Brewin v Magyar, 2022 ABKB 729

Court of King’s Bench of Alberta Citation: Brewin v Magyar, 2022 ABKB 729 Date: 20221103 Docket: 1406 00199 Registry: Lethbridge Between: Cherylene Brenda Brewin Plaintiff/Respondent - and - Bryan Philip Magyar Defendant/Applicant _______________________________________________________ Reasons for Decision of the Honourable Justice G.H. Poelman on Appeal from L.A. Mattis, Applications Judge, Court of King’s Bench of Alberta _______________________________________________________

Table of Contents I. Introduction . 2 II. Amendments to Statement of Claim .. 2 III. The Applications Judge’s Decision . 2 IV. Standard of Review .. 2 V. Legal Principles on Amending Pleadings . 2 A. General Test 2 B. Prejudice . 2 C. Hopeless . 2 D. Limitation Periods . 2 E. Bad Faith . 2 F. Evidentiary Threshold . 2 VI. Wrongful Conversion: Bert’s Assets . 2 A. The Amendments . 2 B. Evidence . 2 VII. Wrongful Conversion: Beatrice’s Assets . 2 A. The Amendments . 2 B. Evidence . 2 VIII. Estate Administration . 2 A. The Amendments . 2 B. Evidence . 2 IX. Findings . 2 A. Prejudice . 2 B.

Evidence and Hopelessness . 2 1. Introduction . 2 2. Wrongful Conversion of Bert’s Assets . 2 3. Wrongful Conversion of Beatrice’s Assets . 2 4. Estate Administration Amendments . 2 C. Limitations Periods . 2 D. Bad Faith . 2 X.

Summary of Conclusions . 2 I. Introduction [ 1 ] The defendant, Mr. Magyar, appeals from the decision of the learned applications judge (formerly styled “master”), set out in an order pronounced August 20, 2021 and January 10, 2022, filed April 20, 2022. The order is based on a chambers endorsement dated and filed August 20, 2021. [ 2 ] The plaintiff, Ms. Brewin, and the defendant, Mr. Magyar, are the children of Bert Magyar (who died on June 1, 2007) and Beatrice Magyar (who died on June 12, 2008). Their parents’ estates mainly comprised farmland and related personalty.

These assets, with some exceptions, went from Bert’s estate to Beatrice and, on her death, were bequeathed equally to the parties. The parties were appointed as joint personal representatives of each estate.

[ 3 ] After Bert’s death, contentious issues arose between the parties. Initially they were addressed by written contracts but ultimately, with the filing of Ms. Brewin’s statement of claim in 2014, litigation ensued. [ 4 ] The applications judge’s endorsement (paragraph 13) gives a detailed list of steps, formal and informal, in the action. There was little activity for several years before June 11, 2019, when Ms. Brewin (represented by new counsel) filed an application to amend her statement of claim.

There were many procedural disputes following this filing before the applications judge heard the amendment application (and other contested applications not a part of this appeal) on December 8, 2020. As indicated above, the applications judge issued her written decision on August 20, 2021. [ 5 ] The decision ruled on a wide range of the plaintiff’s proposed amendments. On this appeal, the defendant no longer challenges some amendments and the plaintiff has withdrawn her application on other amendments.

Further, the applications judge’s denial of the defendant’s application to dismiss the action for delay is not appealed. II. Amendments to Statement of Claim [ 6 ] The original statement of claim was a personal action by Ms. Brewin against Mr. Magyar. It makes no reference to Bert, his death, or his estate.

Rather, it deals only with Beatrice’s estate, allegations of wrongdoing in connection therewith and disputes between the parties relating to contracts they made about farm assets and operations when attempting to manage their co-ownership of the inherited farm. [ 7 ] The proposed amended statement of claim has been modified, with the assistance of court directions, for clarity and organizational purposes. The version at issue on this appeal is attached as a

schedule to the applications judge’s order filed April 20, 2022. [ 8 ] The amendments significantly lengthen the original pleading and increase the amount claimed. They raise issues relating to the administration of Bert’s estate. As plaintiff, Ms. Brewin’s status is expanded so she also claims in her position as a personal representative of both estates against the defendant personally and, new in the amendments, as a personal representative himself. [ 9 ] The many amendments are distributed throughout the statement of claim.

Changes that relate to a particular allegation or claim often appear throughout the document. Helpfully, the defendant organized the amendments in categories so that they can be addressed in groups. The plaintiff has not objected to dealing with them in this way. [ 10 ] There are three categories of amendments in dispute. They are shown in the following chart, reproduced from defendant’s counsel’s May 27, 2022 letter (with italics showing my additions to the first category, explained later in this decision): Category of Amendment Proposed Amended Statement of Claim Subject to This Appeal (by

Schedule “A” to the Order of Master Mattis filed April 20, 2022) Wrongful conversion of Bert’s Banking Assets or Other Assets Paragraphs 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 38 (underlined), 43, 44, 45, 46, 47 (except amendments relating to the Bill of Sale), 48, 56, 57, 67, 68, 69, 72(c) (underlined), 72 (i) , 72(j) (underlined), and 72(k).

Wrongful conversion of Beatrice’s Assets (also defined as Estate Assets) Paragraphs 26, 27, 28, 29, 30 (underlined), 34, 35 (underlined), 36 (underlined), 37 (underlined), 38 (underlined), 39, 43, 44, 46, 47 (except amendments relating to the Bill of Sale) 56, 57, 60 (underlined), 61 (underlined), 72(c) (underlined), 72(i), 72(j) (underlined), and 72(k).

Estate Administration Paragraphs 5 (underlined), 7, 14, 63, 64, 65, 66, 67, 68, 69, 70 (Estate only), 72 (g) (underlined), 72(i), 72(j) (underlined), 72(k), 72(l), 72(m), 72(n), and 72(o). [ 11 ] The three categories of amendments can be summarized in brief as follows:

a) Wrongful Conversion of Bert’s Assets: The plaintiff alleges that banking and other assets belonging to Bert were excluded from the application for probate of his estate prepared by the defendant; and that the defendant converted these assets, particularly the banking assets, to his own use.

b) Wrongful Conversion of Beatrice’s Assets: The plaintiff carries over allegations from the previous category, in the sense that what should have been included in Bert’s estate necessarily should have been in Beatrice’s estate also.

Additionally, amendments allege that the defendant wrongfully took money from the Beatrice estate bank account; took personal assets that should have been sold in the 2013 farm auction (when the defendant retired from farming); took proceeds from the auction for items ostensively owned by the defendant and sold on his behalf, but that in fact belonged to the estate; and the defendant used for his benefit estate assets before they were sold and must account for the benefit derived therefrom.

c) Estate Administration: The plaintiff seeks to add the estates of Bert and Beatrice as parties to the action; to remove the defendant as personal representative of both estates; an accounting in each estate; and alleges breaches of fiduciary duties by Mr. Magyar as a personal representative. The amendments are described in more detail later in this decision.

III. The Applications Judge’s Decision [ 12 ] The applications judge’s decision contains a useful factual background (paras 4-12). Parts of that background are paraphrased in what follows. [ 13 ] As noted above, Bert and Beatrice died, respectively, on September 10, 2007 and June 12, 2008. Ms. Brewin and Mr. Magyar were joint personal representatives for both estates. There has been no passing of accounts in either estate. [ 14 ] Bert owned eleven quarter sections of farmland in the County of Lethbridge, as well as savings, farm equipment and personal property, including numerous vehicles.

His will provided that the land would be transferred to Beatrice and other assets would be divided equally between Ms. Brewin and Mr. Magyar. Beatrice’s will provide that her assets would be divided equally between Ms. Brewin and Mr. Magyar. [ 15 ] Following Bert’s death, Mr. Magyar raised a potential claim against his estate for quantum meruit or unjust enrichment, based on having assisted Bert with farming for about thirty-five years. Ms. Brewin and Mr. Magyar reached an agreement about this potential claim, set out in a short written agreement dated November 23, 2007. Ms.

Brewin agreed to a payout of sixty percent to Mr. Magyar and forty percent to Ms. Brewin of their total inheritances. Ms. Brewin asserts that she was not paid the full amount to which she was entitled under the agreement. In one proposed amendment, she disputed the validity of the agreement but those amendments were refused by the applications judge and not appealed. [ 16 ] Mr. Magyar asserts that he and Ms. Brewin divided the vehicles in Bert’s estate between themselves and entered into a bill of sale on August 25, 2008 for Ms.

Brewin’s interest in the farm equipment they received from Beatrice’s estate to be sold to Mr. Magyar. Amendments contesting the validity of the bill of sale are no longer opposed by Mr. Magyar. [ 17 ] On October 9, 2009, the parties made a “Co-Ownership Agreement” addressing how profits would be shared from farm operations, as Mr. Magyar continued to farm the lands. On October 23, 2009, the parties signed transfers for the farmlands from themselves as executors of Beatrice’s estate to themselves as tenants in common, Ms. Brewin as to forty percent, Mr. Magyar as sixty percent.

This arrangement lasted until October 2012, when the farm was sold to a third party. [ 18 ] On June 8, 2013, Mr. Magyar hired Balog Auction Services Inc. to conduct a sale of his personal property, including the farm equipment he purchased pursuant to the 2008 bill of sale, as well as household items belonging to Beatrice’s estate. [ 19 ] Ms. Brewin’s action was commenced on March 4, 2014, making claims related to Mr. Magyar’s administration of Beatrice’s estate, claiming that he excluded her from the process and withheld information from her.

Further, she alleged that he wrongfully converted estate assets to his own use, fraudulently induced her to sell her interest in estate assets for less than fair value, and failed to perform settlement agreements to which he had agreed. She advanced claims regarding the Co-Ownership Agreement and the sixty-forty percent split for crop proceeds, Mr. Magyar’s handling of a bank account where funds from Beatrice’s estate were deposited, the proceeds from the Balog Auction, and a claim regarding the bill of sale. Fraud, duress and misrepresentation are alleged. [ 20 ] Mr.

Magyar’s statement of defence, filed May 9, 2014, asserted that Ms. Brewin had access to all information relating to both estates, as a personal representative. He stated that he complied with the terms of the Co-Ownership Agreement and denied converting any assets. He also denied the allegations of fraud, misrepresentation and duress regarding the bill of sale. Finally, he pleaded that the action was barred by expiry of limitations periods. [ 21 ] The applications judge reviewed the extensive amendments proposed in Ms. Brewin’s application, and organized them in a series of categories according to Mr.

Magyar’s brief. She reviewed the law relating to amending pleadings after close of pleadings. She noted that an amendment would usually be refused only if there was serious prejudice not compensable in costs, the amendment was hopeless, a limitation period had expired or there was bad faith in failing to plead the amendment in the first instance (para 24). [ 22 ] On these grounds, she refused some amendments but permitted others. [ 23 ] She then considered applications to dismiss the action under rules 4.31 and 4.33 and found those applications should fail. IV.

Standard of Review [ 24 ] The standard of review on appeal from an applications judge to a judge, on all issues, is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 , para 30 . Where no new evidence has been adduced on the appeal, the appeal is based on determining whether, on the record, the applications judge’s decision was correct: Steer v Chicago Title Insurance Company , 2019 ABQB 318 , para 9 . V. Legal Principles on Amending Pleadings A.

General Test [ 25 ] An application to amend pleadings after the close of pleadings (having occurred long since in this case, according to rule 3.67(2)), is governed by rule 3.65, which states that “the Court may give permission to amend a pleading,” followed by procedural directions where such leave is granted. [ 26 ] Generally, any pleading can be amended no matter how careless or late the amendment sought is: Balm v 3512061 Canada

Ltd, 2003 ABCA 98 , para 43 . This generous approach is consistent with the principle of using the rules “to identify the real issues in dispute,” in accordance with rule 1.2(2)(a); and the direction in

section 8 of the Judicature Act , R.S.A. 2000, c. J-2 , which requires that a court exercise its jurisdiction “so that as far as possible all matters in controversy between the parties can be completely determined and all multiplicity of legal proceedings concerning these matters avoided”: AARC Society v Canadian Broadcasting Corporation , 2019 ABCA 125 , paras 53-56 . [ 27 ] Thus, amendments after close of pleadings should be allowed unless there is a compelling reason not to: AARC Society , para 53 . There are four commonly recognized exceptions, where the discretion to allow amendments should not be exercised:

a) Where they would cause serious prejudice not compensable in costs;

b) Where the amendment requested is “hopeless”;

c) Where the amendments seek to add a new party or a new cause of action after expiry of limitation period, unless permitted by statute; and

d) Where there is an element of bad faith associated with the failure to plead the amendment in the first instance, Eon Energy Ltd v Ferrybank Resources Ltd , 2018 ABCA 243 , para 18 , quoting with approval Dow Chemical Canada Inc v Nova Chemicals Corporation , 2010 ABQB 524 , paras 20-21 . B.

Prejudice [ 28 ] It will be easier to establish serious prejudice not compensable in costs where the amendments relate to events that occurred long ago, there have been many years of litigation on original pleadings, new amendments fundamentally change the issues, and the amendments will cause further delay such as adjournment of a trial or the need to redo questioning and production of records: Eon Energy , paras 19-28; Jin v Ren , 2014 ABQB 250 , paras 31-32 ; and Precision Forest Industries Ltd v East Prairie Investments Corp , 2018 ABQB 489 (M.), paras 48-49 . C.

Hopeless [ 29 ] A proposed amendment is “hopeless” where it does not disclose a cause of action or is so inconsistent with the record that it could be fairly described as hopeless – in other words, it is plain and obvious that there is no triable issue: Enmax Power Corporation v Remington Development Corporation , 2022 ABCA 71 , paras 34-37 and 48 . D. Limitation Periods [ 30 ] When amendments are sought after possible expiry of a limitation period, it is preferable to resolve the limitation issues when the application is made.

Where complexity of the facts or state of the record preclude a final decision, the amendments should be allowed, the defendants be permitted to plead the limitations defence, and the issue resolved at trial: Dominic Construction Ltd. v Primewest Capital Corp. , 2020 ABCA 265 , paras 23-28 . E. Bad Faith [ 31 ] A party opposing an amendment on the ground of bad faith must prove the allegation on a balance of probabilities: Club Industrial Trailers v Paramount Structures , 2022 ABQB 34 , para 31 .

The bad faith exception applies to amendments that seek to inflict financial or emotional harm, conceal information relevant and material to the litigation issues, or deceive the adverse party or the court, but is not intended to punish negligent or careless delay that can be remedied through costs: Club Industrial , paras 35 and 36. F. Evidentiary Threshold [ 32 ] Although the evidentiary threshold is not enumerated as one of the exceptions, it may lead to a finding that an amendment is hopeless: Attila Dogan Construction and Installation Co Inc v AMEC America’s Ltd , 2014 ABCA 74 , para 27 .

Indeed, that is one of the main arguments of the defendant in this case. [ 33 ] Although the evidentiary threshold usually is low, some evidence is required to amend after the close of pleadings: Attila Dogan , paras 24 and 26. A modest degree of evidence is enough, as the applicant does not need to show the amended pleading can be proved at trial or would meet the test for

summary judgment: Attila Dogan para 26, citing Balm v 3512061 Canada Ltd , 2003 ABCA 98 . [ 34 ] While the test is low, it does not preclude all weighing of evidence; and while the mere presence of contradictory evidence does not necessarily prevent an amendment, it does not follow that merely providing some evidence on each point is sufficient: Attila Dogan , para 29. [ 35 ] However, where there are allegations of fraud, highhandedness or malicious conduct, the evidentiary threshold is significantly elevated; in such cases, the applicant “must show ‘good ground’ or ‘exceptional circumstances’ for such amendments and that ‘good ground’ cannot be shown without ‘significant evidence’”: Canadian Natural Resources Limited v Arcelormittal Tubular Products Roman S.A. , 2013 ABCA 87 , para 11 , citing Mikisew Cree First Nation v Canada , 2002 ABCA 110 .

VI. Wrongful Conversion: Bert’s Assets

A. The Amendments [ 36 ] Reading the amendments generously, there seems to be two classes of wrongful conversion of Bert’s assets alleged against Mr. Magyar. The first are “bank accounts and financial assets,” the class identified by Mr. Magyar in his brief and the original version of the chart reproduced above. [ 37 ] The amended statement of claim alleges that Mr.

Magyar “fraudulently misrepresented and withheld information regarding the nature and extent of Bert’s Estate assets, including, particularly the bank accounts and financial assets owned or held by Bert Magyar at the time of his death and the disposition thereof or the proceeds therefrom ... as well as fraudulently misrepresenting and withholding information regarding other of Bert’s Estate assets, including disposition thereof or the proceeds therefrom” (para 11). [ 38 ] Specifically, it is alleged that Mr.

Magyar excluded from the inventory contained in the application for probate of Bert’s estate “any information about or reference to or quantification of the bank accounts and financial assets” owned by Bert (para 12). Ms. Brewin acknowledges that she signed the probate applications, but had not been allowed to participate in compiling the information and involuntarily signed the documents “by being bullied, manipulated, threatened and coerced” (para 17). [ 39 ] Remedies for the alleged wrongful conduct are sought, including the removal of Mr.

Magyar as a personal representative, an accounting and reimbursement for converted assets or assets he used for his profit (paras 14-16). [ 40 ] Mr. Magyar, in his briefs and submissions, interprets the allegations about wrongful conversion of banking assets based on questioning on affidavits by Ms. Brewin’s counsel. Thus, Mr. Magyar’s understanding of the allegation against him is as follows: The April 2007 Investment

Summary identified the total of Bert and Beatrice’s invested assets at $499,790.99 as of April 2007. Legal Counsel for Cherylene has suggested (not in the proposed pleading) that the fact no banking assets were included in Bert’s Inventory in the application for a grant of probate, and the fact that Beatrice’s

Schedule 5-Inventory in her Application for a Grant of Probate lists bank accounts that total $213,775.25 represents a theft or conversion of the difference ($347,485.25) by Bryan. [Para 49 of brief, footnotes omitted.] Ms. Brewin has not said this

interpretation is mistaken. [ 41 ] The second class of wrongful conversion of Bert’s assets comprises allegations that Mr. Magyar includes in the chart category “wrongful conversion of Beatrice’s assets.” However, these allegations seem, on my reading of them, to relate to assets from both estates. (Thus, they are added to the chart in italics.) [ 42 ] The amended statement of claim refers to a class of assets confusingly described in the proposed amendments as “Beatrice’s Chattels” (paras 43 through 48).

As I understand the amendments, these assets include, but are not limited to, assets from Bert’s estate that allegedly should have been transferred to Beatrice under Bert’s will but were wrongfully excluded from the application for probate of Bert’s estate. Thus, it is alleged (paras 43 through 48) that the number of items and value of personalty transferred to Beatrice’s estate were inaccurate; this was done “wrongfully and intentionally” (para 47) by Mr.

Magyar “for his personal gain and to cheat the Plaintiff out of her proper bequest under Beatrice’s Will” (para 48). [ 43 ] In addition, particular vehicles that in the original statement of claim (para 19) were alleged to be part of Beatrice’s estate and wrongfully sold by Mr. Magyar in an auction as his own personal property are, in the amended statement of claim (para 38), said to have been assets of Bert’s estate which were wrongfully excluded from Beatrice’s estate. Further, Mr.

Magyar is alleged to have used and obtained personal benefit from Beatrice’s Chattels (as explained above, a combination of assets wrongfully excluded from probate of Bert’s estate plus assets that formed part of Beatrice’s estate) such that he must compensate the estates and Ms. Brewin therefor (para 29). B. Evidence [ 44 ] Ms. Brewin submitted one affidavit in support of her amendment application, sworn June 11, 2019.

It states that the documents listed in the affidavits of records “provide the evidence” to support the new claims (para 6) and that “the contents of the proposed Amended Statement of Claim are all true and correct, especially with respect to the Defendant’s Misconduct outlined therein” (para 7). She attached as exhibits a number of documents.

The ones relevant to the amendments still at issue are affidavits of records, and the applications for and grants of probate in the Bert and Beatrice estates. [ 45 ] Her affidavit contains general statements about the estate process in which, as a joint personal representative, she was legally involved. Thus, she deposed that during the administration of both estates, Mr.

Magyar “continued to dominate me, to over power me, to intimidate me and coerce me into submitting to his will and direction” (para 20) and precluded her from having proper, timely access to records, documents and bank accounts and kept many of them secret from her (para 21).

While she received some bookkeeping information, it “was incomplete, self-serving and failed to account for the improprieties perpetrated by the Defendant in the calling in, the care, the disposition and distribution of the assets [from both estates] ... as well as the personal benefits he wrongfully took therefrom” (para 22). [ 46 ] She further deposed that Mr. Magyar was always hostile, discourteous and disrespectful of her position as joint personal representative of both estates.

He refused to allow her “to participate in evaluation, administration and disposition of the assets” in both estates (para 33); deprived her of her right and responsibility as a personal representative of Beatrice’s estate (para 34); misrepresented values of assets and withheld funds from both estates, for his own gain (para 36); and took total and complete control of the administration of both estates and failed to provide any interim or final accounting (para 37). [ 47 ] She alleged that Mr. Magyar was an intimidating man who bullied and dominated Ms.

Brewin and, accordingly, many documents she signed and steps she took were under intimidation. Ms. Brewin’s affidavit contains no facts or particulars about what

assets of Bert’s estate Mr. Magyar misappropriated or how. [ 48 ] When questioned on her affidavit, she expressed concerns about the drop in value of some accounts but acknowledged that she received funds from the accounts in question. [ 49 ] When cross-examined on his first two affidavits, Mr. Magyar was challenged with the fact that no banking assets were shown on the probate application documents for Bert’s estate. This was in contrast to an April 2007 investment

summary showing just under $500,000 in bank investments held by Bert. Likewise, he was challenged with the fact there was a significant difference between the total bank assets for both deceased parents shown on the 2007 investment

summary and the banking assets disclosed in the probate application documents for Beatrice’s estate. [ 50 ] The difference between the 2007 investment

summary for Bert’s financial accounts and the absence of banking assets in the inventory for his probate application may raise questions but does not of itself constitute evidence of wrongful conversion by a personal representative. Even so, Mr. Magyar explained the differences in his January 15, 2020 affidavit, with supporting documents. He was questioned on these points in a later cross-examination but the evidence, in all its essentials, remains intact and there is no contrary evidence. [ 51 ] In brief, Mr. Magyar’s evidence, Ms. Brewin’s questioning, and the documents establish the following:

a) Before Bert died, Mr. Magyar and Ms. Brewin agreed (at Ms. Brewin’s suggestion) that their parents’ deposit accounts be consolidated into a joint account at TD Bank. Mr. Magyar and Ms. Brewin would open their own joint account at TD Bank and as their parents’ investments matured they would be deposited in the joint bank account held by them.

b) Because Bert’s investments were transferred to a joint account held by him and Beatrice, there were no investments to report in his probate application. William Peterson, the lawyer for Bert’s estate, received confirmation from the bank after Bert’s death that all of his assets from the bank were held jointly with Beatrice.

c) The probate application for Bert’s estate included an affidavit sworn by both Ms. Brewin and Mr. Magyar, indicating no banking assets. Ms. Brewin’s affidavit contains general allegations to the effect that she was intimidated and coerced by Mr. Magyar throughout the management of both parents’ estate, but the evidence is undisputed that the application documents for both estates were signed in the presence of Mr. Peterson, an experienced Lethbridge lawyer.

d) Bert’s April 2007 investment

summary showed 5 GICs. All matured and were deposited in the joint account held by Mr. Magyar and Ms. Brewin before Beatrice’s death. VII. Wrongful Conversion: Beatrice’s Assets A. The Amendments [ 52 ] The original statement of claim contains allegations about wrongdoing with respect to assets in Beatrice’s estate. The proposed amendments add new allegations of fact and new claims. [ 53 ] As a general plea, Ms. Brewin seeks an audited accounting regarding Mr.

Magyar’s use of estate lands and revenue generated from his farming operations and any other revenues associated with estate lands from Beatrice’s death until Mr. Magyar ceased farming in 2012 (para 26). Thus, in addition to any specific allegations, Ms. Brewin wants an inquiry into all of Mr. Magyar’s dealings with estate assets. [ 54 ] More particularly, it is alleged that Mr. Magyar excluded Ms.

Brewin from the application and administration processes related to Beatrice’s estate and intentionally excluded assets in the probate application process (para 28); and those assets he excluded he converted to his own use and benefit (para 29). [ 55 ] The proposed amendments also allege that Mr. Magyar “wrongfully and improperly bullied, manipulated, threatened and coerced the Plaintiff to involuntary succumb to the improper and unlawful division of the money in Beatrice’s Estate account” (para 30); and she seeks an audit of the estate bank accounts (para 34).

The fact that there was a shortage of money to pay the taxes for Beatrice’s estate, requiring personal contribution by Ms. Brewin, was caused by this wrongful conduct of Mr. Magyar (para 35). [ 56 ] There are also new allegations relating to the farm auction conducted by Balog. The original statement of claim (paras 17-19) alleges that Ms. Brewin was excluded from the process; that Mr.

Magyar took many assets that should have gone into the sale, and kept them for his personal use; that he sold many items that he represented were his own, and kept the proceeds, when in fact they were estate assets; and that in particular, he sold certain vehicles that were estate property, but kept all of the proceeds for himself. [ 57 ] The new allegations add epithets about Mr. Magyar’s motives and expressly say he kept or confiscated the assets or proceeds complained of (paras 36 and 37 of the amended statement of claim), but these were already implicit in the original allegations.

A subtle but material change is made in the allegations about Mr. Magyar’s sale of certain vehicles for which he kept all the proceeds (para 38). Whereas the original statement of claim alleged that these were assets of Beatrice’s estate, the new allegations state that they were part of Bert’s estate and excluded by Mr. Magyar when he prepared the probate application documents.

Ultimately, however, the amendment states that the proceeds from the sale of these vehicles belong to Beatrice’s estate (impliedly because Beatrice was the sole beneficiary under Bert’s will). (The draft paragraph 38 of the amended statement of claim fails to underline all of the changes.) [ 58 ] Thus, the amended paragraph 38 changes the allegation of misappropriating vehicle sale proceeds; now, the allegation is that the vehicles were part of Bert’s estate, while the original statement of claim alleged they were part of Beatrice’s estate. The ultimate result, of course, is the same.

[ 59 ] To complete this series of proposed amendments regarding the Balog auction, Ms. Brewin seeks an accounting of all Mr. Magyar’s actions regarding the Balog sale and repayment of any funds wrongfully converted to his use (para 39). [ 60 ] The last of the next group of proposed amendments relate to Beatrice’s Chattels which, as explained above, comprise assets alleged to have been wrongfully excluded from Bert’s estate as well as assets held by Beatrice at the time of her death.

These allegations (paras 43-48 and 56-58) thus overlap with allegations about the wrongful conversion of assets from Bert’s estate. [ 61 ] Insofar as they concern wrongful conversion of Beatrice’s estate assets, these amendments allege that Ms. Brewin was not allowed input into valuation (para 45); that the chattels were valued at $198,200 in the application for probate of Bert’s estate, when only a year later they were represented at merely $79,240 in the application for probate of Beatrice’s will (para 46); that the “wrongfully and intentionally misrepresented” value was done by Mr.

Magyar “fraudulently and intentionally” (para 47); and this was done “for his personal gain and to cheat the Plaintiff out of her proper bequest under Beatrice’s Will” (para 48). [ 62 ] Ms. Brewin alleges, in other amendments, that Mr. Magyar used and obtained personal benefit from Beatrice’s Chattels and must compensate the estates and Ms. Brewin therefor (para 56-58) – again, this overlaps with allegations made regarding wrongful conversion of assets from Bert’s estate. [ 63 ] Finally, with respect to both estates, it is alleged that Mr. Magyar misrepresented values to Ms.

Brewin and estate lawyers so that he could wrongfully acquire an undervalued interest he had purchased from Ms. Brewin; and she seeks compensation for what her real value should have been (paras 60 and 61). B. Evidence [ 64 ] As with the allegations relating to conversion of Bert’s assets, Ms. Brewin’s affidavit contains no particulars about what assets of Beatrice’s estate Mr. Magyar is alleged in the amendments to have misappropriated or how.

The evidence in support comprises reference to records produced, her statement of belief that all of the amendments are “true and correct,” and her allegation that she was kept out of her role as a personal representative. [ 65 ] In support of allegations explaining why Mr. Magyar is responsible for things she also signed or participated in, her affidavit contains statements that she acted from intimidation and bullying. VIII. Estate Administration A. The Amendments [ 66 ] As noted above, the original statement of claim was a personal action between Ms. Brewin and Mr. Magyar.

It made no reference to Bert or his estate. It dealt with Beatrice’s estate, allegations of wrongdoing in connection therewith and disputes between the parties relating to their dealings with the inherited assets. Neither party was named in their capacity as personal representative. [ 67 ] The proposed amendments involve two types of new claims. The first concerns the parties to the action. [ 68 ] Ms.

Brewin seeks to add herself in two capacities additional to her personal one: as personal representative of Bert’s estate and as personal representative of Beatrice’s estate (amended style of cause and paragraphs 8 and 9, although these latter are not objected to). Likewise, allegations are made against Mr.

Magyar in his capacity as personal representative in both estates (paragraphs 7, 8 and 9 (not objected to in this category), 14, 63, 64, 65, 66, and (impliedly) 67 to 69). [ 69 ] The second type of new claim is for relief customarily sought in estate administration proceedings under the Estate Administration Act , SA 2014, c. E-12.5 , and the Surrogate Rules . Thus, Ms. Brewin seeks removal of Mr. Magyar as personal representative in both estates (paras 7, 14 and 64) and an accounting of the administration of both estates (paras 7 and 14). [ 70 ] There are other amendments that Mr.

Magyar classifies in his chart as relating to his estate administration, but I have addressed them as part of other amendments: personal liability for estate tax liabilities (paragraph 35); and seeking return of wrongfully converted assets (scattered throughout, but mainly in paras 14, 15, 16, 29, 39 and 67). B. Evidence [ 71 ] In addition to the evidence summarized for the amendments relating to wrongful conversion of Bert’s assets and conversion of Beatrice’s assets, Ms. Brewin’s affidavit alleges that Mr.

Magyar failed to comply with the Surrogate Rules by failing to give a proper accounting of the two estates (para 63) and states that he has never applied to the court for a passing of accounts. IX. Findings [ 72 ] Broadly speaking, I agree with the decision of the applications judge to allow the amendments relating to the category wrongful conversion of Beatrice’s assets. [ 73 ] I differ, with respect, from the applications judge on the other amendments sought.

The amendments for the wrongful conversion of Bert’s banking assets or other assets are not permitted, nor are the amendments related to estate administration. The reasoning for these findings follows.

A. Prejudice [ 74 ] The applications judge found there was no prejudice that could not be compensated in costs with respect to the amendments remaining in issue before me (wrongful conversion of assets from each estate and claims relating to estate administration). [ 75 ] There are differences potentially relevant to prejudice among theses categories. Allegations relating to Beatrice’s estate were made in the original statement of claim. I find there is less prejudice in relation to those claims, as the amendments expand or provide more detail on events already in issue.

However, the original statement of claim contained no allegations about Bert’s estate or claims for surrogate remedies. [ 76 ] The original statement of claim was 25 paragraphs plus a prayer for relief. The amended statement of claim is 71 paragraphs, with a much longer prayer for relief. As in Eon Energy (paras 21 and 28), the fundamental nature of the action would change if the amendments relating to Bert’s estate and estate administration are allowed. Amendments relating to Bert’s estate focus on events that occurred in 2007, a year prior to events detailed in the original statement of claim.

This action would go from a relatively focused personal action between two siblings dealing with specific, limited allegations to broad-ranging allegations that call into question and ask for a review of every aspect of the probate applications and estate administration for the estates of both Bert and Beatrice. [ 77 ] As the applications judge noted, it is true that unlike Eon Energy , this case is not on the verge of trial. But most pre-trial steps have been taken, including production of records, questioning of each party in 2014 and responses to undertakings.

Just as importantly, for some years very little occurred aside from sporadic correspondence, until this amendment application was filed on June 11, 2019. [ 78 ] The scope of amendments relating to Bert’s estate and the estate administration effectively would require portions of the action to start afresh. But it would now require close inquiry into events that occurred mainly in 2007, which were not part of the original statement of claim or the evidence taken pursuant to it. New evidence and witnesses would include lawyers, accountants, bankers, and others involved over that period. Ms.

Brewin has alleviated some of these concerns by locating the whereabouts of the lawyers involved and their files. [ 79 ] Nonetheless, recasting and relitigating this action after so many years to add the claims relating to Bert’s estate and the estate administration, with no intervening events to keep memories fresh, would cause serious prejudice not compensable in costs – because no one really knows what has been lost.

While there is no balance of convenience test, it is not irrelevant to note that no explanation has been offered for these very late amendments (a factor noted in Eon Energy , para 22; and Jin , para 31 ). [ 80 ] In

summary, I find there is prejudice not compensable in costs for the categories of wrongful conversion of Bert’s assets and estate administration. B. Evidence and Hopelessness 1. Introduction [ 81 ] The applications judge briefly dealt with the adequacy of evidence. She noted that the threshold is low, although stiffer where there are allegations of fraud, highhandedness or malicious conduct (para 40). She referred to Mr. Magyar’s detailed evidence responding to alleged financial discrepancies (para 41). Turning to Ms.

Brewin, she summarized her submissions and, in the same paragraph, gave her conclusions as to the adequacy of evidence: 43. Ms. Brewin submits that the affidavit evidence of both parties filed on these applications, as well as the transcripts from her Questioning, Exhibits entered on Questioning, and answers to undertaking are sufficient to establish a reasonable likelihood of success in establishing the claims advanced in the proposed Amended Statement of Claim. She has filed the June 2019 Brewin Affidavit with documents relating to the Estate and some of the transactions raised in the proposed amendments.

She sets out her concerns about Mr. Magyar’s handling of accounts and describes his conduct towards her, both in general and in respect of the Estates. I find Ms. Brewin has satisfied the evidentiary threshold for the proposed amendments, including the “stiffer” test for fraud, conversion and misrepresentation. This evidence is found in the June 2019 Brewin Affidavit, and also in the record before the Court. [ 82 ] Neither the applications judge or Ms. Brewin explained what evidence supports the amendments, other than to say there are affidavits, documents and transcripts of questioning.

That goes to the form of evidence, not its substance. [ 83 ] I have considered the amendments in relation to the three categories identified. 2. Wrongful Conversion of Bert’s Assets [ 84 ] I do not agree that the higher evidentiary threshold for fraud has been met for the wrongful conversion of Bert’s banking assets, which consist of the bank accounts and financial assets owned by Bert at the time of his death. [ 85 ] The new claims in paragraphs 11 to 14 of the amended statement of claim allege that Bert’s banking assets were fraudulently handled and wrongfully converted by Mr. Magyar.

For the court to allow these amendments, Ms. Brewin must provide significant evidence to ground the amendments: Canadian Natural Resources , para 11. [ 86 ] After a careful weighing of evidence (at paragraphs 49 to 51 of this decision), I have concluded there is insufficient evidence to meet the higher threshold. Mr. Magyar addressed Ms. Brewin’s complaints about financial mismanagement and discrepancies in the bank accounts through his January 15, 2020 affidavit along with supporting documentation. His evidence was not contradicted by other documentary evidence or materially weakened on cross-examination. Ms.

Brewin’s allegations relating to Bert’s banking assets and financial assets, and their exclusion from the inventory for the application from probate, are bare allegations not substantiated by evidence sufficient to ground an allegation of fraud.

[ 87 ] For Bert’s other assets alleged to have been wrongfully converted, the plaintiff did not provide any evidence in her affidavit or the accompanying exhibits regarding particular assets or items at issue, other than the vehicles, which already formed part of the original statement of claim (though they were identified as estate vehicles).

The new allegations of wrongful conversion of Bert’s assets (other than the vehicles) are also bare allegations of fraud not substantiated by sufficient evidence. [ 88 ] Based on the finding of prejudice not compensable in costs relating to the events of 2007, and the failure to meet the evidentiary threshold required for fraud, the amendments in paragraphs 8 to 17 of the amended statement of claim relating to Bert’s estate are not permitted.

References that appear later in the amendments to wrongful conversion or wrongful exclusion relating to “Bert’s Will”, “Bert’s Estate”, “Bert’s Banking Assets” are also not permitted (in paragraphs 67-69 and 72

c) and

j) of the amended statement of claim). [ 89 ] Thus, the amended statement of claim should revert to how it was originally framed, as an action which concerns events that occurred after Beatrice’s death and does not delve into the transfer of funds or property from Bert’s Estate to Beatrice’s Estate (other than the vehicles).

The references to “ Bert’s ” estate vehicles in paragraph 38 should be removed, though this does not change the paragraph substantively, as mentioned above. [ 90 ] The other amendments identified in this category, paragraphs 43-48, and paragraphs 56-57, overlap with amendments in the “wrongful conversion of Beatrice’s assets” category and will be considered alongside that analysis. 3. Wrongful Conversion of Beatrice’s Assets [ 91 ] The first amendments to consider relating to allegations of wrongfully converting Beatrice’s assets are at paragraphs 26-30 and 34-39 of the amended statement of claim.

Many of these amendments expand upon events already pleaded in the original statement of claim and little prejudice arises. The original statement of claim already contained allegations of wrongful conversion of Beatrice’s estate, therefore in my view amendments expanding on those claims do not need to meet the higher evidence threshold, but merely require some evidence in support: Attila Dogan , paras 23-25.

The proposed amendments will be addressed in turn. [ 92 ] Paragraph 26 asks for an audited accounting relating to the defendant’s use of the estate lands and the revenue generated from farming from June 12, 2008 to October 4, 2012. This is asking for an inquiry and accounting into all of Mr. Magyar’s dealings with estate assets.

Although appearing in this category, this amendment seeks relief related to estate administration, and is disallowed for reasons given. [ 93 ] Paragraph 27 provides factual information on Bert and Beatrice’s dates of passing and is permitted, though likely not necessary. [ 94 ] Paragraphs 28 and 29 are new allegations relating to assets that were excluded from Beatrice’s estate in the probate application process, then used by the Defendant for his own use. These claims are founded on the wrongful conversion of Bert’s Estate assets, which in turn were excluded from Beatrice’s estate.

As was previously decided, such amendments are disallowed. [ 95 ] Paragraph 30 amends an already existing paragraph regarding the bank account opened for Beatrice’s estate. The original allegation was that the defendant proposed a division of the cash without providing full information to the plaintiff and transferred funds out of the account without her knowledge. The amendments add that the defendant wrongfully bullied and threatened the plaintiff into agreeing to the division of cash and wrongfully and fraudulently transferred the funds outside of the account to himself.

The additions to this paragraph are permitted, as they are adding more detail to existing allegations. Although the words “wrongfully” or “fraudulently” were not in the original allegation, I find that it was implied the defendant’s actions were improper, and “wrongful conversion” of Beatrice’s assets was a central element of the original claim. [ 96 ] Further, I find the Plaintiff provided some evidence to support that she was subject to bullying and threatening by the defendant in her affidavit of June 11, 2019, in particular in paragraphs 19-22, 26-27, and 31-32.

Although she did not provide specific detail regarding the defendant’s actions, she was not questioned or challenged regarding this behaviour at her cross-examination, and her affidavit stands as “some” evidence sufficient to support the amendments. [ 97 ] Paragraph 34 is new and seeks an audit of Beatrice’s estate bank account and for the defendant to repay the funds he wrongfully converted.

Although this paragraph is new, the original claim asked for $12,363 for the plaintiff’s share of moneys wrongfully taken from Beatrice’s estate bank account or “such other amount as may be proven at trial.” Paragraphs 12-16 in the original claim related to improper dealings with the bank account. This paragraph raises no issue of prejudice or hopelessness and is permitted. [ 98 ] Paragraphs 35 and 36 are amendments of original paragraphs that add more detail to allegations regarding Beatrice’s estate’s income tax obligations and the reasons for the auction.

They raise no issue of prejudice or hopelessness and are permitted. [ 99 ] Paragraph 37 amends an original paragraph regarding the auction of Beatrice’s assets. The amendments raise the issue of the defendant’s wrongful conversion of Bert’s estate assets and are not permitted. The paragraph should revert to the paragraph in the original statement of claim (paragraph 18). [ 100 ] Paragraph 38 amends an original paragraph regarding the sale of vehicles belonging to Beatrice’s estate. The amendments raise the issue of Bert’s Estate and the “Excluded Assets” from Bert’s Estate, which are not permitted.

This paragraph should also revert to the original paragraph (paragraph 19). [ 101 ] Paragraph 39 is new and asks for an accounting of all of the Defendant’s activities regarding the sale of assets through the auction, privately, and as well as the assets converted for his own use, and to repay the estate for funds he wrongfully converted. Originally, the plaintiff asked for her share of monies wrongfully taken from the bank accounts, or not paid to her from the auction, or converted to the defendant’s own use, in paragraph 18 and the prayer for relief.

The new paragraph 39 significantly broadens the scope of the original claim and, being in the nature of an estate administration remedy, it would unreasonably and prejudicially change much of

the focus of the action and is not allowed. [ 102 ] Paragraphs 43-48, 56 -57, and 60-61 largely overlap with the category of amendments in the “Wrongful conversion of Bert’s Banking Assets or Other Assets” on the chart. All of these amendments have been added under the heading of “Fraudulent Purchase of Estate Assets” which appears in the original and amended statement of claim. [ 103 ] In the original statement of claim, the paragraphs under this heading alleged that the defendant used improper valuations when preparing the bill of sale and application for probate for Beatrice’s estate in August 2008.

The plaintiff alleged that she was essentially bullied into signing off on the bill of sale, and that when many of the items were sold five years later at auction it was apparent the assets were significantly undervalued in 2008. She alleged fraudulent misrepresentation and duress in relation to the bill of sale, and sought her proper share of the proceeds from the assets. I note that the defendant is no longer contesting any of the amendments in this

section that relate to the bill of sale. [ 104 ] However,, the plaintiff adds a new allegation that the improper valuation of Beatrice’s assets was due not only to the defendant’s undervaluing of assets, but also to the exclusion of assets from Bert’s estate into Beatrice’s estate.

Those amendments, from paragraph 43 to 47, are not permitted for reasons given earlier. [ 105 ] Paragraph 56 relates to the defendant using Beatrice’s chattels for his own use without compensation, which was already alleged in paragraph 17 of the original statement of claim, and is permitted, other than the reference to compensating Bert’s estate. [ 106 ] Paragraph 57 raises issues relating to the defendant’s duties and role as a personal representative.

For reasons given later, these types of amendments relating to estate administration are not permitted. [ 107 ] Paragraph 60 raises the issue of the defendant fraudulently representing the values of the estate assets in the bill of sale and was in the original statement of claim at paragraph 23. The underlined amendments to this paragraph do not change the allegation substantively and are permitted. [ 108 ] Paragraph 61 alleges the plaintiff would not have signed the bill of sale absent the defendant’s fraud and duress and is entitled to her share of the actual value of assets in the bill of sale.

This allegation was in the original statement of claim at paragraph 24. The underlined amendment adds an allegation that the plaintiff is entitled to her share of the value of all assets to which Beatrice was entitled at the time of her death, which raises the issue of Bert’s estate assets not fully being passed on to Beatrice’s estate, so is not permitted. 4.

Estate Administration Amendments [ 109 ] The amendments identified in the category of “Estate Administration” on the chart are all new and mainly are added in the amended statement of claim under the new heading “Defendant’s Breach of Fiduciary Duty as Personal Representative.” These amendments seek to add the personal representative status of the parties and seek remedies under the Estate Administration Act and the Surrogate Rules . I conclude that none of these amendments should be allowed. [ 110 ] In his December 2, 2019 affidavit, Mr.

Magyar deposed that the administration of both estates was concluded by October 2009 (para 23). It would be irregular, to say the least, to now allow applications to remove a personal representative, grant remedies against him in that status, and require a formal passing of accounts more than a decade later, all in a personal action commenced for other relief. These applications should not be added to this action at this stage, for at least two reasons. [ 111 ] First, it ignores the policy behind having all surrogate procedures conducted under a uniform procedure.

As stated in the May 1996 report of the Alberta Law Reform Institute, Revision of the Surrogate Rules: Final Report , the governing philosophy of what became the Estate Administration Act “is that the statutes should contain the substantive law governing succession to property and that the rules should contain all the procedures necessary to complete an estate administration,” and “one court should have carriage of all applications dealing with the administration of a given estate.

There should be one estate file in court that builds all the estate information in one place” (at 4). [ 112 ] It is likely that in a proper case surrogate relief could be sought as part of another civil action. The Estate Administration Act contemplates use of both the Surrogate Rules and the Alberta Rules of Court : sections 1(

l) and 4. The only provision governing removal of a personal representative is

section 8 of the Act. On the other hand, only the Surrogate Rules contain a procedure for passing of accounts; thus, when

section 32 of the Act states that “a personal representative must comply with the Rules regarding accounting for the personal representative’s administration of the estate,” it must refer to rules 97 to 99 of the Surrogate Rules . [ 113 ] Second, to allow these procedures to be incorporated into this action would be to add a fundamentally new direction well after extensive pre-trial steps and an interval of many years. Related to this, it would allow Ms. Brewin to conduct a wholesale inquiry into Mr.

Magyar’s conduct under the guise of seeking an audited accounting, thus side stepping all restrictions imposed by rules of pleading and, possibly, limitation periods. In my view, that would be an abusive use of this civil action and cause prejudice to Mr. Magyar not compensable in costs. [ 114 ] For these reasons, the amendments in the category of Estate Administration are not allowed, including paragraphs 7, 14, 63, 64, 65, 66, 67, 68, 69, 70 (estate only), 72(i), 72(j) (underlined), 72(k), 72(l), 72(m), 72(n), and 72(o). (The amendments to paragraphs 5 and 72(

g) are permitted, as merely adding detail to the original pleadings and amount claimed). C. Limitations Periods [ 115 ] Determining whether the proposed amendments would be barred by a limitations period is unnecessary, in light of my conclusion that the amendments should not be allowed for other reasons. It seems best not to make a provisional ruling on this point, because the analysis would require many hypothetical assumptions about what amendments might be allowed and what relationship they have to the original pleadings.

D. Bad Faith [ 116 ] Mr. Magyar says the amendment application is motivated by bad faith, namely an attempt to overcome an application to dismiss the action for delay and to improperly combine surrogate claims in the civil action. On that ground alone, he says the amendments should not be allowed. [ 117 ] As I noted earlier, Mr. Magyar has the onus of proving bad faith. Whatever the merits of the amendment application, I am not persuaded that it was made for motives that would amount to bad faith. X.

Summary of Conclusions [ 118 ] For the reasons given, with respect I find that the learned applications judge was correct in permitting some amendments, but erred in allowing those related to alleged wrongful conversion of assets from Bert’s estate and some of the amendments related to alleged wrongful conversion of assets from Beatrice’s estate, and surrogate relief such as removing a personal representative and ordering an audited passing of accounts. [ 119 ] To summarize, the following amendments are not permitted and must be removed from the amended statement of claim: (

i) The amendment to the style of cause stating that Ms. Brewin is suing in the capacity of a personal representative for the estates. (ii) Paragraphs 7 to 17; (iii) Paragraphs 26; (iv) Paragraphs 28-29; (

v) Underlined additions to paragraph 38, and reference to “Bert’s Estate Vehicles” in paragraph 38 (which mistakenly were not underlined); (vi) Paragraph 39; (vii) Paragraphs 43-47; (viii) Reference to “Bert’s Estate” in paragraph 56; (ix) Paragraph 57; (

x) Underlined additions to paragraph 61; (xi) Paragraphs 63-69; (xii) Reference to the “Estate” in paragraph 70; (xiii) Reference to “Bert’s Banking Assets” in paragraph 72(c); (xiv) Paragraph 72(i); (xv) Underlined additions to 72(j); and (xvi) Paragraphs 72(k)(l)(m)(

n) and (o). [ 120 ] The parties may

schedule a further appearance if there are any matters that require clarification or if they are unable to agree on costs. Heard on the 19 th day of May, 2022. Dated at the City of Lethbridge, Alberta this 3 rd day of November, 2022. G.H. Poelman J.C.Q.B.A.

Appearances: Duncan Thompson for the Plaintiff/Respondent Deirdre McKenna, K.C. for the Defendant/Applicant