Court File and Parties
COURT FILE NO.: 18-78313 DATE: 2019/03/04 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ROSEMARY WHELAN, Applicant and ROYAL TRUST CORPORATION OF CANADA in its capacity as Estate Trusteee with a Will of Paul Haddad
BEFORE: Mr. Justice C. MacLeod (designate for the RSJ)
COUNSEL: David M. Lobl, for the Estate Trustee Miriam Vale Peters, for Raymonde & Doris Haddad Gail S. Nicholls, for Rosemary Whelan Debra L. Stephens, for the Children’s Lawyer
HEARD: In Writing (pursuant to para. 51 of the Provincial Practice Direction)
Endorsement
[1] This is a motion to transfer the passing of accounts (Toronto file 02-149/18) to Ottawa. As this is an inter-regional transfer, pursuant to the Practice Direction and the protocol adopted by the Council of Regional Senior Justices, these motions must be dealt with in writing by the Regional Senior Justice (or designate) in the proposed receiving region. In this case, I am acting on behalf of the RSJ.
[2] The motion is opposed by the Estate Trustee. These motions are usually a simple question of addressing the factors in Rule 13.1.02 (2) (b) of the Rules of Civil Procedure and determining whether or not the moving party has met the onus of showing that the interests of justice favour a transfer. In this case, however, a number of steps and missteps have complicated matters and led to unnecessary procedural confusion and conflict.
Background to the Estate
[3] By way of background, the late Paul Haddad made a Primary Will and a Limited Property Will in May of 2015. The wills were prepared in Ottawa where Mr. Haddad was working at the time but they described him as a resident of the City of Toronto. Toronto is where his principal residence was located and it was in Toronto that he passed away on February 22, 2016.
[4] In his wills, Mr. Haddad appointed Royal Trust Corporation of Canada as his Executor and Trustee. Provision was made for several substantial gifts to named individuals and the residue of the estates was to be divided into three trusts for the benefit of his mother and two sisters – Raymonde Haddad, Doris Haddad and Rosemary Whelan. These beneficiaries all reside in Ottawa.
Procedural History
[5] Following the death, the Estate Trustee obtained a Certificate of Appointment of Estate Trustee with a Will (“letters probate”) for the Primary Will. In accordance with s. 7 (1) of the Estates Act, RSO 1990, c. E.21, the file was opened in Toronto where the deceased had his principle residence at the time of death. (Court file no. 01-1382/16).
[6] The Estate Trustee began the process of administering the wills and proceeded with interim distribution but apparently encountered some difficulty in relation to property in the Philippines. In any event a dispute has arisen because the residual beneficiaries are unhappy with the manner in which the estate is being administered in particular the rates of return on investments and the failure to capitalize the three trusts. This has resulted in all parties retaining counsel and those counsel have been in discussions and negotiations for much of the past year.
[7] Royal Trust brought an application for interpretation of the wills in Toronto (court file no. 01-1382/16). The Office of the Children’s Lawyer also became involved and has appointed outside counsel.
[8] In light of the dispute about the administration of the estate, various parties including the OCL had pressed for passing of accounts and Royal Trust had indicated its intention to do so. In the latter part of 2018 there was an exchange of correspondence about the location of the passing of accounts.
[9] Counsel for the beneficiaries took the position that it would be more appropriate for that to occur in Ottawa because the beneficiaries and their counsel are located here, some of the property is located here, and Royal Trust has an Ottawa office which is involved in the administration of the estate. Counsel for the Estate Trustee and counsel for the OCL expressed the view that Toronto was the proper venue as the matter could be readily scheduled on the Estates List and there were already proceedings there. Both counsel for the Estate Trustee and counsel for the OCL practice out of Toronto.
[10] In October of 2018 there was an exchange of correspondence and e-mail between counsel attempting to resolve the question of venue. Counsel for the Estate Trustee had suggested that his client might be amenable to proceeding in Ottawa if there would be no issue about fees and travel costs. The idea that such costs should come out of the estate had been rejected by counsel for Ms. Whalen but she still insisted that Ottawa was the correct location.
[11] On November 1st, 2018 Ms. Nichols advised Mr. Lobl by e-mail that her client “will not consent to having the estate underwrite the travelling and accommodation expenses required for any attendances either by your firm or your client” but maintained that “the balance of convenience favours Ottawa”. In fairness, it should be noted that both Gowlings and Royal Trust have significant operations in Ottawa. In that same e-mail, Ms. Nichols also advised that if there was no agreement to proceed in Ottawa, her client had instructed her to “proceed with an ex parte motion pursuant to Rule 74.15 (1) (h) of the Rules of Civil Procedure”.
[12] On November 2nd, 2018 an associate from Ms. Nichol’s office appeared in express motions court with just such a motion. The affidavit in support of the motion indicated that although the certificate of appointment with a will had been issued in Toronto, Ottawa was the proper venue for the passing of accounts. It did not disclose that there was a dispute about venue or that counsel were involved for other parties nor that there had been recent discussions between counsel on this very point. Relying on Rule 74.15 (1) and (2) of the Rules of Civil Procedure which permit orders for assistance including an order to pass accounts to be brought ex parte, counsel for Ms. Whalen obtained an order from the presiding judge. The order required that the Estate Trustee pass its accounts by filing “accounts of the estate and an application to pass accounts, in accordance with Rules 74.12 and 74.18 of the Rules of Civil Procedure, in the court office within 60 days after this order is served on you”.
[13] Although the rule permits an ex parte motion, that does not mean it is always appropriate. This was not merely an innocuous order requiring the Estate Trustee to pass its accounts (something it was already prepared to do). Rather it was an attempt to unilaterally determine the venue question by obtaining an order in Ottawa. I agree with counsel for the Estate Trustee that it was highly improper to proceed ex parte, even with a one day warning, in the face of an active dispute about venue. It was even more improper to proceed ex parte without advising the presiding judge of all of the facts and making full and frank disclosure. This was compounded by failure to comply with Rule 37.07 (4) of the Rules of Civil Procedure which requires the motion record and supporting material for an ex parte motion to be served on the affected party along with the order. The affidavit was not provided, despite demand from Mr. Lobl, until January 9th, 2019.
[14] For his part, Mr. Lobl ignored the implicit requirement of the order that the accounts be filed in “the court office” in Ottawa and instead filed the application for passing of accounts in Toronto on the Estates List (File 02-149/18). That application was filed on December 21st, 2018. There is nothing in the application which references the existence of an Ottawa order. The Application is scheduled for a hearing in Toronto on April 4th, 2019.
[15] The next step was the launching of this venue motion but even that did not proceed smoothly. Firstly, in disregard of the practice direction, the venue motion was made returnable on a regular motion list on March 22nd, 2019. Secondly, rather than bringing the motion in the Toronto file number which was the subject of the motion, the motion was brought using the Ottawa file number assigned for the ex parte motion. (18-78313). The motion record was filed on January 25th, 2019.
[16] Faced with this motion, rather than bringing a motion to set aside the ex parte order, counsel for the Estate Trustee wrote to the Office of the Regional Senior Justice asking for directions as to whether the motion should proceed orally or be heard in writing by the RSJ. That letter was dated February 6th, 2019 and was sent by fax and courier. [1] Responding material was filed at the counter on February 20th, 2019. Confusion about file numbers (both the Toronto and Ottawa number had been included on the responding material) which caused some difficulty at the counter but in due course it was filed, matched up with the motion record and brought to my attention. [2]
[17] I list this procedural history simply to flag it. Since I am dealing with the venue question in writing and have not convened a hearing, I should not be taken as conclusively determining issues of conduct or incivility. Counsel will no doubt be aware however that the “three C’s” of “Co-operation, Civility and Common Sense” are included in the Practice Directions governing the Commercial List and Estates List in Toronto. No less is expected in Ottawa.
[18] What is apparent is that the dispute over venue and the launching of competing proceedings have used up significant time and will have generated significant expense. It is hard to imagine this will not have exceeded the cost of plane tickets and hotel rooms.
[19] Pursuant to the practice direction and the direction from the RSJ, counsel were advised that the venue motion would be dealt with in writing and assigned to me to review. This brings us to the present.
Venue
[20] Whether in response to an order or voluntarily, Rule 74.18 of the Rules of Civil Procedure deals with applications to pass accounts. The trustee serves the notice of application on all interested parties along with a copy of the accounts. Those parties may then file a notice of objection pursuant to Rule 74.18 (7). It is only then that the passing of accounts becomes “contested”.
[21] In that case the parties proceed to a hearing for directions. In both Toronto and Ottawa, Rule 75.1 of the Rules of Civil Procedure applies which requires a motion for directions which will include directions in relation to mandatory mediation. Those directions are obtained at the first appearance before a judge in Toronto. In Ottawa they are generally obtained at an appearance before the master on Monday mornings. In either case, the court will determine the procedures to be followed. Amongst the other possibilities are referral to assessment under Rule 74.18 (13) or trial of one or more issues under Rule 74.18 (13.1). As mentioned, the parties may also be referred to mediation under Rule 75.1 or Rule 74.18 (13.2). [3]
[22] All of this leads me to the conclusion that a venue motion at this stage is premature. The Application to Pass Accounts has been commenced on the Estates List and a date has been set. Although it would be astonishing if notices of objection were not filed, that is a first step to determining if a hearing is required. The second step, as discussed, is a hearing for directions to define and narrow the issues and determine the procedures to be followed. In all probability this will be followed by mediation. Assuming that the parties involved in the mediation are the beneficiaries, the Estate Trustee and the OCL, the mediation should likely take place in Ottawa but that is no reason to move the proceeding.
[23] It is only if a contested hearing is ordered with live witnesses that it will be possible to determine the question of venue and the balance of convenience. In this case that is the factor likely to be the most determinative. It is far too early to determine if oral evidence will be required from any of the beneficiaries, what other witnesses will be required or from where those witnesses will have to travel.
[24] I am not condoning the unilateral actions of either counsel but for the time being this matter should remain on the Estates List. Toronto was the principal residence of the deceased and is the location of the probate file. Two of the four counsel involved practice in Toronto. One of the principal officers of Royal Trust involved in administering the Estate works out of the Hamilton Office.
[25] The matter should proceed in Toronto at least until notices of objection are filed and a hearing for directions takes place. A venue motion may be renewed if and when it appears that a contested hearing is necessary.
[26] In addition, as I have already reviewed the matter on behalf of the RSJ, I can confirm that the East Region has adequate resources to accommodate this matter. A transfer to Ottawa is approved at any time if the parties consent or the Estates List judge so orders.
Expenses and Costs
[27] With respect to issues such as travel costs, whether the hearings take place in Toronto or in Ottawa, these are questions of costs. All parties should be aware that costs incurred in litigation no longer automatically come out of the estate. A party acting unreasonably may have to bear costs under the normal costs rules. On the other hand, it may well be the case that all costs will indeed come out of the estate. Accordingly, all parties and the court should share an interest in minimizing those costs and in pursuing this matter in as cost effective a manner as possible. Video conference, teleconference and other technological solutions are available.
[28] As to the costs of this motion and all of the other steps taken in the various estate proceeding for which costs have not yet been awarded, those costs are reserved to the judge hearing the passing of accounts.
[29] In conclusion the motion for transfer is dismissed without prejudice to renewing such a motion in future. The costs of this motion are reserved to the judge dealing with the passing of accounts. Further, as set out above, leave is granted to transfer the proceeding to Ottawa at any time if the parties consent or the judge dealing with the matter in Toronto so orders.
Mr. Justice C. MacLeod Date: March 4, 2019
Footnotes
[1] I will note in passing that one copy and one method of delivery would suffice. There is no benefit in sending duplicate correspondence by different methods that arrive on different dates.
[2] In Ontario filing and handling of motion material is a manual process. If the motion record and the responding material do not have the same file number or title of proceedings, it would be difficult to know how the court staff would ordinarily be able to identify the material or ensure they arrive in the correct court room.