Reasons for Judgment

Court File Nos.: CV-23-00702014-00ES; CV-23-00708320-00ES
Date Heard: January 27 and 28, 2025
Date Released: February 10, 2025
Ontario Superior Court of Justice

Between:
Elena Antzon, Applicant
and
Josef Rogovsky, the Estate Trustee of the Estate of Faina Rogovsky, Deceased, Respondent

Counsel:
Arnold H. Zweig, for the Applicant
Brendan Donovan, Ayda A-Tabrizi, and Ava Naraghi, for the Respondent

Heard: January 27 and 28, 2025

Judge: Antonio A. Sanfilippo

Overview

[1] Faina Rogovsky died on December 24, 2016 (the “Deceased”), survived by her two children, Elena Antzon and Josef Rogovsky. The Deceased left a last will and testament dated December 20, 2016 (the “Will”) that is not challenged. The Deceased appointed Josef as the sole executor and trustee of her estate (the “Estate”) and named Josef and Elena as equal beneficiaries in the residue of the Estate. On June 16, 2017, Josef was granted a Certificate of Appointment of Estate Trustee with a Will.

[2] Josef set upon administering the Estate in dialogue with Elena, opening an Estate bank account to consolidate holdings, managing real property owned by the Estate, and with regular email reports to Elena on plans to gather the Estate assets. The jewellery in the Deceased’s safety deposit box was transferred to a safety deposit box held jointly by Elena and Josef.

[3] But the civil relationship between the siblings did not last. The Estate consisted principally of the Deceased’s condominium that Josef was organizing for sale, and the Deceased’s personal belongings and jewellery. The onset of the Covid pandemic in 2020 resulted in Josef deferring in the listing of the property for sale. A condominium owned by the Deceased in Mexico was found to be without value and would eventually be written off as a capital loss. The Deceased’s jewellery was not appraised but rather simply stored. By December 2022, the parties’ written exchanges had become acrimonious, and in early 2023 they retained counsel and then resorted to this litigation.

[4] Elena brought an Application to remove Josef as estate trustee, to require that Josef provide an interim passing of accounts, and for directions on six issues in Josef’s management of the Estate that Elena challenged or questioned on the allegation that Josef had failed to act diligently or promptly or had preferred his own interest over the interest of Elena (the “Removal Application”). Josef brought an Application for an interim passing of accounts (the “Passing of Accounts Application”). Elena delivered a Notice of Objection that set out 71 objections, including that Josef “has been unfair in the accounting, has misrepresented the facts, has intended to deceive me in his accounting and is attempting to shortchange me by not setting out what is properly owed to me.” Josef brought a Request for Increased Costs in the Passing of Accounts Application.

[5] By the hearing of these Applications, all but one of the claims pleaded by Elena in the Removal Application had been abandoned, and the single remaining claim was settled during the hearing. Elena’s 71 objections to the interim passing of accounts were reduced to two for adjudication: whether Josef should be reimbursed for money that he advanced to the Estate to fund Estate expenses, initially contested by Elena in the amount of $86,870.68 but reduced to a challenge of $6,925.07; and whether Josef was entitled to trustee compensation, claimed by Josef in the amount of $51,669.57, plus HST. The lurking issue that overshadowed the two-day hearing was who was going to bear the costs of having engaged so expansive a litigation process for so little purpose.

[6] For the reasons that follow, I order that the Removal Application is dismissed, and that the Estate’s passing of interim accounts is approved with the modifications set out in the disposition section of these Reasons, including that Josef shall be reimbursed $6,925.07 for personal money advanced to the Estate and that Josef shall receive trustee compensation in the amount of $32,000.00, plus HST. Considering that the claims for costs have a greater monetary value than the issues raised by the Applications, and as the parties’ cost submissions will be informed by the findings set out in these Reasons, I accepted the parties’ joint submission that the costs of the Passing of Accounts Application and the costs of the Removal Application be determined at a hearing to be scheduled after the parties exchange written costs submissions, in accordance with a timetable that I will direct.

[7] I refer to the parties in these Reasons by their first names, respectfully, in the same manner as was used by the parties’ lawyers in their written and oral submissions.

I. Factual Background

A. Steps in Estate Administration

[8] When their elderly mother’s chronically frail health was failing in December 2016, necessitating hospitalization, Josef and Elena came together to support their mother. Josef deposed that his family members were not close. The Deceased and her former spouse, Vladmir Rogovsky, were divorced in 1988, and Elena and Josef were distant both geographically and in their relationship as siblings.

[9] On December 17, 2016, Josef and Elena concurred that their mother required a will and a power of attorney for personal care and learned that the Deceased had already consulted with a lawyer. On December 20, 2016, Josef and Elena shared a copy of a draft will that provided that both would share equally in the residue of their mother’s estate. The Will was executed by the Deceased that day.

[10] Josef was named as trustee under the Will, as Elena expected. Josef resides locally while Elena resides abroad. Josef discussed with Elena that executors are allowed to charge the estate a fee for their services, but wrote to Elena, even before their mother’s death, that “[a]s executor, I would waive.”

[11] After their mother’s death on December 24, 2016, Elena travelled to Toronto. Josef and Elena immediately set out jointly to take under control their mother’s bank accounts and registered savings and investment accounts, including the following:

• (a) A Scotiabank account ending in 396 (the “Scotia 396 Account”) held jointly by the Deceased and Elena, which had a balance of $252,164.50 on December 28, 2016. Josef deposed that these funds were preserved by the Deceased for Elena from the sale of a property known municipally as 5460 Yonge Street, Unit 1609, Toronto, for a sale price of $365,000.00, referred to by the parties as the “Dynasty Condo”. Josef showed that on December 28, 2016, the balance of $252,164.50 was transferred to Elena.

• (b) The Deceased owned four registered accounts that together held $183,347.39: consisting of a Scotiabank RRIF, RRSP and TFSA and a B2B Bank RRSP (collectively, the “Registered Accounts”). Josef showed, through production of the opening bank documents, that the Deceased designated Elena and Josef as joint beneficiaries under each of the Registered Accounts. With the joint beneficiary designation, the 50% entitlement of each of Elena and Josef to the Registered Accounts could pass outside the Estate.

[12] On February 15, 2017, Josef obtained for Elena three cheques drawn by Scotiabank payable to Elena totaling $78,138.65, representing 50% of the Scotiabank RRIF, RRSP and TFSA. [1] On February 17, 2017, Josef obtained for Elena a cheque drawn by B2B Bank payable to Elena in the amount of $13,481.85. These four cheques total $91,621.50, representing Elena’s 50% entitlement as a beneficiary under the Registered Accounts. [2]

[13] Josef deposed that he and Elena agreed to pool all funds received from the Deceased, both those passing through the Estate and the Registered Accounts, into a joint account, where both he and Elena could have access and transparency. Josef opened an estate bank account, being Scotiabank account ending in 383 (the “Estate 383 Account”), with both Josef and Elena named as joint account holders. Josef deposited the full proceeds from the Registered Accounts into the Estate 383 Account.

[14] At the time of her death, the Deceased owned two real estate assets:

• (a) The Deceased’s home, known municipally as 2403-59 Annie Craig Drive, Etobicoke, Ontario (the “Annie Craig Property”); and
• (b) A condominium located in Acapulco, Mexico, known as “Torres Gemelas unit 3008S”, located at 1230 Avenida Costera Miguel Aleman, Acapulco, Mexico (the “Acapulco Condo”).

[15] The parties deposed that their mother was a hoarder and that the Annie Craig Property was full of clutter, which included not only personal belongings but also garbage. Elena requested that Josef store seven boxes of her personal belongings, which included family photos and items of sentimental value (the “Personal Belongings”). The boxes of Personal Belongings, along with an art print, were delivered to Elena in the days before the hearing.

[16] The Deceased owned jewellery that was stored in her safety deposit box. Elena deposed, and photographs of the contents of the safety deposit box confirmed, that the safety deposit box contained South African coins, several rings, bracelets, necklaces, pendants, brooches, wedding rings and gold (the “Jewellery”). Elena and Josef agreed to remove the Jewellery from the Deceased’s safety deposit box and to store the Jewellery in a safety deposit box that was jointly opened and controlled by both Elena and Josef (the “Estate Safety Deposit Box”). The parties agreed that the Jewellery would be appraised, except for certain discrete articles belonging to Elena, and the realized value would be deposited in the Estate 383 Account for distribution.

[17] Elena claimed that, at Josef’s request, she advanced a loan of $90,000.00 to the Estate, in or about April 2017, to assist in estate administration (“Elena’s $90,000 Loan”). Josef denied that this was a loan but did not deny that Elena transferred $90,000.00 to the Estate.

[18] Josef claimed loans of his own. Josef deposed that he paid for Estate expenses from his personal line of credit, chequing account and credit card and then reimbursed himself from Estate assets. For example, Josef deposed that pre-authorized expenses for the Annie Craig Property were drawn from a bank account owned by the Deceased that was without assets, and that Josef would fund Estate expenses drawn from this account. Josef deposed that this interim funding, which the parties referred to as “loans”, totaled $86,870.68 for the period from December 24, 2016 to March 31, 2023 (the “Estate Trustee’s Loans”). Elena denied that Josef should be reimbursed for these amounts.

[19] Josef brought an application in Toronto probate file number 01-1632/17 for the issuance of a Certificate of Appointment of Estate Trustee with a Will, which was granted to him on June 16, 2017.

[20] Josef and Elena both investigated the value of the Acapulco Condo, by retaining and consulting with experts in Mexican law and with local agents. They received advice that the Deceased had not maintained in good standing the expenses associated with the Acapulco Condo, resulting in arrears that caused the Acapulco Condo to have no market value. On February 16, 2017, Elena wrote to Josef that she learned that there were many fees to pay regarding the Acapulco Condo and suggested that they “figure out how to write it off as a capital loss instead.” [3] This was reiterated in Elena’s email to Josef on October 4, 2017. [4] In the Estate’s 2016 tax return, Josef applied a capital write-off for the Acapulco Condo of $62,117.00.

[21] The parties held the Annie Craig Property while the contents were cleared and preserved, so that the property could be prepared for listing and sale. A 2017 flood in the building necessitated some repairs and renovation. Josef deposed that the Covid pandemic further delayed the sale of the Annie Craig Property, while Elena became increasingly critical that Josef was relying on a “variety of excuses” to delay the sale of the Annie Craig Property.

[22] On November 4, 2022, Josef signed a listing agreement with a real estate agent known to Elena, Richard Novak of Century 21 Heritage Group, for the sale of the Annie Craig Property, at a listing price of $1,249,900.00 (the “Listing Agreement”). After the negotiation of two offers, on December 11, 2022, Josef accepted an offer to purchase the Annie Craig Property for a sale price of $1,150,000.00. The closing of the sale of the Annie Craig Property completed on February 21, 2023, and produced net sale proceeds of $1,042,144.31 and the return of the deposit, net of real estate commissions, of $54,517.50 for a total of $1,096,661.81 (the “Property Net Sale Proceeds”). These amounts were deposited that day into the Estate 383 Account.

B. The Breakdown in the Relationship

[23] With the sale of the Estate’s largest asset, the Annie Craig Property, and with other Estate assets and liabilities under management, the parties were in a position to proceed to distribution of the Estate. However, conflict arose. On December 12, 2022, after notifying Elena of the sale of the Annie Craig Property and providing accounting that included executor compensation, Elena threatened Josef with removal if he didn’t contact her to discuss how he was “planning on splitting the estate, including the additional $90K owed to me, how much your [sic] planning on keeping for yourself, plus the contents of the safety deposit box” threatening that if Josef did not want to perform his fiduciary duties, Elena would advance a “removal petition” and “report everything to the CRA”.

[24] Josef wrote the same day that he had “no obligation to put up with [Elena’s] constant hostility and invective.” Josef explained how he intended to proceed with the Estate administration. Elena disagreed. The parties retained counsel.

[25] From the closing of the sale of the Annie Craig Property on February 21, 2023, to June 2023, the lawyers exchanged positions on interim distributions, the repayment of Elena’s $90,000.00 Loan, the need to appraise the Jewellery, and other issues. Josef agreed to commence an Application to Pass Accounts by June 5, 2024. When this was delayed, Elena initiated litigation.

II. The Applications

[26] By Notice of Application in the Removal Application issued June 29, 2023, in court file number CV-23-00702014-00ES, Elena sought an Order that Josef be removed as Estate Trustee, that Josef provide an interim passing of accounts, and pleaded six issues in Josef’s administration of the Estate on which Elena sought directions, as follows: (a) a declaration that the Estate is holding $365,000.00 for Elena as proceeds from the sale of the Dynasty Condo; (b) a declaration that Elena be reimbursed for Elena’s $90,000.00 Loan; (c) the delivery to Elena of three discrete pieces of jewellery from the Jewellery kept in the Estate Safety Deposit Box; (d) the disposition of the Jewellery; (e) the disposition of the Acapulco Condo.

[27] Elena’s Removal Application was supported by Elena’s affidavit sworn September 14, 2023. Josef filed a Responding Application Record with his affidavit sworn February 12, 2024. Elena did not deliver a Reply Record.

[28] By Notice of Application to Pass Accounts issued October 24, 2023, in court file number CV-23-00708320-00ES, Josef seeks to pass the accounts of the Estate for the interim accounting period from December 24, 2016 to March 31, 2023 (the “Interim Accounting Period”). Josef claimed trustee compensation, payable by the Estate, in the amount of $51,669.57, plus HST, for a total of $58,386.61, and by Request for Increased Costs, Josef claimed costs of $138,505.29.

[29] On December 21, 2023, Elena filed a Notice of Objection in the Passing of Accounts Application, with 71 objections (the “Notice of Objection”). On February 12, 2024, Josef delivered a Response to the Notice of Objection to Accounts. Elena did not deliver any Reply. The parties filed the transcripts of the two days of cross-examinations.

III. The Abandonment or Resolution of Issues

[30] Elena submitted that she had no option but to initiate the Removal Application because Josef was delaying the management of the Estate, including delay in the sale of the Annie Craig Property, because Josef refused to repay Elena’s $90,000.00 Loan and because the Estate’s interim accounting was unclear and imprecise. Elena submitted that the Estate accounting should not be passed but rather ordered to be re-done because this was principally a single asset estate with half the capital receipts of those shown in the accounting. Elena denied that Josef should receive any compensation as trustee.

[31] Josef submitted that the Removal Application was borne of Elena’s over-reach and selective memory in failing to recall amounts that she has received and agreements that she had made in estate administration and was motivated by Elena seeking to obtain Estate assets to which she was not entitled. Josef denied any hostility toward Elena and claimed that the administration of the Estate was unnecessarily complicated by Elena’s unfounded mistrust and suspicion.

[32] Significant time at the hearing was expended in the parties’ submissions on issues that were settled because the parties’ claimed that the evidence was relevant to two issues: first, the claim by Josef for compensation as estate trustee, and the amount of any such compensation; and second, the issue of costs of the Removal Application and Josef’s Request for Increased Costs of the Passing of Accounts Application. I considered these submissions for these purposes.

A. The Removal Application

[33] In the days before the hearing, and after having exchanged factums on this issue, Elena abandoned her claim that Josef be removed as Estate Trustee. Elena’s claim for an interim passing of accounts, as sought in paragraph 1(b) of Elena’s Notice of Application, was never contested by Josef and was settled when Josef brought the Passing of Accounts Application. Elena’s claim for repayment of Elena’s $90,000.00 Loan, as sought in para. 1(c)(ii) of her Notice of Application, was settled by payment of this amount by September 23, 2024, not through concession that the amount advanced was a loan but in recognition that Elena had transferred $90,000.00 to the Estate. [5]

[34] Other discrete claims for directions sought in the Removal Application were abandoned, but Josef alleged that they were launched by Elena’s misunderstanding or failure to recall steps already completed in estate administration, including the following:

• (a) Elena claimed, in paragraph 1(c)(i) of her Notice of Application, a declaration that the Estate is holding the sum of $365,000.00 in her favour on the basis that the entirety of the Deceased’s net sale proceeds from the sale of the Dynasty Condo belonged to her. This position was also advanced as objection 2(f) in Elena’s Notice of Objection. However, in Elena’s email to Josef of December 18, 2016, Elena wrote that she and Josef would split the Estate “50/50 except for the $250,000.00 from the sale of Dynasty”. Elena’s objection, in paragraph 2(g) of her Notice of Objection, that she “certainly did not receive $252,024.76 from the estate funds” is contradicted by Elena’s receipt of $252,164.50 on December 28, 2016 by transfer from the Scotia 396 Account. Elena received, within days of her mother’s death, $252,164.50 arising from the Dynasty Condo and did not claim any further entitlement until over seven years later, [6] only then to abandon her claim. Elena did not establish any entitlement to the net sale proceeds from the sale of the Dynasty Condo and Josef established that Elena received $252,024.76.

• (b) Elena claimed in paragraph 1(c)(vi) of her Notice of Application that directions be provided regarding the disposition of the Acapulco Condo on the allegation that Josef had failed to realize on its market value. This was also pleaded in paragraph 1(e) of the Notice of Objection, wherein Elena did not accept that the liabilities of the condo exceeded its value and demanded that Josef provide documents in support of the liabilities. The evidence showed that Elena was directly involved in the investigation of the Acapulco Condo in 2017 and concluded, on her own analysis, that the Acapulco Condo did not have any market value.

[35] This leaves the claim for a valuation and disposition of the Jewellery, as pleaded in paragraphs 1(c)(iii), (iv) and (v) of Elena’s Notice of Application. Elena pleaded that the discrete pieces of the Jewellery should be delivered to her and that the remainder should be valuated and disposed, with the monetary amount then distributed. This relief became redundant when Elena removed the Jewellery from the Estate Safety Deposit Box and claimed that she sold all the Jewellery for $13,500.00, except for three pieces that she kept as personal items. Elena proposed to Josef that she be charged $1,000.00 for Jewellery that she retained and that $13,500.00 be included in the estate accounting for the value of the Jewellery. Josef submitted that $40,000.00 be included in the estate accounting for the value of the Jewellery. During the hearing, the parties settled this issue by agreement that $30,000.00 be attributed to the value of the Jewellery.

[36] The evidence leading to this settlement showed that the parties each proposed to attend to the valuation of the Jewellery. Josef contended, in my view correctly, that this was his responsibility as estate trustee although, inconsistently, he granted Elena direct access to “attend to the jewellery”. [7] Elena volunteered to undertake the valuation on her submission that Josef was unduly delaying the completion of this step. No agreement was reached.

[37] Josef established that on July 15, 2024, the day of Elena’s cross-examination, Elena removed the Jewellery from the Estate Safety Deposit Box without notice to Josef. On July 31, 2024, Elena’s lawyer notified Josef’s lawyer of this step, and produced an invoice dated July 26, 2024, issued by Pinto Gold to the real estate agent who assisted in the sale of the Annie Craig Property, Mr. Novak, stating that Pinto Gold purchased “assorted gold and silver jewellery” for $13,500.00. The invoice is unproven and does not explain which pieces of jewellery were sold or how the real estate agent came in possession of an estate asset and purported to attend to its sale.

[38] Josef submitted that Elena had deposed to her belief that the Jewellery had a value of $50,000.00, and that this concession supported the attribution of this amount to the valuation of the Jewellery. [8] Josef is not able to present the Jewellery for valuation, as it has been sold, other than by using photographs that were taken of the content of the Estate Safety Deposit Box.

[39] The settlement of this valuation issue fostered efficiency, including by avoiding the possibility that determination of this issue be delayed until valuation evidence could be obtained using the photographs. However, the Jewellery was estate property and thereby within the authority of the estate trustee. It is unclear how Elena, directly or through the real estate agent, could transfer title to the Jewellery when Elena was not the estate trustee. Further, I accept that Elena did not disclose to Josef that she had removed the Jewellery and intended to attend to its sale even though Elena was present at Josef’s cross-examination on July 16, 2024, the day after she removed the Jewellery from the Estate Safety Deposit Box and heard Josef’s undertaking to attend to the appraisal of the Jewellery. [9]

B. The Passing of Accounts Application

[40] All but two of the 71 objections made to the Passing of Interim Accounts were withdrawn. Regarding certain of these withdrawn objections, I find as follows:

• (a) Elena objected, in paragraph 2(i) of the Notice of Objection, that she was designated as the sole beneficiary of the Registered Accounts. Elena deposed that the Registered Accounts were her sole property that her brother told her had to be divided equally and that she “now know[s] that he lied to me.” [10] This was disproven by Josef’s production of the opening account documents that establish that both Josef and Elena were named as joint beneficiaries of the Registered Accounts.

• (b) Elena objected, in paragraphs 2(l), 2(m), 2(o), 2(s), and 2(qq) of the Notice of Objection, that she had “no information” regarding the payment to her of her 50% entitlement of the Registered Accounts. This was disproven by Josef’s production of the cheques issued to Elena for these amounts in February 2017 and the accompanying email communications wherein Elena was provided with copies of the cheques regarding these payments.

• (c) Elena objected, in paragraphs 2(x), 2(oo) and 2(pp) of the Notice of Objection, that Josef withdrew amounts of $50,000.00, $40,000.00 and $27,672.43, respectively, for himself without providing equal amounts to Elena. At the hearing, Elena conceded that she and Josef each received these amounts, and a further equal distribution of $100,000.00, for equal interim distributions of $217,647.43, as accurately set out in the Table of Interim Distributions in the estate accounting.

• (d) As already explained in reference to the Removal Application, Elena’s claim for directions regarding the Acapulco Condo, which was also objection 2(e) was not established, and Elena’s claim for the net proceeds of the Dynasty Condo in the amount of $365,000.00, which was also objection 2(f), was not established.

[41] I will now turn to the issues remaining for determination in the Passing of Accounts Application.

IV. Analysis of Issues Remaining for Determination

[42] The issues that require determination in the Passing of Accounts Application were whether Josef should be reimbursed for the Estate Trustee Loans, whether the interim estate accounts should be passed and whether Josef is entitled to compensation as estate trustee.

A. Should Josef be Reimbursed for the Loans?

[43] The Estate accounting for the Interim Accounting Period contains some 248 entries in the Capital Receipts ledger (“CR”) described as “Estate Trustee’s Loan for carrying costs”. At CR53, dated October 4, 2018, Josef defined these loans as follows: “As a result of the arrangement between the parties, it was necessary for Josef to make loans to the Estate hereinafter referred to as ‘Estate Trustee’s loan to estate for carrying costs.’”

[44] The smallest amount advanced in an Estate Trustee Loan is $20.00. The largest amount is a one-time transfer of $2,000.00. Most of the Estate Trustee Loans were below $500.00. Josef established that the total amount of the Estate Trustee Loans during the Interim Accounting Period is $86,870.68.

[45] The Estate accounting for the Interim Accounting Period contains some 262 entries in the “Statement of Funds withdrawn by the Estate Trustee” chart described as “Repayment to Estate Trustee of loan to estate.” The smallest amount repaid to Josef is $20.00. The largest repayments were three repayments of $2,000.00. Most of the repayments were below $500.00. Josef established that the total amount of the repayment of Estate Trustee Loans during the Interim Accounting Period is $79,945.61, and that Josef has not reimbursed himself for Estate Trustee Loans of $6,925.07.

[46] Elena contested, in paragraph 2(jjj) of the Notice of Objection, “that Josef made loans to the estate in the amount of $86,870.68”, stating that these amounts should not be characterized as loans. During the hearing, Elena stated that she sought no remedy regarding Josef’s reimbursement of $79,945.61 from the Estate, but sought an order that Josef be “denied his request for repayment of alleged loans that he made to the Estate in the amount of $6,925.07.”

[47] Josef did not provide an acceptable explanation of why he advanced money to the Estate on some 248 instances when the Estate had liquid assets. Josef did not provide any testimony on this issue in his affidavit. In his Response to Notice of Objections, Josef explained that the Estate Trustee Loans were required because the Estate 383 Account never carried a significant balance. [11]

[48] The flaw in Josef’s explanation is that a comparison of the Capital Receipts ledger and the “Statement of Funds withdrawn by the Estate Trustee” chart shows that in many instances the amount advanced by Josef was repaid to Josef from the Estate 383 Account on the same day, [12] showing that the justification for the “loan” could not have been a shortfall in funds in the estate bank account. If the shortfall was in another estate account from which pre-authorized expenses were drawn, such as the account referred to as the “Power Chequing Account” ending in 389 (the “Power Chequing Account”), then the shortfall could have been addressed by a transfer from the Estate 383 Account to the estate account that was short on funds as opposed to a “loan” from the Estate Trustee.

[49] Josef did not show that the loans were required. Furthermore, it was not appropriate practice as an estate trustee to advance 248 loans to the Estate. Not only did it place Josef, a fiduciary, in the position of being both lender and trustee for the Estate as borrower, but it also unnecessarily complicated the estate accounting.

[50] Regarding repayment to Josef of the amount remaining under the loans, $6,925.07, I saw no dispute that Josef advanced $86,870.68 to the Estate and has been reimbursed $79,945.61. Elena raised no objection to Josef’s reimbursement of $79,945.61 apart from its characterization in the accounting. Elena did not establish any basis on which Josef should be denied reimbursement of the remaining amount of $6,925.07. Josef has not sought any interest on the Estate Trustee Loans and, as I will explain, has not sought any executor compensation for managing the Estate Trustee Loans.

[51] I will consider Josef’s decision to advance the Estate Trustee Loans further in my determination of the issues of compensation and costs. But, in my view, the Objector has not shown any basis on which Josef should be denied reimbursement of the remaining amount that he advanced, specifically, $6,925.07.

[52] Elena’s objection that Josef be denied reimbursement of $6,925.07 is dismissed.

B. Should the Estate Accounts be Passed?

[53] As an estate trustee, Josef has a duty “to keep proper books of account and to be ready at all times to account for the trust property that [he] is bound to administer.” [13] A trustee must keep a complete record of their management of the trust and must have the accounts ready and give full information when required to prove that the trust has been administered prudently and honestly. [14]

[54] Section 49(2) of the Estates Act, RSO 1990, c E.21, provides that a judge “has jurisdiction to enter into and make full inquiry and accounting of and concerning the whole property that the deceased was possessed of or entitled to, and its administration and disbursement.” This is done in accordance with the tools set out in ss. 49(3) and (4) of the Estates Act, and the process set out in Rules 74.16 to 74.18 of the Rules of Civil Procedure, RRO 1990, Reg 194. As the Court of Appeal has explained, a passing of accounts application “initiates a judicial ‘inquiry’ into the affairs of an estate.” [15]

[55] Elena’s overarching objection that the Estate’s interim accounts were unclear and imprecise was founded on her complaint that the Capital Receipts of $2,172,174.58 were over-stated and should have comprised little more than the net sale proceeds of the Annie Craig Property and the transfer of modest bank account balances.

[56] The Estate Trustee explained the accounting that produced Capital Receipts of $2,172,174.58. The Capital Receipt ledger shows that $1,042,144.31 was deposited to the estate account on February 21, 2023 (CR334), and that a deposit followed on February 24, 2023 in the amount of $54,517.50 (CR335) constituting the Property Net Sale Proceeds. These two amounts total $1,096,661.81. The Estate Trustee showed that there are six transactions, or sets of transactions, that contributed to the delta between the Property Net Sale Proceeds ($1,096,661.81) and the Capital Receipts of $2,172,174.58, as follows:

• (a) Josef claimed that Elena insisted that the Registered Accounts totalling $183,347.39 be deposited into the Estate 383 Account and distributed through the Estate, relying both on Elena’s evidence and the request by Elena’s lawyer that Josef account for the Registered Accounts. Josef showed that he deposited the Registered Accounts (both Josef’s and Elena’s equal 50% entitlements) into the estate bank account on February 15, 2017. [16]

• (b) The Capital Receipts ledger shows that $156,303.79 was deposited in error on February 15, 2017 [17] (the “Incorrect 2017 Entries”). The Incorrect 2017 Entries were corrected by corresponding withdrawals in the Capital Disbursements ledger on the same day. [18]

• (c) On April 21, 2017, Elena transferred Elena’s $90,000.00 Loan into the estate account. [19]

• (d) As explained, the Estate Trustee Loans, totaling $86,870.68, were deposited into the estate account and then withdrawn with corresponding disbursements.

• (e) The Estate Trustee consolidated into the Estate 383 Account two other accounts owned by the Deceased, representing a total deposit of $82,183.14 (“Account Transfers”). [20]

• (f) On April 2, 2020, Elena deposited $288,660.64 to the estate Power Chequing Account, [21] and then withdrew the entire amount in two withdrawals the same day [22] (“Elena’s Unexplained 2020 Deposit”). Josef claimed that he did not authorize this deposit and withdrawal, and that they had nothing to do with the Estate. Elena did not provide any evidence to explain the basis for this deposit or the corresponding withdrawals.

[57] The total amount of these six sets of transactions ($887,365.64) account for most of the delta between the Capital Receipts of the Estate ($2,172,174.58) and the Property Net Sale Proceeds ($1,096,661.81). The remaining gap is comprised of the aggregate of small monetary transactions usual to estate administration, such as income tax refunds. Josef responded to Elena’s objection that the accounting of Capital Receipts and Capital Disbursements was unclear and imprecise in his Response to Notice of Objections to Accounts and in his answers to undertakings.

[58] Having reviewed the accounting for the Interim Accounting Period, I find that the interim estate accounting is in order. The passing of accounts for the Interim Accounting Period is approved with the modifications that arise from my findings, as summarized in the “Disposition” section of these reasons.

C. The Determination of the Estate Trustee’s Compensation

(a) Applicable Legal Principles

[59] Section 61(1) of the Trustee Act, RSO 1990, c T.23 provides that “[a] trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice.” Section 23(2) of the Trustee Act provides that the amount of compensation can be fixed upon a passing of accounts.

[60] In Laing Estate v. Hines, the Court of Appeal explained that to provide predictability to the assessment of trustees’ compensation, the practice was established to determine the compensation as a percentage of the probate value of the estate. Applying the practice first described in Re Jeffrey Estate, the Court of Appeal endorsed what is commonly referred to as the “tariff guidelines”:

[I]n Ontario at least, a practice has developed of awarding compensation on the basis of 2½% percentages against the four categories of capital receipts, capital disbursements, revenue receipts and revenue disbursements along with, in appropriate cases, a management fee of 2/5 of 1% per annum on the gross value of the estate.

[61] The determination of trustee compensation is not, however, a purely arithmetic exercise but rather a search for a “fair and reasonable allowance for the [trustee’s] care, pains and trouble” in the factual context of the trustee’s administration of the trust. The determination of a “fair and reasonable allowance” is guided by an analysis of the five factors set out in Toronto General Trusts v. Central Ontario Railway, and endorsed by the Court of Appeal in Laing Estate as follows: “(a) the magnitude of the trust; (b) the care and responsibility springing therefrom; (c) the time occupied in performing its duties; (d) the skill and ability displayed; (e) the success which has attended its administration.” The Court of Appeal adopted the two-step process for determination of estate trustee compensation set down by Killeen J. in Re Jeffrey Estate, wherein the judge first calculates the amount of compensation derived from the tariff guidelines, referred to as the “tariff analysis”, and then must cross-check or confirm the mathematical result against the five factors.

[62] This two-stage approach to determining trustee compensation is well-established. The Court must ultimately determine the amount of compensation that is fair and reasonable in the context of the case.

(b) The Parties’ Positions on Compensation

[63] Josef claimed trustee compensation for the Interim Accounting Period in the amount of $51,559.57 plus HST for a total of $58,386.61, all inclusive. Elena objected to the amount of compensation claimed by Josef on two grounds: first, that Josef agreed, indeed promised not to claim compensation; and second, that Josef’s conduct in the accounting has been unfair and was intended to deceive and shortchange Elena. In the alternative, Elena submitted that Josef’s compensation should be fixed at no more than $15,000.00, inclusive of HST, payable from the capital of the Estate.

(c) Analysis

[64] Elena’s submission that Josef waived any entitlement to compensation, or promised not to request compensation, hinges on two emails sent by Josef to Elena. In his email dated December 18, 2016, Josef wrote: “To be clear and upfront, executors are allowed by law to charge the estate a % fee for their services. As executor, I would waive.” On December 12, 2022, Josef wrote that “[w]hile it is my absolute right to do so, I am not planning to charge the estate for my services as trustee.” In the same email, Josef added the following qualification: “Further, if I have to deal with any legal issues, or if you attempt to subject me to further hostility, I will seek legal counsel and consider invoking my absolute right to charge the estate for my services as trustee.”

[65] Josef sent the December 18, 2016 email before the Deceased’s execution of her will. The appointment of an estate trustee, like the Deceased’s expression of her testamentary wishes, was not properly a matter of negotiation between Elena and Josef but rather a decision to be made by the Deceased. Further, Josef’s statement on December 12, 2022 that he did not plan to seek compensation was conditioned on Elena refraining from bringing litigation, and Elena did bring litigation.

[66] Elena did not establish that Josef unconditionally promised to waive compensation in a manner that was, or could have been, relied upon by Elena. Even if she had established this, Elena did not show that any such promise was supported by any consideration or even relied on by Elena. Elena did not present any authority or principle of law that would support her position that Josef should be bound to a promise to waive compensation, had I found that such a promise had been established. I do not accept that Josef is disentitled from compensation by the statements in the emails sent to Elena.

[67] Josef’s appointment as estate trustee and his entitlement to seek compensation were not subject to Elena’s consent. These determinations were made by the Deceased in her Will. Paragraph 10 of the Will provides that Josef can seek compensation. Elena did not displace this clear intention of the testator.

[68] Elena’s second objection to Josef’s claim for compensation under s. 61(1) of the Trustee Act was based on establishing that Josef committed misconduct in his management of the Estate, relying principally on the finding in Assaf Estate (Re) that “exceptional misconduct or serious misconduct will deprive the trustee of compensation altogether”. Elena did not establish exceptional or serious misconduct by Josef as necessary to deprive Josef of any compensation. Further, even in Assaf Estate (Re), where there was a finding of misconduct, the remedy applied by the court was not deprivation of compensation but rather reduction of the compensation.

[69] Josef calculated his proposed compensation by applying the tariff guideline percentage of 2.5% to each of the Capital Receipts and the Capital Disbursements. However, Josef reduced each of these categories to remove transactions on which Josef did not seek compensation, as follows:

• (a) Josef deducted $591,038.84 from the Capital Receipts, comprising the Estate Trustees Loans, the Incorrect 2017 Entries, Elena’s $90,000 Loan and Elena’s Unexplained 2020 Deposit. This produced net Capital Receipts chargeable for compensation in the amount of $1,581,135.74. Applying 2.5% to this net amount produced $39,528.39 in compensation.

• (b) Josef deducted $682,223.99 from Capital Disbursements, comprising the repayment of loans and unauthorized deposits. This produced net Capital Disbursements chargeable for compensation in the amount of $462,548.95. Applying 2.5% to this net amount produced $11,563.72 in compensation.

[70] With the non-chargeable accounting items removed by Josef, the tariff guidelines produced total compensation for adjusted Capital Receipts and Capital Disbursements of $51,092.11. To this amount, Josef claimed a management fee of $577.46, calculated in accordance with the tariff guidelines. I find that the claim for a management fee is appropriate in this case based on the rationale for a management fee as explained by the Divisional Court in Aber Estate, Re, 2015 ONSC 5123:

The fee is intended to compensate after the executor’s year where the will creates a continuing trust that requires ongoing investment and management. Alternatively, there may be justification for a fee when litigation prevents immediate distribution for an appreciable period of time and management of monies is required.

[71] I accept Josef’s submission that the administration of this Estate became subsumed in litigation that resulted in ongoing management of estate assets, supporting a management fee of $577.46. Together with Josef’s tariff analysis on the chargeable Capital Receipts and Capital Disbursements, Josef claimed total compensation of $51,669.57 plus HST.

[72] Elena accepted Josef’s reduction for non-chargeable items but claimed an additional deduction as part of the tariff analysis. Josef’s tariff analysis included the Registered Accounts, which Elena submitted should be excluded from the tariff analysis because the Registered Accounts passed outside the Estate. I accept Elena’s submission on this point. I do not condone Josef’s decision to deposit the Registered Accounts into the estate bank account, even on Elena’s consent. The Registered Accounts were not assets of the Estate because they passed outside the Estate in accordance with their beneficiary designations. The amount of compensation embedded in the tariff analysis arising from the Registered Accounts is $9,167.37, comprising 2.5% on the Capital Receipt of the Registered Accounts ($183,347.39) and 2.5% on their Capital Disbursement.

[73] With the removal of the Registered Accounts from the tariff analysis, the compensation deriving from application of the tariff guidelines to the chargeable Capital Receipts and the chargeable Capital Disbursements plus the care and management fee is $42,502.20 plus HST.

[74] Having analysed the compensation deriving from the tariff analysis, I turn to the second stage of the compensation analysis, specifically, a consideration of the five factors, to determine a compensation that is fair and reasonable for Josef’s “care, pains and trouble” and time as estate trustee.

[75] The first factor is the value of the Estate. The Estate had a gross value of $808,960.50 at the time of the Deceased’s death on December 24, 2016, according to the list of estate assets. The value of the Estate increased with the increase in value of the Annie Craig Property and, according to the accounting, resulted in a tax liability of $76,000.00. The value of this Estate calculated by the net proceeds from the sale of the Annie Craig Property ($1,096,661.81) and the Account Transfer ($82,183.14) is $1,178,844.95. In my view, the value of the Estate does not support the level of compensation sought by the Estate Trustee in the circumstances of this Estate.

[76] In considering the second factor, the care and responsibility shown by the estate trustee, Josef has attended to the administration of the estate, in terms of gathering the estate assets and addressing the estate liabilities. This is reflected as well in the third factor, the time that Josef has spent in the administration of the estate which is significant, and includes purging and cleaning the Annie Craig Property and attending to its repair after sustaining water damage; managing the Annie Craig Property for several years, including attending to its monthly expenses; preparing the Annie Craig Property for sale and attending to its sale, including instructing the real estate agent; investigating the Acapulco Condo, including through contact with agents and advisers; consolidating the bank accounts in which the Deceased had an interest; attending to the Estate liabilities, including the filing of tax returns. Moreover, Josef, as estate trustee, reported to Elena through detailed email communications and discussions for years, until their communications broke down in 2022 and then continued through lawyers. This process was lengthy, and became pointlessly difficult by Elena’s criticism and poor recall of steps that were already completed in estate administration. These factors support Josef’s claim for the level of compensation produced by the tariff analysis.

[77] The fourth factor, consideration of the skill and ability shown by the trustee, does not support the level of compensation produced by the tariff analysis because Josef took steps that needlessly complicated the estate, expanded the scope of the accounting and contributed to an increasingly strained relationship with Elena. First, there was no reason, in prudent estate administration, for Josef to bring the Registered Accounts into the Estate because the Registered Accounts passed outside the Estate. Second, Josef should not have advanced the 248 Estate Trustee Loans. The Capital Receipts Ledger shows that the last such loan was on December 28, 2022 and I would expect that there will be no further such loans in the final estate accounting. Third, it was not prudent for Josef to provide a beneficiary with signing authority on the estate banking. While I accept that this was done with the good intention of providing Elena with transparency, it enabled Elena to deposit funds into an estate bank account that were not estate funds, and to attend to withdrawal of funds from an estate bank account. Each of these steps exacerbated the time required for the estate accounting, unduly complicated the accounting and fostered misunderstanding and misperception in a tenuous family dynamic. In my view, the analysis of this fourth factor supports a reduction of 25% of the compensation sought by the Estate Trustee.

[78] Finally, in consideration of the fifth factor, success of administration, this estate administration is not yet completed. The parties agree that there are only few steps remaining, including the final distributions and the clearance certificate. The parties are encouraged to agree on the final accounting but, if not, an interim award of compensation shall constitute a credit against any claim by the Estate Trustee for further compensation.

[79] Considering my tariff analysis and my assessment of the five factors, I conclude that the fair and reasonable compensation to be paid to the Estate Trustee for services during the Interim Accounting Period is $32,000.00, which is comprised of 75% of the amount produced by the tariff analysis ($42,502.20), rounded, plus HST, for a total amount of $36,160.00. The compensation shall be paid from the capital of the Estate. This award of compensation shall constitute a credit to the Estate Trustee in the event that the Estate Trustee seeks further compensation on any further or final passing of accounts.

V. Disposition

[80] On the basis of these reasons, I order as follows:

• (a) Regarding the Application brought in court file number CV-23-00702014-00ES:

  • (i) This Application is dismissed.
  • (ii) The costs of this Application shall be determined in accordance with a process to be established.

• (b) Regarding the Application to Pass Accounts brought in court file number CV-23-00708320-00ES:

  • (i) The accounts filed by the Applicant for the accounting period from December 24, 2016 to March 21, 2023 (the “Interim Accounting Period”) are hereby passed, with the following modifications only:
    1. In the List of Original Assets as at December 24, 2016, the reference to the “Property in Acapulco, Mexico” shall be listed as an asset of the Estate with a value of $0.00;
    2. In the List of Original Assets as at December 24, 2016, the reference to the “Jewellery and Art” having a value of “TBD” shall be changed to $30,000.00.
    3. In the Statement of Liabilities as at December 24, 2016, the reference to Elena Antzon being a creditor and the following description are deleted: “Elena claims that the Deceased held $365,000.00 in trust for her following the sale of 1609-5460 Yonge Street. There is some evidence that Elena already received $252,024.76 via the Joint Scotia Momentum Savings Account ending in 9620.”
  • (ii) The capital receipts and disbursements of the Applicant for the Interim Accounting Period are $2,172,174.58 in receipts and $1,144,772.94 in disbursements for a credit balance of $1,027,401.64.
  • (iii) The estate trustee shall be paid as fair and reasonable compensation for services as estate trustee of the Estate during the Interim Accounting Period the total amount of $36,160.00, inclusive of HST, all of which shall be paid out of the capital of the Estate.
  • (iv) The accounts show that there remain in the estate trustee’s hands, as at March 31, 2023, the original assets comprised of Jewellery and art of $30,000.00 and cash closing balance of $938,366.32, which amounts shall be shown in a Schedule to the Order on Passing of Accounts.
  • (v) The costs of this Passing of Accounts Application shall be determined in accordance with a process to be established.

VI. Costs

[81] The parties are encouraged to confer and to agree on the issue of costs of the Removal Application and the Passing of Accounts Application.

[82] If the parties cannot agree on the issue of costs, any party seeking costs may, by February 24, 2025, deliver by email to my judicial assistant and to the Estates List Trial Coordinator after service and filing on Case Centre, written submissions of no more than 8 pages plus a Bill of Costs for each of the Applications for which costs are sought. Any party against whom costs is sought may, by March 10, 2025, deliver by email to my judicial assistant and to the Estates List Trial Coordinator after service and filing on Case Centre, responding costs submissions of the same length for each Application for which costs are sought. If the party claiming costs seeks to deliver submissions in reply, they may do so by March 17, 2025 and shall, by that date, confer with other counsel and deliver by email to my judicial assistant and to the Estates List Trial Coordinator a list of four dates and times on which all parties are available to appear to make oral submissions on the issue of costs.

[83] If no party delivers any written cost submissions by March 17, 2025, I will deem the issue of costs to have been settled.

Antonio A. Sanfilippo
Released: February 10, 2025

Footnotes

[1] Scotiabank cheques in the amounts of $10,403.49, $43,857.96 and $23,979.20.
[2] In an email dated February 15, 2017, Josef explained to Elena that the amount paid under the B2B RRSP was “a little less than expected”, which Josef believed to be the result of a withdrawal by the Deceased for tax purposes.
[3] Affidavit of Josef Rogofsky affirmed February 12, 2024 (“Josef’s February 2024 Affidavit”), exhibit 55.
[4] Josef’s February 2024 Affidavit, exhibit 62, email of Elena Antzon dated October 4, 2017: “Sounds like Acapulco is a total write off. … I am not interested in paying the lawyers any ‘future fees’ because I don’t think that paying them will yield a positive result for us.”
[5] Refusals and Undertakings Chart dated September 23, 2024, q. 209: “The Respondent disagrees that the Applicant loaned money to the Estate. In any event, the Respondent has transferred these funds ($90,000) to the Applicant.”
[6] Josef’s February 2024 Affidavit, exhibit 85, letter dated February 22, 2023 from Gale Law to Donovan Kochman LLP.
[7] Cross-examination of Josef Rogovsky conducted on July 16, 2024, at p. 20, q. 72: “The jewellery is in a safety deposit box in a joint account in my name and my sister’s name. She has a key. She can go attend to the jewellery anytime she wants.”
[8] Affidavit of Elena Antzon sworn September 14, 2023 (“Elena’s September 2023 Affidavit”), at para. 16: “My belief is that the value of the valuables in the safety deposit box is at a minimum, $50,000.00.”
[9] Cross-examination of Josef Rogovsky, at q. 178: “We’ve given you our position, which is we’ll get an appraisal, and we’ll get it.”
[10] Elena’s September 2023 Affidavit, at para. 15; Paragraph 2(i) of the Notice of Objection: “…I was designated as the sole beneficiary of my mother’s RSPs and RIFs.”
[11] Response to Notice of Objections to Accounts, at para. 25: “With respect to pages 55-63 of the interim accounting, the supporting documentation attached at Tab 1 shows why the Estate Trustee was loaning the Estate funds. The account where the Estate expenses were paid from [the Estate 383 Account] never carried a significant balance.”
[12] This was admitted by Josef in paragraph 19 of the Response to Notice of Objections: “Closely inspecting the bank statements attached will show that for each receipt, there is generally a corresponding disbursement on the same day, for the same amount or slightly less. The Estate Trustee was maintaining a balance in the account to pay for the ongoing expenses.”