Judge removes them from their role upon finding sole heir lost all trust in them
The Ontario Court of Appeal made two appellants, whom a prior court order had removed as estate trustees, pay $21,000 in costs in their personal capacity upon finding that their appeal was unnecessary and against the estate’s interests.
In MacBeth Estate v. MacBeth, 2025 ONCA 360, the appellants were trustees of the deceased’s estate under a will. The testator’s son was the estate’s sole beneficiary. During a March 2024 case conference, he expressed his intent to file a motion to remove the appellants as estate trustees.
In May 2024, he served his motion record. He alleged that the appellants failed to inform him of their plans to sell the family cottage, made it challenging for him to retrieve his possessions from the property before the sale, and chose to transfer the cottage to a third party rather than to him as part of the estate. He said the third-party sale triggered hefty, unnecessary capital gains taxes.
The appellants’ lawyer informed the son that they might need an adjournment because one of the appellants recently received a cancer diagnosis. The son’s lawyer responded that they would not agree to an adjournment.
In early June 2024, the appellants unsuccessfully attempted to settle. As part of the settlement, they said they would voluntarily give up their role as estate trustees in the son’s favour and retain a $450,000 holdback from the estate.
In mid-June 2024, a motion judge of the Ontario Superior Court of Justice denied the appellants’ requested adjournment and decided to hear the motion on its merits. During the submissions phase, the appellants filed their settlement offer, while the son filed an offer of his own.
The judge granted the son’s motion by appointing him as estate trustee in the appellants’ place. The judge stressed that the court’s primary concern was the beneficiary’s interests. The judge found that:
The motion judge ordered a $50,000 holdback from the estate. She noted that she had to consider the fairness of holding back part of the estate’s money to cover some of the appellants’ legal expenses for the passing of accounts.
The son died after the issuance of this court order. The respondent in this case replaced him as estate trustee. On appeal, the appellants challenged the order removing and replacing them as trustees.
The Court of Appeal for Ontario dismissed the appeal. First, the appeal court saw no error on the motion judge’s part in removing the appellants as estate trustees. The appeal court noted that this was a discretionary decision deserving of much deference.
The appeal court ruled that the judge correctly stated the test for removing an estate trustee, accepted that this test set a high bar, acknowledged that she could only remove a trustee based on clear evidence, and made an amply supported conclusion that the appellants would likely mishandle the estate in the future.
Second, the appeal court rejected the appellants’ argument that the judge made an error in determining the holdback amount. The appeal court considered the context in which this issue arose. The appeal court noted that the appellants appeared to make a strategic decision in the middle of the hearing to file a settlement offer to raise the issue of the holdback.
The appeal court said the judge heard submissions on this issue and considered that the appellants were likely only opposing the son’s motion to argue about the appropriate amount of the holdback.
The appeal court added that the appellants could still try to recover the expenses they reasonably incurred as trustees or the costs of passing accounts at the pending proceeding on the passing of accounts.
Lastly, the appeal court saw no reason to interfere with the judge’s denial of the appellants’ requested adjournment. The appeal court noted that the judge found that the son suffered real prejudice due to the delay in estate administration.
