ONTARIO
SUPERIOR COURT OF JUSTICE
ESTATES LIST
COURT FILE NO.: 06-009/13
DATE: 20140526
BETWEEN:
MODRIS GUNDARS BROZE et al.
Applicants
– and –
JANIS JAMES TOZA
Respondent
Mark A. Ross, Counsel for the Applicants
Robert A. Watson, Counsel for the Respondent
HEARD: MAY 26, 2014
ENDORSEMENT: GREER J.:
[1] Mr. Ross for the Applicants. Mr. Watson for the Respondent, Janis James Toza. The Applicant, Modris Gundars Broze is the step-son of the deceased, Modris Hermanis Toza. Vanessa Broze is his step-granddaughter, and the daughter of Modris Broze. Janis James Toza is the son of the deceased, and he acted as the Estate Trustee During Litigation while the litigation in the Estate between Dzidra Toza, the widow of Modris Toza and mother of Modris Broze and the Respondent.
[2] The deceased died on January 9, 2009, testate, leaving a Will dated November 20, 2007. The Will set out 3 scenarios called “Situations I, II and III”. The widow elected under the Family Law Act to take her entitlement under the Act, rather than the benefits left to her under the Will. The Estate was involved in litigation that was resolved by the Judgment of Madam Justice Conway dated May 13, 2011. The widow was successful in the litigation and received an equalization payment of $209,211.21 plus a payment of $37,016.07 to reimburse her for expenses she had paid after her husband’s death. In addition, the Court vested the title to the deceased’s car in the widow, and she received $5,326.07 of interest owing on her equalization payment. Lastly, the widow was awarded her Costs of $20,000 payable to her out of the Estate. She also was given an option or a right of first refusal to purchase the matrimonial home, a condominium unit occupied by her and the deceased at the date of his death.
[3] A Certificate of Appointment of Estate Trustee with a Will was issued by this Court to Janis James Toza (“the Estate Trustee”) of September 12, 2012.
[4] On October 16, 2012, counsel for the Applicants wrote to counsel for the Estate asking for a timeline as to when these 2 beneficiaries will receive their beneficial shares. Secondly, they asked for an accounting of “all monies received and expenditures made by the Estate Trustee to date.” No answer was sent by Mr. Watson, counsel for the Estate Trustee. A second letter of December 10, 2012 was sent to Mr. Watson. No reply was received until February 4, 2013 from Mr. Watson, who, in an e-mail said, “I’ll write on behalf of James Toza to provide the report that will include Modris and Vanessa as soon as I can.”
[5] On February 25, 2013, counsel for the Applicants again wrote. Counsel for the Estate Trustee replied on February 28, 2013 that the Estate Trustee is “dropping off here…documents to facilitate me preparing on his behalf the required report to beneficiaries.” None was forthcoming so counsel again e-mailed Mr. Watson on April 3, 2013. An immediate reply was received saying he had just received the reporting letter on the sale of the cottage. A further e-mail followed by counsel for the Applicants saying if a report is not received by April 15, 2013, an Application to Pass the Estate’s Accounts would be commenced on April 18, 2013.
[6] A further excuse was given by Mr. Watson on April 15, 2013, followed by the Applicant’s counsel saying on April 23, 2013, “I am still waiting for the report.” He wrote again on April 24 and May 3, 2013 with no reply. A motion was then set down asking the Court to make an Order requiring the Estate Trustee to, “file with the Court a Statement of the nature and value, at the date of death, of each of the assets of the estate to be administered by the estate trustee.”
[7] On June 19, 2013, Mr. Justice Stinson made such an Order, stating that the Estate Trustee was to file such a statement “within 30 days after this order is served on you.” The Order was served personally on the Estate Trustee on July 8, 2013. To date, that Order has never been complied with.
[8] The Applicants’ Motion before me today is as follows:
They ask for a declaration that the respondent Janis James Toza (“Janis”) is in contempt of the order of the Honourable Mr. Justice Stinson dated June 19, 2013; and
An order that Janis comply with the terms of the order of Mr. Justice Stinson.
An order that Janis attend to be examined under oath.
Costs of this motion on a full indemnity basis against Janis James Toza.
Such further and other relief as to this Honourable Court may seem just.
The Estate Trustee was personally served with this Motion Record on March 10, 2014, as required under Rule 60.11 of the Rules of Civil Procedure.
[9] Motions for Contempt are serious in nature and must be strictly complied with by the alleged contemnor. In this case, the Estate Trustee did not appear personally but instead chose to “go to work”. Mr. Watson, his counsel appeared. I read the Rule to him, explaining the quasi-criminal nature of the proceeding and said that the Order of Mr. Justice Stinson had not been complied with. I ordered him to call his client to see if he could attend in Court by 2:30 p.m. today. He agreed to and the Motion proceeded at 2:30. It is the Estate Trustee’s position that he has complied with the Order, as set out in the letter of Mr. Watson to the beneficiaries of August 7, 2013. That letter is 14 pages long and is not the Estate Trustee’s list of assets at death and values. It is counsel’s outline of what took place during the litigation, previously settled, and his own opinion of the roles taken by the litigants, what had happened during the litigation, how the widow had “misplaced hostility”, how she “switched gears”, how her idea assumed by her law suit was “misplaced”. All of this was written after the widow was successful in Court and received the Judgment granted by Madam Justice Conway. This was not an answer to the Order.
[10] On p. 12 of that letter, Mr. Watson set out a list of “Deposits” and “Expenses” with no dates as to any entries. He said his legal bill was $120,806.03 but refused to provide a copy of it to the Applicant’s counsel when he asked for one. He set out on p.13, that the Estate Trustee “…will rest satisfied with being paid compensation of $30,000. HST eligible on that is $3,900.” No Statement of Compensation was enclosed to show how this was calculated. The Estate Trustee was to "retain" an additional $10,000 "as security for his entitlement as estate trustee" for additional expenses.
[11] Mr. Watson then set out what he thought was the balance remaining of the Estate to be distributed in accordance with Situation III in the Will, and on p. 14 provided a chart of what that distribution would be.
[12] On August 27, 2013, Counsel for the Applicants again wrote to Mr. Watson saying that the August 7 letter "…does not comply with the Order of Justice Stinson." He says that the Applicants will be bringing an Application to "compel production of complete estate accounts." He asks for copies of the legal bills, and those of the lawyers acting on the sale of the cottage, says he opposes the amount requested as compensation and it says is not to be paid out "until the estate accounting is settled." E-mails were exchanged by counsel on September 25, 2013, with Mr. Watson saying he would respond at the end of next week. Nothing was forthcoming in October, November and December, despite follow-up letters.
[13] On December 11, 2013, the Applicant Modris Broze, swore an Affidavit in support of this Contempt Motion. A Responding Affidavit was sworn by the Estate Trustee, in response, on May 22, 2014, 2 months after he was served and 4 days before I heard the Motion. It is 7 pages long and reiterates much of what is in Mr. Watson`s August 7, 2013 letter. His view in para. 29 is that what the Applicants say that neither "knew what my father owned is patently false." He never says why the Order of Mr. Justice Stinson was not complied with. He attaches as Exhibits, the Minutes of Settlement in the litigation and a Net Family Property Statement filed by the widow in her proceeding. It is the Estate Trustee's position that this evidence is all that is needed to comply.
Contempt Motion
[14] Rule 60.11 of the Rules of Civil Procedure govern the structure of Contempt Motions. The Notice of Motion was properly served under subrule 60.11(2). Under subrule 60.11(4) I determined that it was necessary that the Estate Trustee appear personally and ordered his counsel to call him. In my view, the delays in failing to comply with the Order of Justice Stinson are unconscionable. No proper Statement of Assets and values was ever provided to the beneficiaries. The Estate cottage appears to have been sold without a valuation as to its fair market value. Even a copy of the MPAC value would have been some information for the beneficiaries on value.
[15] In making a finding of contempt, the Judge is required to review the 3-part test set out in G.(N.) Services aux enfants & adults de Prescott-Russell (2006), 2006 81792 (ON CA), 82 O.R. (3d) 686 (C.A.) at para. 27 as follows:
(a) the Order that was breached must state clearly and unequivocally what should and should not be done.
(b) the party who disobeys the Order must do so deliberately and willfully.
(c) the evidence must show contempt beyond a reasonable doubt.
[16] In this case, the Order of Mr. Justice Stinson was clear and simple. The Estate Trustee had to provide a list of assets at death, with values. He never did so. He deliberately ignored all requests by the Applicants. He thought that his counsel's letter was sufficient. It was not an answer to the Order. It was, in my view, a deliberate rebuke of the Order of Madam Justice Conway which found the widow's claim to be valid. It states on p. 2:
Modris and Vanessa did not choose to "sit on the sidelines" while the law suit that Dzidra commenced dealing with Estate was underway. Modris and Vanessa did all they could to support Dzidra against the Estate.
Modris and Vanessa were beneficiaries of the Estate and had a right, from the outset, to know what the estate assets were and what values were being placed on them. Their mother, the widow, had a right to make the Election she did under the Act. Her Net Family Property Statement filed, when the Election was made, is not an answer to Mr. Justice Stinson`s Order. The failure to properly reply, on the part of the Estate Trustee, was deliberate and willful.
[17] The contempt shown, is, in my view, beyond a reasonable doubt. Time and time again, the Estate Trustee's counsel failed to respond in providing the data, which I assume he had in his file from the very beginning after the deceased died. The Estate, too, had to produce values for the litigation.
[18] I therefore find the Estate Trustee, Janis James Toza in Contempt of Court of the Order of Mr. Justice Stinson made June 19, 2013.
Purging of the Contempt
[19] At the end of the Motion, I spoke to counsel and the Estate Trustee to tell them I was making an Order finding the Estate Trustee in Contempt, with reasons to follow. I explained how such Contempt can be purged by the Contemnor. Under subrule 60.11(5) of the Rules, subparagraphs (a) to (f) give the Judge a wide discretion within which to make orders. Subparagraph (f) reads: "comply with any other order that the Judge considers necessary." In addition, I may take into account the relief requested by the Applicants in their Notice of Motion. The Estate Trustee must therefore comply with the following Orders for the reasons as noted:
(1) file with the court what was ordered by Mr. Justice Stinson – a statement of the nature and value at the date of death, of each of the assets of the Estate. This must be done within 15 days of this Order.
(2) the Estate Trustee must put his Accounts in the form required by the Rules for a Passing of the Estate Accounts, being relief asked for by the Applicants when no data was forthcoming. The 2 lists provided in Mr. Watson's August 2013 letter are insufficient and the NFP Statement is not acceptable. This shall be done within 30 days of this Order.
(3) The Estate Trustee must provide copies of the Vouchers supporting the Estate Accounts, including valuation letters and appraisals of properties to all the Estate Beneficiaries when they are served with a copy of the accounts by the Estate Trustee.
(4) the Estate Trustee must provide, with the above materials, a copy of all legal bills presented by Mr. Watson and any other lawyer to the Estate.
(5) the Estate Trustee must provide in the Accounts, a Statement of all assets and values on hand now and supported by bank statements to show what assets remain as undistributed.
(6) a Statement of Compensation shall be included in the Accounts.
I make these Orders as I have no confidence after all the delays and refusals to provide the beneficiaries with proper information. This is the only way they will receive accurate information. I make no Order as to Passing the Accounts unless the beneficiaries require the same by further Motion.
[20] I am also cognizant that the Estate Trustee's counsel, Mr. Watson, in his letter of August 7, 2013, says he apologizes for its lateness, followed by, "The fault for this rests with me rather than with James."
Costs
[21] The counsel for the Applicants asks for his Costs of the Motion in the amount of $3,250 plus HST of $422.50 plus disbursements of $562.05 for a total of $4,234.55 on a partial indemnity basis. He asks that these Costs be paid personally by the Estate Trustee and not out of the Estate.
[22] Counsel for the Estate Trustee says that there should be no charge for "letter-writing" and that the amount in question is too high. He suggests $2,000 inclusive of HST and disbursements.
[23] In my view the Costs asked for are reasonable. Mr. Ross, counsel, for the Applicants was called to the Bar in 2006. The Costs are proportional, given the fact that this is a Contempt Motion. I order the Estate Trustee to pay these Costs forthwith personally, which I fix at $4,234.55.
[24] All Orders to go accordingly.
Greer J.
Released: May 26, 2014
TYPED VERSION TO FOLLOW
COURT FILE NO.: 06-009/13
DATE: 20140526
ONTARIO
SUPERIOR COURT OF JUSTICE
ESTATES
BETWEEN:
MODRIS GUNDARS BROZE et al.
Applicants
– and –
JANIS JAMES TOZA
Respondent
ENDORSEMENT
Greer J.
Released: May 26, 2014
TYPED VERSION TO FOLLOW