COURT FILE NO.: 4540/19 and 4988/19
DATE: 2020-03-09
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF THE ESTATE OF LAUREL CHADWICK
RE: Lynda Lee Stanisz and Robert Chadwick Smith, Estate Trustee for Estate of Laurel Chadwick, deceased, Applicant
AND:
Leslie Ann Smith, Personally and in her capacity as Estate Trustee for Estate of Laurel Chadwick, deceased, Respondent
BEFORE: Gibson J.
COUNSEL: M. Salman, for Leslie Ann Smith J. Figliomeni, for Lynda Stanisz A. Collins, for Robert Smith
HEARD: March 9, 2020
ENDORSEMENT
[1] This is an unfortunate matter in which acrimony between siblings has stalled the administration of an estate. The relatively modest size of the estate now regrettably risks being dissipated by litigation costs because the siblings cannot agree on how to administer the estate.
[2] Laurel Chadwick (“Laurel”) died on 25 August 2018. She is survived by her three children, Leslie Ann Smith (“Leslie”), Lynda Lee Smith Stanisz (“Lynda”), and Robert Chadwick Smith (“Robert’).
[3] In her Will dated 14 February 2007, Laurel appointed all three of her children to be estate trustees and stipulated that they act jointly. There is no majority clause to override a conflict between the estate trustees. The residue of the estate is divided between her three children.
[4] At the date of death, the most significant estate asset was a TD Canada Trust bank account with a balance of about $66,000.
[5] The three children have not been able to agree on the management of the estate. They have fallen into sharp dispute. Lynda and Robert are on one side of the dispute. Leslie is on the other.
[6] Lynda and Robert commenced an application on 7 November 2019 (Court File No. CV-00004540-0000) seeking the removal of Leslie as estate trustee.
[7] Leslie commenced a cross-application on 2 December 2019 (Court File No. CV-19-00004988) seeking the removal of Lynda and Robert as estate trustees.
[8] Both applications were heard together on 12 February 2020.
[9] The Court has the authority to remove and replace an estate trustee pursuant to ss. 5 and 37 of the Trustee Act.
[10] The Court is reluctant to remove an estate trustee and interfere with the deceased’s choice of representatives without cause. In considering whether to remove an estate trustee, the Court will consider, amongst other factors: the removal of an estate trustee should occur only on the clearest of evidence and where there is no other course to follow; the Court’s main guide in this consideration should be the welfare of the beneficiaries; the applicant must show that the non-removal of the trustee will likely prevent the trust from being properly executed; and friction alone is not a reason for removal: Radford v. Radford Estate 2008 45548 (ON SC) at paras 97-113. The estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the trust: Johnson v. Lanka Estate, 2010 ONSC 4124 at para. 15.
[11] A court is justified, and indeed required, to interfere when, by virtue of the situation arising between the co-trustees, the continued administration of the trust becomes impossible or improbable, despite any actual misconduct on the part of the trustees: Re Consiglio (No. 1), 1973 681 (ON CA), [1973] 3 O.R. 326, at para 6 (Ont.C.A.).
[12] In the present case, there is a great deal of hostility between the estate trustees. The relationship between them has deteriorated to a point where the three siblings cannot effectively communicate or act in concert. The evidence before the Court demonstrates that the continuation of the status quo with Lynda, Robert and Leslie required to act jointly is clearly not viable. The failure of the estate trustees to complete the administration of the estate will continue to deplete the small remainder of the estate.
[13] In the present circumstances, given the countervailing applications by the parties, it falls to the Court to cut the Gordian Knot and make a choice.
[14] The evidence discloses that Leslie has demonstrated a palpable and overwhelming animus towards her siblings. She has made abusive, profane and vitriolic statements towards them, including threats of physical violence.
[15] In light of this, it would be inappropriate to grant Leslie’s request that she be appointed estate trustee, entrusted with the fiduciary duty to act in the best interests of the beneficiaries.
[16] Applying the considerations discussed above, it is evident that Leslie should be removed as estate trustee.
[17] The Application of Leslie Ann Smith in Court File No. CV-19-00004988-0000 is dismissed.
[18] The Application of Lynda Lee Stanisz and Robert Chadwick Smith in Court File No. CV-19-00004540-0000 will be granted in part.
[19] The Court Orders that:
Leslie Ann Smith shall be removed as estate trustee for the Estate of Laurel Chadwick;
Lynda Lee Stanisz and Robert Chadwick Smith shall be the only Estate Trustees of the Estate, to act jointly;
The Registrar of the Superior Court of Justice at Milton shall issue a Certificate of Appointment of Estate Trustee With a Will to Lynda Lee Stanisz and Robert Chadwick Smith upon the filing of the necessary application materials; and,
Leslie Ann Smith shall return any monies, proceeds, personal and household items of the deceased, or any other assets from the Estate that she has removed, to Lynda and Robert for distribution to the beneficiaries of the Estate.
[20] The Parties are encouraged to agree upon appropriate costs. They should strive not to compound the acrimony between them and further dissipate the assets of the Estate. If the Parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs). Lynda and Robert together may have 14 days from the release of this endorsement to provide their submissions, with a copy to Leslie; Leslie a further 14 days to respond; and Lynda and Robert a further 7 days for a reply, if any. If no submissions are received within this timeframe, the Parties will be deemed to have settled the issue of costs as between themselves. If I have not received response or reply submissions within the specified timelines after Lynda and Robert’s initial submission, I will consider that the Parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.
(Original signed by)
Gibson J.
Date: March 9, 2020