OSHAWA COURT FILE NO.: FC-16-739-00
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN
Kimberly Anne Clayton
Applicant
- and -
Andrew Walton Clayton
Respondent
COUNSEL:
Paula R. McMurtry, for the applicant
Matthew A.B. Hickey, for the respondent
HEARD: December 8, 2017
Timms J.
ENDORSEMENT
1On December 8, 2017, I heard a motion brought by the applicant, Cheryl Sparkes, the estate trustee for the estate of Kimberly Clayton. The applicant sought three orders.
2The first was that the respondent be found in contempt of paragraph 6 of the order of Justice Rowsell of March 6, 2017.1 I dismissed that head of relief because I could not find that the respondent had wilfully disobeyed that term of Justice Rowsell’s order.
3The second was for the partition and sale of a property located at 1075 Graham’s Lane, Algonquin Highlands, Ontario. I dismissed that part of the motion because it had been brought before one year after the death of the deceased applicant. As such it was a nullity.2
4The third and final was one dispensing with the consent of the sole beneficiaries of the estate (the two adult daughters of the deceased applicant and the respondent: Tyler Clayton, now 25 years old and Darci Clayton, now 20 years old) for the transfer to them of a one-half interest in the above property and another property located in Uxbridge, Ontario.3 The beneficiaries, who were not parties to the motion, filed affidavit material indicating that they did not want the transfers to take place. After admitting that I knew next to nothing about estate law, I posed the question to counsel for the applicant as to whether the estate trustee could in those circumstances proceed with her motion. I wondered out loud whether the fiduciary duty owed by the trustee to the beneficiaries would prevent her seeking an order contrary to their wishes, and whether as a result she should be replaced. As counsel for the applicant did not seem prepared to address that issue, I gave her the opportunity to make written submissions on that issue and on costs. I have now received those submissions from everyone.
5The submissions of the applicant herein do not address the very issue that led to my adjourning the third head of relief in the motion. Although counsel filed a book of authorities, none of the cases contained therein touched on the right of an estate trustee to act against the specific and clear instructions of the sole adult beneficiaries of the estate.
6Perhaps counsel felt that she did not have to address that issue. She wrote in paragraph 7 of her submissions that the estate trustee did not wish “to continue to try to protect the assets (of the estate) for the children which they do not want”. I interpret that to mean that the applicant is abandoning the remainder of her motion. Therefore, I do not need to determine whether the applicant is entitled to an order dispensing with the consent of the beneficiaries to the transfer to them of a one-half interest in the two properties.
7That leaves the issue of costs. The applicant takes the position that there should be no costs award against her on the motion, but if costs are awarded against her, then those costs should be offset in their entirety by costs against the respondent for his failure to appear on the motion when it was first called on December 7, 2017. For his part, the respondent is seeking costs against the applicant personally. He rejects any responsibility for costs with respect to December 7, 2017.
8On December 11, 2017, counsel verbally advised counsel for the respondent that her client was agreeable to being removed as estate trustee, and to receiving no estate compensation, on the condition that no costs be sought against her. Then on January 15, 2018, counsel for the applicant served a formal offer to settle on the respondent. That offer included a term that the estate trustee would resign, to be replaced by Tyler Clayton the eldest daughter of the parties, as soon as all of the estate debts were paid. There were several additional terms relating costs of the motion:
that the estate trustee receive no compensation;
that the estate accounts as attached be approved under Rule 74;
that the estate trustee not be liable for any loss in the estate as a result of her role, and that she be indemnified by the beneficiaries with respect to any loss;
that the respondent be responsible for his own personal CRA debt; and
that the beneficiaries of the estate accept the offer in writing, upon receipt of independent legal advice.
9I do not understand how any of these terms relate in any way to the issues that I had to decide on the motion that I heard on December 8, 2017, except possibly the term that the estate trustee would resign in favour of Tyler Clayton. One must not forget that Tyler and Darci Clayton are not parties to this litigation. For that reason, I do not intend to set out and examine the position of the respondent as it relates to the applicant’s offer. The respondent made no offer of his own.
10The applicant was entirely unsuccessful on her motion. I dismissed the first two heads of relief on December 8, 2017, and the applicant has now abandoned the third and final head of relief. As the successful party, the respondent is prima facie entitled to his costs.
11The respondent wants the court to make any costs order against the applicant personally, and not in her capacity as trustee of the estate. Other than making reference to the duties of a trustee and the alleged improper motives of the trustee of the estate, counsel for the respondent cited no law that would support an order against the trustee personally.
12There was no evidence that the estate trustee was acting in breach of her duties to the estate or the beneficiaries. The difference of opinion between the estate trustee and the beneficiaries was not due to the estate trustee acting contrary to their interests but contrary to their wishes. The complications arise due to the beneficiaries’ relationship with the respondent (their father) and the estate trustee’s duty to act in the best interests of the beneficiaries. I therefore decline to make a costs order against the applicant personally.
13Neither will I make a costs order against the estate. That would make no sense at all. As counsel for the respondent points out in his submission, any award against the estate will ultimately come out of the pockets of the beneficiaries. Exercising my discretion, I decline to make any order of costs against the estate.
14Finally, having read both sets of submissions regarding costs for the appearance on December 7, 2017, it is my determination that there should be no order as to costs for that date.
15Paragraph 16 of the order of Justice Rowsell of March 6, 2017 contemplated the mess that the parties now find themselves in: the effective frustration of the settlement in the event that children objected to the settlement. That paragraph said that the parties would attend for a further conference if that happened. I am ordering that a conference be arranged at the earliest possible date. I recommend strongly that the judge who presides over the conference be someone with considerable experience in the area of estate law.
The Honourable Mr. Justice Roger Timms
DATE RELEASED: March 8, 2018
Footnotes
- That order purported to resolve all aspects of the litigation between the parties pursuant to the Family Law Act.
- See subsection 3(2) of the Partition Act, R.S.O. 1990 Chapter P.4
- This was supposed to have occurred pursuant to the order of Justice Rowsell of March 6, 2017.