Lopushinsky Estate, Re, 2015 ABQB 63

• Judge: Acton, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 27, 2015
• Citations: 2015 ABQB 63;(2015), 610 A.R. 26 (QB)

Lopushinsky Estate, Re (2015), 610 A.R. 26 (QB)

MLB headnote and full text

Temp. Cite: [2015] A.R. TBEd. FE.021

Estate Name: Dan Lopushinsky also known as Dan T. Lopushinsky and Daniel Theodore Lopushinsky

Barbara Holowaychuk (applicant) v. Julian Lopushinsky (respondent)

(ES03 126831; 2015 ABQB 63)

Indexed As: Lopushinsky Estate, Re

Alberta Court of Queen's Bench

Judicial District of Edmonton

Acton, J.

January 27, 2015.

Summary:

The applicant trustee and executor applied to pass the accounts of her late father's farm estate (some $1 million). She sought compensation as executor for the accounting period ($65,000, all-inclusive), and costs of the application. The father had died in 2007, at the age of 98. The application was supported by three of the applicant's siblings but opposed by the respondent, her brother Julian. The alleged misappropriation of $40,000 worth of canola was the largest issue in dispute. Other issues were the delay in passing accounts, the reasonableness of the exercise of the executor's discretion in dealing with estate assets, and the appropriate compensation. There was contradictory evidence in the affidavits and thus an oral hearing was required to deal with the credibility issues.

The Alberta Court of Queen's Bench declared that the applicant had fully and satisfactorily accounted, and that the remuneration claimed was appropriate. The respondent's demands and actions delayed the matter unnecessarily. The respondent had in his possession all of the documentation necessary to demonstrate that the canola had indeed been accounted for. Exercising the discretion granted in s. 41 of the Trustee Act, the Court excused the applicant from personal liability arising from the minor breaches of trust during the administration of the estate, with the exception of the satellite TV subscription (not a reasonable expense). The respondent's allegations were designed to intimidate and persecute the applicant. Costs on a solicitor and own client (full indemnity basis) were appropriate as against the respondent personally.

Executors and Administrators - Topic 2800

Duties and powers of executors and administrators - Payment of debts (incl. funeral expenses) - General principles - [See first Executors and Administrators - Topic 6210 ].

Executors and Administrators - Topic 5541

Actions by and against representatives - Costs - General - The Alberta Court of Queen's Bench reviewed the law on costs in estate litigation, including the "traditional" approach and the "modern" approach, and the types of costs available - See paragraphs 218 to 226.

Executors and Administrators - Topic 6204

Accounts and passing of accounts - General principles - Court approval of accounts (incl. effect of) - [See Trusts - Topic 6148 ].

Executors and Administrators - Topic 6206

Accounts and passing of accounts - General principles - Time for - The applicant executor applied to pass the accounts of her late father's farm estate (some $1 million) - The application was opposed by the respondent, her brother Julian - Their father had died in 2007, at the age of 98 - The respondent had brought litigation against the estate as early as 2008 - The Alberta Court of Queen's Bench found that the applicant was not at fault for the delay in passing accounts - The respondent's demands and actions delayed the matter unnecessarily for years - He had appropriated a spiteful attitude towards his sister and took every opportunity to find fault - The applicant had relied on a senior lawyer whose practice was restricted to estate work - She had retained experts to guide her - The partial clearance certificate from the Canada Revenue Agency took almost 18 months - By October 2010, the applicant was able to distribute the lands and chattels - All that remained in the estate was cash being held for distribution pending resolution of the dispute with the respondent - The other beneficiaries were satisfied to have a final distribution in 2010 and signed releases at that time - By the end of 2010, the applicant had put forward at least three settlement proposals - The respondent's own actions made the administration of the estate much more difficult - See paragraphs 147 to 154.

Executors and Administrators - Topic 6210

Accounts and passing of accounts - General principles - Estate expenses - What constitutes - The applicant executor applied to pass the accounts of her late father's farm estate (some $1 million) - The application was opposed by the respondent, her brother Julian - One of the major matters the respondent took issue with was the expenses associated with the funeral, grave marker, one-year memorial service, and obituaries - Much cross-examination went into whether or not he was consulted or whether he had consented to the expenses incurred - The Alberta Court of Queen's Bench, in allowing the expenses, stated that "[t]he law does not require that [the respondent] consent. It only requires that the expenses be reasonable having regard to the deceased's station in life and other circumstances, including cultural and religious beliefs, traditions and practices ... . It goes without saying that what may be reasonable in one situation may be unreasonable in another." - See paragraph 136.

Executors and Administrators - Topic 6210

Accounts and passing of accounts - General principles - Estate expenses - What constitutes - The applicant, executor of her late father's estate, applied to pass the accounts of the just over one million dollar estate - The application was opposed by the respondent, her brother Julian - Their father, a well-respected farmer in the community, died in 2007, at the age of 98 - The respondent took issue with the expenses associated with the funeral, grave marker, one-year memorial service, and obituaries, totalling $26,086 - The Alberta Court of Queen's Bench found that the father, who had spent over $22,000 to bury his wife two years earlier, was entitled to a similar or even greater celebration of his life in the community - The father was a patriarch who had lived almost a century in the community and had left a significant mark - "To spend this man's money celebrating this same man's long life was a reasonable expense." - See paragraphs 139 to 145.

Executors and Administrators - Topic 6305

Accounts and passing of accounts - Practice - Procedure - The Alberta Court of Queen's Bench, in the course of reviewing the law on costs in estate litigation, stated that "I am mindful of the principles enunciated in the Foundational Rules of the Alberta Rules of Court. They remind us of the importance of resolving matters fairly and justly in a timely and cost effective way, identifying the real issues in dispute, facilitating the quickest means of resolving a claim at the least expense, etc. While the procedure of this application to pass accounts is governed primarily by the Surrogate Rules, the fact that rule 2 of those Rules makes specific reference to the Alberta Rules of Court leads me to conclude that such foundational principles are likewise intended to undergird applications brought under the Surrogate Rules." - See paragraphs 223 and 224.

Executors and Administrators - Topic 6346

Accounts and passing of accounts - Costs - Where executor's remuneration in issue - [See Practice - Topic 7456 ].

Executors and Administrators - Topic 7251

Compensation - Amount of compensation - Relevant considerations in fixing amount - [See Executors and Administrators - Topic 7260 ].

Executors and Administrators - Topic 7260

Compensation - Amount of compensation - Fair and reasonable allowance - The applicant, executor of her late father's estate, applied to pass the accounts of the just over one million dollar estate - She asked for an all-inclusive fee of $65,000 - The respondent, her brother Julian, complained that the remuneration claimed was excessive - The Alberta Court of Queen's Bench held that the fee was appropriate - The range for compensation for the estate was $26,975 to $61,345, pursuant to the Suggested Fee Guidelines ("Alberta Estate Administration") - The Court also considered the Surrogate Rules (Schedule 1, Part 1, ss. 2 and 3) - This was a complicated estate: it was a farm estate; the farming was intertwined between the deceased and some of his children; parcels of land were rented to others who cropped those lands; a valuation of the equipment was a major challenge; and the estate included pipeline easements, monies, and shares - The respondent's opposition and the accompanying allegations were designed to intimidate and persecute the applicant - Four years ago, the applicant's other three siblings had agreed to the applicant receiving compensation of $55,190 - The applicant had done "her very best to resolve her father's estate and would have done so years ago but for Julian's relentless persecution" - The original proposal, made four years ago, while reasonable at the time, was low considering all the necessary work that had transpired since that time - See paragraphs 183 to 202.

Practice - Topic 7032.1

Costs - Party and party costs - Entitlement to - Estate matters - [See Executors and Administrators - Topic 5541 ].

Practice - Topic 7455

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Estates and estate matters - [See Executors and Administrators - Topic 5541 ].

Practice - Topic 7456

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Executors and administrators - The applicant, executor of her late father's estate, applied to pass the accounts of the just over one million dollar estate - The application was opposed by the respondent, her brother Julian - The applicant's remuneration was in issue - The Alberta Court of Queen's Bench held that in the circumstances and particularly in light of the respondent's conduct, costs on a solicitor and own client, full indemnity basis, were appropriate as against the respondent personally - "[T]he process has been entirely disproportionate to the nature of the dispute and the interests of the parties involved. ... [T]his application has become a vehicle in which Julian has chosen his 'weapon' of choice to strike back at his sister for things she did to hurt him in the past and during the administration of their father's estate. ... [T]he court system is not the appropriate place for such revenge. The Court must take this into consideration as it assesses the issues before it on the matter of costs." - The respondent produced records at the hearing that effectively determined one of the major issues that he himself had raised - The only issues would have been the reasonableness of the exercise of the executor's discretion in dealing with estate assets and the appropriate compensation - The applicant had diligently administered the estate in the face of much opposition from the respondent - "There are times when certain conduct in litigation needs to be discouraged ... . This is one of those times." - See paragraphs 227 to 232.

Trusts - Topic 6148

The trustee - Breach of trust - Statutory immunity - For reasonable and honest acts - The applicant, executor of her late father's estate, applied to pass the accounts of the just over one million dollar estate - The Alberta Court of Queen's Bench, exercising the discretion granted in s. 41 of the Trustee Act, excused the applicant trustee and executor from personal liability arising from all breaches of trust during the administration of her father's estate, with the exception of the satellite TV subscription - While she was not dishonest in paying for that service, it was not a reasonable expense - Accordingly, such sum was deducted from her compensation - All of the other actions undertaken by her in administering her father's estate, including the breaches described (gave away $8 worth of straw bales; expended $81 and $9 for insurance premiums) were done honestly and reasonably - Her use of estate assets demonstrated that she exercised ordinary care and prudence - The impact of the breaches of trust on the overall value of the estate was trivial - "I do not wish to imply that I condone even the smallest breaches of trust. However, by including s. 41 in the Trustee Act, the legislature has clearly recognized that, trustees and executors, particularly lay persons, on occasion may do things that while not legally correct are done honestly and reasonably. There are strong public policy reasons for this." - See paragraphs 162 to 164.

Cases Noticed:

Charles Estate, Re (2014), 577 A.R. 54; 613 W.A.C. 54; 2014 ABCA 200, refd to. [para. 5].

Charles v. Young - see Charles Estate, Re.

Windsor v. Canadian Pacific Railway Ltd. (2014), 572 A.R. 317; 609 W.A.C. 317; 2014 ABCA 108, refd to. [para. 6].

Canalta Concrete Contractors v. Camrose (1985), 38 Alta. L.R.(2d) 153; 1985 CarswellAlta 95 (Q.B. Master), refd to. [para. 54].

Deschenes v. Tramor Properties Ltd., 1986 CarswellAlta 832 (Q.B. Master), refd to. [para. 54].

Laboucane Estate, Re, [2011] A.R. Uned. 334; 2011 ABQB 253, refd to. [paras. 113, 222].

Tatum v. Tatum - see Laboucane Estate, Re.

Sowa Estate, Re, [2003] A.R. Uned. 538; 2003 ABQB 761, refd to. [para. 122].

Chernichan v. Chernichan Estate (2001), 301 A.R. 212; 2001 ABQB 913, refd to. [para. 136].

Taubner Estate, Re (2010), 485 A.R. 98; 2010 ABQB 60, refd to. [para. 159].

MacDonald v. Taubner - see Taubner Estate, Re.

Bibby Estate, Re, [2009] A.R. Uned. 198; 2009 ABQB 321, refd to. [para. 159].

Borisenko Estate, Re, [2013] A.R. Uned. 308; 2013 ABQB 245, refd to. [para. 160].

Mittelstadt Estate, Re, [2002] A.R. Uned. 337; 2002 ABQB 656, dist. [para. 166].

Gibbons Estate, Re, [2009] A.R. Uned. 692; 2009 ABQB 587, dist. [para. 166].

Lefebvre Estate, Re (2007), 419 A.R. 347; 2007 ABQB 195, dist. [para. 166].

Sproule Estate, Re (1979), 13 A.R. 420; 1979 CarswellAlta 194 (C.A.), refd to. [para. 186].

Menard Estate, Re, [2010] A.R. Uned. 220; 2010 ABQB 208, refd to. [para. 186].

Wessa v. Knight, 2014 ABQB 671, refd to. [para. 208].

Babchuk v. Kutz (2007), 411 A.R. 181; 2007 ABQB 88, refd to. [para. 210].

Bizon Estate, Re, [2012] A.R. Uned. 703; 2012 ABQB 605, refd to. [para. 210].

Conway et al. v. Zinkhofer, [2008] A.R. Uned. 306; 2008 ABCA 392, refd to. [para. 212].

Sinigoj Estate, Re (2000), 269 A.R. 30; 2000 ABQB 549, refd to. [para. 218].

Riva v. Robinson (2000), 263 A.R. 389; 2000 ABQB 391, refd to. [para. 219].

Foote Estate, Re (2010), 484 A.R. 188; 2010 ABQB 197, refd to. [para. 220].

Bukkems Estate, Re, [2014] A.R. Uned. 712; 2014 ABQB 678, refd to. [para. 221].

Jackson and Parkview Holdings Ltd. v. Trimac Industries Ltd. et al. (1993), 138 A.R. 161; 8 Alta. L.R.(3d) 403 (Q.B.), affd. on costs (1994), 155 A.R. 42; 73 W.A.C. 42; 20 Alta. L.R.(3d) 117 (C.A.), refd to. [para. 221].

Bizon v. Bizon et al. (2014), 572 A.R. 49; 609 W.A.C. 49; 2014 ABCA 174, refd to. [para. 221].

McCullough Estate, Re (1998), 212 A.R. 74; 168 W.A.C. 74; 1998 ABCA 38, refd to. [para. 221].

College of Physicians and Surgeons (Alta.) v. J.H. et al. (2009), 468 A.R. 101; 2009 ABQB 48, refd to. [paras. 221, 232].

Schwartz Estate v. Kwinter et al. (2013), 558 A.R. 236; 2013 ABQB 147, refd to. [para. 221].

Knight Estate, Re, [2014] A.R. Uned. 84; 2014 ABQB 8, refd to. [para. 222].

Hyrniak v. Mauldin (2014), 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 225].

Stagg et al. v. Owners-Condominium Plan No. 882-2999 et al. (2013), 574 A.R. 363; 2013 ABQB 684, refd to. [para. 226].

Statutes Noticed:

Administration of Estates Act, R.S.A. 2000, c. A-2, sect. 45, sect. 46, sect. 47, sect. 48 [para. 29]; sect. 61 [para. 184].

Surrogate Rules (Alta.), Reg. 130/95, rule 2, rule 97, rule 98, rule 106, rule 113 [para. 30]; rule 113(2)(c) [para. 185]; rule 114 [para. 30]; Schedule 1, Part 1, sect. 1, sect. 2, sect. 3, sect. 9 [para. 185].

Trustee Act, R.S.A. 2000, c. T-8, sect. 41 [para. 158]; sect. 44 [para. 183].

Counsel:

Lois J. MacLean (de Villars Jones), for the applicant, Barbara Holowaychuk;

Doris Bonora (Dentons Canada LLP), for the respondent, Julian Lopushinsky;

Francoise H. Belzil (Biamonte Cairo & Shortreed LLP), for the respondent, Denis Lopushinsky.

This application was heard on December 10-12 and 15, 2014, before Acton, J., of the Alberta Court Queen's Bench. The Court delivered the following judgment and reasons, filed at Edmonton, Alberta, on January 27, 2015.