Estate of Lloyd Frederick Mervyn
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Estate of Lloyd Frederick Mervyn
BEFORE: Justice J.R. Sproat
COUNSEL: R.H. Thomson for the Estate Trustees J. Fischer for Objector Jason Mervyn
HEARD: December 19, 2019 and November 12, 2020
ENDORSEMENT
INTRODUCTION
1This is an application by the Estate Trustees to pass accounts relating to the estate of Lloyd Frederick Mervyn, who the parties all referred to as Bud Mervyn.
2To avoid confusion, I will refer to the Mervyns involved by their first names as the parties did during the court hearing.
3Bud died June 13, 2017.
4The Estate Trustees are Anne (Bud’s second wife), Durk Devries (who had worked for Bud since the 1950s) and Bud’s daughter Cindy.
5Notices of Objection were filed by Bud’s sons Jason and Michael. Jason was represented by Ms. Fischer on this Application.
6Cindy and Mr. Devries testified on behalf of the Estate Trustees. Michael and Jason testified as Objectors.
7Bud carried on a construction business through his corporation Bud Mervyn Construction Ltd. Jason worked in the family business, as well as having other occupations, from 2006 – 2017.
8While I will make certain findings of fact as I proceed through these reasons, all of my findings are based on the totality of the evidence and taking account of any findings that may appear later in these reasons.
CREDIBILITY OF THE WITNESSES
9Jason filed an affidavit dated November 12, 2019 in which he indicated that prior to his father’s death he had a strained relationship with his father’s wife Anne and his sister Cindy.
10A number of factors contributed to increased distrust, and I think there was some fault on both sides following Bud’s death. These factors include:
(a) Bud changed his Will shortly before his death to add Anne as an Estate Trustee.
(b) While Jason and Michael were provided with a copy of the Will in late June 2017, it was not until the Reply to Notice of Objection to Accounts dated November 29, 2019 that the Estate Trustees disclosed and produced a Memorandum to Bud’s Will which provided that the contents of the home, his personal possessions not otherwise dealt with in the Will and any vehicles, tractors, all terrain vehicles, farm equipment and the like, and vacation trailer should be delivered to his spouse Anne Mervyn. As such, prior to that disclosure, there were valid grounds to object that certain assets had been sold with the proceeds going to Anne and certain assets had been gifted by Anne.
(c) Jason claimed he owned two rifles Bud had in his possession. The Estate Trustees took the position Bud owned them. The dispute over the rifles led to Jason reporting to the OPP that the rifles had been stolen. Ms. Fischer suggested that the Estate Trustees might be charged with possession of stolen property. Mr. Thompson suggested that Jason’s assertion that he owned the rifles “effectively amounts to theft by Jason”.
(d) Cindy’s affidavit of October 8, 2019 did not disclose a TD bank account in the amount of $55,301.62.
(e) In the week after Bud died Jason used his online access to bank accounts to pay himself $3,900 which he said Bud Mervyn Construction owed him.
(f) Jason wanted to review electronic copies of the Estate accounts, yet the Estate Trustees insisted he attend to look at paper copies.
(g) The parties had different understandings as to whether Bud wanted there to be a one-day open casket visitation after his death.
(h) The parties differed as to whether Jason quit, or was fired from, his employment by Bud Mervyn Construction.
11There were other issues but what I have recounted gives some insight into what led to the litigation.
12While Jason should not have withdrawn funds to pay himself after Bud’s death, I accept that he was entitled to the money.
13While Cindy’s original affidavit did not disclose the TD account, I don’t think for a moment that she was hiding anything. The Estate Trustees did not know about the account at that time.
14Mr. Devries had worked for Bud since the 1950s and was obviously trusted by him. He gave his evidence in a straight forward manner and appeared uncomfortable to be in the middle of a family feud.
15My conclusion is that all of the witnesses were honestly attempting to relate what occurred. Their recollections may, however, have been coloured by self-interest and distorted by the distrust that exists.
POSITION OF THE OBJECTORS
16The position of the Objectors is that:
(a) The Estate Trustees did not administer the Estate competently and their compensation should be reduced. The compensation should also be reduced as Mr. Thomson’s office did work that the Estate Trustees should have done.
(b) The Estate consisted primarily of real estate and was not complex so the claimed yearly management fee at .4 %, totalling $10,680.23, should be disallowed.
(c) Anne did little or no work as Estate Trustee so the payment to her should be eliminated or reduced.
(d) The Estate Trustees improperly paid certain expenses related to the family home that should have been paid by Anne.
(e) The Estate Trustees should be personally responsible for the costs of the Objectors.
(f) Jason is the owner of the two rifles in Bud’s possession.
ANALYSIS
17I find little to no fault with the Estate administration. The Estate Trustees were overseeing matters and it is not unusual for a law firm to be involved taking the steps necessary to convert assets to cash, pay expenses and ensure that taxes are paid.
18The Objectors claim that a soybean crop was planted on the property and should have been harvested prior to sale. Cindy testified that the crop failed as it could not be harvested due to rain. Cindy and Anne would benefit financially if in fact a valuable crop was sitting there ready to be harvested. I, therefore, accept Cindy’s evidence that it could not be harvested.
19The Objectors claimed the Estate Trustees were negligent in not collecting two amounts owing to Bud Mervyn Construction. Primmer was a judgment debt that Jason could not collect when he worked for Bud Mervyn Construction. The Estate offered to assign the judgment to the Objectors, however, the Objectors did not take the Estate up on that offer. BDX was a corporation that owed money. Cindy and Anne had every reason to want to collect money that was available. Mr. Devries testified in his judgment it did not make economic sense to pursue BDX. I accept that the Estate Trustees acted reasonably in deciding that these were bad debts that could not be collected.
20The Objectors complained that the Estate accounts did not refer to a shell company Bud incorporated which was never active and had no assets. I regard this as a trivial complaint.
21The Objectors questioned what had become of a long list of chattels. I accept that the Estate Trustees have satisfactorily answered most if not all of these questions in the Reply to Notice of Objection to Accounts and in Cindy’s testimony.
22The Will provided in paragraph 4(h) that the Estate Trustees had the absolute discretion to fix the value of assets of the Estate and their decision was final and binding. As such, I see no merit in the Objectors complaining about why a particular asset was sold for a specific amount. The Estate Trustees were entitled to use their discretion as to the proper sale price of assets such as cars and farm equipment.
23Bud wanted three Estate Trustees. I think it is petty to quibble or question how many hours Anne spent on Estate administration. I expect that all of the Estate Trustees have spent more time, and suffered more stress, than ever imagined given the conflicts and litigation that have ensued.
24I do agree that the management fee should be disallowed given that this Estate, almost entirely consisting of real estate, required little management. (See Archibald Estate, Re, [2007] O.J. No. 2390 (S.C.J.), paragraphs 20-24, which explain that care and management fees should not routinely be awarded.)
25The Will permitted Anne to reside in the matrimonial home until the property was sold, provided that she paid for, “heat, hydro, water, insurance and general maintenance”. Bud Mervyn Construction operated out of either the same or a contiguous property. The entire property was sold to one purchaser.
26Jason suggested that $3,458 be repaid by Anne to the Estate. Of this amount, over $3,000 was paid to members of Cindy’s family for items such as grass-cutting and clean up.
27I accept Cindy’s explanation that Bud had his grandchildren do jobs and paid them for it and the Estate Trustees did the same. I also accept the explanation that the amounts expended were for the purpose of selling the property.
28The position of the Estate Trustees, with which I agree, is that they expended funds to prepare the entire property for sale and that this was properly paid by the Estate and was not “general maintenance” of the matrimonial home that Anne was responsible for.
29I also accept that, having regard to the Memorandum to the Will, Anne was entitled to the proceeds of the auction which took place shortly after Bud’s death and the proceeds of other sales referred to in evidence such as tractors and farm equipment.
30Jason testified that he purchased the Henry rifle and the Baikal rifle as Bud did not have an acquisition licence to purchase them. This is the only direct evidence concerning the ownership of the rifles. I accept it and, therefore, the rifles should be returned to Jason.
31I do not, however, fault the Estate Trustees for initially concluding that Bud owned the rifles. They had been in his possession for many years.
32In conclusion:
(a) Apart from the management fee, I would not reduce the compensation of the Estate Trustees as set out in the Estate Accounts.
(b) Anne has no obligation to pay any amount to the Estate.
(c) Jason is the owner of the Henry rifle and the Baikal rifle which should be returned to him.
COSTS
33Mr. Thomson shall provide his submission as to the costs of the Estate Trustees, and the costs claimed by the Objectors within 10 days. Ms. Fischer shall provide her submissions as to the costs within a further 10 days. Reply, if any, within a further 7 days.
SPROAT, J.
Date: November 19, 2020