SUPERIOR COURT OF JUSTICE – ONTARIO
COMMERCIAL LIST
RE: IN THE MATTER OF THE ESTATE OF GLORIA MARILYN BERKLEY, deceased
BETWEEN: MADISON BRASS, Plaintiff
AND:
SANDY BERKLEY AND THE ESTATE OF GLORIA MARILYN BERKLEY, Defendants
BEFORE: C. GILMORE J.
COUNSEL: Martin Zatovkanuk for the Plaintiff
Andrew Sader for the minor child
Sandy Berkley on his own behalf
HEARD: January 29, 2020
ENDORSEMENT ON MOTION
Overview
1This is the return of a Mareva Injunction order originally made ex-parte on August 30, 2019. Counsel for the Applicant seeks directions with respect to the non-compliance of the Respondent, Sandy Berkley ("Sandy") and appointment of an Estate Trustee During Litigation.
2The injunction relates to the Estate of Gloria Berkley ("Gloria" or "the deceased") who 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.
3The deceased was also survived by 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. Sadar was present at this motion on behalf of the Office of the Children's Lawyer ("the OCL") for Maya. However, the OCL only recently became aware that Maya was a minor and has not reviewed all of the materials in this case. The OCL did not take a position on the motion.
4The deceased's husband Joseph Berkley died on April 15, 2017. He had a will which left everything to his wife if she survived him.
5The 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.
6The 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 leaving each grandchild 1/5 of 50% instead of ¼ of 50%.
7A 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 her home located at 43 Brockington Street, Toronto ("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.
8It is not disputed that Brockington is the main asset of the estate and estimated to be worth in excess of $1.5M.
9After 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.
10Sandy 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.
The Allegations
The Applicant
11Both parties have made serious allegations against the other. Madison alleges that
a. Sandy had a strained relationship with her grandfather and was kicked out of Brockington at 17 years of age due to his drug use.
b. Sandy arranged for a fraudulent addendum to Joseph's will purporting to cut Hindy out of the estate. The witness to the addendum swore an affidavit that the signature on the addendum is not his.
c. Sandy moved into Brockington the day after his father died in order to carry out his plan of excluding Hindy from Gloria's estate.
d. Sandy changed the locks on Brockington without the deceased's knowledge and did not give her a new key for a month. He refused to allow access to the home by Hindy or her family without his knowledge.
e. Sandy told Gloria that he would not jointly care for her with Hindy as per her original wishes. If Hindy was involved in Gloria’s caregiving, he would leave.
f. Sandy arranged for different lawyers to draft the codicils and the Power of Attorney and would not share any this about the documents with Hindy.
g. Sandy counselled his mother to change her will and leave Brockington to him and nothing to Hindy on the promise that Sandy would leave Brockington to the five grandchildren equally. Sandy convinced his mother that if she left any money to Hindy in her will, her husband would take it.
h. Sandy transferred the deceased's car to his daughter Amanda in August 2017.
i. The day that Brockington was transferred to Sandy (November 19, 2018), he took out a $500,000 mortgage on the property.
j. Sandy isolated the deceased from Hindy and her family by changing the locks on Brockington, blocking their numbers on the home telephone, placing cameras in the home and a baby monitor in the deceased's bedroom and illegally recording the deceased's conversations with others by placing a recording device in her purse.
k. All of Gloria's jewelry has gone missing. In the tape recordings between Sandy and Gloria, Sandy encouraged his mother to gift her jewelry to her grandchildren while she was still alive. His affidavit, however, says that all of the jewelry was sold by his father prior to his death.
l. Sandy removed $160,000 from the line of credit on Brockington. He was ordered to return $135,000 of the $160,000 and has not done so. He is in breach of many aspects of previous court orders made in this proceeding.
m. Sandy refused to provide disclosure or share information. Hindy and Madison are concerned that Sandy has let Brockington go into disrepair or is not paying taxes, mortgage payments or insurance as those payments come due.
n. There were significant assets in the accounts of Joseph and Gloria Berkley which have since been drained by Sandy.
The Respondent
12Sandy alleges that Hindy's relationship with their parents was always strained. She distanced herself from her parents during her teenage years and for many years after. After Joseph's death, Hindy's family rarely visited Gloria.
13During his father's shiva, Sandy found Hindy looking through his father's nightstand and was never able to locate his father's watch or ring which were typically stored there.
14Gloria was heartbroken after Joseph's death. Sandy moved in with his mother the day after his father died in order to comfort and care for her, and has remained at Brockington ever since. During the remainder of her life, Sandy looked after his mother's day to day needs including meals, housekeeping and companionship. Sandy's evidence was that his mother was very happy with this arrangement.
15When his mother caught pneumonia in April 2017 and had to be hospitalized, Hindy wanted her placed in a home or a rehabilitation facility. Gloria refused and preferred to remain at home. Sandy respected Gloria's wishes.
16Hindy borrowed $47,000 from her father but did not tell Sandy this. Initially she denied any knowledge of the loan. Hindy has been making regular payments of $310 per month on this debt.
17Prior to transferring Brockington into joint tenancy, there was a line of credit on the property for $196,000. Part of this included the loan to Hindy. According to Sandy, he and his mother entered into an agreement whereby he would assume the line of credit which would be rolled into a new joint line of credit for $500,000. Sandy's mother approved of this arrangement as indicated in the second codicil. Sandy submitted that Gloria changed her will to reflect her disappointment with Hindy and her children, who rarely visited after his father's death. Sandy is adamant that Gloria wanted to change her estate planning to reflect the estrangement of Hindy and her children from the family.
18About six months prior to his mother's death, Sandy stopped working so that he could care for his mother full time.
19Gloria gifted her Mazda 3 to her daughter-in-law Jodi Berkley after his father's death. Hindy was aware of this.
20His father sold most of his mother's jewelry before he passed away.
The Court Orders
21On 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.
22On 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.
23The 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 Applicants of $7,000 in two instalments of $3,500 per month. Sandy was to direct BMO to issue two bank drafts for the costs amount. The costs amounts to be withdrawn from the account into which Sandy's income was paid;
The Respondent's Lack of Compliance with Court Orders
24Sandy attended court on January 29, 2020 without counsel. A Notice of Intention to Act in Person was filed on December 18, 2020.
25The Applicant sought several orders during the course of this motion including:
a. An order to appoint an Estate Trustee During Litigation;
b. An order requiring Sandy to vacate Brockington in order to allow the ETDL to inspect, assess and gather in assets;
c. An order requiring Sandy to repay the $120,000 from the line of credit which remains outstanding;
d. An order requiring Sandy to pay the costs ordered from November 19, 2019 which remain outstanding;
e. A freezing of all bank accounts with an order that any incoming funds be paid into court.
f. Provide all missing financial documents as previously ordered.
g. Sandy should not be provided with any funds for his expenses until the funds owing for costs and the line of credit have been paid back.
26Sandy objected to these orders. He submitted that his daughter Maya is living with him at Brockington. He described Brockington as "his" home and that he and Maya would be homeless if he were required to vacate.
27Based on his mother's will, he is the homeowner and should not be displaced by Hindy's allegations.
28Sandy advised that he had delivered a large package of documents to the Applicant's counsel two days ago. He will do his best to produce whatever else he can.
29He is unable to return the $120,000 as described in his affidavit sworn November 4, 2019, given his loan commitment to Remy.
30He has been unable to pay the costs order because this is a seasonally slow period in his employment. Come spring, he will be earning more income, and in a position to pay the costs.
31There should be no concern about expenses for Brockington as it is his home and he has ensured that all accounts are up to date.
Analysis and Ruling
32It is this court's view that this Estate cannot move forward without the appointment of an Estate Trustee During Litigation ("ETDL"). An ETDL is needed because of Sandy's consistent non-compliance with court orders. The disclosure he has provided is deficient and disorganized. The codicil which gives him authority as Estate Trustee is being challenged. His alleged rights as the "owner" of Brockington are also being challenged.
33Further, Sandy has failed to pay a costs order and a very specific order requiring him to repay $120,000 to the estate. His explanation regarding the commitment to a loan for Remy as the reason why he cannot repay the amount ordered borders on nonsensical.
34While Sandy submits that Brockington is in a good state of repair and that he is paying utilities, taxes, insurance and the line of credit payments, there was no evidence before the court that such payments were up to date.
35There is evidence that Sandy may have wrongfully removed funds from both his mother and father's accounts by way of multiple e-transfers.
36I have reviewed the transcripts of the tape recordings between the deceased and Sandy as reproduced in the Applicant's materials. They are nothing short of shocking with respect to Sandy's attempts to influence his mother to change her will, transfer Brockington to him, and cut his sister out of the estate. Sandy has never denied the existence of these recordings nor that they were inaccurately transcribed. The mere fact that he was recording his mother raises more than a small concern in this case.
37Sandy protests that he was only doing what his mother wanted. His intention has always been to leave Brockington to the five grandchildren on his death. However, there was no evidence that Sandy has ever made a will to this effect, or, if he had, that he would not change it.
38During the course of this hearing, counsel were able to determine that Mr. Shael Eisen would agree to take on the role of Estate Trustee During Litigation at the rate of $300 per hour.
39Given all of the above, I make the following Orders:
a. Mr. Shael Eisen shall be immediately appointed Estate Trustee During Litigation in this matter at the rate of $300 per hour. Counsel and Mr. Berkley shall appear before me at a 9:30 a.m. appointment to discuss the parameters of Mr. Eisen's appointment and to determine a litigation timetable as well as a list of the issues to be tried in this case, including but not limited to the validity of the codicils to Gloria Berkley's will, the validity of the transfer of Brockington into joint tenancy and an accounting of any funds removed from the Estate by Sandy Berkley.
b. Sandy Berkley may remain at Brockington pending a final resolution of the outstanding issues in this Application so long as he continues to pay the line of credit, taxes, insurance, utilities and maintenance costs for Brockington along with an appropriate amount of occupancy rent as determined by the Estate Trustee During Litigation.
c. Sandy Berkley shall provide a monthly accounting to the Estate Trustee During Litigation for all amounts paid in relation to Brockington.
d. In the event that Sandy Berkley fails to pay expenses for or maintain Brockington, fails to provide the monthly accounting set out above, or fails to pay any other amounts ordered by this court, the Estate Trustee During Litigation may bring a Motion for Directions to require Sandy Berkley to vacate Brockington and list it for sale.
e. Forthwith upon his appointment, the Estate Trustee During Litigation, or his designate, shall do a complete inspection and inventory of Brockington and its contents. Sandy Berkley shall fully cooperate with the Estate Trustee During Litigation for the inspection and on any other occasions on which the Estate Trustee During Litigation requires access to Brockington.
f. Sandy Berkley to immediately provide all disclosure previously ordered in this matter that remains in his possession or to which he has access.
g. The Estate Trustee During Litigation shall have authority to immediately deal with all accounts belonging to Gloria Berkley, Joseph Berkley and any accounts owned by either Gloria or Joseph Berkley and Sandy Berkley jointly.
h. The Estate Trustee During Litigation shall have authority to encumber Brockington if needed, in order to pay ongoing estate related expenses and fees.
i. Sandy Berkley to immediately repay to the Estate the $120,000 removed from the joint line of credit.
j. All previous orders of McEwen, J. remain in full force and effect, save and except as required to give effect to the appointment of the Estate Trustee During Litigation.
k. Sandy Berkley to immediately pay costs to the Applicant of $7,000 for the previous court proceedings plus $4,000 in costs for the motion on January 29, 2020.
l. Sandy Berkley shall not have access to any accounts owned by Gloria or Joseph Berkley whether owned solely by them or jointly with Sandy Berkley.
C. GILMORE J.
Date: February 3, 2020