2010 ONSC 6375, 2010 ONSC 6375

CITATION : Baranek Estate, 2010 ONSC 6375 COURT FILE NO.: 03-57/09 DATE: 20101119 SUPERIOR COURT OF JUSTICE - ONTARIO RE: In the Estate of Stanislaw Baranek, deceased BEFORE: D. M. Brown J. COUNSEL: A. Casullo, for the applicant, William Coon, former attorney of the deceased K. Barry, for the Public Guardian and Trustee HEARD: November 17, 2010 REASONS FOR DECISION I.

Issue: Should this motion to appoint a litigation administrator be deferred until the Public Guardian and Trustee decides to apply for appointment as estate trustee under the Crown Administration of Estates Act ? [ 1 ] William Coon, a former attorney of the deceased, Stanislaw Baranek, moves to appoint Mr. Derek Miller, a lawyer, as litigation administrator of the Estate of Mr. Baranek so that Mr. Coon can continue his application under the Substitute Decisions Act, 1992 to pass his accounts as attorney. The Public Guardian and Trustee objects to Mr.

Miller’s appointment, contending that the PGT should be permitted to apply for appointment as estate trustee of Mr. Baranke’s Estate pursuant to the Crown Administration of Estates Act , R.S.O. 1990, c. C.47. [ 2 ] For the reasons set out below, I will defer Mr. Coon’s motion until the PGT has had an opportunity to conduct an investigation and to make its application, but I will case manage this proceeding and require the parties to adhere to tight deadlines so that Mr. Coon’s application to pass accounts can be heard with reasonable expedition. II. Background events [ 3 ] Stanislaw Baranek died on April 4, 2010.

The applicant, William Coon, acted as Mr. Baranek’s attorney from May 18, 2007 until September 30, 2007. On September 15, 2007, Mr. Baranek granted new powers of attorney to Irena Biegun. [ 4 ] Intense litigation then ensued between Ms. Biegun, as attorney for Mr. Baranek, and Mr. Coon. On September 27, 2007, Ms. Biegun, exercising the power of attorney granted by Mr. Baranek, commenced an action against Mr. Coon (the “Action”) seeking orders preventing Mr. Coon from exercising any powers as an attorney of Mr. Baranek and requiring Mr. Coon to pass his accounts. Mr. Tufman acted as counsel for Mr. Baranek and Ms.

Biegun. On October 18, 2007, Somers J. made a consent order prohibiting Mr. Coons from acting any further as attorney for Mr. Baranek. In March, 2008, Master Abrams transferred the Action to the Estates List. [ 5 ] In July, 2009, Mr. Coon applied to pass his accounts. Mr. Baranek (presumably through his attorney, Ms. Biegun), filed a notice of objections on August 18, 2009 taking the position that Mr. Coon was not entitled to any compensation for acting as his attorney. [ 6 ] May I pause here and say that I have reviewed much of the material involved in the litigation initiated by Ms. Biegun, as Mr.

Baranek’s attorney, and Mr. Coon’s passing of accounts. The so-called “battle of competing powers of attorney” is emerging as a growing area of litigation. This is a most unhealthy development. I suspect that when the Legislature passed the Substitute Decisions Act back in 1992 it intended to put in place a legal framework which would protect the affairs of the vulnerable elderly, not spawn a new breed of litigation which would see the hard-earned money of the vulnerable being exposed to claims for the payment of legal fees incurred by those whom they had appointed to protect their interests.

In so commenting I am not passing judgment, one way or the other, on the conduct of Mr. Coon or Ms. Biegun. I am signaling that the inter-attorney litigation which erupted in this case is symptomatic of a much larger problem which, as Ontario’s population ages, risks turning into a very serious social issue.

Indeed, I think the time may have arrived for the Legislature of this province to look into this problem of litigation involving competing powers of attorney, especially involving subsequent powers of attorney made during the latter periods of a person’s life when they are vulnerable to pressure, in order to see whether new protections are required to ensure that the assets of the vulnerable are used for one purpose only – the satisfaction of the needs of the vulnerable elderly while they are alive. [ 7 ] Returning to the history of this proceeding, Ms.

Casullo informed me that in his passing of account application Mr. Coon will be asserting claims in excess of $102,000.00 against the Estate involving three categories of compensation: (

i) compensation for acting as attorney for four months (less than $10,000.00); (ii) his costs of the application to pass accounts; and, (iii) the legal fees he

incurred in defending the Action brought by Ms. Biegun. I gather the latter category constitutes the bulk of the claim against the Estate. [ 8 ] In an endorsement made on September 9, 2009, in the passing of accounts application, Klowak J. wrote as follows about Mr. Coon’s claim for his legal fees incurred in defending the Action: “I am of the view it is premature for me to order those costs be tried as part of the Passing of Accounts, particularly since it appears to me even a consent resolution of the action might require Court approval, including approval as to costs.” Klowak J. also ordered that: (

i) any cross-examinations on affidavits filed in the passing of accounts application occur before the end of January, 2010; (ii) the parties attend a mediation before the end of February, 2010; (iii) notice of the application be given to the PGT; and, (iv) the motion for directions was adjourned until March 25, 2010. ( I am uncertain from the materials whether the ordered mediation ever took place.) [ 9 ] On February 9, 2010, Conway J. granted a consent judgment in the Action in which the powers of attorney granted to Mr. Coon were declared null and void, Mr.

Coon was prohibited from acting as attorney under those powers of attorney, and the “costs of this action are reserved to be determined in the future, and that this judgment is without prejudice to the amount of costs and to which party ought to pay the cost.” [ 10 ] On March 25, 2010, D. Wilson J. made an order giving directions in the passing of account application setting October 13, 14 and 15, 2010, as the date for the trial of that application and ordering that one of the issues to be tried included the costs of either party to the application, the Action, and an application for guardianship commenced by Mr.

Coon and a George Loose (Court File No. 03-0808). [ 11 ] On July 13, 2010, Ms. Casullo wrote to Mr. Tufman seeking a date for a pre-trial conference. Mr. Tufman replied that both Mr. Baranek and Ms. Biegun had passed away, the latter on April 11, 2010. Mr. Tufman wrote: I have no idea who, if anyone, is the new estate trustee for either one, and have not been in contact with any such person, but I am making inquiries. [ 12 ] That prompted Ms. Casullo to write him requesting copies of the death certificates for Mr. Baranek and Ms. Beigun, as well as a copy of Mr. Baranek’s will. Mr.

Tufman replied that he did not have copies of the death certificates, nor Mr. Baranek’s will, “and I have no idea if he left one.” Mr. Tufman stated that he had no instructions from any person regarding Mr. Coon’s application to pass accounts. [ 13 ] Ms. Casullo and Mr. Tufman appeared before Roberts J. on September 30, 2010. Her Honour vacated the trial date for the passing of accounts, ordered that the PGT be served with the application record, and set October 6, 2010 for the next scheduling appointment. Roberts J. also ordered: I am concerned in the circumstances of this case to ensure that Mr.

Baranek’s assets are properly preserved pending the appointment of a trustee or administration, not simply for the applicant’s sake, but also for estate purposes. As a result, I order that there be no sale or disbursement of any of Mr. Baranek’s assets pending the return of this matter on October 6 th , 2010. This order is effective without further formality (the “Non-Dissipation Order”). [ 14 ] The matter came back on before me on October 6, 2010, at which time I ordered counsel to obtain a mutually convenient for the hearing of Mr.

Coon’s motion to appoint an litigation administrator for the Estate and continued the Non-Dissipation Order made by Roberts J. [ 15 ] On this return before me, Ms. Casullo and counsel for the PGT appeared; Mr. Tufman did not. The applicant, Mr. Coon, sought an order appointing Mr. Miller as litigation administrator, pursuant to Rule 9.02 of the Rules of Civil Procedure, and a continuation order against the Estate under Rule 11. The evidence filed by Mr. Coon disclosed that Mr. Baranek had a relative in Germany, Ms. Barbara Naczynskia-Janik, who had advised that: (

i) Ms. Biegun told her that Mr. Baranek made a will in 2009 leaving his real property to Ms. Biegun and the residue to Ms. Janik, (ii) given her age and financial circumstances Ms. Janik was not interested in administering the Estate, (iii) she was not quite sure about her precise relationship to Mr. Baranek other than he was a “distant cousin”, (iv) Mr. Baranek had no siblings or children, and was divorced, and, (

v) Ms. Biegun had informed her in early 2010 that she had bought Mr. Baranek’s property. [ 16 ] Indeed, the Land Registry records reveal that on December 30, 2009, Ms. Biegun’s husband and son, Andrej Kumer and Andrew Jan Kumer, purchased Mr. Baranek’s Lake of Bays property for $100,000, with Mr. Baranek taking back an $80,000 mortgage. The Transfer records that it was not authorized under a Power of Attorney by Mr. Baranek, suggesting that Mr. Baranek was capable at the time and directly authorized the Transfer, an interesting situation given that the Action commenced two years previously was done on Mr.

Baranek’s behalf by his attorney, Irena Beguin, suggesting that Mr. Baranek may not have been capable in September, 2007. It would be an understatement to say that the Transfer raises many questions. [ 17 ] The Transfer also indicates that one Ann Woodruff of Toronto acted for the transferor and Carlos Pereira of Mississauga acted for the transferee. According to the Ontario Lawyer’s Phone Book, both individuals are lawyers and their contact information is available. [ 18 ] As noted, the PGT opposed Mr.

Coon’s motion, submitting that it should be given the opportunity to apply under the Crown Administration of Estates Act to act as estate trustee of Mr. Baranek’s Estate. III. Analysis [ 19 ]

Section 1 of the Crown Administration of Estates Act provides as follows: 1.

(1) The Superior Court of Justice may, on the Public Guardian and Trustee’s application, grant to the Public Guardian and Trustee letters of administration or letters probate with respect to a person’s estate, if the following conditions are satisfied:

1. The person dies in Ontario, or is a resident of Ontario but dies elsewhere. 2. The person dies intestate as to some or all of his or her property, or dies leaving a will without naming an executor or estate trustee who is willing and able to administer the estate. 3. There are no known next of kin who are residents of Ontario and are willing and able to administer the estate, or the only known next of kin are minors and there is no other near relative who is a resident of Ontario and is willing and able to administer the estate or to nominate another person to do so.

(2) When letters of administration or letters probate are granted under subsection (1), the Public Guardian and Trustee shall administer the person’s estate for the use and benefit of all the lawful heirs and, if there are no lawful heirs, for the use and benefit of the Crown. [ 20 ] From the evidence filed before me to date, it is clear that Mr. Baranek died in Ontario, it is less clear that he died intestate – Ms.

Janik suggested that he may have made a will in 2009, but she did not have any information about who the executor might be – and it appears that there are no known next of kin who are residents of Ontario, although a detailed search has not been conducted. In oral submissions Ms. Casullo informed the court that a relatively recent search of the Estates Register had not disclosed an application for the probate of Mr.

Baranek’s will, but that is inconclusive as to whether he had a will at the time of death. [ 21 ] Under section 2(1) of the Crown Administration of Estates Act the PGT, while conducting “an investigation to determine whether the conditions set out in subsection 1(1) are satisfied, and until letters of administration or letters probate are granted”, may make an inventory and take possession of the deceased’s property and “exercise all the powers of a personal representative with respect to the person’s property.” [ 22 ] In the present case it is unclear whether the conditions which would permit the appointment of the PGT as executor under

section 1 of the Act exist – Mr. Baranek may have made a will, so somewhere there may exist an estate trustee who is administering the Estate without having obtained probate. Under those circumstances I consider it premature to consider Mr. Coon’s motion for the appointment of a litigation administrator – there may be no need for one, if an estate trustee exists. I think it best to afford the PGT some time to conduct an investigation to ascertain whether an estate trustee of the Estate exists and, if one does not, to apply for its own appointment under

section 1 of the Act. [ 23 ] Not too much time, however. Ms. Casullo submitted that in the past she had encountered difficulty in receiving responses to her correspondence from the PGT. I have read the bundle of correspondence she filed and I do not view the matter in the same light. That said, the application for the passing of accounts has been delayed long enough and must proceed with reasonable dispatch. It should be a simple task for the PGT to ascertain if Mr. Baranek made a will – the contact information for counsel for Ms. Biegun’s husband, Mr. Kumer, appears on the Transfer of Mr.

Baranek’s Lake of Bays property. That counsel should be able to provide current contact information for Mr. Kumer who should have some information about a will if Ms. Janik’s advice that Ms. Biegun was a beneficiary under the will turns out to have been correct. If Mr. Kumer’s counsel has any concerns about disclosing his client’s contact information, he certainly can act as a conduit for communication and, if that proves inadequate, this court can always direct counsel to disclose such information. [ 24 ] Accordingly, by way of formal disposition of Mr.

Coon’s motion, I adjourn that motion to my list on Monday, December 20, 2010 at 10:00 a.m. for 30 minutes. I direct the PGT to conduct, in the meantime, whatever investigations are required to determine whether it intends to apply under

section 1 of the Crown Administration of Estates Act and, if it does, to make that application returnable before me on that date. If the PGT has not concluded its investigation by that date, it must file materials explaining to the court what it has done, what remains to be done and, if necessary, seek from the court any directions it requires to complete that investigation. I will remain seized of this matter as the case management judge with the objective of ensuring that a timely continuation order can be made against the Estate represented by an executor under a will made by Mr.

Baranek or, if no will exists, by an estate trustee appointed by the court who can represent the Estate in the application to pass accounts and who can administer the Estate. [ 25 ] Costs of this attendance reserved to December 20, 2010. Although Mr. Tufman did not attend on the return of this motion, I direct Ms. Casullo to fax or email a copy of these Reasons to him. I continue the Non-Dissipation Order and I direct counsel for Mr. Coon to serve forthwith a copy of these Reasons on Mr. Pereira, who acted for the Kumers on the Lake of Bays transaction, and on Ms. Woodruff who acted for Mr.

Baranek, ostensibly without the aid of his attorney. D. M. Brown J. Date: November 19, 2010