COURT FILE NO.: CV-22-180- ES DATE: 2024/01/26
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF The Estate of Margaret Ila Johnston
BETWEEN:
MARY ELLEN JOHNSTON and KAREN HUTCHINSON, in their personal capacity and in their capacity as named estate trustees of the estate of Margaret Ila Johnston Applicants
– and –
LAURA JOHNSTON MCLEAN and ELIZABETH BRYDGES, in their personal capacity and in their capacity as named estate trustees of the estate of Margaret Ila Johnston Respondents
The Honourable Justice C.D. Braid
Counsel: Benjamin Arkin, Counsel for the Applicants Jennifer Krotz, Counsel for the Respondents
HEARD: June 6 and August 25, 2023
REASONS ON APPLICATION
I. OVERVIEW
[1] Margaret Ila Johnston (“Ila”) owned a farm in Rockwood, Ontario (“the farm property”). Ila had four daughters, all of whom were her powers of attorney: Mary Ellen Johnston and Karen Hutchinson (“the applicants”); and Laura Johnston McLean and Elizabeth Brydges (“the respondents”). When Ila was living in a long-term care facility, the parties brought various court actions regarding Ila’s property, with one of the primary issues being the sale of the farm property. After five years of bitter litigation, the parties signed Minutes of Settlement, which included terms that the applicants pay $422,750 to the respondents and receive title to the farm property. Sadly, the Minutes of Settlement did not bring peace to this family or finality to their property disputes.
[2] In 2016, the parties consented to a judgment, which did not explicitly include the terms from the Minutes of Settlement as they pertained to the applicants’ purchase of the farm property. The parties had numerous disagreements, and the property has not been transferred.
[3] The applicants brought this Application to permit them to pay $422,750 to the respondents and receive title to the farm property. The issues that arise on this Application are as follows:
A. Is the Minutes of Settlement a judgment or a contract? B. Did the applicants repudiate the Minutes of Settlement? C. Did the respondents accept the repudiation, and give notice of their acceptance?
[4] For the reasons set out below, I find that the Minutes of Settlement is a contract. The applicants repudiated the contract, and the respondents gave notice of their acceptance of the repudiation. The applicants are no longer entitled to purchase the farm property pursuant to the terms of the Minutes of Settlement.
[5] In these reasons, I shall refer to the parties by their first names for ease of reference.
II. BACKGROUND
[6] The farm property has been in Ila’s family since 1929. It consists of a two-story farmhouse, a bank barn, and land that is used as a 100-acre cash crop farm operation.
[7] At the time of Ila’s husband death in 2008, she was living in a long-term care facility and the farm property sat vacant. Ila was incapable of managing her property, but the parties, as her powers of attorney, could not agree on how to manage her property for her. For five years, the parties were involved in litigation concerning the management of Ila's property.
[8] The litigation was resolved by the Minutes of Settlement dated December 31, 2015. The terms of the Minutes of Settlement were structured so that Ila’s assets would be divided equally among the parties, which reflected the wording of her will and divided the residue of her estate equally between them.
[9] Para. 3(b) of Ila’s will, together with a subsequent codicil, directed that the farm not be sold for one year after her death “to enable one or more of my children to find a way to keep it in the family, failing which the farm shall be sold and the proceeds shall form a part of the residue of my estate. It is my fervent wish that my children will assist one another in ensuring that, if at all possible, the farm will remain in the ownership of one or more of them.”
[10] Ila passed away on November 12, 2020.
[11] On March 13, 2014, the farm property was appraised and valued at $890,000. More recently, a real estate broker viewed the property and gave an opinion that the fair market value (“FMV”), as of November 12, 2020 (the date of Ila’s death), was approximately $1.9 million.
[12] The parties recently retained a tax expert to provide an opinion about the possible tax implications of my decision on this Application. The FMV of the farm property has increased, which will potentially trigger higher capital gains taxes than if the property had been transferred on an earlier date. However, the court does not have the tools to determine how the appropriate tax will be determined by the Canada Revenue Agency. The court has been asked to adjudicate the civil dispute between the parties, and not necessarily the tax consequences that may flow from the outcome of the dispute. I therefore give this evidence no weight.
III. NATURE OF THE APPLICATION
[13] After Ila’s death, the applicants commenced this Application, asking the court to “determine the contentious issues relating to the farm property.” In April 2022, the parties consented to an order for directions, which appointed BMO Trust Company to administer the estate on an interim basis.
[14] In this Application, the applicants request that the following orders be made:
A. The Minutes of Settlement and Judgment are valid and enforceable; B. The applicants pay $422,750 to the respondents within 60 days of the judgment; and C. Upon that payment being made, that BMO Trust Company transfer title of the farm property to the applicants.
[15] The respondents seek orders directing that the farm property be sold by the estate trustee, with the proceeds being distributed in accordance with the will. As such, each party would be entitled to one-quarter of the residue of the Estate.
IV. ANALYSIS
A. Is the Minutes of Settlement a Judgment or a Contract?
[16] The Minutes of Settlement provides for the withdrawal or dismissal of three court actions and sets out processes for disbursing Ila’s property, while setting aside a reserve fund for Ila’s ongoing support and maintenance. The terms of the Minutes of Settlement that are relevant to this application are as follows:
A. The preamble to the Minutes of Settlement states that “the parties hereto consent to Judgement in the Applications and Motions.” B. Para. 11 directs that Ila’s investments be liquidated and consolidated into one bank account, which was to occur as soon as practicable. Further, para. 11(d) directed that the funds in the consolidated account be distributed into four equal shares. C. Para. 18 states that the farm property shall be transferred to the applicants on the later of 30 days after the disbursal of the assets in para. 11 and February 18, 2016 (the “Closing Date”). D. Para. 19 states that the agreed-upon value of the farm property is $890,000, less $44,500 real estate commission. The applicants agreed to jointly pay the respondents $422,750 on the Closing Date. The parties agreed that they are each entitled to one-quarter of the value of the farm property. E. Para. 20 states: “Where each of Margaret Ila Johnston as Seller and [the applicants] as Buyers shall retain a lawyer to complete the transfer of the Farm Property…” Further, para 25 states that “Miller Thomson LLP, Guelph, Ontario shall be engaged to complete the steps necessary for the sale of the Farm on behalf of Margaret Ila Johnston.” F. Para. 27 states that the purchase of the farm property per paras. 18 and 19 was conditional upon the applicants finalizing mortgage financing on, or one week prior to, the Closing Date. G. Para. 31(c) states that ownership of the chattels at the farm property would be transferred to the applicants, who would pay the respondents half of the value of them.
[17] In an email dated January 20, 2016, the applicants stated: “It is our intention to achieve paragraphs 1-6 of the Minutes of Settlement by seeking an order…” Two lawyers, acting for the parties, drafted and approved a consent Judgment, which was signed by Justice Gordon on April 28, 2016. The relevant portions of the Judgment are as follows:
A. The preamble states that the Motion was for a dismissal and for “a Judgment in accordance with the Minutes of Settlement.” B. Paras. 1-6 of the Minutes of Settlement (procedural orders dealing with dismissal and withdrawal of various court actions) were included in the Judgment. C. Para. 7 states that “this Court Orders that the settlement [of three named court actions], as set out in the Minutes of Settlement filed with this court, are approved.” D. The paras. dealing with the transfer of the farm property were not specifically included in the Judgment.
[18] The applicants argue that the principles of contractual interpretation as set out in Sattva Capital v. Creston Moly, 2014 SCC 53, [2014] 2 S.C.R. 633 should be applied when examining judicial orders. They submit that the interpretation of the Judgment should include a consideration of the surrounding circumstances and the intent of the parties; in this case, the fact that the parties anticipated that the Minutes of Settlement would become a judgment. The applicants point to correspondence showing that the parties treated the Minutes of Settlement as if it was part of the Judgment.
[19] I do not accept that the principles of contractual interpretation apply when interpreting a judgment. Court orders must be read in consideration of the plain dictionary meaning of the words reflected in the order. Notably, the first element for a finding of civil contempt is that the order alleged to have been breached must state clearly and unequivocally what should and should not be done: Carey v. Laiken, 2015 SCC 17, [2015] 2 SCR 79 at paras. 33-35. An order must be interpreted based on its wording, and not on intent or surrounding circumstances.
[20] The applicants submit that the terms of the Minutes of Settlement dealing with the transfer of the farm property actually form part of the Judgment; that the court should read the Minutes of Settlement and the Judgment together; and that it is apparent that the Judgment gives effect to the Minutes of Settlement. The applicants also argue that the use of the word “approved,” specifically in para. 7 of the Judgment, incorporates the Minutes of Settlement into the Judgment.
[21] I do not accept these submissions. As noted above, the Judgment must be interpreted by reading its plain language. The terms regarding the transfer of the farm property are not part of the Judgment. If the parties wanted to make every term of the Minutes of Settlement enforceable under the Judgment, they should have repeated every term in the Judgment. At the very least, the parties could have attached the Minutes of Settlement as a Schedule. They did not do so. In addition, the word “approved” is vague and insufficient to establish that the terms of the Minutes of Settlement are incorporated into the Judgment.
[22] Minutes of settlement in a court proceeding constitutes a contract, and the ordinary law of contracts should apply: Ruskin v. Chutskoff Estate, 2004 SKCA 107, 243 D.L.R. (4th) 432 at para. 22.
[23] I find that the Minutes of Settlement is not a judgment, nor is it incorporated into the Judgment. The terms regarding the payment for, and transfer of, the farm property are part of the Minutes of Settlement only, which is a contract.
B. Did the Applicants Repudiate the Settlement?
[24] The Minutes of Settlement defines the Closing Date for the transfer of the farm property as February 18, 2016 (approximately seven weeks after the Minutes of Settlement was signed) or alternatively, 30 days after the distribution of the funds in para. 11.
[25] The applicants agree that when the closing date was originally negotiated, they expected that the transfer of the farm property could have occurred within 49 days. There is no evidence that the consolidation of the funds, or the sale transaction, was inherently complicated. The respondents had a reasonable expectation that the terms of the settlement would be fulfilled promptly.
[26] Within the first few months of 2016, it appeared that the parties were working together to transfer the farm property promptly:
A. On January 14, 2016, Karen sent an e-mail to the respondents saying that the bank would not initiate the mortgage process without an agreement of purchase and sale (“APS”). Further, she stated that an electronic copy of the APS would be provided shortly. B. Around the same time, the applicants instructed counsel at Miller Thomson LLP to prepare the APS. They then received a draft that contained many errors, so they requested that amendments be made. Despite numerous requests, the applicants never received another version from Miller Thomson. C. On February 24, 2016, a lawyer who was acting for the applicants, at that time, sent an e-mail to the respondents’ counsel confirming that, once a judgment was obtained, releases could be executed, the transfer of funds in para. 11 could be fulfilled, and the transfer of the property could be completed. The Judgment was obtained on April 28, 2016.
[27] By November 27, 2016, Ila’s investments had been consolidated into one account. At that time, Laura suggested that the rest of the money in para. 11(d) of the Minutes of Settlement should be distributed.
[28] On December 6, 2016, the applicants sent an email stating: “the Purchase and Sale Agreement has to be signed and received by the bank a full month before the money referred to in Paragraph 11d is distributed in order to ensure that the Closing Date is timed accordingly and the mortgage can be finalized by that time.” The applicants were concerned that the distribution of the money would trigger the 30-day time limit for the transfer of the farm and insisted that the APS needed to be in place first.
[29] On December 8, 2016, the applicants emailed the respondents and stated that they needed an environmental site assessment (“ESA”) of the farm property before they could proceed with the sale. This was the first time that this issue had been raised between the parties.
[30] Between November 2016 and March 2018, the parties met with, and communicated to, counsel at Miller Thomson, on multiple occasions, to request that they prepare the APS. Despite numerous requests, Miller Thomson did not provide one. The applicants did not retain other counsel to draft an APS and did not obtain an ESA either.
[31] On March 19, 2018, the respondents emailed the applicants, stating: “the agreement was not intended to extend over a period of time and needs to be fulfilled,” and set out the outstanding steps and proposed deadlines. The respondents conclude the email by stating that “if we have not received your Offer to purchase by April 15, 2018, we will understand that you do not intend to fulfil the Minutes of Settlement/Judgment and will take the appropriate course of action.”
[32] The respondents submit that the applicants failed, or refused to complete, the transfer of funds in para. 11(d), in accordance with the Minutes of Settlement and within the deadlines reasonably contemplated by that agreement, and thereby repudiated the contract.
[33] Repudiation involves conduct by a party evincing their intention not to fulfill their obligations under the settlement and constitutes a fundamental breach of a contract that deprives the innocent party of substantially the whole benefit of the contract. A reasonable person would conclude that the breaching party no longer intends to be bound by the contract. If the non-repudiating party accepts the repudiation, the contract is terminated and the parties are discharged from future obligations: Jedfro Investments (U.S.A.) Ltd. v. Jacyk, 2007 SCC 55, [2007] 3 S.C.R. 679 at para. 20; Guarantee Co. of North America v. Gordon Capital Corp., 1999 SCC 664, [1999] 3 S.C.R. 423 at para. 40; Spirent Communications of Ottawa Limited v. Quake Technologies (Canada) Inc., 2008 ONCA 92, 88 O.R. (3d) 721 at para. 37.
[34] Repudiation is not to be lightly inferred from a party’s conduct, especially when a party repeats their intention to carry out the contract: Bates v. Island Cove Development Ltd..
[35] If a contract contains certain terms regarding the price, the land and buildings being purchased, and the parties, the contract is sufficiently certain for the court to infer that the parties reasonably expected that the transaction would be closed within a reasonable period of time: Justein v. 3900 Yonge Street Ltd., 1983 CarswellOnt 648 (H.C.J.).
[36] Where there is no express stipulation in an agreement as to the time of performance, the law will imply a term that is to be performed within a reasonable time. What is a reasonable time must be determined upon the facts of each case: Illidge v. Sona Resources Corporation, 2018 BCCA 368 at para. 61.
[37] Where time is not of the essence of the contract, the aggrieved party is relieved of their obligations when the delay becomes so long as to go to the root of the contract and amounts to a repudiation of it: Sanko Streamship Co. v. Eacom Timber Sales Co. (1986), 32 D.L.R. (4th) 269 (B.C. S.C.) at para. 20.
[38] In this case, I find that the applicants repudiated the terms of the Minutes of Settlement as a result of their extreme delay. Although the contract did not include a time is of the essence clause, the parties reasonably expected that the terms of the settlement would be fulfilled promptly. The applicants’ delay went to the root of the contract and amounted to a repudiation of it.
[39] The applicants agree that, by the summer of 2016, it was evident that Miller Thomson was not going to prepare the APS. The applicants refused to release the funds in para. 11(d) until there was a signed APS, but they did not take meaningful steps to obtain an APS and deliberately stalled the performance of the contract. Although para. 25 of the Minutes of Settlement states that Miller Thomson would be retained to complete the steps necessary for the sale of the farm on Ila’s behalf, there was no requirement that the firm prepare the APS. The applicants should have retained their own counsel to prepare an APS or drafted one themselves. The APS would not have been complex because the terms were spelled out in the Minutes of Settlement.
[40] Indeed, Mary Ellen states that when the APS was still not forthcoming after many months, the applicants retained other lawyers to give them advice about how to achieve some progress in fulfilling the terms of the Minutes of Settlement and the Judgment. However, Mary Ellen does not say when she received this advice, or why they did not ask that counsel to draft their APS. In failing to take reasonable steps to obtain an APS, the applicants deliberately delayed the performance of the contract beyond reasonable time limits.
[41] Although the parties did not agree about the need for Ila to obtain an ESA, or who would be responsible for the cost, the applicants could have obtained one on their own. In fact, they obtained an ESA, at their own expense, in April of 2020; although they did not provide a copy to the respondents until this litigation.
[42] The Minutes of Settlement did not require an APS or an ESA, but the applicants unilaterally imposed these requirements before they would permit the distribution of funds in 11(d) that they were obligated to dispense under the contract. The applicants repeatedly stated their intention to advance the performance of the settlement, but then deliberately delayed the performance of the contract, while not taking meaningful steps to complete these requirements that they had unilaterally imposed.
[43] By refusing to distribute the funds under para. 11(d), the applicants put off the closing date until they felt they were ready to proceed. They adopted the position that the contract did not have a deadline other than one that they could unilaterally impose and subject to terms that they unilaterally imposed. The applicants delayed the entire process indefinitely, never having to set a closing date. By stating that they would not, under these circumstances, make the payments under para. 11(d), the applicants repudiated the contract. The respondents were justified in treating the contract as at an end: Gettle Bros. Construction Co. Ltd. v. Alwinsal Potash of Canada Ltd. (1969), 5 D.L.R. (3d) 719 (SKCA) at para. 21, aff’d , [1971] S.C.R. 320.
[44] The applicants continually stated that they intended to complete the contract. However, a party may be found to have repudiated a contract even when the party honestly believes it wanted to continue with the contract to completion: Kaplun v. Mihhailenko at para. 115.
[45] Both of the respondents were always entitled to one-quarter of Ila’s assets and could have waited to receive their portion of Ila’s estate under her will. Instead, they negotiated the Minutes of Settlement to bring an end to five years of bitter litigation. The applicants needed the respondents to agree to permit them to purchase the farm property. In exchange, the respondents bargained for a quick resolution of the litigation and property disputes, avoiding further conflicts with their siblings over the farm property that was sitting vacant.
[46] The applicants argue that the respondents cannot treat a contract at an end because of a refusal to set a closing date, and that the proper remedy is to commence a court process to fix a closing date. However, I find that the respondents were deprived of more than the delayed closing date. In addition, it would be unfair to require the respondents to commence a further court action to fix a closing date, when they bargained to bring an end to the litigation. In the unique circumstances of this case, the applicants’ undue delay amounted to repudiation of the whole of the contract.
[47] I find that the applicants repudiated the contract. They demonstrated their intention not to fulfill their obligations under the settlement within a reasonable period of time, which was a fundamental breach of a contract that deprived the respondents of the quick resolution of the property disputes. A reasonable person would conclude that the applicants did not intend to be bound by the contract and that the respondents were deprived of substantially the whole benefit of the agreement.
C. Did the Respondents Accept the Repudiation, and Give Notice of Their Acceptance?
[48] On March 19, 2018, the respondents emailed the applicants, noting that the Minutes of Settlement was signed in December 2015 and referred to a Closing Date of February 18, 2016. Although the email came from Laura’s email address, both of the respondents signed it. They stated that “the agreement was not intended to extend over a period of time and needs to be fulfilled by taking the following steps”:
As the purchasers of the farm property, we require your Offer to Purchase by April 15, 2018. The Offer will need to be reviewed with our counsel. There is no requirement for discussion of the Offer with Miller Thomson. They are to complete the steps necessary for the sale of the farm only. As you are aware, we each had Independent Legal Advice prior to signing the Minutes of Settlement. A copy of the complete Release signed by all 4 parties…will need to be provided with your Offer to Purchase.
If we have not received your Offer to purchase by April 15, 2018, we will understand that you do not intend to fulfill the Minutes of Settlement/Judgment and will take the appropriate course of action.
[49] Six days later, Karen sent an email response stating: “you are not in a position to impose arbitrary deadlines on this process.” Although the e-mail of March 19 referred to an offer to purchase, Karen clearly understood the discussion to be about an APS. Even though the March19 e-mail set a hard deadline, Karen did not respond in any meaningful way to advise what steps were being taken to move the transaction forward.
[50] For the respondents to succeed in their claim to void the contract on the basis of repudiation, they must prove, on a balance of probabilities, that they accepted the repudiation and communicated that acceptance: Brown v. Belleville (City), 2013 ONCA 148, 114 O.R. (3d) 561 at paras. 45 and 55.
[51] In the unique circumstances of this case, I find that this e-mail is notice of the respondents’ acceptance of the applicants’ repudiation. As noted above, the repudiation arises as a result of the applicants’ inordinate delays in taking steps to complete the contract. In this email, the respondents clearly expressed their concerns and frustrations with the applicants’ unreasonable delays, and notified the applicants that they would treat the contract as at an end because the applicants failed to move the contract closer to completion.
[52] The respondents accepted the repudiation of the contract, and gave notice of that acceptance, so the contract was terminated. The terms of the Minutes of Settlement dealing with transfer of the farm property are no longer enforceable. The estate trustee is therefore directed to sell the farm property on the open market. The net proceeds of sale, and the funds in the consolidated bank account, are part of the residue of the estate and shall be divided equally between the parties in accordance with Ila’s last will and testament.
V. CONCLUSION
[53] For all of these reasons, the court makes the following orders:
The Applicants are no longer entitled to purchase the farm property pursuant to the terms of the Minutes of Settlement.
BMO Trust Company, in its capacity as the estate trustee of the Estate of Margaret Ila Johnston, shall forthwith sell the farm property located at 5161 7th Line, R.R. #4, Rockwood, ON. The legal description is Part Lot 7, Concession 7 (Formerly Township of Eramosa), Township of Guelph/Eramosa, County of Wellington, PIN# 711690070 (the “farm property”). The farm property shall be sold on the open market on an as-is, where-is basis, with the net proceeds of sale to form part of the residue of the Estate.
The applicants are not prohibited from making an offer to purchase on the farm property when it is listed on the open market.
Prior to the farm’s sale, BMO shall distribute the chattels on the farm property in the ordinary course of the estate administration and in accordance with the terms of Margaret Ila Johnston’s wills and codicils.
The Order of Gordon J. dated April 14, 2022 (attached to these reasons as Appendix “A”), is hereby varied as follows: (i) Paras. 9, 10 and 11 (which directed BMO to preserve and maintain the farm property on an interim basis) shall continue until the farm property is sold. (ii) Para. 12 (which provided direction regarding personal effects) shall be amended to remove the phrase “not including the contents and chattels of the farm property.” (iii) Paras. 19 and 20 (directions on this application) have been fully addressed upon the hearing of this application.
All assets of the Estate that are not specifically addressed by the terms of this Judgment, or the Order Giving Directions of Justice Gordon, dated April 14, 2022, shall be administered in accordance with the terms of the last will and testament of Margaret Ila Johnston and its codicils.
The balance of the application is dismissed.
[54] The respondents seek an order that the applicants reimburse Ila’s estate for the cost of well repairs and installation of a water pump on the farm property. However, since the property will be sold on the open market, the improvements to the property will improve the value for all of the parties. Therefore, I decline to make any order for repayment of this expense.
VI. COSTS
[55] The parties are encouraged to settle the issue of costs. If they are unable to do so, they shall provide written costs submissions, which shall be no longer than two typed pages, double-spaced, in addition to any relevant Bill of Costs and Offers to Settle. The respondents shall provide costs submissions by February 9, 2024; and the applicants shall provide costs submissions by February 23, 2024. If submissions are not received by February 23, 2024, costs shall be deemed settled.
Braid, J. Released: January 26, 2024
Appendix "A" to Reasons on Application of Braid J. dated January 26, 2024
Court File No.: CV-22-00000180- 00ES
ONTARIO SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ESTATE OF MARGARET ILA JOHNSTON
THE HONOURABLE JUSTICE GORDON THURSDAY, THE 14th DAY OF APRIL, 2022
BETWEEN: (Court Seal) MARY ELLEN JOHNSTON and KAREN HUTCHINSON, in their personal capacity and in their capacity as named estate trustees of the estate of Margaret Ila Johnston Applicants and LAURA JOHNSTON MCLEAN and ELIZABETH BRYDGES, in their personal capacity and in their capacity as named estate trustees of the estate of Margaret Ila Johnston Respondents
ORDER GIVING DIRECTIONS
THIS APPLICATION, made by the Applicants Mary Ellen Johnston and Karen Hutchinson for the appointment of an estate trustee and directions, was heard this day at the court house at 85 Frederick Street, Kitchener ON N2H OA7.
ON READING the Application Record dated February 22, 2022 and on hearing the submissions of the lawyer(s) for the parties,
Appointment of estate trustee
THIS COURT ORDERS that the Applicants and Respondents are hereby removed as the estate trustees of the estate of Margaret Ila Johnston (the "Estate").
THIS COURT ORDERS that BMO Trust Company (the "Estate Trustee") shall be and is hereby appointed as the sole estate trustee of the Estate, without the need to post a bond or other security.
THIS COURT ORDERS that the Estate Trustee shall have the authority to act from the date of this Order without the requirement that a Certificate of Appointment of Estate Trustee issue and all property and assets of the Estate shall be and hereby are vested in the Estate Trustee from the date of this Order.
THIS COURT ORDERS that the Registrar shall issue a Certificate of Appointment of Estate Trustee with respect to the will of Margaret Ila Johnston dated November 8, 2000, first codicil dated February 28, 2005, and second codicil dated August 6, 2006 (together, the "Will and Codicils") subject only to the filing of the necessary supporting application, which application is to be expedited by the Registrar. For greater certainty, compliance with rules 74.04(e)(ii) (renunciations), (f) (consents), and (h) (security) are hereby dispensed with.
THIS COURT ORDERS that the Estate Trustee shall receive out of the assets of the Estate of Margaret Ila Johnston reasonable remuneration in accordance with the Fee Schedule attached as Schedule "A".
THIS COURT ORDERS that the Estate Trustee shall not be responsible for any act or decision made prior to its appointment as Estate Trustee and shall not be obligated to account for any period prior to the date of its appointment.
THIS COURT ORDERS that the Applicants and Respondents shall deliver all documents and records relevant to the administration of the Estate going forward that are in their control or possession to the Estate Trustee within 30 days of the date of this Order, and any other documents and records that the Estate Trustee may request at the earliest opportunity.
THIS COURT ORDERS that any Notice of Objection filed with respect to the Estate and any prior application for a Certificate of Appointment of Estate Trustee filed with respect to the Estate shall be vacated and treated as if they had not been filed.
Administration of the estate
THIS COURT ORDERS that the Estate Trustee shall preserve and maintain the farm property at 5161 7th Line, RR#4, Rockwood, its contents and chattels thereon, and its operations (the "Farm Property") on an interim basis pending either the agreement of the Applicants and the Respondents or a further court order. For greater certainty, this Order is without prejudice to any party's rights and obligations relating to the Farm Property.
THIS COURT ORDERS that, pending and subject to the adjudication of the issues at paragraph 19 of this Order, the costs of preserving and maintaining the Farm Property shall be paid by the Estate. The Estate Trustee shall retain sufficient funds in the Estate for this purpose.
THIS COURT ORDERS that the Applicants and Respondents shall provide the Estate Trustee with a set of all keys to the Farm Property. The Applicants and Respondents may attend to view and inspect the Farm Property after seeking advance permission of the Estate Trustee.
THIS COURT ORDERS that the Estate Trustee will distribute the personal effects of the deceased (not including the contents and chattel of the Farm Property) by a fair process that it proposes and that the Applicants and the Respondents agree to, but any item mentioned specifically in the Minutes of Settlement dated December 31, 2015 that is specified to go to a particular person will go to that person. For certainty, this Order is without prejudice to the position any party may take with respect to the enforceability of the other terms of the Minutes of Settlement.
THIS COURT ORDERS that the Applicants and Respondents shall provide the Estate Trustee with a list of items owned by them personally (as distinct from items owned by the Estate) stored at the Farm Property within sixty (60) days of the date of this Order. The Estate shall not be liable for the personal items of the parties that remain stored at the Farm Property and any party that chooses to store personal items at the Farm Property does so at their own risk.
THIS COURT ORDERS that the Estate Trustee shall pay from RBC Account no. 04142-5205968the following amounts: (a) to Sarah Brydges, $1,083.89; (b) to Caitlin Brydges, $1,083.89; and (c) to Scott Brydges, $978.03.
THIS COURT ORDERS that the Estate Trustee shall adhere to the process described at paragraph 35 of the Minutes of Settlement regarding the distribution of the deceased's jewelry. If the beneficiaries cannot agree to proceed in accordance with paragraph 35.a. or 35.b. of the Minutes of Settlement, the Estate Trustee shall select one of these two options. If the Estate Trustee determines that the process in paragraph 35 is not practicable, it may propose an alternative for agreement by the beneficiaries or seek directions from the court. For certainty, this Order is without prejudice to the position any party may take with respect to the enforceability of the other terms of the Minutes of Settlement.
THIS COURT ORDERS that the Estate Trustee shall adhere to the process at paragraph 33 of the Minutes of Settlement regarding the distribution of the old coins and paper money belonging to the deceased. If the Estate Trustee determines that the process in paragraph 33 is not practicable, it may propose an alternative for agreement by the beneficiaries or seek directions from the court. For certainty, this Order is without prejudice to the position any party may take with respect to the enforceability of the other terms of the Minutes of Settlement.
THIS COURT ORDERS that the Respondent Laura McLean shall have three professional quality digital copies of the wedding photos of Margaret Ila and Robert Johnston made by a commercial photo lab and deliver these in digital media form to the Estate Trustee to distribute to the Applicants and the Respondent Elizabeth Brydges. The Estate Trustee shall reimburse the Respondent Laura McLean for the cost of same of out of the assets of the Estate.
THIS COURT ORDERS that, subject to the terms of this Order, the Estate Trustee shall administer the Estate in the ordinary course under the Will and Codicils.
Directions
THIS COURT ORDERS that the issues in dispute between the parties are as follows: (a) The Applicants affirm and the Respondents deny that the Farm Property be transferred to the Applicants at a purchase price of $422,750 as set out in the Minutes of Settlement dated December 31, 2015; and (b) The rights and obligations relating to the Farm Property, including but not limited to an accounting and apportionment of the income, expenses, and income taxes attributable to the Farm Property for the period from the date of Minutes of Settlement dated December 31, 2015 to the date of transfer of the Farm Property if transferred to the Applicants. (c) Any other issues related to or arising from the disposition of the Farm Property that may be identified and agreed to by the parties.
The Applicants and Respondents shall comply with the following timetable for a resolution of the issues in dispute: (a) May 27, 2022: The Applicants shall serve a supplementary application record containing any affidavits on which they intend to rely; (b) June 30, 2022: The Respondents shall serve any responding materials; (c) July 21, 2022: The Applicants shall serve any reply materials; (d) October 14, 2022: Cross-examinations of any non-party witnesses pursuant to rule 30.09 will be complete; (e) November 4, 2022: Cross-examinations of the parties will be complete; (f) December 9, 2022: the Applicants and Respondents shall serve their factums; (g) the parties shall schedule a case conference for for further directions and to schedule a final hearing after completing these steps.
THIS COURT ORDERS that any party shall be at liberty to seek further directions of the court on no fewer than 14 days' notice.
THIS COURT ORDERS that the costs of and incidental to this step of the Application shall be reserved to the judge hearing the application.
Fee Proposal
Compensation as Estate Trustee Schedule "A"
BMO Trust company would charge an Estate Services Fee as follows on the basis of the inventory value of assets passing under the Will, subject to a minimum fee of $20,000.00 (plus applicable taxes).
3.6% on the First.... $500,000 3.2% on the Next..... $500,000 2.4% on the Next.... $2,000,000
The estate administration fee payable for real property which is transferred directly to a beneficiary or beneficiaries will be a flat 1.6% of the appraised market value of the said property. Please note that this would be the only fee applied to the real property that was transferred to the beneficiaries.
Out-of-Pocket Expenses
In addition to compensation for estate administration as set out above, BMO Trust Company would be authorized to pay directly from the Estate reasonable out-of-pocket expenses incurred in carrying out its duties and responsibilities. These expenses would include, but are not limited to, costs of preparing accounts in court form, tax preparation, management or sale of real estate, investment management fees, and travel expenses incurred by employees of BMO Trust Company in carrying out the duties and responsibilities.
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IN THE MATTER OF THE ESTATE OF MARGARET ILA JOHNSTON Court File No.: CV-22-00000180- 00ES
MARY ELLEN JOHNSTON et al. Applicants
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LAURA JOHNSTON MCLEAN et al. Respondents
ONTARIO SUPERIOR COURT OF JUSTICE
PROCEEDING COMMENCED AT KITCHENER
ORDER GIVING DIRECTIONS ARKIN FURROW ESTATE LAW LLP 80 Richmond Street West, Suite 804 Toronto, ON M5H 2A4 ·
Benjamin D. Arkin (LSO# 52748A) ben@arkinfurrow.com Tel: (416) 583- 3730 Lawyer for the Applicants, Mary Ellen Johnston and Karen Hutchinson
COURT FILE NO.: CV-22-180- ES DATE: 2024/01/26 Released: January 26, 2024
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: MARY ELLEN JOHNSTON and KAREN HUTCHINSON, IN THEIR PERSONAL CAPACITY AND AS NAMED ESTATE TRUSTEES OF THE ESTATE OF MARGARET ILA JOHNSTON Applicants – and – LAURA JOHNSTON MCLEAN and ELIZABETH BRYDGES, IN THEIR PERSONAL CAPACITY AND AS NAMED ESTATE TRUSTEES OF THE ESTATE OF MARGARET ILA JOHNSTON Respondents REASONS ON APPLICATION Braid, J.