In the Estate of Waltraud Tyll, Deceased

Court File No.: CV-23-00001606-0000 Date: 2025-09-16 Ontario Superior Court of Justice

Between: Norbert Tyll, Applicant – and – Ruediger Tyll, Wolfgang Tyll, The estate of Waltraud Tyll and The estate of Eric Tyll, Respondents

Heard: August 13, 2025, at Newmarket, by video conference.

Before: S.T. Bale J.

Reasons for Decision

Introduction

[1] Waltraud Tyll died on August 13, 2022. She was survived by her three sons: Norbert Tyll, Wolfgang Tyll and Ruediger Tyll.

[2] This application was commenced by Norbert against his brothers. As part of the application, Norbert sought an accounting from Wolfgang for the period during which Wolfgang acted as attorney for property for Waltraud.

[3] In July 2023, by an order of Edwards J., Norbert was appointed estate trustee of Waltraud Tyll's estate. The order provided that there be no distribution of the estate pending further order of the court or an agreement of the parties. In addition, Norbert was ordered to provide copies of certain documents to his brothers.

[4] On a contempt motion heard in May 2024, I ordered that Norbert provide, within 15 days, an affidavit confirming that no assets of Waltraud's estate had been distributed, and a statement from the account in which the funds were invested. I also ordered that Wolfgang provide Norbert with certain documents no later than June 1, 2024, that the parties exchange affidavits of documents no later than June 28, 2024, and that they submit to examinations for discovery no later than July 31, 2024.

[5] On a second contempt motion heard by Charney J. on July 31, 2024, he ordered that Norbert be removed as estate trustee of Waltraud's estate, that Alison Lester be appointed estate trustee during litigation, and that Norbert pay costs to Wolfgang, fixed in the amount of $4,859.

[6] In November 2024, Norbert unsuccessfully moved for an order setting aside the order of Charney J. on the ground that he had not received notice of the hearing. The motion to set aside was heard by Casullo J. who dismissed the motion with costs to Wolfgang fixed in the amount of $12,000.

[7] At present, there is a balance of $628,791 in Waltraud's estate. On this motion, Norbert requests that he and Ruediger each be paid $300,000 on account of their entitlement under Waltraud's will to one-third of the proceeds of sale of her home. Wolfgang opposes the requested payments.

Analysis

Relevant Provisions of Waltraud's Will

[8] In paragraph 4(d) of her will, Waltraud directed her estate trustee to sell her home at 840 Shadrach Drive in Newmarket. At the time of her death, she held a two-third's interest in the home and Wolfgang held a one-third interest. She directed that from the net proceeds of sale, Wolfgang be paid $20,000, that "any probate fees, taxes and other debts" not satisfied by the balance of her estate be paid, and that the remaining proceeds of sale be divided:

in such a manner that, as nearly as possible, each of my sons, Norbert Tyll, Wolfgang Tyll and Ruediger Tyll receive one-third of the total net proceeds of the sale of the Property. Therefore, if my son Wolfgang Tyll, by virtue of his registered one-third interest in the Property has taken one-third of the remaining funds after the payments required by items i), ii) and iii), the remaining proceeds of the sale shall be divided only between my sons Norbert Tyll and Ruediger Tyll.

[9] In paragraph 4(e) of her will, Waltraud directed that the residue of her estate be divided equally among her three sons.

Sale of 840 Shadrach Drive

[10] In November 2017, Wolfgang sold 849 Shadrach as co-owner and as Waltraud's attorney for property, for $1,275,000. Following the sale, he placed $805,824.51 into Waltraud's bank account, and $412,941.25 into his personal account.

[11] On December 5, 2017, Wolfgang withdrew two amounts from Waltraud's bank account: $114,000 and $86,000. On December 7, 2017, he returned $63,216. He has not accounted for the balance of $136,383.90.

[12] Norbert and Ruediger are yet to receive their one-third interests in the proceeds of sale of the home. It is these interests which form the subject matter of Norbert's request for payment on this motion.

Authority of the Estate Trustee During Litigation to Make the Requested Payments

[13] Ms. Lester is content to make the payments to Norbert and Ruediger substantially in the amounts requested by Norbert. However, she asks this court to confirm her authority to do so. Her uncertainty arises from the texts of the orders of Edwards and Charney JJ., and uncertainty as to the composition of the remaining estate funds: in particular, the extent to which they are proceeds of sale of Waltraud's home, or alternatively, residue.

[14] The order of Charney J. provided that Alison Lester be appointed estate trustee during litigation, that as estate trustee during litigation, she be granted all the authority granted to Norbert Tyll under the order of Edwards J., and the authority to administer the subject estate.

[15] The first question is whether by referring to the order of Edwards J., Charney J. intended that Ms. Lester be subject to the restriction on distribution contained in that order. My answer to that question is that she is not. Although I have not been provided with Edwards J.'s reasons for imposing that restriction, it may be assumed that it was because of allegations of impropriety in dealing with their parents' assets made by the brothers against each other. There is no reason why Ms. Lester, as an independent officer of the court, should not be able to exercise all the authority given to an estate trustee during litigation under s. 28 of the Estates Act. That was the purpose for which she was appointed. Under s. 28, an estate trustee during litigation has all the rights and powers of a general administrator other than the right of distributing the residue of the estate.

[16] The second question then is whether the funds remaining in the estate are proceeds of sale of Waltraud's home subject to the specific bequests to her three sons and may be paid, or alternatively, residue not subject to distribution by an estate trustee during litigation.

[17] Section 36 of the Substitute Decisions Act provides as follows:

Proceeds of disposition

36(1) The doctrine of ademption does not apply to property that is subject to a specific testamentary gift and that a guardian of property disposes of under this Act, and anyone who would have acquired a right to the property on the death of the incapable person is entitled to receive from the residue of the estate the equivalent of a corresponding right in the proceeds of the disposition of the property, without interest.

If residue insufficient

(2) If the residue of the incapable person's estate is not sufficient to pay all entitlements under subsection (1) in full, the persons entitled under subsection (1) shall share the residue in amounts proportional to the amounts to which they would otherwise have been entitled.

Will prevails

(3) Subsections (1) and (2) are subject to a contrary intention in the incapable person's will.

[18] The provisions of s. 36 of the Substitute Decisions Act apply in the present case. Section 38 of the Act provides that s. 36 applies to an attorney acting under a continuing power of attorney, if the grantor is incapable of managing property or the attorney has reasonable grounds to believe that the grantor is incapable of managing property. In this case, Waltraud suffered from severe dementia and there are reasonable grounds to believe that she was incapable of managing property.

[19] Norbert and Ruediger are therefore each entitled to receive from the residue of the estate, the sum of $402,914.25, being the equivalent of a one-third interest in the proceeds of disposition of 840 Shadrach.

[20] A payment from the residue of the estate pursuant to s. 36 of the Substitute Decisions Act is not a distribution of residue within the meaning of s. 28 of the Estates Act. Rather, it is an appropriation from what would otherwise have been residue, for the purpose of fulfilling a specific testamentary gift. Norbert's and Ruediger's entitlement to the money is not under the residuary clause of the will, but rather, under the provisions of s. 4(d) of the will which give each of them a one-third interest in the proceeds of disposition of 840 Shadrach Drive.

Wolfgang's Opposition to the Requested Payments

[21] Wolfgang's position is that the requested payments should not be made because it "would deplete estate assets, undermine the ETDL's ability to administer the Estate, prejudice Wolfgang's entitlements to the subject Estate, and risk further dissipation of Estate funds in the face of continued litigation." He says that denying the request "protects the Estate, recognizes the ETDL's proper exercise of her discretion to not administer the Estate, ensures fairness to all beneficiaries, and upholds prior judicial findings against Norbert's misconduct."

[22] Wolfgang argues that I should not interfere with the exercise by Ms. Lester of her discretion in administering the estate, and that I should therefore not order that the requested payments be made. I agree that there is no reason for me to interfere with Ms. Lester's exercise of discretion. However, as noted above, she is content to make the payments, subject to court approval, which I have given. I see no reason to interfere with her exercise of discretion in that regard.

[23] Wolfgang says that the result of making the requested payments would be to reduce the remaining balance of the estate funds to $28,791.55, an amount he argues would be "plainly insufficient to satisfy the estate's potential liabilities for the parties and/or the ETDL costs in the face of ongoing litigation between the parties, and Wolfgang's potential entitlement to the Estate whether it be a residual interest and/or a specific bequest." I disagree. He has not pointed to any potential source of estate liability to the parties, and it is within Ms. Lester's discretion to determine the holdback necessary to secure her fees. He has also not pointed to any entitlement under the will which would be defeated if the requested payments were made. He is entitled to one-third of the residue, but only such residue as may remain, following receipt by Norbert and Ruediger of their entitlement to one-third of the net proceeds of the sale of Shadrach. Even with payment of the requested amounts, the amounts that Norbert and Ruediger will have received will be far short of their entitlement.

[24] With respect to the brothers' respective entitlements to the proceeds of sale of Shadrach, Wolfgang's counsel says that his client spent significant amounts renovating the home prior to its sale in November 2017. However, I was provided with no evidence to substantiate any particular amounts, and it is now almost eight years since the house was sold.

[25] The only ongoing litigation which Wolfgang has identified is that Norbert is seeking an accounting from him with respect to his management of Waltraud's property from November 19, 2012, to her date of death. He argues that if Norbert is unsuccessful in that litigation, he will be entitled to costs; and that if Norbert receives his entitlement from the estate now, rather than later, he will be unlikely to be in a position to pay such a costs order. Whether that is a legitimate concern or not, I make no finding. It is, in any event, not a reason to deny Norbert and Ruediger their interests in the proceeds of Shadrach which are long overdue. The only potential effect of that litigation on the estate would be to add to the property available for distribution.

[26] Wolfgang argues that the orders requested by Norbert amount to equitable relief and that he should be denied such relief because he has not come to court with clean hands. I disagree. The orders requested do not amount to equitable relief. Norbert and Ruediger have a statutory entitlement to the orders under s. 36(1) of the Substitute Decisions Act, as applied to the provisions of Waltraud's will.

Adjustments Related to Costs & Etc.

[27] The draft order filed by Norbert provides for certain adjustments. Pursuant to the orders of Charney and Casullo JJ. referred to above, Norbert owes costs to Wolfgang in the total amount of $16,859 plus interest. The draft order provides that this amount be deducted from the amount otherwise payable to Norbert and be paid to Wolfgang.

[28] Pursuant to the order of Edwards J. referred to above, Ruediger owes Norbert costs of $25,000 plus interest. The draft order provides that this amount be deducted from the amount otherwise payable to Ruediger and be paid to Norbert.

[29] During the period in which Norbert acted as estate trustee, he withdrew $84,371.76 from the estate. That amount will be deducted from the amount otherwise payable to Norbert and be retained by the estate. In his draft order, Norbert proposes that that amount be split between Ruediger and himself as further amounts on account of their one-third interests in the proceeds of sale of Shadrach. I will leave it to Ms. Lester to determine the total amount to be paid to Norbert and Ruediger at this time.

[30] Wolfgang argues that if Norbert and Ruediger are to receive their interests in the proceeds of sale of Shadrach, he should receive payment of the $20,000 referred to in paragraph 4(d) of Waltraud's will. Provided that he and Ruediger receive payments in substantially the amount he requests, Norbert does not oppose the $20,000 payment to Wolfgang.

Conclusion

[31] For the reasons given, an order will go substantially in the terms of the draft order submitted by Norbert, subject to the right of the estate trustee during litigation to determine the amounts to be paid to Norbert Tyll and Ruediger Tyll on account of their entitlement to one-third of the net proceeds of sale of 840 Shadrach Drive, Newmarket.

[32] If the parties are unable to agree on costs, I will consider brief written argument provided that it is uploaded to Case Center, with a copy to monica.mayer@ontario.ca, no later than October 6, 2025.

Released: September 16, 2025

S.T. Bale J.