Court File and Parties

COURT FILE NO.: CV-22-00000538-0000

DATE: 2022/06/04

SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE ESTATE OF SARKIS NEHMETALLAH, Deceased

RE: YOUSSEF NEHMETALLAH, by his litigation guardian and guardian of property, the Public Guardian and Trustee, Applicant

AND:

ANTHONY NEHMETALLAH and SAM NEHMETALLAH, in their capacity as Estate Trustees of the Estate of Sarkis Nehmetallah, Respondents

BEFORE: Justice I.F. Leach

COUNSEL: Charles W. Walters, for the Applicant

The respondents self-representing

HEARD: In writing

Endorsement

[1] Before me is an application brought by the Office of the Public Guardian and Trustee, as litigation guardian and guardian of property for Youssef Nehmetallah (“Joe”), for approval of the settlement of a dependency claim made on Joe’s behalf against the estate of his father.

[2] By way of further background:

a. Joe was born in 1970 and, at the time this application comes before me, is 52 years old. However, he has suffered from significant drug addiction his entire adult life and, since 1990, he has been unemployed and unemployable, collecting disability benefits as a result of a workplace accident. He also suffers from mental health issues. He was married but separated from his spouse several times, and was formally divorced in 2011. From 2005 onwards, when he moved back into the family home owed by his parents, he successively has been looked after by his parents, his father (following the death of his mother in 2007), his sister (following the death of his father in 2018), palliative care hospital workers, and now other caregivers at Leamington Lodge; i.e., a rest home for the mentally ill.

b. There is no dispute that, (as confirmed by a formal Certificate of Incapacity), Joe is incapable of looking after himself or simple financial management, and is therefore an incapable person within the meaning of section 15 of Ontario’s Substitute Decisions Act, 1992, S.O. 1992, c.30. (Since November of 2013, the Office of the Public Guardian and Trustee – the “PGT” -- has acted as Joe’s guardian of property, pursuant to a court-ordered appointment.)

c. To the extent necessary, I also find that Joe is a person under a “disability”, within the meaning of Rule 1.03 of the Rules of Civil Procedure, for the purposes of Rule 7 of the Rules of Civil Procedure.

d. This litigation stems from a dependency claim brought by the PGT on Joe’s behalf, pursuant to Part V of the Succession Law Reform Act, R.S.O. 1990, c.S.26, following the death of Joe’s father, Sarkis Nehmetallah (“Sarkis”) in 2018. In particular:

i. As noted above, Joe moved back into his parents’ family home in 2005. He thereafter was supported by both parents until his mother’s death in 2007, and then by his father until the death of Sarkis in 2018.

ii. Throughout that time period, Joe’s parents and then Sarkis alone charged Joe nothing for his accommodation or food provided in the family residence, and Joe contributed nothing to household expenditures. Any money Joe did have generally was directed towards his ongoing drug addiction. That arrangement continued up until the death of Sarkis. In my view, the circumstances clearly were sufficient to make Joe a “dependent” of his father Sarkis according to the definition of “dependent” set forth in s.51(1) of the Succession Law Reform Act, supra.

iii. Sarkis died leaving a will, a complete copy of which is included in the filed application material. For present purposes, I think it sufficient to say that, owing to the prior death of Joe’s mother, failure of a specific bequest of certain real estate to Joe, (because the relevant asset no longer belonged to Sarkis at the time of his death), and failure of another specific bequest to Joe’s sister, (because a specified condition precedent was not satisfied when Sarkis died), the will wound up dividing the residue of the estate, (worth approximately $286,724.00), evenly between the three surviving sons of Sarkis; i.e., Joe and his brothers “Tony” and “Sam”. The latter two were issued a Certificate of Appointment as estate trustees of their father’s will.

iv. On Joe’s behalf, the PGT raised a dependency claim against the estate of Sarkis pursuant to Part V of the Succession Law Reform Act, supra, because of concerns that the resulting bequest to Joe, (together with his remaining RDSP and cash assets), might not suffice to provide for Joe’s ongoing needs over the remainder of his life. In that regard, it was noted that Joe had been permitted by the estate to continue living rent free in his parents’ residence for a time after both had died, (before Joe experienced periods of hospitalization and a transition to life in Leamington Lodge), but still was experiencing a monthly shortfall, (approximately $361.06 per month), in his fixed income compared to his necessary monthly expenditures.

e. Negotiations between the PGT, (acting on Joe’s behalf), and the estate trustees, (Joe’s two brothers), resulted in a settlement of the dependency claim, subject to judicial approval. The complete text of the proposed Minutes of Settlement is included in the application material, and attached to the draft Order submitted with the application material. For present purposes, the major substantive provisions of that proposed settlement contemplate a resolution whereby:

i. On Joe’s behalf, the PGT would receive a payment from the estate in the amount of $150,000.00, to represent Joe’s entire entitlement to any funds from the estate, including but not limited to any claims Joe otherwise may have had relating to his share in the estate residue conferred by his father’s will, or to any claim for costs vis-à-vis the estate;

ii. Joe would release the estate trustees from any and all further obligation to prepare and produce a final accounting of their administration of their father’s estate;

iii. Joe would indemnify and hold the estate trustees harmless in relation to any claims made against the estate or the estate trustees in connection with the aforesaid estate distribution to Joe, including any claim for any taxes that should have been remitted in that regard; and

iv. Joe’s legal fees in relation to the dependency claim and its resolution, (i.e., the legal fees incurred by the PGT on Joe’s behalf, currently said to be in the amount of $7,966.50), would be paid from the aforesaid funds to be received by the PGT on Joe’s behalf from his father’s estate pursuant to the settlement.

[3] Through this application, the PGT seeks judicial approval of the proposed settlement on Joe’s behalf, pursuant to Rule 7.08 of the Rules of Civil Procedure. In that regard, I note that the application material filed on behalf of the PGT satisfies all the requirements of Rule 7.08(4).

[4] In my view, the proposed settlement is advantageous from Joe’s perspective, and should be approved. Without limiting the generality of the foregoing:

a. While Joe may have been a “dependent” of his father for the purposes of Part V of the Succession Law Reform Act, supra, and entitled to advance a dependency claim against his father’s estate, his father’s estate planning did leave Joe a significant sum, (i.e., one third of the estate residue), which arguably may have been adequate, along with Joe’s remaining investment and cash assets, and the workers compensation benefits Joe will receive until age 65, to address his Joe’s needs sufficiently for the balance of his life. Indeed, the total of those resources may be more than sufficient to address those needs, given that Joe has been hospitalized several times and committed to palliative care in the recent past. Although his current health situation appears to be stable, in my view there is a realistic prospect of Joe dying before his current assets, further income and a third of his father’s estate residue would be exhausted.

b. Notwithstanding those realities, and the corresponding risk that the court may have found the provisions of the will left by Sarkis adequate to address Joe’s needs, the proposed settlement secures a result that will augment Joe’s estate entitlement from one-third of the estate residue to more than one-half of the estate residue, (prior to payment of associated legal fees), and to approximately one-half of the estate assets once his legal fees have been addressed; i.e., if the proposed legal fees sought by the PGT are also approved. In my view, the proposed settlement therefore represents a very beneficial and satisfactory outcome from Joe’s perspective.

c. Having reviewed the proposed legal fees to be paid from the suggested $150,000.00 amount Joe will receive from the estate, I find that they too are reasonable and should be approved. Without limiting the generality of the foregoing, the $250.00 per hour rate charged by the PGT’s lawyer Mr Walters is more than reasonable for a lawyer of his seniority and experience in this area of the law, and a review of the submitted dockets suggests an appropriate amount of time devoted to the matter to secure the result contemplated by the proposed settlement. The total amount of resulting legal fees, (i.e., $$7,966.50), and the proposed payment of those fees from the amount the PGT will receive in trust for Joe as a result of the settlement, are both reasonable in themselves and, as noted above, still will secure a net beneficial result for Joe tantamount to approximately one half of his father’s estate assets.

[5] For the above reasons, I have finalized and signed the approved draft order submitted with the application material.

“Justice I.F. Leach”

Justice I.F. Leach

Date: June 4, 2022