Superior Court of Justice – Ontario
IN THE MATTER OF THE ESTATE OF THOMAS (a.k.a. ATHANASIOS) STANOULIS, deceased
RE: CATHY DIBASE, MARY TSAPRALIS and JEAN SPEROU, Plaintiffs/Responding Parties
AND:
GARY STANOULIS personally and in his capacity as Attorney for Property and as Estate Trustee for the Estate of Thomas (a.k.a. Athanasios) Stanoulis, NICK STANOULIS personally and in his capacity as Attorney for Property and as Estate Trustee for the Estate of Thomas (a.k.a. Athanasios) Stanoulis and CHRISTINA STANOULIS, Defendants/Moving Parties
BEFORE: L.A. Pattillo J.
COUNSEL: Ian Hull and Sydney Osmar, for the Defendants/Moving Parties Gary and Nick Stanoulis. Stephen Brunswick, for the Defendant Christina Stanoulis. Gregory Sidlofsky and David Wagner, for the Plaintiffs/Responding Parties.
HEARD: May 3, 2021
ENDORSEMENT
1The deceased, Thomas Stanoulis was married to the defendant Christina Stanoulis. Together they had five children, the plaintiffs Cathy DiBase, Mary Tsapralis and Jena Sperou and the defendants Gary and Nick Stanoulis. Thomas died on September 7, 2015.
2On July 31, 2020, the plaintiffs commenced an application against the defendants seeking, among other things, a declaration that Thomas’ Will dated November 17, 2000 was invalid and of no force and effect because of lack of testamentary capacity, no knowledge or understanding of the contents, suspicious circumstances and undue influence. They further alleged that the Will violated public policy by discriminating against the applicants on the basis on their gender. They further sought a declaration that any prior wills which treated their brothers differently from them were also void as a matter of public policy on the basis of discrimination; an order requiring the passing of accounts by Gary and Nick both as de facto co-attorneys for property and as de facto estate trustees; and production of significant evidentiary and documentary information.
3On September 16, 2020, on the consent of the parties, Conway J. made an Order Giving Directions providing, among other things, that the application be converted into an action; setting a timetable for the delivery of statements of claim and defence; listing the issues to be tried; ordering that the applicants’ entitlement to the relief sought in subparagraphs 1(c) - (h), 1(p) and 1(s) of the application be determined on a motion to be brought by the respondents (defendants) and setting a timetable for the motion.
4Pleadings have now been exchanged.
5The defendants, Gary and Nick Stanoulis (moving parties) move for an order pursuant to rule 21(1)(a) dismissing the plaintiffs’ (responding parties) claims in the statement of claim that Thomas’ Will and a prior will dated December 23, 1987 (the “Prior Will”) are invalid for violating public policy on the basis of gender discrimination and, in accordance with the Conway Order, an order providing for directions regarding the responding parties’ entitlement to the disclosure they seek.
6In response, the responding parties have brought a cross-motion seeking their costs thrown away as a result of the adjournment of the defendants’ motion on the return date in January 2021.
Rule 21(1)(a)
7Rule 21(1)(a) provides that a party may move for a determination before trial of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs.
8The Conway Order provides in paragraphs 4(f) and (g) the issues to be tried including whether the Will and any prior wills violate public policy by discriminating against the applicants on the basis of their gender. The responding parties submit that having consented to the Order, the moving parties cannot now bring a rule 21(1)(a) motion. The moving parties counter by saying that they were not able to bring their motion until the pleadings were closed.
9I agree with the responding parties. Having consented to a trial of the issue of whether the Will or any prior wills violated public policy on the basis of discrimination, the moving parties cannot now resile from that consent to determine the issue summarily. If they wanted to bring such a motion, they should have provided for it in the Order as they did their disclosure motion.
10I am also of the view, that rule 21(1)(a) is not applicable in any event. Given the many grounds raised to invalidate the Will, determining the issue of whether it or the Prior Will are void for public policy will in no way shorten the trial or result in substantial cost savings.
11The parties disagree on whether the issue of whether a will can be voided based on discrimination is settled law. Given my conclusion, I do not have to resolve that issue. In any event, it is best left to be determined at trial on a complete record.
Directions Concerning Disclosure
12As noted, the Conway Order provides that the responding parties entitlement to the relief sought in subparagraphs 1(c) - (h), 1(p) and 1(s) of the Notice of Application is to be determined on a motion to be brought by the moving parties. Those sub-paragraphs seek orders requiring the moving parties to pass accounts as de facto attorneys for property from January 1998 to September 7, 2015 and include all relevant corporate documents (paras. 1(c), (d) and (e)) and as de facto Estate Trustees after that date, including “all relevant documents” including all relevant corporate records (paras. 1(f), (g) and (h)). Paragraph 1(p) seeks an order disclosing all transactions and gifts of assets or items worth more than $5,000 from Thomas and “any other person” to either of the defendants, their wives, partners or children from January 1998 to the date of the order. Paragraph 1(s) seeks an order to provide all corporate minute books, shareholder register, corporate valuations share transfer documents, director resolutions and “any other relevant documents” and lists eight corporations and two trusts.
13The Statement of Claim refines but essentially duplicates the above claims in the application.
14The action, as with the application before it, is essentially a will challenge in respect of both the Will and the Prior Will. If the Will is valid, the responding parties have no claim to Thomas’s Estate as they are not beneficiaries. If, on the other hand, their challenge is successful, then the Prior Will would apply under which they only have a contingent interest. It is only if they are successful in setting aside the Prior Will (where their challenge is based solely on discrimination) that they would then have a direct interest in the Estate through intestacy. Yet they claim orders requiring production of all of Thomas’ financial and corporate records from January 1998 to the present.
15In my view, the responding parties’ claims for orders requiring passing of accounts and significant disclosure are more appropriately sought as part of an order for directions rather than claims in an action. Rather than being addressed at the time of the Order, the parties consented to them being incorporated into the action, subject to the moving parties’ motion.
16Given the true nature of the claims in the action, the claims for orders requiring passing of accounts both as de facto attorneys for property and estate trustees and production of related documents are premature, as are the claims for production of all of Thomas’ financial and corporate records. What is relevant is all documentation relating to the will challenge. Once the responding parties establish an interest in the Estate, then the requested production or some part of it may become relevant.
17The responding parties submit that production of all Thomas’ financial information, including all gifts, as well as all of his corporate records from January 1998 to September 2015 is relevant to the issue of capacity. I disagree. It is his medical records and legal documentation at the time of the Will that are relevant.
18The responding parties further submit that to restrict their access to the disclosure at this stage amounts to split discovery which is not permitted. Discovery is based on relevance and relevance is determined by the pleadings. Just because the pleading claims orders for broad disclosure of documents doesn’t make the disclosure relevant. As noted, the claim is in substance a will challenge. Much of what is sought is not relevant to a will challenge. It is not split discovery.
19The moving parties rely on rule 75.06 which deals with motions for direction. Rule 75.06(3) gives the court a broad discretion in estate matters to establish such procedures as are just. In Seepa v. Seepa, 2017 ONSC 5368, in discussing rule 75.06(3), Myers J. stated, in part, at para. 49:
The court should be very reluctant to consign estates and beneficiaries to intrusive, expansive, expensive, slow, standard form fishing expeditions that do not seem to be planned to achieve the goals of civil justice for the parties. But processes that show some thought to customize a process to the evidence so as to promote efficiency, affordability, and especially proportionality, with the use of a scalpel rather than a mallet, use of summary proceedings where possible, use of case management, mediation, and similar efforts to minimize the expense, delay, distress, and the overwhelming disruption caused by the process itself, are to be greatly encouraged.
20The moving parties’ motion for directions concerning disclosure requested by the responding parties is allowed. The moving parties shall only be required to produce all documentation between January 1998 and December 2003 relevant to the will challenges which is the relevant period identified in the pleadings.
The Cross-Motion
21As noted, the responding parties have brought a cross-motion seeking costs thrown away from the adjournment of the moving parties’ motion on its return date on January 15, 2021, the date set in the Conway Order. The responding parties claim partial indemnity costs totaling $12,282.07.
22The motion was adjourned on January 15, 2021 because Christina advised that she wanted to retain counsel. The moving parties also wanted an adjournment because their motion, which sought to bifurcate the responding parties claims to separate out the financial disclosure relief and adjourn it to the conclusion of the will challenge claim, was rendered moot by a recent Court of Appeal decision (Duggan v. Durham Region Non-Profit Housing Corporation, 2020 ONCA 788) which confirmed that bifurcation requires consent of the parties.
23The endorsement adjourning the motion made no mention in respect of costs. Accordingly, I decline to award any costs thrown away in respect of the adjournment. The cross-motion is dismissed.
24Given the divided success, I would normally award no costs. However, between the January 15, 2021 adjournment and the return date before me, the moving parties’ motion was reconstituted from a bifurcation motion to a rule 21 motion. In the circumstances, the responding parties incurred costs in responding to the motion as initially constituted. Not all of those costs were wasted given the issues in respect of disclosure remained. However, in my view, the responding parties are entitled to some partial indemnity costs of the motion as a result which I fix at $5,000 in total. In the circumstances, I consider that amount to be both fair and reasonable.
L.A. Pattillo J.
Released: May 26, 2021