2019 NLSC 178, 2019 NLSC 178

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : O'Dea Estate (Re) , 2019 NLSC 178 Date : October 09, 2019 Docket : 201701E16180 In The Matter of the Estate of Fabian A. O'Dea, late of the City of St. John's, in the Province of Newfoundland and Labrador, Retired Businessman Before: Justice David B. Orsborn Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: October 2, 2019

Summary: Fabian O’Dea died in 2017. His will named two of his four children – Shannon O’Dea Dawson and Michael O’Dea – as co-executors, but because of animosity and friction between the children, no appointment as yet has been made. The four children are the residuary beneficiaries of the estate, the primary asset of which is money in a bank account. Shannon O’Dea Dawson has applied to be appointed sole executrix; Michael O’Dea has asked the Court to appoint the Public Trustee as administrator of the estate.

Held : Although the long-standing acrimony and the prospect of future litigation favours the application of the Public Trustee, the nature of the estate assets and the costs of appointing the Public Trustee suggest that, on balance, the interests of the beneficiaries are best served by the appointment of Shannon O’Dea Dawson as sole executrix. Appearances: Matthew D. Gough Appearing on behalf of Shannon O’Dea Dawson

Michael O’Dea Appearing on his own behalf Authorities Cited: CASES CONSIDERED: Cartwright v. Havens Estate , 2010 ABQB 91 ; Class v. Smith , 2018 ONSC 623 . STATUTES CONSIDERED: Public Trustee Act, 2009 , SNL 2009, c. P-46.1 . REASONS FOR JUDGMENT Orsborn, J. : INTRODUCTION [ 1 ] Fabian O’Dea died on February 16, 2017.

His will named Michael O’Dea and Shannon O’Dea Dawson, two of his four children, as co-executors. (For ease of reading, but with complete respect, I will refer to the named co-executors throughout as Michael and Shannon.) The four children are the equal residuary beneficiaries. [ 2 ] Over two and a half years have passed since Fabian O’Dea’s death. No executor has yet been appointed, but litigation has been abundant. The conflict between Shannon and Michael has been prolonged and acrimonious.

The Court now has before it competing applications; Shannon seeks to be appointed sole executrix and Michael asks that the Public Trustee be appointed to administer the estate. Shannon’s application is supported by her two other siblings. Each application is accompanied by affidavits which reflect the long-running pattern of hostility. [ 3 ] It is evident that a decision must be made between these two options, notwithstanding the wishes of Fabian O’Dea that his children cooperate in administering his estate. ISSUE [ 4 ] Should Shannon be appointed sole executrix? Or should the Public Trustee be appointed?

DISCUSSION [ 5 ] There is disagreement over the value of the estate and the composition of estate assets.

The disagreements relate primarily, as I understand it, to the disposition of vehicles and other items of personal property, and whether or not some or all of these items were given away by Fabian O’Dea before his death. [ 6 ] But it is uncontested that by far the bulk of the estate – approximately $500,000 – is in a bank account; it is also uncontested that each of the four children is entitled to share equally in whatever balance remains after estate expenses are paid. [ 7 ] The initial application for Letters of Probate, filed on August 11, 2017, provided an indication that the administration of the estate would not run smoothly.

In that application, Shannon sought an order appointing her as sole executrix and requiring Michael to turn over all estate assets and to personally pay the costs of the application. She alleged uncooperative and fraudulent conduct.

Concurrently, Michael filed a request to appoint the Public Trustee as administrator, asserting that Shannon had “engaged in unilateral and fraudulent conduct pertaining to Estate assets”. [ 8 ] Despite the passage of time, the Court has not been called upon to make findings with respect to the various cross-allegations. [ 9 ] In February 2018, the parties agreed to facilitate the appointment of Royal Trust Corporation as administrator. However, and unfortunately, that did not happen.

Further applications followed, including a contempt application and a further application to appoint the Public Trustee. [ 10 ] Following discussions between the parties and further Court hearings, on October 12, 2018, I issued a consent order providing for, in part: 1.

Both the Applicant and the Respondent acknowledge and agree to the existence of the two Estate accounts, the first with the Canadian Imperial Bank of Commerce (“CIBC”), located at the Churchill Square Branch and with account number 00763-20-81830, and the second with the Toronto-Dominion Bank (“TD”), located at the Elizabeth Avenue Branch and with account number 00502-6506796 (the “Estate Accounts”);

2. Both the Applicant and the Respondent acknowledge and agree that the approximate value of the Estate Accounts are: i. CIBC (00763-20-81830): $349,000.00 (“CIBC Account”) ii. TD (00502-6506796): $149,000.00 (“TD Account”) 3. It is hereby ordered that TD shall immediately transfer the remaining balance in the TD Account to the CIBC Account, resulting in a total balance of approximately $498,000.00; 4.

Both the Applicant and the Respondent consent to the distribution of funds in the amount of $400,000.00 (the “Released Funds”) from the CIBC Account, to be distributed pursuant to the terms of the Last Will and Testament of Fabian O’Dea dated the 2 nd day of February, 2017 (the “Will”), and more specifically that the $400,000.00 shall be divided in equal shares between Shannon O’Dea Dawson, Michael O’Dea, Ryan O’Dea and Kelly O’Dea Anthony, and that payment to these persons shall be made by certified cheque or bank draft payable to those persons or to whomever they each direct that their payment shall be made; 5.

The Applicant and the Respondent shall each sign the necessary documentation required by both CIBC and TD in order to have the Released Funds released and distributed pursuant to this Order and the Will; 6.

Both the Applicant and the Respondent acknowledge and agree they shall take all necessary steps to have the Released Funds distributed in the most expedient and efficient manner possible, and if possible on or before October 31, 2018. [ 11 ] Although the transfer from TD Bank to CIBC has been effected, and although it is now a year since the order was given, no payments to the beneficiaries have yet been made in respect of the $400,000. [ 12 ] Since October 2018, the four siblings have been involved in litigation – in the estate file – over allegedly improper access to information over which solicitor-client privilege is claimed.

There is also ongoing litigation between Michael and his brother, Ryan; this litigation does not involve the estate. [ 13 ] The two applications now before the Court were filed in September 2019. [ 14 ] What is needed to effect the administration of the estate? Estate tax returns must be filed and taxes paid; it was suggested to me that the parties do not expect a significant tax liability. Any non-cash assets of the estate must be identified and brought under the control of the estate. Given the history of the matter to date, it is likely that this process will not proceed smoothly and may lead to litigation.

Debts of the estate must be quantified and paid; there will likely be differences of opinion over what expenses – particularly legal fees – are properly considered as expenses of the estate. When all is said and done, the assets remaining, if any, must be distributed. [ 15 ] There is a legitimate concern that if $400,000 is now paid out pursuant to the October 2018 order, there may be insufficient monies left in the estate – approximately $100,000 – to satisfy expenses legitimately chargeable to the estate.

This concern is, of course, a product of the time that has passed and the legal expenses incurred in the skirmishes since 2018. To be clear, I am expressing no view on whether or not any of the legal expenses incurred by any of the four children since the death of their father are properly chargeable to the estate. [ 16 ] Given the passage of time, it is not appropriate that any person appointed to deal with the estate be faced with having to comply with the October 12, 2018 order. Paragraphs 1-6 of that order should be vacated.

It will then be up to the person appointed to determine what, if any, distributions can be made currently to the four beneficiaries. [ 17 ] Clearly, it is time for the estate to be administered.

But who should administer the estate? [ 18 ] The animosity between Michael and his three siblings, when considered in light of potential litigation by or against the estate and in light of decisions that will need to be made on estate assets and carrying out the terms of Fabian O’Dea’s will, suggests that the Public Trustee is the preferable choice. [ 19 ] To illustrate one issue that was identified in Court – paragraph 3 of the will says: 3. BURIAL WISHES It is my wish that my remains be buried in the family plot located at Renews, Newfoundland and Labrador, directly in front of the Celtic Cross.

I want two (2) white marble angels, one to be placed on each of the upper corners of the family burial plot, each placed at 45 º angles. One angel shall have my name placed on it and the other angel shall have my sister Christine’s name placed on it. These

marble angels have already been priced at Heritage Monuments at $10,000.00 for both angels with the quote being recorded by the owner. My funeral has been prepaid in total at Caul’s Funeral Home. [ 20 ] Michael indicated that he paid $18,000 to have two angels made and placed on the grave; he says that if Shannon becomes the executrix, she will “pull up” the angels as not being in compliance with Fabian O’Dea’s wishes and, presumably, replace them. I do not know if this is an accurate representation of Shannon’s intentions.

What approach the Public Trustee would take to this issue is not known. [ 21 ] The downside to appointing the Public Trustee is primarily one of cost and in not complying, at least in part, with Fabian O’Dea’s wishes to have his children administer his estate. [ 22 ] At the present eight percent fee charged on estate capital assets received, and assuming estate cash of $500,000, at least $40,000 will be payable to the Public Trustee as a fee, together with any costs incurred by the Public Trustee for counsel. The Public Trustee’s fees are set by regulation but may be waived in a case of “hardship or unfairness”.

See Public Trustee Act, 2009 , SNL 2009, c. P-46.1, subsection 16(3). Assuming that no waiver is granted, the cost to the estate would be significant. [ 23 ] On the other hand, appointing Shannon in the light of the ongoing hostility between her (joined by her two siblings) and Michael raises a real issue – at least of perception – as to whether any discretionary decisions on her part would be made fairly and with an even hand. [ 24 ] An executor is a trustee upon whom the law imposes serious obligations. In Cartwright v.

Havens Estate , 2010 ABQB 91 , Binder J. said at paragraph 17: 17 An executor holds a position of trust toward the beneficiaries of the estate. The duties of an executor include a duty to act impartially and in the best interests of beneficiaries and to observe the wishes of the testator in carrying out the administration of the estate. [ 25 ] Courts are not comfortable appointing a trustee where there is a potential for conflict. I refer, for example, to Class v.

Smith , 2018 ONSC 623 , at paragraphs 39-40 : 39 The general rule is that the court does not appoint a party litigant as Estate Trustee during Litigation. Where there is conflict, impropriety is alleged and/or where the moving party has a significant interest in the outcome of the litigation, it would not be appropriate to appoint a party as Estate Trustee. Even when the interim administration of an estate requires minimal services and is straightforward, potential conflict necessitates the appointment of a neutral Trustee; see Sherbourne v. Shanks , [2005] O.J. No. 2622 (Ont.

S.C.J.) . 40 The court must maintain a level playing field. The fiduciary duties of an executor or trustee can be inconsistent with a party’s ongoing litigation interests. Neither side should be able to use their control over the estate to benefit themselves or to prejudice the other. The estate should be neutral to the positions of the parties in the litigation. The estate assets should be administered to the maximum advantage of the beneficiaries. A trustee who is in an adversarial position towards a beneficiary should not normally be left in charge of trust property: see Mayer , Dempster v.

Dempster Estate (2008), 45 E.T.R. (3d) 139 (Ont. S.C.J.) . [ 26 ] I note that Shannon is not a party to litigation involving estate assets. I understand that the money in the CIBC account constitutes the bulk of remaining estate assets. I also understand that there is no dispute over the equal entitlement to that money. Thus, the potential for an unfair distribution of this primary asset is, I think, minimal. [ 27 ] On balance and after much consideration, I consider that the best interests of all beneficiaries are served by appointing Shannon as sole executrix of the estate.

By asking to have the Public Trustee appointed, Michael has effectively renounced his appointment pursuant to the will. As noted, Shannon’s application is supported by the two other siblings. While a decision by majority vote is not appropriate, the wishes of three of the four residuary beneficiaries cannot be completely disregarded. [ 28 ] The conduct of Shannon as executrix is in her hands. She will be bound by the law governing executors and will be required by that law to treat all beneficiaries in an evenhanded manner.

The distribution of the primary asset – the money in the bank after expenses – does not require any exercise of discretion. Her appointment also carries with it some element of compliance with her father’s wishes that his children administer his estate. CONCLUSION [ 29 ] It is ordered that: 1. Letters of Probate of the will of Fabian O’Dea dated February 2, 2017, be granted to Shannon O’Dea Dawson as sole executrix; 2. Paragraphs 1-6 of the order of October 12, 2018, be vacated; 3.

Shannon O’Dea Dawson is entitled to have her Column 5 costs of this application paid out of the estate, such costs to be taxed before payment; and 4. Michael O’Dea will bear his own costs.

_____________________________ David B. Orsborn Justice