2017 ONSC 800, 2017 ONSC 800

CITATION : Pizzey v. Cimitruk, 2017 ONSC 800 COURT FILE NO.: 834/13 DATE: 20170201 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Ronald Pizzey, as Estate Trustee With a Will of the Estate of Phyllis Pizzey, deceased, Plaintiff AND RE: Brenda Cimitruk, The Public Guardian and Trustee, Rick Cimitruk and Krista Kesik, Defendants BEFORE: Justice A. K. Mitchell COUNSEL: D. Veinot, for the Moving Party, Brenda Cimitruk S.

Gallagher, for the respondents on the Motion, Ronald Pizzey and Barbara Procter HEARD: January 30, 2017 E N D O R S E M E N T Overview [ 1 ] The Defendant, Brenda Cimitruk (“Brenda”) brings this motion seeking, inter alia , an order for contempt against her mother’s guardians of property, Ronald Pizzey (“Ronald”) and Barbara Procter (“Barbara”), for their failure to comply with para. 4 of the Order of Justice Donohue dated December 3, 2014 (the “Order”) which required them to serve an Amended Management Plan on the Public Guardian and Trustee (“PGT”) within 60 days of being appointed as Guardians of Property. [ 2 ] Brenda seeks a fine payable by Ronald and Barbara in the amount of $7,714.24 and removal of Ronald as co-executor of their mother’s estate. [1] Background Facts [ 3 ] Brenda was granted power of attorney of her mother’s property and in 2006 opened a joint bank account in her and her mother’s names. [ 4 ] Ronald and Barbara commenced this application in May, 2013 seeking an order requiring Brenda to pass her accounts as power of attorney for her mother.

On August 13, 2013 and with the consent of the parties, the court made an order requiring Brenda to pass her accounts for the period July 2, 2006 through August 13, 2013. [ 5 ] Brenda delivered her accounting on or about January 30, 2014. From their review of the accounting provided, Ronald and Barbara noted irregularities in the accounts. Most notably, Phyllis’ net worth had declined from $417,393.55 in 2006 to $242,636.67 as of August 13, 2013.

Furthermore the accounts showed that Brenda had purchased a car, liquor and clothing for herself, and made gifts to herself and others. [ 6 ] An understanding of the factual matrix is critical to deciding the issues on the motion. The parties are siblings. Brenda is the older sibling of Ronald and Barbara. Phyllis Pizzey (“Phyllis”) was their mother. Phyllis died on March 31, 2016 at the age of 92. Prior to her death, Phyllis had suffered from Alzheimer’s disease and was unable to manage her own property.

[ 7 ] Ronald and Barbara brought a motion first returnable on May 1, 2014 seeking to remove Brenda as their mother’s power of attorney. The motion was defended by Brenda and cross-examinations on affidavits were conducted in the summer of 2014. On cross- examination, Brenda refused to advise Ronald and Barbara how much remained in their mother’s estate, taking the position that evidence was irrelevant for purposes of her accounting for the period ending August 13, 2013. [ 8 ] The motion for Brenda’s removal was heard by Justice Donohue on December 3, 2014.

Justice Donohue made an endorsement that same day granting the relief sought by Ronald and Barbara, namely, the removal of Brenda as power of attorney of her mother’s property on an interim basis. In her place, Ronald and Barbara were named guardians of Phyllis’ property pending trial. It was also ordered that the application be converted to an action, pleadings exchanged and a pre-trial conducted. [ 9 ] For reasons unknown, the endorsement of Justice Donohue was not released to the parties until June 5, 2015, some six months later.

The endorsement is brief and states: Proctor et al and Cimitruk et al This Endorsement applies to both the cross-motion and motion record this 3 December, 2014. I am satisfied that there have been questionable and unexplained expenditures against the incompetent mother’s Estate. The total amount unaccounted for is substantial and some of the claimed outlays are apparently inappropriate. There is real concern that this Estate is being depleted contrary to the Substitute Decisions Act . I am exercising my discretion to remove the attorney on an interim basis so as to safeguard the Estate.

Beyond doing that I am ordering that these proceedings go forward as a triable action. The following claims for relief are granted:

A) From the Applicant’s Factum (of Dec. 3/14) para. 1, 3, both on an interlocutory basis until Trial; para. 2; para. 4, 5, 6, 7, 10, 11, & 12. Note: The costs claims in paras. 8 & 9 of said Factum are specifically reserved to the Trial Judge.

B) From the Respondent’s Cross-Motion dated Nov. 27/14) with respect to remaining issues a), b), c), e): Parties are to attend a pre-trial arranged by the Trial Coordinator within three months of today, said pre-trial to be based on the Record as it stands by the scheduled date. [ 10 ] A formal order embodying the terms of the endorsement was issued and entered on June 15, 2015. Of particular relevance to this motion are the following provisions of the Order: 1. This court orders that Brenda Cimitruk is hereby removed as Power of Attorney for Phyllis Pizzey on an interlocutory basis until trial. 2.

This court orders that Barbara Procter and Ronald Pizzey are hereby appointed Guardians of the Property of Phyllis Pizzey on an interlocutory basis until Trial. 4.

This court orders that Barbara Procter and Ronald Pizzey, as Guardians of Property for Phyllis Pizzey, shall serve an Amended Management Plan on the Public Guardian and Trustee for approval pursuant to Section 32(11) of the Substitute Decisions Act , 1992 within 60 days of their appointment as Guardians and thereafter within 60 days of any material change in the circumstances of Phyllis Pizzey while Barbara Procter and Ronald Pizzey are acting as Guardians of Property for Phyllis Pizzey. 7.

This court orders that Barbara Procter and Ronald Pizzey shall have their costs of this Motion on a solicitor and client basis paid by the Estate of Phyllis Pizzey. [ 11 ] Immediately upon receiving a copy of the endorsement Barbara and Ronald opened a bank account in trust for Phyllis and deposited the remaining funds in the estate totaling $72,861.33 to this account on June 12, 2015.

In further compliance with their obligations under the Order, Ronald and Barbara served a statement of claim on June 25, 2015 and attended a pre-trial on August 28, 2015. [ 12 ] As guardians of Phyllis’ property, Barbara and Ronald obtained bank statements for the joint account in the name of Brenda and Phyllis. Those statements revealed that Brenda had paid to her lawyers to defend the application and in particular the motion to remove her as power of attorney, the sum of $150,300.28 ($110,640.99 was paid to defend the motion). It should be noted that para. 4 of the order of Mr.

Justice Leach dated August 13, 2013 states: this court orders that costs of the accounting shall be payable out of the estate of Phyllis Pizzey in the first instance, but subject to costs submissions of any of the parties after the completion of the accounting. [ 13 ] Those costs were then deferred by Justice Donohue to the trial judge. They remain an issue in this litigation. To date, Brenda has refused to provide copies of her lawyer’s accounts to Ronald and Barbara claiming privilege.

Conversely, Ronald and Barbara have taken no steps to compel their production; however, rely on s. 31.1 of the Substitute Decisions Act (“ Act ”) as evidence of Brenda’s misconduct as former power of attorney. [ 14 ] Barbara and Ronald incurred costs totaling $27,265.05 with respect to the removal motion. An account rendered by Barbara and Ronald’s lawyers on June 15, 2015 in the amount of $14,204.28 was paid in full from the Estate’s bank account on June 19, 2015. Two earlier accounts relating to the motion remain unpaid.

On August 4, 2015, Ronald and Barbara transferred the balance in the account then totaling $56,346.26 to a new bank account. [ 15 ] Two additional accounts totaling approximately $7,800 rendered by Barbara and Ronald’s lawyers in the fall of 2015 and unrelated to the motion for removal were paid from the Estate’s bank account. The fine that Brenda requests as a remedy for the respondent’s alleged contempt relates to the payment of these accounts which Brenda alleges was in contravention of and not authorized

by the management plan. No further legal accounts of Ronald and Barbara have been paid from the estate funds. [ 16 ] Phyllis died on March 31, 2016 with a will. Under the will, Brenda and Ronald were named as co-executors of her estate. As at the date of her death, Phyllis’ Estate had a value of $53,137.67. [ 17 ] In June 2016, Brenda’s lawyers wrote to Ronald and Barbara’s lawyers inquiring whether they had complied with para. 4 of the Order requiring them to file an amended management plan and requesting an accounting. No response was received to this correspondence.

Inquiries by Brenda’s lawyers of the PGT confirmed no amended management plan had been filed by Ronald and Barbara. [ 18 ] This motion for contempt was first returnable in October 2016. The PGT has not responded to the motion, has not joined with Brenda on the motion and did not appear on the return of the motion. [ 19 ] This action (originally an application and converted to an action pursuant to para. 11 of the Order) has not yet been set down for trial.

In fact, the plaintiff intends to further amend the statement of claim to expand its claims against Brenda, Brenda’s husband, Rick Cimitruk and Brenda’s daughter, Krista Kesik. The issues between the parties continue to grow in number and are far from resolution. Analysis The Applicable Legal Principles [ 20 ] The seminal case on contempt and, in particular, civil contempt is the 2015 Supreme Court of Canada decision in Carey v. Laiken. [2] To prove civil contempt of court for breach of a court order, the following elements must be proven beyond a reasonable doubt: (

a) the Order alleged to have been breached must state clearly and unequivocally what should and what should not be done; (

b) the party alleged to have breached the Order must have had actual knowledge of the Order; and, (

c) the party allegedly in breach of the court order must have intentionally done the act that the Order prohibits or intentionally failed to do the act that the Order compels. [3] [ 21 ] With respect to the third element of civil contempt, “it is not necessary to prove that the defendant intended to disobey or flout the order of the Court,” one must only show that an intentional act disobeyed the order of the Court. Although the absence of ill-intent may mitigate, it is not enough to disprove contempt. [4] [ 22 ] The parties agree that a finding of contempt is a discretionary remedy.

Although declining to delineate the full scope of a court’s discretion as the issue was not squarely before the court in Carey , the Supreme Court of Canada acknowledged that “a judge may properly exercise his or her discretion to decline to impose a contempt finding where it would work an injustice in the circumstances of the case.” [5] Substitute Decisions Act [ 23 ] In addition to the terms of any court order, the Substitute Decisions Act, 1992 [6] governs the obligations of court appointed guardians.

Of particular relevance are the following provisions of the Act: 31(1) A guardian of property has the power to do on the incapable person’s behalf anything in respect of property that the person can do if capable, except to make a will. 31(3) The guardian’s powers are subject to this Act and to any conditions imposed by the court. 31.1 Any person who has personal information about an incapable person to which the incapable person would be entitled to have access if capable, including health information and records, shall disclose it to the incapable person’s guardian of property on request. 32(10) A guardian shall act in accordance with the management plan established for the property, if the guardian is not the Public Guardian and Trustee, or with the policies of the Public Guardian and Trustee, if he or she is the guardian. 32(11) If there is a management plan, it may be amended from time to time with the Public Guardian and Trustee’s approval. 33(1) A guardian of property is liable for damages resulting from a breach of the guardians duty.

Are Ronald and Barbara in contempt of court? [ 24 ] Of the three essential elements constituting civil contempt only the third element is in issue here. The first element has been satisfied. Paragraph 4 of the Order is clear and unequivocal. Barbara and Ronald were required to file an amended management plan within 60 days of their appointment. [7] [ 25 ] With respect to the second element, although Ronald disputed (not strenuously) his receipt of a copy of the Order, he admitted he received a copy of the endorsement on June 5, 2015.

The endorsement specifically grants the relief requested by Ronald and Barbara including their obligation to file an amended management plan within 60 days of their appointment as guardians of property. Moreover, the form of order ultimately issued was prepared by Barbara and Ronald’s lawyers on their behalf. Ronald and Barbara complied with many of the terms of the order including payment of their costs of the removal motion, in part, and service of the statement of claim within 20 days of the Order. I find the second element has been satisfied beyond a reasonable doubt.

[ 26 ] Turning now to the third element - the contentious element. Brenda submits that both Ronald and Barbara have expressly admitted they did not file an amended management plan and moreover that they did not comply with certain terms of the existing management plan. Brenda argues nothing more is needed to establish the third essential element.

I was referred to para. 20 of the Carey decision where it was noted that “contumacy” - the intent to interfere with the administration of justice is not an element of civil contempt and that a lack of contumacy is therefore not a defence. [ 27 ] Ronald and Barbara submit that Brenda has failed to prove, beyond a reasonable doubt, they intentionally failed to file an amended management plan.

They say their failure to file an amended management plan was merely an oversight as their focus was on preserving the remaining funds of the estate for their mother’s ongoing care and investigating the extensive and rapid deletion of her estate during Brenda’s tenure as power of attorney. [ 28 ] Ronald and Barbara submit that a finding of civil contempt is a remedy of last resort and a remedy which should be used sparingly and rarely and only in the most egregious and obvious cases of a breach of court order.

This principle was enunciated in Carey at para. 36 where the court described the nature of the contempt power as “discretionary” and recognized that “courts have consistently discouraged its routine use to obtain compliance with court orders.” In this same paragraph, the court goes on to state that “contempt of court cannot be reduced to a mere means of enforcing judgments…[r]ather, it should be used cautiously and with great restraint” and “is an enforcement power of last rather than first resort”. [ 29 ] Ronald and Barbara submit their failure to file an amended plan was not intentional; however, should I find the three essential elements of civil contempt have been made out on the facts, I should nonetheless exercise my discretion and dismiss the motion for the following reasons: (

a) Ronald and Barbara’s breach of the Order does not impact on the administration of justice. In fact, the obligation is owed to the PGT with remedies available to the PGT under the Act for non-compliance with the provisions of the Act . The PGT chose not to get involved or seek redress from Ronald and Barbara for their alleged contempt. (

b) Civil contempt is a finding utilized by the courts to coerce conduct rather than punish non-compliance. [8] As of the date of Phyllis’ death para. 4 of the Order is no longer operative. The responding parties cannot purge their contempt. The failure to file an amended management plan has had no negative effect on the estate and therefore no negative effect on the beneficiaries of the estate, including Brenda. (

c) Brenda does not have standing to bring the motion as the obligation to file an amended management plan was not owed to her and she would not have been, as former power of attorney, entitled to a copy of the amended management plan had it been filed. (

d) Brenda does not come to court with “clean hands”. She has ulterior motives. She seeks an order of contempt in an effort to thwart the plaintiff’s efforts to prosecute its claims against her. (

e) In his endorsement, Justice Donohue made a specific finding relating to Brenda’s unexplained and questionable use of her mother’s property while acting as power of attorney. (

f) In breach of

section 31.1 of the Act, Brenda refused to provide copies of legal accounts paid from her mother’s estate to defend her removal as power of attorney. [ 30 ] Ronald and Barbara are in breach of para. 4 of the Order and the provisions of the Act recited above . They had knowledge of the Order and are deemed to have knowledge of its various provisions including their obligation to file an amended management plan by August 5, 2015. They failed to comply with the Order. They claim they did not intend not to file an amended management plan. Rather, their failure was an oversight.

They say their focus was on the litigation and pursuing repayment of amounts allegedly misappropriated by Brenda for the benefit of Phyllis. [ 31 ] With respect to whether the third essential element of intent has been established, I note that the form of the Order was prepared by legal counsel, the legal account relating to the costs of the removal motion was issued by legal counsel, the title of proceedings was amended by legal counsel, the statement of claim served in compliance with the Order was prepared and served by legal counsel and legal counsel scheduled and attended on the pre-trial.

I suspect Ronald and Barbara, being laypersons, are not familiar with the concept of a management plan let alone the concept of an amended management plan and their specific obligation to file one with the PGT for approval. In all likelihood they required the benefit of advice and direction from their lawyers. I can imagine these concepts are foreign to lay persons appointed as guardians of property, unlike the obligation to open a bank account which Ronald and Barbara did immediately after the Order came to their attention.

It may very well be the case their counsel failed to diarize the obligation and bring it to their attention. Regardless, with the death of Phyllis, the Order became moot and their focus was redirected towards the administration of Phyllis’ estate under her will. I find that the respondents’ failure to file an amended management plan was not a conscious omission rather an innocent, unintentional oversight.

The moving party has not proven intent beyond a reasonable doubt and, therefore, has not satisfied the test for contempt established in Carey . [ 32 ] Assuming intent had been established on these facts; I would have exercised my discretion and refused to make a finding of contempt. If ever there existed a set of circumstances more demanding of the exercise of the court’s discretion, I cannot imagine one. A finding of contempt is a serious matter. Such a finding cannot be made lightly because of the stigma which it attracts. This is not an appropriate case for a finding of contempt.

I find this motion was brought for tactical reasons. Brenda can show no damage caused by the failure to file an amended management plan. The PGT’s decision to take no position on this motion is further evidence that no damage has been caused by the responding parties’ technical breach of the Order. [ 33 ] As an aside, I query whether Brenda has standing to bring this motion since the obligation to file an amended plan was owed to the PGT and not to her.

The issue of standing need not be resolved in light of my exercise of discretion to refuse the request that Ronald and Barbara be found in contempt of the court. [ 34 ] That portion of the motion seeking a contempt order against Ronald and Barbara is dismissed. The balance of the relief on the

motion and the cross-motion is adjourned to February 7, 2017 at 10 a.m. to be spoken to. Costs of the Motion [ 35 ] The parties request the opportunity to make submissions on their respective entitlement to costs and the appropriate scale.

Accordingly, the responding parties shall serve and file their costs submissions with respect to entitlement and scale not to exceed 3 pages in length within 7 days; the moving party shall serve and file her costs submissions with respect to entitlement and scale not to exceed 3 pages in length within 7 days thereafter; and any reply of the responding parties, if any, not to exceed 2 pages in length within 7 days thereafter. [ 36 ] The parties have agreed that upon the court finding the moving party is entitled to her costs, those costs shall be awarded on a partial indemnity basis in the amount of $7000 and on a substantial indemnity basis in the amount of $9000, as the case may be, and upon the court finding the responding parties are entitled to their costs, those costs shall be awarded on a partial indemnity basis in the amount of $5000 and on a substantial indemnity basis in the amount of $7000, as the case may be. “Justice A.

K. Mitchell” Justice A. K. Mitchell DATE: February 1, 2017