COURT FILE NO.: 2357/76
DATE: 20140609
ONTARIO
SUPERIOR COURT OF JUSTICE
ESTATES LIST
IN THE ESTATE OF ENRICO CARFAGNINI, deceased.
ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants
– and –
LIONEL WHITE, deceased and IDA CARFAGNINI, in their capacities as Trustees, CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE, MARK PALERMO, LOUANNE PALERMO, LORETTA PALERMO, CHRISTOPHER PALERMO, DANIELLE PALERMO, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, CHANTELLE COSENTINO, KATEY CARFAGNINI, ROSS ANTONACCI, DONNY SAGARESE, MICHAEL SAGARESE, MELISSA SAGARESE-BOMBEN, and THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE for and on behalf of Ida Carfagnini and THE OFFICE OF THE CHILDREN’S LAWYER for and on behalf of the minors, unborn and unascertained
Respondents
Kimberly A. Whaley and Benjamin D. Arkin, Counsel for the Applicants
Richard J. Worsfold, Counsel for the Respondents Carmela Palermo, Theresa Antonacci and Rose Marie Sagarese
– and –
COURT FILE NO.: 05-31/14
IN THE ESTATE OF IDA CARFAGNINI, deceased.
ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants
– and –
CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE in their capacity as named estate trustees of the Will of Ida Carfagnini dated March 31, 2008, attorneys for property of Ida Carfagnini, and in their personal capacity, THE PERSONAL REPRESENTATIVE OF THE ESTATE OF LIONEL WHITE, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, and HOWARD CARR in his capacity as succeeding Estate Trustee of the Estate of Enrico Carfagnini, deceased
Respondents
Kimberly A. Whaley and Benjamin D. Arkin, Counsel for the Applicants
Richard J. Worsfold, Counsel for the Respondents Carmela Palermo, Theresa Antonacci and Rose Marie Sagarese
HEARD: JUNE 9, 2014
ENDORSEMENT: GREER J.:
[1] Kimberly Whaley and Benjamin D. Arkin for the Applicants. Richard J. Worsfold for 3 of the Respondents Carmela Palermo, Theresa Antonacci and Rose Marie Sagarese. No one for remaining Respondents.
[2] The parties are before me are asking for an Order for Directions in connection with 2 Estates as follows:
Estate of Enrico Carfagnini – who died in 1976. His Estate File is 2357/76. The administration thereof is in the process of being finalized, given that the life tenant, Ida Carfagnini has died.
Estate of Ida Carfagnini who died on December 5, 2013. Her Estate File is 05-31/14
[3] The parties require an Order for Directions to move the administration of the 2 Estates forward in the litigation involving both estates.
[4] The Applicants move for the relief set out in their Application dated February 25, 2014. In summary, they ask for an Order consolidating the two actions and files and amending the style of cause accordingly. In addition they ask for:
a) an Order to continue
b) a Preservation Order
c) an Order for an accounting by Ida’s Attorneys for Property
d) an Order respecting disclosure by Ida’s Attorneys for Property
e) disclosure of third party solicitor’s files and financial records
f) an Order for Mandatory Mediation
g) Payments out of Enrico’s Estate
[5] The Respondents oppose any Consolidation of the 2 matters and ask for 2 separate Orders for each Estate, with Orders respecting the on-going administration of the Enrico Estate. In the Ida Estate, the Respondents ask for Orders respecting a Trial of issues after a Mediation takes place in the Ida Estate.
Some Background Facts
[6] Ida died on December 5, 2013, at the age of 95. She had been left a widow in her late fifties, when Enrico died in 1976. At his death, Enrico’s major asset was 4 apartment buildings in Toronto. They are multi-unit buildings and have provided income not only for Ida but to the parties who are the children of Enrico and Ida. While there is some dispute as to how the income from Enrico’s Estate was used during Ida’s lifetime, they all agree that they received gifts of money from her over the years.
[7] The couples’ only son, Anthony, died on January 5, 2008. He is the father of the two Applicants, Raymond and Rosemary. He had been his mother’s “right-hand”, with his office in her apartment, from which he managed the Estate’s apartments. His death was a blow to Ida, as they were very close, and ate lunch together most days and administered Enrico’s Estate.
[8] On Anthony’s death, a professional management company took over operation of the apartments. The parties concede, on Ida’s death, the apartments needed repairs and had to be sold by Enrico’s Estate in order to wind-up the Estate.
[9] Ida was the income beneficiary of Enrico’s Estate, which has a value now of approximately $16,000,000. Ida was removed as an Executor of that Estate by Order of Mr. Justice Grace on March 1, 2012. Lionel White, Ida’s Co-Executor was Enrico’s solicitor and later he acted for Ida. He died on November 16, 2011. Howard Carr, a barrister & solicitor, was appointed in Mr. White’s place and is the sole trustee, now. He is finalizing the administration of the Estate.
[10] After Anthony died, Ida made a new Will in 2008, with Mr. White drafting it. Ida then began receiving large income payments from Enrico’s Estate from 2008 to 2011, totalling approximately $2,000,000. She owned a condominium in Florida. It was sold for over $250,000 before her death. When Ida died, she had an Estate worth less than $100,000.
[11] It is within these circumstances that the Applicants bring their Motion.
Analysis: 1. Consolidation
[12] In examining the Draft Orders prepared by the parties, the Applicants put forward their one consolidated Order for both Estates. The Respondents propose that each Estate should have a separate Order. They say Enrico’s Estate has professionals managing it and winding it up. They say there are no issues remaining in Enrico’s Estate and no Order should be made respecting it. The Accounts for that Estate for the period January 1, 2008 to February 28, 2012 are being prepared for Passing.
[13] In my view, the 2 Estates should be consolidated under one Order. Ida and Mr. White were co-executors and managed Enrico’s after Anthony’s death. It was during this period Ida received large amounts of income from it. It was during this period that Ida changed her Will, with Mr. White acting as her solicitor. The beneficiaries of both Estates are the same and an accounting is required in both Estates. Order to go consolidating Ida’s Court File No. 05-31/14 with Enrico’s Court File No. 2357/76 with the style of cause to be amended accordingly.
- Preservation Order
[14] The Applicants ask for a Preservation Order for both Estates. The Respondents oppose such an Order with respect to Enrico’s Estate, saying it is unnecessary in these circumstances. In my view it is a necessary procedure, given that there are documents which affect both Estates, such as the 2009 “Confirmation of Gift” drafted by Mr. White and the “Acknowledgement of Past Gifts and Deed of Gifts”, which deal with income from Enrico’s Estate that would have benefitted the surviving 3 daughters. Secondly, there is some evidence that the 3 daughters were instructing the property management company about the assets of the Enrico Estate, although they were not Trustees.
[15] There is no harm to the Enrico Estate making this Order out of an abundance of caution. The Applicants’ Draft gives the Succeeding Estate Trustee leeway to pay out some income from Enrico’s Estate if need be.
[16] Since Ida’s Estate is in litigation and there is a Will challenge, the Preservation Order is crucial to it. (See below #5)
- Accounting by Ida’s Attorneys for Property
[17] The Applicants say that the Respondents must be ordered to Pass their Accounts under Ida’s Power of Attorney for Property granted to them on March 31, 2008. It was executed by her shortly after Anthony’s death. The Respondents are specific legatees under Ida’s 2008 new Will to the extent of $5,000 each. The Respondents say that the Applicants have no right to ask for an accounting.
[18] If Ida’s Will of 2008 is overturned at Trial, the Applicants become residuary beneficiaries along with the 3 daughters of Ida, because the residue in that Will is shares “per stripes” so they would stand in the place of their father, Anthony, who predeceased Ida. Under S.42(9).6 of the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (“the SDA”), the Court has the power to grant leave to any other person, to ask for a passing of accounts of an attorney for property. As noted in his Endorsement dated August 27, 2008, in Estate of Lois Harriet McAllister and Ian McAllister v. Gail Alexandra Hugin, Court Docket 05-70/07, (O.S.C.J.), Mr. Justice Pattillo said that S.42 is clearly discretionary. He says the Court should consider two main questions, namely the extent of the attorney’s involvement in the grantor’s financial affairs and secondly, whether the applicant has raised significant concern in respect of the management of the grantor’s affairs to warrant an accounting. In my view the Applicants have. Ida’s Estate has very few assets left in it. Each change made by Ida in the management of her affairs, leads to that conclusion. The Attorneys are hereby ordered to Pass their Accounts for the period from March 2008 to the date of Ida’s death.
- Disclosure of third party solicitor’s files and financial records
[19] The Applicants have brought on a Will challenge. Ida’s New 2008 Will was drafted by Lionel White and he and his wife acted as witnesses. His file is essential in any Will challenge, as are Ida’s medical files and her financial banking records and those of the insurance company regarding Ida’s change of beneficiary on Enrico’s insurance policy with Standard Life, after his death. One of the claims alleged by the Applicants is that the Respondents unduly influenced their mother, Ida, to change her Will and to change the beneficiary designation of the insurance policy after their father, Anthony died. It had been previously pledged to the Estate of Enrico for what appears to have been to fund any claim which might arise out of the 1990 Indemnity in place. The Applicants were not signatories to that Indemnity so are not bound by it. The Order is therefore appropriate.
- Preservation Order
[20] Rule 45 of the Rules of Civil Procedure governs Interim Preservations of Property. Under subparagraph 45.01, the Court may make the preservation order for any property in question in the proceeding. The Respondents say that this definitely should not apply to Enrico Estate Property. They point to the test for the granting of interim injunctive orders under S. 45.02 as Enrico’s capital of the Estate as a specific fund. The 3-part test is as set out in RJR MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 SCR 311 at 347-349, as follows:
(a) the Applicants claim a right to a specific fund
(b) there is a serious issue to be tried regarding that claim
(c) the balance of convenience favours granting the relief
sought by the plaintiff
In this case, the Applicants are residuary beneficiaries of the Enrico Estate. They are not asking for an outright freeze. Their draft Order allows all such beneficiaries to agree to a distribution of income and/or capital from that Estate. It does not hinder the Succeeding Estate Trustee from administering the Estate. That Trustee can also come to the Court at any time for advice and directions if they want to distribute capital and the Trustee has the power to distribute income. There are serious issues to be tried involving Ida’s Estate, that overlap with the Enrico Estate Passing of Accounts. In my view, the balance of convenience favours the granting of the relief.
- Mediation
[21] There is Mandatory Medication under Rule 75.1 of the Rules of Civil Procedure. With the Consolidation Order, it encompasses the Enrico Estate as well. All issues involving both Estates should be before the same mediator, as there is a conflict of interest issue regarding Mr. White’s administration and involvement in Ida’s financial affairs, in how they administered Enrico’s Estate after Anthony died.
Order for Directions
[22] I have signed the Applicants’ Order for Directions without change to any of it; except for the issue of Costs and Payments out of the Enrico Estate. The Order shall go without paras. 15, 16, 17 and 18 in it. The redrafted Order without those paragraphs shall be sent to me for signature. The Costs paragraph set out at the end Para. 16 shall be added to it.
Costs
[23] If the parties cannot otherwise agree on Costs, I shall receive written submissions from them no longer than 3 pages plus time dockets plus case law and a Bill of Costs. Since the Applicants were successful on their Motion, they shall prepare theirs first and serve them on the Respondents within 30 days of this Order. The Respondents shall have 10 days thereafter to respond and the Applicants 5 days thereafter for any Reply. They shall be sent to me care of Judges’ Administration, 361 University Avenue, Court House, 1st Floor.
Greer J.
Released: June 9, 2014
TYPED VERSION TO FOLLOW
COURT FILE NO.: 2357/76
DATE: 20140609
ONTARIO
SUPERIOR COURT OF JUSTICE
ESTATES LIST
IN THE ESTATE OF ENRICO CARFAGNINI, deceased.
ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants
– and –
LIONEL WHITE, deceased and IDA CARFAGNINI, in their capacities as Trustees, CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE, MARK PALERMO, LOUANNE PALERMO, LORETTA PALERMO, CHRISTOPHER PALERMO, DANIELLE PALERMO, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, CHANTELLE COSENTINO, KATEY CARFAGNINI, ROSS ANTONACCI, DONNY SAGARESE, MICHAEL SAGARESE, MELISSA SAGARESE-BOMBEN, and THE OFFICE OF THE PUBLIC GUARDIAN AND TRUSTEE for and on behalf of Ida Carfagnini and THE OFFICE OF THE CHILDREN’S LAWYER for and on behalf of the minors, unborn and unascertained
Respondents
– and – COURT FILE NO.: 05-31/14
IN THE ESTATE OF IDA CARFAGNINI, deceased.
ROSEMARY CARFAGNINI and RAYMOND CARFAGNINI
Applicants
– and –
CARMELA PALERMO, THERESA ANTONACCI, ROSE MARIE SAGARESE in their capacity as named estate trustees of the Will of Ida Carfagnini dated March 31, 2008, attorneys for property of Ida Carfagnini, and in their personal capacity, THE PERSONAL REPRESENTATIVE OF THE ESTATE OF LIONEL WHITE, CAROLYN CARFAGNINI, ENRICO CARFAGNINI, and HOWARD CARR in his capacity as succeeding Estate Trustee of the Estate of Enrico Carfagnini, deceased
Respondents
ENDORSEMENT
Greer J.
Released: June 9, 2014
TYPED VERSION TO FOLLOW