Kachur Estate, 2017 ABQB 786

Court of Queen’s Bench of Alberta Citation: Kachur Estate, 2017 ABQB 786 Date: 20171219 Docket: ES03 142843 Registry: Edmonton Court File Number ES03 142843 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial Centre Edmonton Estate Name Walter Bohdan Kachur also known as Walter Kachur Applicants Robert Petroskey and Darrel Petroskey Respondents Nick Kachur, Orest Peter Zatorski, Leona Kirchenberger, Mary (Petroskey) a.k.a. Petroski and Sandra Saidler _______________________________________________________ Memorandum of Decision of the Honourable Mr.

Justice Nielsen _______________________________________________________ Introduction [ 1 ] A trial was held to resolve a number of issues arising out of applications filed by the personal representative and beneficiaries of the estate of Walter Kachur (the Estate). Walter’s Passing and His Will

[ 2 ] Walter Kachur (Walter) was a farmer with a cow/calf operation in the Grassland, Alberta area. He passed away on January 12, 2013, at the age of 68. He had never been married and had no children. [ 3 ] Walter was survived by his brother Nick Kachur (Nick); his sisters Leona Kirchenberger (Leona), Mary Petroskey (Mary), and Sandra Saidler (Sandra); and his nephews Robert Petroskey (Robert) and Darrel Petroskey (Darrel). All are named as beneficiaries in Walter’s will (the Will). [ 4 ] The Will appoints Orest Zatorski (Orest) as the sole executor and trustee.

Orest and Walter were close friends and neighbours, who helped each other on their respective farms. [ 5 ] The Will provides: 3. I GIVE, DEVISE AND BEQUEATH all my property both real and personal, whatsoever and wheresoever situate and belonging to me and over which I may have a power of appointment at the time of my decease in the following manner:

a) Firstly to pay all lawful debts, funeral and testamentary expenses as soon as conveniently may be after my decease.

b) I give a gift of my share of my house in Edmonton, to my sister, Leona Kirchenberger, if she survives me.

c) I give a Life Estate to my brother Nick Kachur on the following four (4) quarters of land.

i) NE-11-67-l8-4 ii) NW-12-67-18-4 iii) NE-02-67-18-4 iv) NW-02-67-18-4 Together with all my Farm Equipment. Upon the death of Nick Kachur the land and equipment should go to my two nephews Robert Petroski [ sic ] and Darrel Petroski [ sic ] in equal shares.

d) I give my 3/4 Ton Dodge 2500 Truck to my nephew Robert Petroski [ sic ]

e) I give all of my cash, bank accounts, GICs, and Wood Gundy account to those of my three sisters who survive me in equal shares, share and share alike, being

a) Leona Kirchenberger of Edmonton, Alberta;

b) Mary Petroski [ sic ] of Sherwood Park, Alberta;

c) Sandra Saidler of Edmonton, Alberta.

f) I give to my brother, Nick Kachur, the following:

i) My home-built steel grainery [ sic ]; ii) The right to take over my grazing lease located near Grassland, Alberta; iii) All the improvements on my grazing lease; iv) All of my cattle.

g) The rest and residue of my estate goes to those of my three sisters and one brother who survive me in equal shares, share and share alike. [ 6 ] Walter executed the Will on November 7, 2012, in the presence of his lawyer, John Kozina, and Mr. Kozina’s legal assistant. [ 7 ] Nick took possession and control of Walter’s farmland (the four quarter sections), farm equipment, and cattle before Walter passed away. He has continued the cow/calf operation (using the farmland, farm equipment and cattle), and sold calves each year, since Walter’s death. He has kept all the income from the cattle sales.

Background and Litigation History [ 8 ] Orest, as the personal representative of the Estate, applied for and received a Grant of Probate in August 2013. The NC7 form (Schedule 5: Inventory of Property and Debts) he submitted with the probate application stated that the gross value of the Estate was $1,439,943.09, broken down as follows: Four quarter sections of land 702,000.00 CIBC account and Wood Gundy account 391,067.09

Farm equipment 171,900.00 Steel granary 1.00 Cows 100,050.00 Calves 74,925.00 $1,439,943.09 [ 9 ] An inventory and appraisal of the farm equipment, prepared by Orest with the assistance of Andruchow Auctions, was attached to the NC7: Exhibit 1, Tab 61. It included 21 items. The only debts listed in the NC7 were funeral expenses totalling $20,149.45. [ 10 ] Issues arose between Nick and Orest, and between Nick and Darrel, early in the administration of the Estate.

Nick did not trust Orest and was unwilling to assist, or cooperate with, him; and the efforts Nick made to negotiate directly with Darrel failed. [ 11 ] In November 2014, Darrel and Robert (the nephews) filed an application for advice and directions and to restrain meddling.

Their application alleged that: • Orest had failed to identify all the farm equipment owned by the Estate, and protect the land and farm equipment in Nick’s possession and control; and • Nick was improperly dealing with the farm equipment. [ 12 ] In June 2015, before the nephews’ application was heard, Leona, Mary and Sandra (the sisters) filed an application for: • a detailed and updated interim accounting of the Estate property; • advice and directions regarding the Will’s

interpretation and Orest’s obligations; and • a partial distribution of Estate funds. [ 13 ] In July 2015, before the nephews’ and the sisters’ applications were heard, Orest filed an application for an order: • passing the interim accounts; • setting his compensation; • directing an interim distribution of the Estate funds; • interpreting the life estate granted to Nick in paragraph 3(

c) of the Will; • declaring that the tools owned by the Estate are residue; • declaring that Nick should reimburse the Estate for payments it made to insure the home on the land; and • directing that the land and farm equipment be registered in the nephews’ names, with a life estate to Nick. [ 14 ] Each of the sisters filed a Notice of Objection to Orest’s application.

Among other things, they challenged the sufficiency of Orest’s financial statements, the professional fees the Estate had paid, and the proposed executor fees. [ 15 ] In August 2015, Nick swore an affidavit outlining his position. [ 16 ] The nephews’ application, the sisters’ application, and Orest’s application were all scheduled to be heard in Special Chambers in May 2016. [ 17 ] In April 2016, a court-ordered inventory and appraisal of all the farm equipment, machinery, tools and implements in Nick’s possession was prepared by Lorne Lakusta (the Lakusta Inventory). [ 18 ] The nephews filed another application in April 2016, to be heard in Special Chambers with the parties’ other applications.

They sought an order declaring that all the farm equipment identified in the Lakusta Inventory (except one tractor) formed part of the Estate, and requiring Orest to monitor Nick’s life estate. [ 19 ] Some issues were resolved by court order at the Special Chambers hearing in May 2016: Exhibit 16. The balance of the matter was adjourned to June 2016 for a judicial dispute resolution (JDR). Unfortunately, the JDR did not proceed. [ 20 ] The matter was subsequently set down for a seven-day trial. Issues [ 21 ] The parties’ Confirmation of Trial Date, filed in March 2017, lists these issues for determination: (

i) What personal property that Walter owned when he died is “farm equipment” for the purposes of the Will?

(ii) What does the term “equipment” in paragraph 3(

c) of the Will refer to? (iii) Is the gift set out in paragraph 3(

e) of the Will a specific or general gift? (iv) How should the life estate granted to Nick in paragraph 3(

c) of the Will be administered by the Estate? (

v) As the life tenant, is Nick responsible for insuring the farmland and farm equipment? If so, how much should he reimburse the Estate for the insurance premiums it has paid? (vi) Should Orest’s accounts be passed and, if so, in what amount? (vii) Should Nick have elevated costs awarded against him because of his conduct? Trial [ 22 ] The trial was held over eight days in April 2017. It was continued over four days in October and November 2017. [ 23 ] A large binder of documents that the parties agreed could be relied on for the truth of their contents was entered as Exhibit 1 at the beginning of the trial.

Many more documents were entered as exhibits during the trial. [ 24 ] Seven witnesses testified: Mr. Kozina; Orest; Nick; Nick’s wife, Katica Kachur (Kate); Kate’s daughter, Therese Lee-Ann Warren (Therese); Darrel; and Robert. Some of the witness testimony proved to be superfluous or immaterial to the issues before me. What personal property did Walter own when he died? [ 25 ] The first thing I must determine is what personal property Walter owned when he died. More specifically, I must determine which of the items listed in the

Schedule to the Notice to Admit Facts under Tab 62 of Exhibit 1 (the Schedule) belonged to Walter, and now form part of the Estate. The

Schedule includes 86 items: 79 from the Lakusta Inventory, 6 from a second court-ordered inventory and appraisal that Dennis Andruchow prepared in November 2016 (the Andruchow Inventory), and 1 that was missing from the Lakusta and Andruchow Inventories. Nick’s joint ownership argument [ 26 ] Nick disputes that any of the items (farm equipment) listed in the

Schedule form part of the Estate. He argues that he and Walter had a joint farming operation; they owned all their farm equipment jointly (regardless of who purchased it); and he became the sole owner of the farm equipment when Walter died. This argument cannot succeed because Nick’s evidence in support of it is not corroborated by other material evidence, and is inconsistent with other evidence adduced during the trial. [ 27 ]

Section 11 of the Alberta Evidence Act , RSA 2000, c A-18 “applies in respect of evidence offered or taken in” this trial: Wills and Succession Act , SA 2010, c W-12.2, s 3(3) and Estate Administration Act , SA 2014, c E-12.5, s 3(3).

Section 11 provides that: In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposed or interested party shall not obtain a verdict, judgment or decision on that party’s own evidence in respect of any matter occurring before the death of the deceased person, unless the evidence is corroborated by other material evidence. [ 28 ] Nick testified that he and Walter ran the cow/calf operation together, on lands owned and leased by both of them.

Nick explained that Walter worked on the farm on a full-time basis, and that he did road construction work in the summer months and worked on the farm with Walter during the winter months. Nick said he would typically leave the farm at the end of May and return at the end of October or early November. [ 29 ] Nick explained that Walter’s herd of cows was substantially larger than his. Nick only had 43 cows. He said his arrangement with Walter was that Walter would pay him for 40 calves each year. The gross amount paid to Nick was based on the calves’ average selling price in the relevant year.

From that amount, Walter would deduct $6,000 for labour, small repair, and supply costs. Additional amounts might be deducted for farm equipment purchases and major repairs. Nick said he and Walter “never did paperwork” to document the deductions. [ 30 ] Regarding the farm equipment, Nick explained that he bought some items, Walter bought some items, and the brothers bought some items together. He also explained that the brothers both did, and paid for, repair work on the farm equipment, regardless of who purchased it.

Finally, he explained that he and Walter combined their resources to build some of the farm equipment. [ 31 ] Much of this evidence was corroborated by other witness evidence, although Orest and the nephews indicated that the role Nick played in the cow/calf operation was far less involved than Nick made out. [ 32 ] Nick took the position that all the items in the

Schedule were his because he and Walter had agreed (verbally) that, “if I died, Walter got it” and “if Walter died, I got it.” He said there was “no such thing, as this is mine, this is yours”, when it came to the brothers’ farm equipment. He explained that he and Walter used all the farm equipment without seeking each other’s permission; and that Walter would lend the farm equipment to others (neighbours) without consulting him. Nick suggested that all of the brothers’ farm equipment was “mixed up” and that it all belonged to both of them; it was jointly owned.

He said, “it was our equipment.” [ 33 ] Nick’s evidence regarding the brothers’ alleged agreement, and joint ownership of all the farm equipment, is not corroborated

by other material evidence and is inconsistent with:

a) Nick’s and Walter’s income tax returns, which claimed capital cost allowances for different pieces of farm equipment and made no mention of any partnership between the brothers;

b) Orest’s, Darrel’s, Robert’s and Nick’s evidence indicating that the brothers treated their equipment as separately owned;

c) Mr. Kozina’s evidence that Walter never mentioned that he and Nick jointly owned any farm equipment when he provided his instructions for the Will;

d) Nick’s admission that he never mentioned to Mr. Kozina (when he attended at his office with Walter on November 7, 2012, or with Orest after Walter’s death) that he had an ownership interest in Walter’s farm equipment; and

e) the fact that the Will refers to “all my Farm Equipment”, indicating that Walter considered certain pieces of farm equipment to be his (emphasis added). [ 34 ] Regarding (b), Orest testified that Walter would not let anyone use certain pieces of farm equipment because they belonged to Nick, and Nick did not want others using his equipment. Darrel confirmed this, testifying that Walter never loaned any of Nick’s farm equipment out. Darrel said Walter owned most of the farm equipment, but certain pieces of equipment were identified as belonging to Nick.

For example, there was a swather that was referred to as “Nick’s swather”, and a tractor that Walter only let him use if he was wearing “clean pants” because it was Nick’s. Robert gave similar evidence. For example, he said that Walter would say “go take my tractor”, indicating that he owned it; and that he could smoke and eat sunflower seeds, and not worry about having clean pants, in Walter’s tractor. And, Nick testified that Walter gave him some pieces of farm equipment during his lifetime, undermining his own argument that the brothers jointly owned all the equipment.

Nick’s items [ 35 ] Although I have rejected Nick’s joint ownership argument, I am satisfied that there are a number of items listed in the

Schedule that belong to Nick, and do not form part of the Estate. [ 36 ] Based on the documentary evidence (purchase documents), and the non-conflicting testimony of Orest, Nick and Darrel, I am satisfied that Nick purchased and owned these twelve items: • item 3 (JD 4440 tractor), • item 10 (Versatile 400 swather), • item 17(JD 535 round baler), • item 19 (JD 336 square baler), • item 31 (roll of crusher belting), • item 32 (Jiffy 900 bale processer), • item 40 (JD 210 disc), • item 50 (1982 Chevrolet truck), • item 58 (JD 322 riding mower), • item 63 (Honda water pump), • item 64 (Lincoln 200 welder), • item 74 (1000 gallon fuel tank).

Orest and the nephews have acknowledged that these items belong to Nick, and do not form part of the Estate. [ 37 ] Based on Darrel’s testimony, I am also satisfied that two of the three 500 gallon fuel tanks that make up item 73 belong to Nick, and do not form part of the Estate. Orest has acknowledged this. [ 38 ] And, based on Nick and Orest’s testimony, I am satisfied that item 78 (planed spruce boards) belongs to Nick, and does not form part of the Estate.

The nephews acknowledged this. [ 39 ] Next, based on Nick’s testimony, and the documents corroborating his testimony, I am satisfied that he and Walter each contributed to the purchase of, and jointly owned, these two items: • item 7 (Caterpillar D6C dozer), and • item 57 (JD AMT 600 5-wheeler). [ 40 ] Based on the non-conflicting testimony of Orest, Nick and Darrel, I am also satisfied that Nick and Walter jointly owned item 26 (Peerless 500 roller mill) and the rest of the lumber in the Schedule, being items 76, 77 and 79.

[ 41 ] As joint ownership of personal property features a right of survivorship, Nick became the sole owner of these jointly owned items when Walter died: Halsbury’s Laws of Canada (online), Personal Property and Secured Transactions (2013 Reissue) at HPS-39 “Ownership Usually Indivisible”. Accordingly, they do not form part of the Estate. Items forming part of the Estate [ 42 ] With four exceptions (discussed below), I am satisfied that the rest of the items in the

Schedule belonged to Walter, and form part of the Estate.

The documentary evidence (purchase documents and bills of sale that Orest prepared for Nick so he could register and use Walter’s vehicles), together with the non-conflicting testimony of Orest, Nick and Darrel, demonstrate that Walter purchased, built or inherited, and owned, the remaining items. [ 43 ] Nick provided some contrary evidence, testifying that Walter gave some of the items to him; and that he had an ownership interest in others, because of payments he made towards them, repair work he did on them, and labour and materials he contributed to them.

However, that testimony was not corroborated by other material evidence. To the extent that it conflicted with the evidence showing that Walter owned the remaining items in the Schedule, Nick’s evidence was self-serving and unpersuasive. The four exceptions (Items not forming part of the Estate) [ 44 ] Orest testified that item 56 (2005 Snowbear utility trailer) was Nick’s. However, Nick acknowledged that it belongs to Dave Medijowski (Dave), a man he hired to do work on the farm.

Accordingly, item 56 does not form part of the Estate. [ 45 ] Orest could not recall anything about item 66 (20-ton air hydraulic jack), and there was no other evidence regarding the item. Accordingly, I am not satisfied that item 66 belonged to Walter. It does not form part of the Estate. [ 46 ] Item 27 (Peerless 500 roller mill) and the first unnumbered item (grain bunks) are duplicates of items 26 (Peerless 500 roller mill) and 24 (grain bunk troughs), respectively, and should not have been included in the Schedule.

Interpreting the Will [ 47 ] I will now move on to the issues that require me to interpret the Will. [ 48 ]

Section 26 of the Wills and Succession Act provides that: A will must be interpreted in a manner that gives effect to the intent of the testator, and in determining the testator’s intent the Court may admit the following evidence: (

a) evidence as to the meaning, in either an ordinary or a specialized sense, of the words or phrases used in the will, (

b) evidence as to the meaning of the provisions of the will in the context of the testator’s circumstances at the time of the making of the will, and (

c) evidence of the testator’s intent with regard to the matters referred to in the will. [ 49 ] Accordingly, in determining Walter’s intent for the purposes of interpreting the Will, I can consider extrinsic evidence regarding: • the meaning of the words used in the Will; • the meaning of the Will’s provisions in the context of Walter’s circumstances when he made the Will; and • Walter’s intent with regard to the matters referred to in the Will. [ 50 ] That said, in order to be effective, extrinsic evidence provided by “an opposed or interested party” regarding any matter occurring before Walter’s death must be corroborated: Alberta Evidence Act , s 11.

What personal property that Walter owned when he died is “farm equipment” for the purposes of the Will? [ 51 ] The first

interpretation issue I must determine is what the term “farm equipment” in paragraph 3(

c) of the Will includes. [ 52 ] Oxford Dictionaries (online) defines “equipment” as “[t]he necessary items for a particular purpose”: Oxford <https://en.oxforddictionaries.com>. Building on this general definition, “farm equipment” ordinarily means “the necessary items for farming.” [ 53 ] Mr. Kozina testified that, when he met with Walter to obtain his instructions for the Will, Walter did not provide a list of his farm equipment, nor any details about what his farm equipment included. Mr.

Kozina said, “when Walter said farm equipment, I thought that that was a good enough definition.” He did not seek any further details from Walter. [ 54 ] Orest testified that, excepting the contents of his home, everything Walter purchased “related to his farm work.” When

specifically asked whether automobiles might be distinguished from farm equipment, Orest said, “It all depends where they’re used. If they’re used on the farm, it’s farm equipment.” [ 55 ] Darrel testified that he thought “farm equipment” in paragraph 3(

c) of the Will meant “anything and everything” that was used on the farm, including tools. He said “pretty much everything” Walter had was farm equipment. Darrel considered all of the items listed in the

Schedule to be farm equipment. [ 56 ] Nick testified that items 1 through 79 in the

Schedule were all used in the farming operation. The descriptions of the seven unnumbered items (“calf shelters”, for example) clearly indicate that they were also used in the farming operation. [ 57 ] Based on the dictionary definition (or ordinary meaning) of “equipment”, and all the evidence (including the evidence regarding how certain items in the

Schedule were used in the farming operation), I am satisfied: (

i) that “farm equipment” in paragraph 3(

c) of the Will includes all the devices, machines, tools, vehicles, and other items used in Walter’s farming operation; and (ii) that all the items in the

Schedule that belonged to Walter were used in the farming operation and, therefore, constitute “farm equipment” for the purposes of the Will. [ 58 ] My

interpretation of “farm equipment” accords with the evidence demonstrating that it was Walter’s intent to have the farming operation continue. That is, it accords with: • Mr.

Kozina’s evidence that Walter “wanted what he started” – that is, the farming operation – “to continue” after his death; • Orest’s evidence that Walter wanted the farm equipment and land to be used by Nick during his lifetime and then go to the nephews because he “wanted to keep his land as long as he could in the family”; and • Nick’s evidence that Walter “never left the farm”, that the farming operation was “the most important” thing to Walter, and that Walter told him he wanted the farming operation to continue. [ 59 ] A less inclusive

interpretation of “farm equipment” would detract from Walter’s intent, by allowing some items used in the farming operation to form part of the residue of the Estate, rendering them unavailable to the farming operation. What does the term “equipment” in paragraph 3(

c) of the Will refer to? [ 60 ] Although I was asked to determine what the term “equipment” in the last sentence of paragraph 3(

c) of the Will refers to, at the end of the trial, no one contended that it refers to anything other than the “farm equipment” referenced in the previous sentence of paragraph 3(c). [ 61 ] Mr. Kozina testified that he simply “neglected to repeat the word ‘farm’” in the last sentence of paragraph 3(c). Accordingly, I find that, for the purposes of the Will, “farm equipment” and “equipment” have the same meaning. Is the gift set out in paragraph 3(

e) of the Will a specific or general gift? [ 62 ] The next issue I must determine is whether the gift to the sisters, set out in paragraph 3(

e) of the Will, is a specific or general gift of property. This issue is important because of the marshalling provision in the Estate Administration Act . [ 63 ]

Section 28 of the Estate Administration Act provides that:

(1) The order in which property is applied as among beneficiaries toward the payment of funeral and estate administration expenses and unsecured debts and liabilities is as follows: (

a) property specifically charged with the payment of debts or left in trust for the payment of debts; (

b) property passing by way of intestacy and property passing by way of residue; (

c) general gifts of property; (

d) specific gifts of property; (

e) property over which the deceased person had a general power of appointment that has been expressly exercised by will.

(2) Each class referred to in subsection (1) includes both real and personal property.

(3) Each asset within a class referred to in subsection (1) must, according to its value, contribute proportionately to the payment of funeral and estate administration expenses and unsecured debts and liabilities.

(4) The order set out in subsection (1) applies unless a contrary intention is signified in the will of the deceased person.

(5) A contrary intention is not signified (

a) by a general direction for the payment of debts of the deceased person; (

b) by a general direction that a personal representative pay the debts of the deceased person; (

c) by the imposition of a trust that debts of the deceased person be paid.

(6) Nothing in this

section affects the right of a claimant to obtain payment or satisfaction of his or her claim out of the property of the deceased person or otherwise. [ 64 ] In this case, the order set out in section 28(1) applies as no contrary intention is signified in the Will. [ 65 ] There is no “property specifically charged with the payment of debts or left in trust for the payment of debts”, nor any “property passing by way of intestacy”: s 28(1)(

a) and (b). [ 66 ] The “property passing by way of residue” is minimal: s 28(1)(b).

No such property is mentioned in the NC7, and the inventory of Walter’s personal effects and household goods (that Orest prepared in January 2014) indicates that those items were only worth about $2,500: Exhibit 5. [ 67 ] The nephews and Nick argue that the gift to the sisters, of “all of [Walter’s] cash, bank accounts, GICs, and Wood Gundy account” is a general gift of property; and, therefore, that Orest has properly used the Estate fund containing Walter’s cash, the contents of his CIBC bank account, his cashed GIC, and the contents of his Wood Gundy account to pay the “funeral and estate administration expenses and unsecured debts and liabilities”: s 28(1)(c). [ 68 ] The sisters dispute this, arguing that the gift in paragraph 3(

e) of the Will is a specific gift of property: s 28(1)(d). I agree with the sisters. [ 69 ] The British Columbia Court of Appeal discussed specific and general gifts in Wood Estate v Arlotti-Wood , 2004 BCCA 556 , 203 BCAC 205 at paras 11-13 [ Wood Estate ], and determined that a gift of “any cash or any stocks and bonds” held in a certain account at RBC Dominion Securities in Vancouver was a specific gift.

At para 13, it said: [The gift was] a gift in specie of the actual contents of the account, identifiable not by sum or numbers of shares but only by the broker's name (RBC) and account number mentioned in the will. … [ 70 ] I am satisfied that Walter’s gift to his sisters, of “all of [his] cash, bank accounts, GICs, and Wood Gundy account” is a specific gift as well. That is, I am satisfied that the sisters’ gift is a gift of sufficiently described, particular things that formed part of the Estate. [ 71 ] It is clear, from paragraph 3(

e) of the Will that Walter intended to gift all of his cash, the entire contents of all of his bank accounts, all of his GICs, and the entire contents of his Wood Gundy account to his sisters. [ 72 ] It is inconsequential that Walter did not provide bank names, and account or investment numbers, for his accounts and GICs because, unlike in Wood Estate , such “identifiers” are not required to say how much money, or which GICs, Walter intended to gift his sisters. It is clear that he intended to gift all of his money, and all of his GICs, to them. [ 73 ] The evidence of Mr.

Kozina and Orest supports this conclusion. Mr. Kozina testified that, when he met with Walter to take his instructions for the Will, Walter had really thought out what he wanted to do. He knew what his assets were and who he wanted to leave them to. Mr. Kozina explained that the Will’s provisions evince what Walter’s instructions were. For example, he said the use of the word “my” in the Will was the way Walter “put it”. [ 74 ] Mr. Kozina agreed with the sisters’ counsel that paragraphs 3(

b) through (

f) of the Will contain the specific gifts that Walter instructed him to include; and that paragraph 3(g) - the residue clause at the end - was a catch-all clause for anything that may have been forgotten. He explained that he and Walter “were not thinking of any particular piece of property when [they] spoke of ... rest and residue.” [ 75 ] Specifically regarding the gift to the sisters in paragraph 3(e), Mr. Kozina said, “This is what [Walter] wanted”, and explained that Walter “just gave [him] the [sisters’] names and what gift they got.” Mr.

Kozina did not ask for, and Walter did not provide, any details about his cash, bank accounts, GICs or Wood Gundy account. Walter did not tell Mr. Kozina what the value of those assets were, nor provide Mr. Kozina with any identifying information for the accounts. Mr. Kozina was satisfied that he had the information he needed from Walter. [ 76 ] Orest testified that Walter told him “he wanted all the money to go to the girls”. He confirmed that Walter wanted to give all his money to his sisters several times during his testimony.

He also agreed with the sisters’ counsel that Walter wanted his cash, bank accounts, and investments to go to his three sisters. Orest understood that those things constituted Walter’s money. [ 77 ] Orest also testified that Walter had $1,000 cash in a safe, a CIBC bank account, a CIBC GIC, and a Wood Gundy account when he died.

He said it was easy for him to ascertain where Walter’s money was because Walter had told him he had a Wood Gundy account, a GIC, and “money in the bank”; and he knew that Walter dealt with the CIBC in Boyle. [ 78 ] In support of their argument that I should interpret the sister’s gift in paragraph 3(

e) of the Will to be a general gift, the nephews and Nick rely on (

i) the evidence demonstrating that it was Walter’s intent to have the farming operation continue and (ii) Mr. Kozina’s evidence that: • he and Walter did not discuss how estate administration expenses would be paid, nor the possibility that property might

have to be sold in order to pay estate administration expenses; • he and Walter had a “minimal discussion” about how the funeral expenses and debts would be paid, “because Walter was proud to be a debt-free farmer, and his equipment was paid for, his land had been paid for 20 or 30 years earlier, and he expected to leave no debts”; • he did not give Walter any legal advice regarding the Estate’s potential tax liabilities; and • “the last thing [Walter] would have wanted was for everything to be sold off after his death.” [ 79 ] This evidence does not support the

interpretation the nephews and Nick seek. That is, it does not support the contention that the sisters’ gift is a gift, not of any particular thing, but of something that is to be provided out of Walter’s general estate: Wood Estate at para 11 . All the evidence demonstrates is that Walter did not consider the possibility that the property he specifically gifted to his siblings and nephews may have to be sold (or spent, in the case of the sisters’ gift) to pay for “funeral and estate administration expenses and unsecured debts and liabilities”: s 28(1). [ 80 ] As I have concluded that the sisters’ gift in paragraph 3(

e) of the Will is a specific one, there are no “general gifts of property” in this case: s 28(1)(c). Accordingly, each of the assets specifically gifted in the Will “must, according to its value, contribute proportionately to the payment of funeral and estate administration expenses and unsecured debts and liabilities”: s 28(3). For the purposes of

section 28 of the Estate Administration Act , “property” includes “real and personal property, as well as rights or interests in them”: s 1(h)(i). [ 81 ] To date, Orest has used the sisters’ gift to pay for funeral and estate administration expenses and debts and liabilities. This situation must be corrected. Does the Will need to be rectified? [ 82 ] During the trial, the sisters filed an application, pursuant to

section 39 of the Wills and Succession Act , to have the Will rectified to make it clear that the gift to the sisters, set out in paragraph 3(e), is a specific gift. [ 83 ] As I have already determined that the sisters’ gift is a specific one, there is no need to resort to rectification of the Will under

section 39 : Elsenheimer v Matras , 2016 ABQB 728 at para 47 , 48 Alta LR (6th) 318. The bank account and GIC “identifiers” that the sisters sought to have added to the Will are unnecessary. Issues relating to Nick’s life estates [ 84 ] I will now move on to the issues relating to the life estates given to Nick in paragraph 3(

c) of the Will. Nick’s absolute gift argument [ 85 ] As an alternative to his joint ownership argument, Nick argues that the Will should be interpreted as making an absolute gift of the farm equipment to him, not as giving him a life estate in the farm equipment. This argument lacks merit. [ 86 ] Paragraph 3(

c) of the Will clearly gifts Nick a life estate, and the nephews the remainder interest, in (

i) the four quarter sections of land it references and (ii) the farm equipment. Moreover, the evidence provided by Orest and Mr. Kozina, and some of the evidence Nick provided, confirms that Walter only intended to give Nick a life estate in the farm equipment. [ 87 ] Mr. Kozina testified that Walter was familiar with the concept of a life estate when he provided his instructions for the Will; and it was obvious, from the balance of his testimony, that Mr. Kozina understood that Walter only intended to give Nick a life estate in the farm equipment. For example, Mr.

Kozina acknowledged that, although he and Walter did not discuss the issue, he realized (when he met with Walter) that the farm equipment would depreciate over the course of Nick’s life estate. [ 88 ] Orest testified that he attended at Mr. Kozina’s office with Walter in September 2012, when Walter gave Mr. Kozina instructions for a will. Orest recalled Walter instructing Mr.

Kozina that, among other things, Nick was “to have the right to use all the equipment and the land that belonged to Walter” for as long as he lived. [ 89 ] Sometime later, Walter told Orest that he had shown a draft will to Nick, and that “Nick was not impressed with it at all.” Walter said he was going back to Lac La Biche (where Mr. Kozina practices) to make another will. Orest understood that Nick went to Mr.

Kozina’s office with Walter in November 2012, when Walter signed the Will. [ 90 ] Orest did not see the Will before Walter died, but he did witness Nick expressing his discontent with it on several occasions.

He said Nick kept badgering Walter about the equipment, saying “All equipment should be mine.” Orest recalled one occasion at Walter’s house when Nick asked Walter, “Whose equipment is this going to be?” He said Walter, who was very ill by that point, “just threw up his arms in despair” and said, “Nick, you can have it all.” This was in late November or early December 2012. [ 91 ] Despite this incident, Orest did not get the impression that Walter wanted to give Nick all his equipment. He said Walter told him that Nick had enough and that he wanted his nephews to have his equipment after Nick passed away.

Orest specifically denied that Walter ever suggested that, if there were any problems with the Will, all the equipment should go to Nick. [ 92 ] Finally, Orest testified that Walter was in the hospital for about a month before he died; and that, while he was in the hospital, he told Orest “he wanted Nick to use the equipment and the land for as long as he lives and then it was to go to the nephews.”

[ 93 ] To the extent that Nick’s evidence conflicted with Orest’s evidence on these points, I reject it, and accept Orest’s evidence. Orest was an independent or uninterested witness, in that he is not a beneficiary under the Will and has no stake in the outcomes of this trial. He consistently testified in a forthright and candid manner. In contrast, Nick was an interested witness, who hoped to gain a lot in these proceedings.

He provided a significant amount of evidence that was inconsistent with the evidence he gave during his questioning, self-serving, unpersuasive, and uncorroborated by other material evidence. [ 94 ] During his testimony, Nick confirmed that Walter tried to explain something about a life estate to him in early November 2012, and that he attended at Mr. Kozina’s office with Walter on November 7, 2012 (the date Walter signed the Will). Nick said he saw a draft of the Will and told Mr. Kozina that a “life estate in equipment does not make sense.” He left Mr.

Kozina’s office before Walter that day because he got upset about the life estate issue. [ 95 ] Nick also confirmed that he questioned Walter about the equipment after the Will was signed. He raised the fact that the equipment was old and hard to get parts for, and told Walter: I’m not going to spend all my money on this stuff. ... What’s there for me in the end? If I got to make a sale, I can’t. If I want to retire and – or if I want to exchange equipment for newer stuff, I can’t. My hands are tied. ...

I don’t know what the heck you’re thinking. [ 96 ] At the end of the day, Nick’s own evidence undermines his absolute gift argument as it demonstrates that he understood that he would only be receiving a life estate in the farm equipment under the Will. What are Nick’s obligations as a life tenant? (Is he responsible for insuring the land and the farm equipment?) [ 97 ] As it is clear that paragraph 3(

c) of the Will provides Nick with a life estate in the land and the farm equipment, the next issue I must consider is: What are Nick’s obligations as a life tenant? [ 98 ] A gift of a life estate comes with periodic expenses. When the gift is of a life estate in land, those expenses ordinarily include property taxes, utility charges, insurance premiums, and maintenance and repair costs.

A gift of a life estate in personal property, like equipment, comes with many of the same types of expenses. [ 99 ] The Will offers no directions on how the expenses relating to Nick’s life estate in the land and the farm equipment should be paid, or what Nick’s obligations as a life tenant are. For example, the Will does not create a trust for the life estates.

There is no suggestion in the Will that Walter expected, or anticipated, that Orest would hold the land and the farm equipment in trust for Nick’s benefit, and pay the expenses relating to those assets from the Estate, during Nick’s lifetime (and then transfer the assets to the nephews). [ 100 ] Moreover, there is no extrinsic evidence demonstrating that Walter considered how the expenses relating to Nick’s life estates would be paid, or what Nick’s obligations as a life tenant would be. Mr. Kozina specifically testified that he and Walter did not discuss those things.

For example, he had this exchange with Nick’s counsel regarding the life estate in the farm equipment: Q Was any direction requested as to how that life estate might be administered? A No. Q Is it fair to say there was no discussion as to who would pay for repairs and maintenance in the event that the equipment broke down or required maintenance or capital improvements? A There was no discussion on that subject. [ 101 ] Nick testified that he has been maintaining and repairing the home and some of the buildings on the land, and the farm equipment, since Walter’s death.

Kate confirmed this, by describing some of the improvements her and Nick have made to the Estate property. [ 102 ] Nick also testified that he has been paying the property taxes assessed against the land and the utility charges for the land. He said he has insurance on all of the land, but has not been insuring the home on the land. The Estate has been paying to insure the home on the land, because Nick refused to do so. The insurance premiums are high ($5,850 every six months) as the home is insured as a vacant dwelling: Exhibit 1, Tab 22. [ 103 ] Orest explained why the home is insured as a vacant dwelling.

He testified that, about two years after Walter’s death, the insurer he had been dealing with refused to continue insuring the home because it was vacant. Orest’s insurance broker found another insurer but the proposed premiums for a vacant home were very high. Orest knew that Dave, the man Nick had hired to help on the farm, was living in the home. He told the broker that the home was occupied. The broker advised Orest that they required Dave’s details, and information about his comings and goings from the home. Orest tried to get that information to no avail.

He visited the land and briefly spoke to Dave, but Nick intervened. Nick told Dave not to speak to Orest, and told Orest to leave the property. As a result, the Estate has been insuring the home as a vacant dwelling for years. [ 104 ] Nick acknowledged that Dave works for him, and sleeps in the home on the land; that another friend of his stays in the home on occasion; and that he did nothing to help Orest with the vacant dwelling insurance problem. Kate confirmed that men Nick hired to help on the farm stayed in the home on the land.

She also testified that her and Nick moved some of their personal belongings into the home, that they have cared for the home with all their hearts, and that they are at the home “every day, because the farming operation runs out of there.” [ 105 ] I have determined that Nick is responsible for paying the following for the duration of his life estate in the land and the farm equipment:

• the costs of insuring the land, including the home on the land, and the farm equipment; • the taxes assessed against the land; • the utility charges for the land; • the costs of reasonable maintenance and repair of the land, including the home on the land; and • the costs of reasonable maintenance and repair of the farm equipment. These are among the expenses a surviving spouse or partner is ultimately responsible for paying for the time he or she temporarilypossessed a family home and used the household goods: Wills and Succession Act, s 79.

They are also the expenses other life tenantshave been made responsible for: see Hurst v Soucoup, 2010 NBQB 216, [2010] NBJ No 206 (QL) at paras 23-24; Ryan Estate vBoulos-Ryan, 2007 NLTD 40, [2007] NJ No 62 (QL) at paras 48-49 [Ryan Estate]; Hawkins Estate (Re), 2006 BCSC 1374, [2006]BCJ No 2068 (QL) at paras 6 and 15-19 [Hawkins Estate]; Paulgaard v Hager Estate, 1998 ABQB 824, [1998] AJ No 1085 (QL) atparas 4 and 15 [Hager Estate]; and the authorities referenced in those cases. [106] I acknowledge that there are authorities suggesting that, at common law, there is no obligation on a life tenant to insure theproperty: Powers v Powers Estate (1999), (NL SC), 182 Nfld & PEIR 341, [1999] NJ No 196 (QL) at para 11[Powers Estate]; Bruce Ziff, Principles of Property Law, 6th ed (Toronto: Carswell, 2014) at 184.

However, considering all theevidence, I am satisfied that Walter assumed that Nick would carry on the farming operation as he had, and cover the ordinary expensesof that operation, for the duration of his life estates. More specifically, I am satisfied that Walter expected that Nick would pay all of theordinary expenses, including the insurance premiums, relating to the land and the farm equipment during his lifetime.

This seems themost reasonable conclusion to reach given that the land and the farm equipment are income-producing assets, and that Nick is the onlyone benefitting from the income they are producing: Powers Estate at para 14. Nick has received all of the income from the farmoperation since Walter’s death.

I cannot imagine that Walter intended that his estate, or his nephews (the remaindermen), would pay anyof the ordinary expenses relating to the farm and the farm equipment during Nick’s lifetime. [107] Regarding Nick’s obligation to pay maintenance and repair costs, he must ensure that the land, the home and other buildings onthe land, and the farm equipment “are maintained and kept in a state of reasonable repair, taking into account [their] state of repair” atthe time of Walter’s death: Wills and Succession Act, s 80.

This is the obligation to maintain and repair imposed on a surviving spouse orpartner who temporarily possesses a family home and uses the household goods. Similar obligations have been imposed on other lifetenants: see authorities referenced in paragraph 105 (above). [108] Nick is not obliged to arrange or pay for any major repairs that prove necessary to preserve the land, the home or otherbuildings on the land, or the farm equipment. The nephews, as the remaindermen, are responsible for expenses of a capital nature: RyanEstate and Hawkins Estate, and the authorities referenced therein.

Accordingly, Nick must keep the nephews apprised of any propertythat requires major repairs. [109] Nick should also keep the nephews apprised of, and perhaps give up his interest in, any property (particularly farm equipment)that he deems not worth repairing and maintaining.

How much should Nick reimburse the Estate for the insurance premiums it has paid? [110] As I have determined that Nick, as the life tenant, is responsible for insuring the land (including the home on the land) and thefarm equipment, I must now determine how much Nick should reimburse the Estate for the insurance premiums it has paid. [111] Based on Orest’s evidence explaining why the home on the land has been insured as a vacant dwelling, and Nick’sacknowledgment that he did nothing to help Orest with the vacant dwelling insurance problem, I am satisfied that Nick must reimbursethe Estate for all the insurance premiums it has paid.

The evidence indicates that, as at the commencement of the trial, the Estate hadpaid $23,841 to insure the home on the land: Exhibit 1, Tabs 3(A)-(F).[1] Nick must reimburse the Estate this amount, and anyadditional amounts the Estate pays to insure the home on the land before Nick assumes responsibility for the insurance. How should the life estate granted to Nick in paragraph 3(

c) of the Will beadministered by the Estate? [112] The next issue I must determine is how Orest should administer Nick’s life estate in the land and the farm equipment. How should Orest distribute the land and the farm equipment to Nick and the nephews? [113] Orest seeks to distribute the land and the farm equipment to Nick and the nephews. However, he cannot do that until he rectifiesthe situation that has resulted from him using the sisters’ gift to pay all the funeral and estate administration expenses and unsecureddebts and liabilities.

See paragraphs 80 and 81 above. [114] Once that situation is corrected, Orest should distribute the remaining land and farm equipment with land transfers and a bill ofsale. [115] The Land Titles Act, RSA 2000, c L-4 provides that: 32(1) The owner of any estate leased or demised to the owner or to the person from whom the owner claims a title, for a life or forlives, or for a term of more than 3 years, in any land for which the grant from the Crown has been registered, may apply to have theowner’s title registered and to have a certificate of title issued for it to the owner under this Act.

(2) A certificate of title issued for a leasehold or life estate is, by implication and without any special mention in the certificate of title, subject to all instruments and caveats registered against the certificate of title from which the estate is derived prior to the registration of the instrument creating the leasehold or life estate. … 64(1) When land for which a certificate of title has been granted is intended to be transferred, the owner may execute a transfer in the prescribed form [Form 8]. …

(3) A transfer made pursuant to subsection (1) … shall (

a) give a description of the land that is sufficient to identify it, and (

b) contain an accurate statement of the estate or interest intended to be transferred or created. [ 116 ] Accordingly, to distribute the land referenced in paragraph 3(

c) of the Will, Orest should execute two transfers (using Form 8): (

i) a transfer of a life estate to Nick, for the duration of Nick’s life; and (ii) a transfer of the fee simple estate to the nephews. [ 117 ] The executed transfers should be presented for registration in the Land Titles Office at the same time. This will result in: (

i) a life estate certificate of title being issued to Nick, and (ii) a fee simple certificate of title being issued to the nephews. The nephews’ fee simple certificate of title will be endorsed with a memorandum acknowledging Nick’s life estate; and Nick’s certificate of title will be endorsed with this memorandum: “SEE TITLE FOR ESTATE OF LARGER EXTENT FOR REGISTRATIONS PRIOR TO LIFE ESTATE”. See Alberta Land Titles Procedures Manual (Edmonton: Government of Alberta, 2017) at LIF-1. [ 118 ] No registry exists for farm equipment.

Accordingly, all that is necessary to convey title from one to another is a bill of sale. See Alberta Wills and Estates Practice Manual (Edmonton: Legal Education Society of Alberta, 2016) at 9-38. [ 119 ] Therefore, to distribute the farm equipment referenced in paragraph 3(

c) of the Will, Orest should provide the nephews with a bill of sale that acknowledges Nick’s life interest. Will Orest have any further obligations relating to the land and the farm equipment once he distributes them? [ 120 ] Once Orest distributes the land and the farm equipment, he will have no further obligations relating to those assets. More specifically, he will not be obliged to monitor Nick’s life estates, as the nephews suggest he should.

It will be up to the nephews (as the remaindermen) and Nick (as the life tenant) to resolve any remaining issues between them themselves; that is, without Orest’s assistance: see Hager Estate at paras 19-20 . Should Orest’s accounts be passed and, if so, in what amount? [ 121 ] The next issue for me to determine is whether Orest’s interim accounts should be passed and, if so, in what amount.

Based on the parties’ arguments, it appears that their only dispute is about the interim compensation that Orest is entitled to receive. [ 122 ] Although the sisters filed Notices of Objection challenging the sufficiency of Orest’s financial statements, the professional fees the Estate had paid, and Orest’s proposed executor fees (of $38,393.08), they limited their trial argument to the issue of the proper characterization of the gift in paragraph 3(

e) of the Will, and the effect its characterization as a specific gift will have on the final accounts. They did not make any other arguments regarding Orest’s accounts.

I can only assume that this was because their other accounts-related concerns were quelled by the trial evidence and Orest’s counsel’s statement, at the beginning of the trial, that he would only be seeking interim executor compensation of $10,000. [ 123 ] Orest’s argument is limited to providing justification for the interim compensation (of $10,000 plus out-of-pocket expenses) that he is seeking; and the nephews simply say that they support Orest’s application and submissions. [ 124 ] Nick argues that Orest’s compensation should be reduced because his actions and inactions have caused or contributed to the wasting of the Estate.

What compensation should Orest receive? [ 125 ] In order to determine the interim compensation that Orest should receive, I must consider the relevant provisions of the Estate Administration Act and the Surrogate Rules , and what Orest has done as the personal representative of the Estate. Duties and tasks of a personal representative

[ 126 ] Sections 5(1) and 7(1) of the Estate Administration Act set out the general duties, and core tasks, of a personal representative. Section 5(1) provides that: A personal representative must (

a) perform the role of personal representative (

i) honestly and in good faith, (ii) in accordance with the testator’s intentions and with the will, if a valid will exists, and (iii) with the care, diligence and skill that a person of ordinary prudence would exercise in comparable circumstances where a fiduciary relationship exists, and (

b) distribute the estate as soon as practicable. [ 127 ] Section 7(1) provides that: The core tasks of a personal representative when administering an estate are (

a) to identify the estate assets and liabilities, (

b) to administer and manage the estate, (

c) to satisfy the debts and obligations of the estate, and (

d) to distribute and account for the administration of the estate. [ 128 ] The

Schedule to the Estate Administration Act provides examples of the types of activities that might be included in a personal representative’s core tasks: s 7(2). [ 129 ] In this case, the evidence demonstrates that, among other things, Orest: • had no prior experience as an executor; • visited Walter’s farm almost every day for the first couple of weeks after Walter died, and then once every two weeks for awhile; • gathered documents from Walter’s home; • received legal advice from Mr.

Kozina early on, and then retained another lawyer (Bruce Lennon) to help him with the probate application; • negotiated a discount on legal fees with Mr. Kozina (Exhibit 1, Tab 6); • had the land, and the buildings on the land, appraised by Landucation Appraisals; • prepared an inventory of Walter’s farm equipment by going to Walter’s yard and making a list of the items he saw in the yard; • added items that he knew to be Walter’s to the list, and deleted items that Nick said were his; • had Mr.

Andruchow (of Andruchow Auctions) appraise the items on the list; • got the cow and calf numbers (87 and 81, respectively) in the NC7 from Nick; • ascertained where Walter’s money and investments were; • had Walter’s cash, the contents of his CIBC bank account, his cashed CIBC GIC, and the contents of his Wood Gundy account placed into a new CIBC account in the Estate’s name; • prepared an inventory and appraisal of the contents of Walter’s home (Exhibit 5); • retained his current counsel (Christopher Hoose) at some point after March 2014 (Exhibit 1, Tab 6 and Exhibit 3); • was present for the two court-ordered, on-site inventories and appraisals (the Lakusta Inventory and the Andruchow Inventory); • sought the advice of accountants, had tax returns prepared for each year since Walter’s death, paid the taxes owing, and obtained a clearance certificate (to the date of Walter’s death) from the Canada Revenue Agency (Exhibit 1, Tab 20); • negotiated a settlement with an accounting firm that forgot to file a “rights and things return” (Exhibit 1, Tab 8);

• insured the home on the land (because Nick refused to insure it); • kept a log book to document the steps he has taken as the personal representative of the Estate (Exhibit 3); and • kept records of all the Estate’s revenue and expenses (Exhibit 1, Tabs 3(A)-(F). [ 130 ] When asked if he could estimate the time he has spent performing tasks as the personal representative of the Estate, Orest said: It was a lot of time. We did do a lot of miles too. It first started with the funeral, had to make arrangements for the funeral, then we had to go to the bank and set up accounts.

From there then that’s when we could get money orders or cheques made out to different places that we had to pay. Then I needed signatures from a notary. I had to drive [from the Grassland area] to Lac La Biche for that, go to the mail, to pick up the mail, which was sometimes picked up at the same time as we did ours, other times we were expecting some mail for Walter. We’d drive in and pick that up. Had to do business for Walter with the post office. Had to do business with the couriers, so we also had to drive to town to bring in letters or parcels to the mail which had to be shipped out.

Go to different business places where Walter had accumulated some monies, due to be a membership. Had to get that all settled. There was I know for fact Co-op, [UFA]. He had the shares in a couple of different meat plants, so I had to find out which they were, phone those places, and found out that they were no longer in business. Any time there was any bills come in that I had to pay from the estate, I had to drive to Boyle, which was approximately 25 minutes from our place. Many phone calls.

One of the lawyers we had was first in Lac La Biche, which I had to make trips there, then we had transferred to a lawyer from Westlock. We made quite a few trips there, and that’s where we had first part of the will done, probated.

And then later on we had to transfer to Edmonton, which was a two-hour drive every time we had to come in. [ 131 ] I am satisfied that, in doing all he has done as the personal representative of the Estate, Orest has acted honestly and in good faith; and has tried his best to fulfill Walter’s intentions, follow the Will, and seek advice about how to administer the Estate and distribute the Estate property.

Unfortunately, Orest’s path has not been an easy one, due to the lack of direction in the Will; the issues that arose between him and Nick, and between Nick and Darrel, early in the administration of the Estate; and the protracted litigation that followed. Compensating a personal representative [ 132 ] So, how much should Orest be compensated for the work he has done in administering the Estate to date? [ 133 ] Section 5(2) of the Estate Administration Act provides that “[a] personal representative is a trustee within the meaning of the Trustee Act ”; and,

section 44 of the Trustee Act , RSA 2000, c T-8 provides that a trustee “is entitled to any fair and reasonable allowance for the trustee’s care, pains and trouble and the trustee’s time expended in and about the trust estate that may be allowed by the Court”. [ 134 ]

Part 1 of

Schedule 1 to the Surrogate Rules also deals with personal representatives’ compensation. It provides that a personal representative “may receive fair and reasonable compensation” for the duties he performs, and lists the factors to be considered when determining the compensation that should be allowed to a personal representative: ss 1-2. It also provides that “[a]dditional compensation may be allowed” when a personal representative encounters “unusual difficulties or situations” or “must instruct on litigation”: s 3.

Moreover, it provides that, “[i]f a lawyer or other agent performs some or all of the duties of [a] personal representative, the amount payable to the personal representative must be reduced commensurately”: s 7. Finally, it provides that a personal representative is entitled to be reimbursed for expenses he “properly incurred ... in the administration of the estate”: s 9. [ 135 ] Orest is entitled to fair and reasonable compensation for the work he has done in administering the Estate to date.

Having considered the factors relevant to a determination of what his interim compensation should be, I am satisfied that Orest should receive the $10,000 he is seeking for the tasks he has completed to date. [ 136 ] Orest also seeks reimbursement for the out-of-pocket expenses he has incurred while administering the Estate. His claimed expenses total $592.47. They consist of amounts Orest paid to have Walter’s 2012 income tax return prepared, to have Walter’s mail re- routed, to open Walter’s safety deposit box, to change the name on the grazing lease, and for postage: Exhibit 1, Tab 9.

I am satisfied that Orest reasonably incurred all of his claimed expenses in carrying out his duties, and that he should be reimbursed for them. [ 137 ] Accordingly, Orest should be paid $10,592.47 from the Estate. This setting of Orest’s interim compensation will not preclude him from making a claim for additional compensation in the future, for the tasks he performs after this decision: Podulsky Estate v Podulsky Estate , 2015 ABQB 509 at para 84 , [2015] AJ No 878 (QL).

Remaining accounts-related issues [ 138 ] If there are any remaining issues regarding Orest’s interim accounts, the parties can speak to them within sixty days. Costs (Should Nick have elevated costs awarded against him because of his conduct?) [ 139 ] The final issue before me is whether Nick should have elevated costs awarded against him because of his conduct. I agree with the nephews that that issue, and the issue of costs generally, must be left to another day.

The parties need an opportunity to consider my decision, and who was successful/unsuccessful on each of the issues I have determined, before the issue of costs can be addressed.

[ 140 ] That said, I invite the parties to consider these rules and principles: • Generally-speaking, the rules and principles governing costs in civil litigation apply to estate litigation (the modern rule): Goold Estate v Ashton , 2017 ABCA 315 at para 3 , [2017] AJ No 1000 (QL), citing Koma v Tomich Estate , 2011 ABCA 257 at para 8 , [2011] AJ No 992 (QL) and Schwartz Estate v Kwinter , 2013 ABQB 147 at paras 113-116 , 558 AR 236 [ Schwartz Estate ]. Accordingly, as in other civil litigation, costs in estate litigation are usually awarded to the successful party (to be paid by the unsuccessful party), and are typically based on

Schedule C to the Rules of Court . • There are some recognized exceptions to the modern rule. For instance, costs may not follow the event in an estate matter where an unsuccessful challenge to the will or the estate was reasonable: Schwartz Estate at paras 113 and 115 ; Chabros v Anderson , 2012 ABQB 517 at para 7 , [2012] AJ No 859 (QL). • As in other civil litigation, the Court enjoys a wide discretion to award (or refuse to award) costs in estate litigation.

For example, it is open to the Court to deny costs to a successful party, or require an unsuccessful party to pay enhanced costs, based on that party’s misconduct in the litigation: see Alberta Rules of Court , rule 10.33(2); Schwartz Estate at para 111 . • Rule 64(1)(

h) of the Surrogate Rules makes it clear that this Court can “order costs to be paid from the estate or by any person who is a party” to the proceeding. • For the purposes of Division 2 (Recoverable Costs of Litigation) of

Part 10 (Lawyers Charges, Recoverable Costs, Etc.) of the Alberta Rules of Court , “‘party’ includes a person filing or participating in an application or proceeding who is or may be entitled to or subject to a costs award”: rule 10.28. Accordingly, Nick is a party, even though he did not file any of the applications that led to this trial. [ 141 ] If the parties cannot reach an agreement on costs, they may speak to them within 60 days. Heard on the 10 th -13 th and 18 th -21 st days of April, the 30 th and 31 st days of October, and the 1 st -2 nd days of November, 2017.

Dated at the City of Edmonton, Alberta this 19 th day of December, 2017. K.G. Nielsen J.C.Q.B.A. Appearances: Christopher G. Hoose for Orest Zatorski Slader E. Oviatt for Robert Petroskey and Darrel Petroskey Peter J. Mawson for Nick Kachur Thomas E. Plupek for Leona Kirchenberger, Mary Petroskey and Sandra Saidler