Re: Estate of Andre Jacques Blitz, Deceased

2000 BCSC 1596 Citation: Re: Estate of Andre Jacques Blitz, Deceased Date: 20001031 2000 BCSC 1596 Docket: 229350 Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA RE: THE ESTATE OF ANDRE JACQUES BLITZ, DECEASED

REASONS FOR JUDGMENT

OF THE HONOURABLE MR. JUSTICE DROST Counsel for the Applicant: F.E. Maxwell, Q.C. Counsel for Anita Gans: H.S. McLellan Date and Place of Hearing/Trial: Vancouver, BC August 10, 2000 Introduction [1] Andre Jacques Blitz (the "Deceased") died on the 19th day of July, 1999. In a Last Will and Testament, dated the 6th day of October, 1995, he appointed his common-law spouse, Anita Gans, together with Jane Shadley and Susan Hilton as Co-Executors and Co-Trustees of his Will and Estate. [2] In his Will, the Deceased directed his Executors and Trustees to: (a) set aside and keep invested the sum of $100,000.00 for the benefit of his son, Maurice Blitz, and to use so much of the income and capital thereof as they consider advisable for his benefit until he completes his medical studies and obtains his medical degree; (b) allow Anita Gans, during her lifetime, the use, occupation and enjoyment of any property used by him as his primary residence, together with any furniture and household contents contained therein; (c) pay to Anita Gans the sum of $300.00 per month, adjusted according to the Cost of Living Index; and (d) hold the residue of his estate in trust for the benefit of his son, Marcel Jacques Blitz. [3] Jane Shadley and Susan Hilton have renounced their rights and Co-Executors and Trustees of the Deceased's Will and Estate, and Ms. Gans now intends to apply for a Grant of

Letters Probate to the Deceased's Estate. [4] This application was brought by the Deceased's eldest son, Maurice Blitz, for orders under the Estate Administration Act and Rules 19(24), 61 and 57 of the Rules of Court that: 1. A Caveat filed by Ms. Gans, and the Notice to Caveator and Appearance, if any, be cancelled under Rule 19(24) of the Rules of Court as an abuse of process and removed from the registry file; 2. Ms. Gans be passed over as executrix of the Deceased's estate and that Barnes, Kissack, Henfrey & George, cba MacKay and Partners Ltd. ("BKHG") be appointed as Administrators with Will Annexed with the power to sell assets and expend monies on the preservation and determination of assets; 3. In the alternative, that BKHG be appointed as Administrator ad colligenda bona and/or Administrator ad litem until such time as an Administrator with Will Annexed is appointed, and that BKHG be empowered to represent the Deceased's Estate in ongoing matrimonial litigation between Maud Blitz and the Deceased, Vancouver Registry, Docket No. D090585 (the "matrimonial action"); 4. In the further alternative, that Stephen H. Barnes of BKHG, a Trustee in Bankruptcy, be appointed as Administrator ad colligenda bona and/or Administrator ad litem with the power to sell assets and expend monies on the preservation and determination of assets until such time as an Administrator with will

Annexed is appointed and that he be empowered to represent the Deceased's Estate in the ongoing matrimonial action. Background [5] At the time of his death, the Deceased was involved in the matrimonial action in which both parties sought a determination and division of their family assets, and Maud Blitz sought reapportionment of the assets located within the jurisdiction of this court. [6] One of the central issues in the matrimonial action was the allegation by Mrs. Blitz that the Deceased had failed to account for substantial amounts of money held in undisclosed bank accounts in Europe and Israel, which monies she claimed to be part of the family assets. [7] On August 17, 1998, I handed down Reasons for Judgment in which I stated that I found the evidence insufficient to establish her claims with respect to the alleged undisclosed monies. It is my understanding that, while no Order has yet been entered in the matrimonial action, both parties have filed Notices of Appeal and their appeals remain pending. [8] On July 28 1999, Associate Chief Justice Dohm, on the ex parte application of Mrs. Blitz, gave her leave to re-open the trial of the matrimonial action. He also directed Mr. Barnes to take possession of and hold in trust pending further order of this court and any all assets in which the Deceased had an interest. Dohm A.C.J. further ordered that the Deceased's estate be

restrained and enjoined from transferring, disposing of, encumbering or otherwise dealing with any family assets or other property at issue in that proceeding, pending further order, and that Ms. Gans, or her agents, be restrained and enjoined from transferring or disposing of any assets that may be in issue in that proceeding pending further order of this court. [9] On July 29, 1999, on what appears to have been an ex parte application brought by Ms. Gans, Dohm A.C.J. vacated that part of the order he made the previous day allowing Mrs. Blitz to reopen the matrimonial action. He also varied that order by granting Ms. Gans sole occupation and possession of what is referred to as the "Richmond Condominium" and a 1995 Mercedes automobile, on her undertaking not to dispose of or encumber it. [10] Mrs. Blitz subsequently renewed her application to reopen the matrimonial action on the ground that new evidence has been discovered which tends to prove the existence of the alleged undisclosed monies. Her counsel maintains, and I accept, that, notwithstanding the pending appeals, I remain seized of the matrimonial action for the purpose of hearing the application to reopen and, if it is allowed, hearing the new evidence. However, at a case management conference held on January 25, 2000 I refused to proceed with the application to reopen until such time as a person was appointed to

represent the Deceased's Estate. [11] It seems that little, if anything, can be done to confirm the location and valuation of the alleged further assets until that is done. Lawyers retained by Mrs. Blitz to act for her in Israel have advised that a financial institution in Jerusalem, to which some of the monies have been traced, will only divulge information to a duly appointed representative of the Deceased's Estate. [12] Another problem has arisen requiring the attention of a legal representative of the estate. On June 7, 2000, the Richmond Savings Credit Union began foreclosure proceedings with respect to the Richmond Condominium. The Credit Union holds a mortgage against that property under which there remains owing a balance of approximately $180,000.00. According to the solicitors acting for the Credit Union, no payments have been made on the mortgage since approximately August, 1999. [13] The applicant, Maurice Blitz, was willing to assume the duties and responsibilities of an administrator with will annexed of his late father's estate, but Ms. Gans objected to his appointment. She also opposes the present application made by Maurice for the appointment of BKHG or Stephen Barnes. She says that, as the remaining named executrix, she is willing to accept the responsibilities of that position and, should this application fail, she will apply for a Grant of Letters

Probate. The Evidence On This Application [14] In an affidavit sworn July 5, 2000, Mr. Barnes deposed, in part, that: 5. Ms. Gans has previously expressed an inability and unwillingness to take on the role of executor for two reasons: a. she is not a tax resident of Canada and feels that her status as such would unnecessarily complicate the administration of the estate; and b. she may have a conflict of interest.

6. Ms. Gans, in fact, prepared and swore an affidavit on December 17, 1999 in support of having another third independent party appointed as administrator with Will annexed. The affidavit is attached as Exhibit "D" hereto.

7. Ms. Gans has not, to my knowledge, taken any steps to gain probate of the Will. She has, however, a. expressed opposition to any potential application by Maurice Blitz to become Administrator with Will Annexed, as I am informed by Mr. Maxwell; b. expressed opposition to myself being appointed as Administrator with Will Annexed for reasons set out in her correspondence attached hereto as Exhibit "E"; c. filed 2 caveats against the estate of the Respondent in the herein matter, as I am informed by Jacqueline E. Clark of Maxwell, Schuman & Company (Ms. Clark); ...

17. It is my view that in order to properly ascertain the true nature and extent of the assets of the deceased, BKHG or the affiant needs to be the personal representative of the deceased to facilitate inquiries. Many financial institutions will not divulge personal information to any one but the personal representative of the estate of the deceased. I have experienced this first hand in trying to deal with banks in Israel in relation to the deceased's accounts.

18. It is my experience that the longer one waits after the disposition of a property or the time at which the property goes missing, that the more difficult it becomes to track down the assets.

19. BKHG or the affiant is willing to undertake the duties and responsibilities of administrator ad litem in the context of this action and to assume such duties as this Court sees fit, including the duty to ascertain the assets of the estate, on the following conditions: a. the Court direct the Administrator to sell the Mercedes Benz immediately for a price set by the Administrator, subject to the taxation of the Administrator's accounts; b. the Court authorize the Administrator to redeem any remaining Retirement Savings Plans, if any; c. the funds derived from the sale of the Mercedes Benz and the redemption of the Retirement Savings Plan be made available for Administrator's fees and the fees of an independent counsel which we may be engaging; d. we would appoint counsel to advise us of our rights and responsibilities; e. we would not commence recovery of any assets that required litigation, forensic accounting or the assistance of foreign courts unless money becomes available to take these steps; and f. should there be no reasonable source of funds to complete our duties, we have the right to resign. [15] In Ms. Gan's affidavit sworn December 17, 1999, to which Mr. Barnes referred, she deposed that: 19. I wish to be discharged as executor of the Will and trustee of Andre's estate because I may wish to make a claim against the estate, and because I do not want to risk being sued by the other beneficiaries because of their dislike of me.

20. I am concerned that due to the bad feelings generated by the matrimonial proceedings, neither Maud Blitz nor Maurice Blitz would be able to objectively evaluate the evidence and provide proper instruction to Andre's lawyers in the matrimonial action. More particularly, I believe that both of them have an extreme dislike of me which I have no doubt would affect the manner in which they would handle the estate's affairs.

21. As a result, I will not give my consent for Letters of Administration with Will Annexed being granted to Maud Blitz or Maurice Blitz.

22. I believe that an independent, objective third party is best suited to handle the administration of Andre's estate given the competing interests. If I am discharged as executor and trustee, I consent to Letters of Administration with Will Annexed being granted to Canada Trust, without bond. [16] However, in an affidavit sworn August 8, 2000, Mrs. Gans stated that she is not going to contest the Will, and she denied Mr. Barnes' assertion that she "may" be in a conflict of interest position. She also described Mr. Barnes assertion that she is not a tax resident of Canada as "nonsense" and a "fabrication of his mind." Ms. Gans deposed that, while she has been back and forth between British Columbia and the Netherlands this year, she considers the Richmond Condominium to be her residence and she intends to live there. [17] There remains, however, the possibility of a conflict of interest on Ms. Gans part in connection with the Richmond Condominium. That property is registered in the Deceased's name and was, I understand, his primary residence at the time of his death. As noted above, in Clause 2(g) of the Deceased's Will, Ms. Gans is given a life interest in any property used by the Deceased as his primary residence at the time of his death together with any furniture and household contents located therein, with the proviso that his trustees may at any time, at Ms. Gans

request, sell the residence to any person, including Ms. Gans, "for such price and upon such terms and either for cash or credit as they may think fit". In the event of such a sale, the proceeds of sale fall into and form part of the residue of his estate which is to be held for the benefit of his son Marcel. [18] The potential conflict arises because, if Ms. Gans obtains a Grant of Letters Probate, the discretion as to the price and terms of sale which would, subject to court intervention, be hers to exercise. [19] Ms. Gans has, to some extent, intermeddled in the administration of the Deceased's estate. Not only did she pay for his funeral in the Netherlands, she deposed in her affidavit of December 17, 1999, that she "arranged for payment of some of the bills of the estate which were outstanding". Furthermore, in her affidavit of August 8, 2000 she deposed that: 9. In addition to the activities I have undertaken with respect to administering this estate as set out in my affidavit of December 17, 1999, through my counsel, I have contacted the Bank Hapoalim in Israel but they will not provide me with information on the estate without obtaining probate. Attached and marked as Exhibit "B" to my Affidavit is a true copy of the letter from the Bank. I have contacted Mr. Baruch Hakim, a lawyer in Israel and faxed him a copy of the Will and the letter of Bank Hapoalim in anticipation of him acting for me to obtain probate in Israel once I have obtained private probate in British Columbia.

10. Although I was not able to obtain any details of Andre's assets in Israel, other friends have told me that Andre's assets should exceed his debts. Therefore I decided to apply for probate of Andre's Will knowing that I could also rely on professional assistance. As the Executrix, I may obtain an agent to help look after the Estate and administration such as Canada Trust.

11. I will act in the best interests of the estate with complete fidelity and neutrality with respect to the beneficiaries. I am retired and in good health. I am prepared to travel wherever necessary to assist in probating Andre's Will and administering his estate. It is my intention to live in the Richmond condo pursuant to the terms of Andre's Will. Analysis and Conclusion [20] Courts are very hesitant to interfere with the discretion of a testator to name an executor, and good reason must be shown for believing that the interests of the persons entitled under the will are in danger: Feeney's Canadian Law of Wills, (4th ed.) 2000, para 8.12. [21] The test to be applied on applications of this nature is found in Conroy v. Stokes [1952] 4 D.L.R. 125 (B.C.C.A.) and in Oates v. Baker (unreported) June 11, 1993, Vancouver Registry No. A931565 (B.C.S.C.). [22] In Conroy the issue was whether trustees appointed under a will should be removed from office and a new trustee appointed under the Trustee Act. The court held that to warrant such an intervention there must be a finding that the conduct of the named trustees has endangered the trust property, or has shown a want of honesty, or of proper capacity to execute the duties of the office, or of reasonable fidelity. [23] In Oates the petitioners sought to have the executor named in a will passed over pursuant to s. 99(1) of the

Trustee Act and s. 7 of the Estate Administration Act. [24] Notwithstanding that: (a) the named executor did not apply for a grant of letters probate until three years after the death of the testator; (b) the named executor was a creditor of the estate; (c) there was hostility between the named executor and one or more of the named beneficiaries; and (d) the petitioners had asserted that they were going to sue the named executor for wasting assets of the estate; Catliff J., held that: ... the acts and omissions complained of by the petitioners do not support the conclusion referred to in [the Conroy] test. Nor is the removal of the named executor required for the welfare of the beneficiaries. Undoubtedly some hostility has arisen between some of the beneficiaries and [the named executor]. The last will having been admitted to probate, I am not sure why this hostility should continue.... Certainly the question of hostility would be significant if the executor had been given wide discretion in, for example, the distribution of income or capital. [25] I find nothing in the evidence to support a finding that the interests of the beneficiaries will be placed in jeopardy if Ms. Gans obtains a Grant of Letters Probate. In my view, the potential conflict that I identified above is not, of itself, sufficient reason to interfere with the Deceased's right to appoint the representative of

his estate. Should Ms. Gans attempt to dispose of the Richmond Condominium at less than its real value, or in any other way fail in her duties to the estate and the other beneficiaries, the court can intervene. But to deny her the right to apply for a Grant at this time would be to prejudge the issue. [26] Furthermore, I agree with Ms. Gans submission that, should Mr. Barnes (or BKHG) was appointed, there would be the very real possibility of a conflict between his duties as the court-appointed trustee in the matrimonial action and his responsibilities to the beneficiaries of the estate. As Ms. Gans points out, as Administrator with Will Annexed, Mr. Barnes would be expected to defend the estate against the claims of creditors, including those of Mrs. Blitz. [27] And finally, I consider the conditions attached by BKHB and Mr. Barnes to their appointment to be onerous and of potential detriment to the estate. It is not hard to imagine the confusion and difficulty that would follow should Mr. Barnes or BKHG decide to abandon their responsibilities to the estate and its beneficiaries should there be no "reasonable source of funds" to complete their duties. [28] For those reasons, the application is refused. [29] Costs shall follow the event. "I.L. Drost, J." The Honourable Mr. Justice I.L. Drost