Court of Queen ’ s Bench of Alberta Citation: Ponich Estate (Re), 2011 ABQB 424 Date: 20110704 Docket: ES03 120819 Registry: Edmonton Court File Number ES03 120819 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Edmonton Estate Name Estate of Leonard Victor Michael Ponich, also known as Ponich, Leonard Applicant (Plaintiff) Nicholas Matthew Ponich Respondent (Defendant) Michelle Shivon Ponich, Personal Representative of the Estate of Leonard Victor Michael Ponich, also known as Ponich, Leonard, Rosalind Margaret Ponich Mosychuk, as Trustee for the Ponich Family Trust, Rosalind Margaret Ponich Mosychuk as Trustee for the Estate of T.R., Dependent Adult, and T.R. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B.

Veit _______________________________________________________

Summary

[ 1 ] There is a dispute between the parties concerning the form of the order which reflects the court’s decision resulting from the December 15, 2010 case management meeting, in particular whether the form of order should restrict itself to the court’s direction concerning the way in which the matter would proceed to be tried or whether the order should also make reference to an earlier decision of the court.

There is also a dispute between the parties concerning costs: Matthew Ponich asserts that costs should be in the cause whereas the other parties assert that they were successful in establishing the way in which Matthew Ponich’s claim must proceed. [ 2 ] The form of order proposed by the respondents more accurately represents the decision of the court on the December, 2010 hearing. [ 3 ] The costs of the December 15, 2010 hearing relate to a discrete issue, which was finally determined by the court. The respondents were successful on that issue; therefore, they are entitled to costs of that hearing. 1.

Background [ 4 ] The general background to this matter has been set out in previous written decisions.

For the purposes of this application, it is sufficient to state the following: - at the outset of the litigation, it was not clear that the claimant, Matthew Ponich, an adult son of the deceased Leonard Ponich for whom no provision was made in Leonard Ponich’s will, was a dependant within the meaning of the Dependants’ Relief Act ; - the court was of the view that, until it was established that a claimant was in fact entitled to make a claim against an estate, that claimant had no right of discovery against the estate.

At that early stage of the proceedings, this notion was expressed as arising out of dependancy; it was only as the issues became more clear that the court’s language also evolved to meet the developing complexity around the issue of whether the claimant was entitled in law to share in the deceased’s estate; - steps were then undertaken to determine if Matthew Ponich met the statutory pre-requisites to make a claim against Leonard Ponich’s estate.

During the course of that process, although Matthew Ponich had not made himself fully available for discovery with respect to his ability to earn some livelihood, the respondents conceded that Matthew Ponich was, indeed, a dependant with the meaning of the DRA, but asserted that what dependancy in that context did not equal entitlement; - Matthew Ponich then claimed that he was now entitled to discovery and to continue his claim against the estate.

The respondents contested that view stating that the issue of entitlement was not automatic on the finding of dependancy but was, on the contrary, discretionary and that the next issue to be decided was whether, in the circumstances, it was permissible for Leonard Ponich not to include his son Matthew in his will. The court agreed with the respondents that the issue of whether Matthew was entitled to receive a portion of his father’s estate had not yet been determined and should be tried prior to, and separately from, the issue of the quantum of that entitlement. 2.

Form of order [ 5 ] The order arising from the December 15, 2010 hearing should not include an order that Matthew Ponich is a “dependant” within the meaning of the DRA: that was not an issue at the December hearing. [ 6 ] The December hearing did not deal with whether Matthew was a “dependant”, but rather dealt with what should happen next. Therefore, the draft order presented by the respondents more clearly represents the result of the December hearing. 3. Costs of the December 15, 2010 hearing

[ 7 ] The respondents were successful on the December 15, 2010 hearing; therefore, they are entitled to costs of that hearing. [ 8 ] Indeed, the court observes that the proposal by the respondents that they receive a total of $1,000.00 in costs from Matthew Ponich is reasonable.

In concluding that the respondents’ approach is reasonable, I take into account that, for the purposes of this costs award, they are content to receive costs on the basis of column 1, without arguing whether a higher column would be appropriate, and the beneficiaries are content to share one award of $500.00 costs instead of making individual costs claims. [ 9 ] On the issue of whether the costs for the December, 2010 hearing should be in the cause, the court concludes that they should not be in the cause because the issue of the mode of trial has now been finally determined.

The mode of trial was a discrete issue which does not determine the eventual outcome of the litigation. For that reason, the costs of that hearing should be paid on the basis of success: the respondents were successful, and therefore they should be paid. In contrast to that situation, it is not yet determined that Matthew Ponich will get a share of his father’s estate and, if so, how much; he is not yet a successful litigant.

I note, as well, that the respondents have not asked for and have not received “costs throughout the first phase of the action” as contended by Matthew Ponich; on the contrary, they are only asking for costs of the one, discrete, phase represented by the outcome of the December 15, 2010 hearing. [ 10 ] At the case management meeting held on May 13, 2011, Matthew Ponich asked the court to direct that the costs of the first part of the proceedings, i.e. the part up to which Matthew Ponich was recognized as a dependant under the DRA should be dealt with by the judge hearing the entitlement issue.

That application is denied. The judge hearing the entitlement issue should only decide costs issues if Matthew is found not to be entitled to overturn his father’s will; in that case, that will be the end of the proceedings, and, therefore, the appropriate time to determine costs.

If, on the other hand, the trial judge who hears the entitlement issue concludes that Matthew is entitled to a share of his late father’s estate, then the last trial issue, the issue of quantum of that entitlement will have to be tried and it is only at the conclusion of that trial that costs of the proceeding can be adequately and fairly dealt with. 4.

Payment of estate counsel from the estate [ 11 ] The court concludes that the account recently rendered by the personal representative’s lawyer should be paid by the estate. [ 12 ] Matthew Ponich opposes such a payment, because, in this particular case at least, the personal representative, whom he acknowledges may be a necessary legal party to the proceedings, should not be taking a position at the hearings and that by doing so is in fact doubling up on costs. [ 13 ] In coming to the conclusion that the estate should pay the costs of the lawyer of the personal representative, I have taken into account that: - the personal representative is a necessary party to the litigation; - the personal representative has an obligation to the beneficiaries of the estate.

We have seen in the history of this very file that there have been some changes of legal counsel; beneficiaries could, over the course of time, take different positions. The obligation of the personal representative remains constant. That obligation can only be satisfied by consideration of all representations made that affect the estate and participation at the hearings so that the position of the personal representative can be recorded. 5.

Procedural directions for the pre-trial process of the trial of the entitlement stage of the litigation [ 14 ] The respondents ask the court to order that the affidavits of record for the entitlement stage of the litigation be restricted to that stage.

In other words, they ask that no documents relating to the financial disclosure of the estate should be required to be produced unless and until a court determines that Matthew is entitled to a share of his father’s estate and the parties embark on a trial of the issue of how large a share he should obtain. [ 15 ] I accept the respondents’ position on the affidavits of records and order that the affidavits of records which must be provided

at this stage of the proceedings should be limited to the issue to be tried next, which is the issue of entitlement. [ 16 ] Because this is a relatively small estate, and because the litigation costs are so relatively high, this might well be the type of litigation in which all parties should provide a sworn statement from each of their proposed witnesses - including non-party witnesses - which would then serve as the evidence on which that party relies, ie. that the party could not then call the witness in chief without leave of the trial judge.

The witness would, however, have to be presented at trial for cross-examination. This mechanism - used in courts in other jurisdictions - would provide to each party more information at an earlier stage than is currently available under Questioning, would ensure that each party is able to fully answer any evidence called by a party opposite, and would limit trial costs. However, since this would be such a radical departure from the pre-trial process that has recently been adopted in the new Rules, it does not seem fair to impose it on the parties here.

In the result, each of the parties is entitled to Questioning under the new Rules. In coming to the conclusion that Matthew Ponich should be subjected to additional questioning, I note that his cross-examination on affidavit earlier in the proceedings was cut short by himself; therefore the respondents are entitled to conclude their pre-trial examination of Matthew Ponich. For his part, Matthew Ponich is entitled to Question the defendant parties, although, of course, that questioning will be related only to the subject of the forthcoming trial.

Evidence which has been obtained during cross-examination on affidavit can be used as evidence from questioning at the trial. [ 17 ] As case manager, I do not relieve the parties from having some type of dispute resolution process prior to the trial. On the contrary, given the small size of the estate, and the likely cost of a 5 day trial with testimony from three expert witnesses, it is imperative to use every opportunity to reasonably settle the dispute without the cost of a trial. 6.

Trial process [ 18 ] Matthew Ponich will, of course, have conduct of the trial as he is the one asserting a right to his father’s estate. [ 19 ] The trial will be scheduled for 5 days; although the parties hope that the trial could be heard in the Fall of 2011, that timing may have to be delayed because of Questioning and ADR. [ 20 ] Because it is expected, at this stage of the proceedings, that Matthew Ponich’s psychiatrist will be called to give evidence, the issue of whether that psychiatrist should be in the courtroom while Matthew Ponich gives evidence will be left for the trial judge to decide.

Prior to the trial, all parties will ask their experts if they have any personal or professional relationships with trial judges and counsel will then alert the civil trial coordinator about the resulting disqualification of any judges. [ 21 ] Prior to the trial, the parties will exchange the expert reports on which they intend to rely. The trial judge will determine whether those experts shall be called as witnesses during the trial. [ 22 ] The case manager shall not be the trial judge. 7.

Responsibility for drafting the order arising from this hearing [ 23 ] The estate has been successful at this case management hearing on the issue of payment of fees from the estate. Most of the case management issues were not opposed, but Matthew Ponich was unsuccessful on the issue of further questioning of himself. In the result, the court directs the lawyer for the estate to draft the order arising from the May 13 case management hearing. 8. Costs of this hearing [ 24 ] If the parties are not agreed on the costs of this hearing, I may be spoken to within 30 days of the release of this decision.

Heard on the 13 th day of May, 2011. Dated at the City of Edmonton, Alberta this 30 th day of June, 2011. J.B. Veit J.C.Q.B.A. Appearances: Joseph Schuck (Brownlee LLP) for Nicholas Matthew Ponich Sylvia Tensfeldt (Attia Reeves) for Rosalind Mosychuk as Trustee for the Ponich Family Trust and for the Estate of Tanya Rosalind Ponich, Dependant Adult. Michelle Reeves (Attia Reeves) for Michelle Shivon Ponich as Beneficiary of the Estate of Leonard Victor Michael Ponich Shelly K. Chamaschuk (Reynolds Mirth) for Michelle Ponich as Executor of the Estate of Leonard Victor Michael Ponich