Court File and Parties

COURT FILE NO.: CV-15-124697 DATE: 20170427 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Bank of Nova Scotia Trust Company, In its capacity as Estate Trustee, Applicant AND: Carlo Iaboni, Ferdinando Iaboni and Norma Moretto, Respondents

BEFORE: The Honourable Madam Justice A.M. Mullins

COUNSEL: David N. Delagran, Counsel for the Applicant Emilio Bisceglia, Counsel for the Respondents, Norma Moretto and Ferdinando Iaboni Alfred Shorr, Counsel for the Respondent, Carlo Iaboni

HEARD: March 24, 2017

Endorsement

[1] Pursuant to an application made by Carlo Iaboni wherein he sought to be appointed as Estate Trustee, and to remove his siblings Norma Moretto and Ferdinando Iaboni as Estate Trustees, The Bank of Nova Scotia Trust Company was appointed on March 6, 2013 as Estate Trustee for the estate of Lidia Iaboni.

[2] Mr. C. Iaboni, Mr. F. Iaboni and Ms. Moretto are the three children of Umberto Iaboni and Lidia Iaboni. Umberto Iaboni passed away on February 13, 2010, leaving his entire estate to his wife, Lidia. Lidia Iaboni died on January 12, 2012.

[3] Mr. C. Iaboni deposes that his father became incapacitated from a stroke in or about September of 2005. After his father’s stroke, his mother Lidia assumed control of her husband’s property pursuant to a power of attorney.

[4] On January 11, 2006, Lidia Iaboni executed a continuing power of attorney of property appointing her three children jointly. On December 17, 2006, Lidia suffered a debilitating stroke. A declaration of incapacity was made on May 22, 2007.

[5] On October 31, 2008, Mr. C. Iaboni resigned as one of the three attorneys under his mother’s continuing power of attorney.

[6] The last will and testament of Lidia Iaboni named her three children as Estate Trustees. The will is dated January 11, 2006.

[7] The Bank of Nova Scotia Trust Company, in its capacity as Estate Trustee brought an application to pass accounts returnable in January of 2016. Mr. C. Iaboni filed a Notice of Objection to the passing of accounts dated December 29, 2015, on the following grounds:

1. The trustee refused to give him access to the evidence…
2. The trustee has ‘excluded’ many valuable assets such as a mortgage, two businesses, a condo and life insurance policy.
3. When Lidia Iaboni became disabled, her husband’s wealth evaporated and the applicant has no interest in marshalling this wealth.
4. The applicant has a conflict of interest, as is apparent from their attempt to pass accounts.

[8] The moving parties Ms. Moretto and Mr. F. Iaboni ask that the Notice of Objection be struck as the grounds contained therein are without merit and the issues have already been the subject of an earlier proceeding initiated by Mr. C. Iaboni.

[9] There is a cross motion brought by Mr. Iaboni seeking to set aside orders made in his absence by the Honourable Justice E. Quinlan. On consent, that relief, in part, was granted.

[10] With the exception of the period that pre-dates the appointment of the Bank of Nova Scotia Trust Company as Trustee, Mr. C. Iaboni now consents to the relief sought in the application of the estate trustee for the passing of accounts for the period between March 6, 2013 and July 31, 2015 and allowing compensation as claimed by the estate trustee, payable from the estate, in the amount of $99,343.14. There shall be an order accordingly.

[11] To the extent that Mr. Iaboni has now withdrawn any complaint to the relief sought by the Bank of Nova Scotia Trust Company as Trustee to pass accounts for the period noted above, the first of Mr. C. Iaboni’s objections is dismissed to the extent it may apply to the period from March 6, 2014 and July 31, 2016.

[12] On December 15, 2010, Mr. C. Iaboni issued a statement of claim bearing Court File No. CV-10-102169-00. Ms. Moretto, Mr. F. Iaboni and the estate of Umberto and Lidia Iaboni, among others, were named as defendants to that claim. In that claim, Mr. C. Iaboni sought reinstatement as a power of attorney for his mother. As well he claimed the sum of $45,643.14, sought extensive disclosure of funds that he alleged had been drawn from estate accounts, less justification for payments made on behalf of Umberto and Lidia Iaboni since November 1, 2008. He sought orders for disclosure of all financial statements pertaining to the affairs of the estates of Umberto and Lidia Iaboni, including bank statements, income tax statements, both personal and corporate financial statements, accountants’ bills and legal bills.

[13] Ms. Moretto and Mr. F. Iaboni defended Mr. C. Iaboni’s civil proceeding. Minutes of settlement were entered into in light of a motion brought. Pursuant to these, Ms. Moretto and Mr. F. Iaboni agreed to provide an accounting of their management of the assets and liabilities of Lidia Iaboni’s funds and Mr. C. Iaboni agreed to provide an accounting of his management of the assets and liabilities of his mother while they were under his management. Accounts for the power of attorney for Lidia Iaboni were prepared and delivered on behalf of Ms. Moretto and Mr. F. Iaboni for the period from May 22, 2007 to October 12, 2011. No accounting was delivered by Mr. C. Iaboni.

[14] An order was made on May 15, 2013 dismissing the action for delay pursuant to r. 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[15] His siblings submit that the objections of Mr. C. Iaboni ought to be dismissed because they will delay the administration of the estate, are scandalous, frivolous or vexatious and their filing is an abuse of process of the Court. Notices of Objection are akin to a pleading, they submit, citing Evanoff Estate (Re). Given the earlier proceeding, which raised the same issues, the Notice of Objection is an abuse of process. The claims in the civil action issued on December 15, 2010 were asserted by Mr. C. Iaboni soon after the death of Lidia Iaboni, in 2012. The limitation period to have asserted his claims expired, therefore, more than two years before the Notice of Objection dated December 10, 2015 was delivered. The respondents have, by their evidence, accounted for the assets forming part of their mother’s estate. Mr. C. Iaboni’s allegations that his siblings have misappropriated funds are denied.

Disposition

[16] The relief sought by Mr. C. Iaboni, it may be worth observing, is an amalgam of complaints in relation to (a) the administration of his father’s property following his father’s incapacity and before his death, whilst his mother exercised power of attorney before her incapacity, (b) the administration of his mother’s property following her incapacity for part of which he was one of three attorneys and (c) the administration of his mother’s estate. Assuming that the procedural machinations used to bring these forth for disposition are appropriate, the issues raised by the proceedings are:

1. Are the grounds particularized in the Notice of Objection ‘without merit’ and if so, may the court dismiss the Objections?
2. Did the limitation periods for Mr. C. Iaboni to have asserted claims arising from the administration of his father’s estate and/or the administration of his mother’s affairs under power of attorney for property expire, such that the claims made in his Notice of Objection within the administration of his mother’s estate are out of time?
3. Is Mr. C. Iaboni’s Notice of Objection to the passing of accounts by the Bank of Nova Scotia Trust Company frivolous, vexatious or otherwise an abuse of process?

Allegations that the trustee has ‘excluded’ many valuable assets such as a mortgage, two businesses, a condo and life insurance policy

[17] According to the affidavit of Mr. C. Iaboni sworn May 25, 2016, the mortgage to which he refers in his Notice was a mortgage on 104 Firglen Ridge in Woodbridge, Ontario. That is a property owned and occupied by his sister and her husband. He deposes that, to his knowledge, his father did not discharge this debt prior to his stroke, nor has ‘this asset’ been marshalled by the Bank of Nova Scotia.

[18] The abstract of title appended to Mr. C. Iaboni’s Affidavit discloses that his sister granted a charge in his father’s favour on November 3, 2003. The charge was discharged on January 30, 2006, a matter of some 20 or so days after Lidia Iaboni executed the will and power of attorney for property in favour of her three children that is the subject of these proceedings. It would appear, therefore, that the mortgage was discharged at a time when Lidia Iaboni would have been lawfully and with capacity acting as power of attorney for her husband.

[19] Mr. C. Iaboni had ample time as his mother’s power of attorney following her incapacity in May of 2007 and before he resigned as such in October 2008 to investigate her discharge of a mortgage his father held on his daughter’s property. To the extent his objections arise in respect of this mortgage, it is without merit to an accounting of his mother’s estate. There is no evidence that as of his mother’s death the mortgage was an asset of her estate.

[20] Ms. Moretto and Mr. F. Iaboni are the registered owners of a condominium in Florida. There is a declaration of trust that Norma, Ferdinando and Carlo own the condominium. However unorthodox an investment of Lidia Iaboni’s funds that this real property purchase may have been, there is no evidence that this asset has been excluded from the accounting for the assets of Lidia Iaboni. Effectively, the interests of her three beneficiaries in this asset is adequately reflected in the disclosed documents, and fully addressed in the accounting of the trustee.

[21] The evidence of Ms. Moretto includes a letter marked as exhibit “J” to her Affidavit of May 26, 2016. This and the document marked as exhibit “S” clearly establish that Mr. C. Iaboni has misinterpreted an investment held in the form of segregated funds as a life insurance policy. He has received a one third share of this fund. The evidence establishes that his objection on this ground is unfounded.

[22] As to the complaints Mr. C. Iaboni makes with respect to two businesses, he has now signified his consent to the sale of Casone Investments Limited. Although he alleges that Ms. Moretto has no equity interest in Casone Investments Limited, the share certificate and share register attached as Exhibit “A” to Ms. Moretto’s Affidavit, sworn the 16th of June, 2016 discloses that she is the holder of one common share. The share register confirms that this share was issued on December 1, 1983 and that her mother held one common share and her mother and father held two common shares as joint tenants. Mr. C. Iaboni’s objections relating to the corporate interests are, therefore, no longer relevant and clearly unfounded respectively.

Allegation that when Lidia Iaboni became disabled, her husband’s wealth evaporated and the applicant has no interest in marshalling this wealth.

[23] Pursuant to the Minutes of Settlement signed by Mr. C. Iaboni and Mr. F. Iaboni and Ms. Moretto, the latter two caused accounts to be prepared covering their administration as power of attorney to their mother for the period from May 22, 2007 through October 21, 2011. These accounts present a list of original assets, a reconciliation of capital receipts and disbursements, details of the capital receipts and disbursements, details of the revenue receipts and disbursements, a list of unrealized original assets, details of investment accounts at TD, Scotiabank and National Trust Co., Montreal Trust, Dundee Wealth, a list of Trustees Investments, a list of the liabilities of Lidia Iaboni, a reconciliation of U.S. Funds, receipts and disbursements and detailed lists of these, and a statement of compensation showing, among others things, payment to Mr. C. Iaboni.

[24] In respect of the accounting provided by his siblings, Mr. C. Iaboni deposes as follows:

At exhibit F in the Applicant’s motion record there is about 70 pages of stuff, which might be evidence as far as the Executor is concerned, but it is certainly not evidence of banking transactions as far as I am concerned ……..I highlight the following dubious entries from the Executor’s (sic) stuff….

[25] Specifically, Mr. C. Iaboni regards the entries at page 49 of the accounting as dubious, because, he says, this contradicts what he was told by a bank manager that the accounts were closed and all of the money was gone; he perceives there to be a gap before the funds ‘resurfaced’ in investments noted at items 30 and 33-34, cheques were likely written to an agent/broker not specifically to Hollis Wealth a.k.a. Scotia Wealth, he only remembers one, not two accounts at Scotia Bank, and he questions a deposit from London Life of $140,000 and suspects its veracity. He characterizes a sum that he acknowledges having received, which is absent from the accounting, as evidence that there are other sums being ‘hidden’ from the Court. The purchase of the condominium in Florida constituted a criminal transaction and there was rent received before a permit to rent the condominium had been obtained.

[26] In summary, Mr. C. Iaboni contends that when Lidia Iaboni became disabled, her husband’s wealth evaporated and the applicant has no interest in marshalling this wealth. He further deposes that there remain live issues as to the validity of the life insurance policy, the discharge of the mortgage, the validity of a family trust, the ownership of the house in Florida, the ownership of Casone Investments Limited, the cash worth of Lidia Iaboni, the disposition of cash by his siblings, and a conflict of interest he alleges exists between Penmore Wealth Management and Scotia Wealth Management (the parent company of the Executor).

[27] Mr. Iaboni deposes that he consents to pass his accounts as power of attorney for his mother, but complains he has not had access to the information necessary to do so. After his father’s death, he says, he became suspicious, attended at Scotiabank, RBC and called police. He is unable to pass his accounts, he says, without the cooperation of RBC, TD, CIBC and Scotia Bank, among other institutions. He offers no other evidence as to why he has failed to comply with the Minutes of Settlement he signed, and which obliged him to pass accounts then, nor does he give any explanation as to why he allowed his civil action to be dismissed.

[28] Ms. Moretto deposes that she and Mr. F. Iaboni have provided all accounting records requested of them by the trustee and has provided the trustee with the accounting for the entire period she and her two brothers were estate trustees and attorneys for property.

[29] If an analogy is drawn to the rule governing motions for summary judgment, the question to be answered is whether there are genuine issues raised by Mr. C. Iaboni’s Notice of Objection that require a trial. The evidence is to be considered and may be weighed, evaluated as to credibility and reasonable inferences may be drawn.

[30] The evidence tendered by Mr. C. Iaboni rises little above bald assertions and interpretations suffused with suspicion but devoid of real substance. The evidence establishes that he is mistaken as to there being unrealized assets consisting of a mortgage, condominium and life insurance. His assertion that his sister has no interest in the corporation flies in the face of clear evidence of her having been issued a share.

[31] The accounts prepared by his siblings and the accounts prepared by the trustee of his mother’s estate establish prima facie that all of the assets have been marshalled. I find the evidence of his sister to be credible and reliable and I accept her assertion that there has been no misappropriation of funds and full disclosure to the present trustee. (The assertion that the Bank of Nova Scotia Trust is in a conflict of interest was not advanced in argument nor is it made out on the evidence). By the criteria established in the rule governing motions for summary judgment, his objections on the merits ought to be dismissed.

Did the limitation periods expire, such that the claims made in his Notice of Objection are out of time?

[32] The objections of Mr. C. Iaboni that the trustee ‘excluded’ many valuable assets such as a mortgage, two businesses, a condo and life insurance policy from the estate of Lidia Iaboni and that when Lidia Iaboni became disabled, her husband’s wealth evaporated and the applicant has no interest in marshalling this wealth is, in part, a complaint about the administration of Umberto Iaboni’s affairs, between the onset of his disability in 2006 and his death in 2010 and latterly a complaint about the administration of his mother’s affairs between the onset of her disability in 2006/2007 and before her death in 2012. His allegations in the Notice of Objection filed in his mother’s estate, as outlined above were in substance the same as those made in the litigation he initiated on December 15, 2010. All of the transactions about which he complains were disclosed to him no later than the accounting delivered on behalf of his siblings pursuant to the Minutes of Settlement, with the possible exception of the discharge of the mortgage on his sister’s home, which was a matter of public record. His civil action was dismissed on May 15, 2013.

[33] It appears, therefore, that Mr. C. Iaboni’s Notice of Objection raises issues as particularized above that are outside of the 2-year period within which they may have been pursued.

Abuse of Process

[34] Mr. C. Iaboni’s civil action was not adjudicated on the merits, it was dismissed by the administrative consequences of the Rules of Civil Procedure, which is an important factor to consider. The allegations in the Statement of Claim dated December 15, 2010 are, particularly when the evidence he filed in these proceedings is considered, largely the same. He did not comply with the obligation he undertook, on consent, to pass accounts, whereas his siblings did. He has proffered no evidence as to why he allowed his action to be dismissed, nor why he didn’t to seek to revive it. He alleges wrongdoing by his siblings, including criminal misconduct, misappropriation of funds and of hiding assets from the Court, which are serious and approach scandalous. In all of these circumstances, his assertion of a right to litigate the issues he now attributes to the estate of his mother, but which are really issues arising from the exercise by he and his siblings of the powers of attorney his father, then mother granted, does, in my view, constitute an abuse of process.

[35] For all of the above reasons, the Notice of Objection of Mr. C. Iaboni is struck.

[36] The parties may make submissions as to costs in writing within 30 days or such longer period to which they consent.

Madam Justice A.M. Mullins Date: April 27, 2017