Court File and Parties

COURT FILE NO.: 18-66136 DATE: 2018-12-11 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: EMMANUEL NECTARIOS VOLOUDAKIS, JOANNA SCHISLER a.k.a. JOANNA VASSILIKI VOLOUDAKIS and CHARICLIA PICHE a.k.a. CHARICKLIA ALEXIA VOLOUDAKIS, Applicants

AND:

KALLIOPI VOLOUDAKIS and GEORGE VOLOUDAKIS a.k.a. GEORGEOS VOLOUDAKIS, Respondents

BEFORE: The Honourable Mr. Justice C.S. Glithero

COUNSEL: Konstantine P. Ketsetzis, for the Applicants Respondents, Self-represented

HEARD: December 6, 2018

APPLICATION UNDER RULES 14.05(2), 14.05(3)(a), 14.05(3)(b), 14.05(3)(c) and RULE 75.04 OF THE RULES OF CIVIL PROCEDURE and SECTION 37(3) OF THE TRUSTEE ACT, R.S.O. 1990, c.T23

Ruling on Application

[1] The three applicants and the two respondents are all siblings.

[2] All five of them are named as executors in the Will of their deceased father.

[3] All five of them are equal beneficiaries under the Will and are each entitled to a one-fifth share of the estate proceeds, net of usual expenses and a $1,000 specific bequest to the testator’s estranged wife.

[4] The Will was signed on December 20, 1995. It was not changed in the ensuing 23 years.

[5] Zacharias Voloudakis died on September 8, 2017.

[6] It would seem implicit in his decision 23 years ago to name all five children as executors, that the testator had faith that his children would cooperate and work together to follow his wishes in the administration of his estate. The evidence on this application clearly demonstrates that his belief that his five children would work together harmoniously has proven to be unfounded.

[7] One day before the Will was signed, the testator and his wife entered into a separation agreement pursuant to which the testator paid her the sum of $112,000, as one-half of the value of the matrimonial home on Broadway Avenue in Hamilton.

[8] One of the few matters upon which all parties agree is that the separation of the parents led to an alienation as between the siblings. The three applicants sided with their mother, Maria. The two respondents sided with their father, the testator.

[9] In the 15 months since their father’s death, the applicants and the respondents have agreed on very little, have had many occasions of conflict as between them, and have accomplished little towards the administration of the estate.

[10] The parties have filed lengthy affidavit materials detailing what each side sees as being the unreasonable conduct of the others. I need not review chapter and verse of all the complaints that flow in each direction. The important point is that it is crystal clear to me that the applicant siblings and the respondent siblings are unable to work together.

[11] This application was brought to break the logjam by seeking an order removing the respondents as executors of the Will, and for other orders directing actions on the part of the respondents that are necessary in order to permit the applicants to get on with the estate administration.

[12] The main asset in the estate is the former matrimonial home, owned since separation by the testator, on Broadway Avenue in Hamilton. For reasons that follow, it has not been evaluated in any meaningful way. In a draft application for a Certificate of Administration With a Will, it was valued at $498,500, apparently the value given for the property for realty tax purposes. The other estate assets appear to comprise a bank account of approximately $80,400 and a GIC of approximately $22,300. Other than the obstacles arising from the inability or unwillingness of the parties to agree and cooperate, it seems to be a relatively straightforward estate.

[13] Much of the disagreement as between the parties, and the frustration in the administration of the estate, centers on the testator’s house on Broadway Avenue. The testator continued to live in that home from the time of his separation from his wife through to the time of his death. So did the respondent, George Voloudakis. He never left home. He still continues to reside in the home. He seems to believe that he should be allowed to continue to reside in the home, although he clearly has no resources with which to purchase it from the estate. His sister, Kalliopi, is concerned for him and supports his position, although with a more realistic understanding that it can’t go on forever. The applicants want him out of the home so that it can be cleaned up and sold.

[14] Photographs of the interior of the house taken prior to the interim order, to which I will refer, shows it to be in a state of disgusting disarray, with stacks of bottles and cans all over the house and garbage bags filling several of the rooms, occasionally almost up to the ceiling. It is clear that the house could not even be valued in this condition, never mind listed for sale.

[15] Police were called on many occasions when efforts were made by the applicants to gain access to the home so as to gain an understanding of its condition, or when they attended at the home to try to obtain documentation necessary to the administration of the estate. The respondents called the police claiming the applicants were breaking into the home. The level of mistrust as between the two groups of applicants is reflected by allegations by the plaintiffs that there are, within the home, documents evidencing monies owing to the estate, and debts owing to the estate, with counter allegations by the respondents that if permitted unfettered access, the applicants would steal George’s belongings or the testator’s personal property.

[16] Police became involved in March of 2018 as a result of alleged harassment by the respondent Kalliopi of her mother. A month later, police became involved again as a result of a confrontation as between Kalliopi and her mother at the courthouse here in Hamilton.

[17] As a result of one of the police involvements, the applicants obtained temporary access to the Broadway property and formed the opinion that it was in a deplorable condition, which was borne out by photographs taken by them.

[18] Another allegation is that Kalliopi wrongfully applied for payment of her father’s CPP death benefit only to be told by government officials that it had already been paid out to the estate. The applicants don’t know what happened to the cheque. It appears to be in the possession of the respondents or one of them.

[19] Another source of conflict arises from the fact that Kalliopi appears to have obtained repayment of approximately $11,000 spent by her for various funeral expenses and expenses stemming from Greek traditions surrounding the funeral. It appears that, on her request, a former solicitor for the testator succeeded in having those expenses paid out from the testator’s bank account. The applicants understandably want to see copies of invoices to substantiate the amounts paid, and object to the encroachment on the estate without their consent as co-executors even though it is clear some of the expenses, at least, would end up being repaid out of the estate if done properly.

[20] Adding salt to this wound is the fact that expenses allegedly incurred by the testator’s estranged wife, Maria, in the amount of approximately $10,000, remain unpaid by reason of the refusal of the respondents to agree.

[21] Two students at McMaster University rented apartments in the basement of the Broadway home and each paid approximately $500 a month rent, pursuant to written leases. The leases expired in May of this year and the two tenants have remained on a month to month basis. The bank holding the testator’s personal account refused to permit deposit of funds in that account once it learned of the testator’s passing. Without the cooperation and participation of all five executors, the bank would not open an estate bank account. Accordingly, the rent cheques from the tenants have not been deposited and remain in the possession of George.

The Interim Order

[22] With this unsatisfactory state of affairs, the application was launched. On its original return, it was adjourned so as to permit the respondents an opportunity to file materials, which Kalliopi did. It then came on before Justice Sheard on a regular motion day, but she determined that it would be of a length that required it to be put on a long motion list. It was on that basis that it came before me on December 6, 2018.

[23] Although Justice Sheard did not have time on a regular motions day to deal with the application in total, on the merits, she nevertheless saw fit to make a detailed interim order which is obviously designed to try and resolve some of the difficulties existing as between the parties.

[24] Her order contained 12 substantive provisions. Some provisions were complied with, others were not, and others partially so.

[25] Importantly, the respondents have not removed all the cans and bottles and other trash within the house.

[26] As a result of their inability to agree, the parties have not arranged for the opening of an estate bank account. The respondents have not been reimbursed for their alleged expenses, in part because they have not provided receipts for the expenses, and also in part because there has been no estate bank account opened with which to pay the expenses. Kalliopi has not provided the applicants with a copy of the deceased’s T3 tax return.

[27] The respondents have not provided the deceased’s original personal papers and records of a financial nature, so that they might be copied, to the applicants. This failure is significant in that it is alleged that such documentation is voluminous, that the testator was a keeper of detailed records, and that access to this documentation is necessary to prove or disprove the existence of debts allegedly owing to the estate and is necessary to ensure a proper understanding of the assets of the estate.

[28] As a further complicating feature, and in fairness to Kalliopi and the extent to which she failed to provide materials according to the Sheard J. order, there has admittedly been a falling out, to some extent, as between the two respondents. As a result, she advises she has been unable to obtain some of the documentation from the Broadway home.

[29] In compliance with the order, the applicants were permitted an access visit to the Broadway home on November 21, 2018 and at that time took photographs, which are before the court as Exhibit “T” to the affidavit of Mr. Aresta. Those photographs show the house to be in the same disorganized and dirty state, and show it to be uninhabitable by any reasonable standards.

[30] Some plumbing fixtures would appear to be beyond cleaning and require replacement. Importantly, the roof appears to be missing the majority of shingles in one large quadrant of the roof, and to apparently have a leak of some kind in another shingled area with the leak being covered by plastic sheeting. This is of significant concern, not only to the marketability of the home, but also to its realistic prospect for interior damage and structural damage.

Legal Principles

[31] Section 37 of the Trustee Act, R.S.O. 1990, c.T23, s.37, permits the removal of an executor, and Rule 14.05(3) permits that such may be done by an application, and that the court may also give directions in respect of the administration of an estate.

[32] As held in Johnston v. Lanka, 2010 ONSC 4124 in exercising its discretion to remove estate trustees, the general principles are that “(1) the court will not likely interfere with a testator’s choice of estate trustee; (2) clear evidence of necessity as required; (3) the court’s main consideration is the welfare of the beneficiaries, and (4) the estate trustees acts or omissions must be of such a nature as to endanger the administration of the trust.”

Discussion

[33] If I were able to conclude that these parties could work together then I would certainly not interfere with the testator’s choice to make them all executors. As indicated earlier, the testator made that decision 23 years ago and obviously a lot of water has gone under the bridge, much of it of a troubled nature, and the question of the appropriateness of all five being executors was not revisited.

[34] I am of the view that it is necessary to remove the two respondents as executors. This is necessary, I conclude, both for the benefit of the applicants as beneficiaries, but also for the benefit of the respondents as beneficiaries. None of the beneficiaries benefit if the estate remains in a state of frozen inaction as has been the case for the past 15 months. I am satisfied that the estate cannot be properly administered because of the inability of the respondents and the applicants to work cooperatively and effectively. The respondent George has not abided by the terms of Justice Sheard’s order. He filed no materials, but in submissions indicated that he would now be willing to do so. I don’t believe him. He just does not seem to recognize that the house is not his, but the condition to which he has allowed it to deteriorate is unacceptable, and the state of disrepair into which it has fallen is detrimental to each beneficiary’s interest in the estate, including his own. I accept that many of the bottles and cans have been collected by him as something that could be turned in for their deposit value. But it hasn’t been done. For a long time. When questioned on this, his answer is that he doesn’t have a vehicle. In the face of a court order, that is not a satisfactory answer, when arrangements could easily have been made to rent a vehicle for this purpose, at the estate expense, or hire a service to do so.

[35] The decision with respect to Kalliopi is initially less clear. I am of the view that she is sincere and unlike her co-respondent, understands that the estate is not an individual fiefdom, but rather is something decreed by their father to be shared by all of them. She professes a willingness to work with the applicants, but in her next breath, reiterates that she’s done nothing wrong and that all the fault lies with them. It is clear in listening to her and in her affidavit materials that her favouring of her father’s position, as opposed to that of her mother, has created strongly held beliefs on her part which disable her from trusting and working productively with the applicants and I am satisfied that it is necessary to remove her as a trustee as well.

[36] The parties have conducted themselves in these proceedings as though the position of executor is some sort of prize. The role of executor is a job, a duty, a responsibility. The “prize” is the 20% interest each of them have in the net proceeds of the estate.

[37] I am satisfied it is necessary to remove the two respondents as executors in order to allow the estate to be administered in an efficient and productive way for the benefit of all the beneficiaries. If the two respondents are dissatisfied with the way in which the applicants administer the estate, they are of course free to file objections when the applicants come to file for a passing of accounts.

Directions

[38] Given the level of distrust as between the parties, and the fact that the family home, the Broadway home and its contents form the focus of much of the dispute, I conclude that certain directions are necessary as follows:

(1) Owing to the level of distrust as between the parties, with the applicants asserting that the house is in such disarray that it is impossible to know what relevant documentation exists, and given that the applicants do not trust the respondents to produce relevant accounting information, and given the respondents’ belief that the applicants shouldn’t be allowed unsupervised access to the home, I order that the parties agree upon a date when all of them, or such of them who wish to be present, can be together within the home and conduct an inventory of the relevant financial documentation necessary for the proper administration of the estate, and identify items of a personal nature belonging to George, and identify the items that are of no use and are to be gotten rid of. Unless the parties otherwise agree that now they are able to remain civil and peaceful with each other, then I direct that an off-duty police officer be retained on a paid duty basis to be present for this audit. The above process is to occur within 30 days.

(2) I further direct that the bottles and cans and any other items having recyclable value be removed and “cashed in”, within 15 days of the inventory process described in the preceding paragraph, and that the proceeds of a disposition of these recyclables, less any costs in removing them and obtaining payment, shall belong to the respondent George.

(3) The respondent George shall vacate the Broadway Avenue home by not later than February 15, 2019.

(4) All documentation of a financial nature, relating to taxes, debts owing to the estate and constituting personal papers of the testator are to be turned over to the applicants within 15 days of the completion of the inventory process outlined in subparagraph (1).

(5) The applicants shall open an estate bank account within 15 days of the release of this decision.

(6) The respondents are to produce invoices to substantiate any expenses for which they seek reimbursement within 21 days of the completion of the inventory process outlined in subparagraph (1).

(7) The applicants shall proceed with the necessary roof repairs forthwith.

(8) The applicants shall cause the Broadway Avenue home to be listed for sale within 90 days of obtaining vacant possession of the home at a price to be determined by them, taking into account the listing realtor’s opinion of value.

(9) If any of the five applicants wish to purchase the home on Broadway Avenue, they may do so in accordance with paragraph 6. of the Will, but must do so by submitting a written offer in binding form prior to the listing of the property for sale, or if afterwards, with the real estate commission being the responsibility of the purchasing beneficiary.

(10) The CPP death benefit cheque and all tenants’ cheques are to be provided by the respondents to the applicants within 10 days.

(11) The applicants shall be provided with keys to both the front and back doors of the Broadway Avenue home, and shall be at liberty to enter the premises, other than the tenants’ apartments, upon giving 24 hours’ notice to the respondents.

(12) The decision as to whether to terminate the two existing tenancies shall be a decision for the applicants to make.

(13) The respondent George shall owe occupation rent for remaining in the house in the amount of $1,000 per month for the period of time following the death of the testator. Payment of that amount can be offset to the extent of any expenses proven by invoices which George has paid in respect of the taxes, utilities or other expenses relating to the upkeep of the house during that period.

(14) The existing court application, brought by Maria Voloudakis challenging the validity of the Will, if not withdrawn within 20 days of the release of these reasons, shall be responded to by the applicants on behalf of the estate and they shall take all available steps to move that application expeditiously to either resolution or adjudication.

Result

[39] For the foregoing reasons, an order will go removing the respondents as executors of the estate. As the applicants’ counsel advises that court staff require that a new Certificate of Appointment be granted, that is ordered, if indeed required.

[40] An order will also go for the directions outlined in paragraph [37], (1) through (14) above.

Costs

[41] Counsel for the applicants presents a cost outline claiming fees on a partial indemnity basis in the amount of $10,260, on a substantial indemnity basis in the amount of $15,390, and on an actual basis of $17,100.

[42] It is to be remembered that when the matter was before Justice Sheard on October 4, 2018, when the matter was adjourned to a long motion date, costs of that day were reserved to me as the judge hearing the motion, on the merits.

[43] Turning to the factors identified in Rule 57.01, I have had regard for the hours claimed, the fact that counsel has 4 years experience, and the laudable effort to keep costs down by making substantial use of a student.

[44] The applicants were successful on the main issue and largely successful on the accompanying directions.

[45] In my opinion, this was not a complex matter in terms of the applicable law, but was of moderate complexity factually. The matters were of importance to the parties, largely as a result of the fact that five family members were involved and there has been a long history of high emotion and difficulty as between them.

[46] In my opinion the conduct of the respondents, particularly that of George, very much tended to lengthen unnecessarily the duration of these proceedings. If the order of Justice Sheard had been obeyed, most, if not all, of the contest would have been over. Kalliopi took steps towards fulfilling Justice Sheard’s order as best she could, but ran into difficulties in terms of obtaining items from George. George did essentially nothing to comply with the order. As he maintained control over the house and its contents, it is his failure to abide by the order that prolonged matters considerably.

[47] I remind myself of the direction of the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, and repeated on numerous occasions since, that the overall objective is to fix costs in an amount that is fair and reasonable, and that the fixing of costs is not simply a mathematical exercise of having regard to hours spent and hourly rates charged.

[48] I also have regard for the financial circumstances of the respondents. It appears that George has very little money, and that Kalliopi has had health issues that have impacted her financially. On the other hand, each of them stand to receive 20% of the net proceeds of this estate, and hence there is a fund from which costs can be paid.

[49] Taking into account all these considerations, I order that costs in the amount of $7,500, plus disbursements in the amount of $400 and applicable HST be paid by George Voloudakis to the applicants, and that costs fixed in the amount of $2,500, plus disbursements in the amount of $257.78, plus applicable HST be paid by the respondent, Kalliopi Voloudakis to the applicants.

[50] I further order that these costs are to be paid out of the share of each of these two respondents from the estate.

C.S. Glithero J. Date: December 11, 2018