COURT FILE NO.: CV-18-4769
DATE: 2021 10 04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOEL HERMISTON and JOEL HERMISTON in his capacity as Litigation Guardian of AGNIESZKA EWA HERMISTON
Applicants
- and -
THE ESTATE OF MAREK JANUSZ KROL, HANNA GAJEK and KATARZYNA KROL
Respondents
Marc Whiteley and Dylan Fisher for the Applicants
Robert Jagielski, for the Respondent Hanna Gajek
Brendan Donovan for the Respondent Katarzyna (Kathy) Krol,
R. Bickhram as the Estate Trustee During Litigation
HEARD: April 15 and June 21, 2021, by video-conference
REASONS FOR DECISION
Emery J.
[1] This application and related proceedings concern the Estate of the Marek Janusz Krol, who died unexpectantly in Poland on September 18, 2017. It is a three way contest over the assets in the Estate between the two daughters from the late Marek Krol’s first marriage, and his second wife, Hanna Gajek[^1].
[2] The applicants in this proceeding are Agnes Hermiston, the youngest daughter, and her husband, Joel Hermiston (collectively, the “Hermistons”). Tragically, Agnes suffered permanent and irreversible brain damage in 2015 from chronic drug use, and does not have the capacity to instruct counsel. Joel is an applicant in his own right, and also acts as litigation guardian for Agnes. The respondents are Marek’s Estate, Hanna, and Katarzyna (Kathy) Krol, the eldest daughter.
[3] I propose to use the first names of the parties to this application for clarity and convenience, and without intending any indication of disrespect to any of them by that informality.
[4] Marek was married to his first wife, Elzbieta, until her death in 2010. Marek and Elzbieta were the parents of Agnes and Kathy. After Elzbieta’s death, Marek married Hanna in 2012.
[5] Agnes seeks damages against the Estate in this application for the tortious conduct of her father towards her during his lifetime. She also makes a claim in unjust enrichment against Marek’s Estate and asks the court to find that she holds a constructive trust interest in the property known as the Cawthra Road house owned by Marek, among other claims. Agnes and Joel currently live in the house on Cawthra Road.
[6] Joel also brings an application to make a dependant’s relief claim on behalf of Agnes against Marek’s Estate under the Succession Law Reform Act (the “SLRA”).
[7] Hanna has brought two applications in relation to the Estate. In the first application, Hanna asked the court to appoint her as estate trustee without a will, or in the alternative, to appoint lawyer Mr. Marek Malicki as the estate trustee. Hanna also asked for an advance of $28,000 on her preferential share as Marek’s surviving spouse under the intestacy provisions of the SLRA. In addition to that application, Hanna has brought a second application against the Estate in which she is making a dependant’s relief claim.
The Motion
[8] The Hermistons have brought this motion in which they initially asked the court to find that Hanna and Kathy have not complied with two prior orders of the court. The first Order for Hanna and Kathy to make disclosure was made by Fowler Byrne J. on February 19, 2019. The second Order was made by Coroza J. on February 6, 2020, when he was a judge of this court. Those orders required Hanna and Kathy to make disclosure of those assets and liabilities of the Estate known to them. The Hermistons ask for an order to compel that disclosure.
[9] The Hermistons amended their motion on October 29, 2020 in the form attached as Exhibit “K” of the Reply Motion Record. The amended notice of motion asks the court for the following relief: to find that Hanna and Kathy have not complied with the Orders made by Fowler Byrne J. or Coroza J. to date; to order Hanna and Kathy to comply with the Order of Fowler Byrne J. for the third time; directions with respect to the payment of the outstanding costs Hanna and Kathy have been ordered to pay; and an order for cross-examinations of Hanna and her son Lukasz Gajek. The motion does not seek any sanction for non-compliance against Hanna or Kathy, or any directions for scheduling next steps in the litigation.
[10] Kathy had initially appeared in person on one of the earliest return dates for the application. On the return of the present motion, Kathy did not appear, nor had she filed any material. The court was advised that Kathy may be an indigent person. The court directed that the Office of the Public Guardian and Trustee (“PG&T”) be notified in case their involvement was required to protect Kathy’s interests in the event she was found to lack capacity to manage property or to instruct counsel. The motion was adjourned at least twice to ensure Kathy received notice of the motion and to give her, or the PG&T, an opportunity to respond.
[11] Kathy subsequently appeared in person on the motion to indicate there was no reason to question her capacity, and that the involvement of the PG&T was not necessary.
[12] Kathy has now retained counsel who has filed responding material to the motion on her behalf. She has also commenced an action through those lawyers against the Estate. In that action, Kathy is seeking ownership of the Cawthra Road house, or alternatively, the proceeds from Marek’s sale of a previous house he owned on Westmount Avenue in Mississauga (the “Westmount Avenue house”).
[13] There are now four proceedings in which the Hermistons, Hanna and Kathy make competing claims against the Estate. I was designated by the Regional Senior Justice in early 2020 to hear all motions and to essentially case manage two of those proceedings, to which Hanna’s dependant’s relief claim was added for case management in early 2021. The action Kathy recently commenced in the course of this motion is now included under that case management umbrella.
[14] In my view, all parties have an interest in identifying all assets and liabilities, their location and values, to determine the substance of the Estate. They all have an interest in learning what assets are available for distribution under Part II of the SLRA in the event there is no Will, or pursuant to any Will or other testamentary disposition that may be found or proven.
[15] The two prior Orders may have been made in the context of the Hermistons’ application, but the documents and information for which disclosure is required are relevant in the broader context of the several proceedings. I therefore propose to review the evidence of disclosure made or that could not be made in reference to the two Orders broadly. I do so having regard to the spirit of estate litigation in this province that encourages cooperation in estate matters, and in my role as the judge appointed under Rule 37.15 to make procedural orders and to give directions in all four proceedings as are just.
The Orders Requiring Compliance
[16] The factual background for the developing litigation between the parties is set out in the Endorsement of Coroza J. at 2020 ONSC 752, and need not be repeated here. In his decision, Coroza J. made an Order Giving Directions. For present purposes, I highlight the orders he made appointing Rajendra (Rick) Bickhram as the Estate Trustee During Litigation (the “ETDL”), and requiring Hanna and Kathy to comply with the Order of Fowler Byrne J. dated February 19, 2019 within 30 days.
Order of Fowler Byrne J. dated February 19, 2019
[17] On an earlier Application for Directions brought by the Hermistons, Fowler Byrne J. made an Order that, among other things, required each Hanna and Kathy to disclose the following information in a sworn affidavit within 30 days of the Order:
Pursuant to paragraph 3, the full extent of their knowledge, information and belief of the assets and liabilities of Mr. Krol at the date of his death on September 17, 2017. This disclosure would include a statement of assets passing outside his Estate, including RRSP’s, RRIF’s, TFSA’s, life insurance policies, pension death benefits, segregated accounts and property held by Mr. Krol and any other person, or in the name of his late wife, Elzbieta Krol, and any information about their location;
Pursuant to paragraph 4, any and all documentation in their power, possession or control relating to:
(a) the financial affairs of Mr. Krol, before his passing and of the Estate after his passing; and
(b) any Last Will and Testament of Marek Krol or other written document of Mr. Krol evidencing testamentary intentions;
- Pursuant to paragraph 5, all documents which were once in, but are no longer in their power, possession or control, relating to:
(a) the financial affairs of Mr. Krol, before his passing and of the Estate after his passing; and
(b) any Last Will and Testament or other written document of Mr. Krol evidencing testamentary intentions; and
(c) to disclose and particularize the circumstances in which power, possession or control of such document(s) was/were lost.
- Pursuant to paragraph 6, all of their dealings with assets of Mr. Krol following his death, including any assets jointly held, or in the name of Elzbieta Krol, which also includes the collection of any rents and any and all documentation in respect of those rents.
Order of Coroza J. dated February 6, 2020
[18] Coroza J. made findings in his Endorsement dated February 6, 2020, and in his Costs Endorsement released on April 27, 2020 that Hanna had not complied with the Order of Fowler Byrne J. In the Order dated February 6, 2020, Coroza J. required Hanna and Kathy to comply with the Order of Fowler Byrne J. Hanna was also ordered to provide the disclosure contemplated by that Order to the parties and to the ETDL.
[19] This Order was made by Coroza J. on finding at paras. 43 and 44 of the Endorsement that Hanna’s request for an advance on her preferential share of the estate should be deferred until compliance was made. Coroza J. also agreed with the submission of counsel for the Hermistons that financial disclosure should be made about the rents on the Elliot Lake cottages, either by Hanna under the Fowler Byrne Order, or by the ETDL.
[20] In paras. 12, 26 and 29 of his subsequent Costs Endorsement, Coroza J. confirmed that he had found there had been no compliance by Hanna or Kathy with the Fowler Byrne Order. In that respect, he reminded them that compliance with the court order was not optional. As he found that Hanna had caused unnecessary expense by litigating issues without providing the disclosure that was within the control of Kathy and herself, he ordered each of them to pay $2,000 in costs.
[21] In paragraph 16 of the Order dated February 6, 2020, Coroza J. went on to order that the parties were entitled to compel production of all financial records and files relating to Marek’s assets, and of Marek’s financial affairs prior to, and after his death. This Order was to include disclosure of any assets held “under attorneyship” either solely or jointly by Marek with another person, in the same manner and to the same extent as he would have been able to provide himself if he was alive.
Significant Assets Known by the Hermistons to Date
Assets of possible relevance prior to Marek’s death
[22] In order to determine what disclosure the Hermistons could expect from Hanna or Kathy, it is instructive to identify the assets in Marek’s Estate they already have knowledge about.
[23] Marek married Hanna in Poland in 2012. At the time Hanna came to live with him in Ontario, Marek owned the Westmount Avenue house. Marek and Elzbieta had purchased the Westmount Avenue house in 1998. They had made this house their home along with Kathy, her common-law husband Lee Geisel and Kathy and Lee’s two children, Michael and Mark.
[24] The Westmount Avenue house was sold in November 2016. It appears from the evidence before the court that Marek received net proceeds of approximately $345,000 from this sale.
[25] It also is apparent from the evidence filed that Marek kept a large safe at the Westmount Avenue house. Hanna has confirmed that a safe of some description was either carried out or disposed of upon the sale of the house. According to Joel, the safe was too large to carry and may have been emptied before Marek and Hanna moved to live in Iron Bridge, a town in north Ontario on the shores of Lake Huron.
[26] Marek may have also had a legal or beneficial interest in a house that Joel says he and Agnes purchased in 2001 at 1965 Keele Street, Toronto (the “Keele Street house”). Kathy describes how Marek gave them $5,000 to purchase this home. She goes on to state that the Krol family spent approximately $100,000 to rebuild the Keele Street house, as well as having to “shoulder the entire mortgage”.
[27] The past ownership of the Keele Street house is relevant to the disclosure Orders concerning the Estate because the Keele Street house was apparently sold in 2013 for an estimated $400,000. There is no explanation in evidence about where the proceeds of sale from the Keele Street house were disbursed.
Known assets owned by Marek as of his death
[28] The following real properties were owned by Marek at the time of his death:
1045 Cawthra Road, Mississauga (house and property) – estimated value $890,000 - $1.5M;
41 Poplar Road, Elliot Lake (cottage and land) – estimated value $84,000;
92 Mississauga Road, Elliot Lake (cottage and land) - $85,000;
40 Main Street, Iron Bridge (vacant land) – estimated value $42,000;
43 Meyers Road, Iron Bridge (vacant land) – estimated value $55,000.
[29] Marek had an account at the Northern Credit Union, at 186 Main Street in Thessalon, a village near Iron Bridge on Highway 17. Hanna has stated in her affidavit sworn on March 7, 2020 that this account contained approximately $100,000 at the time of his passing. In her affidavit sworn on October 18, 2020, Hanna states that Marek held a GIC Certificate for $100,000 at Northern Credit Union. It is unknown whether this is the same $100,000 asset.
[30] Marek also held account ****433 at the Dixie Road branch of Royal Bank of Canada in Mississauga (hereinafter, “RBC”). Marek had Hanna added as a joint holder of this RBC account. Marek made a deposit of $354,219.13 to this account on November 10, 2016, which was around the time he sold the Westmount Avenue house. It was also from this account at RBC that Marek, or Marek and Hanna made two transfers of $100,000 each to an account at branch 0422 on December 12 and December 14, 2016 respectively.
[31] Hanna has deposed in her March 7, 2020 affidavit that she is aware that Marek rented the two properties in Elliot lake. The tenants of those rental properties were expected to pay the utilities and a small amount for rent. However, she is unsure of the exact terms of the rental agreement with each tenant, and in a later affidavit, professes to have no knowledge of their identities.
[32] There is also evidence that Marek owned a Suzuki vehicle and an old four wheel ATV in northern Ontario. Both vehicles are believed to be non-operational and of little but scrap value.
[33] In an affidavit sworn on June 18, 2019 and filed for a previous step in this proceeding, Joel states that it was his understanding that Marek owned a 2005/2006 Honda SUV that had been purchased by Elzbieta for $17,000.
Position of the Hermistons
[34] The Hermistons submit in no uncertain terms that Hanna has not complied with the disclosure Orders. They refer to an unsworn draft of an affidavit she served that does not disclose the documents and information required under the two prior Orders.
[35] Hanna subsequently served the affidavit sworn on March 7, 2020 that the Hermistons and their counsel have found equally deficient. Hanna filed a further affidavit dated October 18, 2020. The Hermistons are of the view that Hanna purports to make the disclosure ordered by the court in these affidavits, but that disclosure is wholly inadequate to meet the intended purpose. For instance, they submit that the capital value of the RBC account to which Marek added Hanna before his death is deemed to be part of his net estate under section 72(1) of the SLRA. As a result, the details of that jointly held account are subject to the disclosure Hanna has been ordered to make.
[36] The Hermistons therefore take the position that the evidence given in Hanna’s two affidavits are insufficient in many respects. They maintain she has made up stories about why she cannot make disclosure of certain matters in other respects. The Hermistons take the position that Hanna remains in breach of both Orders.
[37] Joel and Agnes are not as critical of Kathy for her failure to file an affidavit in a timely manner because of her personal circumstances. However, they held her to filing an affidavit to satisfy the Orders of the court upon retaining counsel. Kathy has now retained Mr. Donovan, and she has filed an affidavit affirmed on June 17, 2021.
Position of Hanna Gajek
[38] Hanna filed the affidavit sworn on March 7, 2020 which was for the most part a duplicate in form and substance to the earlier unsworn document, except for a reference that Marek had added her to the RBC account. I consider this to be Hanna’s first affidavit.
[39] Hanna’s second affidavit sworn on October 18, 2020 provides the same information as her first affidavit, but is more comprehensive. It is in this affidavit that Hanna makes most of the disclosure she deposes she has the knowledge, information and belief to make. This affidavit also provides Hanna’s response to the Hermistons’ claims that she has not made the required court ordered disclosure. Whether the evidence contained in that affidavit meets the requirements of the prior Orders is another matter.
Position of Kathy Krol
[40] Kathy deposes in her affidavit that she is unsophisticated, and does not understand the law or her rights under the law. In her affidavit, Kathy provides the court with an overview of her family, her life working at her father’s pawn shop known as “Kings Jewellery and Pawn Shop”, and later as an adult dancer.
[41] Kathy describes how she was raised by her parents in a culture where “family should look after family.” She tells of how she gave all the money she would earn in her life with the family to her father. She believes that Marek would purchase land with this money on which he would build or renovate houses, or pay mortgages on land he had purchased.
[42] Kathy states that her parents promised her one of the houses purchased by Marek for the family. She also makes the candid statement that she believes they made Agnes the same promise. Kathy states in her affidavit that she was taught by her parents that this was the “European way” of life.
[43] In her affidavit, Kathy describes how Joel and Agnes contributed nothing to the Westmount Avenue house. She states as a fact that Agnes had run away when the family lived on Westmount Avenue, and did not have any contact with them until later.
[44] According to Kathy, Agnes became involved with a man by the name of Lee Romain early in her life. Together they had a daughter, Amanda, who would return to live with Agnes from time to time.
[45] Kathy describes how her family purchased the house at 1045 Cawthra Road. According to Kathy, Marek intended the Cawthra Road house to be a rental property. However, the family had to rebuild the house after a tenant set it on fire. Kathy states in her affidavit that the Cawthra Road house was rebuilt in part with the money she earned from adult dancing. Marek told her that the Cawthra Road property would belong to her once it was rebuilt.
[46] This plan changed when Agnes resurfaced. Kathy states that Agnes needed a place to live with her daughters, Sarah and Shannon. After Agnes reconnected with her parents, Marek and Elzbieta allegedly agreed that she and her daughters could live in the Cawthra Road house provided there was “no Joel and no drugs”.
[47] Although not stated in specific terms, I take it from her affidavit that Kathy continued to live at the Westmount Avenue house after Agnes moved into the house on Cawthra Road. Kathy goes on in her affidavit to describe how she was “kicked out” of the Westmount Avenue house in 2013 by Hanna and Hanna’s son, Lukasz Gajek. Marek was in Elliot Lake where he was collecting rent at the time.
[48] Kathy states that she fled the house, not knowing what to do. She became homeless. She left all of her belongings at the Westmount Avenue house where she had lived since 1998. She later learned that the Westmount Avenue house had been sold.
[49] Kathy suffers from physical pain, psychological issues and is financially distressed.
Rulings
[50] Several affidavits make up the evidentiary record on this motion. The Hermistons have filed the affidavit of Maggi Smith dated September 25, 2020 in support of the motion. Ms. Smith is a law clerk with the Pallett Valo LLP firm that represents the applicants. Hanna has filed the two affidavits described above in which she provides certain information that she declares to be the full extent of her knowledge. Kathy filed her affidavit after retaining counsel in which she states that she has not possessed any documents since leaving the family home on Westmount Avenue in 2013. It is Kathy’s evidence that she has no other knowledge of assets in the Estate.
[51] The Hermistons have filed affidavits made by the following affiants in reply to Hanna’s affidavit dated October 18, 2020:
Andrzej Bukowski dated October 26, 2020;
Joel Hermiston dated October 28, 2020; and
Maggi Smith dated October 29, 2020.
[52] At first glance, the affidavits filed by Hanna raise credibility issues when compared to facts put in evidence by Maggi Smith’s affidavit filed in support of the motion, and those affidavits filed in reply to Hanna’s second affidavit. Where credibility issues arise from the written record because of conflicting evidence, the court is often unable to decipher the truth from the different sides of any issue given by the parties.
[53] On procedural motions, especially where disclosure issues abound, the court often relies on the claims made and material facts alleged in pleadings. Any rulings is made upon a determination whether a fact or document is relevant to those matters the parties have put in issue. These rulings are generally made without prejudice to the ability of any one party to argue the relevance or admissibility of documents or evidence at trial. Credibility findings are often deferred to the trial judge to make those findings after hearing witnesses testify in court.
[54] On this motion, a close reading of the evidence reveals that the parties are not necessarily giving inconsistent evidence on matters that must be disclosed under prior Orders. Instead, the Hermistons are seeking information from Hanna and Kathy at a more granular level, or requiring each of them to disclose information the Hermistons could access themselves.
Kathy
[55] I accept the evidence given in Kathy has given in her affidavit as it is for the most part uncontradicted. Where she describes Joel’s relationship with Agnes and their use of drugs, and while Joel may disagree with that evidence, I am not called upon to make a credibility finding on this motion. I need only make findings of an individual’s knowledge and access to information for the purpose of determining compliance with the prior Orders. In Kathy’s case, that means making a finding whether she has made the disclosure she is capable of making.
[56] It is open for me to conclude from Kathy’s evidence, at least for the purpose of the Hermistons’ motion, that she does not have any knowledge of Marek’s assets or liabilities as of the date of his death. I am satisfied that she did not remove any documents relating to the business or affairs of her late mother Elzbieta or her father Marek when she left the Westmount Avenue house in 2013. There is no evidence for me to find that she had any dealings with Marek’s assets following his death.
[57] I find that Kathy has not had any documents in her power, possession, or control since she was ejected from the Westmount Avenue house. I find on balance that she has satisfied her disclosure obligations under the prior Orders to the best of her ability by serving her affidavit dated June 17, 2021.
[58] The motion as against Kathy is therefore dismissed.
Hanna
[59] In view of this ruling, my consideration about what disclosure has been made and what disclosure remains outstanding will be limited to whether Hanna has complied with the requirements of the prior Orders.
On the preliminary objection about reply evidence
[60] The Hermistons rely on the affidavits of Mr. Andrzej Bukowski, Joel Hermiston and Maggi Smith contained in the Reply Motion Record dated October 29, 2020. Of those affidavits, the Hermistons submit that the affidavit of Maggi Smith filed in reply purports to provide further evidence of Hanna’s non-compliance with a court order. In particular, Ms. Smith attaches information from financial institutions, notably statements from RBC accounts in the name of Marek alone, or Marek and Hanna. These account statements purportedly show:
A list of cash withdrawals and branch to branch transfers after Marek passed away on September 17, 2017, to February 2019. These cash withdrawals and fund transfers are unexplained;
A deposit of $354,219.13 from the sale of the Westmount Avenue house in November 2016 was made to the RBC account before Marek’s death, and two transfers in the amount of $100,000. Each of these transfers are unexplained;
There is no information about how or to where the $400,000 realized by Marek from the sale of the Keele property in 2013 was disbursed, if he received some or all of those proceeds of sale;
Most information about the collection of rents from two properties in Elliot Lake that are deposited into the Northern Credit Union account in Marek’s name remains unknown.
[61] Hanna objects to the affidavit of Maggie Smith sworn on October 29, 2020 as she submits it is improper reply evidence. I agree for two reasons.
[62] First, the financial information Ms. Smith details is information arising from Hanna’s own affidavit of October 18, 2020. The further evidence given by Ms. Smith is commentary on that information, rather than evidence that introduces contrary facts relevant to the matters at issue. If this commentary was permitted, Mr. Whiteley would have a basis to make submissions on what Ms. Smith had to say about this information without having evidence from Hanna in sur-reply. This would also be unfair to Hanna’s position because that evidence expands upon other evidence that she has already put before the court and that Mr. Whiteley was at liberty to use in his submissions in chief. The scope of proper reply evidence is generally limited to matters that were raised in the evidence of the responding party and that the moving party could not have reasonably anticipated.[^2]
[63] Second, it is clear from the reply evidence of Ms. Smith that the Hermistons already have certain information and access to accounts that give them what they seek from Hanna. The bank information, for example, was included in paragraphs 35 to 39, and Exhibits “G” to “J” of Hanna’s second affidavit. They would be entitled to rely on any perceived deficiency in Hanna’s disclosure, failing which they may ask a court to draw various inferences at trial.
[64] The Hermistons may also seek further evidence through inquiries that Mr. Bickhram makes as the ETDL.
[65] The objection over the affidavit of Maggie Smith for the purpose of this motion is sustained. As a result, her second affidavit will not be considered on this motion. There is no need to strike evidence that offends a rule for admissibility, as the motions judge is capable of taking into account what evidence is relevant, and ignoring what evidence is not.[^3]
[66] Hanna also objects to the affidavits of Mr. Bukowski and Joel Hermiston filed in reply. Each of these affidavits was filed in reply to the detailed evidence set out in Hanna’s affidavit about the safe at the Westmount Avenue house, and documents Marek apparently kept in that safe. Hanna deposed that she denied ever seeing those documents, and described how that the safe was carried out of the house and disposed of by two people.
[67] Hanna’s evidence was met with reply affidavits from Mr. Bukowski and Joel Hermiston on those points, and those affidavits are admissible. In particular, Joel describes the safe as standing five feet tall and weighing more than what two people could carry.
[68] These affidavits in reply respond to new matters raised or enlarged by Hanna in her responding affidavit. In such circumstances, the court has the discretion to allow the evidence in reply to ensure the moving party is afforded a fair opportunity to present its case. This discretion is guided by striking a balance between the orderly exchange of evidence, and fairness to the opposing party. It is employed for the purpose of ensuring that rules of procedure are not so rigidly applied that important evidence is excluded.[^4]
[69] I now turn to the disclosure made, and the disclosure required.
Paragraph 3: Assets and Liabilities as of Marek’s date of death
[70] Hanna submits that the Hermistons seek an accounting from her at a level expected on a passing of accounts. She argues that she should not be subject to an order that would require her to provide that level of disclosure. She is correct in that regard. However, Hanna is compellable to provide all information known to her and to which she has or had access to make the disclosure ordered by this court.
[71] Hanna’s second affidavit dated October 18, 2020 provides the evidentiary basis on which to assess what disclosure Hanna has made, against the disclosure required by paragraph 3 of the Fowler Byrne Order dated February 19, 2019. The scope of this disclosure is defined by the language in paragraph 3, limited to disclosing in an affidavit the full extent of her information, knowledge and belief of Marek’s assets and liabilities as of the date of his death. This affidavit discloses property held in Marek’s name and bank accounts open in his name and with Hanna jointly as of the date of his death.
[72] Hanna also takes the opportunity in that affidavit to profess what information she does not have or know. While she was to produce this affidavit within 30 days of the Order, the non-compliance with the Order for lack of timeliness is a matter better left for costs.
[73] I find on the evidence that Hanna has complied with paragraph 3 of the Fowler Byrne Order. This conclusion is subject to any further evidence that may come forward at trial.
Paragraph 4: Documents relating to Marek’s financial affairs or testamentary papers before and after his death
Documents relating to Marek’s financial affairs
[74] The court ordered Hanna to disclose and produce those documents in her power, possession or control relating to Marek’s financial affairs before and after his passing. This order is limited to documents that she is able to produce, rather than her narrative of those facts based on information, knowledge and belief.
[75] Hanna has stated in the affidavit dated October 18, 2020 that Marek’s granddaughter Amanda and her boyfriend carried the open safe out of the Westmount Avenue house and disposed of it in a garbage bin. In contrast, Andrzej Bukowski has deposed that he was told by Marek, and personally witnessed that Marek stored documents in a large safe located in the Westmount Avenue house before it was sold.
[76] Mr. Bukowski has given evidence that Marek told him that he was making a Will before he left for Poland after Elzbieta’s death and before he married Hanna, and again before he and Hanna made what was to be Marek’s final trip to Poland. On each occasion, Mr. Bukowski states that Marek told him the Will was placed in the safe, although Mr. Bukowski admittedly never read the contents of the Will.
[77] Kathy also described how Marek told her that he and Hanna had signed a pre-nuptial agreement. The pre-nuptial agreement and any Will were among the important papers that Marek would have kept in the safe.
[78] For the purpose of this motion, I find on the balance of probabilities that Marek kept papers and documents of a legal nature in the safe at the Westmount Avenue house. It is hard to accept that those papers, as well as other contents including gold from his pawn shop business, were not retrieved by Hanna or on Hanna’s behalf from the safe when the house was sold in 2016. In this regard, I prefer the evidence given in Kathy’s affidavit and Joel’s affidavit in reply.
[79] I therefore conclude that Hanna has not produced documents that were in all likelihood stored in Marek’s safe, contrary to paragraph 4 of the Fowler Byrne Order.
[80] I also find on the balance of probabilities that Marek included Hanna in his decision making about bank accounts. She would have known about his decision to move any of the funds he received from the sale of either the Keele Street house or the Westmount Avenue house, and where those funds came to rest prior to his death. She would also likely know what Marek did with the funds on deposit at RBC. Hanna would have had access to documents showing these funds on deposit, including the deposit of the net proceeds of sale from the Westmount Avenue house, and any transfer of those funds including the two transfers of $100,000 from that account in December 2016. Whether one of those transfers was the same $100,000 invested at Northern Credit Union remains to be determined.
Documents relating to Marek’s Will or testamentary papers
[81] Hanna has deposed that she does not recall that Marek made a Will at a lawyer’s office in Poland. I consider that evidence to be evasive, and unresponsive to the requirements of the Fowler Byrne Order.
[82] The Order requires that Hanna produce any Will or other document that evidences Marek’s testamentary intentions. This requirement includes the production of documents Marek wrote or signed in Ontario before taking either trip to Poland. Paragraph 4 of the Fowler Byrne Order includes any Will or testamentary document whether or not superseded by a later Will or testamentary document. The language in the Order is wide enough to cover any secondary document such as a lawyer’s letter or memorandum referencing a Will or other writing.
[83] I find that Hanna has not been forthright about disclosing any and all documents of this nature. She would have exercised access to Marek’s personal papers upon her return to Canada after Marek’s death, and those papers are subject to the disclosure Order of Fowler Byrne J.
Paragraph 5: Documents no longer in Hanna’s power, possession or control
[84] Paragraph 5 of the Order made by Fowler Byrne J. provides that, if Hanna cannot produce documents relating to Marek’s business affairs arising before or after his death, or any Will or paper evidencing his testamentary intentions, she must disclose the extent of her knowledge of any document no longer in her possession.
Paragraph 6: Dealings with assets of Marek Krol after his death
[85] I have made the finding on the evidence filed on this motion that Marek was more likely than not to include Hanna in his plans and business affairs. He made her a joint account holder on his account at RBC. In my view, she has not made sufficient disclosure of her dealings with that account or any other account in the name of Marek Krol solely or jointly with another person after his death to comply with paragraph 6 of the Fowler Byrne Order.
[86] From her affidavit dated March 7, 2020, it appears Hanna was aware of the arrangements he made with the tenants of the Elliot Lake properties. It is more likely than not that she was knowledgeable about the property owned by Marek or Elzbieta in Poland. It was even more likely that Hanna was conversant with the collection of rents from the tenants of the two properties in Elliot Lake.
[87] I conclude that Hanna has not made the disclosure required by the Fowler Byrne Order, and has not cured the breach of that order found by Coroza J. in February 2020.
Further Directions
[88] The Hermistons seek directions from the court with respect to enforcing costs awarded to them under the Order of Coroza J. against Hanna and Kathy. Those costs have been outstanding since they were awarded.
[89] I make no order at this time in respect to the payment of those costs. The Hermistons have their remedies under the Rules of Civil Procedure if they remain unpaid.
[90] I also make no order for the Hermistons to “cross-examine” Lukasz Gajek. This relief was not argued on the motion, and Mr. Gajek is not a party to the action. In the event he becomes the litigation administrator for his mother’s estate, or files an affidavit in respect to a subsequent motion, the Hermistons will have an opportunity to cross-examine him under the Rules of Civil Procedure.
[91] Upon any party obtaining an order under Rule 9.02 to appoint a person as the litigation administrator to represent the Estate of Hanna Gajek, or an order under Rule 10.02 that the action may continue as against the Estate of Hanna Gajek in the absence of a person to represent her Estate, and on obtaining an Order to Continue under Rule 11.02(1) with respect to that Estate, this court orders the Estate of Hanna Gajek to make the disclosure described in Schedule “A” by producing the documents and giving the information by affidavit within 30 days after the last of those Orders are made.
Conclusion
[92] The motion is dismissed as against Kathy Krol, and allowed in part as against the Estate of Hanna Gajek.
[93] In the event the Estate of Hanna Gajek fails to comply by the date on which the Order I am making becomes effective, or the disclosure made is insufficient, any adverse party may contact my judicial assistant by email at snaza.velanovski@ontario.ca, with a copy to all counsel, to request a Case Conference to schedule the appropriate motion.
[94] The parties are strongly encouraged to resolve the issue of costs for this motion between them. If necessary, costs may be spoken to at the next Case Conference.
Emery J.
Released: October 4, 2021
Schedule “A”
Paragraph 4: Documents relating to Marek’s financial affairs or testamentary papers before and after his death
Documents relating to Marek’s financial affairs
To produce all documents from, or provide a further affidavit describing the extent of the affiant’s knowledge about, the contents of the safe when it was located at the Westmount Avenue house. This affidavit shall also include the affiant’s knowledge, information and belief of what happened to those documents after the sale of the Westmount Avenue house, as well as their current whereabouts.
To disclose all documents and other information related to the deposits, transfer of funds and withdrawals originating in any account in Marek’s name or the names of Marek and Hanna jointly, including but not limited to the following:
(a) the $100,000 in the Northern Credit Union account, and any statements of a bank or investment account showing where the two transaction of $100,000 were transferred from RBC on either December 12 or 14, 2016;
(b) Documents tracing the transfer, retention or withdrawal from the $345,000 of net proceeds of the sale for Westmount Avenue house deposited to the RBC account in November 2016;
(c) Documents showing the movement of all or any of the funds Marek may have received from the sale of the Keele Street house; and
(d) Any documents, including bank accounts, showing the account holder and transactions from November 2016 to the present day for any account open in Marek’s name or Hanna and Marek jointly at branch 0422.
Documents relating to Marek’s Will or testamentary papers
- To produce any and all documents that could be described as Marek’s Last Will and Testament, including any Holographic Will, and any other documents that can broadly be described as evidencing his testamentary intentions.
Paragraph 5: Documents no longer in Hanna’s power, possession, or control
- An affidavit describing in detail the steps Hanna took and the search she made of his personal papers and possessions before and after his death, and the results of taking those steps and conducting that search. If there is evidence Hanna found any of the subject documents, the affiant must set out in the affidavit each document Hanna found at the time, the full extent of the affiant’s knowledge of what she did with that document, and why the affiant cannot produce it now to comply with paragraph 4 of the Fowler Byrne Order.
Paragraph 6: Dealings with assets of Marek Krol after his death
- To produce an affidavit, with supporting documents to disclose all of her knowledge of the following:
(a) The sale, disposition or state of title of the land Marek owned in Poland with Elzbieta;
(b) The collection of rents from the two properties in Elliot Lake directly or indirectly from the respective tenants, and where those rents have been deposited;
(c) An explanation about where $100,000 on each December 12, 2016 and December 14, 2016 was transferred, and where the funds are now; and
(d) Payments made on the mortgage to TD Bank and taxes to the City of Mississauga for the Cawthra Road house after September 2017.
COURT FILE NO.: CV-18-4769
DATE: 2021 10 04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JOEL HERMISTON and JOEL HERMISTON in his capacity as Litigation Guardian of AGNIESZKA EWA HERMISTON
Applicants
- and –
THE ESTATE OF MAREK JANUSZ KROL, HANNA GAJEK and KATARZYNA KROL
Respondents
REASONS FOR DECISION
EMERY J.
Released: October 4, 2021
[^1]: Ms. Gajek passed away before this decision was released. Any reference to Hanna Gajek throughout these reasons should be read to include the Estate of Hanna Gajek where the context permits, and any order or direction applies to her Estate.
[^2]: Johnson v. North American Palladium Ltd., 2018 ONSC 4496.
[^3]: Andersen v. St. Jude Medical Inc., 2003 CanLII 5686 (SCJ) per Cullity J. See also 876502 Ontario Inc. v. I.F. Propco Holdings (Ontario) 10 Ltd., 1997 CanLII 12196 (SCJ), and Friends of Lansdowne v. Ottawa (City), 2011 ONSC 1015.
[^4]: Johnson v. North American Palladium Ltd., at para. 15.