COURT FILE NO.: CV-15-0112
DATE: 2015-09-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Peter Kuzyk, as estate trustee of the estate of Mary Kuzyk,
Applicant
- and -
Michael Romaniuk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Hanusia Tkaczyk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Olesia Blando also known as Elaine Blando, as estate trustee of the estate of Walker Chopty and as estate trustee of the estate of Dan Chopty, and Stephanie Theresa Romaniuk, as estate trustee of the estate of Anna Chopty,
Respondents
Counsel: Morris J. Holervich, for the Applicant Martha Petryshyn, for the Respondents
HEARD: June 11, 2015, and written submissions filed July 9, 2015 (Respondents) and July 11, 2015 (Applicant), at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Reasons On Application
[1] This is an application by the applicant, Peter Kuzyk, for an order vesting in him, as estate trustee of the estate of Marey Kuzyk, ownership of a 25% interest in a home in Thunder Bay. In the alternative, the applicant seeks an order requiring the responding estate trustees of three related estates to administer any interest which those estates may have in the home.
Background
[2] In 1952, Dan Chopty and his son, Walter Chopty, purchased a home at 364 Hallam Street, Thunder Bay, as tenants in common, each as to 50%.
[3] Dan died in 1975, leaving his estate, including his 50% interest in the home, to his wife, Anna Chopty. Walter was the sole estate trustee of Dan’s will. After Dan’s death, Walter and Anna lived in the home.
[4] Anna died in 2000, leaving her estate equally to her daughters, Marey Kuzyk and Stephanie Romaniuk. Each of Marey and Stephanie were therefore beneficiaries of Anna’s 50% interest in the home. Marey and Stephanie were also the estate trustees of Anna’s will.
[5] In June 2007, Marey died, leaving Stephanie as the sole remaining estate trustee of Anna’s will. Marey left her estate equally to her children, Peter Kuzyk and Elaine Blando. Each of Peter and Elaine were therefore beneficiaries of Marey’s 25% interest in the home. Peter was named in Marey’s will as the sole estate trustee.
[6] In November 2007, Walter died. Walter left his estate to his six nephews and nieces who were the children of his sister, Stephanie Romaniuk. As noted above, Stephanie is sole remaining estate trustee of Anna’s will. One of those nieces was Orysia Romaniuk. Walter gave Orysia a life interest in the home. Walter’s will provided that Orysia was permitted to use and occupy the home and its contents for as long as she desired or needed to, provided that she took full responsibility for payment of all the expenses of the home. In the event that Orysia no longer wanted to occupy the home, the same opportunity was to be extended to her brothers and sisters. If none of them wanted to occupy the home, the home and contents were to be sold and the net proceeds divided between the six siblings.
[7] Orysia, who is now 56, moved into the home in 1993. She lived there with her uncle Walter, and her grandmother, Anna. Walter and Anna moved from the home in 1994. Orysia continues to reside in the home. She pays all the expenses for the home and has paid for renovations to the home.
[8] The estate trustees of Walter’s will are Orysia’s brother, Michael Romaniuk, and her sisters, Hanusia Tkaczyk and Elaine Blando. As noted above, Elaine and the applicant, Peter Kuzyk, are each the beneficial owners of one-half of Marey Kuzyk’s 25% interest in the home. Because Walter was the sole estate trustee of the estate of his father, Dan Chopty, Walter’s estate trustees are also the estate trustees of Dan’s estate.
[9] In 2009, Michael Romaniuk, Hanusia Tkaczyk and Elaine Blando, in their capacities as estate trustees of the estates of both Walter Chopty and Dan Chopty, took title to the home by way of Registered Transmissions by Personal Representatives.
[10] Michael, Hanusia and Elaine as estate trustees of Dan Chopty’s estate, have not taken any steps to convey to the estate of Anna Chopty the 50% interest in the home which Dan owned.
[11] Similarly, as the sole remaining estate trustee of Anna’s estate, Stephanie Romaniuk has not taken any steps to obtain the 50% interest in the home beneficially owned by Anna.
[12] Orysia wishes to continue to reside in the home pursuant to her life interest granted under Walter’s will.
[13] Orysia’s fellow beneficiaries under Walter’s will are content that Orysia continue to reside in the home. The estate trustees of Walter’s and Dan’s estates are content that Orysia continue to reside in the home. Stephanie Romaniuk, as the sole remaining estate trustee of Anna’s estate, is content that Orysia continue to reside in the home. Elaine Blando, in her capacity as one of the two beneficiaries of Marey’s estate, is content that Orysia continue to reside in the home.
[14] None of the estates have any assets other than 364 Hallam Street. All other aspects of the estates have been administered. The home has been appraised at an estimated market value of $165,000 to $175,000. It is the position of the respondents that the life interest should expire naturally.
[15] The applicant, Peter Kuzyk, who is the estate trustee of Marey’s estate and one of the beneficiaries of Marey’s estate, wants the home to be sold. He submits that as the estate trustee of Marey’s estate, he has both an entitlement and a duty to compel the estate trustees of the estates of Dan Chopty and Anna Chopty to proceed to administer those estates, at least insofar as the home is concerned. Peter seeks an order, vesting in him as estate trustee of the estate of his mother, Marey Kuzyk, ownership of a 25% interest in the home. In the alternative, he seeks an order that the respondents proceed to administer the estates of Dan Chopty and Anna Chopty, including administering any interest which those estates have in 364 Hallam Street.
[16] The will of Dan Chopty is a pre-printed stationer’s form. It grants to the estate trustees:
… full power and authority to sell and dispose of all my Estate where necessary, and execute any and all Documents requisite to carry out this my Will, and should one or more of my said Executors or Trustees wish to retire I authorize them to appoint a successor instead thereof.
[17] Each of the wills of Walter Chopty and Anna Chopty grant the respective estate trustees the following powers:
(a) To use their discretion in the realization of my estate with power to my Trustees to sell, mortgage, lease, or otherwise dispose of my estate and in realizing my estate to sell, call in and convert into money any part of my estate not consisting of money at such time or times, in such manner and upon such terms, and either for cash or credit or part cash and part credit as my said Trustees may in their discretion decide upon, with power and discretion to postpone such conversion of such estate or any part or parts thereof for such length of time as they may think best, and I hereby declare that my said Trustees may retain any portion of my estate in the form in which it may be at my death (notwithstanding that it may not be in the form of any investment in which trustees are authorized to invest trust funds and whether or not there is a liability attached to any such portion of my estate) for such length of time as my Trustees may in their discretion deem advisable, and I also declare that my Trustees when making investments for my estate shall not be limited to investments authorized by law for trustees, but may take any investments which in their absolute discretion they consider advisable, and my Trustees shall not be held responsible for any loss that may happen to my estate by reason of their so doing.
Discussion
[18] Section 2(1) of the Estates Administration Act provides that upon a person’s death, all of that person’s property vests in the estate trustee. Section 120 of the Land Titles Act provides that, upon the owner’s death the land registrar is entitled to register the estate trustee as owner in place of the deceased. Accordingly, on the deaths of Dan Chopty and Walter Chopty, 364 Hallam Street vested in their estate trustees (Michael Romaniuk, Hanusia Tkaczyk and Elaine Blando) and the estate trustees were entitled to take title to the home by way of the registered Transmissions by Personal Representatives.
[19] Section 9 of the Estates Administration Act provides:
Real property not disposed of, conveyed to, or distributed among the persons beneficially entitled thereto under section 17 by the personal representative within three years after the death of the deceased is, … at the expiration of that period, whether probate or letters of administration have or have not been taken, thenceforth vested in the persons beneficially entitled thereto under the will … without any conveyance by the personal representative, unless such personal representative, if any, has signed and registered in the proper land registry office, a caution in Form 1. …
[20] However, s. 9 of the Estates Administration Act is subject to s. 10 of the Act. Section 10 provides:
Nothing in section 9 derogates from any right possessed by an executor or administrator with the will annexed under a will or under the Trustee Act or from any right possessed by a trustee under a will.
[21] In Di Michele v. Di Michele, 2014 ONCA 261, Gillese J.A. discussed the interaction of ss. 9 and 10 of the Act. At para. 100 Gillese J.A. held:
The paramountcy of the testator’s intention is confirmed in the jurisprudence. Where a will gives the estate trustee a power to sell property at such times and in such manner as the estate trustee sees fit, s. 9 of the Estates Administration Act will not limit the scope of that power by requiring that the property vest after a specific period of time: … (citations omitted).
[22] In Di Michele, the will in question gave the estate trustee the power to sell the testator`s property and to postpone the sale in wording identical to the wording in the wills of Walter Chopty and Anna Chopty.
[23] Gillese J.A. held in Di Michele, at para. 102, that on a plain reading of these provisions in the will, the estate trustee was given the power to postpone the sale of the property in question for whatever length of time he deemed advisable. The estate trustee had the discretion to delay selling the property beyond the three year limit in s. 9 of the Estates Administration Act. Consequently, s. 9 did not apply and the property did not vest in the beneficiaries.
[24] In the instant case, the applicant submits that Di Michele does not support the proposition that a power to sell or postpone confers an unfettered or absolute discretion on a trustee to do as he or she wishes, which would include simply doing nothing to administer the estate. The applicant refers to the comments of Gillese J.A. at para. 98 that the intention of the deceased, as expressed in the will, is always paramount and, at para. 89, that the estate trustee has an overriding obligation to duly administer the estate.
[25] The applicant submits that the court has the jurisdiction to intervene in a trustee’s exercise of discretion where there is (1) a mala fides exercise of discretion or (2) a failure to exercise discretion or (3) a deadlock between trustees, citing McGovern Estate v. McGovern, 2014 ONSC 1785, at para. 25.
[26] The applicant submits that Stephanie Romaniuk, as the sole remaining estate trustee of the estate of Anna Chopty, is in a conflict of interest because she is using her power to postpone to benefit her daughter, Orysia, who continues to enjoy a life interest in the property, notwithstanding that that life interest is subject to the interest of the estate of Anny Chopty.
[27] In my view, the application of Peter Kuzyk cannot succeed. The decision of the Court of Appeal in Di Michele governs the outcome of this case.
[28] I agree with the submission of the applicant that the intention of the testator as expressed in the will is paramount. However, what Di Michele holds is that where the will gives the estate trustee power to sell a property at such time and in such manner as the estate trustees see fit, it is this expressed intention that must prevail. Where the estate trustee possesses this right under the will, s. 10 of the Act provides that s. 9 of the Act will not derogate from that right. Section 9 will not limit the scope of the power that the testator has given to the estate trustee by requiring that the property vest in the beneficiaries after three years. It is in this sense that the testator’s intention is paramount.
[29] The powers given to the estate trustees in Dan Chopty’s will are not expressed as broadly as the powers given to the estate trustees in the wills of Walter Chopty and Anna Chopty. However, because Dan’s estate flows down to Anna, and because the powers given to Anna’s estate trustee, Stephanie Romaniuk, are identical to those given in the wills in Di Michele, and in Walter’s will, it is not necessary to determine if Dan’s will ousts s. 9 of the Act. In my view, both Anna’s will and Walter’s will must be viewed in the same way that the Court of Appeal viewed the will in Di Michele: Stephanie Romaniuk, as estate trustee of Anna’s will, takes the same position as do the estate trustees of Walter’s will, namely that Orysia’s life interest should continue to be recognized.
[30] Peter Kuzyk, as the estate trustee of Marey Kuzyk’s will, does not have the right to insist to the estate trustee of Anna’s will that a 25% interest in the home be vested in him at this time.
[31] I do not find that the applicant has demonstrated that the responding estate trustees have exercised their discretion in bad faith. There is no dispute that Orysia has a valid life tenancy in the 50% of the home that Walter owned. That life tenancy has a value. If the life tenancy was terminated by a sale of the home, arguably Orysia would be entitled to some compensation. While she is in occupation, Orysia is solely responsible for the expenses and maintenance of the home. She has made improvements to the home that may be subject to an accounting. The home has a modest value, even in today’s market, of between $165,000 and $175,000. Marey’s 25% interest would have a value of between $43,250 and $42,250. Peter Kuzyk’s interest would have a value of between $21,875 and $20,625. This would be before the resolution of issues of compensation, accounting and potential litigation surrounding termination of the tenancy. The decision of the respondent estate trustees is within their discretionary powers and cannot be said to be unreasonable or based on frivolous or improper considerations. The decision is also supported by all those persons who are beneficially interested in the property, other than the applicant.
[32] The decision of the estate trustees not to sell the home at this time and to allow Orysia to continue to reside in the home, while she pays all the costs of keeping and maintaining the home, is not a failure by the estate trustees to exercise their discretion. It is an exercise of their discretion.
[33] There is no deadlock between the trustees who are responsible for exercising the powers given to them under the wills of Dan Chopty, Walter Chopty and Anna Chopty. The estate trustees are unanimous in their positions.
[34] In my view, Di Michele provides a complete answer to the application to compel the respondents to administer the estates of Dan Chopty and Anna Chopty and to vest in the applicant, as estate trustee of the estate of Marey Kuzyk, ownership of a 25% interest in the home.
[35] The application is therefore dismissed.
Costs
[36] If the parties are unable to agree on costs, the parties shall contact the Trial Co-ordinator within 30 days to arrange a date to speak to the issue, failing which costs shall be deemed to have been settled.
The Hon. Mr. Justice D. C. Shaw
Released: September 28, 2015
COURT FILE NO.: CV-15-0112
DATE: 2015-09-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Peter Kuzyk, as estate trustee of the estate of Mary Kuzyk,
Applicant
- and -
Michael Romaniuk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Hanusia Tkaczyk, as estate trustee of the estate of Walter Chopty and as estate trustee of the estate of Dan Chopty, Olesia Blando also known as Elaine Blando, as estate trustee of the estate of Walker Chopty and as estate trustee of the estate of Dan Chopty, and Stephanie Theresa Romaniuk, as estate trustee of the estate of Anna Chopty,
Respondents
REASONS ON APPLICATION
Shaw R.S.J.
Released: September 28, 2015
/mls