COURT FILE NO.: 05-232/19

DATE: 20201029

SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE MATTER OF THE ESTATE OF GLORIA MARILYN BERKLEY, deceased

RE: Madison Brass, Applicant

AND:

Sandy Berkley and the Estate of Gloria Marilyn Berkley, Hindy Brass, Justin Brass, Amanda Berkley, Remy Berkley and Maya Berkley, Respondents

BEFORE: C. Gilmore, J.

COUNSEL: Martin Zatovkanuk, Counsel for the Applicant and for Hindy Brass Andrew Sader, Counsel for the OCL on behalf of the minor Respondent Maya Berkley. Sandy Berkley on his own behalf. Joshua Eisen for the Estate Trustee During Litigation, Shael Eisen

HEARD: October 28, 2020

ENDORSEMENT

OVERVIEW

[1] This is a return of the motion originally brought by the Estate Trustee During Litigation (“the ETDL”) on September 17, 2020 for the sale of property located at 43 Brockington Crescent, Toronto (“Brockington”). Sandy Berkley, the son of the deceased, opposes the motion. His position is that in accordance with the terms of his mother’s will he is the owner of Brockington and he should be entitled to remain there until a trial judge decides otherwise.

FACTUAL BACKGROUND

[2] Gloria Berkley(“Gloria” or “the deceased”) died on April 6, 2019. The Applicant in this matter, Madison Brass (“Madison”) is the deceased’s granddaughter. The deceased was survived by her two adult children, Hindy Brass (“Hindy”) and Sandy Berkley (“Sandy”).

[3] The deceased had five grandchildren, Hindy’s children Justin and Madison Brass, and Sandy’s children, Remy, Amanda and Maya. Maya is a minor who resides with Sandy. Mr. Sader was present at this motion on behalf of the Office of the Children’s Lawyer (“the OCL”) for Maya.

[4] The deceased’s husband Joseph Berkley died on April 15, 2017. He had a will which left everything to his wife if she survived him.

[5] The deceased’s will dated March 27, 2002, left everything to her husband. If he predeceased her, her estate was to be divided into five parts. Four parts were to be divided equally between her grandchildren Justin and Madison Brass and Remy and Amanda Berkley. The fifth part was to be divided equally between Sandy and Hindy. Sandy and Hindy were named the alternate Estate Trustees in the event that Joseph Berkley predeceased his wife.

[6] The deceased made a codicil to her will dated July 10, 2017. The codicil specifies that Sandy’s daughter Maya was to be included in the residue of the estate for the grandchildren thus reducing the share of the grandchildren in the original will.

[7] A second codicil was made by the deceased on April 3, 2019. This codicil changed the Estate Trustees from Sandy and Hindy to Sandy and his daughter Remy. It also purported to add paragraphs to the deceased’s original will confirming that the deceased wished to clarify that Brockington did not form part of her estate and was to be transferred to Sandy on her death including all of its contents. The codicil also set out that the deceased had transferred Brockington to herself and Sandy as joint tenants in late 2018 and that a mortgage was registered on Brockington at that time in order to pay off the existing mortgage, provide funds for Sandy and provide funds for the deceased’s care.

[8] It is not disputed that Brockington is the main asset of the estate and estimated to be worth in approximately $2M.

[9] After the death of Joseph Berkley, Sandy moved into Brockington. He says he did this to care for his mother. Madison and Hindy allege that he moved in so that he could control Gloria, exclude her from the rest of the family and coerce her into signing a new Power of Attorney, codicils to her will, a transfer of Brockington and register a new mortgage on Brockington.

[10] Sandy denies this is the case. He submits that he did all of this to assist his mother and was only carrying out her wishes. His position is that Hindy and her children virtually ignored Gloria after Joseph’s death and Sandy was the only one who cared for his mother. Further, had matters been left up to Hindy, she would have put her mother in a retirement home and sold Brockington, which was contrary to his mother’s wishes. Based on his mother’s wishes, the plan was that he was to receive Brockington on her death and leave it in his will to the grandchildren equally.

[11] The Applicant commenced this litigation by way of challenge to both the first and second codicil of Gloria’s will which she says were obtained as a result of undue influence by Sandy.

THE PREVIOUS COURT ORDERS

[12] Counsel are well aware of the history of this matter but given the amount of litigation in just over a year, I felt it best to provide a summary of the previous appearances.

[13] On August 30, 2019 an ex-parte Mareva order was issued. Sandy was restrained from dealing with any assets of the estate. Sandy was permitted to apply to the court for an order for living expenses on 24-hours notice. The matter was to be returned on September 10, 2019.

[14] On September 10, 2019 the court ordered that Sandy return $135,000 of the $160,000 he had removed from the line of credit after the date of the Mareva order. The funds were to be held by Sandy’s solicitor in trust. The Estate assets of both Gloria and Joseph Berkley were ordered to be frozen and Sandy was permitted to retain $10,000 per month for living expenses. In addition Sandy was ordered to:

a. Produce all financial records for Sandy, Gloria and Joseph Berkley within 15 days of a request to produce;

b. Produce a Statement of Assets and Liabilities of Gloria Berkley’s Estate within 30 days;

c. The $15,000 transferred to Sandy’s counsel from the $160,000 taken from the line of credit was to remain with his counsel solely for legal fees, and;

d. Sandy was permitted to use up to $10,000 per month for personal expenses up to January 29, 2020.

[15] The matter was returned to court again on November 19, 2019 as there were outstanding issues with respect to disclosure and Sandy’s non-compliance with the previous orders. Based on Sandy’s monthly net income of $7,000, Sandy was permitted to retain $3,500 per month. The other $3,500 was to be paid to the Applicant’s solicitor to offset her costs. Sandy was also required to:

a. Continue to follow up with TD Canada Trust, CIBC and BMO for production of previously ordered financial information;

b. Provide all supporting documentation in relation to the funds withdrawn from the joint line of credit while the Mareva order was in effect;

c. Produce Joseph and Gloria Berkley’s terminal tax returns and Sandy’s 2018 Notice of Assessment;

d. Request records from CRA, if necessary, to comply with the Order;

e. Within 20 days, serve an affidavit on the Applicant’s counsel setting out a list of items owned by Gloria or Joseph Berkley that were transferred to third parties after their deaths;

f. Pay costs to the Applicant of $7,000 in two instalments of $3,500 per month. Sandy was to direct BMO to issue two bank drafts for the costs amounts. The costs amounts to be withdrawn from the account into which Sandy’s income was paid;

[16] On January 29, 2020 a motion was argued before me which resulted in my Order of February 3, 2020 appointing Shael Eisen as the ETDL. My Order also required that Sandy could remain living at Brockington so long as he paid the line of credit, taxes, insurance, utilities, taxes, maintenance and occupation rent. Sandy was also required to repay the $120,000 he had removed from the line of credit and $11,000 in costs. In the event that Sandy failed to comply with the January 29, 2020 Order the ETDL could bring a Motion for Directions to sell Brockington.

[17] The ETDL’s position is that Sandy has failed to comply with the February 3, 2020 Order and in order to preserve the Estate’s only asset, Brockington must be sold. The ETDL originally brought this motion before Justice McEwen on September 17, 2020 seeking to sell Brockington. The September 17, 2020 Order of Justice McEwen required that the parties attend mandatory mediation before October 28, 2020. In addition, Sandy was to pay all outstanding costs orders, provide proof that the property taxes and insurance on Brockington were current, pay occupation rent, provide information regarding a CRA tax lien registered on title to Brockington, provide a video of the interior of Brockington and repay the $135,000 to the Estate as previously ordered.

[18] The parties attended the mediation ordered by Justice McEwen on October 22, 2020. The mediation was not successful. The ETDL now returns to this court to request the original relief sought on September 17, 2020.

THE POSITIONS OF THE PARTIES ON THIS MOTION

[19] The ETDL requests that Brockington now be listed for sale and sold given that the mediation ordered by Justice McEwen was unsuccessful. Mr. Eisen expressed concern that he cannot protect the Estate’s sole asset unless it is sold. This is because Sandy has not complied with court Orders, has minimal income with which to maintain Brockington, has “maxed out” the home equity line of credit at $499,000 and has failed to provide required documentation and accounting.

[20] While there are documents to confirm that the home insurance is current, there is a concern with respect to outstanding property taxes and a CRA lien of close to $100,000 related to personal income taxes owed by Sandy. This lien was registered after the Mareva Order was obtained.

[21] Sandy has been given months to comply and chooses not to do so. The housing market is very good right now and Mr. Eisen wants to maximize the value of Brockington so that the Estate can pay expenses and to ensure the value of the asset is not further depleted. This litigation cannot otherwise move forward as the Estate has no other source of funds.

[22] Mr. Sader on behalf of the OCL advised that Maya is 17 and wishes to continue to live with her father. She understands that they may not be living at Brockington for much longer, but she was clear that going back to live with her mother is not an option. Mr. Sader agrees that there is no other way to move the litigation forward than selling Brockington. He does not want to delay the sale as once Maya turns 18 she will no longer have counsel from the OCL’s office and may not be able to afford her own counsel.

[23] Mr. Zatovkanuk on behalf of the Applicant and Hindy Brass has significant concerns. He provided an affidavit to the court from Brian Brass sworn October 27, 2020 who deposed that he contacted Sandy’s employer, Brock Windows, who confirmed that Sandy continues to work there and worked there throughout the COVID-19 lockdown. Yet, Sandy has maxed out the line of credit and has failed to pay court costs, occupation rent and other court ordered amounts. Further, Sandy has still not provided outstanding document disclosure and did not mention the CRA lien until the ETDL discovered it upon completing a title search of Brockington.

[24] Mr. Zatovkanuk supports the sale of Brockington but submits it would not be fair to pay out Sandy’s CRA lien from the proceeds especially when it was registered after the Mareva Order was made.

[25] Sandy is vehemently opposed to the sale of Brockington. His position is that according to his mother’s valid will the house is his and until a court orders otherwise he has the right to live there. This is his family home and if it is sold he can never regain it. He is working and doing the best he can to pay the court ordered amounts. He has kept all household payments up to date. It would be extremely unfair to sell the home and force he and Maya to find a new home pending trial.

ANALYSIS AND RULING

[26] The ETDL has a court ordered mandate to gather in, account for and protect the Estate’s assets. I find that the ETDL cannot do so while Sandy remains living at Brockington given that Brockington is the only significant asset of the Estate. While Sandy protests that he is doing his best and should be allowed to remain there with Maya pending trial, the Court has concerns about that position which may be summarized as follows:

a. While there was proof that the house insurance is current, Sandy did not provide proof that utilities or realty taxes are current.

b. Sandy admits that he has not paid court ordered costs or other amounts he was ordered to pay back to the Estate. He says he is trying his best to do so but provided no explanation as to why the line of credit secured by Brockington is at its limit.

c. Sandy is working but freely admits he doesn’t earn much income. There is a concern he simply cannot afford the carrying costs of the home and now the line of credit payments.

d. There is outstanding court-ordered documentary disclosure which has still not been provided.

e. Sandy tends to provide items only when a court date looms. He provided the court ordered video of the interior of Brockington last evening.

f. Sandy’s significant tax debt resulting in a CRA lien is concerning given that CRA could take steps to enforce on the lien.

[27] In addition to the above concerns it is clear that this litigation will be entirely stalled if the Estate has no resources. Mediation was unsuccessful. It is now time to move forward expeditiously with the litigation.

[28] While the court is sympathetic to Sandy not being able to replace his family home if Brockington is sold, he will have funds to buy a new home if he is successful at trial.

[29] The ETDL must be able to carry out his court ordered tasks and he cannot do so without Estate resources.

[30] Given all of the above I have signed the attached Order which is in effect immediately. I shall remain seized of this file as the motions’ judge. As I have now heard two substantive motions in this matter Case Management should be assigned to a different Commercial List judge.

COSTS

[31] The Applicant seeks costs of $4,000 for the appearance before McEwen, J. and $4,000 for today’s appearance. The OCL does not seek costs. The ETDL is content to receive costs of $5,000 for both appearances but payable in any event of the cause.

[32] Costs are appropriately ordered in this case. Sandy has failed to abide by court Orders without reasonable explanations and has maxed out the line of credit secured by Brockington without attempting to pay his court ordered obligations. His actions have resulted in increased costs.

[33] Therefore, Sandy shall pay costs to the Applicant in the amount of $8,000 being costs for both the September 17^th^ and October 28^th^ appearances. Costs are payable to the ETDL in the amount of $5,000 in any event of the cause.

C. Gilmore, J.

Date: October 29, 2020