The recent case of Rizzo v Farruggia, 2024 ONSC 4615, discusses two common issues in estate litigation: the sale of real property and the removal of estate trustees.

The deceased, Ignazia Rizzo, died leaving a Last Will and Testament that named her three children, Sam, Ed and Angela, as Estate Trustees and provided that the Estate Trustees should obtain an appraisal of her house (the “Property”) so that Sam could have a right of first refusal if he wanted to purchase the Property. Ignazia’s Will directed that any debts were to be paid from the residue of her Estate.

The Estate Trustees jointly agreed to value the Property at $660,000 and that amount, less any debts, taxes and Estate expenses, would be distributed between Angela and Ed once Sam obtained financing for the Property.

Angela soon began demanding that her share be paid to her net of any possible taxes. Ed and Sam refused to agree as they were all to be equal beneficiaries under the Will. A stalemate eventually arose, and the Estate administration was unable to move forward. Angela brought an application to have the Property sold on the open market, and Sam and Ed brought an application to have Angela removed as Estate Trustee.

The Judge dismissed Angela’s application, stating that Angela had no standing to seek the sale of the Property as explained by the Court of Appeal in Di Michele v Di Michele. There, the Court of Appeal stated that only persons entitled to the immediate possession of property may bring an action or make an application for its partition or sale. As Angela’s interest in the Estate was only an interest in the residue, and not a specific interest in the Property, she was not entitled to immediate possession of the Property and therefore had no standing to bring a claim for its sale.

With respect to Angela’s claim that Sam must pay occupation rent for the time he was living in the Property following Ignazia’s death, Justice I.R. Smith found that it must also fail because a claim for occupation rent must be made by an owner of the property in question and again, Angela had no interest in the Property. Additionally, he noted that had the parties not been involved in this estate dispute, Sam would have already been able to take ownership of the Property. He had only been delayed in doing so because the parties were unable to resolve their issues.

Sam and Ed were successful in their application to remove Angela as Estate Trustee. Citing Dewaele v Roobroeck wherein the Court stated that where there is conflict between the Estate Trustees, it may justify a removal of one of the Estate Trustees, Justice I.R. Smith stated that given the Estate Trustees’ obvious animosity and their inability to co-operate, one of them should be removed. As Angela had offered to renounce her position as Estate Trustee more than once (although had not followed through) and had not brought a removal application against Sam and Ed, it was most sensible to remove her. However, Justice I.R. Smith did also note that Angela’s conduct had been the chief impediment to administering the Estate.

This case serves as a reminder of the importance of acting reasonably in the best interests of the estate and the beneficiaries throughout the administration process.

Thanks for reading!

Darien Murray