COURT FILE NO.: (CV-19-3784 and) CV-19-3035

DATE: 2021 03 18

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Armando Carlos, Ilda Luceri and Lino Carlos

Orie Niedzviecki, for the Applicants

Applicant

• and -

Fernanda Leitao, as Estate Trustee of Armando De Oliveira

Bradley Phillips, for the Respondent

Respondent

HEARD: March 9, 2021

REASONS FOR DECISION

McGEE J

Overview

[1] This is the contested passing of accounts for the period of January 1, 2016 to January 7, 2017 that I required in my October 22, 2020 endorsement; together with a hearing on the objections to the pre-death accounting that was earlier required by the June 27, 2019 Order of Justice Fowler Byrne.

[2] As set out in my October 22, 2020 endorsement, Mr. Armando De Oliveira died in Portugal on January 7, 2017. His November 12, 1999 Last Will and Testament provides for an equal distribution of his estate amongst eight nieces and nephews, one of whom is the estate trustee, Ms. Leitao.

[3] It is not contested that Mr. De Oliveira was of sound mind and fully capable of managing his property throughout his life. Ms. Leitao’s responsibilities as his named Power of Attorney were therefore limited to carrying out his instructions as his agent.

[4] The estate has generated disproportionate litigation: four separate court applications, three of which were issued by Ms. Leitao. Of those three, one was necessitated by the failure of Lino Carlos – one of the Objectors to this proceeding – to present himself, another was abandoned and, in November 2018, Ms. Leitao brought an application to pass accounts for the post-death period.

[5] Once details of the estate’s accounts were obtained in that November 2018 application, three of the beneficiaries filed objections. They were already concerned with their cousin’s management of the estate: she delayed providing the beneficiaries with copies of their uncle’s Will for six months and had issued T5s to be included in their Tax Returns prior to a distribution. Once the accounts were made available, they learned that a series of cheques totaling $89,400 had been signed by her on their uncle’s account and dated for the weeks just prior to his death. One cheque in particular stood out: $50,000 payable to Ms. Leitao.

[6] It was ultimately agreed that Ms. Leitao would deduct the amounts of the gifts from each beneficiary’s share, including her own, and that she would then file an amended accounting reflecting the repatriation of the funds back into the estate. The dispute now continues with respect to her compensation and legal fees related to the dispute.

[7] Three witnesses testified in person at the hearing and were made available for cross examination: Ms. Leitao and two of the Objectors: Armando Carlos and Lino Carlo. I also received affidavit evidence from Eugenia Evans on behalf of the Estate Trustee, who was not required by the Objectors for cross examination.

[8] During the hearing, the Trustee set out her tasks in the administration of the estate, including the filing of the deceased’s non-resident Income Tax Returns for 2016 and 2017. She described how she completed all the necessary steps in what she considered to be a complicated estate. A CRA Clearance Certificate was obtained on August 16, 2018.

[9] For the reasons set out below, I grant the passing of accounts for the period from January 1, 2016 to January 7, 2017 in accordance with the draft Order filed by counsel for the Applicant Objectors, without compensation to Ms. Leitao; and I grant the passing of accounts for the post death period of January 7, 2017 to February 19, 2021 in accordance with the draft Order filed by counsel for the Respondent Estate Trustee, but with reduced executor’s compensation of 1.5% on all capital receipts and disbursements and 1.5% on all revenue receipts and disbursements.

[10] I further order a payment of $80,479.97 in legal fees incurred by the estate trustee up to February 22, 2021, to be paid by the estate to the trustee.

The Passing of Accounts for the period from January 1, 2016 to January 7, 2017

[11] I have had the opportunity to review in detail the pre-death accounts in the compendium and am satisfied that they are acceptable, but for the series of cheques issued just before Mr. De Oliveira’s death. Because those amounts have all been returned to the estate, I am content to pass the pre-death accounts; but given the litigation that has been generated on those cheques and the outstanding issue of compensation, I make the following observations.

[12] The focus of this dispute has been whether the deceased was a generous person, and whether the purported gifts made before his death were consistent with that generosity. If answered in the negative, the inference is that Ms. Leitao wrongly removed funds from a competent person to whom she owed a duty of care, or alternatively, that she wrongly removed funds from the estate.

[13] I do not find the evidence to be conclusive on this point, and counsel has not assisted me in terms of who bears the onus. The test cannot be the state of Mr. Armando De Oliveira’s historical generosity