2013 ONSC 2659, 2013 ONSC 2659

CITATION : Petrovskaya v. Morelli, 2013 ONSC 2659 COURT FILE NO.: 01-2311/12 DATE: 20130507 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Natalia Petrovskaya, Applicant AND: John Morelli, a.k.a. Giovanni Morelli, a.k.a. Giovanni Morelli Jr., Respondent BEFORE: Morgan J. COUNSEL: Victor Pilnitz , for the Applicant John Morelli, on his own behalf Christopher P.

Goldson , for Maria Ferreira (mortgagee) HEARD: May 6, 2013 ENDORSEMENT [ 1 ] This is an Application by the spouse of Giovanni Morelli Sr. (“G.M.”) to be appointed Estate Trustee Without a Will for the estate of G.M. [ 2 ] The Respondent is G.M.’s adult son from a previous marriage, who objects to the Applicant’s appointment. [ 3 ] The Applicant and G.M. married in Italy in 2009. The Applicant is from Russia and was sponsored to immigrate to Canada by G.M.

They apparently met over the internet in 2009 and married later that year. [ 4 ] G.M. died intestate on May 7, 2012. [ 5 ] The estate appears to have two assets of significance. The first, of which much was said in the materials filed and in oral argument, is a home at 63 Bowring Walk, Toronto, in which the Applicant and G.M. resided at the time of G.M.’s death.

The second, which is mentioned only in passing in the affidavit material, is a house in G.M.’s birthplace of Rende, Italy. [ 6 ] The Applicant and the Respondent have each spent considerable energy trying to convince the court that he or she is more knowledgeable than the other about G.M.’s business affairs. Frankly, neither party has impressed me in this regard. [ 7 ] The Respondent states in his affidavit that he has always helped out with his father’s business and that he knows about the legal structure put together by the family lawyer.

He states that some of the corporations were in fact registered in his mother’s name. According to the Respondent, the businesses were run out of four different corporate entities, three of which were thriving before G.M. met the Applicant. [ 8 ] The Applicant states that she was an accountant in Russia and that she also studied accounting at George Brown College in Toronto. She attests that after moving to Canada she always helped out with her husband’s bookkeeping and that, in fact, she ran the business’ day-to-day operations out of the Bowring Walk home.

She states that there was only one active business, a pasta and prepared food company, and that G.M. never mentioned any other businesses in which he was actively engaged. [ 9 ] I see little relevance in any of this. The issue in this Application is who should be the Estate Trustee for G.M.’s personal estate.

The business was incorporated under one or more corporate entities and the management of the corporations is not in issue; indeed, both parties appear to concede that the business has ceased to operate since G.M.’s death. [ 10 ] In any case, neither party has put forward convincing evidence that they were involved in more than a passing way in the business. G.M. ran his company or companies for many years. The Respondent states in his affidavit that he has been a successful business professional in his own right. It stands to reason that his time and engagement with G.M.’s business was limited.

The Applicant states in her affidavit that G.M. was self-employed and had an ongoing business when she first came to Canada in 2009. It stands to reason that her engagement with G.M.’s business was equally limited. [ 11 ] Each of the parties has also expended considerable energy explaining why he or she is more competent than the other to manage the personal affairs that are residual in G.M.’s estate.

Again, neither of them has impressed me. [ 12 ] The Respondent relates in his affidavit that his father’s financial problems began after the death of his first wife (the Respondent’s mother) in 2007, and that his father went into debt in order to support his new wife after marrying the Applicant in 2009. He gives some sparse details about what he guesses his father’s income would have been from 2009 until his death in 2012, and states that G.M. had to pawn various belongings in order to support his new wife.

He exhibits a couple of deposit slips purportedly belonging to G.M. that he says demonstrates that the he had to help his father out financially. [ 13 ] The Applicant relates in her affidavit that her spouse’s financial problems were incurred in connection with the money he had

to raise in order to help support his son. She contends that the Respondent was in financial trouble and that he was at one point accused by his partner of embezzling funds and subjected to a police investigation.

She also states that the Respondent was out of work for a significant amount of time and that the second mortgage on the Bowring Walk house was placed there so that G.M. could provide money to the Respondent. [ 14 ] All of this evidence by both parties proves very little and is unnecessarily inflammatory. [ 15 ] Continuing with the inflammatory approach, the Respondent includes as an exhibit to his affidavit a without prejudice offer made by the Applicant’s counsel, as if to demonstrate that the Applicant is only contesting this matter for the money. This, of course, is entirely improper.

I have ignored the content of the offer, and have only mentioned it here to note the impropriety of this form of advocacy. [ 16 ] For her part, the Applicant has seen fit in her affidavit to tell the world, through double hearsay supposedly provided by the police who in turn allegedly heard from the Respondent’s partner, that the Respondent at one point wrote out a suicide note. This is so inflammatory and improper that it almost defies description. Each party appears to be engaged in a form of character assassination.

These mutual recriminations are unhelpful to either one of them. [ 17 ] G.M. has been served with a Notice of Sale Under Mortgage by the second mortgagee of the Bowring Walk property, who has now apparently bought the first mortgage and is seeking a remedy under that mortgage as well. The Applicant states that she is contesting the validity of the second mortgage, and contends that as the mortgage is on her matrimonial home she is the only party with an interest in pursuing that matter. [ 18 ] Counsel for the mortgagee was present at the hearing of this Application.

He indicated that his client has no preference as to which of the parties becomes Estate Trustee. His only concern, which is certainly a reasonable one, is that the Estate be administered in an orderly way in order to allow for the mortgagee to pursue its remedies. [ 19 ] The Respondent puts more emphasis on the property in Italy, which he also submits is debt-ridden although there is little hard evidence of that. He states in his affidavit that since he speaks Italian, he is the only party who will have the ability to deal with G.M.’s affairs in Italy.

He also indicates that he is the one person with an interest in salvaging G.M.’s financial reputation since he and his father share the same name. [ 20 ] Finally, each of the parties states that the other has acted badly in respect of G.M.’s property since his death. In this respect, they are both right. After G.M.’s death, the Respondent apparently removed banking and other documents, and possibly some valuables, from the safe in the Bowring Walk home.

He is also alleged to have driven away with G.M.’s car and to have redirected G.M.’s mail to his own address. [ 21 ] As for the Applicant, she apparently took it on herself to list the Bowring Walk house for sale even though she is not the titleholder. She claims that this was done merely for the purpose of ascertaining the value of the property, but the evidence shows that she went so far as to actually obtain an offer from a purchaser.

Attempting to sell a house that she does not own strikes me as a significant step beyond simply obtaining a valuation for the property. [ 22 ] There is evidence that G.M.’s estate is in substantial debt. There are two mortgages secured against the house, and a construction lien has recently been registered on title that neither party can explain. There is evidence that there are taxes owing, and that collection agencies had been writing to G.M. before his death about various monies owing.

As of this date, the debts of G.M.’s estate are of unknown quantity. [ 23 ] Administering the Estate will not be an easy matter. Given the atmosphere of distrust between the parties, the Estate Trustee can expect to be closely scrutinized by the other party; and given the debts and contentious property issues that have arisen, the Estate Trustee can expect to have to devote considerable time and effort to the task.

I am not convinced that either one of the parties is truly up to the task. [ 24 ] That said, there are debts and taxes to be looked after, mortgage actions to answer, and other matters that make it imperative that someone act as Estate Trustee for G.M.’s estate. Section 29(1) of the Estates Act , RSO 1990, c. E.21(the “Act”) provides that the first in line to be Estate Trustee where a person dies intestate is the person to whom the deceased was married immediately before this death.

Accordingly, the statute dictates that in the absence of any more appropriate choice, the Applicant shall be appointed. [ 25 ] There are no grounds here for relieving the Estate Trustee of the obligation to post a bond under

section 35 of the Act . The net value of G.M.’s estate is unclear, and in any case there is no affidavit that sets forth all of the debts of the estate. Moreover, given the contentious nature of this matter, I find there are no grounds on which to reduce or dispense with the amount of the bond. This is a case where a bond is a necessity.

In order for the Applicant to receive a Certificate of Appointment of Estate Trustee Without a Will, she will have to post a bond in the amount set out in section 37(1) of the Act. [ 26 ] The Applicant is appointed as Estate Trustee Without a Will in the Estate of Giovanni Morelli, on condition that she post a bond as described above.

The Respondent shall deliver to the Applicant any and all documents, financial and banking records, and property that is in his possession or control that belonged to G.M. or that was removed from G.M.’s home at his death. [ 27 ] Any need for the Applicant to obtain the Respondent’s consent as to form and content of the formal order herein is dispensed with. [ 28 ] Given my comments about the materials and the conduct of the litigation by the Applicant and the Respondent, there will be no costs for or against either party.

Morgan J. Date: May 7, 2013