Court File and Parties
Court File No.: 05-162/16 Date: 2018-09-09 Ontario Superior Court of Justice
In the Matter of the Estate of Johann Rubin, also known as Jay Rubin, Deceased
Between: Joseph Pernica in his capacity as litigation guardian for Ida Rubin, Applicant
And: The Bank of Nova Scotia Trust Company, in its capacity as Succeeding Estate Trustee of the Estate of Johann Rubin, also known as Jay Rubin Estate, Morris Eric Rubin in his capacity as attorney for the property for Ida Rubin and personal capacity, Sarah Werner, Faigy Esther Hammer, Annie Mayer and The Office of the Children’s Lawyer, Respondents
Before: F.L. Myers J.
Counsel: William D. Black, Shane D’Souza and Jessica Firestone for Joseph Pernica, Litigation Guardian for Ida Rubin, Henry Juroviesky for Sarah Werner Justin DeVries and Jacob Kaufman for Morris Rubin, David Lobl for The Bank of Nova Scotia Trust Company, Estate Trustee of the Estate of Johann Rubin, Arieh Bloom for Annie Mayer, John Adair and Stephanie Bishop-Hall for Faigy Hammer.
Heard: September 7, 2018
Endorsement
The Case Conference
1Joseph Pernica, the litigation guardian for Ida Rubin, sought a case conference to deal with his status in relation to upcoming motions to be heard on September 12, 2018.
2I was case managing this matter until December 21, 2017. The matter is now proceeding on the Estates List in the ordinary course. However, Mr. Pernica asked me to convene a case conference, appropriately, in light of the subject matter of the current dispute as I explain below.
Background
3This application was commenced by Annie Mayer. It concerns her efforts to obtain an accounting of the estate of her late father Johann Rubin. The estate is worth many tens of millions of dollars or more.
4After being stonewalled for several years in her efforts to obtain information and to have the trustees of her father’s estate pass their accounts, Ms. Mayer sued her brother Morris Rubin, her sisters Faigy Hammer and Sarah Werner, and her mother Ida Rubin to obtain the accounting to which she was entitled by law.
5In my endorsement dated March 1, 2017, reported at 2017 ONSC 1404, I rejected an effort by Ms. Mayer’s siblings to prohibit Ms. Mayer’s counsel from acting for her. In setting out the background, I noted that in 2015 an issue arose among the siblings concerning their mother’s capacity to act as an estate trustee of her late husband’s estate. At that time, Mr. Juroviesky was acting for all three of Ms. Mayer’s siblings and their mother. [1]
6In the course of seeking to remove Ms. Mayer’s counsel, the moving parties disclosed an email that their lawyer Mr. Juroviesky wrote in which he set out his view that Ida Rubin did not have capacity to manage her affairs. He also doubted that she had capacity in 2004 when she signed a power of attorney in favour of her son Morris Rubin.
7After dismissing the motion to remove counsel, the court assessed costs of the motion against Ms. Mayer’s siblings on a substantial indemnity basis. In doing so, I found that the motion had not been brought in good faith. Mayer v Rubin, 2017 ONSC 1704.
8By endorsement dated May 29, 2017, reported at 2017 ONSC 3498, I granted Ms. Mayer’s request to appoint Scotiatrust as Estate Trustee During Litigation for the father’s estate. Paragraphs 3 to 6 of my endorsement provide:
3It seems apparent that Ida Rubin likely lacks capacity to manage her affairs and has for many years to the knowledge of all of the other parties. They have all been content with Morris putting cheques before Ida for signature and dealing with her funds as if it was Ida actually making informed investment and gifting decisions. There is much pretense at play.
4The estate trustees are empowered to act by majority. Without the applicant, obtaining a majority requires all three of the others. Just the two of Morris and Sarah are not a majority of the four. Yet many acts, including both very substantial commercial transactions as well as distributions to the trustees of very substantial amounts of the trust funds held by the trustees for Ida, have been conducted ostensibly by Morris and Sarah with Ida having no real involvement beyond signing cheques that Morris puts in front of her.
5In 2014, the respondents’ lawyer, Mr. Juroviesky, wrote that Ida Rubin lacked capacity and he doubted that she had capacity as long ago as 2004 when she purportedly signed a power of attorney in favour of Morris. While Mr. Juroviesky is not a capacity assessor, as counsel to the respondents, his words are admissible as statements of a party which is an exception to the hearsay rule. The respondents submitted at the hearing that Ida Rubin supports their position. I told counsel’s agent at the hearing that if the respondents wished to rely on Ida’s evidence, she could be brought to court to testify that afternoon. Not surprisingly, she did not testify.
6One wonders whether Ida ought to be represented by a litigation guardian and how Mr. Juroviesky takes instructions from her given his view.
9In addition to appointing the ETDL, the court also ordered the estate trustees to pass their accounts within 90 days.
10On September 8, 2017, Morris Rubin obtained a current and a retrospective capacity assessment of his mother conducted by Dr. Richard W. Shulman. Dr. Shulman is a well-known psychiatrist who specializes in geriatric psychiatry in Toronto. His reports are regularly sought out and admitted as expert evidence in estates matters in Toronto. Dr. Shulman left no doubt, as everyone already understood, that Ida Rubin lacked capacity to manage her property or to participate in this litigation.
11By endorsement dated September 18, 2017, I ordered Morris Rubin to produce the capacity assessments and all documents that had been provided to Dr. Shulman to Ms. Mayer and the ETDL in connection with a new motion by Ms. Mayer to appoint a litigation guardian for her mother and to make the ETDL’s appointment permanent. I scheduled a full day for the hearing of this motion.
12No one opposed an order appointing a litigation guardian for Ida Rubin. The contest concerned the choice of the litigation guardian. By order dated October 19, 2017, I appointed Mr. Pernica as litigation guardian for Ida Rubin, “…in [this] application in court file 05-162/16, in the application to pass accounts to be commenced by Morris [Rubin] and Sarah [Werner] and in any related litigation or matters.”
13Paragraph 2 of the October 19, 2017 order provides:
THIS COURT ORDERS that Mr. Pernica, or his agent or counsel, shall be entitled, upon request to production and delivery of any and all information related to Ida [Rubin] including but not limited to medical, psychiatric, financial, governmental and personal information from any person, firm, corporation, institution or government authority, whether federal, provincial or municipal, to which Ida [Rubin] would be entitled in fulfilling his role as litigation guardian as set out in paragraph 1 above.
14The October 19 order adjourned to a later date Ms. Mayer’s request for the appointment of the ETDL as the permanent estate trustee. I deferred this outcome to allow Mr. Pernica time to get up to speed and make submissions as to an appropriate outcome from Ida Rubin’s perspective.
15Mr. Pernica reported to the court that in light of the conduct of the siblings, he supported the appointment of Scotiatrust as replacement estate trustee on a permanent basis as being in the best interests of Ida Rubin. By that time, Morris Rubin had appointed Messrs. DeVries and Kaufman as his counsel. On the return of the motion, all parties consented to the permanent replacement of the estate trustees by Scotiatrust.
16With that order, this proceeding was concluded. The remaining accounting by the former estate trustees Mr. Rubin and Ms. Werner was to be brought by a fixed date.
Current Status
17It is now September and the accounting has still not advanced. Apparently, the parties are continuing to negotiate with the estate’s accountants to obtain access to records. No one has brought the issue to the court.
18In the late spring or early summer, Mr. Pernica’s counsel obtained copies of some of Ida Rubin’s bank account records from her bank. As I had made clear in prior endorsements, funds distributed from the late Mr. Rubin’s estate through Ida Rubin’s spousal trust had been deposited into Ida Rubin’s bank accounts and Morris Rubin then distributed the funds to the siblings by putting cheques in front of their mother for signature. Any effort to have the siblings account as estate trustees for the funds taken from their father’s estate and the spousal trust necessarily includes tracing the funds through their mother to each of the siblings.
19Mr. Juroviesky, now acting only for Ms. Werner, vociferously objects to Mr. Pernica having obtained Ida Rubin’s personal banking records. He argues that despite his authority in para. 2 of the October 19, 2017 order appointing him, Mr. Pernica has exceeded his jurisdiction as litigation guardian and invaded Ida Rubin’s privacy. He raises Ida Rubin’s rights under the Charter of Rights. Mr. Juroviesky notes that Mr. Pernica’s entitlement to obtain financial documents under para. 2 of his appointment order is limited to “fulfilling his role as litigation guardian as set out in paragraph 1 above,” Under para. 1 of the appointment order, Mr. Pernica can only act in this proceeding, in the estate accounting, and “in any related litigation or matters.” Mr. Juroviesky argues that Ida Rubin’s private affairs do not fall within the Mr. Pernica’s mandate. He argues further that Ida Rubin gave gifts when she had full capacity and it is no one’s business what she chose to do with her funds once they were distributed to her from her late husband’s estate. This issue remains for others to decide.
20Meanwhile, Scotiatrust has funds on hand and it has concerns as to whom the funds should be distributed. It has brought a new application for directions to seek court approval of a distribution methodology. Morris Rubin is Ida Rubin’s attorney for property under a 2004 power of attorney – the validity of which is likely contested. Mr. DeVries advises that he is working with counsel for the estate trustee and Mr. Pernica to reach an agreement on a transparent mechanism to allow Mr. Rubin to receive and deal with the funds pending the accounting. This should be soluble by the parties especially as each wants interim distributions to fund their own families and their mother.
21Mr. Pernica has also commenced a new application on behalf of Ida Rubin to require Morris Rubin and Sarah Werner to pass their accounts in relation to their dealings with their mother’s bank accounts. The parties know that the spousal trust distributions were received formally by Ida Rubin. The issue that has formed the subject of Ms. Mayer’s complaints throughout is what Mr. Rubin and Ms. Werner did with those funds once in their mother’s accounts.
22Ms. Hammer has recently appointed Mr. Adair as her counsel. She took no position in the case conference.
23Mr. Juroviesky, now for Ms. Werner alone, has raised a series of objections to the two new proceedings brought by the estate trustee and Mr. Pernica. As a result, by endorsement dated July 20, 2018, Wilton-Siegel J. set three preliminary questions to be resolved on a motion this coming Wednesday, September 12, 2018:
i. Should a litigation guardian be appointed for Ida Rubin in the applications commenced by Scotiatrust and Joseph Pernica? ii. If #1 is “yes”, should the litigation guardian be Mr. Pernica or someone else? iii. Can the litigation guardian for Ida Rubin compel Morris Rubin and Sarah Werner to pass their accounts?
24Justice Wilton-Siegel set a timetable for the delivery of material for the motion. After the time for delivery of material had expired and after Ms. Hammer appointed Mr. Adair as her counsel, Mr. Juroviesky, for Ms. Werner, delivered a new purported capacity assessment of Ida Rubin dated August 20, 2018. In it, an assessor purports to opine that “Ms. Rubin is capable of understanding and appreciating her relevant financial affairs.”
25Upon receiving objections as to the late delivery of this material, Mr. Juroviesky has sought to regularize the proceedings by delivering a notice of motion to vary the October 19, 2017 order appointing Mr. Pernica as litigation guardian for Ida Rubin. As a result, counsel for Mr. Pernica requested this case conference to consider how to deal with the new motion especially in light of the motion that has been scheduled for this coming Wednesday. He rightly notes that a motion to vary is generally to be brought before the judge who made the order originally.
The Parties’ Positions
26Mr. Black, for Mr. Pernica, argues that the passing of accounts from the estate requires the passing of accounts by Morris Rubin and Sarah Werner on behalf of their mother in relation to her bank accounts as well. It is common ground that rightly or wrongly the children have taken Ida Rubin’s funds. Mr. Black argues that the purpose of the passing of the estate accounts is to find the money that was supposed to be used for Ida Rubin and has been distributed to the estate trustees and Ms. Hammer. The purpose of the motions on Wednesday is to start to deal with accounting for past gifts and to determine how future distributions are to be handled. This requires that the issue of who represents Ida Rubin at the motion be dealt with. Mr. Black says that the issue was fully briefed for the motion next Wednesday (before Mr. Juroviesky brought the motion to vary my order) and that I can deal with it now on that written record.
27Mr. DeVries for Morris Rubin agrees that the issue of Ida Rubin’s capacity needs to be resolved. He notes that capacity issues are usually resolved in open court. He asks the court to stay the internecine skirmishes and schedule the main accounting. He says that once the parties have Deloitte’s records, mediation should be possible.
28I have already recited Mr. Juroviesky’s objections to the litigation guardian’s conduct above. Mr. Juroviesky agrees that the question of Ida Rubin’s capacity should only be dealt with in open court. He supports Mr. DeVries’ request for a stay of the proceedings to allow the parties to try to negotiate toward settlement. If negotiations fail, he would then have the litigation resume full bore.
29Mr. Bloom for Ms. Mayer agrees that mediation is desirable as soon as possible. But his client wants information as to how much money her siblings took as compared to what they gave to her in order to have a level informational playing field going into a mediation. She therefore supports Mr. Pernica’s application.
30Mr. Lobl for the estate trustee argues that his client’s application for directions as to how to distribute funds on hand is needed by all of the parties and should not be stayed regardless of any other stay that may be considered.
Outcome
31Mr. Juroviesky was unable to cite a basis on which his client, Ms. Werner, has status to bring a motion for Ida Rubin seeking to remove the litigation guardian or to vary the order appointing Mr. Pernica. He does not assert any of the grounds to vary an order listed under Rule 59.06. He also did not mention Rule 7.06 (1)(b) that allows a person for whom a litigation guardian was appointed, or the litigation guardian himself or herself, to move to end the guardianship if the party “ceases to be under disability.” Ms. Werner has no standing under that rule to bring this matter forward.
32I therefore decline to schedule for hearing Ms. Werner’s purported motion to vary my order appointing Mr. Pernica as litigation guardian. The motion does not purport to raise a prima facie basis to vary an order under Rule 59.06 and Ms. Werner has no standing under Rule 7.06 (1)(b) to seek to remove the litigation guardian otherwise. The purported motion is an untimely disruption that should not proceed.
33Mr. Pernica remains as litigation guardian under the terms of his appointment until he is discharged.
34I do not foreclose a motion by Ida Rubin or Mr. Pernica under Rule 7.06 (1)(b). I am not making any decision on the merits of whether Ida Rubin has returned to capacity. No proper motion or proper evidence is before me. [2]
35Although Rule 7.06 (1)(b) generally allows a motion to remove a litigation guardian to be brought ex parte, I direct that in the event that Ida Rubin wishes to bring a motion to remove the litigation guardian, she is to deliver motion materials to counsel for all parties listed at the outset of this endorsement including, at minimum, an affidavit sworn by her personally. She is also directed to attend the hearing of the motion personally in open court for cross-examination by counsel for any of the listed parties. I agree with Mr. DeVries that capacity issues can have a special need for transparency. Mr. Juroviesky too argued that an assessment of Ida Rubin’s capacity should be held in open court. It is essential in the interests of justice and in the best interests of Ida Rubin that the greatest of care be taken before proceeding down any road that may disturb Ida Rubin's status quo. The usual course of handling such matters discreetly in ex parte proceedings creates too much risk of abuse in this particular case. It would also undermine the open courts principle in this highly contested proceeding.
36I do not purport to make any ruling to bind the judge on September 12, 2018 in dealing with any matter properly before him or her. I have decided only that Ms. Werner’s proposed motion to vary my order will not proceed and I have made a direction as to process in the event that Ida Rubin wishes to move under Rule 7.06 (1)(b). Whatever was to be before the judge next Wednesday remains for that judge to deal with and decide.
37I told the parties at the end of the case conference that I would not be staying the case so that they should be prepared to proceed on September 12, 2018. While mediation is very desirable, I would not at this time force a party to go into mediation without information as to the amounts received by each sibling from the estate or the spousal trust funds purportedly distributed to Ida Rubin. Moreover, the estate trustee needs a mechanism to distribute funds on a go forward basis. While the parties should be able to agree on that if they are acting reasonably and transparently, in the absence of agreement, the matter needs to be heard and resolved sooner rather than later.
38Any party seeking costs of the case conference and the purported motion to vary may deliver no more than two pages of costs submissions plus a costs outline to my attention by September 17, 2018. Anyone against whom a costs order is sought may respond with no more than two pages of submissions (or, if more than one party seeks costs against that party, then up to five pages of submissions) plus a costs outline by September 24, 2018. All submissions shall be delivered as searchable PDF attachments to an email to my Assistant. No copies of case law or statutory provisions are to be included. References to case law or statutory materials are to be made by hyperlink to embedded in the party’s submissions.
F.L. Myers J.
Date: September 9, 2018
Footnotes
1Ms. Hammer had ceased to be a trustee of her father’s estate some time ago. Ms. Werner, Mr. Rubin, and their mother Ida Rubin were the remaining estate trustees with Ms. Mayer.