In Lugarich v. Fabris, a 2021 decision of Justice Penny of the Ontario Superior Court of Justice, the issue was not uncommon to estate litigators: how do the parties to a will challenge deal with a pressing estate administration issue that has arisen, after a challenge has been commenced but before the appointment of an Estate Trustee During Litigation (“ETDL”)?
Here, the estate residence was sold and the closing was pending. Both the Applicant (the disappointed son of the deceased who was challenging the Will) and the Respondent (the stepdaughter and sole beneficiary of the deceased under the impugned Will) agreed that the house sale should proceed. What they could not agree on, however, was who should be appointed by the Court to convey title to the property.
The Applicant opposed the Respondent’s position that the estate trustee named in the Will, Mr. Fabris (a lawyer) should act. The Applicant relied on the usual law tendered in cases where the Court was considering whether to appoint an ETDL. In short, because Mr. Fabris was a party to the proceeding and adverse to the applicant, the submission was that he ought not to act on the sale.
Justice Penny did not see the ETDL jurisprudence as having any bearing on the issue before him. It was, strictly speaking, not a contested motion to appoint an ETDL. He also took issue with the Applicant’s contention that he was owed a fiduciary duty by Fabris: “…until there is a final court determination that the 2018 Will is invalid, the Applicant is not a beneficiary and does not have the rights of a beneficiary….The Applicant’s arguments are both technical and theoretical. He has been unable to indentify any need for, or benefit to the Estate, of replacing Mr. Fabri in order to conclude the sale of the property to the bona fide Buyers.”
In deciding that Mr. Fabri should act as Estate Trustee to close the sale, Justice Penny chose practicality over any technicality:
Mr. Fabris is the named executor. He was chosen for that role by the Deceased. The fact that he does not have [a] certificate of appointment is the result of the applicant’s notice of objection. The lack of a certificate does not release Mr. Fabris from his obligations as Estate Trustee. Mr. Fabris is not a beneficiary of the estate. He has no financial stake in the outcome of the applicant’s will challenge. As noted above, the applicant is also not a beneficiary estate. His financial stake is contingent on the success or failure of his challenge to the 2018 Will, a matter that will not decided for some time and, even then, only after a trial.
Further, Ms. Eland has paid all of the carrying costs of the Estate, including the carrying costs of the property, out of her own pocket. More delay in concluding the sale equals more carrying costs to preserve the property, which is more expense to Ms. Eland; this is expense, I might add, which the applicant refuses to agree to reimburse from the Estate. The applicant, by contrast, has paid none of these costs. I agree with counsel for the respondents that the applicant is, in this sense, behaving like the proverbial dog in the manger.
In a similar vein, Ms. Eland is the sole beneficiary under the 2018 Will. The costs of preserving the property are costs of the Estate. If the will challenge is unsuccessful, she will bear all of that cost; absent court order to the contrary, the applicant will bear none. Even if the will challenge is successful, Ms. Eland will still suffer the effect of half of those costs.
Finally, Mr. Fabris is a member in good standing of the Law Society of Ontario. He is liable to account and is subject to stringent rules of professional conduct and rules governing the management of trust funds. There is no evidence whatsoever suggesting he represents a risk to the preservation of the assets of the Estate. Mr. Fabris’ has no obligation to speculate on the real estate or equities markets. His duty is to bring in, liquidate and hold the assets of the estate until distribution. That, based on the evidence, is precisely what he is doing, to the extent possible without a certificate.
Thanks for reading,