VALERIE PICKETTS, BRENDA WHEATLEY, ANNE SUMMACH, v. JACQUELINE PICKETTS, 2017 SKQB 93

QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2017 SKQB 93 Date: 2017 03 29 Docket: QBS 549 of 2014 Judicial Centre: Saskatoon ___________________________________________________________________________ BETWEEN: VALERIE PICKETTS, BRENDA WHEATLEY, ANNE SUMMACH, and JACQUELINE PICKETTS APPLICANTS - and - JOHN A. PICKETTS, Deceased, MURRAY J. PICKETTS and ELIZABETH MARIE PICKETTS, Executors of the Estate of John Albert Picketts RESPONDENTS Counsel: Curtis J. Onishenko for the applicants Raymond Wiebe for the respondents ___________________________________________________________________________ DECISION MILLS J.

March 29, 2017 ___________________________________________________________________________ Introduction [ 1 ] This decision involves management of the estate of John A. Picketts and disclosure of estate financial information pending resolution of disputes arising from the administration of his estate. John A. Picketts died on September 13, 2013. He is survived by his spouse, four daughters and a son. The children are all adults. I will refer to all parties by their first names for ease of reference.

The spouse, Elizabeth, and son, Murray, submitted to this Court an application for grant of probate of two documents. The first dated July 23, 2004 is entitled Last Will of John A. Picketts and is a fill-in-the-blank type of document that has typewritten portions of standard form and handwritten insertions. The document was witnessed by two lawyers. The second is a document dated July 17, 2013 directed to John A. Picketts from Rodney Blakley, a financial planner. The subject of the document is stated to be estate planning.

It appears to be an instruction document as to the deceased’s intention. [ 2 ] All the daughters opposed Murray and Elizabeth’s application for probate in its entirety. The daughters maintain that the deceased made a Will dated in 2008 which has now been lost and presumed destroyed with the intention of the deceased to revoke the 2004 Will. The daughters submit that the estate planning document is just that and not a Will and cannot be admitted to probate. They further submit that the 2008 Will revoked the 2004 Will.

The 2008 Will, deemed revoked by destruction, results in intestacy for the entire estate. [ 3 ] The matter of what documents, if any, should be admitted to probate was before Rothery J., and she issued a fiat on December 19, 2014 directing a trial of the above issue. She ordered that costs of the application were to be paid from the estate to all parties on a solicitor/client basis. [ 4 ] Elizabeth and Murray’s application listed the total value of the estate at $751,000. In addition, a further $4,323,000 was listed in

Part II as jointly owned properly of the deceased. The majority of that property, $3,650,000 worth, is listed as land jointly owned with right of survivorship by the deceased and Murray. The daughters have brought a separate action alleging that the jointly owned property is held by Murray in a resulting trust for the benefit of the estate (resulting trust action). [ 5 ] The cash assets in the estate are over a quarter million dollars. The deceased was a shareholder in a company called John Picketts Holdings Ltd.

That company was valued by Murray and Elizabeth in the probate application at $290,000. [ 6 ] Until such time a trial of the issues as directed by Rothery J. has been completed it will not be known who will be beneficially entitled to what assets. There are some general observations that can be made about entitlement however.

In the event of an intestacy, Elizabeth and the children will be entitled to the distributive share of the entire estate in percentage terms. [ 7 ] In the event that the Court accepts the combination of the estate planning document and Will of July 23, 2004 as valid as propounded by Murray and Elizabeth, it would appear that the deceased’s interest in John Picketts Holdings Ltd. will devolve to the daughters equally. [ 8 ] If the Court does not accept the estate planning document to probate but does accept the Will of July 23, 2004 to probate, it appears a portion of the estate may go on in intestacy. [ 9 ] With this background in mind I turn to the application before the Court.

The application is in three parts. The daughters in

part 1 seek an order appointing one of them, Anne Summach, as interim administrator of the estate pursuant to s. 17(1) of The Administration of Estates Act , SS 1998, c A-4.1 [ Act ]. The stated purpose of this application is to secure the property of the estate, obtain an accounting of the operations of the company and provide a full interim accounting, including income tax return statements, etc. [ 10 ] The second part of the application is made in the alternative to the first part.

It seeks an order that Murray and Elizabeth provide a full accounting of the company from 2009 to 2016, including a copy of the minute book, disclosure of officers and shareholders and an interim accounting for the estate. [ 11 ] The third application is an alternative to the first application seeking the appointment of Anne as administrator ad litem of the estate for the purpose of acting as plaintiff in the resulting trust action. [ 12 ] Murray and Elizabeth oppose all applications.

Application pursuant to section 17(1) of the Act to appoint Anne Summach as an interim administrator of the estate. [ 13 ] No one has yet been appointed to administer this estate. The application of Murray and Elizabeth is held in suspension pending the trial ordered by Rothery J. There currently is no administrator. The applicants have raised concerns that Murray and Elizabeth are administering the estate without authority and are dealing with estate assets potentially to the detriment of them as beneficiaries.

They further state that Murray and Elizabeth refuse to provide any detailed information as to what has been occurring with the estate assets up until this point in time despite requests. [ 14 ] Of particular concern to the applicants is their allegation that the corporation, half of which appears to have been specifically bequeathed to them, in the estate planning document that has been submitted by Murray and Elizabeth for probate has been dealt with inappropriately. The daughters allege that the shares held by the deceased at his death have been transferred from the deceased’s name to Elizabeth’s name.

They allege that the directors and officers of the company are now Murray and his spouse. They allege that corporate assets are being dealt with when Murray and Elizabeth have no authority to do so. Their allegations are well founded and indeed supported by the affidavit of Murray where he candidly says: The company John Picketts Holdings Ltd. was owned by both my father and mother. After my father’s death, the shares owned by my father were transferred to my mother. The advice of the accountant was that doing so

would reduce the tax that would otherwise have been payable. It was also my understanding that my mother would receive a significant share of the estate under any circumstances and, since all of the family are on common ground that she should be adequately provided for, my mother and I saw no reason not to transfer these shares to her. My mother continues to be the only shareholder of the company. My wife and I and my mother are the only directors of the company. …

a) The company has continued to operate after my father’s death in the same way as it did before his death. The proceeds of the crops go into the company each year.

b) The condominium on Calder Crescent was sold and the proceeds went to my mother. She used a large portion of those proceeds to make improvements to the home my sister Jacqueline lives in. … The only use that has been made of estate funds are payment of debts and expenses and Canada Revenue Agency. The proceeds of the sale of the condominium owned by the corporation went into a separate account for the corporation which my mother has used to upgrade Jackie’s home. [ 15 ] Murray is obviously acting as if he has the authority to act as an executor of the estate.

He has taken steps in relation to the corporation that are contrary to the stated intention of the document that he has proposed for probate. He acknowledges that he essentially is operating the corporation.

He also refuses to disclose the operations of the company including current assets, the sale or transfer of any assets since the deceased’s death and the income and expenses the corporation has incurred since the deceased’s death. [ 16 ] Murray resists not only the application to have Anne Summach appointed as administrator pursuant to s. 17 but also to providing any updated financial information on his activities in relation to the estate at this time.

He states: … the time for providing an accounting is when the estate is being divided according to the Will. … I will provide a complete accounting when the time comes to do so or when ordered to do so. [ 17 ] In seeking the appointment of an interim administrator, the daughters point to the following cases: Whitworth Estate v Whitworth , 2016 SKQB 369 , Figley v Figley , 2012 SKCA 36 , 393 Sask R 44 , Reiter v Reiter Estate , 2016 SKQB 100 , and the cases referred to in those decisions. [ 18 ] All of those decisions involve the removal of an executor or administrator from acting as such and being replaced with an alternate.

Those cases do not apply in this situation where no administrator has yet been appointed.

Section 19 of the Act is the more appropriate

section on which to proceed. It reads: 19(1) Where an action or matter respecting the validity of the will of a deceased person or for obtaining or revoking letters probate or letters of administration is pending, a judge may appoint an administrator of the property of the deceased person.

(2) An administrator appointed pursuant to subsection (1) has all the rights and powers of a general administrator other than the right to distribute the residue of the property.

(3) An administrator appointed pursuant to subsection (1) is subject to the immediate control of the court and shall act under its direction.

(4) A judge may direct that an administrator appointed pursuant to subsection (1) shall receive, out of the property of the deceased, the remuneration that the judge considers appropriate. [ 19 ] The applicants have not sought appointment under s. 19 as administrator ad litem for the purpose of administering this entire estate. [ 20 ] In

part 3 of the application the applicant has sought to be appointed as administrator ad litem for the purpose only of pursing the resulting trust action. [ 21 ] If I treat this as an application under s. 19 , I do not believe that any prejudice would arise in respect of the respondents. The factual scenario that both parties describe in their affidavits covers the issue of whether an administrator ad litem to administer the entire estate is needed. [ 22 ] The decision of the Court in any application must bear in mind the foundational rules, in particular Rules 1-3(1), (2)(

b) and (d). 1-3(1) The purpose of these rules is to provide a means by which claims can be justly resolved in or by a court process in a timely and cost effective way.

(2) In particular, these rules are intended to be used: … (

b) to facilitate the quickest means of resolving a claim at the least expense; … (

d) to oblige the parties to communicate honestly, openly and in a timely way; and … [ 23 ] If I was to appoint Anne Summach as administrator, she would then have to expend considerable time and effort in gathering the information required, analyzing it and presenting it to the other beneficiaries. It is conceivable that she would have to engage professional help in so doing. To have it done in a timely fashion she would need the cooperation of her brother Murray. His cooperation is unlikely.

His text description of his sister as an immature, self-centred bitch is probably the kindest thing he says to her, his comments degenerate from that. [ 24 ] Appointing Anne Summach as administrator under s. 19 is unlikely to advance this case in the most efficient fashion. [ 25 ] That does not mean that nothing can be done. In the alternative should the respondents be directed to provide a full accounting of John Picketts Holdings Ltd. and an income accounting of the estate? [ 26 ] The applicants rely on s. 3(1)(

b) and (

c) of the Act and Rule 16-51 of The Queen’s Bench Rules as the basis of my authority to make these orders. 3(1) The court may: … (

b) hear and determine all actions and matters relating to: (

i) the granting and revoking of letters probate and letters of administration; and (ii) the

interpretation of wills; (

c) require an executor or administrator to bring in his or her accounts of the administration of an estate with respect to which letters probate or letters of administration have been granted and examine and pass those accounts; and … … 16-51 On application by a creditor or beneficiary interested in an estate or trust to require a personal representative or trustee to administer or execute an estate or trust, if no accounts or insufficient accounts have been rendered, the Court may, in addition to its other powers: (

a) order that: (

i) the application stand over for a certain time; and (ii) the executors, administrators or trustees render to the applicant a proper statement of their accounts, with a warning that if this is not done, they may be made to pay the costs of the proceedings; and (

b) if necessary to prevent proceedings by other creditors or by persons beneficially interested, make the usual judgment or order for administration, with a condition that no proceedings are to be taken under the judgment or order without leave of the Court. [ 27 ] I am not certain that my authority is found under these sections given that no administrator has been appointed or sanctioned by the Court. Murray is acting informally as an administrator, and although he acknowledges administering estate assets, it has not been identified as to how he is able to do so.

Presumably the financial institution he is dealing with has allowed him access to the accounts of the deceased. Perhaps money coming into the estate has been placed in a separate account under his control and authority. It is common for a person named as an executor to administer the estate pending formal appointment.

There is nothing inherently wrong with this, but such action still has to be consistent with the Will and the interest of all beneficiaries. [ 28 ] The authority relied on by the applicants contemplate that the appointment of an administrator by the Court has already occurred. [ 29 ] That does not mean the Court is without authority to act. This Court has the inherent jurisdiction to deal with estate matters. All of the issues related to this estate are already before the Court.

To restrict the ability of the Court to control an individual who purports to act as executor without formally being appointed and who is actively administering the estate is inconsistent with the concept of this Court’s authority in estate matters. Relying on the Court’s inherent jurisdiction and acknowledging the principles contained in the foundational rules quoted, I order that Murray J. Picketts and Elizabeth Marie Picketts provide to the solicitor for the applicants the following material:

(1) A full accounting of actions taken in relation to the assets of the deceased since the date of his death to February 28, 2017 and without restricting the foregoing, including the following: (

a) A statement of all sales of assets owned by the deceased or John Picketts Holdings Ltd. including the date of the sale, to whom the sale was made and the proceeds received from the sale;

(

b) A statement showing transfers of any assets owned by the deceased at the date of his death indicating the date of the transfer and to whom the asset was transferred; (

c) A statement showing all income or receipts received by or on behalf of the estate or John Picketts Holdings Ltd. from the date of the deceased’s death to February 28, 2017; (

d) A statement of all expenses paid by or on behalf of the estate and John Picketts Holdings Ltd. from the date of the deceased’s death to February 28, 2017; (

e) Copies of the minute book of John Picketts Holdings Ltd. from the date of the deceased’s death until February 28, 2017; (

f) Copies of the income tax returns filed with Revenue Canada encompassing the last time period up to the date of the deceased’s death including any date of death return and income tax returns filed on behalf of the deceased’s estate since the date of his death to the present; (

g) Income tax returns filed on behalf of John Picketts Holdings Ltd. for the last fiscal year immediately preceding his death and all income tax returns of the corporation filed since the date of his death; (

h) Copies of all financial statements of the corporation including income and expense statements and balance sheets since the date of the deceased’s death to February 28, 2017; and (

i) A separate list of assets of the corporation in existence at the time of the death with specifics as to any asset over $5,000 in value and a general description of assets under $5,000 in value. [ 30 ] The above information shall be provided within 90 days of the date of this decision. I am providing the respondents with 90 days as I believe that is more than ample time for them to gather the information that they should have been keeping track of in any event and presenting it to the applicants.

I hesitate to provide an earlier time frame simply because failure to obtain that information will likely result in further applications and extensions of time. An application to appoint Anne Summach as administrator ad litem for the purpose of pursuing QB Action 1160 of 2016 on behalf of the estate. [ 31 ] This application is made as an alternative to the first part. I was not prepared to grant that application, nor am I prepared to grant this one at this time. Instead I am adjourning

part 3 of their application sine die to be brought back on 14 days’ notice if so desired by the applicant, but only after the financial disclosure as ordered herein has been provided. [ 32 ] The affidavit material from the applicants disclosed that the primary concern appeared to be inappropriate dealings with the corporation by Murray. Their application was well founded in that regard.

Further, the material discloses that Murray has been dealing with estate assets by way of transfer and disposition when it has not yet been determined what documents, if any, will be admitted to probate and what the beneficiaries will be entitled to receive either as specific assets or percentage entitlements. [ 33 ] If Murray had left his abrasive attitude at the door and acknowledged that his sisters are entitled to the information, although not necessarily the assets at this time, there would have been no need for this application.

The solicitor/client costs of the applicants are payable by the estate within 30 days. Murray Picketts shall be responsible for his own legal costs associated with this application. He shall not charge back or arrange for payment from the estate assets. [ 34 ] The fiat of Rothery J. provided solicitor/client costs be paid from the estate. Murray’s approach was that no funds were available for payment of the applicants’ costs pursuant to Rothery J.’s order, at least initially. Once this initial application had been launched, that was corrected and funds were obtained from the estate assets to pay those costs.

I do not know the source of those funds and whether the bank account was under Murray’s specific control or not. In any event, if there is any difficulty with respect to the issue of payment of the applicants’ solicitor/client costs and a further order is needed directed to a financial institution, the matter can be brought back to me by way of telephone conference call. [ 35 ] Counsel acting on behalf of Murray and Elizabeth is also a witness to the 2004 Will being submitted for probate and which will have to be proved in accordance with the order of Rothery J. at trial.

Counsel has indicated that he is aware of the matter and is considering his position on continuing to act for Murray and Elizabeth. J. R.C. MILLS