Court rules on issues on estate trustee's authority and will interpretation
In a complex and contentious estate dispute, the Ontario Superior Court of Justice issued a ruling addressing issues regarding the interpretation of wills, the authority of estate trustees, and the administration of family assets.
A man died in March 2018, leaving behind a will dated May 1988. His will appointed his wife as estate trustee with a life interest. The will stated that, upon his wife’s death, his estate should be divided equally among their children – John, Rose, and Diane – and John should be its trustee. His estate consisted of a two-storey commercial building on Yonge Street, Toronto.
The wife passed away in November 2020, leaving behind a November 2018 will. Her will appointed John and Diane as co-estate trustees and made the three children equal benificiaries of her estate, which consisted of a residential property on Lord Seaton Road, Toronto.
The children were then involved in disputes over the administration of their parents’ estates. In 2023, John filed an application asking the court to interpret the father’s will such that he and Nadine would receive ownership of the Yonge Street building and Diane would get a cash sum for her share.
Diane argued that this interpretation contravened the terms of the father’s will. She also wanted to remove John as trustee of the father’s estate based on his actions that were allegedly self-serving and conflicting with his fiduciary duties. She requested the appointment of a disinterested trustee to oversee the sale of the Yonge Street building.
Court ruling and findings
In La Calamita v. La Calamita, 2024 ONSC 4219, the Ontario Superior Court issued a decision interpreting the father’s will. The court noted that a provision of the will required a disinterested trustee to conduct any private sale of the estate property involving a beneficiary who was also a trustee.
Citing this provision, the court ruled that, as both trustee and a potential buyer, John could not distribute the Yonge Street building to himself and to Nadine because this would go against the requirement in his father’s will for a disinterested trustee to oversee such a private sale.
However, the court dismissed Diane’s request to remove John as trustee and to appoint a disinterested trustee at this stage. The court saw no evidence that John breached his fiduciary duties or endangered estate assets. Friction among the siblings was not sufficient grounds to disrupt the father’s explicit choice of John as trustee, the court said.
The court found John’s action of seeking guidance on the will’s interpretation appropriate for a trustee facing uncertainties about the estate administration. Regarding John’s accounting duties, the court noted that John provided sufficient information about the estate’s assets and liabilities.
