Horbaczyk v. Horbaczyk, 2017 ONSC 6666

CITATION: Horbaczyk v. Horbaczyk, 2017 ONSC 6666

COURT FILE NO.: CV-15-459-ES

DATE: 20171106

SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE ESTATE OF JOHN JOSEPH HORBACZYK, deceased

RE: TED HORBACZYK and EDWARD HORBACZYK, Applicants – and - STANLEY HENRY HORBACKZYK, Respondent

BEFORE: Emery J.

COUNSEL: Wendy Greenspoon-Soer, for the Applicants Ted Horbaczyk and Edward Horbaczyk

Stanley Henry Horbaczyk, appearing in person

HEARD: October 30, 2017

E N D O R S E M E N T

1The applicants and the respondent are brothers. Edward John Horbaczyk (“Edward”) and Ted Joseph Horbaczyk (“Ted”) were named as the Estate Trustees in a Codicil made on December 7, 2012 by their father, John Joseph Horbaczyk (“the deceased”) to his Last Will and Testament dated August 11, 1999. The spouse of the deceased, Sophie Horbaczyk, predeased him on October 25, 2012.

2The deceased died on April 15, 2015. Edward and Ted have been acting as Estate Trustees of their father’s Estate ever since, even though no Certificate of Appointment has ever been issued. Their brother Stanley Henry Horbaczyk (“Stanley”) has taken steps to dispute several issues ranging from the making of the Codicil by the deceased, to the administration of his Estate by the applicants.

3The Estate consisted primarily of a house and property at 2073 Feldwood Road in Mississauga, the contents in that house and the personal effects of the deceased.

4The house and property at 2073 Feldwood Road was sold under an Order made by Justice Edwards on October 15, 2015. This order also required the applicants to have the contents of the house appraised or otherwise valued, and to permit Stanley three opportunities to visit the house for as long as he liked in the presence of a neutral third party.

5Under an Order made by Justice Sproat on April 28, 2016, title to 2073 Feldwood Road vested in Edward and Ted to give them the legal ability to complete the sale of that property. The brothers could not agree on an appropriate holdback from the distribution of the proceeds of sale because of the issues raised by Stanley. The Order therefore provided that the net proceeds be split evenly between all three brothers subject to a holdback of $250,000 to be held in trust by the real estate lawyer, Robert Lof.

6A further distribution of $52,000 was made to each brother pursuant to a subsequent Order made by Justice Trimble, subject to a costs award of $1,000 that was deducted from Stanley’s share.

7Stanley has now brought a motion for directions to litigate the issues he has raised. Edward and Ted have also brought a motion for directions to litigate or resolve those issues. Their motion materials contain evidence that they applied for a Certificate of Appointment in April 2015, but Stanley filed a Notice of Objection to that application.

8Edward and Ted have also brought an application to pass accounts. Stanley has filed a Notice of Objection to the accounting filed on that application as well.

9Both motions for directions and the application to pass accounts were adjourned to October 30, 2017 to be heard together. After receiving submissions, I determined that both motions for directions should be heard together that day. Upon hearing those submissions, I have also determined that the application to pass accounts should be adjourned to a later date because the resolution or adjudication of those issues raised in each motion for directions will in all probability inform related issues on the application to pass accounts.

10I therefore make the following Order under Rule 75.06 (3) that the following issues are in dispute and shall be adjudicated by the Court:

1. the validity of the Codicil made by the deceased on December 7, 2012 to his Last Will and Testament, and whether he changed it under the alleged undue influence asserted by Edward and Ted upon him to make that Codicil;

2. an accounting of the sale, transfer, gifting or retention by the applicants of any and all personal property of the deceased, including all furniture and personal effects in the house at 2073 Feldwood Road at the time of his death;

3. a distribution of the remaining proceeds from the sale of 2073 Feldwood Road held in trust by Robert Lof;

4. breach of any fiduciary duty owed by Edward and Ted to the Estate or to any beneficiary when acting as trustees appointed by the deceased with respect to their management of the cash disbursements and receipts for the Estate; and

5. whether Edward and Ted can pass accounts for the Estate despite the fact that neither of them has ever been appointed as an Estate Trustee by the Court under a Certificate of Appointment.

11I further order that the issues shall be litigated as an action, and give the following directions under Rule 75.06(3) for the conduct of that action:

1. Stanley shall be the plaintiff;

2. Edward and Ted shall be the defendants;

3. all documents Stanley is to serve on Edward and Ted shall be served on Ms. Greenspoon-Soer as their lawyer of record;

4. Stanley shall serve and file a Statement of Claim setting out the issues and all allegations of material fact in support of those issues by December 15, 2017;

5. the defendants shall serve and file a Statement of Defence and any Counterclaim by January 30, 2018;

6. Stanley may serve a Reply and/or a Statement of Defence to any Counterclaim by February 15, 2018;

7. Ted shall be appointed as the Estate Trustee during Litigation for this action, without having to post security;

8. each party shall serve a sworn Affidavit of Documents on any adverse party within 20 days after the last Statement of Defence is served. Edward and Ted may refer to the accounts they have filed in the application to pass accounts as part of that disclosure, and if so, those documents shall become evidence before the Court at trial;

9. each party shall give their evidence in chief by affidavit, to be served on every adverse party 30 days before trial, and shall attend in Court to be cross-examined on the day of trial; and

10. any person that a party proposes to call as an expert to give opinion evidence shall produce a report, with qualifications and an Acknowledgement of Expert, at least 60 days before trial. The expert’s report shall be filed as his or her evidence in chief, but the expert must attend Court to be cross-examined on the day of trial.

12Stanley is also asking for an order directing the parties to participate in mediation. He asks for this order under Rule 75.2. However, he has not requested this relief in his motion for directions; he seeks only directions generally with respect to the Estate under Rule 75.06.

13Fortunately, Rule 75.06 (3.1) provides that the Court may order that a mediation session take place under Rule 75.2, with power to give the necessary directions. Therefore, this Court makes an order that the parties attend a mediation session, subject to the following directions:

a. the parties shall retain a lawyer or retired judge of any Court in Ontario who is recognized as a person knowledgeable in the law of Wills and Estates as the mediator;

b. those issues identified for the trial of an action in paragraph [10] shall be the issues for mediation;

c. this mediation shall take place by April 30, 2018, but only after the steps in paragraph [11] 4 to 8 have been completed to ensure that all parties have notice of the positions on any issue taken by the other parties, and the necessary level of disclosure has been made;

d. it is a condition of this mediation that Stanley retain legal counsel knowledgeable in estate litigation to prepare for, and to attend this mediation with him; and

e. the costs of the mediator shall be borne by the Estate, not to exceed $5,000.

14The application to pass accounts is adjourned to no fixed date, returnable on 14 days’ notice.

15All costs related to each motion for directions are reserved to the trial judge hearing the action.

16I am not seized of either motion for directions or any hearing arising from these orders, or of the application to pass accounts.

Emery J.