SARNIA COURT FILE NO.: 7143/13
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF the Estate of Leonard Wilfrid Goetz, deceased
RE: Lorne Bion Goetz, Objector
AND:
Stephen Goetz and Kevin Goetz, Executors
BEFORE: Campbell J.
COUNSEL:
Lorne Bion Goetz, acting in person
Stephen Goetz, acting in person
Kevin Goetz, acting in person
HEARD: June 23, 2014
ENDORSEMENT
Introduction
1On February 14, 2014, I released my decision on the executors’ initial application to pass accounts. In that decision I did not approve the accounts and I set out the specific portions of those accounts that were deficient.
2At para. 12 of my decision I encouraged the executors to seek the assistance of an experienced and properly licensed professional in preparing amended accounts. They did so. Attached to the affidavit verifying estate accounts filed May 28, 2014 were accounts apparently prepared by Anya-Deane Best of O’Flynn Weese LLP of Belleville.
3The objector, Lorne Goetz, filed his objections to the amended accounts April 14, 2014. In those objections he essentially restated and maintained the objections he raised to the earlier accounts.
4At my request the trial coordinator set the matter to be dealt with in court. On June 23, 2014, I received oral evidence from the parties as well as submissions.
Discussion
5The amended accounts were prepared having regard to my earlier decision. It would not be accurate to state that the amended accounts fully incorporated that earlier decision. Therefore I will set out here my specific findings with respect to the amended accounts. I will then direct the executors to prepare an order in accordance with Form 74.51 (Judgment on Passing of Accounts).
6I would note that whoever prepared the accounts made a valiant effort to follow my decision. The objector’s challenges were far-reaching. In my view there are a very limited number of relevant concerns.
Statement of Original Assets on Death
7In my previous decision I requested details with respect to those original assets. That has been provided in the amended accounts. The total value of the assets as of the date of death is $1,722,735.31.
8The reconciliation at page three of the accounts explains the difference between the original cash on hand and the cash on hand as of June 30, 2013.
Capital Receipts and Disbursements
9The capital receipts are set out at pages four and five of the accounts. I would approve that portion of the accounts with one relatively minor change to which I will refer later in these reasons.
10The capital disbursements are set out at pages six through eight. It is this aspect of the accounts to which Lorne Goetz raises relevant objections.
11I will deal firstly with the $39,458.14 capital disbursements paid to OVID Consulting. The evidence is that OVID Consulting is a business that refers its clients to specific accounting and legal professionals. It was the evidence of the objector that OVID Consulting is the alter ego of Mr. Peter Eickmeier. He claims that Mr. Eickmeier is a disbarred lawyer. There is no evidence linking OVID Consulting and Mr. Eickmeier.
12If such evidence existed it would be irrelevant. What is relevant is whether the professional(s) OVID Consulting referred the trustees to did work that ought to have been done by the trustees.
13At the original hearing of this matter the executors proposed that the amounts paid to OVID Consulting be deducted from the compensation to which they are otherwise entitled. In my view that is a reasonable resolution to this issue and would be an answer to Lorne Goetz’s objection.
14The objector also challenged lines 24 and 25 being payments to the Heritage Foundation. I dealt with the Heritage Foundation at the beginning of para. 30 of my February 14, 2014 decision. At para. 41, I stated, “…the letter cannot be considered an obligation of the estate. Any amounts paid to the Foundation ought not to have been paid. They are not a proper disbursement and it should not have been made by the estate trustees.”
15On June 23, the estate trustees acknowledged that no further payments were to be made to the Heritage Foundation. However, they asked the court to approve the payments already made. In support of their argument they referred the court to the decision of K. van Rensburg J. (as she then was) in The Estate of Nugent McDougall, aka Nugent Clement McDougall, deceased, 2011 ONSC 4189, 69 E.T.R. (3d) 280.
16In that case the estate trustees made a donation of $10,000 to a clinic in Jamaica. The executors argued that the charitable donations were authorized by the will and approved by the beneficiaries. van Rensburg J. concluded that the donation ought to be approved. She found that while the gift was not specified in the will the executors’ interpretation of the will was not unreasonable. It would appear the decision rested significantly on a finding of good faith on the part of the executor.
17In this matter I do not find evidence of good faith. There is no cogent evidence as to the existence of the Foundation. There is no evidence of any donation to the Foundation or similar charities by the testator during his lifetime.
18In my original decision I also referred to the lack of evidence about the existence of the Heritage Foundation or its purposes and goals. On June 23, 2014, I did not hear any evidence that responded to those concerns.
19Exhibit 5 was filed in the course of the evidence of Kevin Goetz. It purports to be the search results for foundations in Panama. I would note that search was done August 19, 2013 prior to the first date for passing accounts. It may be that was the additional evidence that Kevin Goetz referred to at the first hearing. That search offers no insight into the Heritage Foundation save that it might exist.
20I still have no evidence with respect to the constating documents of the trust. There is not even any evidence by way of a copy of a cheque, et cetera, to the fact that payment was made. Presuming the payment was made by way of cheque there should be some information on the cheque as to where it was deposited. Further, there would be some evidence as to where the cheque was sent. There should be some acknowledgement of payment.
21The evidence repeated the references to a child born out of wedlock, living in Costa Rica and wanting to assist children in Costa Rica through a foundation established in Panama. The approach of the executors appeared to be that they were confident the payment was legitimate and therefore so should others. They clearly see no need to justify the legitimacy of their actions.
22In the evidence of Lorne Goetz he produced a letter that he says he sent to the Heritage Education Foundation. That was sent to the address provided by the executors. That letter came back unopened. The fact it was received by Lorne Goetz on the same day as another envelope containing a brochure for what was clearly a lottery scam is curious but not meaningful.
23In cross-examination of Lorne by the objectors it was suggested that he had no proof that he had used the correct address or director of the Foundation. It is not for Lorne Goetz to disprove the existence of the Foundation.
24I do not approve the payment to the Heritage Foundation. It was not authorized by the will (see my earlier decision, Goetz v. Goetz, 2014 ONSC 729, at paras. 35-41) and it is not a payment by the executors that should be approved retrospectively.
25Items 22 and 23 of the capital disbursements require some amendment. The payment of the costs order and interest as well as the specific bequests are proper capital disbursements.
26The two payments of $14,069.49 are not proper disbursements. In my earlier decision (Goetz v. Goetz, 2012 ONSC 6254, (November 14, 2012)) I found that Lorne Goetz should repay to the estate the sum of $12,329 together with interest at three percent from July 27, 2010. This amount should be deducted from Lorne’s distributive share. However, it is a capital receipt and should be shown as such. The executors’ methodology of paying themselves an amount equal to what Lorne owes is flawed. Reference was made to that in my earlier decision.
27Subject to the above comments I approve of the capital disbursements.
Revenue Receipts and Disbursements
28I have reviewed the revenue receipts and revenue disbursements. I find them in order. I do find that this is a proper case to award a management fee. I accept the executors’ submission that the delays in this proceeding were on balance created by the objector.
29There is one unrealized asset of the estate as at June 30, 2013. That asset continues to be unrealized. I would direct that upon that asset’s sale, one-third of the net realized proceeds be distributed to each beneficiary.
Statement of Compensation
30The statement of compensation requires some adjustment. It should be calculated in accordance with the amendments which I have directed in this decision. The capital receipts should total $1,924,203.30. The capital disbursements should be $1,158,990.60. Based on that I find the appropriate compensation is $77,079.85.
31As noted previously the amount of compensation to be received by the executors is to be reduced by the amount paid to OVID Consulting. The total amount paid to OVID is $39,458.14. Therefore I would reduce the executors’ compensation by $39,458.14. The net compensation to be paid is $37,621.71.
32This decision will require amendments to the proposed distribution. I direct the executors prepare an order in accordance with Form 74.15 and submit it to the court. A copy should be sent to Lorne Goetz. Any comments with respect to that order should be made within seven days of the draft order being filed. Any response by the executors to the objector’s comments should be made within seven days of the objector’s comments being received by them. I would then sign the order with any amendments if necessary.
33I fix the estate trustees’ compensation for attendance at court and preparation of the order at $3,500 inclusive of HST and disbursements.
Original signed “Justice Campbell”
Scott K. Campbell
Justice
Date: July 8, 2014