Court File and Parties
COURT FILE NO.: CV-22-00676608-00ES DATE: 2024-05-28 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ROWLAND HILL, in his capacity as Estate Trustee of THE ESTATE OF SAMUEL JEFFERSON HILL, Applicant AND: BRYAN JEFFERSON HILL, Respondent
BEFORE: M.D. Faieta J.
COUNSEL: A. Sean Graham, for the Applicants Lien Tran, for the Respondent
HEARD: May 16, 2024
Endorsement
[1] In this Application, the Applicant, who is the deceased’s 75-year-old brother, seeks his own removal as Estate Trustee and the court’s directions concerning his informal accounting.
Background
[2] The Deceased died in October 2009. His Will makes specific bequests and leaves the residue to his two children: Bryan Jefferson Hill and Solange Destouche and to his grandchildren: Aaron Hill, Bryan Hill, George Davis and Jordan Destouche.
[3] The Will provided the following specific bequests:
(a) CN Rail pension and Scotiabank GICs to his friend Celia Vidal; (b) $10,000 to his friend Merie Colbie; (c) $3,000 to his neighbour Siwah Payne; (d) Old chiming clock to Bryan Hill; (e) Life interest in his house at 88 Beckwith Crescent, Markham, to Celia Vidal subject to her payment of all taxes, fire insurance premiums, utilities and maintenance and repair costs (f) Hold his house at 46 Aldernay Gardens, Middlesex, UK, in trust for his grandson, Devon Hill, until he is 25 years old and then sell the house and transfer the net proceeds of sale to Devon Hill for his own use; (g) Transfer his land on the Island of Dominica known as the Pickard Estate to: (i) A one acre lot to his friend Michael Vidal; (ii) A one-half acre lot to his neighbour’s son Massata Gueye (iii) To each of his grandchildren alive at the date of his death, a ¾ acre lot; (iv) The balance of the parcel of the land to his daughter Solange Destouche. (h) Transfer his land on the Island of Dominica known as Grand Savannah to his son, Bryan Jefferson Hill. (i) Transfer any land owned by the Deceased at his death on the Island of Antigua to his grandson Aaron Hill. (j) Residue of the Deceased’s Estate shall be equally shared by his children Bryan Jefferson Hill and Solange Destouche.
[4] The Will appointed three executors: 1) the Applicant; 2) the deceased’s common law spouse, Celia Vidal; and 3) the Applicant’s lawyer, Peter Hubbard. In October 2011, the Applicant and Celia Vidal were appointed as the deceased’s Estate Trustees pursuant to a Certificate of Appointment of Estate Trustees with a Will. The Applicant does not have a beneficial interest in the Estate.
[5] In March 2012, Celia Vidal commenced an application for dependent’s support pursuant to Part V of the Succession Law Reform Act, R.S.O. 1990, c. S.26. On September 25, 2013, Justice Chapnik granted an Order approving the settlement of Celia Vidal’s SLRA application. Amongst other things, the Minutes of Settlement note that the assets of the Estate do not appear to be sufficient to satisfy all the bequests under the Estates and to pay Celia Vidal’s claim.
[6] The Order, which implements the settlement, provides that: (1) Celia Vidal would be paid $61,486.24 and that she would be removed as Estate Trustee and discharged from her duty to pass accounts, and that she shall not receive executor’s compensation; (2) Rowland Hill will remain as the sole Estate Trustee and will be discharged from his duty to account or pass accounts, except to the extent necessary to demonstrate that he has complied with the settlements and arrangements set out in the Minutes of Settlement and with the administrative obligations from September 23, 2013 to the wind-up of the Estate; (3) Rowland Hill shall proceed to sell the Estate’s property in Middlesex at fair market value to fund Estate expenses and liabilities. Any funds not spent for these purposes hall be paid into court to be held to Devin Hill’s credit until his 18th birthday when the amounts held shall be paid to him in full.; (4) If the net proceeds of sale of the Middlesex property are insufficient to satisfy the payments to Celia Vidal and legal fees mandated by the settlement, then Rowland Hill may at his discretion use any other Estate asset to make those payments; (5) legal fees and executor’s compensation to September 23, 2023 was fixed.
[7] A letter from Dr. Salwa Azer dated recommends that the Applicant be relieved of his duties as Estate Trustee. Dr. Azer’s letter dated March 4, 2021, states:
The protracted nature of this responsibility has caused him severe emotional distress and he was diagnosed with severe anxiety and severe depression. This depression even involved self-harm thoughts and he was adamant all of this was due to his role as executor and there were no other stressors from the rest of his life. I recommend that he should be relieved of this responsibility for the sake of his emotional and mental health.
[8] In his affidavit sworn November 4, 2022, at paragraphs 4-9, the Applicant states:
For almost a decade since that time, I have worked to keep the Estate administration moving forward. I have protected the Estate and its assets. However, I cannot bring the administration to a close: the Court-approved settlement carried forward Celia’s life interest in the Estate’s largest remaining asset, namely a home at 88 Beckwith Crescent, Markham Ontario. …
The Estate administration has been extremely stressful and troubling, so much so that it has had a serious detrimental effect on my personal health. …
I confirm Dr. Azer’s statements about the source of stress and depression: my position as Estate Trustee and related issues such as family disharmony, and that alone, has caused me anxiety and depression. My health has otherwise always been good.
So, continuing as Estate Trustee puts my health at continued and in my view increasing risk. Since Dr. Azer’s March 2021 letter confirming my health risks caused by the Estate administration, the situation has not significantly improved. Continuing on as Estate Trustee will continue to harm me. In fact, I am worried it could cause my death.
To compound the problem, the Estate’s administration cannot be moved substantially forward until the expiry of Celia’s life interest. If I continue as Estate Trustee, then to be blunt, and especially considering the deleterious effect acting as Estate Trustee is having, Celia is likely to outlive me anyway.
Putting my health aside, I do not feel capable of carrying out the remaining administration of the Estate in any case. Keeping me in the position risks compromising the proper administration of the Estate. I believe that someone else should take over the role in the interests of all concerned. I have done a tremendous amount of work over the years. I have fulfilled my duties. This has had health and financial costs to me. Nevertheless, if the Court sees fit to remove me, I will waive all compensation for acting as Estate Trustee for over a decade. I do not waive reimbursement of my costs however. Those costs include, among others, legal fees.
Administration of the Estate
[9] The Applicant states that the beneficiaries under the Will have been disinterested in the administration of the Estate. In this same affidavit, at paragraph 10, the Applicant states:
For years I have attempted to engage beneficiaries in creating a practical solution caused by the ramifications of the settlement with Celia. Through my February 9, 2022, Application Record I had hoped to engage the beneficiaries and seek their positions and views. That hope has not been realized. To date, no beneficiary has given me any significant input. I know the beneficiaries have no duty to get involved, and I do not intend to be critical, but if the beneficiaries are not engaged in moving the situation forward, I cannot realistically do so unilaterally.
[10] The Respondent disputes this assertion. He states, in his affidavit sworn April 26, 2023, that:
I very much take issue with the misstatements contained in paragraph 10 of the Affidavit wherein Rowland states that he has attempted for years to engage the beneficiaries and seek their positions and views. To my knowledge, Rowland has not put forth any actual proposals aside from seeking directions, and he has not requested any input on any proposals from me or my sons, all of whom are beneficiaries. Overall, Rowland has not made meaningful attempts to engage the beneficiaries regarding next steps in the administration of the estate.
At the start of these proceedings, my sons, Devin, Aaron, and Bryan were minors, but have since reached the age of majority and should be added to these proceedings in their personal capacities on this basis. If Rowland truly wished to engage the beneficiaries and obtain their positions, he would have added all the beneficiaries to these proceedings, especially given that the Court-approved settlement unfairly affects Devin, as acknowledged by Rowland in the Affidavit.
[11] In approving the amendment of this Application to allow the Applicant to permit his resignation and to waive the passing of account, Justice Sanfilippo, in his Endorsement dated May 5, 2023, stated:
[12] It does not appear that the steps described in paragraph 12 of Justice Sanfilippo’s Endorsement have occurred, particularly a discussion between the Applicant and the persons interested in the Estate regarding the continued administration of the Estate have occurred.
Accounting
[13] In his affidavit sworn November 4, 2022, at paragraphs 11-24, the Applicant states:
I also request an Order that the Court discharge me from my duty to account. In support of that Order, I provide information and documentation with respect to the history and current state of the Estate administration. I can attempt to provide further information and documentation if the Court so directs or the beneficiaries request, prior to my removal.
A copy of my September 24, 2013 Responding Record to Celia’s application is attached as Exhibit “G”. Included at Exhibit “C” of my record was an informal accounting for the period from the Deceased’s October 30, 2009 date of death to June 20, 2011. This provided the Court with a baseline for the assets and administration leading up to the settlement approval motion.
Again, on September 25, 2013 Justice Chapnik approved the settlement. In so doing, and without any objection from any beneficiary, my belief is that my informal accounting up to June 30, 2011 was approved, albeit implicitly and not formally.
Since June 30, 2011, nothing significant has transpired in the Estate’s administration except to fulfil terms of the settlement and obtain the ability to deal with overseas assets. I provide more detail below concerning each significant asset mentioned in the Will.
Paragraph 3d)(i) and (ii) – 88 Beckwith Crescent, Markham and its Contents
Under the approved settlement, Celia’s life interest in 88 Beckwith Crescent from the Will is being honoured, as is her entitlement to the contents. 88 Beckwith Crescent is the only asset with a value sufficient to redress the unfairness of the Court-approved settlement to Devon, but this cannot take place until Celia’s life interest is satisfied. So, the distribution of the entire Estate is effectively indefinitely postponed unless the Court allows for specific assets to be sold or distributed.
Paragraph 3e)(i) - 46 Aldernay Gardens, Middlesex, UK
Aldernay Gardens was sold in 2015 and the proceeds were used to satisfy the settlement. Attached as Exhibit “I” is a copy of closing documents. Attached as Exhibit “J” is a copy of Graham Estate Law’s June 7, 2016 trust ledger entries confirming the payments made pursuant to the Court-approved settlement. Attached as Exhibit “K” is a copy of documents confirming the payment into Court of the remaining net proceeds following payment of the amounts mandated by the Court-approved settlement.
Paragraph 3f) – The Pickard Estate, Dominica
‘The Pickard Estate’ is a piece of land on the Island of Dominica which the Will divides into multiple shares, valued at $23,011.33 as at June 30, 2011 in my informal accounting. Attached as Exhibit “L” is a copy of a May 27, 2013 valuation of the Estate’s land in Dominica. Attached as Exhibit “M” is a copy of March 6, 2014 valuation reports of the Estate’s land in Dominica.
Paragraph 3g) – Land at Grand Savannah, Dominica
This is another piece of land in Dominica, left to Bryan Jefferson Hill. The valuations mentioned in paragraph 23 above also value this piece.
Paragraph 3h) – Land on the Island of Antigua
The Will says that any land owned by the Deceased on the Island of Antigua goes to his grandson Aaron Hill. Attached as Exhibit “N” are copies of documents concerning the Estate’s land in Antigua which I obtained shortly after the Deceased’s death.
Further Informal Accounting Documents
Attached as indicated are further copies of documents concerning my administration: • Exhibit “O” – documents received October 17, 2022 concerning the contemplated transfer of the Antiguan land to Aaron Hill; • Exhibit “P” – copies of periodic statements from the Estate’s Scotiabank investment account for the period from 2017 to 2022; and • Exhibit “Q” – copies of Notices of Assessment from Canada Revenue Agency for the tax years ending December 31, 2018, 2019 and 2020
[14] The Respondent states at paragraphs 6-9 of his affidavit sworn April 26, 2023:
I also take issue with paragraph 11 of the Affidavit, and adamantly oppose Rowland's request to discharge him from his duty to account as Estate Trustee. I request that Rowland be ordered to fulfill his duty to account as Estate Trustee. He should be required to pass his accounts prior to addressing the issue of his potential removal.
The informal accounting Rowland has provided is insufficient and a passing of accounts should occur to determine if Rowland has complied with his duties and obligations as Estate Trustee.
Furthermore, as Rowland is the sole remaining Estate Trustee, the appointment of a succeeding Estate Trustee is required. Rowland has not provided any proposal with respect to who can act as Estate Trustee, should he be removed. The Estate cannot and should not be left without a proper accounting or a replacement Estate Trustee being appointed to take over the administration of the Estate.
Prior to addressing the issue of Rowland's potential removal as Estate Trustee, a formal passing of accounts needs to occur, in addition to a proposal for the beneficiaries to consider with respect to the outstanding matters to be addressed in the Estate, as well as a proposal with respect to replacing Rowland as Estate Trustee
[15] The Respondent further states at paragraph x of his affidavit sworn February 26, 2024:
Despite being provided with the said contact information, to my knowledge, Rowland has made no attempts to engage the beneficiaries and seeks their positions. Further, to my knowledge, Rowland has made no attempts to communicate with the beneficiaries with respect to the alleged difficulties he has had with the administration of the Estate and/or any proposals for the resolution of such issues.
I am also concerned with whether the Estate’s assets have been properly maintained and whether there has been proper administration of the Estate. …
A formal passing of accounts should occur to determine if Rowland complied with his duties and obligations as Estate Trustee. …
Further, Rowland has not proposed any adequate replacement Estate Trustee. Thus, if he were to be removed, the Estate will be left in limbo if a replacement is not found.
[16] The Estate presently includes three properties outside of Canada that has an estimated total value of about $150,000, a property in Markham, Ontario, which is the subject of a life interest, and about $30,000 to $40,000 in cash.
[17] In his affidavit sworn February 8, 2022, the Applicant states that the remaining assets of the Estate are:
(1) 88 Beckwith Crescent, Markham, Ontario. (2) Bank account - $4,875.00. (3) Investment account - $35,700.00. (4) Pickard Estate, Dominica property – while an appraisal was done by Grant Thornton was one in June 2011, following a 2017 hurricane the Applicant opines that these properties have a value of substantially less than $70,000.00. (5) Grand Savannah, Dominica property – an appraisal by Grant Thornton in 2011 indicated a value of $31,687.35 and a later appraisal in May 2013 indicated a value of $65,750.00. (6) Durham Estate, Dominica property – an appraisal by Grant Thornton of this 2 acre lot indicated a value of $15,170.40. (7) Land on the Island of Antigua – an appraisal by Grant Thornton in June 2011 indicated a value of $5,418.00
Analysis
[18] The court’s authority to remove a sole estate trustee without the appointment of a replacement is generally inappropriate. In Gonder v Gonder Estate, 2010 ONCA 172, Rouleau and Esptein, JJ.A. stated:
33 We recognize that there is good reason to ordinarily require a replacement trustee to be located. The fiduciary nature of the trustee role ensures that they "put the beneficiary's interests first in the performance of any act and the exercise of any powers or duties": see Gilles e, at p. 130. History has proven that trustees are effective actors in ensuring that the estates of deceased persons are administered properly. When a trustee wishes to resign, it will ordinarily fall to that person to locate a replacement trustee. The modern reality is that the court is ill suited to locate replacements.
34 However, as we will discuss below, a trustee is not the only entity that can ensure the proper administration of an estate. In the very rare cases where equity demands that a sole trustee be removed, but no replacement is forthcoming, courts possess an inherent jurisdiction to order the trustee's removal and provide for the orderly administration of the estate. …
49 While we agree with the motion judge that, in exceptional circumstances, the court has the jurisdiction to remove a sole trustee without appointing a replacement, this power may only be exercised where an alternative mode of administration can be put in place that secures the best interests of the beneficiaries and ensures that the estate's assets are properly maintained. The motion judge, in removing the respondents without providing for proper administration, committed an error. …
68 The removal of a sole trustee without appointment of a replacement is an extreme remedy, and will be inappropriate in most cases. It will only be available when no other option is realistically available. In our view, given the limited value of the estate, the conflict of interest that the respondents are now in as creditors of the estate, and the lack of viable replacement trustees, this is one such exceptional case.
69 That said, the motion judge was wrong to remove the respondents as trustees without also crafting a mechanism by which the estate could continue to be administered.
70 This is a case that cries out for a practical solution. It is in that spirit that the judge hearing this matter should approach the task. [Emphasis added]
[19] The Applicant has acted as Estate Trustee for more than 12 years. All parties agreed to the settlement of Celia Vidal’s SLRA claim. Unfortunately, there was insufficient in the Estate to pay the settlement which necessitated the sale of the Middlesex property and such action was contemplated by the settlement. Given that the Middlesex property was specifically bequested to Devon Hill, it appears that this specific bequest has adeemed as a result of its sale. A further issue arises in that there appears to be insufficient assets in the Estate to administer it given the low values of the other properties (other than the Markham property) and the costs associated with their administration and sale. The life interest in the Markham property that is enjoyed by Celia Vidal may result in those proceeds of sale of that property not being available to the Estate (whether to compensate Devon Hill as suggested above, and/or to distribute to the Deceased’s two children).
[20] I accept Mr. Graham’s submission that professional Estate Trustees are unwilling to accept an appointment in this case as Estate Trustee given the complexity of the Estate and the lack of funds in the Estate.
[21] As noted by Mr. Graham, a deed of arrangement to vary the Will may be a practical approach to moving the administration of this Estate forward. By way of example, a deed of arrangement was addressed in Hart v. Jacobs, 1991 CarswellOnt 526, 24 A.C.W.S. (3d) 898. This should be a solution that counsel for both parties explore.
[22] The administration of the Estate has been stalled for many years. The Applicant did not create the difficult, if not unworkable, financial circumstances in which the Estate finds itself. The Applicant is not required to sacrifice his health to administer this Estate. This Application is adjourned to September 10, 2024. It is my intention that an Order will be issued at that time permitting the Applicant to resign as Estate Trustee effective September 30, 2024. In the meantime, the parties and the beneficiaries should locate a replacement trustee.
[23] I direct that, within 30 days, the Applicant ask that any of the beneficiaries named in the Will provide their views to the Applicant and the Respondent by email regarding who should be appointed to administer the Estate following the Applicant’s anticipated resignation on September 30, 2024, as well as their views on any other issues related to the administration of the Estate. The suggestions will hopefully include the exploration of a deed of arrangement and an offer from one of the named beneficiaries, possibly the Respondent, to step forward to act as Estate Trustee in place of the Applicant.
[24] Those persons with a financial interest in the not seeing the remaining assets in the Estate (aside from the Markham property) being sold to pay for the formal passing accounts sought by the Respondent and the appointment of a professional Estate Trustee, who if such person comes forward will, unlike the Applicant, seek compensation for his services, should contact counsel for the Applicant to provide their suggestions for moving the administration of this Estate forward.
[25] Further, it appears that paragraph 12 of Justice Sanfilippo’s Endorsement dated May 5, 2023 has not been fully complied with. It states:
The Applicant submitted that he intends to deliver further informal accounting with the objective of satisfying Bryan, and others interested in the Estate, of the financial status of the Estate, and thereby render unnecessary a formal passing of accounts. I encourage the Applicant and the persons interested in the Estate, particularly Bryan, to confer on the financial information required, and on a plan for the continuing administration of this Estate, including the Applicant’s plan for a succeeding estate trustee.
Order
[26] Order to go as follows:
(a) This Application is adjourned to September 10, 2024. (b) Both the Applicant and the Respondent shall send a copy of this Endorsement to all of the beneficiaries of the Estate. (c) Should any of the beneficiaries of the Estate wish to participate at the hearing of the Application on September 10, 2024, I direct that they deliver a Notice of Appearance by August 30, 2024 (d) The Applicant shall provide an informal accounting, as contemplated by paragraph 12 of Justice Sanfilippo’s Endorsement dated May 5, 2023, to the Respondent and other beneficiaries within 90 days. (e) This Endorsement, and the orders and directions contained in it, shall have immediate effect as a court order without the necessity of formal entry, although any party may take out a formal order by following the procedures under Rule 59.
Mr. Justice M.D. Faieta Date: May 28, 2024