Pitblado LLP et al v Zenyk, 2015 MBCA 97

Citation: Pitblado LLP et al v Zenyk, 2015 MBCA 97 Date: 20151006 Docket: AI14-30-08310 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Michel A. Monnin Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner BETWEEN : PITBLADO LLP ) G. R. Clay ) for the Appellant (Plaintiff) Respondent ) ) - and ) T. W. Turner ) for the Respondent, JANICE MARIE KOWALYK and ) Pitblado LLP GERALDINE JOAN GARAND as ) Executrices of the Estate of MARJORIE ) JOAN ZENYK and the Estate of ) T. A. McMahon MARJORIE JOAN ZENYK ) on a watching brief ) for the Respondents, (Defendants) Respondents ) J. M.

Kowalyk et al ) - and - ) ) Appeal heard and DARYL FRANK ZENYK ) Decision pronounced: ) October 6, 2015 (Applicant) Appellant ) CAMERON JA (for the Court): [ 1 ] The applicant appeals the order of the motion judge refusing to add him as a party to the action over legal fees between the plaintiff (Pitblado) and the defendants (the executors). He is a residual beneficiary of the estate and is concerned over how this proceeding may affect his interest in the estate. [ 2 ] A discretionary decision such as this calls for review on the standard of great deference.

The onus is on the applicant to show that the motion judge either misdirected himself or that the decision he arrived at was so clearly wrong as to amount to an injustice (see Towers Ltd v Quinton’s Cleaners Ltd et al , 2009 MBCA 81 , 245 ManR (2d) 70 ). [ 3 ] In dismissing the motion, the motion judge concluded that there was nothing sufficiently unique and necessary for the applicant to be added as a party. He stated that the applicant, like the other residual beneficiaries, would not add anything to the dispute underlying the collection.

He held that he was not satisfied that the applicant could make a useful contribution to the matter without causing injustice to the immediate parties.

Further, he observed that many of the reasons advanced by the applicant to be added as a party related to issues between the applicant and the executors, or as between the executors and Pitblado, and were not germane to the lawsuit. [ 4 ] We do not agree with the applicant’s argument that the motion judge misinterpreted Queen’s Bench Rule 13.01(1) by considering whether his addition as a party would be “sufficiently unique and necessary” (see Manitoba, Court of Queen’s Bench Rules , Man Reg 553/88).

Read as a whole, there is nothing in the motion judge’s reasons to suggest that he imposed a threshold higher than the jurisprudence that he relied on (see Cropo Estate, Re , 2008 MBQB 194 , 230 ManR (2d) 236 ; and Buccilli et al v Pillitteri et al , 2014 ONCA 337 , 318 OAC 365 .) [ 5 ] The applicant’s argument that he has an interest in the outcome of the litigation between the executors and Pitblado

rests on an assumption that the executors have an unassailable right to indemnify themselves out of the estate for any fees payable to Pitblado. This is not necessarily the case, although, in general, executors are entitled to indemnification from the estate for expenses properly incurred in the execution of their duties. The estate is not a separate legal entity.

The executors contracted with Pitblado in their personal capacities and, presumptively, are personally liable for the fees subject to their ability to advance a claim for indemnification from the estate. [ 6 ] The question of whether the executors can indemnify themselves from the estate assets for their legal fees is the real issue of concern to the applicant.

The proper forum to resolve that question (and most of the other issues raised by the applicant relating to the administration of the estate) is on a passing of accounts once the litigation between the executors and Pitblado has been resolved. [ 7 ] The appeal is dismissed with costs. JA JA JA