Yurkiw Estate, 2011 ABQB 344

Court of Queen ’ s Bench of Alberta Citation: Yurkiw Estate, 2011 ABQB 344 Date: 20110520 Docket: ES03 129680 Registry: Edmonton Court File Number ES03 129680 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Edmonton Estate Name Steve Yurkiw, also known as Stefan Yurkiw, Steve F.

Yurkiw Applicant (Plaintiff) Rose Yurkiw Respondent (Defendant) Gerald Yurkiw, Andrew, Yurkiw, Kenny Yurkiw, Morris Yurkiw, Lorne Yurkiw, Marvin Yurkiw, Michael Yurkiw, Linda Dombowski, Carol Kee, Larry Yurkiw, Connie Bencharsky, Karan Prockiw, described in the Will as Karen Prockiw, Olga Kapach, Audrey Kapach, Sylvia Dmytruk, Eugene Kiriak, Lawrence Kiriak, Rose Marie Homik, Russel Czaban, Iris Plamondon, Gladys Wachowich, Fedyna Water Hauling Ltd.

Corrected judgment: A corrigendum was issued on June 2, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] Which appraised value should be used as the basis of the estate sale of farm land to Gerald Yurkiw? [ 2 ] The testator, Steve Yurkiw, intended his farm land to be offered to his relative, Gerald Yurkiw, at "appraised market value"; if the relative declined the offer to purchase the land at that value, the land was to be divided equally amongst 21 beneficiaries. As part of the probate in 2008, Steve Yurkiw's executrix, who is his widow, obtained an appraisal of the land at $230,000.00.

Two years later, the same appraisal firm stated that the market value of the land would have remained the same, or decreased, since the date of the original appraisal. On February 1, 2011, Gerald Yurkiw obtained his own appraisal of the property at $220,000.00.

On February 15, 2011, some of the 21 beneficiaries obtained an appraisal of the land at $292,000.00. [ 3 ] The court accepts the Yurkiw appraisal of $220,000.00 as the "appraised market value" at which the estate should sell the farm land to Gerald Yurkiw. [ 4 ] Where there is no basis for choosing between or amongst appraisals, a court will typically take their average: LaCroix . However, in this case, there is a basis for preferring the probate/Yurkiw appraisals to the Kiriak appraisals: on their face, the former appraisals appear to be more accurate in their description of the subject farmland.

Cases and authority cited: By the Court: LaCroix v. LaCroix 2008 ABQB 534 , [2008] A.J. No. 962 1.

Background [ 5 ] The definition of market value in all of the appraisals is consistent: The most probable price which a given property should bring, assuming a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus. [ 6 ] In 2008, as part of the probate of the late Steve Yurkiw's estate, Steve Yurkiw's executrix, who is his widow, obtained an appraisal of the farm land at $230,000.00.

The widow is not a beneficiary under the will; she has, however, a family relief act claim which is still outstanding. In other words, in addition to her obligations as testatrix, she has the same interest as any of the residuary beneficiaries in maximizing the value of the farm land. [ 7 ] There is no evidence of any active effort by the executrix at about the time of probate to determine if Gerald Yurkiw chose to purchase the farm land. Some two years after the probate, the executrix put Gerald Yurkiw to a decision about whether to purchase the land.

As part of that process, the executrix contacted the appraisal firm which had prepared the probate appraisal to ask whether the cost of having a new appraisal would be justified. The firm responded that it would not be justified since the market value of the land would

have remained the same, or decreased, since the date of the original appraisal. [ 8 ] In the Knight & Company Appraisals Ltd. appraisal obtained by the executrix at the time of probate in early February 2008, hereafter probate appraisal, the soil of the subject farm land is classified according to the Canada Land Inventory map "as #2x; subclass"x" denotes a combination of cumulative limitations". A copy of the CLI map for the area is attached to the appraisal. The appraisal states "most of the land appears to be open and cultivated, excepting about 10 acres of bush in the southeast corner of the quarter.

Treed shelterbelts have been preserved around the perimeter". The probate appraisal goes on to describe the land as "overall, the subject is of the better quality farmland in the subject area and is well suited to various agricultural utilities". The appraisal also discusses "neighbourhood" issues, including the upward effect on land prices in the areas surrounding the town of Redwater of an announcement of a new upgrader. The probate appraisal appraised the land at $230,000.00.

In 2011, when the original appraisal firm told the executrix that the value of the land would be the same as, or less than, it had been in 2008, the firm specifically mentioned that the announcement that the upgrader, or industrial heartland projects, were cancelled or postponed was in part responsible for that stagnation or downturn in the market. [ 9 ] In early February, 2011, Gerald Yurkiw obtained an appraisal of the farmland from Carmata Appraisals. That appraisal, hereafter Yurkiw appraisal, describes the soil as 80% #3 soil, 20% #5 soil; it valued the land at $220,000.00.

In other words, the probate appraisal essentially endorses the Yurkiw appraisal. [ 10 ] In mid-February, a group of residuary beneficiaries obtained an appraisal from the CDC Consulting Services Inc. That appraisal, hereafter Kiriak appraisal, classifies the land as "The soil is 100% #2; this would be adequate for cultivation." The top left hand picture on p. 26 of the appraisal report illustrates what appears to have been described as bush in the probate appraisal.

Those photographs of the subject farm land also illustrate shelterbelts described in the probate appraisal. [ 11 ] The Kiriak appraisal is the only one which mentions the offers that were made for the land; however, that appraisal does not appear to take those offers into account in making a final assessment of value. The highest of those offers were made, on the one hand, by a distant relative of the testator, and on the other, by a numbered company, the principals of which are not known to the parties on this application. 2.

How to choose between appraisals? [ 12 ] As a general proposition, the court accepts that if there is no basis for choosing between or amongst appraisals, then the court would usually take their average: LaCroix at para. 27 . 3.

Is there a basis for choosing amongst appraisals? [ 13 ] On the basis of the evidence presented to the court, the court prefers the probate/Yurkiw appraisals, which are consistent, to the Kiriak appraisal. [ 14 ] In coming to that conclusion, the court takes the following into account: - the probate appraisal describes the subject quarter as containing approximately 10 acres, or 8%, bush and shelterbelts, the combined area of which is not estimated. The photographs included in the Kiriak appraisal establish that, as of the time of this application, there still remained an area within the quarter that is bush.

It is possible that a farmer would decide to leave 10 acres out of a cultivated quarter in bush when the area covered by bush was 100% #2 soil; however, this seems improbable given the relatively small total area available for cultivation and the lack of explanation for the amount of land given over to bush.

Therefore, when the Kiriak appraisal states that the subject land was 100% #2 soil, that opinion is less weighty than the probate and Yurkiw appraisals which are more specific in the description of the land; - the probate appraisal describes the subject quarter as containing #2x soil, and attaches the CLI map for the area for confirmation

of that description. That map shows other parcels of land in the general area described as 2r, 3s, 4w, etc. Although no full explanation of the grading system, or of the grade "2x", is provided in any of the material, at the very least we are told that 2x "denotes a combination of cumulative limitations". The parties also agree that #1 soil is the best. It appears to me, therefore, that soil which is #2x could very well be closer to #3 soil than to the highest grade of #2 soil.

The comparables relied in the Kiriak appraisal therefore appear to be overly generous in failing to take into account that the soil of the subject land is "only" 2x. Here again, therefore, the probate appraisal and the Yurkiw appraisal are more detailed than the Kiriak appraisal. [ 15 ] In preferring the probate/Yurkiw appraisals, I have ignored the reference in the Kiriak appraisal to the information about the bids made on the subject lands.

In coming to that conclusion, I note that although the Kiriak appraisal mentions the bids, it does not appear to take those bids into account in coming to its opinion about the value of the land which appears to be based solely on a direct comparison approach. I might add that the Kiriak appraisal is correct in ignoring the bids on the land: the bids represent a kind of auction of the property and the court can take judicial notice of the fact that an auction does not always represent a prudent assessment of the value of the thing being auctioned. 4.

Costs [ 16 ] If the parties are not agreed on costs, I may be spoken to within 30 days of the release of this decision. Heard on the 19 th day of May, 2011. Dated at the City of Edmonton, Alberta this 20 th day of May, 2011. J.B. Veit J.C.Q.B.A. Appearances: Douglas G. Gorman, The Estate House by Gorman & Koski LLP for the Executor Jerry D. Kiriak, Kiriak Law Office for Larry Yurkiw, Connie Bencharsky, Carol Kee, Russel Czaban, Karan Prockiw, Kenny Yurkiw, Linda Dombowski, Lorne Yurkiw, Lawrence Kiriak Nestor Makuch, Wheatley Sadownik for Gerald Yurkiw

Ms. Helen R. Ward, Duncan & Craig LLP - did not appear for Rose Yurkiw a.k.a. Penny Yurkiw Gladys Wachowich - appeared and made no submissions on her own behalf, and as representative of Andrew Yurkiw, Michael Yurkiw, Iris Plamondon, Eugene Kiriak, Olga Kapach, Marvin Yurkiw, Sylvia Dmytruk, Morris Yurkiw, Audrey Kapach _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Madam Justice J.B.

Veit _______________________________________________________ The Appearance of Gladys Wachowich has been corrected to read: Gladys Wachowich - appeared and made no submissions on her own behalf, and as representative of Andrew Yurkiw, Michael Yurkiw, Iris Plamondon, Eugene Kiriak, Olga Kapach, Marvin Yurkiw, Sylvia Dmytruk, Morris Yurkiw, Audrey Kapach