DeCotiis v. DeCotiis Estate

2024 BCSC 892 DeCotiis v. DeCotiis Estate

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: DeCotiis v. DeCotiis Estate, 2024 BCSC 892 Date: 20240523 Docket: S216393 Registry: Vancouver Between: Ivano DeCotiis Plaintiff And The Estate of Innocenzo Decotiis Deceased by its executors, Rossano Decotiis, Giulio Decotiis, IDC Alter Ego Trust (2019), Rossano Decotiis And Giulio Decotiis in their capacity as Trustees of the IDC Alter Ego Trust (2019) and in their personal capacity, Morris Decotiis, Paolo Decotiis and RPMG Capital Corp. Defendants Before: Associate Judge Robertson Reasons for Judgment Counsel for the plaintiff: J. Watson Counsel for the defendant, Giulio Decotiis: R. Lee Counsel for the defendant, Rosanno Decotiis A. Cocks C. Bildfell No other appearances Place and Date of Hearing: Vancouver, B.C. March 27, 2024 Place and Date of Judgment: Vancouver, B.C. May 23, 2024 Table of Contents Background.. 3 Subject Application.. 5 Analysis. 6 Conclusion.. 11 [1] The plaintiff brings this application for production of the file materials of lawyers (the "Lawyers Files") who provided estate planning advice in respect of a will and trusts established by his father, Innocenzo DeCotiis ("Innocenzo"), a successful real estate developer who founded the Onni Group of Companies, and died on September 26, 2020. Background [2] This action involves the claim by the plaintiff, one of seven children of Innocenzo, in which he

seeks, among other relief, a variation of Innocenzo's will as executed on December 1, 2016 (the "2016 Will), breach of trust and fiduciary duty in respect of the 2019 IDC Alter Ego Trust, and for a declaration that transfers of assets by Innocenzo into a further trust, the Onni Alter Ego Trust (collectively with the 2019 IDC Alter Ego Trust, the "Family Trusts") be declared invalid, including on the basis that such transfers were fraudulent conveyances. [3] For the purpose of this application, the parties referred to the group of the three oldest brothers, which includes the plaintiff, as the "Older Brothers" and the four younger brothers, which includes Giulio DeCotiis ("Giulio") and Rossano DeCotiis ("Rossano"), as the "Younger Brothers". I will similarly do so. However, when I refer to the individual parties, I will refer to them by their first name given the common surname, but mean no disrespect by doing so. [4] The claims include that, as a result of the 2016 Will and terms of the Family Trusts, the Older Brothers were not adequately provided for, in favour of the Younger Brothers. [5] In advancing those claims the plaintiff alleges that, to the best of his knowledge, he was a beneficiary under prior wills but that he was later excluded through the 2016 estate planning, which he argues was done with undue influence on Innocenzo by the Younger Brothers. Although not raised

specifically in the notice of civil claim, and although no claim is made in the current pleadings as to lack of capacity, the plaintiff suggested at this application that Innocenzo had a limited Grade two education, difficulty with reading, limited understanding of the English Language, and a medical condition, namely terminal cancer. Although it was not entirely clear as there is no specific pleading as to capacity, the allegation appears to be that Innocenzo was vulnerable to the Young Brother's undue influence given his circumstances. Given that undue influence is plead, not much turns on this point. [6] The plaintiff alleges that none of the Older Brothers have received any inheritance or share of the Family Trusts since Innocenzo's passing, with the entirety of the estate being transferred to the Younger Brothers, Onni Corporate entitles, or otherwise dealt with to the exclusion of the Older Brothers. [7] The alleged invalid transfers include the pre-death transfers of significant assets into the Onni Alter Ego Trust, of which the plaintiff is not a beneficiary, as well as a post death transfer of $34,190,000 in insurance proceeds received by the 2019 IDC Alter Ego Trust, to which all of the brothers excluding the plaintiff were to be beneficiaries, to RPMG Capital Corp. ("RPMG") a company controlled entirely by the Younger Brothers (RPMG being an acronym based on the

first initial of the first name of each of the Younger Brothers). [8] In terms of the status of this action, the notice of civil claim was filed July 12, 2021, with amendments being made on October 26, 2022 and RPMG being added as a defendant on August 30, 2023. [9] No parties have been discovered to date. Although discoveries of Rossano and Giulio had been scheduled for January 2023, they were adjourned due their retainer of new counsel. The defendants, Morris, Paulo and RPMG issued a demand for particulars on February 15, 2024, which was responded to on February 28, 2024. [10] No trial date has been set. [11] The Younger Brothers, particularly Rossano and Giulio, are executors of Innocenzo's estate and trustees of the Family Trusts. They produced a list of documents on September 19, 2022 containing 13 documents, which are essentially limited to the 2016 Will, a previous family trust, and the documents supporting the 2019 IDC Alter Ego Trust, including three sworn declarations (the "Sworn Declarations") sworn by Innocenzo on September 5, 2020, 3 weeks before his death, in which he states his estate planning intentions including his disinheritance or inequitable treatment in respect of his children and his intentions for inter company loans made prior to this death to the Younger Brothers. [12] There is no indication that the 2016 Will, the Family Trusts, or the Sworn

Declarations were translated when executed, despite the allegation that Innocenzo spoke no, or limited, English. [13] On December 7, 2023 the plaintiff brought a prior application for production of documents, as a result of which Guiolio and Rossano were ordered to produce six prior wills made by Innocenzo, the trust agreement in respect of the 2019 Onni Alter Ego Trust, documents evidencing Innocenzo's net worth as disclosed in, and the pleadings in respect of, a divorce proceeding involving his former spouse, that being the individual parties' mother. [14] In updated lists of documents dated January 22, 2024, Rossano and Giulio produced four of the six prior wills, documents relating to the Onni Alter Ego Trust, and one document filed in the divorce matter which they say discloses what Innocenzo's net worth was, that being a valuation of his personal and business assets. Rossano and Giuolio indicate that hey have been unable to locate any other prior wills, or the pleadings from the divorce action, which presumably include the required F8 Financial Statements, although it is unclear why they could not obtain those from the court file. In any event, they have now produced 22 documents, as summarized above. Subject Application [15] After the previous order for disclosure was made, the plaintiff made demand for the Lawyers Files to be produced in respect of the 2016 Will, Family

Trusts, and the Sworn Declarations, by letters of August 2, 2023 and September 21, 2023. [16] Specifically, the plaintiff seeks the files of Sally Dennis who dealt with the 2016 Will and Onni Alter Ego Trust, the files of Chris Jackson who also dealt with the 2016 Will, and the files of Steve Cooks, who dealt with the Sworn Declarations. [17] Rossano and Giulio do not oppose the production of the files of Sally Dennis or Chris Jackson provided that the disclosure is: a) Limited to the file materials directly related to instructions and advice given regarding the creation and contents of the 2016 Will, which relate to both Mr. Jackson and Ms. Dennis' files, and the Onni Alter Ego Trust, which relates only to Ms. Jackson's filed, up until those documents' execution or creation, as applicable; and b) To be provided within 30 days, rather than 14 days being sought. [18] Rossano and Giulio oppose the production of any files relating to either the 2019 IDC Alter Ego Trust, as handled by Ms. Dennis, or the Sworn Declarations, which were handled by Mr. Cook, on the basis that these files are subject to solicitor-client privilege and do not fit within the general exceptions for production of such materials in estate matters. Analysis [19] There is no issue raised as to the technical requirements under R. 7-1 being complied with. Similarly, the parties do not dispute that relevant

documents, those being ones that can prove or disprove a material fact, are subject to production. [20] However, given a client's fundamental civil and legal right to assert solicitor client privilege, a claim which survives a client's death, solicitor's files will only be producible if they fit within clearly defined exceptions: Solosky v. The Queen, 1979 CanLii 9 (SCC) at para. 839. [21] Such an exception exists in respect of estate matters, on public policy grounds, for the following purposes (the "Wills Exception"): a) To determine whether a testator (or settlor in the case of a trust, which the Supreme Court of Canada confirmed would also be subject to the exception where trusts were created as part of the estate planning), was subject to undue influence; b) To determine the true intentions of the testator or settlor; and c) To determine whether the testator or settlor possessed testamentary capacity. Geffen v. Goodman Estate, 1991 CanLii 69 (S.C.C.) ("Geffen"), at paras. 50 and 64 [22] The Wills Exception is not limited to the will, or a trust, and can apply to other transactions that are part of the overall estate planning. [23] In Armstrong v. Kotanko, 2019 BCSC 1519, for example, the Wills Exception was held to apply in respect of the file materials relating to a transfer of property by the deceased into joint tenancy during his lifetime. Similarly, in Kobzos v. Kobzos

Estate, 2019 BCSC 2254, it applied in respect of a pre-death transfer of assets which were claimed to be held in trust for the estate. [24] Rossano and Giulio argue that the Wills Exception is generally not one that is applied in a wills variation action, relying on Gordon v. Gilroy,1994 CanLii 829 (BCSC) ("Gordon"), where the court, after considering Geffen, concluded as follows: The question is whether or not that rationale supports disclosure in the present case? I am of the opinion it does not. In this case the issue is not "what were the true intentions of the testator". There is no issue that he intended to leave his entire estate to Ms. Gilroy and thereby to disinherit his children. The purpose for seeking disclosure of the confidential communications in this case is not for the purpose of determining the testator's true intentions or even the reasons for them, which are fully stated in the will itself, but rather for the purpose of attempting to defeat those intentions. The plaintiffs seek disclosure of the confidential communications in an attempt to overturn the will and defeat Mr. McKay's testamentary wishes. I suspect that it would surprise and distress a client if told by the solicitor whom that person retained to give advice and to prepare a will concerning the disposition or lack of disposition to the client's children that after his or her death the solicitor

would be obliged to disclose the discussions which the client had in confidence with the solicitor in the event the children were dissatisfied with the will and chose to commence an action under the Wills Variation Act. [25] In Brown v. Terins, 2015 BCSC 775, the court upheld the findings in Gordon, commenting at para. 13 that disclosure will not be ordered where the purpose for that disclosure is not to determine the true intentions of the testator or settlor but rather to defeat those intentions, in which case whether or not the reasons for those intentions are justifiable is a matter to be determined at trial, and not one that supports an exception to solicitor client privilege. [26] Ultimately, these cases stand for the proposition that if the true intentions are clear, and there is no issue as to undue influence, lack of capacity, or formality, privilege remains over the deceased's solicitor's files. [27] Rossano and Giulio argue that, on the pleadings as filed, there is no dispute as to Innocenzo's intentions, such that the Lawyers Files do not meet the requirements for production under the Wills Exception. Here, they argue, Innocenzo's intentions are not only clearly set out in the 2016 Will and Family Trusts, but confirmed in the Sworn Declarations made in the weeks prior to his death. [28] However, as noted in Becker v. Hagehassen, 2021 BCSC 1508 ("Becker") at para. 35

where undue influence is alleged the Wills Exception serves to allow a litigant to determine whether the estate documents set out the testator's or settlor's "true" intentions or whether they are the product of that undue influence. Notably, Geffen also involved claims of undue influence in respect of a trust agreement. [29] Here, the same argument is made, namely that the various estate planning documents, whatever they be, are not the product of Innocenzo's true intentions, but rather the undue influence of the defendants. [30] If such an argument is successful to compel production in this case, Rossano and Giulio argue any such production ought to be limited, as noted, to only those files relating to the communications and instructions in creating the 2016 Will and the Onni Alter Ego Trust. They argue that any disclosure beyond that is not relevant for the purposes stated in the Wills Exception. [31] In addition, they argue that there are temporal or other limitations by which the disclosure should be limited, as documents that are too distant or removed from the testamentary documents, they may not be relevant to the issue to be determined. In Becker, a power of attorney signed a year after the will was executed was found to be too remote to the question of the testator's intention, with the court noting at para. 40: [40] The purpose of the wills exception is not to explore

allegations of undue influence generally, but rather to determine whether a testamentary document reflects the true intentions of the testator. There is no allegation that the power of attorney itself is invalid or null and void due to undue influence. [32] Rossano and Giulio argue that the Sworn Declarations and 2019 Alter Ego Trusts are too distant or remote to be probative as to Innocenzo's intentions when the 2016 Will was executed. [33] In considering the remoteness, it is appropriate to consider the pleadings. The fourth amended notice of civil includes the following claims for undue influence: 53. Decisions on the Deceased's behalf were made by his sons, Rossano, Giulio Paolo, and Morris, or all of them, who unduly influenced him.

60. The Younger Brothers unduly influenced the Deceased to transfer to the Onni Alter Ego Trust all of the Decease's assets.

61. The Younger Brothers assured the Deceased that they would be suitable trustees for the estate of the Deceased and would have regard to the welfare of the three Older Brothers. including the Plaintiff.

62. The Younger Brothers never had any intention of providing for the Plaintiff and their assurances to their father to the contrary were false. The Younger Brothers have at various times. made empty offers to provide for the Plaintiff but these offers were not genuine and never came to fruition because of the refusals of the Younger Brothers.

64. Faced with the threat of losing the affection and the participation in his life of his four youngest sons and their children. the Deceased acceded to the demands of the Younger Brothers and did not bring the Plaintiff back into the family or the family business in any real sense.

65. All of the Deceased's estate planning. and in particular. the winding up of the 1993 Trust. the transfers of his assets to the Onni Alter Ego Trust. the creation of the lnnocenzo De Cotiis (2019) Trust. was done with the assurances from the Younger Brothers that they would provide for the Plaintiff.

66. At all material times up to and including the time at the end of his life when the Deceased was in the hospital,. the Deceased was assured by the Younger Brothers that they would provide for the Plaintiff. The Deceased relied on these assurances in order to structure the affairs of his estate as he did.

67. The Deceased desired at all times for the Plaintiff to be provided for.

73. Giulio acted as "agent" for the Deceased as of April 2020 or such earlier date as may become known. The Deceased was not acting of his own free will and volition. but rather. his decisions. financial and otherwise. were being made by Giulio as the Deceased's "agent". [34] With respect to the 2019 Alter Ego Trust, Rossano and Giulio argue that the trust is not in issue in the fourth amended notice of civil claim, in so far as its validity is concerned. [35] As plead, the claims relating to the 2019 Alter Ego Trust are related to it being used as a vehicle to take receipt of the payouts from the various life insurance policies, which amounted to $34,800,000, and subsequent loan to RPMG of $34,190,000 of those amounts, which the plaintiff claims was done by Rossano and Giulio's duties as trustees, and put them in a direct conflict of interest. [36] Having regard to the whole of the claims made in the fourth amended notice of civil claim, I am satisfied that the true nature of Innocenzo's intentions in estate planning, both in creating the 2016 Will and the Family Trusts, are in issue such that the Lawyers' Files in respect of each of those documents is relevant and not too remote. [37] While the plaintiff does not specifically plead that the 2019 IDC Alter Ego Trust is invalid, the general allegations as to representations made and undue influence exerted by Rossano and Giulio

in respect of the entirety of the estate planning, for which the Family Trusts were vehicles, bring the communications and instructions between the solicitors and Innocenzo in respect of all three of those transactions into the ambit of the Wills Exception. [38] With respect to the Sworn Declarations, while they were made years after the 2016 Will, they are, notably, not necessary for the initial estate planning. The reason why statutory declarations would be made weeks before his death is not entirely explained, other than as an intention by Innocenzo to clarify his intentions. To that end, they are therefore a confirmation of the estate planning. The plaintiff deposes that he does not believe that they truly represent Innocenzo's intentions, as he was in significant pain at the time, it being weeks before he succumbed to his stage 4 liver cancer, and the wording is not the type of wording that he would use and, given his limited English he would have relied upon someone explaining the contents to him. There is no affidavit evidence filed by the defendants to explain why these Sworn Declarations were made. [39] In my view, they were made solely to create evidence in direct support of the contents of the other documents. In this respect, despite being made later in time, they are relevant as to the issue of Innocenzo's intention, which is directly in issue in this

proceeding. [40] As such, the Lawyer's Files in respect of the Sworn Declarations are also producible under the Wills' Exception. However, I agree that such production is to be limited to the communications between solicitor and client, and instructions taken and given, leading up to the execution of each document, or creation of each trust. Conclusion [41] I make the orders as sought at paras. 1, 2 and 3 of the notice of the application, however with the disclosure to be limited to the file materials directly related to instructions and advice given, and communications with the client or his agent, in respect of the creation and contents of the 2016 Will, the Onni Alter Ego Trust, the 2019 IDC Alter Ego Trust and the Sworn Declarations, up to the point in which those documents were executed. [42] The parties shall have 30 days, rather than 14, from the date of these reasons to produce those files. [43] With respect to costs, given that the plaintiff was substantially successful on this application, the plaintiff shall have his costs of this application, in any event of the cause. "Associate Judge Robertson"