COURT OF APPEAL FOR ONTARIO

CITATION: Kasanda v. Sartarelli, 2025 ONCA 27

DATE: 2025-01-17

DOCKET: COA-23-CV-1068

Sossin, Madsen and Pomerance JJ.A.

BETWEEN

Elke Kasanda in her personal capacity and in her capacity as Estate Trustee of the Estate of Alfonso Sartarelli

Applicant (Appellant)

and

Helmut Sartarelli in his personal capacity, in his capacity as Attorney for Property of Alfonso Sartarelli and in his capacity as Estate Trustee of the Estate of Alfonso Sartarelli* and D. Scott Murray in his capacity as Estate Trustee of the Estate of Alfonso Sartarelli

Respondents (Respondent*)

Eric Lay, for the appellant

John Paul Zubec and Neelum Raja[^1], for the respondent

Heard: December 17, 2024

On appeal from the order of Justice Sally Gomery of the Superior Court of Justice (Ottawa), dated July 28, 2023, with reasons reported at 2023 ONSC 4400.

REASONS FOR DECISION

OVERVIEW

[1] This appeal arises in the unfortunate circumstance of conflict between adult siblings following the passing of their father in 2018, against a background of, as the appellant alleges, longstanding inequitable treatment by the parties’ father.

[2] Both siblings, the appellant and respondent, were named executors under their father’s last will and testament, along with his long-time solicitor, Mr. Murray. Litigation arose, in which each sibling sought to have the other removed as estate trustee. The appellant appeals the decision of the application judge to remove her as estate trustee while dismissing her application to remove her brother, the respondent. In oral argument, the focus was on the decision to remove the appellant as estate trustee. For the reasons set out below, the appeal is dismissed.

FACTS

[3] This was a simple estate, with two assets: a rental property which was bequeathed to the appellant; and the proceeds of a joint account, held by the father and respondent for several decades, bequeathed to the respondent.[^2] The total estimated value of the estate was approximately $278,000. Any residual assets, of which there were none, were to be split equally. Debts associated with the estate included the final income taxes owing by the deceased. The respondent also incurred amounts for expenses such as funeral costs, unpaid medical bills of the deceased, and probate fees.

[4] The parties disagreed how debts of the estate should be paid given the absence of residue, causing conflict and delay. The respondent relied on the advice of Mr. Murray regarding how the assets should abate, namely, that the debts should be borne pro rata in relation to the value of the assets bequeathed to each sibling. This would result in the appellant, who received the rental property, effectively paying 89.76% of the estate debt, while the respondent, who received the balance of the joint account, paying 10.24% of the estate debt.

[5] The appellant found this “unfair” and opposed addressing the estate debts in that manner. This delayed the filing of an amended tax return for 2018 which became necessary to address recapture in relation to prior claimed depreciation on the rental property, and the related payment of additional taxes. This disagreement over the payment of the estate’s liabilities led to a breakdown in the parties’ relationship and the administration of the estate. By the time the applications for removal went before the application judge, the administration of the estate had been ongoing for four years.

[6] The application judge correctly set out the test for the removal of an estate trustee, acknowledged to be a high threshold: Radford v. Radford Estate (2008), 2008 CanLII 45548 (ON SC), 43 E.T.R. (3d) 74 (Ont. S.C.), at paras. 100-113. She recognized that an estate trustee is to be removed “only on the clearest evidence that there is no other course to follow”: Crawford v. Jardine (1997), 20 E.T.R. (2d) 182 (Ont. Gen. Div.), at para. 18; and that past misconduct may justify removal if it is likely to continue in the future: St. Joseph’s Health Centre v. Dzwiekowski, 2007 CanLII 51347 (Ont. S.C.), at para. 28. Further, conflict between trustees may also warrant removal: Chambers Estate v. Chambers, 2013 ONCA 511, 367 D.L.R. (4th) 151, at paras. 98-99.

[7] The application judge made extensive findings of fact, and of mixed fact and law, both entitled to deference, that led to the conclusion that the appellant had preferred her own interests to those of the estate and had in fact obstructed its proper administration. By contrast, she found that the respondent had acted reasonably and that there was no basis for his removal. She explicitly found that:

a. The parties’ relationship had been strained for many years and the appellant had long felt that the deceased favoured the respondent and his wife. The appellant was convinced that the respondent never paid the full price for a business acquired from the deceased many years earlier, and that the respondent had received assets worth upwards of $2 million while the deceased was alive. As a result, the application judge found that the appellant was focused on her persistent belief that she had been treated inequitably during their father’s lifetime;

b. The appellant obstructed the filing of the deceased’s amended tax return and payment of taxes owed to the Canada Revenue Agency, based on “evolving justifications” that “d[id] not withstand scrutiny,” variously asserting that she needed more time to review calculations, that the estate owed no taxes and had no exposure to penalties, but also that it had “significant tax debts”;

c. The appellant rejected professional accounting advice indicating that the return should be filed to avoid interest and possible penalties in obstructing the filing of the amended 2018 tax return and payment of additional taxes;

d. In unilaterally filing the amended 2018 return in 2022 without notice to the co-trustees, the appellant failed to recognize the need for trustees to act jointly;

e. The appellant’s conduct had generated unnecessary conflict and expense for the estate; and,

f. The respondent, by contrast, had not acted unreasonably in accepting the opinion of the lawyer regarding how debts of the estate should be apportioned.

[8] The application judge concluded that the appellant’s continued role as estate trustee would hamper the administration of the estate and further reduce amounts available to creditors and beneficiaries. She dismissed the application to remove the respondent, finding that he had not preferred his own interests over those of the estate, had reasonably relied on professional advice, and was competent to act as estate trustee.

ISSUES ON APPEAL

[9] In this court, the appellant casts the central issue as the law of abatement in Ontario. She suggests that the application judge effectively endorsed an incorrect statement by Mr. Murray of the law of abatement, and in so doing made an error in law. Further, she argues that that this error “suffused” her findings of fact and mixed fact and law, leading to misapprehensions of the evidence surrounding the appellant’s conduct and motivations, as well as those of the respondent. She says that if Mr. Murray’s opinion about how the assets should abate was wrong, then it would not be unreasonable of her to decline to rely on it when addressing debts of the estate, or to decline to pay the estate debts in the apportionment recommended.

[10] The difficulty with this position is that it does not accord with the record or the facts as found by the application judge. It is clear that the decision did not turn on the issue of abatement. Nor does the record support any assertion on appeal that this was the concern at the root of the appellant’s conduct in causing conflict and delay. We note the following:

a. The appellant’s response to Mr. Murray’s 2019 letter was simply that his proposal for apportioning debt was not “fair.” She stated that she needed more time to review, and then refused to participate in addressing the debts of the estate for two years;

b. Although the appellant was represented, the focus in correspondence was not on the law of abatement, but on whether the value of the estate should properly be considered larger due to the respondent’s alleged mismanagement of the deceased’s finances (and thus the notional existence of residue from which to pay the debts of the estate);

c. At no point before the hearing of the applications did the appellant obtain a second legal opinion suggesting Mr. Murray’s recommendation was wrong. Rather, she continued to assert that the proposal was simply unfair, she restated her grievances about inequitable treatment, and she expressed concern about the “pittance” she was to receive relative to the respondent over a 30-year period. Any concern about Mr. Murray’s advice on abatement could fairly be characterized as ex post facto rationalization of her conduct;

d. While the appellant now states that she was prepared to file an amended 2018 income tax return before 2022, but not to pay in accordance with Mr. Murray’s recommendation, this distinction is not clear on the record. The finding that the appellant simply refused to cooperate with the timely administration of the estate was available on the evidence;

e. Finally, it is clear from the findings of the application judge that among the central reasons for removing the appellant as estate trustee was her focus on her past grievances regarding treatment of the siblings by their father, and her consequent failure to prioritize the interests of the estate over her own interests.

[11] The decision to remove an estate trustee is discretionary and entitled to a high level of deference on appeal: Di Santo v. Di Santo Estate, 2023 ONCA 464, 87 E.T.R. (4th) 167, at para. 30. As acknowledged by the appellant, appellate intervention on discretionary decisions will generally only be warranted where the court below makes a clearly identifiable error in the application of the law, a material misapprehension of the evidence, or comes to a result that is clearly wrong: Popack v. Lipszyc, 2016 ONCA 135, 129 O.R. (3d) 321, at para. 25. No such errors are evident in this case, and we find no basis to intervene.

[12] It may be that during his lifetime, the deceased treated his son and daughter differently. We acknowledge the perception of hurt and unfairness that the appellant, the deceased’s daughter, appears to carry. However, as correctly stated by the application judge, “there is nothing in law or equity … that requires a parent to distribute their assets equally to their children, either during their lifetime or in a will”: at para. 48. We also note that, on its face, the will left assets of greater value to the appellant than to the respondent, irrespective of how the debts are addressed.

[13] While it may be that the law of abatement in Ontario could benefit from a statement by this court, this ought, in our view, to await a case in which that issue is central. As outlined, in this case, the issue was at most ancillary.

DISPOSITION

[14] For the reasons set out above, the appeal is dismissed. As agreed between the parties, costs are set at $25,000, inclusive of HST and disbursements, payable by the appellant to the respondent.

“L. Sossin J.A.”

“L. Madsen J.A.”

“R. Pomerance J.A.”

[^1]: Neelum Raja appeared but made no written or oral submission on behalf of the respondent.

[^2]: Counsel were asked about whether the joint account, referenced in the will, was properly considered part of the estate at all, given that the account had been joint for about 30 years and the respondent may have become the sole owner by right of survivorship, notwithstanding the presumption of resulting trust. This issue was not argued in the court below, and neither party pressed the issue on appeal. Accordingly, while a right of survivorship could potentially arise on these facts, we refrain from making any finding on that issue.