Court of Appeal for Ontario

Date: 2025-05-09
Docket: COA-24-CV-1002
Coram: Huscroft, George and Favreau JJ.A.

In the matter of the Estate of Ruth Eileen Stevens MacBeth, deceased

Between:
Robert Hurst and Catherine Hurst, in their capacity as Estate Trustees with a Will, in the Estate of Ruth Eileen Stevens MacBeth
Applicants (Appellants)

and

Wendy Joan MacBeth, Earl Patrick Shea in his capacity as Estate Trustee of the Estate of John Stevens MacBeth, Chloe Py-MacBeth and Maya MacBeth
Respondents

Appearances:
Gregory Sidlofsky and David Wagner, for the appellants
Arieh Bloom and Jessica Karjanmaa, for the respondent

Heard: May 2, 2025

On appeal from the order of Justice Catriona Verner of the Superior Court of Justice dated June 17, 2024, with reasons reported at 2024 ONSC 3483.

Reasons for Decision

Introduction

[1] The appellants, Robert and Catherine Hurst, appeal the motion judge’s order removing them as trustees of the estate of Ruth MacBeth (the “Deceased”), and replacing them with the Deceased’s son John MacBeth (“John”).

Background Facts

[2] On March 21, 2024 the appellants and John attended a case conference before the motion judge. At that conference John advised that he would be bringing a motion to have the appellants removed as estate trustees. The motion judge seized herself and endorsed that John’s motion should be heard “sooner, rather than later”. On May 6, 2024 John served his motion record. John alleged, among other things, that the appellants failed to notify him of their intention to sell the family cottage; made it difficult for him to collect his personal belongings from the cottage before it was sold; and triggered substantial unnecessary capital gains taxes by selling the cottage to a third party rather than transferring it to him as part of the estate. On May 8 John served a supplementary motion record containing an expert report on the capital gains tax issue.

[3] On May 16 the appellant’s lawyer wrote to John advising that Robert had been recently diagnosed with cancer and that an “adjournment may be required”. On May 17 John’s lawyer advised the appellants’ counsel that they would not consent to an adjournment. On June 6 the appellants served an offer to settle: they would “voluntarily retire” as estate trustees; they would retain a holdback of $450,000 from the estate; and John would replace them as estate trustee. John rejected this offer. John had earlier made his own offer to settle that included a $100,000 holdback, which the appellants rejected.

[4] John’s motion was heard on June 10, 2024. The motion judge denied the appellant’s request for an adjournment and proceeded to hear the motion on its merits. While John’s motion did not seek a holdback, and even though there was no cross-motion seeking a holdback, during the course of submissions the appellants filed their offer to settle which included the request for a $450,000 holdback. John also filed his offer to settle. The motion judge granted John’s motion and ordered a $50,000 holdback.

[5] John passed away following the order. The respondent, Earl Patrick Shea, was appointed as John’s estate trustee and replacement as trustee of the Deceased’s estate.

Issues Raised on Appeal

[6] The appellants argue that the motion judge: 1) erred by denying their request for an adjournment; 2) erred by removing them as estate trustees; and 3) erred by fixing a holdback amount from the estate without hearing submissions on the appropriate amount.

Discussion

Adjournment

[7] Whether to grant or deny an adjournment is “quintessentially an exercise of judicial discretion”: Tarlo Lyons v. Gauthier, 2012 ONCA 39, at para. 3. The scope of appellate intervention is limited. As this court held in Toronto Dominion Bank v. Hylton, 2010 ONCA 752, 270 O.A.C. 98, at para. 36, “the presiding judge has a well-placed and well-established discretion to decide whether an adjournment request ought to be allowed or denied.”

[8] The court in Hylton, at para. 38, sets out several factors that should be considered when deciding whether to grant an adjournment, including: a) the evidence and strength of the evidence of the reason for the adjournment request; b) the history of the matter; c) the prejudice to the party resisting the adjournment; and d) the consequences to the requesting party.

[9] In deciding not to grant the adjournment the motion judge turned her mind to these factors. While noting that the appellants were able to perform other litigation-related tasks the week before the hearing of the motion, she did not find the evidence in support of the adjournment request to be compelling. She found that the reasons she could discern for opposing John’s motion did not raise contentious factual issues, and it was unclear what other evidence the appellants would like to introduce such that they needed more time to prepare for the motion.

[10] Contrary to the appellants’ argument on appeal, the motion judge found real prejudice on John’s part in the form of further delay in estate administration. For these reasons, the motion judge denied the adjournment. This was her call to make. There is no basis for appellate intervention.

Removal as Estate Trustees

[11] Nor do we accept the appellants’ argument that the motion judge erred by removing them as estate trustees. This too is a discretionary decision which is afforded a high degree of deference. The motion judge correctly set out the test for the removal of an estate trustee, acknowledged that this presented a high bar, and understood that a trustee could only be removed on the clearest of evidence.

[12] The motion judge recognized that John was the only beneficiary and that he had lost all trust in the appellants. Relying on the evidence before her, she found that the appellants had made it difficult for John to collect his belongings from the family cottage before selling it and accepted the expert evidence tendered by John that the appellants unnecessarily triggered a $600,000 capital gains tax by selling the cottage to a third party, despite being warned beforehand that tax consequences would ensue.

[13] As the motion judge held, “[s]ince the interests of the beneficiaries must be the primary concern of the court, it is apparent that [the appellants] should be removed”. There was ample support for the motion judge’s finding that, going forward, the appellants would likely mishandle the estate.

Holdback from the Estate

[14] Turning to the $50,000 holdback from the estate, the application judge noted that as “a court of equity [she] must consider whether it would be fair in the circumstances to order a portion of the money be held back for the purposes of covering at least some of the [appellants’] legal expenses for the passing of accounts.”

[15] It is important to consider the context in which this issue arose. As noted earlier in these reasons, John’s motion did not raise the issue of a holdback. Nor did the appellants file a cross-motion seeking a holdback. However, part way through the hearing of the motion, the appellants filed the offer to settle they had made a week prior which sought a holdback of $450,000. In our view, the appellants made the strategic mid-hearing decision to in effect place the question of a holdback in issue. In any event, the motion judge heard submissions on the issue and understood that quantum was likely the only reason the appellants were opposing John’s motion.

[16] It is important to note that the appellants are not without recourse regarding the expenses they have already incurred as estate trustees or the costs of passing accounts. During the yet-to-be-resolved passing of accounts proceeding, the application judge will have to make decisions in respect of any objections and will be able provide directions or hear motions should the need arise. In short, the motion judge’s decision does not foreclose a further amount being granted to cover the appellants’ reasonably incurred expenses as trustees.

Conclusion

[17] For these reasons the appeal is dismissed.

[18] The respondent seeks his partial indemnity costs of the appeal, and the appellants’ earlier stay motion, in the all-inclusive amount of $21,000, payable by the appellants personally. He argues that this appeal was not brought in the interests of the estate.

[19] The appellants argue that, even if they are unsuccessful, they are entitled to costs from the estate in the amount of $31,000.

[20] In our view, this appeal was unnecessary, not brought in the interests of the estate, and should attract personal cost consequences. Costs are payable by the appellants, personally, to the respondent in the all-inclusive amount of $21,000.

Grant Huscroft J.A.
J. George J.A.
L. Favreau J.A.