SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Shane O’Brien, Applicant
AND:
Carole Deslippe in her capacity as Estate Trustee for the Estate of Brian O’Brien and in her personal capacity, Respondent
BEFORE: Howard J.
COUNSEL: Eric M. Katzman, for the Applicant/Moving Party
Darwin E. Harasym, for the Respondent/Responding Party
HEARD: August 29, 2024
ENDORSEMENT
Overview
1The parties here, two siblings, are engaged in contentious litigation over the estate of a deceased parent.
2The parties’ father,1 Brian Matthew O’Brien (the “Deceased”), died on March 19, 2022, at the age of 81 years.
3The Deceased’s late wife, Bernadette Lise O’Brien (“Bernadette”), predeceased him on April 25, 2016.
4The Deceased and Bernadette are survived by their two children, being the applicant Shane O’Brien (“Shane”) and the respondent Carole Deslippe (“Carole”). Shane was born July 10, 1959, is currently 66 years of age, and resides in the State of California. Carole was born September 3, 1961, is currently 64 years of age, and resides in the City of Windsor. Shane and Carole have no other siblings.
5The Deceased’s operative Last Will and Testament was executed on March 21, 2007 (the “Will”). The Will appointed Bernadette to serve as Estate Trustee in the first instance. In the alternative, in the event that Bernadette did not survive the Deceased or was unable or unwilling to act, the Will appointed Carole as Estate Trustee.
6The residue of the Estate was to be divided equally between Shane and Carole.
7Carole acts as Estate Trustee for the Deceased’s Estate under the Will.
8The litigation at bar involves no challenge to the Will.2 However, suffice it to say that a number of issues have arisen during the course of the administration of the Estate, as described below.
9One of the central issues in the litigation involves a condominium property situate at 4789 Riverside Drive East in Windsor (the “Condo Property”), legal title to which was held by the Deceased and Carole as joint tenants. Shane argues that Carole holds the property on a resulting trust for the beneficiaries of the Estate.
10The parties have agreed, inter alia, that the issue surrounding the beneficial title to the Condo Property (and another issue) shall continue to trial as an action3 (although they disagree as to which rule under the Rules of Civil Procedure4 should authorize the conversion to an action).
11The applicant now seeks to have other issues be heard at the trial of the Condo Property action. The respondent’s position is that Shane’s application is, essentially, a motion for directions under rule 75.06 and, as such, the applicant’s various claims should be subject to an evidentiary threshold requirement, which, Carole says, Shane’s claims do not meet.
12There are ancillary issues between the parties regarding the applicant’s requests for disclosure and his claims that the outstanding issues are personal to Carole and, as such, she should not be allowed to have her legal fees incurred in respect of these issues paid out of the Estate funds.
Factual Background
13Some of the details of the facts in question are set out in paras. 1-10 of the Applicant’s Factum and paras. 1-8 of the Respondent’s Factum. That said, I would highlight the following features of the factual background.
14More than five years after the Will was made in March 2007, on December 5, 2012, the Deceased opened a Registered Retirement Income Fund (RRIF) with Scotiabank. The RRIF documents list the “beneficiary” as “Carole Deslippe” and the “beneficiary role” as being “Child.”
15Prior to the passing of Bernadette, she and the Deceased resided together in a residential home on Larkin Road in Windsor. After the death of Bernadette in April 2016, the Deceased sold the Larkin Road home and decided to move into a condominium. The evidence of Carole is that she and her father discussed the matter and decided they would buy the condominium together. Carole’s evidence is that, at the time, her marriage was not going well, and she and her father decided to purchase the Condo Property together.
16The evidence of Carole is that both she and her father were listed as purchasers on the agreement of purchase and sale dated August 26, 2016. The purchase of the Condo Property closed on November 15, 2016. Carole and the Deceased took title as joint tenants.
17In terms of the financing of the purchase of the Condo Property, the evidence of Carole is that:
a. Both Carole and the Deceased applied for a mortgage from Scotiabank to finance the purchase of the Condo Property.
b. Scotiabank approved the mortgage for both Carole and the Deceased, together, in the amount of $197,600.
c. The $197,6005 was advanced by Scotiabank to Carole and the Deceased pursuant to a charge/mortgage dated November 15, 2016.
d. Upon the closing of the Condo Property, the total amount to be paid to the vendors was $250,397.18. After deducting the mortgage advanced by Scotiabank, a shortfall of $53,097.186 remained. The shortfall was paid by the Deceased.
e. The monthly mortgage payments came out of joint bank account that Carole and the Deceased opened at Scotiabank at the same time they obtained the mortgage (the “Joint Bank Account”). In Carole’s view, the purpose of the Joint Bank Account was to pay for expenses associated with the Condo Property.
18Some two years after the Condo Property was purchased, on September 25, 2018, the Deceased opened a Tax-Free Savings Account (TFSA) with Scotiabank. Like the RRIF, the TFSA lists Carole as the designated beneficiary. In the “relation to account owner” field, the Deceased entered the word “Child.”
19On September 8, 2022, Carole applied for a Certificate of Appointment of Estate Trustee with a Will in the Estate, without opposition or objection from Shane. On December 8, 2022, the certificate of appointment was issued to Carole.
20As of the date of death of the Deceased, the RRIF had a value of about $95,000 and the TFSA had a value of about $84,000.
21Shane commenced the instant application on November 16, 2023, which was amended on February 4, 2024. As described by Mr. Katzman, counsel for Shane, in oral argument, generally speaking, the application raises the following five larger issues:
a. In connection with the RRIF, has the Estate Trustee complied with her obligations under section II of the Will to “transfer such plan benefits to my issue then living”? Shane alleges that by taking the RRIF funds for herself and not disclosing the existence of the RRIF for nearly two years after the passing of the Deceased, Carole committed a breach of trust and breach of fiduciary duty.
b. Were the funds in the Joint Bank Account held on a resulting trust for the benefit of the Estate?
c. Were the funds in the TFSA held on a resulting trust?
d. Was the Condo Property held on a resulting trust?
e. Should Carole be removed as Estate Trustee for the Estate?
22Carole and Shane have agreed that the fourth and fifth issues, concerning the Condo Property and the removal of Carole as Estate Trustee, should proceed to trial as an action.
23The position of Shane on this motion is that the other three issues above, concerning the RRIF, TFSA, and Joint Bank Account, should also be heard at trial along with the issues concerning the Condo Property and the removal of the Estate Trustee.
24As referenced above, the position of Carole is that Shane’s application should be characterized as a motion for directions under rule 75.06. She maintains that the applicant’s various claims fail to meet the evidentiary threshold requirement that, she says, apply to such claims.
25In addition, Shane seeks productions of bank statements and related documents concerning the RRIF, TFSA, and Joint Bank Account.
26As well, Shane seeks an order that these issues are personal to Carole and that she should be prohibited from using Estate assets to pay any litigation fees in connection with this proceeding and should repay the Estate for any amounts expended to fund this litigation to date.
27Carole resists these latter two claims.
Issues
28In my view, given the way the parties have framed their dispute on this motion, the following issues arise for determination:
a. What is the nature of the application before the court and does the applicant have to satisfy an evidentiary threshold requirement?
b. If there is an evidentiary threshold requirement, has the applicant satisfied the threshold?
c. Should this court make an order for the requested production concerning the bank files and statements for the RRIF, TFSA, and joint account?
d. Is the respondent Estate Trustee entitled to use Estate funds to fund her position in this litigation?
Analysis
What is the nature of the application before the court and does the applicant have to satisfy an evidentiary threshold requirement?
29In support of her position that Shane’s various claims in question should be subject to a threshold requirement, Carole relies on the 2016 decision of the Ontario Court of Appeal in Neuberger Estate v. York,7 the 2017 decision of Myers J. in Seepa v. Seepa,8 and the 2022 decision of the Court of Appeal in Johnson v. Johnson.9
30In Seepa, Myers J. called for a “culture shift” in certain contentious estate proceedings, as follows:
In the estates court in Toronto motions for directions are routinely brought on consent in will challenges. The fact pattern in these cases is almost always the same. The applicant has been cut out of a will or has been gifted less than he or she believes was due. Of course, the beneficiary who obtains “more” is usually the one who cared for, or at least spent comparatively more time with the deceased. This lets the disgruntled applicant allege, virtually on that basis alone, that the caretaker beneficiary exercised undue influence to induce the deceased to make an unfair distribution of the estate.
The standard form orders for directions routinely granted on consent in these cases consign the parties to lengthy, intrusive, expensive documentary collection and investigation proceedings that can last for the better part of a year or more. The orders are all or nothing. There are few orders that seem to be tailored to the needs of the individual case. Ongoing case management is generally not provided for.
One wonders whether, in the absence of evidence supporting the causes of action and a need for such extensive processes, there is good reason to subject not just the parties but all of the beneficiaries in these cases to the cost, delay, and distress of lengthy proceedings. The disputes delay distribution of bequests to all of the beneficiaries while a disgruntled relative conducts a fishing expedition and often a deep dive through the deceased’s privileged legal files and most private, personal medical records.10
31In his subsequent 2023 decision in Giann v. Giannopoulos,11 Myers J. explained why, in a contentious estate proceeding involving a challenge to a will, there exists an initial hurdle to test an applicant’s allegations:
Estates litigation, especially this classic formulation of sibling dispute, raise slightly different issues however. The principal defendant, the person whose actions are in issue, is dead and gone. He or she cannot deliver a pleading, adduce evidence, or move for summary dismissal of the claim before being put to the expense, inconvenience, and embarrassment of disclosure. Worse still, in an estates case like this one, the thinnest of allegation by a jilted child can thwart the deceased parent’s intention and deprive deserving siblings of their just due. Simply by making an untested, or even a malicious allegation, a resentful child can embroil an estate and siblings in years of ruinously expensive litigation.
The common law and the Rules of Civil Procedure have responded to guard against the threat of abuse caused by the absence of the deceased. In cases such as this, an initial hurdle is perfected to test an applicant’s allegations before risking allowing him or her to use the cost and delay of the civil litigation process to punish the rest of the family. It is not a high hurdle. It can be readily surmounted with evidence adduced by the applicant to show that there is a real basis for the claim or, in legal terms, that there is some prima facie merit to the allegations made.12
32Our Court of Appeal has held that in order to avoid exposing estates to needless expense and litigation, “some minimal evidentiary threshold” must be met “before a court will accede to a request that a testamentary instrument be proved.”13 The Court of Appeal has said that the correct approach that a court should follow is as follows:
[A]n applicant or moving party under rule 75.06 must adduce, or point to, some evidence which, if accepted, would call into question the validity of the testamentary instrument that is being propounded. If the applicant or moving party fails in that regard or if the propounder of the testamentary instrument successfully answers the challenge, then the application or motion should be dismissed. If, on the other hand, the applicant or moving party adduces or points to evidence that calls into question the validity of the testamentary instrument which the propounder does not successfully answer, the court would generally order that the testamentary instrument be proved.14
33But all of that having been said, it does not assist the respondent here, and I reject Carole’s fundamental position on the motion before me for two reasons.
34First, as is made expressly clear by the passage quoted above from the Court of Appeal in Johnson and Neuberger, the threshold applies to an “applicant or moving party under rule 75.06” – i.e., an application or motion for directions. Shane acknowledges that a motion for directions under rule 75.06 attracts a threshold requirement.15
35But Shane has not brought a motion for directions under rule 75.06; he has brought an application under rule 14.05. The originating process for the commencement of an application is a notice of application (here, by Form 14E). That is what is before me.
36Subrule 14.05(3) provides that:
(3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,
(a) the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust;
(b) an order directing executors, administrators or trustees to do or abstain from doing any particular act in respect of an estate or trust for which they are responsible;
(c) the removal or replacement of one or more executors, administrators or trustees, or the fixing of their compensation;
(d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument, or on the interpretation of a statute, order in council, regulation or municipal by-law or resolution;
(e) the declaration of an interest in or charge on land, including the nature and extent of the interest or charge or the boundaries of the land, or the settling of the priority of interests or charges;
(f) the approval of an arrangement or compromise or the approval of a purchase, sale, mortgage, lease or variation of trust;
(g) an injunction, mandatory order or declaration or the appointment of a receiver or other consequential relief when ancillary to relief claimed in a proceeding properly commenced by a notice of application;
(g.1) for a remedy under the Canadian Charter of Rights and Freedoms; or
(h) in respect of any matter where it is unlikely that there will be any material facts in dispute requiring a trial. [Emphasis added.]
37I agree with Mr. Katzman that the relief sought by the applicant on his application falls within the parameters of subrule 14.05(3), particularly clauses (b) through (e).
38I appreciate that some of the relief sought by the applicant here in his rule 14.05 application might also be available through a motion for directions under rule 75.06. But that does not change a rule 14.05 application into a rule 75.06 motion for directions.
39I also appreciate, as Mr. Harasym, counsel for Carole, emphasized in his submissions, that Shane’s notice of application (or amended notice of application) actually cites rule 75.06 as one of the grounds for the application, in para. 2(j) of the notice.16 That is true. But the paragraph lists four different provisions of the Rules of Civil Procedure, and, indeed, the very first rule it cites as grounds for the application is rule 14.05. In any event, while reference to the specific statutory and regulatory provisions in the notice of application is required, informative, and often of great assistance, it is not determinative of the nature of the proceeding at hand.
40In the same vein, I recognize that in para. 1(v) of Shane’s amended notice of application, he asks for an order “that the parties be granted leave to move for further directions as may appear advisable or necessary.”17 However, I respectfully disagree with Mr. Harasym’s submission that the reference to “further directions” must mean that this rule 14.05 application is actually a rule 75.06 motion for directions. I note that subpara. (v) is but one of 27 claims for relief set out in para. 1 of the amended notice of application.
41Moreover, I agree with Mr. Katzman that rule 75.06 has no monopoly over the use of the term “directions.” The term “directions” appears in the text of the Rules of Civil Procedure at least 118 times.18
42Importantly for present purposes, I note the term appears three times in rule 38.10 – which deals with the disposition of applications and upon which Shane relies as authority to have the Condo Property and other claims proceed as an action – as follows:
(1) On the hearing of an application the presiding judge may,
(a) grant the relief sought or dismiss or adjourn the application, in whole or in part and with or without terms; or
(b) order that the whole application or any issue proceed to trial and give such directions as are just.
(2) Where a trial of the whole application is directed, the proceeding shall thereafter be treated as an action, subject to the directions in the order directing the trial.
(3) Where a trial of an issue in the application is directed, the order directing the trial may provide that the proceeding be treated as an action in respect of the issue to be tried, subject to any directions in the order, and shall provide that the application be adjourned to be disposed of by the trial judge. [Emphasis added.]
43Accordingly, in my view, the argument that Shane’s application is, essentially, a motion for directions under rule 75.06 must fail. Here, the applicant has brought a rule 14.05 application, which does not attract “any minimal evidentiary threshold requirement.”19
44The second reason that I reject Carole’s argument that Shane’s various claims in question should be subject to a “threshold” requirement is because those claims do not include a challenge to the Will.
45The line of cases upon which Carole relies for establishing a threshold – the decisions in Neuberger, Seepa, and Johnson – were all cases involving will challenges.20 The applicant here does not challenge the validity of the Will. He relies on it. He is a beneficiary under the Will. Moreover, he does not dispute that there is a threshold to meet in cases involving will challenges,21 but his point is that no such challenge is made in the instant case.
46In both his argument in the Applicant’s Reply Factum and his oral submissions at the hearing before me, Mr. Katzman invited (if not challenged) Mr. Harasym to provide some authority for the proposition that a threshold applies to rule 14.05 applications in contentious estate proceedings not involving will challenges. For example, Mr. Katzman submitted that:
The Respondent fails to address, or even argue against, the fact that Rule 14 relief requires no threshold to meet. The Respondent argues that the Court has a gatekeeping function, but that is only with respect to Rule 75.06 relief. There is no gatekeeping function for the Court here given that all the relief requested by the Application can be dealt with by Rule 14. None of the caselaw with respect to Rule 75 hearings applies here and none of the Respondent’s precedent applying a threshold deals with applications to remove an estate trustee or breach of trust and resulting trust relief. The Respondent would have every matter dealing with an estate attract a threshold hearing when the rule only applies to challenges to the validity of a will.
… Certainly, if a threshold applied to all forms of estate litigation, that would have been made clear in at least one of these decisions offered by the Respondent.
… It is telling that the Respondent is unable to provide a single case in which a threshold was applied to a breach of trust or resulting trust argument and asks the Court to be the first, seemingly by analogy, even though Kasanda v. Sartarelli makes it clear that a threshold only applies to will challenges and other revocations of certificates of appointment in very limited situations like error or fraud. …
In sum, the Respondent seeks to refute the Applicant’s argument that a threshold only applies to will challenges with limited excerpts of text from three will challenge cases. This only evidences the Applicant’s position that a threshold is isolated to will challenges, and the Applicant does not challenge the validity of the Will. The Court has no precedent or statutory authority to impose a threshold for resulting trust, breach of fiduciary duty, breach of trust, or executor removal matters.
47I think it is fair to say that Mr. Harasym did not take up the challenge. The court was provided with no judicial precedent or statutory authority for the specific proposition advanced on behalf of the respondent, and the cases relied upon by the respondent – all cases involving will challenges – are distinguishable from the case here.
48To my mind, another distinguishing feature of the instant case arises from the fact that this is a case where the parties have already agreed that two significant issues should proceed to trial as an action. Going back to the expressed rationale for imposing the threshold in contentious estate proceedings involving will challenges and the like, one of the reasons why the courts hoped for a “culture change” was to avoid subjecting “not just the parties but all of the beneficiaries in these cases to the cost, delay, and distress of lengthy proceedings.”22
49I simply note that, in the present case, the parties have already agreed to have a trial with respect to certain issues. That is, the reality is that they have already agreed to face the cost, delay, and distress of trial proceedings. In my view, that distinguishing feature of the instant case serves to blunt the force of the rationale underlying the respondent’s line of cases.
50In the result, there shall be an order directing the other claims in question to proceed to trial along with the issues involving the Condo Property and the removal of the Estate Trustee. It is more appropriate that such order be made pursuant to subrule 38.10(2) of the Rules of Civil Procedure, as referenced above, given that the motion before me is not a motion for directions under rule 75.06.
51To be clear, my conclusion on the first issue – that the applicant’s claims are not subject to “some minimal evidentiary threshold” – is not the same thing as saying that there is no merit in the arguments advanced by Mr. Harasym on behalf of the respondent. On the contrary, in my view, there is merit in the respondent’s arguments. Indeed, the position of the respondent on, say, the applicant’s claims regarding the TFSA may well prevail at trial. Both parties have presented arguable positions. And neither party has advanced a summary judgment motion. In my view, the parties’ respective positions should be determined on their merits.
52As Myers J. succinctly stated in Seepa, at this preliminary stage, “the issue is not whether the applicant has proven his or her case but whether he or she ought to be given tools, such as documentary discovery, that are ordinarily available to a litigant before he or she is subjected to a requirement to put a best foot forward on the merits.”23
If there is an evidentiary threshold requirement, has the applicant satisfied the threshold?
53Given my conclusion on the first issue, it is unnecessary to determine this second issue.
Should this court make an order for the requested production concerning the bank files and statements for the RRIF, TFSA, and joint account?
54In the context of the first issue above, Mr. Katzman argued that the applicant’s various claims should be subject to the trial process. I have concluded on the first issue that the applicant’s argument should prevail. In my view, it should follow that the applicant’s discovery requests should be subject to the same trial process.
55In other words, I agree with Mr. Harasym that it is premature for the court to make any rulings regarding documentary productions before the scope of the proceedings have been defined.
56I note and agree with the gist of Mr. Harasym’s argument on behalf of the respondent, as follows:
Many of the documents that Shane is demanding have already been disclosed if [sic, in?] the affidavits filed by Carole in response to Shane’s Application/Motion. If this Court allows certain issues to proceed, then of course productions will follow as they do in any action. Carole has never disputed that. However, given that the main purpose of the Court’s gate-keeping function is to ensure that estates are not put through any unnecessary burdens, it is premature for this Court to make any rulings regarding documentary productions before the scope of the proceedings have been defined.
For any of the issues that this Court allows to proceed, Shane should be directed to file and serve a Statement of Claim pursuant to subparagraph (e) of Rule 75.06. Following the filing of the Statement of Claim, the normal course of the proceeding will take place, including pleadings, production of relevant documents, discoveries, mandatory mediation, etc. Carole submits that the lawyers will be able to work out timetable, and if needed, a discovery plan that sets out the scope of productions.24
Is the respondent Estate Trustee entitled to use Estate funds to fund her position in this litigation?
57The applicant argues that the respondent Estate Trustee should be prohibited from funding her litigation costs incurred in connection with this proceeding from the Estate. Shane also seeks an order that Carole repay the Estate any funds used in connection with the litigation within 30 days.
58Estate trustees are entitled to be indemnified for expenses reasonably incurred in connection with the administration of the estate.25
59In Geffen v. Goodman Estate,26 the Supreme Court of Canada established that the entitlement to indemnification encompasses litigation expenses. This right extended even when the estate trustee, who was also a beneficiary, pursued personal interests alongside those of the trust:
Nor can there be any serious question that the appellants in defending the action were acting, not for their own benefit, but for the good of the trust. For William Geffen, of course, defending the action promoted both his personal interest as well as that of his fellow beneficiaries. While we have not been referred to a case in which trustees seeking indemnification from a trust were also beneficiaries of the trust, I do not consider the co-existing interest of trustee and beneficiary a valid basis for denying costs. Similarly, the fact that the Geffen brothers were acting in the interests of their children, nephews and nieces does not, in my view, cast any doubt upon the propriety of their actions.27
60In Furtney Estate v. Furtney, Mitrow J. of this court held that an estate trustee does not require the consent of the beneficiaries or a court order prior to having litigation expenses, reasonably incurred by the estate trustee, paid from estate funds.28
61However, Shane argues that the respondent’s authorities do not assist Carole here because, he says, in taking the position that, for example, because the Deceased made Carole the designated beneficiary under the RRIF and TFSA, the funds in those plans do not form part of the Estate, Carole is acting solely in her own personal interests. “She wants to exclude assets from the Estate and its beneficiaries and keep them for herself.”29
62Shane argues that Carole is acting in her own self-interest; he points to the following passage in the decision of the Ontario Divisional Court in Pletch v. Pletch Estate,30 a case relied upon by the respondent, which he says supports his position:
In Brown v. Rigsby, 2016 ONCA 521, 350 O.A.C. 236, at para. 12, the Ontario Court of Appeal reaffirmed the general rule that estate trustees are entitled to be “fully indemnified” by the estate for their reasonable costs incurred, to the extent they are not recovered from another person or party. Referring to Geffen , as well as Sawdon Estate and Neuberger Estate as authorities, Pepall J.A., at para. 14, summarized the principles that apply to an estate trustee’s ability to recover legal costs from an estate as follows:
a. an estate trustee is entitled to indemnification from the estate for all reasonably incurred legal costs;
b. if an estate trustee acts unreasonably or in his or her own self-interest, he or she is not entitled to indemnification from the estate; and
c. if an estate trustee recovers a portion of his or her costs from another person or party, he or she is entitled to indemnification from the estate for the remaining reasonably incurred costs.31 [Shane’s emphasis.]
63On the other hand, Shane’s claims concerning, for example, Carole’s retention of the funds in the RRIF and TFSA and his allegations of breach of trust, etc., depend, in part, on “a determination of his rights under the Will.”32 They depend, in part, on an interpretation of the Estate Trustee’s obligation under section II of the Will to “transfer such plan benefits to my issue then living.” Our Court of Appeal has held that one of the relevant public policy considerations that may dictate that the costs incurred by an estate trustee should be paid out of the assets of the estate include “where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator.”33
64It remains to be seen whether the trial judge will determine whether the Deceased, having made a Will in 2007 in which section II seemingly directs his Estate Trustee to “transfer such [RRIF] plan benefits to my issue then living” but then, five years later, having specifically designated Carole as his beneficiary as his “Child” under his RRIF in 2012, might be considered to be a testator who, in whole or in part, is responsible for the difficulties or ambiguities that give rise to the litigation here.
65As well, it remains to be seen whether the trial judge will conclude that Carole acted unreasonably in the performance of her duties as Estate Trustee – which is a significant finding in the context of an estate trustee’s ability to recover legal costs from an estate.
66For these and other reasons, I agree with the gist of the submission of Mr. Harasym that, at this preliminary juncture, it is premature to attempt to assess whether Carole has acted unreasonably, whether some of the difficulties here arise because of ambiguities in the Will, etc., and, ultimately, whether the Estate Trustee should be prohibited from funding her litigation costs incurred in connection with this proceeding from the Estate.
67There will be time enough for those determinations. In this regard, it is important to note the provisions of s. 23.1 of the Trustee Act,34 which section, generally speaking, codifies the estate trustee’s right of indemnification, as follows:
(1) A trustee who is of the opinion that an expense would be properly incurred in carrying out the trust may,
(a) pay the expense directly from the trust property; or
(b) pay the expense personally and recover a corresponding amount from the trust property.
(2) The Superior Court of Justice may afterwards disallow the payment or recovery if it is of the opinion that the expense was not properly incurred in carrying out the trust. [Emphasis added.]
68In my view, the trial judge will be in the best, most informed position to make the requisite determinations necessary to determine the issue of the entitlement of the Estate Trustee to fund the litigation costs from the assets of the Estate, based on a fully developed record.
69As well, the trial judge will be able to determine whether the costs issue is better decided as part of the costs of the trial and/or on a passing of accounts.
70In the result, Shane’s request for an order prohibiting the Estate Trustee from using Estate assets to pay any litigation fees in connection with this proceeding and for an order compelling the Estate Trustee to repay the Estate for any such litigations fees paid to date is dismissed, without prejudice to the right of the applicant to renew such requests at trial.
Conclusion
71For all of these reasons, there shall be an order that:
a. Pursuant to subrule 38.10(2) of the Rules of Civil Procedure, this matter shall be treated as an action and proceed to trial on the following issues:
i. Whether the condominium property municipally known as 606-4789 Riverside Drive East, Windsor, Ontario, forms part of the Estate of the Deceased;
ii. Whether the Deceased’s RRIF, TFSA, and Joint Bank Account (as defined above) form part of the Estate of the Deceased;
iii. Whether the respondent Carole Deslippe should be removed as Estate Trustee for the Estate of the Deceased; and
iv. Any other issues ancillary to the above.
b. For the purposes of the said action, the applicant, Shane O’Brien, shall be the plaintiff, and the respondent, Carole Deslippe in her capacity as Estate Trustee for the Estate of Brian O’Brien and in her personal capacity, shall be the defendant.
c. The plaintiff shall deliver his statement of claim on or before 30 days following the date this order is issued and entered.
d. The defendant shall deliver her statement of defence on or before 60 days following the date this order is issued and entered.
e. Each party shall serve their affidavit of documents on or before 90 days following the date this order is issued and entered.
f. Examination for discovery shall be conducted on or before 120 days following the date this order is issued and entered.
g. The mediation shall be completed on or before 160 days following the date this order is issued and entered.
h. The action shall be set down on or before a date to be agreed upon by the parties, subject to further order of the court.
i. If any issue regarding the litigation timetable should arise, either party shall be at liberty to request a case conference before Regional Senior Justice Howard, or his designate, to be arranged through the Trial Coordination Office in Windsor.
j. Either party may move for such further and other directions as are advisable, if necessary.
k. The applicant’s claim for a production order as set out in para. 46(b) of the Applicant’s Factum is dismissed, without prejudice to the right of the applicant to renew such request, if necessary, in the context of the discovery process.
l. The applicant’s claim for a prohibition order as set out in para. 3 of the applicant’s amended notice of motion dated June 14, 2024 [Case Center A490] and para. 46(c) of the Applicant’s Factum is dismissed, without prejudice to the right of the applicant to renew such requests at trial.
72In terms of the costs of the special appointment motion before me, success on the motion was certainly divided. The applicant was clearly successful on the threshold issue. But the respondent was successful on the much-pressed issue regarding costs from the Estate.
73In the circumstances, I am of the view that the most appropriate order here is an order for costs in the cause. Whichever party is ultimately successful at trial shall have their costs of this motion.
74If the parties are unable to resolve the quantum payable for the motion, that amount shall be fixed by the trial judge, noting that argument of the special appointment motion before me began just after 10:00 a.m. and concluded at 12:30 p.m.
75As such, there shall be a further provision in the order that:
m. the costs of this motion shall be in the cause, in an amount reserved to the trial judge.
“Justice J. Paul R. Howard”
J. Paul R. Howard
Justice
Date: January 5, 2026
Footnotes
- I have read, inter alia, the affidavit of the parties’ paternal aunt and am aware that the applicant is not the biological son of the Deceased: see Responding Party’s Motion Record dated June 20, 2024 [Respondent’s Record], Tab 5, Affidavit of Eileen King sworn April 26, 2024, at paras. 5-6 [Case Center B-1-466]. However, that biological fact is completely immaterial for present purposes. It is common ground that the Deceased raised the applicant as his own son, and the respondent herself regards the applicant as “our Father’s son” (see Respondent’s Record, Tab 3, Affidavit of Carol Deslippe sworn February 2, 2024 [“Carol’s Affidavit”], at para. 30 [Case Center B-1-390].
- See Factum of the Applicant/Moving Party dated July 9, 2024 [“Applicant’s Factum”], at para. 8: “The validity of the Will is not in question.”
- See Factum of the Responding Party/Respondent dated July 29, 2024 [“Respondent’s Factum”], at para. 7: “Carole is not disputing that the Condo Property issue can proceed to trial.” See also para. 18.
- Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
- While the evidence of Carole is that Scotiabank advanced $197,600 (see Carol’s Affidavit, at para. 14 [Case Center B-1-386], the statement of adjustments or “Statement of Monies Required” attached as Exhibit “B” to Carol’s Affidavit indicates that the amount received from “The Bank of Nova Scotia” was “$197,300” [Case Center B-1-400].
- The amount of $53,097.18 appears on the statement of adjustments [Case Center B-1-400]. The mathematics reflected in the statement of adjustments is accurate: $250,397.18 – $197,300 = $53,097.18. The mathematics reflected in para. 14 of Carole’s Affidavit is incorrect: $250,397.18 – $197,600 = $52,797.18.
- Neuberger Estate v. York, 2016 ONCA 191, 129 O.R. (3d) 721, 16 E.T.R. (4th) 1 [Neuberger].
- Seepa v. Seepa, 2017 ONSC 5368 (S.C.J.) [Seepa].
- Johnson v. Johnson, 2022 ONCA 682, 81 E.T.R. (4th) 7 [Johnson].
- Seepa, at paras. 1-3.
- Giann v. Giannopoulos, 2023 ONSC 5412 (S.C.J.) [Giann].
- Ibid., at paras. 13-14. Note that para. 15 of Respondent’s Factum is in error. Paragraph 15 of the Respondent’s Factum quotes the passages set out above and attributes them to the Court of Appeal’s decision in Johnson, at paras. 12-14. But the passages quoted in para. 15 of the Respondent’s Factum do not come from the Court of Appeal in Johnson; they come from the decision of Myers J. in Giann, at paras. 12-14.
- Johnson, at para. 7, quoting Neuberger, at para. 88.
- Johnson, at para. 8, quoting Neuberger, at para. 89.
- See Applicant’s Factum, at para. 12.
- See Respondent’s Record, Tab 1, Amended Notice of Application, issued November 16, 2023, amended February 5, 2024, at para. 2(j) [Case Center B-1-375].
- Ibid., at para. 1(v) [Case Center B-1-372].
- Mr. Katzman submits the term appears 146 times. On my count, excluding references in titles and subtitles, I count 118.
- Kasanda v. Sartarelli, 2022 ONSC 185, 74 E.T.R. (4th) 67 (S.C.J.), at paras. 33-34.
- That point was ably demonstrated in paras. 6-11 of the Reply Factum of the Applicant/Moving Party dated August 6, 2024 (“Applicant’s Reply Factum”) and pressed in oral argument by Mr. Katzman.
- See Applicant’s Factum, at para. 12, and Applicant’s Reply Factum, at paras. 6 and 8.
- Seepa, at para. 3.
- Seepa, at para. 35, quoted with approval in Johnson, at para. 17.
- Respondent’s Factum, at paras. 38-39.
- Thompson v. Lamport, 1945 2 (SCC), [1945] S.C.R. 343, [1945] 2 D.L.R. 545, at p. 356 [cited to SCR].
- Geffen v. Goodman Estate, 1991 69 (SCC), [1991] 2 S.C.R. 353, 81 D.L.R. (4th) 211, 42 E.T.R. 97.
- Ibid., at p. 391 [cited to SCR].
- Furtney Estate v. Furtney, 2014 ONSC 3774, 100 E.T.R. (3d) 312 (S.C.J.), at para. 44.
- Applicant’s Reply Factum, at para. 2.
- Pletch v. Pletch Estate, 2024 ONSC 1411, 92 E.T.R. (4th) 328 (Div. Ct.).
- Ibid., at para. 32.
- Applicant’s Reply Factum, at para. 7.
- Neuberger, at para. 24.
- Trustee Act, R.S.O. 1990, c. T.23