Endorsement

Court and Parties

Court File No.: CV-23-00705516-00ES
Date: 2025-04-15
Ontario Superior Court of Justice

Re: Joe Panchyshyn and Ted Panchyshyn, Applicants
-and-
Kathryn Pietron (also known as Kathie Pietron), personally and in her capacity as Estate Trustee of the Estate of Mike Panchyshyn, Respondent

Before: Frederick L. Myers
Counsel:
Jocelyn Tatebe, counsel for the Applicants
Orie Niedzviecki, counsel for the Respondent
Heard: April 7, 2025

The Urgent Case Conference and Outcome

[1] On April 2, 2025, counsel appeared at a case conference to schedule a motion to be brought by the Applicants to remove the Respondent as executrix and trustee of their late father’s estate. As set out below, I ordered an urgent hearing to be held on April 7, 2025 to consider the Respondent’s health concerns. This is the endorsement determining the outcome of the urgent hearing.

[2] For the reasons set out below, the Respondent is removed as executrix and trustee of her father’s estate on an interim basis pending the earlier of the outcome of the Applicants’ motion to remove her permanently or further order of the court. For the interim period, the Applicants are appointed as interim executors and trustees of the estate under the will and the property of the estate is vested in them accordingly.

Background Facts

[3] In their original application commenced in 2023, the Applicants did not expressly seek to remove or replace the Respondent as estate trustee under the father’s will.[^1] Rather, they sought orders to compel her to produce the will, to restrain her from selling or disposing of property of the father’s estate or traceable to assets formerly held by their father, and to pass her accounts.

[4] The Applicants were frustrated with the slow pace of the administration of the estate. Even after they commenced this application, they say it took too long for the Respondent to provide them with the will. Then it took two court orders to get her to list the father’s farm property for sale.

[5] The farm property is listed for sale on MLS right now as the spring thaw is upon us.

[6] On June 28, 2024, Faieta J. expressed concern with the Respondent’s apparent disregard of the prior order to sell the farm among other things. He agreed with the Applicants’ proposal to bring a motion to remove the Respondent as estate trustee. He scheduled the motion to be heard on November 27, 2024.

[7] The motion settled. By consent order dated November 27, 2024, the Respondent agreed, and Dietrich J. required the Respondent, to disclose and produce numerous listed items within 30 days.

[8] The Respondent did not make any of the disclosure within the required time.

[9] The Applicants therefore once again sought to schedule a motion to remove the Respondent as estate trustee.

The Case Conference on April 2, 2025

[10] The Respondent requested an adjournment or deferral of the proposed motion to remove her as estate trustee because of her ill-health. In my endorsement dated April 2, 2025, I wrote:

[9] In response to the scheduling request, counsel for the ET requests that the matter be put off until June. He relies on an unsworn note from a doctor. He has redacted the doctor’s name and address to protect the ET’s privacy.

[10] The doctor’s note says:

Feb 27, 2025
To Whom It May Concern:
Re: Kathryn Pietron Apr 16, 1957 Age: 67 yr
Kathryn is a patient under my medical care and is currently experiencing significant health challenges that necessitates time away from her duties and obligations for proper rest and recovery.

To facilitate recovery and prevent exacerbations of the condition, it is recommended she takes a temporary leave for 12 weeks beginning Feb. 24, 2025. This is crucial to allow for the reduction of chronic symptoms significantly affecting her overall well-being.

Please do not hesitate to contact me with any further questions.

Yours truly,

[11] I inquired of counsel what privacy interest Ms. Pietron is protecting by redacting the doctor’s name. He submits that his client does not want her brother to know her medical condition although she relies on it for the relief she seeks.

[11] The note was not evidence. But what is important is not the inadmissible use of the note as evidence, but rather, that the Respondent puts the note forward to bolster a submission made on her behalf by her lawyer that she needs at least three months off from her duties and obligations as estate trustee.

[12] I take counsel at his word. I assume, as I ought to do, that counsel’s submissions are a fair representation of the client’s instructions and the underlying facts material to the issues at the case conference.

[13] The current duties and obligations on the Respondent, beyond the normal fiduciary stewardship of assets expected of all executors, trustees, and estate trustees, are: (a) to comply with the consent order made by Dietrich J.; and (b) to manage the sale of the commercial farming property that is on the market.

[14] Hearing the request for adjournment based on the Respondent’s serious health challenges, I expressed concerns as follows:

[12] I am extremely concerned. The ET is asking for months in which to remain in breach of the court order that required early disclosure of information as a settlement of a motion to remove her. In addition, the ET is said to crucially need time away from her duties and obligations to facilitate recovery and allow for the reduction of symptoms affecting her well-being.

[13] Taking the respondent at her word means that she cannot carry out either the court order or her responsibilities to negotiate and carry a significant commercial real estate transaction with the farm remaining on the market over the next several months.

[15] I asked counsel if the Respondent consented to an order removing her due to her submission that she lacked capacity to fulfill her duties. He submitted that she could only be removed for wrongdoing rather than health reasons.

[16] I therefore scheduled this urgent hearing for April 7, 2025 to allow the Respondent to deliver evidence to support her request for an adjournment while staying on as Estate Trustee. I wrote:

[16] I view the absence of an ET to preserve, protect, and manage assets as a matter of urgency. In light of the respondent’s admission that her ill health necessitates that she take several months away from her duties and obligations, I do not see it necessary for the applicant to bring a motion to remove her. Rather, if the respondent opposes removal, she should be required to bring forward evidence and law to justify her claim to stay on.

[17] I will hear the parties on Monday, April 7, 2025 by Zoom at 1:15 p.m. This endorsement is notice to the respondent that I will consider the applicants’ request to remove the respondent as ET at a case conference at that time under Rule 50.13 (6).

[18] The redacted, anonymous doctor’s note is not in evidence. If the respondent wishes to rely on a doctor’s evidence, the doctor should give live evidence at the case conference and will be subject to cross-examination in open court by Zoom. He or she should have the respondent’s file at the ready.

The Urgent Case Conference on April 7, 2025

[17] Both counsel helpfully provided factums for this hearing addressing removal of an executor/trustee/estate trustee.

[18] In addition, the Respondent was able to swear an affidavit for the urgent hearing. In her affidavit, the Respondent provided some of the disclosure ordered by Dietrich J. that remained outstanding on April 2, 2025.

[19] For example, there are bank accounts that the Respondent held in joint tenancy with her father. In this proceeding the Respondent claims the bank accounts belong to her by survivorship. Despite the timing ordered by Dietrich J., the Respondent has only disclosed, just before this urgent hearing, that she is unable to produce any evidence to rebut the presumption of resulting trust.

[20] The Respondent has now also provided insurance beneficiary designations as ordered. She provided information about the status of the estate administration. She also swears that she has complied with broad disclosure requirements in para. 2 of Justice Dietrich’s order. But the applicants disagree.

[21] The Respondent did not adduce any medical evidence for the urgent hearing. She swears instead:

16. I have significant concerns about my privacy and safety and do not want to disclose my medical condition. Therefore, I did not want the name of the doctor or any identifying information made available to the Applicants - thus the medical letter was provided in redacted form on April 2. I have inquired of my doctor as to his availability on April 7 at 1:15, but his office advised me he is not available next week at all. (I will not summons him as I do not wish to negatively affect our relationship.)

[22] The Respondent concludes her affidavit with the following paragraph:

22. I wish to remain as the Executor of my father's estate, as it was his wishes that I act in such capacity. I intend to do everything in my power, with the help of my counsel, to move along the administration of this estate and provide information updates.

[23] The obvious problem with this evidence is that while the Respondent says she intends to do everything in her power to move forward, a mere five days ago she had her lawyer submit to the court that her health made it beyond her power to fulfill her duties to comply with the order of Dietrich J. and to conduct a sale of commercial real estate for several months at least.

[24] The Respondent had a chance to make this matter more certain by bringing her doctor to court to give evidence. With video conferencing, the doctor would have had to open his or her calendar for part of an hour.

[25] While the Respondent says she feared a summons could impair her relationship with her doctor, that submission is not available to her. She opened the door on her health by having a lawyer make a factual submission to the court about her serious ill-health supported by an inadmissible doctor’s note. There is no stuffing that genie back in the bottle.

The Legal Basis to Make an Interim Order

(i) This is not an Application to Remove a Trustee

[26] Mr. Niedzviecki makes a procedural point that is important. An application to remove a trustee requires that all beneficiaries be named as parties. See Rule 9.01(2)(c) of the Rules of Civil Procedure, RRO 1990, Reg 194.

[27] The court’s authority to remove trustees is set out in ss. 5 and 37 of the Trustee Act, RSO 1990 c T.23. The statute provides for a final order. It is an authority with potentially severe consequences. Removing the trustee chosen by the settlor, or the deceased in the case of a testamentary trust, removes the person in whom the creator of the trust reposed the powers and fiduciary duties needed to protect the beneficiaries.

[28] I agree with the authorities cited by both sides, that the court’s authority to remove a trustee is to be exercised cautiously, on clear evidence, considering the welfare of the beneficiaries, and only if the trustee’s acts endanger the administration of the trust. See, for example, Meuse v. Taylor, 2022 ONSC 1436.

[29] There are 22 residuary beneficiaries under the will in this instance. Seven are children of the deceased and 15 are grandchildren. Only three are parties. The Respondent says that her urgent polling of the beneficiaries shows that at least 11 support her continued role. I am not provided with the question she put to them to see if the Respondent disclosed her need for months away from her duties due to her health issues.

[30] I am satisfied that I cannot and should not consider removing the respondent with finality under the Trustee Act now. The Applicants were just trying to schedule that motion when the Respondent raised her ill-health.

[31] I told counsel at the urgent case conference that I was dealing only with the urgent situation caused by the Respondent’s illness. I specifically did not call on Mr. Niedzviecki to respond to the Applicants’ complaints about the Respondent’s administration (or non-administration) of the estate more generally. That is the subject matter of the motion being scheduled.

[32] In my view, the motion to remove the Respondent should be scheduled. The Applicants may want to consider how to deal with the other beneficiaries as part of that process. Once counsel have discussed (and hopefully agreed) on a timetable for the motion steps, or, if they cannot agree, then a further case conference should be convened before a judge.

(ii) What should Happen in the Interim?

[33] Judges are empowered to make interlocutory orders at a case conference. Under Rule 50.13(6), the parties were notified by my April 2, 2025 endorsement of what the issue and process would be at the urgent case conference.

[34] There is no specific rule or statute authorizing the court to remove an estate trustee and appoint a caretaker on an interim basis.

[35] Section 28 of the Estates Act, RSO 1990, c E.21 does not apply expressly because neither the validity of a will nor a grant of probate is in issue in this application.

[36] Rule 75.06(3)(f) provides for the appointment of an estate trustee during litigation. Mr. Niedzviecki submits that with no probate that rule cannot apply. I am not convinced that this is so. However, what is under consideration is not really an estate trustee to manage an estate while litigation proceeds among conflicted parties.

[37] I do not see how I can leave the ship of the estate without a captain while reporting remains outstanding under Justice Dietrich’s order and, most importantly, while the farm property is for sale.

[38] The farm is the major asset of the estate. Getting the Respondent to list it for sale took two court orders. The farm is now actively for sale as ordered by the court. The deceased father died some five years ago. The beneficiaries are entitled to have the sale proceed regardless of the Respondent’s ill-health.

[39] Managing the sale process for a farm will require more than the estate’s lawyer at the helm. The estate trustee must be available to manage the process and communicate with the other beneficiaries. The estate trustee must be available to deal with offers if nothing else.

[40] In my view, on the Respondent having her counsel submit that she needs three months away from her duties creates a situation of urgent risk to the welfare of the beneficiaries. Fulfilment of the court’s outstanding orders for the sale of the farm and disclosure of information require an estate trustee to be present and able to act.

[41] In my view, the court’s inherent jurisdiction to ensure fairness to all parties and its authority to control its own processes necessarily includes the authority, indeed the duty, to protect the welfare of the beneficiaries from endangerment by a trustee on an interim basis. Gonder v. Gonder Estate, 2010 ONCA 172, at paras. 21, 24, 41 and 42; Mayer v. Rubin, 2017 ONSC 3498, at paras. 26 to 33.

[42] This is consistent and supported by the court’s authority in estates proceedings to make, “an order providing for any other matter that the court directs” under Rule 74.15(1)(i) of the Rules of Civil Procedure.

[43] In my view, while the Applicants bring forward their motion to remove the Respondent, she must be replaced as executrix and trustee of her father’s estate on an interim basis to protect the administration of the estate. The removal is temporary pending the earlier of the outcome of the Applicants’ motion to remove her permanently or further order of the court. For the interim period, the Applicants are appointed as interim executors and trustees of the estate under the will and the property of the estate is vested in them accordingly.

[44] Costs are reserved to the judge who hears the Applicants’ motion to replace the Respondent permanently.

Frederick L. Myers
Date: April 15, 2025

[^1]: Mr. Niedzviecki submitted that because there has been no grant of probate, the Respondent is an executrix and trustee rather than an “estate trustee” as that term is used in the Rules of Civil Procedure, RRO 1990, Reg 194. However, Rule 74.01 defines the term “estate trustee” to mean, “an executor, administrator or administrator with the will annexed.” That is, an “estate trustee” does not need a grant of probate or a Certificate of Appointment as Estate Trustee. Rather, it is a generic and inclusive term for a personal representative of an estate.