CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, 2025 ONSC 3382

COURT FILE NO.: CV-24-00005081-0000
DATE: 2025-06-06
ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:
CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust
Applicant

• and -
  John Szewczyk, personally and Edward Szewczyk, as Trustee of the Szewczyk Grandchildren’s Trust
  Respondents

Applicant Counsel: Daniel J. Dochylo
Respondent Counsel:

• Martin Zatovkanuk (for John Szewczyk)
• Natalia R. Angelini (for Edward Szewczyk, trustee of the Szewczyk Grandchildren’s Trust)

Heard: In Writing

REASONS FOR JUDGMENT
Sean F. LeMay

Introduction

[1] Jennie Szewczyk had three sons, Edward, John and Robert Szewczyk. Given that all of the parties share a last name, I will refer to them all by their first names. No disrespect is intended by this.

[2] Jennie passed away on October 6, 2018, and left a Primary Will and a Secondary Will. The wills contained two trusts, the John Szewczyk Testamentary Trust (“John’s Trust”) and the Szewczyk Grandchildren’s Trust (“the Grandchildren’s Trust”). CIBC Trust (“CIBC”) is the Trustee of John’s Trust and Edward is the Trustee of the Grandchildren’s Trust. The residue of Jennie’s estate was left equally to Edward and Robert through a complex trust structure.

[3] Under the terms of John’s Trust, the Trustee has purchased him a home for his use and the Trustee pays the expenses for the maintenance and upkeep of the house out of the trust funds. John is also entitled to an annuity that is paid to him, net of tax, monthly. The capital in John’s Trust can only be used in emergencies and only at the discretion of the Trustee. The residue of John’s Trust flows to the Grandchildren’s Trust on John’s death or, if that trust no longer exists, directly to the Grandchildren.

[4] There were disputes about the funding of John’s Trust. Those were eventually resolved between the parties by way of minutes of settlement. The issue that is before me is whether the annuity that John’s Trust pays to John is increased by $5,000 every five years or is indexed to inflation annually and increased every five years. CIBC had originally been indexing the annuity annually and increasing it by $5,000 every five years. They now take the position that this was done in error. On behalf of the Grandchildren’s Trust, Edward takes the position that the indexing by CIBC has always been in error and that the overpayments need to be refunded. John takes the position that the annual indexing combined with the five-year increases are properly done and should not be reversed. In the alternate, John argues that any monies that have been overpaid should not be repaid.

[5] The value of that dispute to date is approximately $20,000. It will grow over time. However, after discussion with me, the parties determined that they would attempt to resolve this matter by way of an Agreed Statement of Facts (“ASF”) and written submissions. They have done so.

[6] I have now reviewed the ASF and the written submissions, and have determined that the interpretation of the will as offered by Edward and CIBC is correct. In terms of the repayment, I have concluded that John’s Trust is precluded from collecting the repayment prior to January 1, 2024. However, the amounts being paid should be adjusted downwards effective January 1, 2024 and any excess amounts should be repaid by postponing the date of the next $5,000 increase.

Background

a) The Parties and the Relationship

[7] As I have indicated, Jennie had three children, John, born in 1964, Robert, born in 1968 and Edward, born in 1970. Robert has three adult children. They are the beneficiaries of the Grandchildren’s Trust.

[8] John left home when he was approximately fifteen years old. He apparently did not have much relationship with Jennie until about 2003. There is a dispute between the parties as to the extent of the relationship between John and Jennie after 2003. I will return to that issue in my discussion of the interpretation of the will, but I note that Jennie’s Letter of Wishes makes it clear that she did not want John told of her funeral or service because she was concerned that “he will cause a scene and create a stressful environment for my friends and other family members.”

[9] John has a number of medical conditions that have resulted in him being disabled from working. Those issues include chronic nerve pain and associated stress from a surgery in 2014. John has been approved for the Disability Tax Credit and had been approved for Ontario Disability Support Program (“ODSP”) benefits until he began receiving income from John’s Trust. John is also in receipt of Canada Pension Plan Disability benefits.

[10] John has no relationship with Robert or Edward and has not had a relationship with either of them for a long time. Other than knowing that John left home at age 15, I do not know how this lack of a relationship came to be.

[11] Jennie and her husband, who predeceased her, accumulated more than $10 million in assets during Jennie’s lifetime. These were accumulated through a privately held family business. I have not been made aware as to what the business (or businesses) were. However, it is clear from Jennie’s wills that her intention was for her sons Robert and Edward to run the business. The provisions of the wills are complicated and appear to be designed to ensure that the assets pass from Jennie to Robert and Edward in the most tax-efficient way possible. To dispose of the issue before me, it is not necessary to review all of the provisions of either of Jennie’s wills in detail. However, an understanding of both the structure and some of the provisions of the will are necessary and I turn to those now.

b) The Wills

[12] The documents that I have are the Primary Will, the Secondary Will and Jennie’s Letter of Wishes. These documents were all signed on August 29, 2018. Jennie died on October 6, 2018.

[13] The wills left almost all of the assets to trusts. Both Edward and Robert had a trust established for them that contained significant assets that I understand were illiquid shares of privately held family companies. The trust structure for Edward’s and Robert’s trust, which I do not need to explore in detail in this decision, appears to have been adopted to ensure that the assets were transferred in the most tax-efficient way possible. The only relevant point about that trust structure is that there was an advisory committee established under the terms of the Secondary Will to administer certain affairs connected to the company. Christine Perry, the solicitor who drafted the Primary and Secondary Wills, was a member of the advisory committee.

[14] There were two testamentary trusts that were established for beneficiaries other than Edward and Robert. One was John’s Trust and the other was the Grandchildren’s Trust. CIBC was named as the Trustee for John’s Trust and administered that trust. The Grandchildren’s Trust was set up for the grandchildren who are, at the moment, Robert’s three children. Their money is held in trust until each of them turn thirty.

[15] The relevant terms of John’s Trust were as follows:

• John’s Trust was to be funded in the amount of $2 million.
• John was to be paid an annuity, after taxes, of $35,000 per year.
• The annuity was to be indexed. I will return to how it was to be indexed in my analysis of the issues, below.
• The Trustee could purchase a house for John, up to 35% of the value of the Trust assets.
• If a house was purchased, the costs of maintenance and upkeep of the house were to be borne by John’s Trust.

[16] Once John passes away, the remainder of the monies in his trust flow through to either the Grandchildren’s Trust or, if that trust no longer exists, the Grandchildren in equal portions.

[17] Starting in 2019, CIBC determined that the amounts owing to John should be indexed on an annual basis. CIBC also determined that John was entitled to an increase in his annuity of $5,000.00 every five years. The relevant provisions from both the Primary and Secondary Wills read as follows:

18 (c) Beginning in the year of my death, the Trustees shall commence making annual payments to my son, JOHN, in the net (i.e. after tax) amount of thirty-five thousand dollars ($35,000), multiplied by the Indexing Factor and payable in such monthly or other periodic payments as my Trustees in their absolute discretion deem advisable (hereinafter the "Annuity Payment"). Such payments shall, subject only to Subparagraph 18(d) hereto, be made until the date of JOHN's death.

18 (d) On the date which is five (5) years after the date of my death the Annuity Payment (as calculated as of the date of my death) shall be increased by the net (i.e. after tax) amount of five thousand dollars ($5,000). The Annuity Payment shall be further increased by the amount of five thousand dollars ($5,000) every five (5) years after that. For purposes of clarity, if the Annuity Payment is $35,000 in the year of my death, it shall be increased to $40,000 in year 5, $45,000 in year 10, $50,000 in year 15, and so forth.

42. Indexing Factor. For any given date (hereinafter in this Paragraph 42 of this Primary Will referred to as the "Relevant Date") the "Indexing Factor" shall mean the number of dollars (expressed to the nearest one-tenth of one cent) which as at the Relevant Date shall have the same purchasing power in Canada as the sum of ONE DOLLAR ($1.00) had on January 1, 2018, provided that in no event shall the Indexing Factor be determined to be less than ONE DOLLAR ($1.00); and in so determining the Indexing Factor my Trustees shall rely, whenever possible, upon the applicable Consumer Price Index (All Items) or upon any successor index thereto, adjusted for intervening modifications; and such determination of the Indexing Factor by my Trustees shall be conclusive and binding on all the beneficiaries of my Primary Estate for all purposes of this Will.

[18] The paragraph numbers set out above are from the Primary Will. Paragraph 18(c) in the Primary Will is the same as paragraph 21(c) in the Secondary Will. Similarly, paragraph 18(d) in the Primary Will is the same as paragraph 21(d) in the Secondary Will. Finally, paragraph 42 from the Primary Will is the same as paragraph 43 from the Secondary Will.

[19] There are a series of communications between various officials at CIBC and John that make it clear that CIBC was interpreting these clauses as providing John with both an annual adjustment for inflation and an adjustment once every five years. It is common ground that CIBC did not consult with either Robert or Edward about the interpretation of these provisions before providing John with both types of increases to his annuity. It is the interpretation of these provisions that are in dispute on this application.

[20] John had been in receipt of ODSP benefits when Jennie passed away. However, his entitlement to ODSP benefits ended shortly after he started receiving payments from his inheritance as he was receiving too much income fromJohn’s Trust to be entitled to ODSP benefits. John’s Notice of Assessment for 2021 listed Line 150 income of $14,639. Given that the payments from the trust were net of taxes, and not taxed in John’s hands, I am assuming that this is the CPP Disability Income that John receives. John states that this income has been reduced by “over half”, but there are no additional documents in respect of John’s income before me.

[21] In any event, starting in 2021, John began to raise issues with CIBC about the fact that his trust was not fully funded. The funding of the John Trust ultimately became the subject of litigation.

c) The Litigation

[22] There was some back-and-forth between various parties about the funding of John’s Trust. Ultimately, an application was brought by John to have the trust fully funded. There were a number of Court appearances and orders that were made during the course of that application.

[23] The parties appeared before me on February 27, 2024 to argue a motion on the funding issues. At that time, they advised me that they believed that they had fully resolved the application. The parties were advised that they could submit the final Order to me for signature and, if there were continuing issues, I retained jurisdiction to address them. The issues in respect of the funding of the trust were ultimately resolved by a consent Order that I signed on September 18, 2024.

[24] The resolution of the funding issues resulted in the resolution of all of the matters in respect of the creation of John’s Trust. There were specific provisions in that Order that prevented John from bringing any further applications in respect of Jennie’s Estate, and prevented all of the other parties (Robert, Edward and the companies) from bringing any claims against John. The one exception was in respect of the issue of indexing. The scope of that exception is a live issue in this application.

[25] As a result, CIBC began a separate proceeding to obtain the Court’s directions over what should be done in respect of the administration of John’s Trust. The specific issue was how the Primary and Secondary Wills should be read in respect of the indexing factors and, if an error had been made, how (and to what extent) it should be unwound. That application was placed before me on consent of the parties.

[26] The parties prepared an Agreed Statement of Facts, and provided detailed factums and reply factums.

[27] I should also note that there was other litigation in respect of Jennie’s affairs, but that litigation has, I understand, been settled.

The Positions of the Parties

[28] Edward, on behalf of the Grandchildren’s Trust, takes the position that the provisions of the will are unambiguous. They clearly support the interpretation that the indexing of the $35,000 is to take place once, based on the time that has passed between January 1, 2018, and the date of Jennie’s death. Subsequent increases are limited to the $5,000 set out in paragraph 18(d) of the Primary Will and are to be implemented every five years. In the alternative, if I find that the will is ambiguous, I can consider the surrounding circumstances to infer that the interpretation of the wills proposed by Edward is to be preferred. Edward also takes the position that John should pay the overpayments back to the John Trust over time.

[29] CIBC states that it had originally formed the view that the payments should be indexed annually and increased by $5,000 every five years. However, CIBC advises that it is now of the view that the annual indexing is not contemplated by the language of the provisions. CIBC also advises that, if I accept the interpretation advanced by the Grandchildren’s Trust, I should also accept that this was a good faith error that was made by CIBC on the advice of the Estate solicitor. CIBC also suggests that, if there is an overpayment, John has been enriched and should be required to repay that money to the John Trust over time.

[30] John takes the position that the terms of the will are unambiguous and that they clearly support the conclusion that he is entitled to both indexing on an annual basis and to the five-year adjustments as set out in paragraph 18(d) of the Primary Will. He argues that this interpretation gives effect to Jennie’s wishes and that it ensures that his annuity will not lose its purchasing power. In the alternative, John argues that if I find the language ambiguous, I should still conclude based on all of the circumstances that he is entitled to annual indexing and the five-year adjustments as set out in paragraph 18(d) of the Primary Will. Finally, John argues that this interpretation exercise can only be applied going forward, as John asserts that my September 18, 2024, order precludes consideration of previous years.

[31] Both CIBC and Edward oppose John’s interpretation of my September, 2024 Order. They argue that the entire calculation can be revisited and that I should do so. CIBC suggests that the repayment can be recovered by postponing the 2028 adjustment to 2032.

Issues

[32] The following issues must be resolved:

a) Should the annuity payments to John be indexed annually and increased by $5,000 every five years?
b) If the answer to question (a) is no, should John be required to reimburse the John Trust for any overpayments?

[33] I will deal with each issue in turn.

Issue #1 – Interpretation of the Provisions

[34] The relevant provisions of the Primary and Secondary Wills are set out at paragraph 17, above.

[35] In my view, the interpretation of the provisions proposed by the Grandchildren’s Trust is the correct one, based both on the plain meaning of the words and on the evidence of the surrounding circumstances. I explain the reasons for my conclusion by first setting out the applicable law in respect of the interpretation of a will. Then I will review the language of the will and the surrounding circumstances.

The Legal Framework

[36] A will is not the same as a commercial contract. Its interpretation is governed by some specific principles. The Court begins by considering the ordinary meaning of the words in the will. As set out in Noik v. Noik Estate, [2003] O.J. No. 6235, (2003) 11 E.T.R. (3d) 175 (at para. 4):

One of the first governing principles that apply when constructing a will is to read the language used by the testator, and from this determine his or her intention. The language that is being assessed must be considered in the context of the will as a whole. The purpose is to determine the testator's actual intent and not that which might be objectively viewed.

[37] The Courts have noted that, given that the interpretation of a will involves the subjective intention of the testator, reference to past cases will be of limited use: Re Coughlin, (1982), 36 O.R. (2d) 446. The Courts have also held that testators are presumed to be rational and not to intend arbitrary, unjust or irrational consequences from their testamentary dispositions. Doyle v. Doyle Estate, 1995 CarswellOnt 826, (1995) 9 E.T.R. (2d) 162.

[38] Ultimately, the basic approach to interpreting a will has been described in Burke (Re), [1960] 1 O.R. 26 where the Court stated (at p. 30):

Each Judge must endeavour to place himself in the position of the testator at the time when the will was made. He should concentrate his thoughts on the circumstances when then existed and which might reasonably be expected to influence the testator in the disposition of his property. He must give due weight to those circumstances in so far as they bear on the intention of the testator. He should then study the whole contents of the will and, after full consideration of all the provisions and language used therein, try to find what intention was in the mind of the testator. When an opinion has been formed as to that intention, the Court should strive to give effect to it and should do so unless there is some rule or principle of law that prohibits it from doing so.

[39] This approach was adopted in Ross v. Canada Trust Company, 2021 ONCA 161 at para 37. It requires me to consider the subjective intention of Jennie when she wrote the will in order to determine how it should be read.

[40] Given that the Grandchildren’s Trust and CIBC have argued that one interpretation is clear and unambiguous and John has argued that the opposite interpretation is clear and unambiguous, I am going to review both the plain meaning of the words and the surrounding circumstances. In doing so, I will explain why I have concluded that both sets of considerations result in the same interpretation of the provisions.

Plain Meaning

[41] In my view, these provisions are not ambiguous. The indexing according to CPI is set out in paragraph 21(c) of the will. It requires the payments to be made beginning in the year of Jennie’s death in the sum of $35,000 multiplied by the indexing factor.

[42] The indexing factor is specifically defined in paragraph 42 of the Primary Will as being calculated “for any given date”, which suggests that it is a calculation that is designed to be used for an instant in time. The term “for any given date” is then referred to in the rest of the paragraph as “the Relevant Date” (emphasis added). The use of the singular “the” strongly suggests that the indexing factor is to be used once. When paragraph 21(c) is considered along with paragraph 21(d), the relevant date is Jennie’s death, as paragraph 21(d) says that the annuity is to be calculated as of the date of Jennie’s death. This is a one-time pre-commencement indexing of the $35,000.

[43] In addition, paragraph 21(d) also suggests that the increases of $5,000 are the only increases that are envisioned once John begins to receive the annuity. The language in this paragraph speaks to a straight-line $5,000 increase every five years. This is the only section that speaks to an increase in the annuity, and the increase is specifically applied to the annuity “as of the date of Jennie’s death”.

[44] The indexing paragraph (paragraph 42) speaks to an amount that the annuity is to be adjusted to as of the date of Jennie’s death. It is not mentioned in paragraph 18(d) at all and is not accompanied by the word “annual”, or any similar word, anywhere. As a result, I am of the view that the indexing in paragraph 42 was to be used once in respect of John’s Trust, to calculate the original value of the annuity.

[45] My view that the indexing factor in paragraph 42 was to be used to calculate the original amounts of various payments rather than as an annual indexing factor is supported by the use of the same term, indexing factor, in the provisions setting out the funding for the Grandchildren’s Trust. The Grandchildren’s Trust was to be funded in the amount of $1,200,000 multiplied by the Indexing Factor. I draw two conclusions from this fact. First, that Jennie wanted to ensure the amounts that she specified for John and her grandchildren did not get devalued by inflation if she lived for several years after she wrote these wills. Second, the Indexing Factor was to be applied to make a one-time adjustment to the starting amount.

[46] From the structure of this language, two other conclusions can be drawn. First, it would be illogical to expect to find two different provisions (18(c) and 18(d)) applying an increase in an annuity for the same time period in the same will. It is more logical to read the two provisions as covering different time periods and addressing different issues. The indexing factor protects the value of the annuity between January 1, 2018 and the day that Jennie died, while the five-year adjustments provide inflation protection going forward.

[47] Second, there is no indication in any of the provisions in the will that the Indexing Factor is intended to be applied annually. Indeed, as counsel for CIBC points out, the words “every year”, “adjusted annually” or “indexed annually” are not used in paragraphs 18(c) or (d) of the Primary Will, or the corresponding paragraphs of the Secondary Will.

[48] One of the significant problems with John’s argument can be found in paragraph 56 of his factum, where he states:

56. The Will’s Language is Unambiguous: The Secondary Will explicitly states that the annuity payments “shall be increased” by $5,000 every five years. At no time does the Will state that this increase is to replace the annual Indexing, or that the Indexing is to cease.

[49] There are a number of other places in his argument where John’s counsel refers to the “annual indexing”. The problem with that argument is that, as noted above, the will does not use the term “annual indexing” anywhere. Therefore, contrary to John’s argument, it was not necessary for the testator to have written a provision bring an end to any annual indexing. It was a one-time event, and not an annual event.

[50] This brings me to a related argument advanced by John. He argues that “CPI Indexing is Long-Term by Design”. As I understand this argument, he suggests that the fact that the CPI is calculated year after year supports the fact that it was intended, in this case, to be used on a long-term basis.

[51] There are two problems with this argument. First, the CPI adjustment was intended to be used to ensure that there was no decrease in the purchasing power of the annuity that Jennie left for John between the time she made the will and the time that she died. While this period was, in actuality, quite short, it could have been years. Second, the fact that someone uses CPI, a value that is calculated repeatedly over a long term, does not mean that they intend to use the CPI repeatedly.

[52] Finally, as part of his reply factum, John’s counsel provided an analysis of the language of Jennie’s will that was performed by ChatGPT. He suggests that, “while not determinative, the fact that an advanced language-processing tool arrived at the same plain meaning demonstrates that the wording is clear”. In other words, the fact that ChatGPT supports John’s interpretation is a reason for the Court to adopt John’s interpretation.

[53] There are three serious problems with this approach:

a) This argument was first advanced in counsel’s reply factum, which meant that neither of the other parties had the opportunity to comment on it. It is improper reply.
b) There is no evidence as to what information ChatGPT was given about the contents of the will or the principles of interpretation that the Court would adopt beyond being asked about the three provisions.
c) There is no evidence as to ChatGPT’s ability to interpret the words of a testator. This is especially true because the interpretation of a will is a subjective exercise.

[54] For these reasons, I reject this argument. Going forward, I would caution Mr. Zatovkanuk against providing the Court with ChatGPT interpretations of documents as part of his reply arguments.

[55] When I step back and look at the language, I am of the view that it is not ambiguous and that the interpretation proposed by CIBC and the Grandchildren’s Trust is correct. I am fortified in that conclusion by the surrounding circumstances, to which I now turn.

Surrounding Circumstances

[56] Generally, it is only indirect circumstances that are considered in determining the interpretation of a will. The reason for that rule is to preserve the role of the written will as the primary evidence of the testator’s intention. The rule avoids displacing the written will with an “oral will” cobbled together from various declarations of the testator’s intent. Kaptyn Estate (Re), 2010 ONSC 4293, (2010) 102 O.R. (3d) 1 at para. 36.

[57] The exceptions to the inadmissibility of this direct evidence exist if there is an “equivocation” in the will, either when the will is read as a whole or when it is construed in light of the surrounding circumstances. As a result, I will begin by considering the evidence of surrounding circumstances. As will be seen, there is no “equivocation” in either the Primary or Secondary Will.

[58] There is some discussion in the case-law as to whether, if the terms of the will are unambiguous, the Court needs to have reference to the surrounding circumstances. I have determined that I will reference the surrounding circumstances because, in my view, they fortify the conclusion I have reached.

[59] Feeney’s Canadian Law of Wills (4th Edition, Lexis Nexis) sets out a number of factors (at para 10.57) that the Courts can consider as surrounding circumstances. Those factors include the character and occupation of the testator, the amount, extent and condition of the testator’s property and the relationship to the testator of their immediate family and other relatives.

[60] In my view, there are two sources for the surrounding circumstances that I should consider in this case. First, there is Jennie’s Letter of Wishes. While this is a “precatory” document, and not legally binding on the Trustees, it is still something that explains both what Jennie would like the Trustees to do and why she would like them to do it. Rudaczyk Estate v. Ukrainian Evangelical Baptist Assn. of Eastern Canada, (1989) 69 O.R. (2d) 613. The parties also agreed that I should review this evidence. Indeed, the parties all used Jennie’s Letter of Wishes to support their arguments.

[61] Second, and more generally, the evidence of the family businesses and the split in the family is also relevant. Much of that evidence comes from the letter of wishes, but there is also other evidence in the Agreed Statement of Facts.

[62] I start with the letter of wishes. In paragraph 1, Jennie states:

1. It is my belief that my children should be self-sufficient in adult life, responsible for their own finances among other things. I have tried to give them a good start and adequate preparation for life in terms of education, values, and work ethic. I hope that their lives will be productive, responsible and satisfying in terms of their work and relationships and society as a whole.

[63] She goes on to address issues in respect of John by noting that she was intending to leave him less in the way of assets because Jennie viewed Robert and Edward as being best-suited to run the family business (and receive the rewards therefrom), that John’s involvement in the family business would endanger its success and that John voluntarily left home at age 15 (in 1979) to live with relatives, and Jennie only re-connected with him in 2004. Jennie also specifically stated that she did not want John to either know about her funeral or to access her personal residence after her death. She specifically asked her Trustees to ensure that he did not do so.

[64] Jennie then describes the testamentary trust that she is leaving for John in the following words:

8. I included a testamentary trust for John as I believe that he would dissipate the assets were they to be left to him outright (as he currently suffers from a number of health issues). I have concerns about his long term ability to adequately provide for himself, and would like to ensure that the amount left to him is used to provide him with an annual income which he can use to supplement his lifestyle. The precise terms of this annuity are set out in the Wills.

[65] In my view, this is a key passage. It illustrates that Jennie intended to provide John with an income to “supplement” his lifestyle. This is not a gift that is to be viewed as John’s entire income. In my view this is evidence, when taken together, that suggests that Jennie was prepared to assist John by providing him with a residence and some income, but that she was not prepared to completely fund his lifestyle. Her expectation was that John would be self-sufficient.

[66] John’s counsel argues that, in paragraph 8, Jennie refers to the $35,000 as being both indexed and subject to the increases every five years. This argument does not assist John, as Jennie’s statements are completely consistent with the interpretation I have set out above at paragraphs 42 and following. Indeed, if Jennie was going to have John’s annuity indexed annually, one would have expected her to say so, either in her will or in her Letter of Wishes. She did not do so.

[67] John’s counsel focuses on Jennie’s intent to “prioritize John’s financial security over residual beneficiaries’ interests”. Jennie was focused on ensuring that John had some financial security and she was clearly worried about his ability to be self-sufficient. However, that has already been achieved because he has a residence with all expenses paid and an annuity that, after tax, started above $35,000 and is now worth more than $40,000. Jennie’s desire to ensure that John has some financial security must be measured against Jennie’s desire that John be financially self-sufficient and the fact that John now has a considerable measure of financial security.

[68] Finally, in his submissions, John’s counsel argued that it was only through both indexing and through the periodic increases of $5,000 that John’s annuity could be protected from inflation. Counsel attached a table to his factum that was designed to demonstrate this concern.

[69] There are three problems with this submission. First, as I have noted above, Jennie did not intend to provide completely for John. Instead, this annuity was something to “supplement” his lifestyle. Second, counsel has not provided a good explanation as to the rate of inflation that was chosen, as it is not historically supported and appears quite high. Finally, I am not at all sure that the calculations are done correctly. In that respect, I note that there is to be an increase of $5,000 in each year and it does not appear to be added in after each five years. Smaller amounts appear to be added in. This argument and these calculations do not assist John in his position.

[70] This brings me to the information that was received from Christine Perry, who was both the drafting solicitor and the solicitor who applied for probate. In 2019, Ms. Perry stated that the annuity paid by John’s Trust was to be indexed in the manner now suggested by John. In 2024, she provided evidence that Jennie’s intent was to have the annuity calculated in accordance with the approach currently proposed by the Grandchildren’s Trust and CIBC.

[71] I will not give any consideration to Ms. Perry’s evidence for three reasons. First, if accepted, it is direct evidence of the testator’s oral intent. Given that I have concluded that there is no “equivocation” in this will, this type of evidence is inadmissible. Second, contrary to Ms. Perry’s assertion that there is no inconsistency between her 2019 information and what she is providing today, CIBC certainly determined that the annuity should be calculated differently than is now proposed based on Ms. Perry’s 2019 information. Finally, Ms. Perry was involved in the Administration Committee that assisted both Edward and Robert in the management of the businesses. As a result, she is wearing too many hats in this case for me to consider her evidence as impartial even if it is, in fact, impartial.

[72] To return to the key point, Jennie did not intend for the annuity to pay for all of John’s expenses. Instead, she intended it to “supplement” his lifestyle. Further, the Trust already takes care of all of John’s shelter expenses, which leaves him with an after-tax income of $40,000 at this point plus his CPP Disability payments to cover his other expenses.

[73] For these reasons, the surrounding circumstances also support the position taken by CIBC and the John Trust.

Conclusion on Interpretation

[74] Having reviewed both the surrounding circumstances and the plain meaning of the language, I arrived at the same conclusion. The interpretation proposed by CIBC and the Grandchildren’s Trust is the correct one and should be adopted. This conclusion requires me to consider Issue #2, which I turn to now.

Issue #2 – Repayment of Previous Sums

[75] Having found that the interpretation of the indexing provisions of the Primary and Secondary Wills favours the position taken by CIBC and the Grandchildren’s Trust, the question then becomes what remedy should be ordered.

[76] I start with the proposition that overpayments made by a trustee generally must be refunded by the recipient. As noted in Chapman and Kay Ltd v. Harold Kay et. al., 1993 CarswellOnt 559 (Ont. Gen. Div.):

48 Halsbury's Laws of England, 4th ed. deals with overpayments by a trustee in para. 975; it reads:

975. Overpayment. Where a beneficiary receives from the trustee more than he is entitled to, whether in respect of capital or income, he is liable to refund to the trust estate the excess which ought not to have been paid to him. So far as it is capable of being identified or disentangled, money or property wrongly paid or transferred to a beneficiary or the money or property into which it has been converted may be followed and recovered, unless it has come into the hands of a purchaser for valuable consideration without notice of the trust. Where possible, the court corrects errors of account between a trustee and beneficiary, and, if the administration is out of court, directs the appropriate adjustment.

In administering the estate the court will cause the amount wrongly paid to the beneficiary in respect of one interest to be deducted from any other shares in the estate to which he is entitled. A trustee who overpays a beneficiary can thus adjust accounts by retaining the overpayments out of other interests of the beneficiary, such as future income as it arises. In administering a trust estate, the court will require that any amount wrongly paid to a beneficiary in respect of one interest be deducted from any other shares in the estate to which the beneficiary is entitled: In re Ainsworth. Finch v. Smith, [1915] 2 Ch. 96; In re Musgrave. Machell v. Parry, [1916] 2 Ch. 417. In the Ainsworth and Musgrave cases the overpayment was the result of mistake.

[77] As a general proposition, therefore, the excess monies paid out to John by John’s Trust should be refunded by John.

[78] However, John argues that the settlement between the parties in respect of funding John’s Trust, which was encapsulated in my September 19, 2024 Order, precludes any litigation prior to January 1, 2024. That Order reads:

5. THIS COURT ORDERS that, given John's Trust has been funded as referred to above, John Szewezyk shall be and the same shall have no further interest in the Estate and is hereby barred from bringing any further claims against the Estate, Estate Trustee(s) and Executor(s) and Trustee(s) of the Estate, CIBC Trust Corporation, Robert Szewczyk, Edward Szewczyk, Autumn Leaf Investments ULC, Jen-Ron Investments ULC, Jenvale Investments ULC, 1105455 B.C. ULC, Buy-More Real Estate and 2552402 Ontario Ltd. (collectively, the "Other Parties"), and the Other Parties shall be and the same are hereby barred from bringing any claims against John Szewezyk personally, John's Trust, in respect of matters raised or which could have been raised in the within proceedings and with respect to any estate related matters. The foregoing does not apply to the continued administration of John's Trust (since inception), as between the Trustee of John's Trust and the beneficiary(ies) thereof (including the issue of indexing of payments to John Szewczyk from January 2024 to the date of death of John Szewczyk).

[79] The Grandchildren’s Trust and CIBC argue that this provision leaves it open to them to litigate over (and recover) any overpayments that have been made to John since Jennie’s demise. I disagree.

[80] The wording of the second part of the Order, and the specific date of January 1, 2024, suggests that the parties had intended to limit any repayment obligations to that date or subsequently. The plain words of the Order support that conclusion, as it specifically limits all actions between these parties, and creates a specific carve-out to permit the continued litigation of the “indexing of payments from January 2024 to the date of death of John Szewczyk”. This language makes it clear that the payments prior to January of 2024 are not to be revisited, and I decline to revisit them.

[81] However, that still leaves the vexing question of what is to be done with John’s payments going forward. It is arguable that the phrase “indexing of payments” in the Order of September 19, 2024, precludes the Court from revisiting any of the indexing that has been done for all time.

[82] The problem with that argument is that the error is a continuing one. The calculation made in 2019 remains wrong. As a result, the Court has the jurisdiction to correct the calculation from January 1, 2024, forward.

[83] Therefore, John’s annuity is to be reduced to the amount properly calculated in accordance with these reasons effective January 1, 2024. The amounts that have been overpaid since that date will be collected. However, I am mindful of John’s financial circumstances. As a result, these amounts will be collected by postponing the date of the next increase for the appropriate amount of time. I leave that to the parties to calculate, but I retain the jurisdiction to make the calculations if the parties cannot agree.

[84] Finally, it is arguable that there could be interest owing on the amounts overpaid since January of 2024. That amount is de minimis given both the value of the estate and the amount of time that has been spent on litigating these issues. It will also be difficult to calculate, given that the amounts will be paid back in the future and over time. I note that the award of interest in any action is discretionary: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 130. For the reasons I expressed earlier in this paragraph, I exercise my discretion and decline to order the payment of any interest on the overpayments.

Conclusion and Costs

[85] For the foregoing reasons, I am ordering as follows:

a) Paragraphs 18(c) and (d) in the Primary Will (and paragraphs 21(c) and (d) in the Secondary Will) are to be interpreted to apply the Indexing factor between January 1, 2018, and the date of Jennie’s death. Thereafter, increases in the annuity amounts are to be limited to the $5,000 increases set out in paragraph 21(d).

b) The provisions of my September 19, 2024, Order preclude the collection of any overpayments to John by John’s Trust prior to January 1, 2024.

c) Effective July 1, 2025, the payments to John by John’s Trust are to be reduced to the proper amount as calculated by the proper application of paragraph (a).

d) The overpayments that have been made between January 1, 2024, and July 1, 2025, are to be recovered by postponing the next increase of $5,000.00 to an appropriate date. There is to be no interest on these overpayments.

e) The parties are to calculate both the amount of overpayment and the date when the next increase is to come into effect within thirty (30) days of the release of these reasons. In the event that the parties are unable to agree on these calculations, I retain jurisdiction to address them.

[86] This brings me to the subject of costs. Success has been divided in this case. As a result, there would normally be no order as to costs. However, this is an Estate proceeding involving a trust, and the approach to costs is different.

[87] To that end, the parties are to endeavour to agree on the costs of this proceeding. Failing agreement, costs submissions are to be made on the following timetable:

a) Each party shall have fourteen (14) calendar days to serve, file and upload their costs submissions. Those costs submissions are to be no more than two (2) single-spaced pages, exclusive of bills of costs, offers to settle and case-law.

b) Each party shall then have seven (7) calendar days thereafter to serve, file and upload any reply costs submissions. Reply submissions are to be no more than one (1) single-spaced page, exclusive of bills of costs, offers to settle and case-law.

[88] In addition to serving, filing and uploading their costs submissions, the parties are to provide a copy of those submissions to my judicial assistant. Those submissions are to be sent to the general email box at SCJ.CSJ.General.Brampton@ontario.ca. This is not in lieu of filing with the Court office. The e-mail is to have the file name and for my attention in it when it is sent.

Released: June 6, 2025

Sean F. LeMay