IN THE ESTATE OF JOHN WILLIAM STECYK JOY WITWICKI, EXECUTOR OF THE ESTATE OF JOHN WILLIAM STECYK APPLICANTS - v. -, 2019 SKQB 116

QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2019 SKQB 116 Date: 2019 05 02 Docket: SUR 93 of 2017 Judicial Centre: Yorkton BETWEEN: IN THE ESTATE OF JOHN WILLIAM STECYK JOY WITWICKI, EXECUTOR OF THE ESTATE OF JOHN WILLIAM STECYK APPLICANTS - and - BILLY TESLAK AND THERESSA SOLOMON RESPONDENTS Counsel: Doreen Clark for Applicant Ryan Tulloch for Respondent _____________________________________________________________________ FIAT LAYH, J. MAY 2, 2019 Introduction [ 1 ] Joy Witwicki is the executrix of the estate of John William Stecyk.

In this application, she applies for an order to receive five percent of the value of the estate as an appropriate executrix’s fee. Her application is opposed by two of the major beneficiaries, sibling respondents, Billy Teslak and Theressa Solomon. They propose that reasonable compensation to Ms. Witwicki would be one percent of the value of the estate. Ms. Witwicki’s application is unopposed by the other major beneficiary, Connie Sernowski.

[2] Mr. Stecyk was a 60 year-old bachelor when he died on January 24, 2017. The affidavit evidence shows that Mr.Stecyk had a history of alcohol abuse, including a period of incarceration for driving-related offences. [3] According to the Statement of Property submitted in the Application for Grant of Probate, Mr. Stecyk died with cashassets of $4,041.73; personal effects of $10,600.00; and $2,701.83 in Canada Pension benefits. Additionally, and most significantly, heowned $819,600.00 of real property, consisting mainly of farmland. Ms. Witwicki seeks five percent of the value of the estate asdescribed in the Statement of Property

Part I submitted with the Application for Probate, namely five percent of $836,943.56, or$41,847.18. From para. 30 of Ms. Witwicki’s affidavit sworn in support of this application, she states that $606,548.26 has beendistributed from the estate and $177,891.00 is held in trust, for a total realized value of $884,439.26, slightly more than the Applicationfor Grant of Probate. [4] In his Will dated August 13, 2007, after gifting $4,000 to four charities and a gift of $200 to Joy Witwicki, Mr.

Stecykdivided the remainder of his estate three ways among four beneficiaries: one-third to his step-father, Bill Martyniuk; one-third to ConnieSernowski; and one-third to be divided equally between his cousins, Billy Teslak and Theressa Solomon. Bill Martyniuk died on October24, 2012. As per the Will’s instructions, if Mr. Martyniuk predeceased Mr. Stecyk, his share was to be divided equally among Mr.Teslak, Ms. Solomon and Ms. Sernowski. [5] When Mr. Stecyk was about nine years old, his mother, Ann, married Bill Martyniuk. Ms. Witwicki’s father and BillMartyniuk were cousins. Ms.

Witwicki’s family lived one mile from the Martyniuk farm. Connie Sernowski is also a relative of the lateBill Martyniuk. The respondents, Billy Teslak and his sister, Theressa Solomon, are unrelated to the Martyniuk family. Their motherwas Ann (Stecyk) Martyniuk’s sister. Billy Teslak and Theressa Solomon live in the Ituna area. According to Ms. Witwicki, who wasfamiliar with Mr. Stecyk’s acquaintances, she had never met the respondents until after Mr. Stecyk’s death. [6] Ms. Witwicki engaged the services of a realtor, Terry Chaikowksy, to provide his opinion of value respecting thefarmland. Ms.

Witwicki sold three quarters of the land to previous tenants for a price reflective of the value provided by Mr.Chaikowksy. Relatives of the late Mr. Martyniuk purchased the remaining four quarters of land. Mr. Stecyk’s small amount of farmequipment was sold by auction and private sale. [7] Administration of the estate was to become complicated when, on July 13, 2017, Rosalynn Lavallee issued a petitionalleging she was Mr. Stecyk’s common-law spouse and claiming one-half of the family property. The estate solicitor, Doreen Clark,successfully brought an application and Ms.

Lavallee`s claim was struck a year later, on July 10, 2018. Following that date, funds weredistributed to the beneficiaries. The remainder of the estate, $177,891.00, is held in trust. The Issues [8] The issues raised in this application are: 1. What is an appropriate remuneration to pay Ms. Witwicki as executrix of Mr. Stecyk’s estate; and 2. What is an appropriate award of costs for this application and who should pay such costs?

The Analysis The Applicable Legal Principles [9] Trustee compensation (where remuneration is not determined by the trust instrument) must be “a reasonable allowancefor administration of an estate.” Section 52(1) of The Trustee Act, 2009, SS 2009, c T-23.01 states: 52(1) Unless remuneration is determinable by the trust instrument, a trustee is entitled to a reasonable allowance for administration of anestate, including remuneration for professional services rendered to the estate by a lawyer who is a trustee. [10] As a preliminary finding, the court accepts that the testamentary gift of $200 to Ms.

Witwicki, even if Mr. Stecykconsidered it payment for trustee fees, falls within s. 52(3) of The Trustee Act, 2009. It states: 53(3) The court may vary a term of a trust or instrument creating a trust that fixed the remuneration of a trustee other than by contractbetween the settlor or testator and the trustee if that term does not provide for sufficient remuneration.

Preliminary Matter – Rule 13-30 of The Queen’s Bench Rules [11] All parties agree that determining a reasonable allowance for administering an estate has its origins in the long-standingdecision in MacDonald (Estate) (Re) (SK CA), [1933] 1 WWR 421 (Sask CA) [MacDonald]. In MacDonald, theSaskatchewan Court of Appeal adopted five considerations earlier stated in Toronto General Trusts Corp. v Central Ontario Railway,1905 CarswellOnt 449 (WL) (Ont Ct), as being applicable to assessing a trustee’s fee or allowance, namely: i. The magnitude of the trust; ii. The care and responsibility springing therefrom; iii.

The time occupied in performing its duties; iv. The skill and ability displayed; and

v. The success which attended its administration. These principles have been repeatedly confirmed by the Saskatchewan courts, including the recent decision in Gutiw-Kuzub v Pobran,2018 SKQB 218 [Pobran]. How these five principles apply in the context of Mr. Stecyk’s estate will determine an appropriate amount ofcompensation to Ms. Witwicki. Preliminary Matter – Rule 13-30 of The Queen’s Bench Rules [12] Ms. Witwicki points out that much of Mr. Teslak’s affidavit sworn March 1, 2019 is speculative, based on his belief ofhow events should have occurred and not on his personal knowledge of the situation. Indeed, Mr.

Teslak repeatedly premises many ofhis statements as matters he believes to be true. Commonly, in his affidavit one sees the preface, “it is my belief that….” He offersopinions, but without a factual basis: an appraisal of the land would have been better than a realtor’s opinion; Ms. Witwicki’s salenegotiations could not have taken five hours because the purchaser was a tenant of the land; Ms. Witwicki colluded against thebeneficiaries to sell land at a discounted price; Ms.

Witwicki did not have to make 12 phone calls to sell certain land; a John Deere tractorwas worth more than $20,000; and many more statements of conjecture and opinion, invariably offered without a factual basis. [13] I agree with Ms. Witwicki’s concerns. Much of Mr.

Teslak’s affidavit runs afoul of Rule 13-30(1) of The Queen’sBench Rules, which states that affidavits must be confined to facts that are within the personal knowledge of the person swearing oraffirming the affidavit: 13-30(1) Subject to subrule (2), an affidavit must be confined to facts that are within the personal knowledge of the person swearing oraffirming the affidavit.

(2) In an interlocutory application, the Court may admit an affidavit that is sworn or affirmed on the basis of information known to theperson swearing or affirming the affidavit and that person’s belief.

(3) If an affidavit is sworn or affirmed on the basis of information and belief in accordance with subrule (2), the source of theinformation must be disclosed in the affidavit.

(4) The costs of every affidavit that unnecessarily sets forth matters of hearsay or argumentative matter, or copies of or extracts fromdocuments, must be paid by the party filing the affidavit.

(5) If an affidavit based on information and belief is filed and does not adequately disclose the grounds of that information and belief, theCourt may direct that the costs of the affidavit shall be paid personally by the lawyer filing the affidavit. [14] As a result of Rule 13-30, I have not considered Mr. Teslak’s evidence where it is based on his speculation and opinion. The Magnitude of the Trust [15] The size of the trust is a starting point in considering an appropriate trustee fee. In this instance Ms.

Witwicki hasadministered an estate valued at $884,439.26 [16] One often sees the value of an asset as a handy, easily ascertainable measure of how to charge associated professionalfees for dealing with that asset. For example, lawyers commonly charge fees to prepare a mortgage proportionate to the amount of themortgage, or to sell and transfer land based on the value of the land, or to obtain Letters Probate based on the value of the estate.Financial advisors commonly charge fees as a percentage of the portfolio and not as a return on the investment.

Real estate agents chargevendors a percentage of the sale price of real property. [17] One might question whether such fee structures are more consistent with “charging what the traffic can bear” ratherthan a measure of the value of the service. Similarly, a large liquid estate, for example a single bank account, should not justify a largefee unless the other four factors also augur for a higher fee.

I agree with the statement offered by Cameron, J.A. in Safian Estate v Safian(1995), (SK CA), 134 Sask R 229 (Sask CA) when he cautioned about rigidly applying a percentage of the estate todetermine an appropriate fee, stating at para. 9: …This is a useful practice, having the advantages of predictability and ease of application, and it is not to be taken as inappropriate. Butit has its limitations, as do all formula-based practices when what is at issue is the discretionary determination of a "fair and reasonable"allowance in a particular situation.

This is especially so in situations out of the ordinary and entailing genuine dispute. As was noted inRe: Atkinson, (ON CA), [1952] O.R. 685 (Ont. C.A.), affirmed at (SCC), [1953] 2 S.C.R. 41: In fixing the compensation to be awarded to an executor the Court must never lose sight of the fundamental principle, as set out in s.60(3) of The Trustee Act, that the compensation is to be "a fair and reasonable allowance for his care, pains and trouble, and his timeexpended in or about the estate".

The Court should never adopt a rule of fixing compensation by a rigid adherence to fixed percentages,either of the probate value or of the revenue and disbursements. In many estates no fairer method can be employed than by theapplication of percentages, but in others, while percentages may be of assistance, it would be manifestly unreasonable to apply themslavishly, and to do so would violate the true principle on which compensation is based.

The care, pains and trouble and the timeexpended may be wholly disproportionate to the actual size of the estate; a small, complex estate may make much greater demands uponan executor's time and skill than a much larger estate of a simpler nature. [Emphasis added.] [18] I endorse the emphasized quotation. A trustee’s fees, once established, always can be (and usually are) ultimately statedas a percentage of the value of the estate. However, the size of the estate may have little to do with its complexity.

The size of Mr.Stecyk’s estate, although considerable, begs the application of the remaining four factors to determine what constitutes a reasonable fee.Size matters; however, size might be the least significant of five factors. A “reasonable allowance” for fees may be approximated by apercentage of the value of the estate, but application of a percentage should be seen as “a rough guide to assist in the computation of whatmay be considered a fair and reasonable allowance”: Re: Atkinson, (ON CA), [1952] OR 685 (Ont CA).

The Care and Responsibility Springing from the Trust [19] The court accepts that two major (and certain minor) responsibilities arose in the administration of Mr. Stecyk’s estate:selling the farm land and defending the estate against Ms. Lavallee’s claim. [20] The majority of the estate consisted of farmland. Three of the seven parcels of land were sold to tenants who previouslyleased the land. Selling farm land in Saskatchewan is a common trustee responsibility. The respondents say that minimal work wasrequired to sell the farmland because no listings or showings were required.

Additionally, they argue that because a realtor sold the housein Norquay, Ms. Witwicki had little work to complete. [21] Ms. Witwicki submits that she put substantial effort into selling the land without the assistance or associated fees of arealtor. She directly approached and negotiated with the buyers. She states that selling the three parcels of land to two tenants involvedapproximately five hours of negotiation with each tenant to confirm the purchase price. According to Ms. Witwicki, the sale of theremaining four parcels of land involved significant negotiation with Mr.

Martyniuk’s family members who wanted to buy the land butwere unwilling to pay the value the realtor suggested. [22] In Verbonac, Re (1984), (SK SU), 31 Sask R 161 (Surr Ct), Justice Noble made the followingcomments in regards to the executor’s claim for five percent of the sale of the real property: [8] With respect to the items listed only one percentage charge gives me some concern. That is the 5% fee levied on the sale of realproperly listed as item #1 under Capital Account Receipts. On reading the material and in particular the

summary of administration filedby the Co-op Trust officer, it seems to me that the executors were required to do very little promotion to sell these lands. Apparentlysome neighbours enquired early as to the availability of it and tenders were asked for. However, a fee of 5% seems excessive if that is allthe executors were required to do and accordingly I propose to reduce the percentage to 3 ½ % for the sale of the land, thus reducing theproposed fee by $5700.00.

On the other hand, as we shall see, the beneficiaries of this estate delayed the sale of land by showingreluctance in approving it, a factor to be considered in determining whether or not the executors should be given an overall managementfee in addition to the allowance suggested by the percentages applied to various phases of their administration.

Noble, J. allowed for a $5,000 management fee to compensate for the difficulties faced in the administration of the estate due to theactivities of some of the beneficiaries. [23] In Pobran, Justice Scherman allowed for a percentage fee of five percent of the estate, which equalled $184,519.00, tobe divided among the four executors of the estate. Regarding the magnitude and complexity of the trust, he said the following of theexecutor`s role (at para. 26): The magnitude of the trust they were to administer was significant, both monetarily and in complexity of administration.

It involved theadministration of Vernon Pobran`s estate in two jurisdictions and in the context of a layman`s holograph that created

interpretationalproblems… [24] Ms. Witwicki states that she was responsible for more than solely selling of the farmland and dealing with the cashassets of the estate. She submits that other issues arose which should be taken into account in deciding her fee, including negotiating witha friend of the deceased, who cleared some land, but was never paid; dealing with Mr. Teslak’s mortgagee and sending part of hisbequest directly to the mortgagee to settle an amount owing; and, crucially, defending the lawsuit launched against the estate by Ms.Lavallee. [25] Ms. Witwicki states that to defend Ms.

Lavallee`s claim against the estate she had to provide an affidavit and approachthree other witnesses to provide affidavits. She submits she met with these witnesses on several occasions to gain their understanding ofMr. Stecyk’s relationship with Ms. Lavallee. She also accompanied the witnesses to two appointments with the estate’s solicitor. The Time Occupied in Performing Her Duties [26] Ms. Witwicki states that from the time Mr.

Stecyk died she “kept track of what [she] did and for how long.” Sheestimates that her time totals 320 hours and, in addition to these hours, she states that she saw the estate solicitor 33 times. [27] Ms. Witwicki has been paid for out of pocket travel expenses for traveling a total of 7,763 kilometres respecting whichshe charged $0.86 per kilometre for a total compensation of $6,762.38 for travel expenses. [28] The court is troubled by Ms. Witwicki’s assertions, and these “troubles” cast a pall over the entirety of her affidavitevidence.

For example, charging $0.86 per kilometre as a reasonable travel expense is approximately double what one might expect forlegitimate travel expenses. As well, 7,763 kilometres is more than the distance from Tuktoyaktuk, Yukon to Mazatlan, Mexico (adistance reported on Google Maps). The court does not accept that such travel was necessary when distances travelled were betweenNorquay, Canora and Yorkton. Why Ms. Witwicki would personally attend at her solicitor’s office 33 times is unexplained. One wouldexpect that emails and telephone calls would have sufficed except for occasions when Ms.

Witwicki was required to sign documents. InMs. Witwicki’s “notes” of her attendances upon estate matters over a two year period, she first mentions an appointment with the estatelawyer on April 1, 2017. In July 2017, she writes “many Lawyers app.” In December she writes “meeting with lawyer.” Of the 33alleged attendances at her lawyer’s office, these are the only entries in Ms. Witwicki’s notes that mention attendances at a law firm. [29] The court is suspect of both Ms. Witwicki’s travel reimbursement of $0.86 per kilometre and the exorbitant traveldistances.

Accordingly, if, for example, her rate and her distances were halved she would have received compensation approximating$2,000.00 for travel expenses, not $6,762.38, the equivalent of a $4,762.38 “overpayment” or slightly greater than one-half percent of the

value of the estate. [ 30 ] In her affidavit, Ms. Witwicki states that she logged 320 hours, excluding the 33 visits to the estate lawyer. However, in her hand-written notes, whenever she describes the few instances of attending at her lawyer’s office, she includes those visits in her calculation of hours spent. According to her own notes, the total number of hours Ms. Witwicki spent handling estate matters totals 320 hours, including visits to the estate lawyer. If Ms. Witwicki were to receive five percent of the estate as a reasonable fee, her hourly rate would exceed $130.00. [ 31 ] Ms.

Witwicki’s record keeping falls far short of what one would expect from someone who, in her affidavit, states, “From when I learned that the late John died, I kept track of what I did and for how long.” Exemplary of the shortfall is Ms. Witwicki’s accounting for 115 hours during 2018 as follows: 2018 time spent Jan more phone calls to lawyers. more phone calls from Billy complaining Talking to friend about Johny’s [sic] girl friend not being common law 15 hours Feb Same as Jan. ` 15 hours March Same 15 [hours] April Same 15 [hours] May` Same 15 [hours] June 10 hours .

Went to Court family action dismissed. [Illegible] was out of estate. 10 hours . Many phone calls July meeting with Lesons funeral home to get tomb stone 10 hours Aug. Same 10 hours . Many phone calls. Billy phone complaining Sept Oct Nov Dec [Emphasis added]

[ 32 ] Ms. Witwicki asks the court to accept these descriptions for 2018 as justifying 115 hours of time. How four consecutive months (February to May 2018) could possibly have entailed the same description as estate work in January 2018 defies logic. And, even taking Ms. Witwicki’s entries at face value, she asks the court to accept that 75 hours was spent on “phone calls to lawyers”, to “Billy” and to a “friend.” [ 33 ] The nature of Ms. Witwicki’s record keeping has appearance of a single entry prepared at one sitting, particularly for 2018. The court has no confidence in Ms.

Witwicki’s record keeping. [ 34 ] In Rositch Estate, Re , 2003 SKQB 368 , the court considered an executor’s application for a fee of $22,000.00 or 1.4 percent of the estate. In addressing the time estimates by the executor, the court found the estimate unreasonable: 8 Notwithstanding the value of the estate, it is apparent that very little was required by Mr. Rosen to administer the estate, with all but the condominium and personal effects consisting of bank accounts and the RIF. Even if Mr.

Rosen`s estimate of time expended is accurate, the fee requested would represent approximately $200.00 per hour, which is difficult to comprehend given the nature of the detailed services, entailed no particular expertise. Consequently, Mr. Rosen`s fee is fixed in the amount of $15,000.00. [ 35 ] Similarly, I find Ms. Witwicki’s assertion of the time spent to be inaccurate and, even if accurate, the time spent equates to an hourly rate well beyond what the court would accept as a reasonable fee.

The Skill and Ability Displayed [ 36 ] The respondents submit that these circumstances are similar to those in Barnett v Leifso , 2000 SKQB 525 [ Barnett ]. In Barnett , the executor claimed three percent of the total capital assets of the estate. As is the case here, the beneficiaries contended that one percent of the estate was more appropriate.

Respecting the capital assets, other grain and land, the court found two and one-half percent of the estate to be reasonable partly because the executor`s involvement in settling the dispute regarding matrimonial property was minimal and the accounting and tax issues were handled by a separately compensated accountant. The Success Which Attended Her Administration. [ 37 ] The respondents posit that Mr. Stecyk’s estate was fairly standard in terms of its administration. The estate administration was straightforward, short in duration and required no extraordinary effort from Ms.

Witwicki. [ 38 ] On the other hand, Ms. Witwicki states that she expediently dealt with the sale of the land and all other matters. Additionally, she persisted quickly in dealing with Ms. Lavallee`s claim, which ultimately was dismissed. [ 39 ] In Pobran , Justice Scherman accepted a five percent fee recognizing that the four executors displayed skill and diligence in going beyond accepting the valuations provided by real estate professionals. They generated $750,000 for the estate that would have not been realized if the initial appraisal values had been accepted.

The estate had to be administered in two jurisdictions in the context of a holograph will that created

interpretational problems. The testator chose to appoint four joint executors, each with an individual obligation to perform his or her fiduciary duty without delegation. [ 40 ] The court accepts that Ms. Lavallee’s claim presented an unusual estate issue. Ms. Witwicki conducted investigative work to find affiants to support a dismissal of Ms. Lavallee’s claim. Without a dismissal of the claim, the assets of the estate would have been significantly lessened. Ms.

Witwicki suggests that this Court should consider her request for five percent of the estate as equal split between administering the estate and handling Ms. Lavallee’s claim, each compensated by two and one-half percent of the estate. [ 41 ] The court sees no precedent for Ms. Witwicki’s suggested analysis. A trustee must be compensated based on the five enumerated factors stated in MacDonald . The court accepts that the court application that resulted in the dismissal of Ms.

Lavallee’s claim was largely handled by legal counsel and the estate has paid for the necessary professional assistance that ultimately saw the claim dismissed. Conclusion [ 42 ] If the court accepts Ms. Witwicki’s notes which, as she states, show she spent 320 hours administering the estate, a reasonably generous hourly fee for a lay person might approximate $50.00 per hour, or $16,000.00. As a percentage of the estate value ($836,943.56), $16,000.00 equals 1.9 percent. Considering, too, that the court has found that the reimbursement Ms.

Witwicki has received for travel expenses is exorbitant, the court finds that a fixed compensation of $16,000.00 is a “reasonable allowance for administration of an estate," as required by s. 52(1) of The Trustee Act, 2009 . [ 43 ] The respondents ask that the costs of the application be paid from the estate on a solicitor-client basis.

They rely on Barnett , where the court in discussing the costs to both parties stated: 21 As both parties have been partially successful in the passing of accounts, and as there has been, in the result, some benefit therefrom to the other residuary beneficiaries, both parties shall be entitled to recover their costs on a solicitor and client basis from the estate. [ 44 ] The court orders that the respondents’ solicitor-client costs shall be paid from the estate. If the parties cannot agree on an appropriate assessment of solicitor client costs, this matter may be returned to me. J.

D.H. LAYH