Court File and Parties
COURT FILE NO.: CV-22-00677887-00ES and CV-22-00680609 DATE: 20240108
ONTARIO SUPERIOR COURT OF JUSTICE ESTATE’S LIST
IN THE MATTER OF THE PROPERTY AND ESTATE OF JOSEPH POSOCCO
BETWEEN:
YVETTE DUBAJIC, in her capacity as Estate Trustee of the Estate of JOSEPH POSOCCO Applicant
– and –
VANESSA BITTANTE, ISABELLE POSOCCO, STEFAN DUBAJIC and ALEX DUBAJIC Respondents
Counsel: Joseph Figliomeni and Angela Kwok, for the Applicant Gerard Borean, for the Respondents Vanessa Bittante and Isabelle Posocco
-and BETWEEN-
VANESSA BITTANTE and ISABELLE POSOCCO Applicants
Counsel: Gerard Borean, for the Applicants Vanessa Bittante and Isabelle Posocco
– and –
YVETTE DUBAJIC, in her personal capacity as Attorney for Property for JOSEPH POSOCCO and in her capacity as Estate Trustee of the Estate of JOSEPH POSOCCO, and in her personal capacity, STEFAN DUBAJIC and ALEX DUBAJIC Respondents
Counsel: Joseph Figliomeni and Angela Kwok, for the Respondent Yvette Dubajic
REASONS FOR JUDGMENT
C. GILMORE J.
Introduction
[1] There are two Applications before the court: an application to pass the accounts of the Applicant Yvette Dubajic (“Yvette”) (the “Passing of Accounts Application”), and the application of Vanessa Bittante (“Vanessa”) and Isabelle Posocco (“Isabelle”), which names Yvette and her adult sons Stefan Dubajic (“Stefan”) and Alex Dubajic (“Alex”) as the Respondents (“Vanessa’s Application”). Isabelle and Vanessa are the objectors in relation to the Passing of Accounts Application. The Applications have been consolidated and were heard together on December 13, 2023. Stefan and Alex did not participate in this proceeding or file any material.
[2] Yvette and Isabelle are sisters. They do not get along and have not spoken since their mother’s death in 2016. Vanessa is Isabelle’s daughter and Yvette’s niece. Joseph Posocco (“Joseph”) was Yvette and Isabelle’s father. He died on July 22, 2021. He was predeceased by his wife Maria Posocco (“Maria”) in August 2016. On Maria’s death, all of her estate passed to Joseph.
[3] Alex, Stefan and Vanessa are Joseph’s grandchildren. Joseph’s will left his estate (the “Estate”) to his three grandchildren equally. There is no dispute that on the date of death the Estate had bank accounts with a combined balance of $430,000. Joseph had other assets in Italy, but this case deals only with the Canadian bank accounts.
[4] In these proceedings, Yvette seeks approval of her accounts while acting as both Power of Attorney for Property and Estate Trustee for her father. Her sister and niece oppose those accounts and have requested a detailed accounting going back more than 20 years.
[5] For the reasons set out below I make the following findings:
a. Yvette’s accounts for the post-death period (July 23, 2021 to February 14, 2022) are passed;
b. Yvette’s accounts as Power of Attorney for Property are properly provided and passed for the period of September 2016 to July 22, 2021 and an accounting back to 2003 is not required;
c. The Estate is liable to pay Yvette’s legal fees for all advice relating to the guardianship proceeding in Italy (the “Italian Guardianship Proceeding”), including the retention of Italian counsel;
d. Yvette shall receive compensation of $15,000 as Estate Trustee;
e. Vanessa and Isabelle shall pay their own legal fees;
f. The legal fees incurred by Yvette for the within Applications shall be paid from the Estate with a small portion payable by Isabelle and Vanessa;
g. Yvette shall remain as Estate Trustee given the modest balance left in the Estate and there being insufficient evidence to meet the high threshold necessary to remove an Estate Trustee; and
h. The balance remaining in the Ontario accounts shall be distributed to the beneficiaries after payment of any further debts and expenses of the Estate.
Background Facts
[6] In April 2003, Joseph and Maria sold their Toronto home for $372,000 and retired to Italy. Before leaving for Italy, they executed Powers of Attorney for Property in favour of Yvette. After they left Canada, Joseph and Maria gave instructions to Yvette to transfer funds from their two Ontario bank accounts at TD Bank and National Bank (the “Ontario Accounts”), to them in Italy as needed.
[7] Between 2003 and 2016, Joseph and Maria would return to Ontario periodically to take care of taxes and medical appointments. They continued to have CPP and OAS income deposited to the Ontario Accounts and then transferred to Italy by Yvette. Isabelle lives in Italy and resided close to Joseph and Maria when they were living. Vanessa lives in New York state.
[8] After Maria died in 2016, Isabelle commenced the Italian Guardianship Proceeding to be appointed her father’s Guardian. She did not advise the Italian court that Yvette had a valid Power of Attorney for Property in Ontario. In December 2016, the Italian court declared Joseph incapable and named Isabelle as his Guardian. She then retained a lawyer to demand that Yvette provide a passing of accounts. Yvette did not receive any notification concerning the guardianship order in Italy until January 2017. She obtained legal advice in Ontario and was required to hire an Italian lawyer to challenge the guardianship order.
[9] The Italian court revoked the guardianship order in May 2017 and ordered the appointment of an Italian lawyer, Mr. Maurizio Bonotto, to act as Joseph’s Guardian. After Maria’s death and prior to Mr. Bonotto’s appointment, Isabelle was managing her father’s affairs in Italy. After Mr. Bonotto’s appointment, Yvette transferred money to him as required for her father’s needs in Italy. Isabelle was aware of the funds that were transferred and deposed that she communicated with Mr. Bonotto regarding funds for her father’s expenses.
[10] Yvette was asked by Mr. Bonotto to provide an accounting of her father’s Ontario assets. Yvette deposed that she provided the bank statements for the Ontario Accounts to Mr. Bonotto on several occasions through her Italian lawyer, Ms. Maria Antonazzi.
[11] Isabelle deposed that she was familiar with her parents’ bank accounts in Italy. Around the time of her mother’s death in 2016, there was approximately 130,000 Euros in their chequing account with Centro Marca bank. This was the account into which their Canadian pension funds were paid. Isabelle and Yvette were joint account holders on that account with their parents. By the date of their mother’s death there was still a few thousand Euros in that account. Those funds were divided between Isabelle and Yvette.
[12] Joseph died on July 22, 2021. At the date of death, the Ontario Accounts held $429,894.61. Joseph’s 2011 Will appointed Yvette as Estate Trustee and left the residue of his Estate to his three grandchildren equally (“Joseph’s Will”). Yvette and Isabelle are not beneficiaries of Joseph’s Estate.
[13] Isabelle deposed that she commenced litigation in Italy after her father’s death in relation to his Estate. She did not inform the court in Treviso, Italy about her parents’ Wills. She did not tell the Italian court about the Ontario court proceedings. Isabelle disagreed during her cross‑examination that her daughter Vanessa was a beneficiary of the Estate in Canada. She also deposed in her May 2023 examination, that she intended to challenge Joseph’s Will as he was not a resident of Canada. He resided in Treviso, Italy and his Estate was subject to Italian succession law. No steps were ever taken by Isabelle to formalize her intention to challenge Joseph’s Will. Isabelle deposed that according to her Italian lawyers, Joseph’s Will is not valid.
[14] Joseph’s Will sets out at paragraph 3, that it is intended to deal with all of his assets “wherever situate.” In her cross-examination, Vanessa conceded that this likely included her grandfather’s Italian assets. There was no evidence on either Application with respect to the value of Joseph’s assets in Italy although it is clear he had assets there.
[15] The initial request for an accounting is contained in a letter from Mr. Borean on behalf of Isabelle to Yvette dated November 8, 2021. In that letter, Yvette is requested to produce Joseph’s Will, all bank statements, investment accounts, RRSPs/RIFs, insurance policies and payouts and real estate transactions for her parents back to 2003. She was also requested to provide an accounting of all pension payments and benefits received by her parents back to 2003. All of this documentation was requested by November 12, 2021, a period of only four days.
[16] Yvette’s counsel responded by email on November 22, 2021, and advised that since Isabelle was not a beneficiary, she was not entitled to receive a copy of Joseph’s Will. Vanessa could view Joseph’s Will at counsel’s office. The bank statements for the Ontario Accounts going back to 2016 were also available for review. Yvette’s counsel was of the view that a request for an accounting going back to 2003 was disproportionate and if there were any concerns, asked why they were not raised with the parents directly while they were alive. Further, Yvette’s position was that she only began acting in a fiduciary capacity as Power of Attorney for Property for her father in September 2016. Prior to September 2016 she acted as her parents’ agent upon their instruction.
[17] In November 2021, Yvette’s counsel offered to provide Vanessa with her share of the Estate upon execution of a release. Isabelle and Vanessa were dissatisfied with this response. Vanessa would not sign any release without receiving a complete accounting.
[18] Yvette commenced the within Passing of Accounts Application in March 2022. The Passing of Accounts Application relates only to the period after Joseph’s death.
[19] Vanessa and Isabelle complain that Yvette did not actually produce any documentation until February 2023, and that when she did, it was in the form of a “document dump” without receipts or explanations. The documentation provided was bank statements for the Ontario Accounts commencing in July 2016. All of the accounts were in Yvette’s name. According to Isabelle and Vanessa, even after Yvette was extensively cross-examined in May and October 2023, there were virtually no accounts provided prior to 2012. Isabelle and Vanessa also questioned Visa statements in Joseph’s name and a number of other transactions which they viewed as suspicious. Isabelle and Vanessa submit that Yvette’s personal interests are in conflict with her duties as Estate Trustee and she should be removed.
[20] During her cross-examination on May 9, 2023, Vanessa agreed that she had reviewed all of the bank statements from the Ontario Accounts with her lawyer. She could only articulate one suspicious transaction for $50,000. She further deposed that she had no direct evidence that Yvette had taken any money that belonged to her grandfather. Isabelle identified a number of transactions which she questioned from the Ontario Accounts. The larger ones in question all related to legal fees.
[21] In May 2022, Vanessa commenced her Application. She sought to have Yvette removed as Estate Trustee as well as an accounting from Yvette as Power of Attorney from 2003 to her father’s date of death in 2021. The Passing of Accounts Application and Vanessa’s Application were consolidated by court order dated August 4, 2022. Isabelle was added as a party to the consolidated Applications in October 2022.
Issues
A. Should Yvette’s Post-Death Accounts be Passed?
[22] Yvette has provided her post-death accounts in passing form for the period of July 23, 2021 (her father’s date of death) to February 14, 2022, in her Supplementary Application Record dated February 23, 2023. The Statement of Assets confirms that there was a total of $429,894.61 in the Ontario Accounts as of the date of death. The current balance in the Ontario Accounts is $335,383.48.
[23] Vanessa and Isabelle have not filed a formal Notice of Objection to the accounting. Rather, their complaints are set out in their affidavits, culminating with a series of specific objections contained in their factum delivered on December 1, 2023.
[24] Vanessa gave evidence that her grandparents told her their assets in Ontario totalled $300,000. Isabelle’s evidence was that she thought her parents had between $270,000 and $300,000 in Ontario. Yvette submits that there is far more in the Estate than either Isabelle or Vanessa was aware. She has done everything asked of her and produced comprehensive documentation and answered all questions and concerns during three separate cross-examinations. She requests that her post-death accounts be passed.
[25] Vanessa and Isabelle make the following complaints related to Yvette’s post-death accounts:
a. Yvette’s accounting is composed of a large number of documents without explanations. As such, it is not possible for Vanessa and Isabelle to assess whether the post-death assets were properly managed.
b. No accounting has been provided for 2023, including an explanation for an e-transfer of $2,293.07 on June 16, 2023 and an e-transfer of $2,535.21 on June 19, 2023.
c. There is no information as to whether Yvette has taken compensation.
d. The Ontario Accounts are now approximately $100,000 less than they were on the date of death. No explanation has been provided for the difference.
[26] Yvette’s response to the concerns raised by Vanessa and Isabelle is that she was never questioned about the e-transfers on June 16 and June 19, 2023. In any event, the agreed-upon accounting period ended on February 28, 2022.
[27] Her father’s post-death assets were limited to two bank accounts. She has provided statements for those accounts and answered all enquiries related to those accounts.
[28] As for the difference between the date-of-death amount in the Ontario Accounts and the current balance of approximately $335,000 (a difference of $94,000), Yvette explained that she paid her lawyers $22,000 between March and December 2022, and $50,000 in 2023. The rest of the difference related to market fluctuations in the investment account.
[29] Yvette has not taken any compensation. She claims compensation of $15,000 for the post‑death period. Yvette submits that she has provided all the necessary documentation and answered all questions related to the post-death period. Her accounts in their current form should be passed.
[30] The first time that Vanessa and Isabelle clarified their concerns with Yvette’s accounts (both pre- and post-death), was in their factum dated December 1, 2023. Only then did Yvette receive a clear understanding of exactly what “suspicious” transactions were in issue. I accept Yvette’s argument that her accounting has been attacked piecemeal over the course of this litigation, culminating with the service of the December 1, 2023 responding factum.
[31] During her cross-examination in October 2023, Vanessa was unable to identify any specific transactions that caused her concern or what the total of those transactions were. However, only seven days prior to this hearing, Vanessa’s counsel provided a list of suspicious transactions. Vanessa and Isabelle accuse Yvette of not providing disclosure until February 2023. However, after receiving that disclosure, it took them months to identify their concerns.
[32] The only post-death transactions that relate to the period of the passing of accounts are the e-transfers on June 16 and June 19, 2023, but even those fall outside of the accounting period. Her explanation with respect to the decline in the balance of the account is fully explained by the cost of legal fees (invoices were provided) and market conditions.
[33] A trustee is obliged to exercise ordinary care and prudence when managing the trust of an estate. Where there are allegations of suspicious dealings with the trust, the trustee’s good faith is to be considered and fair allowance to be made in his/her favour, especially if the transactions are dated: see Carmen S. Thériault (ed.), Widdifield on Executors and Trustees, 6th ed., (Toronto: Thomson Reuters, 2023), ch. 10.
[34] I see no reason why Yvette’s accounts should not be passed for the period of July 23, 2021 to February 14, 2022. Yvette has demonstrated the ordinary care and prudence required and explained any questioned transactions. In any event, the biggest expenditures from the Estate during the accounting period were legal fees which are dealt with separately below.
B. Should Yvette’s Pre-Death Accounts be Passed and for What Period?
[35] As a preliminary issue, Mr. Figliomeni argued that Vanessa and Isabelle have not sought leave under the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (the “SDA”), to compel an accounting. Neither Vanessa nor Isabelle come within the enumerated grounds in s. 42(4) which sets out that in addition to the attorney and the grantor, the following persons are entitled to apply for a passing of accounts of an attorney for property:
(1) The grantor’s or incapable person’s guardian of the person or attorney for personal care.
(2) A dependant of the grantor or incapable person.
(3) The Public Guardian and Trustee.
(4) The Children’s Lawyer.
(5) A judgment creditor of the grantor or incapable person.
(6) Any other person, with leave of the court. 1992, c. 30, s. 42(4); 1994, c. 27, s. 43 (2).
[36] Yvette submits that neither her sister nor her niece fall into any of the listed categories and have never sought leave. The court should deny leave, not permit them to pursue their request for an accounting and dismiss that portion of the relief sought in their Application.
[37] Vanessa and Isabelle argue that their Notice of Application issued on May 3, 2022, does request leave at paragraph 1(b). They rely on Ali v. Fruci (2006), 22 E.T.R. (3d) 187 (Ont. S.C.), in which the court granted leave under s. 42(4) of the SDA. In that case, the great niece of the grantor and former donee of the power of attorney, sought leave to require the current power of attorney for property to pass her accounts. The court granted leave based on a finding that the moving party had a genuine interest in the grantor’s welfare, based on the lifelong relationship between them and the fact that the current power of attorney refused to give the moving party particulars of her actions as power of attorney for property: at paras. 3, 7.
[38] Further, on January 30, 2023, Dietrich J. ordered that Yvette provide an informal accounting of her parents’ assets without prejudice to Yvette, arguing that she did not act as Power of Attorney or Estate Trustee for her mother and subject to Vanessa and Isabelle seeking a formal accounting.
[39] Vanessa and Isabelle have not brought a motion for leave under s. 42(4) of the SDA; however, given the endorsement of Dietrich J., the point has become moot. Justice Dietrich ordered an informal accounting which Yvette has produced. The issue now is whether the accounting is sufficient and from what date it should commence.
[40] With respect to the proper period of the accounting by Yvette as Power of Attorney for her parents and following her mother’s death in 2016, I find that the accounting period must start in September 2016, for the following reasons:
a. Vanessa and Isabelle were free to consult with Maria and Joseph while they were of sound mind and alive prior to 2016. Their parents could have answered any of their questions regarding the arrangement in Canada with Yvette. In this court’s view this is the most compelling reason not to start the accounting period in 2003. I agree with Yvette’s position that prior to 2016, she was not acting in a fiduciary capacity but was acting on her parents’ specific instructions.
b. Yvette’s evidence on examination was that neither Vanessa nor Isabelle ever reached out to her personally with questions about her parents’ accounts until the letter from Mr. Borean was received in November 2021.
c. There is evidence that the parents had a financial advisor in Italy and that Maria was in full control of the family finances in both Canada and Italy up to her death in 2016. Neither Vanessa nor Isabelle can point to any specific act of misfeasance or wrongdoing prior to their mother’s death. Yvette’s evidence was that prior to her mother’s death she only accessed her parents’ accounts on their direction.
d. There is no dispute that the parents had capacity up to Maria’s death in August 2016. It would be unfair and extremely prejudicial to Yvette to require her to account for the 13-year period prior to 2016, when her parents were sui juris and making their own financial decisions. Requiring Yvette to effectively second-guess her parents’ spending during that time is neither logical nor reasonable.
e. Neither TD Bank nor National Bank have records going back to 2003. The best that Yvette was able to do was some records going back to 2012 from TD Bank.
f. After Mr. Bonotto was appointed as Joseph’s Guardian of Property in Italy on May 22, 2017, all transactions went through him. Isabelle had access to that information. Between December 2016, when Isabelle was appointed as her father’s Guardian of Property, and May 2017, when she was removed, she had full access to her father’s accounts and managed his property.
g. In August 2016, the Ontario Accounts held approximately $295,000. By July 2021, they held approximately $430,000. According to Yvette, there was no depletion of the accounts as alleged.
[41] Yvette submits that she has provided explanations for all questioned transactions after 2016. As per her reply factum at Schedule 1, she has provided an explanation of all transactions after her mother’s death as per her undertakings chart. Yvette has admitted that there are some transactions whose purpose she cannot identify. The total of those transactions is $2,338.71. There are also transactions about which Yvette was not questioned. Those transactions total $5,391.04. There are two transactions which predate her mother’s death for a total of $1,693. The balance of the withdrawals and payments were made in relation to her father’s care when he was in Italy.
[42] Isabelle and Vanessa make the following specific objections to the accounts.
a. There are legal accounts which have been paid to O’Sullivan Estate lawyers, WEL Partners and a lawyer in Italy, Ms. Antonazzi. Those accounts relate to the Italian Guardianship Proceeding brought by Isabelle and are not appropriately expensed to Joseph’s affairs in Canada. The accounts were addressed to Yvette personally and not as Power of Attorney for Property. Yvette has failed to produce any documentation related to her response to the Italian Guardianship Proceeding. She should be required to repay all of those legal fees to the Estate.
Yvette submits that these expenses were necessary to defend the Italian Guardianship Proceeding. Isabelle was removed as her father’s Guardian as a result of Yvette’s hiring counsel in Italy and pursuing a removal application. Once removed, Yvette was required to deal with Mr. Bonotto regarding all payments for her father’s expenses. However, Mr. Bonotto would only deal with Ms. Antonazzi and not Yvette personally, thereby increasing expenses. The expenses for legal fees paid to the O’Sullivan and WEL Partners firms related to legal advice regarding the Italian Guardianship Proceeding, succession laws in Italy, and the demands for accounting from Mr. Bonotto and the Italian court.
b. There were cash withdrawals, fund transfers, and credit card payments totalling over $41,000 which have not been substantiated, including the following:
i. A transfer of $15,000 on September 12, 2016. Yvette claims this amount was used for her parents’ expenses in Italy, including caregiving for her father and for her mother’s funeral. No breakdown has been provided. Yvette’s position is that when she went to Italy, she would take money to pay for her father’s expenses in cash including caregivers, groceries, and other household expenses. She also paid cash for many of her mother’s funeral-related expenses including a large donation to her church.
ii. Yvette has paid her counsel’s fees from Estate funds. Vanessa and Isabelle submit this is improper and if she is not required to repay those fees, then Vanessa and Isabelle should have their fees paid from the Estate, as well. Vanessa’s Application would not have been required if Yvette had produced her documentation in a timely and comprehensive manner with the appropriate receipts and vouchers. Yvette’s position is that all of her legal fees have been necessitated by Vanessa and Isabelle’s unrelenting and misplaced demands.
iii. Credit card payments from February 2012 to July 12, 2016, totalling $24,837.28. Yvette has done her best to respond to enquiries regarding these transactions, but she was not the person making the charges to the card at that time. She objects to having to account for transactions prior to August 2016.
iv. Many of the amounts objected to were under $100. Yvette did not receive specific inquiries about any withdrawals or payments from the accounts until she was examined in May 2023.
v. Yvette made various cash withdrawals and transfers to her account between December 20, 2012 and July 21, 2016, totalling $16,613.25. Yvette responds that once again, these amounts were dated prior to September 2016, and she has no duty to account for these withdrawals and transfers which were made on her mother’s direction.
[43] With respect to the period after September 2016, rr. 74.16 to 74.18 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, set out the procedure on a passing of accounts. Those rules apply to persons acting under a power of attorney. Those persons are obliged to keep proper books and records and be ready to account if requested.
[44] As well, the conduct of an attorney is governed by the provisions of the SDA, which sets out that such attorneys are fiduciaries whose duties must be exercised diligently with good faith, honesty and integrity.
[45] The provisions of the SDA require attorneys for property to keep a list of assets, a list of all money received, and a list of all money spent. A proper accounting must be kept as a pre‑condition for receiving compensation.
[46] In Zimmerman v. McMichael Estate, 2010 ONSC 2947, 103 O.R. (3d) 25, the court dealt with a passing of accounts relating to an attorney for property. After reviewing numerous transactions and evidence, Strathy J. found that the attorney for property was grossly indifferent to his duty to account, deliberately obstructed the objectors, made unauthorized payments and loans to himself, pre-took compensations, mingled trust property with his personal property, pre‑took compensation of almost $450,000 without keeping proper records, and acted in a conflict of interest.
[47] In the end, Mr. Zimmerman was ordered to repay the compensation and other sums totalling over $400,000 plus interest.
[48] In Zimmerman, Strathy J. held that a trustee (and an attorney for property), must keep proper accounts and be ready to provide an accounting whenever required: at paras. 31-32. The court further held that Mr. Zimmerman’s conduct fell below the required standards of a trustee and that he had breached some of the basic obligations of a trustee.
[49] I find that Yvette’s conduct as Power of Attorney for Property is nothing like that of Mr. Zimmerman. She did not pre-take any compensation, did not make loans to herself and did not deliberately obstruct the objectors. She did not breach her basic obligations as a trustee.
[50] In Laird v. Mulholland (1998), 21 E.T.R. (2d) 204 (Ont. Gen. Div.), the court dealt with a case in which an individual who was acting as fiduciary but who was not a named attorney, was unable to recall the purpose of most of the withdrawals from the incapable person’s account. The court held that a trustee who is a layperson is not required to keep perfect records with respect to every disbursement or expense. Ordinary prudence and diligence were all that was required: at paras. 21, 24-27. It should be noted that in that case, the donor had full capacity. The fiduciary simply assisted her with her financial affairs. The court held that given the attorney’s overall honest and diligent conduct towards the donor, it would be inconsistent to find that the withdrawals were used for the fiduciary’s personal benefit.
[51] In Toller James Montague Cranston (Estate of), 2021 ONSC 1347, 65 E.T.R. (4th) 84, the deceased’s sister brought an application to pass accounts as estate trustee of her brother’s estate. Her two other brothers filed various objections.
[52] In determining whether the estate trustee had met the required standard, the court noted that the brothers’ objections did not relate to the accuracy of the accounting presented, but rather that a receipt was not provided for each and every expense. Citing Zimmerman and Laird, the court held that while having a receipt for all expenses was the recommended approach, a receipt was not required for each expense in order for the required standard to be met where the accounts presented were otherwise accurate. A standard of perfection is not required: at paras. 57, 61.
[53] I find that Yvette did the best she could given that after September 2016, she was acting as a fiduciary for her incapable father who lived in another country. All of his expenses were paid through Mr. Bonotto after Isabelle was removed as Guardian in May 2017. If Isabelle had issues with her father’s expenses as paid by Yvette, she could have asked for information through Mr. Bonotto as he was a court-appointed Guardian. Many of the disputed expenses are small. The explanations for some of the larger withdrawals make sense. I accept that there were expenses related to Maria’s funeral in 2016 which were paid in cash. I further accept that when Yvette travelled to Italy to visit her father, she brought cash to pay housekeepers, caregivers and other expenses related to her father.
[54] This is a modest estate. I find that Yvette has acted with the care of a person of ordinary prudence and diligence in managing her father’s affairs. She should not be required to provide a formal passing of accounts from August 2016 to the date of her father’s death. That would be disproportionate given the amounts in question. Further, the amounts available for distribution to the beneficiaries have already been seriously reduced by the costs of this litigation. Incurring more costs for the exercise of putting the amounts in the bank statements in the required court form for passing is not efficient, nor will it change the result at this point.
C. Should Yvette be Personally Liable for Legal Fees in Relation to the Italian Litigation and the Within Litigation?
[55] In determining who should bear the costs of litigation, the principle is simple – whose fault is it that the costs were incurred? Generally, costs are borne by an estate where the capacity of the testator or an unclear provision in a Will has resulted in litigation. That is not the case here.
[56] Considerations which weigh in favour of awarding costs out of an estate include ones in which the court’s scrutiny or supervision is required. Considerations which weigh in favour of a party having to pay costs personally (or in this case repay amounts to the estate), include ones in which a proceeding may be considered unjustified or where a party has been intransigent, arising out of extra-legal considerations such as resentment or bad feelings between the parties.
[57] In this case there can be no doubt that this litigation arises because of resentment or ill will on the part of Isabelle and Vanessa against Yvette.
[58] Dealing first with the legal costs related to the Italian Guardianship Proceeding, I accept Yvette’s evidence that the first she knew of it was when she received a demand for an accounting from Isabelle as her father’s newly appointed Guardian. Of course she required legal advice as to what her obligations were as Power of Attorney for Property. It is unfathomable that Isabelle would not have made some communication to Yvette about the Italian Guardianship Proceeding. Certainly in Ontario, Yvette would have been a party who was required to be served with an Application for Guardianship. In the end, Isabelle was removed as her father’s Guardian. This alone speaks volumes.
[59] I do not see that Yvette’s actions to obtain legal advice with respect to the Italian Guardianship Proceeding can be criticized. As her father’s Power of Attorney for Property she had a duty to ensure that his funds were managed reasonably and prudently. Without professional advice, she could not possibly have known what her obligations as a fiduciary would be in relation to litigation in another country.
[60] Furthermore, I find that when Mr. Bonotto was appointed, further fees were incurred by way of necessary communication between him and Ms. Antonazzi relating to Joseph’s ongoing expenses.
[61] All of this could have been avoided had Isabelle communicated with her sister up front, discussed her questions regarding the accounting, and discussed a guardianship in Italy. However, Isabelle’s unilateral actions alone caused these expenses to be incurred.
[62] Given all of the above, I therefore find that the legal fees for all of the Italian litigation in Italy, and any advice given in relation to the Italian litigation in Ontario, was related to Joseph’s affairs in Canada, and that those fees were reasonably paid from his assets. Those fees include the fees billed by Ms. O’Sullivan, WEL Partners and Ms. Antonazzi.
[63] As for the legal fees for Cambridge LLP, those bear different considerations. Those fees relate to Yvette’s counsel in Ontario and the fees related to the cost of preparing the accounts post‑death (July 2021 to February 2022), the accounting sought from 2003, and the defence of Vanessa’s Application.
[64] It is trite law that a trustee should be indemnified for his or her costs in relation to the cost of preparing accounts when required to do so. The costs of Yvette’s counsel for that task have been properly paid from the Estate.
[65] As for the costs of Yvette’s counsel for defending Vanessa’s Application, there are several issues. First, the initial demands were made by Isabelle, who is not a beneficiary of the Estate and had no standing to make such demands. Second, I have already found that it was not necessary for Yvette to account for any period prior to July 2016, when her mother was sui juris and Yvette was acting on her instruction. The demand for such an accounting back to 2003 when both Isabelle and Vanessa could have approached the parents directly with any concerns or requests is misdirected and improper. Finally, the initial demand for an accounting was overly aggressive, including a turnaround time for documents over a decade old that was entirely unreasonable. The demand from Isabelle’s counsel in November 2021, smacks of the resentment and anger that Isabelle has toward her sister and I infer, to direct the litigation through her daughter prior to becoming a party herself in 2022.
[66] Further, I have already found the following:
a. Yvette’s accounts for the 2016-2021 period while acting as Power of Attorney should be passed in their current form and a formal passing is not required;
b. Yvette has explained all of the questioned transactions; and
c. Yvette has conducted herself to the standard of ordinary prudence and diligence which I reiterate is not a standard of perfection.
[67] Isabelle and Vanessa are still not satisfied. They want explanations for bank charges and amounts under $100. Their complaints must end here and the Estate finally distributed. Unfortunately, Stefan and Alex will dearly pay for their aunt and cousin’s insistence that their mother has engaged in some form of malfeasance, none of which has been proven or corroborated.
[68] While normally the legal fees for defending an application for removal of an estate trustee on the grounds of conflict of interest would not be paid from the Estate, Yvette has successfully defended this claim and was not removed. As such, it does not make sense for Yvette to repay the Estate for those fees and then be reimbursed from the Estate.
[69] Given all of the above, I find that all of Yvette’s legal fees as both Power of Attorney for Property and as Estate Trustee shall be paid from the Estate. Further, Vanessa and Isabelle shall be required to pay their own legal fees and shall not be reimbursed by the Estate. Their position in this litigation has been aggressive, unreasonable and at times illogical.
D. Should Yvette be Removed as Estate Trustee?
[70] This request by Isabelle and Vanessa is also overreaching. Isabelle and Vanessa both gave evidence that they were unable to point to any specific transaction which would demonstrate that Yvette engaged in fraud or malfeasance. They insist she is in a conflict of interest but without any evidence of this. Yvette is not a beneficiary of the Estate. They were upset that she did not provide documents as far back as they wanted or as quickly as they wanted. They insist she has failed to explain certain suspicious transactions, all of which I have dealt with above. These issues are insufficient to remove Yvette as Estate Trustee.
[71] As noted in Radford v. Radford Estate (2008), 2008 45548 (ON SC), 43 E.T.R. (3d) 74 (Ont. S.C.), at paras. 111‑113, friction alone is insufficient to remove an estate trustee. The friction must be of a nature that would prevent the proper administration of the trust. While there is certainly friction here, it does not reach the required level set out in Radford.
[72] Further, from a practical perspective and given my findings above, there is little left to do in this Estate other than file a terminal return (if not already done), and complete the distribution to the beneficiaries. As Yvette held the Ontario Accounts jointly with her parents, there is no need to probate the Estate. As such, it would be impractical to remove Yvette at this late date given the ever-diminishing size of this Estate.
[73] I also note that there is no consent from any third party to act as Estate Trustee nor a fee schedule from that person.
[74] Vanessa and Isabelle have failed to meet the high evidentiary threshold to remove an estate trustee and displace Joseph’s testamentary wishes. The relief is therefore denied.
E. Should Yvette Receive Compensation as Estate Trustee?
[75] Yvette is not claiming compensation for the period in which she acted as Power of Attorney for Property for her father. She claims the sum of $15,000 for acting as Estate Trustee for her father’s Estate. This figure is less than 3.5 percent of the value of the Estate.
[76] Despite the modest size of this Estate, Yvette has had to spend considerable time and effort answering the demands of Isabelle and Vanessa. She views $15,000 as a very reasonable sum.
[77] The factors which the court must consider when determining the amount of executor’s compensation are clearly set out in the case of Re Jeffrey Estate (1990), 39 E.T.R. 173 (Ont. Surr. Ct.), at para. 13, as follows:
(1) the size of the trust;
(2) the care and responsibility involved;
(3) the time occupied in performing the duties;
(4) the skill and ability shown; and
(5) the success resulting from the administration.
[78] The size of the Estate is certainly modest but disproportionate to the amount of time and responsibility required to answer the challenges of the opposing parties. In the end, Yvette has had success as her accounts have been passed and she has not been required to repay any amounts to the Estate. This court has found that her accounting, although imperfect, met the required standard and that Vanessa and Isabelle’s demands were misplaced and uncorroborated.
[79] As such, Yvette should be entitled to the modest amount of compensation she is requesting. This amount is intended to encompass Yvette’s entire administration including any further time and effort she is required to spend with respect to the final distribution of the Estate.
Costs
[80] Vanessa and Isabelle seek substantial indemnity costs of $73,630.80. Their position is that Yvette has been non-compliant and has unnecessarily prolonged this litigation with her resistance to disclosure and answering objections.
[81] Yvette seeks substantial indemnity costs of $70,302.23 and partial indemnity costs of $53,713 (net of what has already been paid from the Estate). Her position is that this litigation was futile. She has had success in every aspect of her defence. Any costs not already paid should form a first charge against Vanessa’s share of the Estate and by Isabelle personally.
[82] Yvette’s success in this litigation is clear. Vanessa and Isabelle have failed to have Yvette removed as Estate Trustee, deprived of compensation or require that she repay any amounts to the Estate.
[83] I view this litigation as emanating from long-held resentments and negativity on the part of Isabelle and Vanessa that is not rooted in the actual relief sought by them, but based on family dynamics that have no place in this court.
[84] Given all of the above, I find that any legal fees reasonably incurred in this litigation by Yvette on a partial indemnity scale to date shall be borne by the Estate. Any difference between those fees and the fees on a substantial indemnity scale (I calculate the difference to be $16,589) shall be borne by Vanessa and Isabelle equally. Vanessa’s share of those costs ($8,294.50) shall be paid from her share of the Estate. Isabelle shall be responsible for her share ($8,294.50) personally. Isabelle’s share of costs to be paid within 30 days.
[85] Counsel may provide an approved draft Order for my review when ready.
C. Gilmore J.
Released: January 8, 2024
COURT FILE NO.: CV-22-00677887-00ES and CV-22-00680609 DATE: 20240108
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
YVETTE DUBAJIC, in her capacity as Estate Trustee of the Estate of JOSEPH POSOCCO Applicant
– and –
VANESSA BITTANTE, ISABELLE POSOCCO, STEFAN DUBAJIC and ALEX DUBAJIC Respondents
-and BETWEEN-
VANESSA BITTANTE and ISABELLE POSOCCO Applicants
– and –
YVETTE DUBAJIC, in her personal capacity as Attorney for Property for JOSEPH POSOCCO and in her capacity as Estate Trustee of the Estate of JOSEPH POSOCCO, and in her personal capacity, STEFAN DUBAJIC and ALEX DUBAJIC Respondents
REASONS FOR JUDGMENT
C. Gilmore J.
Released: January 8, 2024