Superior Court of Justice

Court File No.: CV-24-00005081-0000 Date: 2026-02-19

Ontario

Superior Court of Justice

BETWEEN:

CIBC TRUST CORPORATION, as Trustee of the JOHN SZEWCZYK TESTAMENTARY TRUST

Daniel J. Dochylo, for CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust

Applicant

- and -

JOHN SZEWCZYK, personally and EDWARD SZEWCZYK, as Trustee of the SZEWCZYK GRANDCHILDREN'S TRUST

Martin Zatovkanuk, for the Respondent, John Szewczyk Natalia R. Angelini, for the Respondent, Edward Szewczyk, trustee of the Szewczyk Grandchildren's Trust

Respondents

HEARD: In Writing

REASONS FOR JUDGMENT

LEMAY J

[1] Jennie Szewczyk had three sons, Edward, John and Robert. Given that they all share a last name, I will refer to them by their first names. No disrespect is intended by this. Jennie passed away in October of 2018. Jennie's will established two trusts, the John Szewczyk Testamentary Trust ("John's Trust") and the Szewczyk Grandchildren's trust ("the Grandchildren's Trust"). The residue of the estate was left to Edward and Robert through a complex trust structure.

[2] This decision addresses an issue in the ongoing litigation between John on one hand, and Edward and the Grandchildren's Trust on the other hand. The issues have been over the calculation of the annuity that John is entitled to from the funds of the John Trust. The Grandchildren's Trust has an interest in the annuities paid out by the John Trust because, when John dies, the residue of the John Trust flows to the Grandchildren's Trust or, if it the Grandchildren's Trust no longer exists, to the grandchildren themselves.

[3] CIBC was acting as the Trustee for the John Trust and, in this litigation, has generally supported the position of Edward as Trustee for the Grandchildren's Trust. The issues in this case have previously been the subject of a detailed decision in respect of the funding of John's Trust (see 2025 ONSC 3382). I repeat and rely on the facts set out in that decision.

[4] In that decision, I determined that the terms of Jennie's will permitted for the one-time indexing of John's annuity between January 1st, 2018, when the wills were executed, and October of 2018, when Jennie died. After that point, I determined that the only increases in his annuity that John was entitled to receive were $5,000.00 increases once every five years, beginning five years after Jennie's death.

[5] I directed the parties to calculate the overpayment owing by John based on my decision. I also directed that the overpayment was to be collected by deferring the next increase of $5,000.00 to a later date. Finally, the parties were advised that they were to provide written submissions if they could not agree on the calculations within thirty (30) days of the release of my reasons.

[6] Ultimately, I received submissions from John's counsel. Those submissions raised both calculation issues and the issue of whether the CPI calculation itself had been correct. That was not an issue I was expecting to have to address. As a result, I directed the other parties to provide responding submissions. I have duly received and reviewed those submissions.

[7] John's counsel argues that the CPI is miscalculated because it does not use the correct CPI chart and does not measure CPI from the correct date. The Trustee argues that the calculation is a matter that is within the discretion of the Trustee. In the alternative, the Trustee argues that the calculation has been done correctly.

[8] For the reasons that follow, I accept the Trustee's position on this matter. Therefore, I have determined that the Trustee's calculations are to be used in calculating the indexing and the overpayment.

Background Facts

[9] I should begin by setting out the materials that I have received in order to resolve these issues. As I have noted, the additional issue of how to calculate the Indexing Factor was first raised in John's submissions of July 21st, 2025. I reviewed those submissions and released an endorsement on July 28th, 2025, indicating that these were "unsolicited submissions", but directing the Respondents to respond within fourteen further days.

[10] A response was received from the Trustee of John's Trust within the timeline, which was August 11th, 2025. The Trustee of the Grandchildren's Trust indicated his agreement with these submissions.

[11] Then, on August 15th, 2025, I received an email from John's counsel stating "we note the Applicant served their overpayment submissions on August 11th, 2025, well past the July 21st, 2025 deadline". Counsel requested that I disregard these submissions. I rejected this request, as the submissions were not filed out of time.

[12] My endorsement provided that John's counsel could provide submissions within seven (7) calendar days after August 11th, 2025. I reminded John's counsel of the deadlines in response to his e-mail asserting that the Trustee's submissions were out of time. Nothing has been received and, as a result, I am basing my decision on the materials that have been provided.

[13] The underlying facts are set out in detail in my decision of June 6th, 2025, and I do not intend to repeat them here. I will simply highlight a couple of key points that will assist in understanding my disposition of this part of the matter.

[14] First, the provisions of Jennie's will specifically address the issue of the Indexing Factor. That provision is set out in paragraph 42 of the Primary Will, which is same as paragraph 43 of the secondary will. It reads as follows:

42. Indexing Factor. For any given date (hereinafter in this Paragraph 42 of this Primary Will referred to as the "Relevant Date") the "Indexing Factor" shall mean the number of dollars (expressed to the nearest one-tenth of one cent) which as at the Relevant Date shall have the same purchasing power in Canada as the sum of ONE DOLLAR ($1.00) had on January 1, 2018, provided that in no event shall the Indexing Factor be determined to be less than ONE DOLLAR ($1.00); and in so determining the Indexing Factor my Trustees shall rely, whenever possible, upon the applicable Consumer Price Index (All Items) or upon any successor index thereto, adjusted for intervening modifications; and such determination of the Indexing Factor by my Trustees shall be conclusive and binding on all the beneficiaries of my Primary Estate for all purposes of this Will.

[15] This provision governs the calculation of the Indexing Factor and is the expression of the Trustee's authority in this matter.

[16] The Trustee has chosen to use the January 2018 CPI data and to compare it to the October 2018 CPI data. The Trustee has also used the core CPI data rather than the standard CPI data to calculate the indexing factor. Counsel for the Trustee argues that the decision as to how to calculate the CPI is in the Trustee's exercise of discretion. In the alternative, the Trustee argues that they have calculated the amounts correctly.

[17] Counsel for John argues that the standard CPI should be used, that the number from December should be used and that a "flat rate subtraction approach" should be used to calculate the Indexing Factor. Counsel argues that the Court should direct the Trustees to calculate the Indexing Factor differently.

Issues

[18] Given the foregoing, the following issues are to be determined:

a) Does the Trustee have the discretion to determine the calculation of the indexing factor in this case?

b) Has the Trustee calculated the Indexing Factor correctly?

[19] I will deal with each issue in turn.

Issue #1 - The Trustee's Discretion

[20] Consideration of this issue starts with the provisions of the will itself. Paragraph 42 of the Primary Will, and 43 of the secondary will say the same thing. The provision states that the determination of the Indexing Factor will be "conclusive and binding on all of the beneficiaries.... for all purposes." This provision seems to be clear on its face, that the discretion as how precisely to calculate the CPI is left in the hands of the Trustees.

[21] In Trustees' Duties, Powers and Discretions- Exercise of Discretionary Powers, 1980 L.S.U.C Special Lectures, 13, M. Cullity notes:

The settlor or testator is relatively free to define the scope of a power as he pleases and the ability of the trustee to exercise it in a particular manner may depend not only on its terms but on the overall context provided by other provisions of the trust instrument, the purpose - often unstated or stated only in the most general terms - for which the power was conferred, the nature of the trust property and the changing circumstances of the beneficiaries.

[22] This has been the approach that the Courts in Ontario have adopted for a very long time. See, for example, Re: Rutherford, [1933] O.R. 707 (ON CA), where the Court of Appeal found that the power of a trustee to convert property "as they see fit" created a discretion as to the manner of the conversion but not as to the time of the conversion.

[23] Similarly, in this case, the trustees have been directed to use the CPI index where possible but have had the calculation otherwise left up to their discretion. The Trustee would have to exercise that discretion in good faith but there is no suggestion that there is any bad faith in respect of the Trustee's calculation. Indeed, John's counsel simply appears to be arguing that the calculation is wrong. In my view, that is not enough. In the absence of a claim of bad faith, the Trustee had the discretion to calculate this amount and exercised that discretion. That is the end of the matter.

[24] Finally, when I step back and consider the history of this family, as described in my previous decision, it only fortifies the view that the calculation of the Indexing Factor was a matter to be left to the Trustees. It is clear that Jennie anticipated the possibility of litigation and conflict with John. As a result, the conclusion that she left the matter to her Trustees to determine in their discretion fits with the underlying facts.

[25] For these reasons, I find that the Trustee had the discretion to calculate the CPI and, having exercised that discretion, it is not open to John to have the matter revisited.

Issue #2 - The Calculation

[26] Strictly speaking, it is not necessary to address this issue. However, given the contentiousness of this matter and the fact that the arguments have been made, I will briefly address all of John's arguments as to the errors in the calculation. All of these calculation errors would result in an increase in the Indexing Factor, to John's benefit.

[27] I start with John's argument that the calculation should be done on the basis of a "flat rate subtraction approach". I reject this argument for two reasons. First, it is not consistent with Jennie's will. The provision in the will speaks to purchasing power being $1.00 as of January 1st, 2018. John's submissions suggest using 131.8 from October of 2018 and 129.6 from December of 2017 to calculate the Indexing Factor. Those numbers are inflated from the original base of 100 and, if the flat rate subtraction approach is used, it would result in the purchasing power being based on $1.29 as of January 1st, 2018 instead of $1.00.

[28] Second, it is not the way that Statistics Canada suggests calculating the amount. In its publications, filed by the Trustee, Statistics Canada explains how to calculate the month over month, or one-month percent change as follows:

The one-month % change, also referred to as the month-over-month % change, is used to compare price indices in a given month to price indices in the preceding month (e.g. November compared to October).

Example: CPI one-month percentage change in February 2018 equals ((February 2018 CPI value + January 2018 CPI value) - 1) x 100 = ((132.5 + 131.7) - 1) x 100 = 0.6%).

[29] This is the method that the Trustee adopted, and not the method that is proposed by John. As a result, the Trustee's method is to be preferred as it is more in accordance with the approach adopted by the organization that prepares and presents the data.

[30] Then, there is the question of whether the data from December or January should have been used. The explanation provided by Statistics Canada and set out at paragraph 28 is quite clear that measuring the inflation increase from a month to the next month, you use the data from those two months. Jennie's will speaks to the measurement starting from January 1, 2018. As a result, the month of January is to be used. Similarly, since Jennie died in October of 2018, that is the end month for the purposes of calculating the Indexing Factor

[31] Put another way, the goal of the Indexing Factor is to ensure that the annuity that John gets when Jennie dies has the same purchasing power as $35,000 would have had on January 1st, 2018. The Trustee's calculations use the correct methodology to arrive at that number.

[32] This last observation brings me to the question of which version of the CPI should be used. It is difficult to determine which version of the CPI more accurately reflects inflation and, therefore, more accurately reflects Jennie's desire that the annuity that John gets has the same purchasing power as $35,000 on January 1st, 2018.

[33] However, I would note that the Trustee's rationale that the version that removes the eight most volatile items, as defined by the Bank of Canada, for the calculation seems to be a reasonable approach and I would not disturb it.

[34] For these reasons, even if the Trustees did not have discretion as to how to calculate the Indexing Factor in this case, they have calculated it correctly.

Conclusion and Costs

[35] For the foregoing reasons, the Trustee is entitled to an order confirming the correctness of its calculations. Those calculations shall govern, and I am not going to revisit them at this point.

[36] In terms of costs, the parties are encouraged to agree on them. Failing agreement, the following timetable will apply:

a) The Trustee's counsel shall have until March 4th, 2026, to serve, file and upload costs submissions of no more than two (2) single-spaced pages, exclusive of bills of costs, offers to settle and case-law.

b) John shall have until March 16th, 2026, to serve, file and upload costs submissions of no more than two (2) single-spaced pages, exclusive of bills of costs, offers to settle and case-law.

c) In addition to serving, filing and uploading their costs submissions, counsel is to provide a copy of the submissions to my attention through the e-mail address: SCJ.CSJ.General.Brampton@ontario.ca. The e-mail should be sent to my attention and should contain the name and file number of the case.

d) There are to be no reply submissions. If I do not receive costs submissions in accordance with these deadlines, then there will be no order as to costs. There are also to be no extensions to the deadlines for filing costs submissions, even on consent, without my leave.

[37] In providing these submissions, counsel for John should explain why the issue of the CPI factor to be used was not raised earlier in the process, given that these very clauses of the will were being adjudicated last summer.

[38] The final issue I should address is that of the stay of my order, which was raised by the Trustee for the John Trust. It appears to me that the question of whether a stay of my Order should be granted is for a different Court to determine. I make no comment on the issue beyond that observation.

LEMAY J

Released: February 19, 2026