Court File and Parties
COURT FILE NO.: CV-23-92470-ES
DATE: 2023/08/14
SUPERIOR COURT OF JUSTICE – ONTARIO
In the matter of the Estate of Rosemarie Mikolajewski, deceased
RE: Ingrid Taetz, Applicant
AND
Kurt Mikolajewski, in his personal capacity and his capacities as Power of Attorney for Property for Rosemarie Mikolajewski and as Estate Trustee for the estate of Rosemarie Mikolajewski, Respondent
BEFORE: Justice A. Doyle
COUNSEL: Ken Dunham, Counsel for the Applicant Lucas Ostrowski, Counsel for the Respondent
HEARD: August 10, 2023
Endorsement
[1] Rosemarie Mikolajewski (Rosemarie) passed away on February 5, 2022. She had two children, the applicant Ingrid Taetz (Ingrid) and the respondent, Kurt Mikolajewski (Kurt).
[2] In her will dated April 20, 2017, Rosemarie bequeathed her home, municipally known as 157 Anna Avenue, Ottawa, ON (home), and all its contents to Ingrid. Kurt and Ingrid were to equally share the residue of the estate. Kurt was named estate trustee and had previously been appointed as Rosemarie’s Power of Attorney (POA) for both Property and Personal Care.
[3] Kurt and Ingrid are estranged, and Ingrid only learned of her mother’s passing from her aunt one week after her death.
[4] Kurt only provided meaningful information regarding the administration of the estate after the issuance of this application and one week before this hearing.
[5] Ingrid moves for an order removing Kurt as estate trustee and appointing her as estate trustee, an order requiring Kurt to bring an application to pass his accounts both as Rosemarie’s POA and estate trustee for the time period of January 1, 2019 to the present within 30 days and an order authorizing the immediate transfer of Rosemarie’s home to Ingrid on her undertaking to pay any legitimate debts of the estate as confirmed through Kurt’s passing of accounts.
[6] Kurt states that he has provided all information and can complete the remainder of the estate administration. The court can have confidence that he will be able to pay the debts and complete the passing of accounts. The court should lightly interfere with his mother’s choice of estate trustee and a removal is not necessary.
[7] For the reasons that follow, the court grants the following order:
- Kurt Mikolajeski shall be and is hereby removed as estate trustee and he shall return his Certificate of Appointment to the court registrar forthwith;
- Ingrid Taetz shall be appointed as succeeding estate trustee and is not required to post security;
- Kurt shall forthwith transfer all records and property belonging to the estate to the counsel for Ingrid along with the keys to 157 Anna Avenue; and
- Kurt will bring an application to pass the accounts as Rosemarie’s estate trustee within 45 days.
Legal framework
[8] Section 37(1) of the Trustee Act, RSO 1990, c. T.23, as amended, authorizes a judge to remove an executor.
[9] In Johnston v. Lanka, 2010 ONSC 4124, Justice Patillo at para. 15 summarized the principles guiding the court in the removal of estate trustees:
[15] The principles that guide the court's discretion to remove estate trustees are set out in Radford v. Radford Estate, 2008 45548 (ON SC), [2008] O.J. No. 3526, 43 E.T.R. (3d) 74 (S.C.J.), paras. 97-113, per Quinn J.; and St. Joseph's Health Centre v. Dzwiekowski, 2007 51347 (ON SC), [2007] O.J. No. 4641, 2007 CarswellOnt 7642 (S.C.J.), paras. 25-30, per Cullity J. [page263] By way of general overview, they can be summarized as follows: (1) the court will not lightly interfere with the testator's choice of estate trustee; (2) clear evidence of necessity is required; (3) the courts main consideration is the welfare of the beneficiaries; and (4) the estate trustee's acts or omissions must be of such a nature as to endanger the administration of the trust. See, too, Weil (Re), 1961 157 (ON CA), [1961] O.R. 888, [1961] O.J. No. 602 (C.A.); Consiglio Trusts (No. 1) (Re), 1973 681 (ON CA), [1973] 3 O.R. 326, [1973] O.J. No. 2022 (C.A.).
[10] An estate trustee named in a will should be removed only “on the clearest of evidence that there is no other course to follow”. See Crawford v. Jardine, [1997] O.J. No. 5041 (Ont. Gen. Div.), at para. 18.
[11] Even if an estate trustee has not executed their functions perfectly or ideally, “that is not the test”: Radford, at para. 120; St Joseph’s Health Centre v. Dzwiekowski, 2007 51347(ONSC), at para. 25.
[12] Past misconduct may justify removal if that misconduct is likely to continue in the future. The court must assess “whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries”; removal “is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries”: St Joseph’s Health Centre, at para. 28.
Outline of events
[13] Kurt and his spouse were living with Rosemarie in her house during the last period of her life.
[14] Despite Ingrid’s requests for information, Kurt only provided information prior to the issuance of the application. His two affidavits filed in the proceedings describe his administration of the estate. The following information has now been provided:
- Kurt filed Rosemarie’s 2019-2022 tax returns as of June 12, 2023 and he has not paid the taxes owing of $7,877;
- Rosemarie’s home is uninsured;
- He indicates that he does not have time to take care of his mother’s home as he has family responsibilities and his own home and cottage property;
- The estate has two registered accounts (Registered Retirement Income Fund) valued at approximately $55,000. He was the beneficiary and those funds were transferred to him;
- The estate had one unregistered account (Guaranteed Investment Certificate) valued at approximately $30,000 and this was deposited in the estate account;
- There was one joint bank account with Kurt as the Power of Attorney with the amount of $2,454.50 which was transferred to him but he now states that he will return this money to the estate, or it can be credited to what the estate owes him; and
- Kurt indicates that the estate owes him $6,500 for the roof that was not completed.
[15] Ingrid has not been permitted access to the home.
[16] At the hearing, Kurt’s lawyer read an email that was sent to Ingrid’s counsel on August 9, at 3:47 p.m. but received by counsel this morning: Kurt revealed for the first time that he had a tenant living in the nanny suite in Rosemarie’s home, was charging them $120 per month since October 2022 and that he intends to pay the rent money to the estate. He recognizes this is below market rent. It is someone he knows, and they have been told to leave. Counsel indicated that it is not relevant who the person is.
[17] There is no confirmation whether this person has a lease and whether they will actually vacate the unit.
[18] Kurt has agreed that if he remains estate trustee, he will not sell the home. However, ultimately with the debts that are owed, the sale of the home is inevitable. He argues that Ingrid never had confidence in him.
[19] He is waiting to pay the CRA taxes and obtain a clearance certificate. He will then be able to pass the accounts.
Discussion
[20] Rosemarie’s will is simple and straightforward. Unfortunately, Kurt did not understand his role as an estate trustee and the duty he owed to his sister, Ingrid.
[21] But for this application, she would not have received any meaningful information regarding the estate.
[22] In fact, he did not disclose that he was receiving income from the estate until the eve of the hearing of the motion.
[23] In addition, the accounting regarding the roof repair lacks credibility as he stated in one affidavit that the roof cost $9,000 but the invoice produced was for a $800 deposit and then another $1,000 payment. He states that he was also responsible to purchase the materials but there was no evidence to support that purchase.
[24] There is no question that there has been past misconduct and that Kurt has not acted in the interest of the estate beneficiaries, in particular, Ingrid. The court does not find inordinate delay but there has been a consistent pattern of non-disclosure to Ingrid.
[25] In this case, I find that it is likely that this misconduct will continue in the future. This is not meant to punish Kurt but rather to protect the only asset left in the estate, that is the house, which is uninsured.
[26] In order to ensure that Ingrid, the beneficiary is aware of the details of the estate and ensure that her interests are protected, a change of estate trustee must be made.
[27] Only now, does Kurt own up to the fact that he is not entitled to the $2,450 in the joint account and agrees that it should be credited to the estate. Only now, does he admit to earning rental income from the estate.
[28] As stated by Justice Belobaba in Borisko and Muyleart v. Borisko and Borisko, 2010 ONSC 2670 at para. 5:
The reason why trustees step aside when their competence or conduct is unanimously impugned by the beneficiaries - rather than engaging in protracted litigation - is that a trusteeship is not an inalienable right or sinecure: “Trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.”[^2] The welfare of the beneficiaries is primary. If the charges against the trustee prove to be unfounded so that the trustee was justified in resisting them, this a factor to consider when costs are awarded. But the process itself is not a detailed fault-finding exercise. It is enough that there is mistrust or disharmony between the beneficiaries and the trustee. As the Court noted in Letterstedt, if the judge is satisfied that the continuance of the trustee would prevent the trust from being properly executed, the trustee can be removed: “It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.”[^3]
[29] Kurt has demonstrated that the animosity he and his sister have for each other has gotten in the way of acting properly as an estate trustee. He has not been honest and forthright in his handling of his mother’s estate with the other beneficiary. His continued lack of candour and forthrightness is manifested by telling his lawyer the day before the motion of income he has received and pocketed from the estate. The court is not confident that he will act in the best interests of the estate in the future.
[30] The house, which is the only asset, being uninsured compromises the major asset that was bequeathed to Ingrid.
[31] With respect to the request for a full accounting of Rosemarie’s accounts and assets from four years prior to her death, Rule 74.15(1)(d) of the Rules of Civil Procedure permits a person who has a financial interest in an estate may move for an order requiring an estate trustee to file with the court a statement of the nature and value of the assets of the estate at the date of death. There is evidence that a statement was filed with his application for certificate of appointment as estate trustee.
[32] In addition, the court is not convinced that the provisions of the Trustee Act referred to by Ingrid (sections 39 and 48 through to 50) provide the basis for this requestion. Ingrid has not provided that basis for the demand, and hence the request for this relief is adjourned.
[33] At this time, it is not appropriate to transfer the home to Ingrid. There are outstanding debts and a clearance certificate has not been obtained. The transfer of this asset or the sale of the asset will form part of the administration of the estate once Ingrid takes over the responsibility of the estate.
[34] Accordingly, the court orders the following:
- Kurt Mikolajeski shall be and is hereby removed as estate trustee and he shall return his Certificate of Appointment to the court registrar forthwith;
- Ingrid Taetz shall be appointed as succeeding estate trustee and is not required to post security;
- Kurt shall forthwith transfer all records and property belonging to the estate to the counsel for Ingrid along with the keys of 157 Anna Avenue;
- Kurt will bring an application to pass the accounts as Rosemarie’s estate trustee within 45 days.
[35] If the parties cannot agree on the issue of costs, Ingrid may file her 2-page costs submissions by August 21, 2023, and Kurt may file his 2-page costs submissions by August 28, 2023. Ingrid may file a one-page reply by September 5, 2023.
Justice A. Doyle
Date: August 14, 2023
COURT FILE NO.: CV-23-92470-ES
DATE: 2023/08/14
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Ingrid Taetz, Applicant
AND
Kurt Mikolajewski, in his personal capacity and his capacities as Power of Attorney for Property for Rosemarie Mikolajewski and as Estate Trustee for the estate of Rosemarie Mikolajewski, Respondent
BEFORE: Justice A. Doyle
COUNSEL: Ken Dunham, Counsel for the Applicant Lucas Ostrowski, Counsel for the Respondent
ENDORSEMENT
Justice A. Doyle
Released: August 14, 2023