Court File and Parties

Court File No.: CV-18-48, CV-18-49, CV-18-79 Date: 2019-02-12

Ontario Superior Court of Justice

Between:

CV-18-48 MICHAEL LEWIS BERREY, Estate Trustee for the Estate of Keith Bertram Berrey and PATRICK ANTHONY BERREY, Estate Trustee for the Estate of Keith Bertram Berrey Counsel: Ms. H. Gladstone, for the Applicants Applicants IN THE ESTATE OF KEITH BERTRAM BERREY, deceased

CV-18-49 MICHAEL LEWIS BERREY, Estate Trustee for the Estate of Claire Yvonne Berrey and PATRICK ANTHONY BERREY, Estate Trustee for the Estate of Claire Berrey Counsel: Ms. H. Gladstone, for the Applicants Applicants IN THE ESTATE OF CLAIRE YVONNE BERREY, deceased

CV-18-79 MICHAEL LEWIS BERREY, Estate Trustee for the Estate of Keith Bertram Berrey, MICHAEL LEWIS BERREY, Estate Trustee for the Estate of Claire Yvonne Berrey, PATRICK ANTHONY BERREY, Estate Trustee for the Estate of Keith Bertram Berrey and PATRICK ANTHONY BERREY, Estate Trustee for the Estate of Claire Yvonne Berrey Counsel: Ms. H. Gladstone, for the Applicants Applicants

- and -

DALE VICTOR BERREY, Estate Trustee for the Estate of Keith Bertram Berrey, DALE VICTOR BERREY, Estate Trustee for the Estate of Claire Yvonne Berrey, DALE VICTOR BERREY, in his personal capacity, and BRENDA LEIGH BELL Counsel: Dale Victor Berrey, Self-Represented and not appearing Respondents

Heard: January 8, 2019 at Kenora, Ontario Before: Mr. Justice J.S. Fregeau

Judgment on Passing of Accounts and Application to Remove Estate Trustee Dale Victor Berrey

Introduction

1The Keith Bertram Berrey Estate file (CV-18-48) is an application brought by Patrick Anthony Berrey, estate trustee, to pass the estate accounts. Dale Victor Berrey, also an estate trustee, has filed Notices of Objections on this passing of accounts.

2The Claire Yvonne Berrey Estate file (CV-18-49) is an application brought by Patrick Anthony Berrey, estate trustee, to pass the estate accounts. Dale Victor Berrey, also an estate trustee, has filed Notices of Objection on this passing of accounts.

3The Estates of Keith Bertram Berrey and Claire Yvonne Berrey file (CV-18-79) is an application brought by Patrick Anthony Berrey and Michael Lewis Berrey for an Order removing Dale Victor Berrey as estate trustee for the estates of Keith Bertram Berrey and Claire Yvonne Berrey. The applicants further apply for orders for the distribution of estate assets to pay specific debts.

Background

4Keith Bertram Berrey (“Mr. Berrey”) and Claire Yvonne Berrey (“Ms. Berrey”) were husband and wife. Mr. and Ms. Berrey had three children, Michael Lewis Berrey (“Michael”), Patrick Anthony Berrey (“Patrick”), and Dale Victor Berrey (“Dale”). Mr. Berrey died on May 24, 2002. Ms. Berrey died on October 2, 2013. Michael, Patrick, and Dale all survived their parents.

5Mr. and Ms. Berrey signed “complimentary spousal wills” on May 11, 1998. Pursuant to these wills, the validity of which is not in issue, Mr. and Ms. Berrey each:

1. Appointed the other spouse as their primary estate trustee;
2. Appointed Michael, Patrick, and Dale as their alternate trustees in the event the other spouse predeceased the testatrix/testator;
3. Bequeathed the residue of their estate to the other spouse and, in the event the other spouse predeceased the testatrix/testator, bequeathed the residue equally to Michael, Patrick, and Dale.

6The wills of Mr. and Ms. Berrey each contained a clause stipulating that a decision of a majority of the trustees was to govern in the event of a disagreement between trustees (the “majority rules clause”).

7Subsequent to Mr. Berrey’s death in 2002, Ms. Berrey completed the administration of his estate under the belief that Mr. Berrey had not, on the date of his death, held any real or personal property in his sole name. As a result, Ms. Berrey did not apply for a Certificate of Appointment of Estate Trustee with a Will for her husband’s estate.

8Subsequent to Ms. Berrey’s death in 2013, Patrick, Michael, and Dale jointly retained Ms. B. Bell, a solicitor practicing in Dryden, Ontario, to apply for a Certificate of Appointment for their mother’s estate and to assist them in the general administration of the estate. On October 13, 2013, a Certificate of Appointment of Estate Trustee with a Will was issued in the estate of Ms. Berrey, appointing Patrick, Michael, and Dale as estate trustees for their mother’s estate.

9After being appointed as estate trustees for their mother’s estate, it was learned that Mr. Berrey had owned a parcel of real property in his name alone on his death that had not been dealt with during the administration of his estate. The property is described municipally as 15421 Highway 17, Dryden, Ontario (the “property”).

10Patrick, Michael and Dale jointly retained Ms. Bell to apply for a Certificate of Appointment for their father’s estate to allow them to deal with the property and to assist them in the general administration of their father’s estate. On February 24, 2016, a Certificate of Appointment of Estate Trustee with a Will was issued in the estate of Mr. Berrey, appointing Patrick, Michael, and Dale as estate trustees for their father’s estate.

11On or about March 4, 2016, the property was sold to a third party. Ms. Bell acted for the estate trustees for Mr. Berrey’s estate, the transferor. Subsequent to completion of the sale of the property, net sale proceeds of $116,762.13 remained in Ms. Bell’s trust account. Dale signed the required sale documents on the condition that Ms. Bell not release any of the net proceeds of sale held in trust without his consent.

12As a result of the sale of the property, a further T3 Trust Tax Return will have to be filed for Mr. Berrey’s estate. It is estimated that this will result in Mr. Berrey’s estate owing approximately $8,000.00 in taxes, which are now past due. Ms. Berrey is the residual beneficiary of Mr. Berrey’s estate. After payment of the tax liability of Mr. Berrey’s estate, the residue of his estate will be distributed to Ms. Berrey’s estate.

13Ms. Berrey’s estate had significant investment accounts which incurred a large tax liability upon the deemed disposition of these assets on her death. On February 23, 2016, the Canada Revenue Agency (“CRA”) sent Ms. Bell a Demand to Pay in the amount of $67,201.84 in regard to Ms. Berrey’s estate.

14The only remaining asset in Mr. Berrey’s estate is the net proceeds of sale of the property. The only remaining asset in Ms. Berrey’s estate is the required distribution of the residue of Mr. Berrey’s estate. Dale has refused to consent to the payment of the outstanding CRA debts, which continue to accrue interest and penalties. Ms. Bell has refused to release any estate funds without Dale’s consent, despite the presence of the majority rules clause in both Mr. and Ms. Berrey’s wills.

15Patrick and Michael retained their current counsel to assist in addressing the remaining estate administration tasks in regard to both estates, including Dale’s refusal to allow the CRA debts to be paid.

16Mr. Harold Van Winssen has represented Dale since 2015. Mr. Van Winssen dealt with Ms. Bell on behalf of Dale in relation to the sale of the property in the winter of 2016 and in relation to some preliminary estate account issues.

17Draft estate accounts were first sent to Mr. Van Winssen by Patrick and Michael’s present counsel on March 27, 2018. On or about August 27, 2018, Dale was first served with the Notice of Application to Pass Accounts for Mr. and Ms. Berrey’s estates after five requests for a response from Mr. Van Winssen subsequent to March 27, 2018. These Notices were first returnable on November 14, 2018.

18The deadline for filing Notices of Objections to the estate accounts was October 10, 2018. No Notices of Objections were filed by this date and the applications were therefore scheduled to proceed on an uncontested basis on November 14, 2018.

19On November 8, 2018, counsel for Patrick and Michael received a Notice of Objection to Accounts for each of the estates of Mr. and Ms. Berrey, noting Dale as the objector and Mr. Van Winssen as “Solicitor for the Objector”.

20These matters were first before the court on November 14, 2018. At that time, Ms. Gladstone appeared on behalf of Patrick and Michael. Mr. Van Winssen did not appear nor did he make any effort to contact opposing counsel or the court to explain his non-appearance. On November 14, 2018, I endorsed the record as follows:

Passing of Accounts scheduled for January 8, 2019 at 10:00 am (1/2 day) subject to confirmation of Mr. Van Winssen’s availability. Matter adjourned to November 21, 2018 at 10:00 am to confirm January 8, 2019 date for contested passing of accounts and to set deadlines for the filing of materials. Mr. Van Winssen to appear November 21, 2018, either by CourtCall or by agent or date will be confirmed in his absence.

21Ms. Gladstone served this endorsement on Mr. Van Winssen.

22On November 21, 2018, Ms. Gladstone was present in court. Mr. Van Winssen did not appear. My endorsement from that date reads as follows:

Date of January 8, 2019 at 10:00 am confirmed for passing of accounts on files CV-18-48 and CV-18-49, peremptory on the respondent. Court shall copy this endorsement to Mr. Van Winssen. Any further/all Notices of Objection to accounts shall be filed/served on or before December 4, 2018. Consolidated objections, Reply and Application Record for opposed passing to be served/filed by December 31, 2018.

23Affidavits of Service filed by the applicants confirm the following:

1. The Application Record containing the Notice of Application to Pass Accounts in the Estate of Keith Bertram Berrey was served on Dale by sending a copy by courier to Mr. Van Winssen on December 18, 2018;
2. The Application Record containing the Notice of Application to Pass Accounts in the Estate of Claire Yvonne Berrey was served on Dale by sending a copy by courier to Mr. Van Winssen on December 18, 2018; and
3. The Application Record containing the Notice of Application seeking to remove Dale as Estate Trustee for both estates was served on Dale personally on December 7, 2018.

Adjournment Request of Dale Berrey

24On January 4, 2019, a letter authored by Dale Berrey was filed with the court. In this letter, Dale Berrey advised the court, among other things, the following:

1. That he was writing the letter because he was self-represented and unable to attend court on January 8, 2019;
2. That he had not retained Mr. Van Winssen, but for a “limited scope retainer on a pro bono basis related strictly to the preparation of Notices of Objection to Accounts, a couple of letters and now the preparation of the attached Affidavits”; and
3. That he was requesting “that the matter be adjourned until such time as I can retain a lawyer in respect this matter.”

25Filed and served with this letter were two affidavits of Dale Berrey dated January 3, 2019, one in regard to the Estate of Keith Bertram Berrey and one in regard to the Estate of Claire Yvonne Berrey. The affidavits essentially supplement issues raised in Notices of Objections previously filed by Dale Berrey.

26Counsel for Patrick and Michael opposed Dale’s request for an adjournment of the passing of accounts and the application to have him removed as estate trustee for these two estates. Counsel submitted that Mr. Van Winssen depicted himself as “Counsel for the Objector” on the Notices of Objection that were filed and that he never indicated to her that he was on any sort of limited scope retainer.

27Counsel further notes that all pleadings have been served on Dale, either personally or by way of service on Mr. Van Winssen. The January 8, 2019, return date on the initial two files was expressly made peremptory on Dale to proceed on January 8, 2019.

28On January 8, 2019, I denied the adjournment request of Dale and proceeded with the hearing of the three applications before the court in his absence. I indicated that reasons for refusing the adjournment request would follow.

29Counsel for Patrick and Michael further submitted that the January 3, 2019, affidavits of Dale were not properly served and filed pursuant to my endorsement of November 21, 2018, which required that any further objections to the estate accounts were to be served and filed by December 4, 2019.

30I rejected this submission and accepted the January 3, 2019, affidavits of Dale. I further required counsel for Patrick and Michael to address all objections of Dale, in regard to each of the estates, whether contained in his January 3, 2019, affidavits, in his January 3, 2019, letter to the court or found in the previously filed Notices of Objection.

31The adjournment request of Dale was refused for the following reasons.

32This matter was scheduled to proceed on January 8, 2019, as of November 14, 2019. Neither Dale nor Mr. Van Winssen chose to appear on either November 14, 2018, or November 21, 2018, the latter date being scheduled specifically to confirm the January 8, 2019, hearing date with Mr. Van Winssen.

33The endorsements of November 14, 2018, and November 21, 2018, were served on Mr. Van Winssen, who purported to act on behalf of Dale at the time. At no point has he suggested to opposing counsel or to the court that he was not retained by Dale.

34Mr. Van Winssen did not make any effort whatsoever, on either November 14 or 21, 2018, or January 8, 2019, to explain the terms of his apparent “limited scope retainer” to the court. My November 14, 2018, endorsement expressly required Mr. Van Winssen to appear on November 21, 2018, and expressly authorized his appearance by either CourtCall or agent.

35Dale obviously was aware of the January 8, 2019 court date, as evidenced by his January 3, 2019, letter requesting an adjournment. Dale could have appeared by CourtCall to address his adjournment request. He chose not to do so. Dale provides no indication of when he may be able to retain counsel, essentially requesting an “open-ended” adjournment.

36The January 8, 2019, hearing date for court files CV-18-48 and CV-18-49 was made peremptory on Dale on November 21, 2018. Both Dale and Mr. Van Winssen were aware, for six weeks prior to January 8, 2019, that this matter was scheduled to proceed on January 8, 2019, and that further adjournment requests would not be entertained, absent urgent and compelling circumstances.

37The matters to be concluded in the administration of these estates are simple and straightforward. They have been outstanding for almost three years. They remain outstanding because of the refusal of Dale to address the issues in a reasonable fashion. His last minute request for an adjournment of the January 8, 2019, hearing is, in my opinion, a further example of attempted delay for no reasonable purpose. Granting the adjournment would result in further significant delay.

38Given that debts are owing from both estates to the CRA, significant penalties and interest are accruing, diminishing the balance of both estates. Further delay is contrary to the interests of all beneficiaries.

39Dale’s objections are before the court and the merits of each will be carefully considered. Dale’s request to adjourn these proceedings is refused for all of the above reasons.

Application to Pass Accounts in the Estate of Keith Bertram Berrey CV-18-48

40The materials before the court on this Application are:

1. Notice of Application to Pass Accounts issued August 20, 2018;
2. Patrick Anthony Berrey’s Affidavit Verifying Estate Accounts, sworn July 30, 2018, and attached Estate Trustee Accounts for the period February 24, 2016, to December 8, 2017;
3. Notice of Objection to Accounts, undated and date stamped November 13, 2018;
4. Notice of Objection to Accounts, undated and date stamped November 26, 2018;
5. Correspondence of Dale Berrey, dated January 3, 2019;
6. Affidavit of Dale Berrey, dated January 3, 2019;
7. Supplemental Affidavit of Patrick Anthony Berrey, sworn December 17, 2018; and
8. Reply to Notices of Objection, dated December 18, 2018.

Notice of Objection Date Stamped November 13, 2018

1. The Estate Trustee has not provided the beneficiaries with a copy of the accounts in proper court format and, accordingly, the beneficiaries have been unable to review the accounts.

41The estate accounts were not served with the Notice of Application because this is not required pursuant to Rule 74.18(3) of the Rules of Civil Procedure. The estate accounts as filed with the court were served on Mr. Van Winssen on November 13, 2018.

2. The Estate Trustee provided a draft Judgment, which references a Statement of Unrealized Assets attached a Schedule “A”. No Schedule “A” was attached to the Judgment. The beneficiaries cannot consent to the Order without reviewing a full and complete copy.

42A draft Judgment on an opposed passing of accounts has now been provided to Dale as part of the Application record. The draft Judgment includes Schedule “A” referred to above.

Notice of Objection to Accounts Date Stamped November 26, 2018

1. One of the disbursements is shown as an invoice reimbursement to Pinchin Enviromental Engineers. The only cheque for which I was provided a copy was paid to Michael.

43A copy of the Pinchin invoice dated February 22, 2016, is included in the Application Record at pg. 51.

2. They indicate that there is a value at the date of appointment of an additional Phase II Enviromental Assessment debt owed to the estate of $13,560.00. This says the debt was incurred by me. This is not a proper charge, nor has there been any basis for this set out that is legal or proper.

44Patrick submits that environmental assessments were required as a condition of the sale of the property in 2016 and that Pinchin was retained to conduct Phase I and Phase II environmental assessments. Patrick further submits that, following the completion of the Phase II environmental assessment, “I am advised that Dale contacted the purchaser of the property to discredit the environmental assessments by stating that the well holes drilled for water table assessments were done in incorrect locations.”

45Patrick submits that Pinchin was required to conduct a second Phase II environmental assessment on the locations identified by Dale to the purchaser, which simply confirmed the results of the first Phase II assessment. Patrick submits that the second Phase II assessment cost the estate $13,560.00 as a direct result of Dale’s actions “to prolong or prevent the sale of the property.”

46Patrick submits that this was an unnecessary disbursement that should be charged against Dale’s share of the estate.

47In his January 3, 2019, affidavit Dale deposes that the purchaser of the property was a customer of the fuel delivery business that was formerly operated on the property and therefore familiar with potential environmental issues. Dale further deposes that any further environmental testing was requested by the purchaser without his input.

48I reject the position of the Patrick in regard to this objection. This allegation of Patrick is contained in his December 17, 2018, affidavit, found in the Application Record. It is a hearsay statement which has not been attributed to any source. There is no evidence from the purchaser of the property or anyone else to support this assertion.

49This suggested charge against Dale’s share of the residue of the estate is rejected. It shall be reflected in the estate accounts as a proper disbursement of the estate.

3. The accounts of the estate solicitor were paid without my approval and specifically notwithstanding my request that they be approved by me.

50Patrick submits Dale does not raise any objection to the quantum or propriety of the accounts of the estate solicitor. Rather, Dale objects to them being paid without his approval. Patrick submits that the fees were properly incurred for the sale of the property and that he and his co-executor, Michael, paid the accounts pursuant to the majority rules clause found at paragraph 13(b) of the will of his father.

51I assume this objection relates to the payment of Ms. Bell’s invoice No. 4196 for the sale of the property, in the amount of $1,979.63. In my opinion, this is an appropriate fee for Ms. Bell in acting for the vendor on the sale of this commercial property.

52Pursuant to the majority rules clause found in Mr. Berrey’s will, the two estate trustees had the authority to pay this invoice. There is no reason why this invoice should not have been paid on a timely basis, as was done. There is no basis to this objection.

4. Compensation has been waived for the Estate Trustees without my consent or approval notwithstanding I am an Estate Trustee.

53Patrick submits that the applicants, being he and Michael, have chosen to waive their own entitlement to compensation, given the negligible net value of the estate.

54Dale’s objection is this regard is without merit. If his two co-executors choose to waive their entitlement to compensation for services rendered in the administration of the estate, that is their choice. They do not require Dale’s “approval or consent” to do so.

55The Estate Accounts in the Estate of Keith Bertram Berrey, as filed by the applicants for the period February 24, 2016, to December 8, 2017, are to be amended to incorporate the findings as to Dale’s objections as set out above. The amended estate accounts and a draft Judgment on Passing of Accounts shall be served on Dale by the Applicants and filed.

Application to Pass Accounts in the Estate of Claire Yvonne Berrey CV-18-49

56The materials before the court on this Application are:

1. Notice of Application to Pass Accounts issued August 20, 2018;
2. Patrick Anthony Berrey’s Affidavit Verifying Estate Accounts, sworn July 30, 2018, and attached Estate Trustee Accounts for the period October 2, 2013, to December 8, 2017;
3. Notice of Objection to Accounts, date stamped November 26, 2018;
4. Correspondence o Dale Berrey, dated January 3, 2019;
5. Affidavit of Dale Berrey, sworn January 3, 2019;
6. Supplemental Affidavit of Patrick Anthony Berrey, sworn December 17, 2018; and
7. Reply to Notice of Objection to Accounts, dated December 18, 2018.

Notice of Objection to Accounts Date Stamped November 26, 2018

1. I am an Estate Trustee and have not approved the accounts as submitted to the court by the other estate Trustees.

57Any estate trustee or estate trustees may bring an application to pass estate accounts, regardless of the cooperation of other estate trustees. Objecting estate trustees, such as Dale, are entitled to submit a Notice of Objection in response to an Application to Pass Accounts, as Dale has done herein.

2. Household contents shown as received by me is not correct. Most of the household contents were taken by the other two executors and not accounted for in the estate accounts but for the sale of the sofa, hope chest and fur coat. Little of the household contents remained yet they are noted in the accounts as being distributed to me.

3. Some of these assets were in fact personal assets of my own, such as mechanics tools, which I had kept there, in order to assist my mother and were not estate assets.

58The estate accounts value the household contents at $6,100.00 as of the date of death. The accounts further document a distribution of “various household contents” to Dale as a $5,000.00 disbursement and note the “private sale” of a sofa, hope chest and fur coat in the amounts of $200.00, $100.00 and $800.00 respectively. The estate accounts reflect that the funds received on the sale of these contents was transferred to the estate account.

59In his December 17, 2018, affidavit Patrick deposes that in July 2011 he was advised by a neighbor that Dale removed approximately eight truckloads of household contents from their mother’s house prior to the home being sold and that he retained all of these items subsequent to her death. Patrick further deposes that he and Michael were only able to sell the sofa, hope chest and fur coat as reflected in the estate accounts. All other personal items and household contents were either donated or disposed of.

60Patrick deposes that he and Michael have estimated the value of household contents taken by Dale at $5,000.00. These items included a vintage Brunswick pool table, a Pinwheel crystal set, china cabinet, vintage reel-to-reel plus records, vintage 8 mm projector and records and a 12 place Royal Albert Silver Birch china set.

61Dale deposes that he did in fact remove some household contents from his mother’s home, but that they “were of no value and garbage.”

62I accept the submission of Patrick in response to this objection by Dale. Dale does not specifically address or deny the removal of the specific items noted by Patrick. I am persuaded that he did in fact remove these items from the home of his mother and must account for the value of same upon the distribution of the estate.

63While the $5,000.00 valuation is somewhat arbitrary it is the best evidence available to Patrick and Michael as to the value of these items. Given the items listed by Patrick, the valuation seems reasonable.

64The valuation of these contents and the distribution of contents valued at $5,000.00 to Dale as reflected in the estate accounts filed is hereby approved.

4. Under the jewellery, there are various items which are indicated as being left to me. Some of these were not my property and were in fact returned to the proper owner, such as the .83 carat diamond and gold chain, which is the property of my ex-wife. I am not sure where the values were obtained and certainly no values were ever provided to me for any amounts shown as distributed to me.

5. The jewellery shown as distributed to Michael Berrey has not been valued, nor any method of valuation provided to the writer for review, notwithstanding my request for same.

65The estate accounts value the jewellery owned by Ms. Berrey on the date of death at $8,400.00. The estate accounts set out the distribution and valuation of the individual items of jewellery as follows:

a) To Dale – gold earrings $1,500.00, gold cross $1,000.00, .83 ct. diamond and gold chain $2,650.00; b) To Michael – gold sapphire ring $1,500.00, gold wedding band $400.00, .25 ct. diamond earrings $200.00, family ring with 6 gemstones $650.00, gold bracelet $250.00, electroplate ring $50.00; and c) To Marlene Hyrcay – gold bingo pendant with chain $200.00.

66Patrick deposes that following his mother’s death, he searched her purse looking for her birth certificate to provide to the funeral home. When he did so he discovered that Dale had taken his mother’s wallet, bank cards and cell phone from his mother’s purse.

67Patrick further deposes that his mother owned the gold earrings, gold cross with gold chain and the .83 ct. diamond and gold chain at the time of her death, that she had them with her in the hospital at the time of her death and that Dale took them from her hospital room after her death. Patrick deposes that he and Michael used the insured values of these items for the purposes of the estate accounts.

68Patrick deposes that the jewellery items distributed to Michael and Marlene Hyrcay were taken to an appraiser and that he and Michael were advised that they had negligible value, as noted in the accounts.

69Dale deposes that he did take these items attributed to him, but that they did not belong to his mother. He deposes that the items had been “given to my ex-wife by my mother. I merely returned them to her…their value is significantly less than represented in the accounts.”

70First, there is no reason not to accept the value of the jewellery distributed to Michael and the third party. I approve of these entries in the estate accounts.

71Second, if the items did not belong to Ms. Berrey, I do not understand why she would have had them insured such that Patrick and Michael were able to obtain the insured values of the items. Dale had no authority to remove these items without the approval of at least one of his brothers. He acknowledges having done so and is therefore responsible to account for the value of these items, absent some compelling evidence corroborating his rather unusual allegation.

72I accept the estate accounts entries as to these items being attributed to Dale at the values set out therein.

5. With respect to the 2005 Hyundai Tuscon, this was sold not at arms-length to my nephew. This is my nephew and the son of one of the other executors. This was a non arms-length sale with less than half of book value. No appraisal or other justification has been provided for the sale price.

73The estate accounts value this vehicle at $2,500.00 and indicate it was sold for $2,500.00 which was transferred into the estate account.

74Patrick deposes that the Canadian Red Book wholesale value for a 2005 Hyundai Tuscon GL is between $1,970 and $2,586, and that the car was in poor condition requiring significant repairs including replacement of the suspension.

75Dale simply deposes that he disagrees with this value, suggesting that it should have been appraised.

76I accept the value for this vehicle as set out in the estate accounts because it is supported by the Red Book value.

6. Under Estate Account, they indicate there is a loan that has been made to Dale Victor Berrey. I did not receive and have no recollection ever of a cheque being paid to me from the Estate for $10,000.00. I have asked for a copy of same and have never been provided.

77The estate accounts note the following: “October 4, 2013 – cheque – loan by estate to Dale Victor Berrey - $10,000.00.”

78Patrick deposes that Dale had substantial debts at the time of their mother’s death and that he requested an advance on the inheritance he was to receive as a named beneficiary on multiple policies and accounts held by Ms. Berrey at Sun Life financial. According to Patrick, on October 4, 2013, he and Michael advanced Dale $10,000.00 from the estate as a loan, which remains outstanding.

79Attached to Patrick’s affidavit is a copy of cheque #06657 payable to Dale in the amount of $10,000.00, drawn on the account of Keith Berrey Ltd.

80Dale deposes that he never received $10,000.00 from his mother’s estate. According to Dale, his mother had agreed to reimburse him for the lost wages as a result of Dale caring for Ms. Berrey in the last three months of her life. Dale deposes that the money was paid to him by Keith Berrey Ltd. as a repayment, as previously agreed to by his mother.

81Patrick submits that this advance to Dale was by a cheque drawn on the account of Keith Berrey Ltd. because his mother’s estate had very limited assets at that time. In my opinion, the date of the cheque and the fact that it was not directly from the estate of Ms. Berrey is more corroborative of the position of Patrick than of Dale.

82I find that this was in fact a loan to Dale that remains outstanding. This entry in the estate accounts of Ms. Berrey is approved.

7. I would note that the legal fees of the lawyers for the other two Trustees, namely Brenda Bell and Carrel+Partners, have been paid and shown as disbursements. My lawyer’s fees have not been paid. There has been vastly unequal treatment and given the other executors have controlled the bank accounts and the monies without my consent or signature, it has put me in the position of not being able to afford proper legal counsel, not being able to continue to retain legal counsel and therefore not being able to file notices on time. The other Executors have generated this by their own conduct.

83The estate accounts record that Ms. Bell was paid $7,407.15 on March 6, 2014, and $2,345.21 on April 15, 2015. The accounts also note that a $5,000.00 retainer was paid to Carrel+ Partners as a retainer on April 28, 2017.

84Patrick deposes that he and Michael retained Carrel+Partners in an effort to conclude the administration of their mother’s estate and that an initial retainer of $5,000.00 was paid from estate assets as reflected in the accounts. Patrick submits that the decision to do so was taken by him and Michael pursuant to the majority rules clause in Ms. Berrey’s will.

85Patrick further deposes that he and Michael have subsequently incurred significant legal fees in having counsel attempt to satisfy Dale’s concerns and objections prior to commencing this litigation. They then incurred further legal fees in bringing these proceedings. Patrick deposes that very significant fees have been incurred and paid personally by him and Michael beyond the initial retainer.

86Patrick submits that the legal fees paid to Ms. Bell were for her legal assistance in the initial administration of the estate and that they were also paid by him and Michael pursuant to the majority rules clause in Ms. Berrey’s will.

87Dale deposes that Ms. Bell’s accounts and the retainer paid to Carrel+Partners were paid without his “consent or approval and…without any input from me notwithstanding I am one of the executors.” Dale further deposes that “there is no provision in the Will (of his mother) for a majority decision of the Trustees.”

88The accounts of Ms. Bell were necessarily incurred by Patrick and Michael for estate administration purposes. I find them to have been reasonable in the circumstances. They had to be paid, Patrick and Michael had the authority to do so and it was appropriate for the two executors to pay these accounts.

89The payment of the initial $5,000.00 retainer to Carrel+Partners was similarly reasonable and necessary. Patrick and Michael realized that estate litigation was on the horizon and jointly decided to retain counsel experienced in this type of legal work.

90In any event, the will of Ms. Berrey does in fact contain a clause granting a majority of the trustees decision making authority, contrary to Dale’ submission.

91I approve the payment of Ms. Bell’s invoice and the $5,000.00 retainer to Carrel+Partners from estate funds, as detailed in the accounts filed.

8. The amount showing as owing for income taxes in the Statement of Anticipated Debts is incorrect. This is not in accordance with either the Summary provided by the Accountants or the CRA tax information that was provided to my solicitor who acted for me at the time.

92The estate accounts note, as Current and Anticipated debts as of February 23, 2016, the sum of $67,201.84 owing in income taxes.

93Patrick deposes that their mother’s estate incurred significant CRA debts because her estate plan included numerous investment accounts with a total value of $571,327.07 with named beneficiaries. The deemed disposition of these accounts on the date of death resulted in significant capital gains being triggered and the resultant tax being charged to the estate. Patrick, Michael and Dale each received approximately $163,578.83 from these accounts.

94Patrick further deposes that he and Michael each loaned the estate significant funds to partially pay income taxes owing and that Dale was asked to do likewise but refused to contribute.

95A CRA Demand dated February 23, 2016, in the name of the Estate of Claire Berrey and in the amount of $67,201.84 is attached to Patrick’s affidavit. Patrick deposes that this was provided to Dale through Mr. Van Winssen.

96Patrick deposes that the CRA debt had grown to $77,681.31 as of November 30, 2018. Attached to Patrick’s affidavit is a November 30, 2018, demand letter to the estate from the CRA demanding the immediate payment of this debt.

97Dale deposes that he is now satisfied as to this particular debt and that he consents to the payment to the CRA of the amounts disclosed in the estate accounts.

9. We would note the Application waives Estate Trustees’ compensation. I note that I am an Estate trustee and never agree to waive same, nor was I requested to.

98Patrick and Michael submit that they are waiving their claim to compensation as there are insufficient assets in the estate to satisfy any claims for Estate Trustee compensation.

99Patrick and Michael are obviously entitled to waive their own claims to compensation, as they have done. They have not, at this time, taken any position regarding any claim for compensation that may be forthcoming from Dale.

10. There is no accounting for Keith Berrey Ltd. This is an important asset where the other two acted as directors of the corporation and no accounting has been provided for that. An accounting should be provided. There are significant disagreements with respect to the accounting and payment of funds and expenses out of the Keith B. Berrey corporate account. This is shown on the accounts as merely a receipt without any underlying background, including receipts and disbursements within the corporation, many of which are disputed. Approval of that, without a proper accounting in respect to the corporation is inappropriate.

100The estate accounts record Keith B. Berrey Ltd. as an asset of the estate at a value of $26,165.44 and a transfer to the estate of $24,165.44 on the dissolution of the company.

101Patrick deposes that this corporation was dissolved on or about November 7, 2014, and that its bank account balance on April 30, 2014, the corporate year end, was $13,896.00. A TD Bank statement attached to his affidavit confirms this bank balance. On dissolution, the company realized an additional tax refund of $10,269.44 which was distributed to Ms. Berrey’s estate, the residual beneficiary of Mr. Berrey’s estate.

102Patrick deposes that he and Michael were advised by BDO LLP that the best estimation of the company’s value, given that the only remaining asset was the bank account, was to use the year end bank balance and the tax refund, resulting in the estimated value attributable to Ms. Berrey’s estate for the company of $26,165.44.

103A more involved formal valuation was not seen as appropriate, given the relatively low value of Ms. Berrey’s estate and the fact that the only corporate asset was the bank account, according to Patrick.

104There is no merit to this objection by Dale. I am satisfied with the explanation as to the value of the company provided by Patrick and Michael.

11. Among the disbursements shown is a repayment of amounts to the Estate Trustee. This was done without my consent and approval. This is under the estate Account Item bb, partial repayment of loan to Estate and Item kk, partial repayment of loan to Estate.

105The estate accounts record that Patrick and Michael each loaned the estate $10,000.00 on November 29, 2013, and $25,787.97 on April 24, 2014. The accounts also reflect a payment from the estate to Patrick Berrey on January 15, 2015, in the amount of $4,000.00, and a payment from the estate to Patrick Berrey on October 1, 2015, in the amount of $2,000.00. Both are indicated to be ‘partial repayment of loan to estate.”

106Patrick deposes that he and Michael each loaned the estate $35,787.00 to pay a portion of taxes owing. Dale was asked to contribute but refused. A portion of Patrick Berrey’s loan to the estate was repaid as reflected in the accounts.

107In my opinion, the accounts properly reflect these transactions. The loans to the estate by Patrick and Michael were made to enable the estate to pay down its tax debt and to minimize interest and penalties. It was perfectly appropriate that repayment be made as and when possible. Patrick and Michael had the authority to do so without Dale’s approval. This objection of Dale is without merit.

108I reject all objections of Dale as contained in his Notice of Objections. The estate accounts In the Estate of Claire Yvonne Berrey, as filed by the Applicants for the period October 2, 2013 to December 8, 2017, are hereby approved and passed.

Application CV-18-79

109This is an application brought by Patrick Berrey and Michael Berrey as Estate Trustees for the estates of Keith Bertram Berrey and Claire Yvonne Berrey. The respondents are Brenda Leigh Bell, Dale Berrey as Estate Trustee for the estates of Keith Bertram Berrey and Claire Yvonne Berrey and Dale Berrey in his personal capacity.

110The applicants make application for the following relief:

1. An Order that Ms. Bell pay the sum of $77,681.31 from funds held in trust by her law office for the Estate of Keith Bertram Berrey to the Receiver General of Canada for the Estate of Claire Yvonne Berrey;
2. An Order that Ms. Bell pay the sum of $39,080.82, plus accrued interest, from the funds held in trust by her law office for the Estate of Keith Bertram Berrey into court pending further order of this court or the consent and direction of the Estate Trustees for the Estate of Keith Bertram Berrey;
3. An Order that upon compliance with the above proposed orders, the liability of Ms. Bell in respect of monies held in trust by her for the Estate of Keith Bertram Berrey be extinguished;
4. An Order that Dale Victor Berrey be removed as Estate Trustee for the Estates of Keith Bertram Berrey and Claire Yvonne Berrey; and
5. Costs of the application on a substantial basis.

The CRA Debts

111Ms. Bell has been served with the Application record in this matter and takes no position as to the relief sought.

112The background in this matter has been set out above. Ms. Bell retains in her trust account the net proceeds of sale the property owned by Keith Berrey. The sale of the property requires that a further T3 Trust Return be filed for Mr. Berrey’s estate. It is estimated that this will result in a tax liability for Mr. Berrey’s estate of approximately $8,000.00.

113Ms. Berrey’s estate incurred a significant tax liability as a result of the nature of the assets held by her and the deemed disposition of these assets on her death. As of November 30, 2018, Ms. Berrey’s estate debt to the CRA was $77,681.31.

114The estates of Mr. and Ms. Berrey currently have an outstanding tax liability of at least $85,681.31. These debts will continue to accrue both interest and penalties until paid in full.

115The only remaining assets in Mr. Berrey’s estate are the net proceeds from the sale of the property held in trust by Ms. Bell. The only remaining asset in Ms. Berrey’s estate is the pending distribution from Mr. Berrey’s estate.

116Dale signed the sale papers for the property owned by Mr. Berrey on the condition that the net proceeds of sale be held in trust by Ms. Bell and not be released without his consent. To date, Dale has refused to consent to the payment of the CRA debts from the net sale proceeds held in trust by Ms. Bell. Ms. Bell refuses to release any trust funds pursuant to the instructions of Patrick and Michael despite the majority rules clause present in the wills of both Mr. and Ms. Berrey.

117Dale’s failure to consent to the payment of the CRA debts of his parents’ estates defies common sense. Leaving the debts unpaid while funds available to pay them languish in Ms. Bell’s trust account is resulting in increased interest and penalties for both estates, further diminishing their value.

118I accept the submission of the applicants that it is in the best interest of the estates to pay the CRA debt owing by Ms. Berrey’s estate in full to stop the further accrual of interest and penalties. I further accept the submission of the applicants that the balance of the funds held in trust by Ms. Bell be paid into court to the credit of Mr. Berrey’s estate. This will allow the outstanding tax returns for Mr. Berrey’s estate to be filed and any taxes owing paid.

119The relief sought in Paragraphs 1(a), (b) and (c) of the Notice of Application is granted.

The Removal of Dale Victor Berrey as Estate Trustee in the Estates of Keith Bertram Berrey and Claire Yvonne Berrey

120Rule 14.05(3)(c) of the Rules of Civil Procedure provides that:

A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is the removal or replacement of one or more…trustees.

121The Trustee Act, R.S.O. 1990. C. T.23, provides this court with statutory authority to remove a trustee. Section 37(1) of the Trustee Act states that:

The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee…

122In St. Joseph’s Health Centre v. Dzwiekowski, [2007] O.J. No. 4641 (Ont. SCJ), Cullity J., at para. 26, commented on the long-standing legal principles applicable in considering an application to remove an estate trustee:

In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries. Probably it is not possible to lay down any more definite rule in a matter so essentially dependent on details often of great nicety.

123Justice Cullity proceeded to discuss, at paragraphs 28 and 29, the potential risks to the future administration of the estate if an allegedly recalcitrant trustee is not removed:

28. The authorities are, I believe consistent in placing the emphasis on the future administration of the estate, and the risks to which it will be exposed if the trustee remains in office. The question is whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries. The sanction of removal is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries. As Lord Blackburn stated:

…if satisfied that the continuance of the trustee would prevent the trust being properly executed, the trustee might be removed.

29. Past misconduct that is likely to continue will often be sufficient to justify removal, and there have been other cases where it has led to such friction, distrust and animosity with the beneficiaries that such an order has been made. In all cases, however, I believe the guiding principle is that stated by Lord Blackburn.

124In Consiglio, Re (No. 1), [1973] O.J. No. 2022, 36 D.L.R. (3d) 658, at para. 6, the Ontario Court of Appeal held that actual misconduct of a trustee is not a prerequisite to removal:

It is our view that misconduct on the part of a trustee is not a necessary requirement for the Court to act and that the Court is justified in interfering, and indeed required, to interfere, when the continued administration of the trust with due regard for the interests of the cestui que trust has by virtue of the situation arising between the trustees become impossible or improbable.

125In Mailing v. Conrad, [2003] O.J. No. 735, the Ontario Superior Court of Justice considered an application by two estate trustees to remove a third trustee in the case of a will which contained a majority rules clause, as in the case before me. The Court stated the following at paragraphs 4, 15, 17 and 18:

4. The matter is complicated somewhat by the “majority clause” included in the will of the deceased. The clause is intended to facilitate resolution of conflict between executors by permitting two of the appointed administrators to deal with the assets of the estate. However, some of the incidents complained of by the applicants include occasions where the respondent has refused to give instructions or to sign documents. Therefore, despite the existence of the “majority clause”, administration of the estate has allegedly been significantly delayed.

5. My review of the materials filed and the arguments of counsel leads me to the conclusion that the existing friction between the executors and trustees of the estate has, in fact, led to a delay and consequently potential costs to the beneficiaries of the estate.

6. I agree with the applicants’ position that notwithstanding the “majority clause” the lack of co-operation by the respondent would continue to make the job of the other executors difficult if not impossible. The nature of the respondent’s behavior, including threatening to take legal action against his co-executors, cannot be resolved by the “majority clause”. The applicants are right to be cautious in the face of the allegations by the respondent and apparent threats of litigation.

7. On these facts, I find that the respondent’s hostility and lack of co-operation make it improbable that the executors would be able to administer the estate. Having considered the materials filed regarding the respondent’s past conduct, I can conclude that in view of the somewhat complex issues yet to be dealt with in the estate, centering on the sale of the commercial properties especially, that the continuation of the respondent’s role of executor or trustee would be detrimental to the estate.

126[Kar v. McCarvell 2012 ONSC], was an application to remove two of four estate trustees, all children of the testatrix, where the estate was comprised of only the net proceeds of sale of a home and $5,000.00 and where nothing had happened in the five years since the home had been sold. McDermid J. noted the following at paragraphs 2, 3 and 6:

2. The estate assets comprise a home, which was sold in 2006 and yielded approximately $160,000, now held in trust, and about $5,000 in cash deposited in an estate bank account. Neither the testatrix’s final tax return or any estate tax returns has been filed. Nothing has happened with respect to distributing this uncomplicated estate among the four children of the testatrix, who are her beneficiaries and the parties to this application, notwithstanding that the estate assets could not be more liquid and that over five years have elapsed since they were realized.

3. It is clear from the material filed and the submissions of counsel and Mr. William McCarvell that there is a great deal of tension and animosity between the Estate Trustees to the point that a state of paralysis has resulted, which has prevented the distribution of the estate among the beneficiaries that should have been a very straightforward procedure. Each blames the other for the failure to complete the distribution. This has led to potential costs to the beneficiaries and an unwarranted withholding of their respective distributive shares of the estate.

4. I have no hesitation in finding that this situation cannot continue. To permit that to happen would put the welfare of the beneficiaries at further risk and prevent the trust from being properly executed. The remaining issue is whether only one, rather than both, of the Estate Trustees should be removed.

127Ms. Berrey died on October 2, 2013. Patrick, Michael and Dale were appointed as her estate trustees on October 13, 2013. On February 24, 2016, they were also appointed as estate trustees for their father’s estate. Property owned by their father at the time of his death was sold shortly thereafter, on March 4, 2016.

128In the three years since that sale was completed, the net sale proceeds have remained in Ms. Bell’s trust account while significant tax debts have remained unpaid. This is despite the existence of a majority rules clause in the wills of both Mr. and Ms. Berrey and is because of Dale’s inexplicable lack of cooperation.

129I find that it is necessary to remove Dale as estate trustee for both estates so that the balance of the administration of these estates can be completed in a timely fashion. All that remains to be done is the payment of the CRA debt of Ms. Berrey’s estate, the filing of the final return for Mr. Berrey’s estate and the payment of any resulting taxes for his estate.

130Judging from Dale’s complete lack of cooperation over the past three years, it is reasonable to infer that he will continue to be uncooperative and hinder and delay the completion of the administration of these estates, contrary to the interests of all beneficiaries.

131I order that Dale Victor Berrey be removed as estate trustee of the Estate of Keith Bertram Berrey and of the Estate of Claire Yvonne Berrey.

Costs

132The applicants, Patrick and Michael, seek their costs for each of these three Applications against Dale personally. They have filed Costs Outlines seeking costs as follows:

• In the Estate of Keith Bertram Berrey CV-18-48: Partial Indemnity Fees of $2,809.90 or Substantial Indemnity Fees of $4,014.85, plus disbursements of $765.57.
• In the Estate of Claire Yvonne Berrey CV-18-49: Partial Indemnity Fees of $3,470.50 or Substantial Indemnity Fees of $5,005.75, plus disbursements of $794.40.
• In the Matters of the Estate of Keith Bertram Berrey and Claire Yvonne Berrey CV-18-79: Partial Indemnity Fees of $4,567.90 or Substantial Indemnity Fees of $6,651.85, plus disbursements of $1,661.42.

Files CV-18-48 and CV-18-49

133The applicants submit that they acted in good faith in attempting to deal with issues raised by Dale through Mr. Van Winssen. Mr. Van Winssen was first provided with draft estate accounts on March 27, 2018. The applicants submit that they received no substantive response from Dale or Mr. Van Winssen for five months after the provision of the draft accounts, despite several requests for a response from Mr. Van Winssen. The requests for a response from Mr. Van Winssen were made on April 17, May 17, May 25, June 1, and June 11, 2018.

134The applicants submit that they had no alternative but to bring their Applications to Pass Accounts for both estates on August 20, 2018. Neither Dale nor Mr. Van Winssen responded by the deadline, either by formally objecting or by requesting further information.

135The applicants submit that they therefore proceeded on the basis that the passing of accounts would be unopposed. Very shortly before the first return date of the applications, Mr. Van Winssen filed Notices of Objection on behalf of Dale in regard to both estates.

136The applicants submit that their counsel was required to attend two court appearances in order to set a hearing date for the apparent contested hearing of the applications. Mr. Van Winssen did not attend at either of the return dates to speak to these matters.

137The applicants acknowledge that legal fees of $5,000.00 have been paid out of the estates. They submit that the remaining substantial legal fees, as set out in the Costs Outlines filed, have been paid personally by them.

138The applicants submit that the actions of Dale and Mr. Van Winssen have unnecessarily increased the length, complexity and acrimony of these proceedings. The applicants submit that the relatively low value of the estates and the straightforward administration tasks that had to be completed did not warrant the excessive costs ultimately incurred by them. The applicants submit that the formal application to pass accounts for the estates should not have been necessary.

139The applicants seek their costs of these two applications from Dale personally on a substantial indemnity basis as set out in their Costs Outlines.

File CV-18-79

140The applicants reiterate their costs submissions made in relation to the previous two files.

141The applicants submit that Dale’s refusal to agree to pay the CRA debts from funds held in trust by Ms. Bell was unreasonable and in direct conflict with Dale’s fiduciary duty to act in the best interests of the estates. The applicants submit that Dale’s position left them with no choice but to incur the unnecessary expense of commencing the application seeking an order for the payment of these debts out of Ms. Bell’s trust account and for the removal of Dale as an estate trustee in order that all remaining estate administration tasks can be completed on a timely basis.

142The applicants seek their costs of this application from Dale personally on a substantial indemnity basis as set out in their Costs Outline.

143In Neuberger Estate v. York, 2016 ONCA 303, at paragraphs 24 and 25, the Ontario Court of Appeal commented on the modern approach to the costs of estate litigation in Ontario:

24. In estates litigation in Ontario, the historical approach to costs has been displaced in favour of one in which the costs rules in civil litigation apply both at first instance and on appeal, unless the court finds that one or more of the relevant public policy considerations dictate that costs (or some portion thereof) should be paid out of the assets of the estate: McDougald Estate v. Gooderham (2005), 255 D.L.R. (4th) 435 (Ont. C.A.), at para. 80; see also Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, 370 D.L.R. (4th) 686 (Ont. C.A.), at para. 101. The public policy considerations at play in estate litigation are primarily of two sorts: (1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and (2) the need to ensure that estates are properly administered.

25. Blended costs awards, in which a portion of costs is payable by the losing party and the balance is payable out of the estate, are available at first instance and on appeal, in the discretion of the court, where one or more of the relevant public policy considerations are found to be engaged: Sawdon, at paras. 93-100 and 107.

144In McDougald Estate v. Gooderham, [2005] O.J. No. 2432, at para. 85, the Ontario Court of Appeal stated the following:

The modern approach to awarding costs, at first instance, in estate litigation recognizes the important role that courts play in ensuring that only valid wills executed by competent testators are propounded. It also recognizes the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.

145In [Rudling Estate, Re, [2009] O.J. No. 3065, 178 A.C.W.S. (3d) 1069], the Superior Court of Justice addressed the issue of an estate trustee who failed to pay estate taxes, resulting in the accrual of interest and penalties. The court stated the following:

21 In my view, it would be unfair to Ronald to require him to bear any portion of the added costs that Larrie’s ill advised opposition caused. Long gone are the days when parties to Estate proceedings can expect that all of their costs will be paid from the Estate, regardless of the merit of their arguments or their conduct that increased costs: McDougald Estate v. Gooderham, [2005 CarswellOnt 2407 (Ont. C.A.)], 2005