CITATION: Potrzebowski v. Potrzebowski, 2016 ONSC 6981
COURT FILE NO.: FS-16-85709
DATE: 2016 11 09
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: AGATHA POTRZEBOWSKI and PETER POTRZEBOWSKI, deceased
BEFORE: PRICE J.
COUNSEL: Rick Bickhram, for the Applicant
Marek Z. Tufman, for the Respondent
E N D O R S E M E N T
[1] The Public Guardian and Trustee (PGT) moves to set aside this Court’s Order dated October 25, 2016, appointing the PGT, on a temporary basis, as Estate Trustee during Litigation for the Estate of Peter Potrzebowski, who died October 4, 2016, without a Will.
[2] The motion is made pursuant to Rule 37.14(1)(a) of the Rules of Civil Procedure, incorporated into family law proceedings by Rule 1(7) of the Family Law Rules. Rule 37.14(1) permits a party who is affected by an order obtained on a motion without notice to that party to move to set the order aside. There is no dispute that the PGT was not given notice of the motion that resulted in the Order dated October 25, 2016, or that it is affected by the Order.
[3] The Public Guardian and Trustee Act, R.S.O. 1990, C.P. 51 provides, in s.7(1.1), that the PGT shall not be appointed as a trustee without his or her consent in writing. In the affidavit filed by the PGT in support of its motion, Claire Kadwell states that the PGT does not consent to be appointed as Estate Trustee during Litigation, notwithstanding that the sale of the real property at 77 Glenmore Crescent, Brampton, a major asset of the Estate, is scheduled to close in six days, on November 15, 2016.
[4] The PGT explains its refusal to consent by arguing that it should be a trustee of last resort. It asserts that, in the present case, there appear to be next of kin who are residents of Ontario who are willing and able to administer the Estate. It notes that, in addition to Peter Potrzebowski’s widow, the Applicant Agatha Potrzebowski, there are two adult daughters, Kinga Potrzebowski, who is 32 years old, and her younger sister, Klara Potrzebowski, from Mr. Potrzebowski’s first marriage, and that, if they are not acceptable to the court, an Estates lawyer, Shael Eisen, is also willing to act as Estate Trustee during Litigation.
[5] Agatha Potrzebowski, who is the primary beneficiary of the Estate, is agreeable to Mr. Eisen being appointed as Estate Trustee during Litigation. Mr. Eisen has practiced exclusively Estates law for the past 10 years, and would charge $300 per hour for his services.
[6] In Re Bazos 1964 ONCA 258, [1964] 2 O.R. 236-238, the Court of Appeal for Ontario set aside the appointment of the trustee named in a contested Will as administrator pendente lite, or Estate Trustee during Litigation. Gale J.A., speaking for the Court, stated:
The principles which govern the Court in this situation are well stated in two texts. I refer in the first place to Macdonell and Sheard on Probate Practice, at p. 212, where this appears:
Under normal circumstances the Court will not, except on consent, appoint one of the litigant parties as administrator pendente lite. The rule is not an absolute one, but will be departed from only in a very strong case.
In the 21st edition of Tristam and Coote’s Probate Practice, at p. 549, the following statement is made:
A party unconnected with the suit is the most proper person to be appointed administrator pendente lite. A party to the suit is not as a rule appointed unless all other parties consent, but where circumstances make it desirable, the court may appoint a party in the absence of such consent. [Emphasis added]
[7] In Estate of Jean Duncan Sherbourne, 2005 ONSC 22148, Gordon J., after referring to the principle established in Re Bazos, stated:
Although specific criteria for such a strong case [for appointing a litigant as Estate Trustee during Litigation] have not yet developed, I am of the view that the focus of the exercise of the Court’s discretion is with the issue of conflict. In Salisbury v. Dell, [1993] O.J. No. 920 (Gen. Div.), Jenkins J. allowed the appointment of one of two named executors who did not stand to inherit anything of significance under the will, there being no allegations of impropriety on his part.
[8] In the present case, I do not find a strong case for appointing one of the disputing beneficiaries as Estate Trustee during Litigation. The Applicant was the deceased’s second wife. The competing litigants, Kinga and Karla Potrzebowski, are daughters of the deceased’s first wife. To appoint any of these as Estate Trustee would encourage an escalation of the conflict among them, the cost of which would likely exceed the fees that will be charged by Mr. Eisen for his services in the role of a neutral Estate Trustee.
[9] In the view of the Court, it would have been desirable for the PGT to have:
a) consented to serving as Estate Trustee during Litigation for the short term;
b) seen the administration of the Estate through to completing the sale of the home and resolving immediate controversies arising in connection with the cremation or burial of Mr. Potrzebowski and the liquidation of his Estate’s other non-liquid assets; and
c) either secured the consent of the beneficiaries to the substitution of one of them as Estate Trustee, which would then likely have been forthcoming, or applied to the court for directions, pursuant to the leave given to it in the Order dated October 25, 2016, and for the substitution of another Estate Trustee at that time.
[10] The PGT’s decision, instead, to move to set aside the Order was, in the Court’s view, unnecessary and unreasonable, but it was one which the legislation governing it entitled it to make.
[11] Having regard to the additional cost that the order sought will entail for the Estate, the beneficiaries, or both, leave will be granted to the parties and to the beneficiaries, and to the Children’s Lawyer, on behalf of the Applicant’s child, Sara, who is 5 years old, to move for further directions, and a direction will be given at this time for the parties, and the children, and the Children’s Lawyer, to be given notice of future steps in the proceeding.
[12] For the foregoing reasons an order shall issue in the terms of the draft order filed, as amended, which I have signed, as follows:
My Order of October 25, 2016, is hereby varied by removing the Office of the Public Guardian and Trustee as the Estate Trustee During Litigation for the Estate of Peter Potrzebowski.
Mr. Shael Eisen, Barrister and Solicitor, shall be and is hereby appointed as the Estate Trustee during Litigation, without security, of all assets of the Estate, pending the final resolution or settlement of the litigation herein. A Certificate of Appointment of Estate Trustee During Litigation shall be issued to Mr. Eisen, in accordance with Rule 74.10 of the Rules of Civil Procedure forthwith upon the filing of the necessary supporting application with the Court, without further notice or service upon anyone.
Mr. Shael Eisen, Barrister and Solicitor, shall be entitled to compensation at the rate of $300 per hour for services rendered in his capacity as Estate Trustee during Litigation and such compensation is subject to review by the Applicant and Mr. Potrzebowski’s children and by the Office of the Children’s Lawyer. The Applicant or Mr. Potrzebowski’s children and the Office of the Children’s Lawyer may request that Mr. Eisen pass his accounts and Mr. Eisen shall pass his accounts.
The appointment of Mr. Shael Eisen as Estate Trustee during Litigation shall be and is hereby effective immediately notwithstanding that a Certificate of Appointment of Estate Trustee during Litigation has not yet been issued.
The Estate Trustee during Litigation shall be and is hereby authorized to exercise those powers given by law to an administrator, including such powers under the Estates Act, R.S.O. 1990, c. 21, as amended, and the Trustee Act, R.S.O. 1990, c. 51; and without limiting the generality of the foregoing, the Estate Trustee during Litigation is hereby specifically authorized to do the following:
(a) to execute the necessary documents to complete the closing of the sale of property municipally described as, 77 Glenmore Crescent, Brampton, Ontario;
(b) to gather and take full account of the assets and liabilities of the Deceased and of the Estate;
(c) to preserve and maintain the assets of the Estate;
(d) to pay all just debts, funeral and testamentary expenses and all taxes, including real property and income taxes, of the Deceased and of the Estate;
(e) to obtain information, records and files relating to the assets and liabilities of the Deceased in the same manner and to the same extent the Deceased would have been if he were alive; and
(f) to obtain an appraisal for any real or other property comprising the assets of the Estate.
The parties, and Kinga and Karla Potrzebowski, and the Children’s Lawyer, on behalf of Sara Potrzebowski, are at liberty to seek further orders giving direction from the court. Notice shall be given to Kinga and Karla Potrzebowski, and to the Children’s Lawyer on behalf of Sara Potrzebowski, shall be given notice of all future steps in the proceeding.
The costs of this motion are reserved to the judge ultimately hearing this proceeding.
Price J.
DATE: November 9, 2016
CITATION: Potrzebowski v. Potrzebowski, 2016 ONSC 6981
COURT FILE NO.: FS-16-85709
DATE: 2016 11 09
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: AGATHA POTRZEBOWSKI and PETER POTRZEBOWSKI, deceased
BEFORE: Price J.
COUNSEL: Rick Bickhram, for the Applicant
Marek Z. Tufman, for the Respondent
ENDORSEMENT
Price J.
DATE: November 9, 2016