfer the 45 Greendowns Drive property to Stoja in partial satisfaction of her interest in the estate as a beneficiary and dependant; e. An order that Michael shall pay to the estate $251,875.10 representing the amount he received from Maslina Sekulovski’s estate; f. An order that the balance of the residue of the estate after payment of the estate’s liabilities, debts, and expenses shall be divided in equal shares among Stoja, Melanie, and Michael; g. An order discharging any and all registrations made by Michael under the PPSA against the estate and Stoja. It is unclear whether there is evidence in the record of unjustified PPSA registrations against others, namely, the ETDL, Melanie, and the lawyers for any parties to this litigation. If so, the discharge order also applies to such registrations; h. An order that Michael pay to Stoja $500 being the statutory amount pursuant to s. 56(4) of the PPSA; i. An order that Michael pay punitive damages to Stoja in the amount of $10,000; and j. An order that any and all amounts payable to Michael out of the estate shall be set off against amounts he owes to the estate.
[132] Stoja seeks costs of this application, and she has provided a Costs Outline. Melanie also seeks an award of costs, and she has provided a Costs Outline. At the hearing, Michael advised that he rejects the costs that are claimed against him in their entirety. He submitted that each party should bear their own costs.
[133] I will receive written submissions from any party seeking costs (not exceeding 5 pages, double spaced, excluding costs outlines) within 15 days. Michael may provide responding costs submissions in writing within 15 days thereafter (also not to exceed 5 pages double spaced, excluding any costs outline). If so advised, any party seeking costs may make written reply submissions (not exceeding 3 pages) within 10 days thereafter.
Cavanagh J.