Court File and Parties

COURT FILE NO.: CV-23-00694490-00ES DATE: 20241114 ONTARIO SUPERIOR COURT OF JUSTICE – ONTARIO (Estates List)

IN THE ESTATE OF SADOLLAH ZARRINMEHR, deceased

BETWEEN: MEHDI ZARRIN-MEHR Applicant

AND:

SORAYA SHOKRAI, personally and in her capacity as estate trustee of the Estate of Sadollah Zarrinmehr Respondent

BEFORE: Justice Sanfilippo

COUNSEL: Esmaeil Mehrabi and Alexandra Thomas, for the Applicant, Mehdi Zarrin-Mehr Jonathan Kulathungam and Nipuni Panamaldeniya, for the Respondent, Soraya Shokrai

HEARD: September 12, 2024

Endorsement

Overview

[1] Sadollah Zarrinmehr died on November 15, 2020 (the “Deceased”), survived by his wife of almost 40 years, Soraya Shokrai, and his two children: Mehdi Zarrin-Mehr (the “Applicant”), who is the Deceased’s son from a previous marriage; and Maral Zarrin-Mehr, who is the daughter of Soraya and the Deceased. Soraya seeks to propound a last will and testament of the Deceased dated September 30, 1999 (the “1999 Will”) in which she is appointed as the estate trustee of the estate of Sadollah Zarrinmehr (the “Estate”). Mehdi brought this Application to challenge the validity of the 1999 Will, alternatively, to seek directions regarding the interpretation of the 1999 Will, to assert trust claims against assets of the Estate and to contest Soraya’s administration of the Estate.

[2] In this Motion, Mehdi sought an Order for the appointment of a professional estate trustee during litigation for the Estate, nominating an experienced estates lawyer. For the reasons that follow, this Motion is dismissed.

[3] For brevity and clarity, I will refer to the parties by their first names, respectfully, in the same manner as was done by their lawyers in their written materials and oral submissions.

I. PROCEDURAL BACKGROUND

[4] The early stage of the administration of the Estate proceeded as an intestacy. On June 18, 2021, Soraya filed an application in Newmarket, probate file 2021-01272 (the “2021 Probate Application”), for a Certificate of Appointment of Estate Trustee without a Will (“CAET Without a Will”) of the Estate on the submission that no will had been located for the Deceased. Soraya, Mehdi and Maral were listed in the 2021 Probate Application as “Persons Entitled to Share in the Estate”, which was stated to have a value of $1,214,425.85. On November 16, 2021, a CAET without a Will was issued to Soraya.

[5] Soraya claims that after obtaining the CAET Without a Will, she located the 1999 Will, a last will and testament alleged to have been executed by the Deceased on September 30, 1999. On November 16, 2022, Soraya issued an application in Newmarket court file number CV-22-00003784-0000 (the “2022 Soraya Application”) for orders revoking the CAET Without a Will and issuing a Certificate of Appointment of Estate Trustee with a Will (“CAET With a Will”). Soraya set out to propound the 1999 Will.

[6] On February 9, 2023, Mehdi initiated this application against Soraya. In this Application, Mehdi contests the validity of the 1999 Will and challenges Soraya’s administration of the Estate.

[7] Each party has brought a motion:

(a) Soraya brought a motion under Rule 75.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a declaration that Mehdi has failed to meet the minimal evidentiary threshold to call into question the validity of the 1999 Will, an order that this Application be dismissed or, alternatively, an order directing that this Application be heard as a summary trial (“Soraya’s Rule 75.06 Motion”). This motion was dismissed, on the basis of reasons released March 27, 2024. [1]

(b) Mehdi brought a motion for three remedies: an order granting leave for the issuance of a certificate of pending litigation for registration against title to real properties owned by the Deceased or in which the Deceased held an interest (the “CPL Issue”); an order preserving assets held by the Estate (the “Preservation Issue”); and an order removing Soraya as estate trustee and appointing an estate trustee during litigation (the “ETDL Issue”) (collectively, “Mehdi’s Motion”).

[8] The Preservation Issue was resolved by the parties’ agreement to a Restated No Dealings Order. [2] Considering the parties’ agreement to preserve the Estate properties pursuant to the Restated No Dealings Order, and limitations on the time available to hear Mehdi’s Motion, the CPL Issue was adjourned to a date to be scheduled.

[9] In accordance with the orders made upon dismissal of Soraya’s Rule 75.06 Motion, Mehdi brought a Motion for production and non-party examination that was heard by Justice Gilmore on July 31, 2024 (“Mehdi’s Production and Examination Motion”). Justice Gilmore ordered documentary production from the Deceased’s former lawyers pertaining to the drafting, execution and circumstances surrounding the execution of the 1999 Will and examination.

II. THIS MOTION

[10] In this Motion, Mehdi seeks an Order appointing a professional ETDL to administer the Estate until adjudication of these proceedings and corollary Orders providing for the ETDL’s authority and powers.

III. APPLICABLE LEGAL PRINCIPLES

[11] I saw no disagreement between the parties on the legal principles regarding the appointment of an ETDL. Rule 75.06(3)(f) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that on a motion for directions, “the court may direct that an estate trustee be appointed during litigation, and file such security as the court directs”. Furthermore, s. 28 of the Estates Act, R.S.O. 1990, c. E.21, provides the court with authority to “appoint an administrator of the property of the deceased person”. As the son of the Deceased, and thereby a residuary beneficiary of the Estate in the event of an intestacy under s. 46(2) of the Succession Law Reform Act, R.S.O. 1990, c. S.26, Mehdi is a person with a financial interest in the Estate. [3] Mehdi is therefore a proper person to bring a motion for the appointment of an ETDL.

[12] The power to appoint an ETDL is an exercise of the Court’s broad and inherent jurisdiction to supervise the management of estates and its own process. [4] The Court’s inherent jurisdiction includes the appointment of a trustee to preserve and protect the assets of the estate if they are at risk during the litigation. [5] The purpose of an ETDL is to “ensure that the playing field is kept level” while the parties contest the administration and management of the estate, to ensure fairness to the parties, and to preserve the assets to the maximum benefit of the beneficiaries. [6]

[13] The decision of whether to appoint an ETDL is discretionary. [7] Courts have considered the following factors in the exercise of discretion regarding the appointment of an ETDL:

(a) Whether a trustee may be a witness in the litigation; (b) Potential for conflict of interest; (c) Conflict between the interests of the trustees and/or beneficiaries; (d) Hostility between the trustees and/or beneficiaries; (e) Lack of communication between the parties; and (f) Evidence of settlement discussions that exclude some of the parties. [8]

[14] The appointment of an ETDL as part of estate administration is not extraordinary. [9] The Court will favour the appointment of an ETDL unless the administration of the estate is particularly straightforward or simple. [10] It is in the interests of all beneficiaries that the disputes between the litigating parties do not impair the assets of the estate. [11]

IV. ANALYSIS

[15] Mehdi submitted that the appointment of an ETDL is warranted because Soraya has displayed hostility, lack of transparency and openness with Mehdi and has disregarded his interests as a beneficiary. Mehdi submitted that this is seen in the following ways: Soraya’s refusal to provide Mehdi with a copy of the 1999 Will; failure to provide proper notice to Mehdi regarding issues in administration of the Estate; by taking positions regarding the ownership of estate assets that is contrary to the Estate; and by acting contrary to the interests of Mehdi. Soraya denies each of these allegations. I have considered these positions and have determined that they do not support the appointment of an ETDL, as I will explain.

[16] First, Mehdi submitted that Soraya initially took the position that the Deceased died intestate and then propounded the 1999 Will in an Application for a CAET With a Will without notice to Mehdi. Soraya explained that she did not find the 1999 Will until the late Spring of 2022 and concedes that her Notice of Application for a CAET With a Will was incorrect in that it stated, erroneously, that the Deceased “left behind no children”. Soraya does not dispute that she did not provide Mehdi with the 1999 Will and the Amended Notice of Application in the 2022 Soraya Application until February 28, 2023. However, Soraya’s lawyer, Ms. Hollman, deposed she set upon correcting the error in the description of the beneficiaries and effecting service upon Mehdi within days of the error being detected. I accept Ms. Hollman’s evidence on this point and find that this oversight does not support the appointment of an ETDL.

[17] Second, Mehdi submitted that Soraya swore an Affidavit of Debts dated September 29, 2021 (“the Affidavit of Debts”), in which she stated that the Estate did not have an interest in any business or business assets and that this was incorrect because the Deceased had an interest in 2438890 Ontario Inc. (“24328890 Inc.”) at the time of his death. I do not accept this submission because Soraya showed that she disclosed the value of these shares in paragraph 5 of the Affidavit of Debts.

[18] Third, Mehdi submitted that Soraya intends to improperly use funds from the Estate to wind up 24328890 Inc. There is no evidence of any steps having been taken in this regard.

[19] Fourth, Mehdi submitted that Soraya has refused to produce documents from the lawyers who acted for her and the Deceased and that this has impaired an investigation of whether the Deceased had another Will or had made other estate plans. I accept Soraya’s submission that the production of these materials was subject to determination of Soraya’s Rule 75.06 Motion and by determination of Mehdi’s Production and Examination Motion. With the conclusion of these Motions, the documentary production will now be made.

[20] Fifth, Mehdi submitted that Soraya is taking a position contrary to the Estate regarding the ownership of a property known municipally as 29 Pleasant Avenue, North York, Ontario (the “Pleasant Avenue Property”). Soraya showed that the title to the Pleasant Avenue Property was declared by a consent Judgment issued by Justice Black on September 12, 2022, wherein Soraya and the Deceased were declared to be 50% owners of the Pleasant Avenue Property.

[21] Sixth, I do not accept Mehdi’s submission that an ETDL is necessary to protect the assets of the Estate. The properties that Mehdi has alleged to form part of the Estate are subject to the Restated No Dealings Order which, on the agreement of Soraya, shall remain in effect until the determination of the issues raised by this Application or further order of the Court. And, there is no evidence that Soraya has breached the Restated No Dealings Order from the time that it was first ordered by Justice Gilmore on March 23, 2023, and then restated in my order of March 27, 2024.

[22] This evidence showed that the differences between Mehdi and Soraya arose from an error in Soraya’s Application and a delay in service on Mehdi, and then disputes on the scope of production arising from Mehdi’s will challenge. These have been explained. Mehdi and Soraya are adverse in interest in the issue of the validity of the 1999 Will. However, Mehdi did not establish that there is a lack of communication between the parties that is detrimental to the administration of the Estate or that there is hostility between the parties that impacts the preservation of the assets for the benefit of the beneficiaries.

[23] Last but importantly, this is a simple, straightforward Estate that does not require the appointment of a professional ETDL. In the Affidavit of Debts, Soraya deposed that the Estate had a value on September 29, 2021, of $1,214,425.85, as follows:

The only assets of my late spouse are a condominium unit with a net value of $438,229.00, one hundred (100) shares in a corporation which shares have been valued at $354,120.00, and a credit due to the deceased by the Corporation in which he holds shares, in the amount of $422,076.00, for a total estate value of $1,214,425.85.

[24] Even if Mehdi establishes a severance of the joint tenancy of the properties said to have been transferred outside of the Estate, the Applicant contends that the Deceased’s interest would be limited to a share of each property.

[25] In my view, the value of this straightforward Estate would be detrimentally impacted by the cost of a professional ETDL. The costs of the motion practice to date and the ongoing costs of advancing this litigation will already reduce the amount that might be available to the beneficiaries in distribution without unnecessarily incurring the costs of a professional ETDL. The issues raised by this Application are not complex and should, in my view, be prepared by the parties for determination at the earliest opportunity.

[26] On these reasons, I dismiss Mehdi’s motion for the appointment of an ETDL.

V. COSTS

[27] The parties are encouraged to confer and agree on the issue of costs of this Motion. If the parties cannot agree on the issue of costs of this Motion, any party seeking costs may, at the Case Conference to be scheduled, speak to a process for the determination of the issue of costs.

VI. NEXT STEPS

[28] The CPL motion may now be scheduled for determination, if Mehdi considers that it is necessary and if the parties cannot agree on its resolution. Apart from the scheduling of the CPL motion, if necessary, I endorse Justice Gilmore’s order, rendered on October 30, 2024, that no further Motions are permitted in this Application without leave. The parties have unresolved issues on the reserved costs of their motion practice to date, and it is not in their interests that this be expanded by further motion practice. Rather, it is in the interests of all parties that this Application be prepared for prompt adjudication.

[29] While the Parties do not agree on the validity of the 1999 Will, or on issues in estate administration, they share a common objective of an efficient, proportionate process for the adjudication of the issues raised by this Application on their merits. I direct that the lawyers for the parties attend at a Case Conference on December 11, 2024 at 9:15 am, to proceed by video conference for 30 minutes, before me schedule permitting, to establish a timetable for the remaining steps in this Application and a hearing date for its determination.

VII. DISPOSITION

[30] On the basis of these reasons, I order:

(a) The motion advanced by the Applicant, Mehdi Zarrin-Mehr, for an Order appointing an estate trustee during litigation to administer the estate of Sadollah Zarrinmehr, is dismissed.

(b) On the consent of the parties, the Restated No Dealings Order, as ordered on March 23, 2024, shall remain in effect until the determination of the issues raised by this Application, subject to further Court order.

(c) The costs of this motion are reserved, subject to resolution by agreement between the parties, to be determined in accordance with a process to be established at a case conference.

(d) The lawyers for the parties shall attend at a case conference to be conducted on December 11, 2024 at 9:15 am, to be conducted by video conference for 30 minutes, before me schedule permitting, to speak to the following:

(i) The scheduling of the Applicant’s motion for an order granting leave for the issuance of a Certificate of Pending Litigation for registration against title to real properties owned by the Deceased or in which the Deceased held an interest, if necessary.

(ii) A process for the determination of the reserved issues of costs.

(iii) A timetable for the completion of the steps necessary for the adjudication of all issues raised by this Application and the scheduling of an Application hearing date.

(e) The parties may not bring any further motion in this Application without leave of the Court.

[31] This endorsement and the orders and directions contained in it shall have the immediate effect of a court order without the necessity of the issuance and entry of a formal order. Nonetheless, any party may take out a formal order by filing a draft order on Case Center, together with the approval as to form and content of all parties and may then speak to the draft Order at the pending case conference.

Justice Sanfilippo

Date: November 14, 2024

[1] Zarrin-Mehr v. Shokrai, 2024 ONSC 1754. [2] Ibid, at paras. 19-20 and 55(c). [3] Neuberger Estate v. York, 2016 ONCA 191, 129 O.R. (3d) 721, at para. 74. [4] Mayer v. Rubin, 2017 ONSC 3498, 30 E.T.R. (4th) 239, at paras. 26-27 and 31. [5] Baran v. Cranston, 2019 ONSC 3127 (“Baran SCJ”), at para. 25. [6] Mayer, at para. 32, citing Dempster v. Dempster Estate, at para. 24; Baran SCJ, at para. 25. Section 28 of the Estates Act prohibits the ETDL from distributing the residue of the Estate. [7] Baran v. Cranston, 2020 ONSC 589 (“Baran Div. Ct.”), at para. 24; Shapiro v. Shapiro, 2021 ONSC 4501, at para. 30. [8] Baran Div. Ct., at para. 24; Cabrera v. Coughlan, 2022 ONSC 1087, at para. 17; and Shapiro, at para. 28. [9] McColl et al. v. McColl et al., 2013 ONSC 5816, 93 E.T.R. (3d) 116; Mayer, at paras. 35-36. [10] McColl, at para. 26; Cabrera, at para. 16; and Baran SCJ, at para. 25. [11] Mayer, at para. 36.