In the recent decision of MacBeth Estate v. MacBeth, 2025 ONCA 360, the Court of Appeal ordered the Appellants, two former estate trustees removed under a prior Court Order, to pay $21,000.00 in costs personally. This decision exemplifies the consequences estate trustees face should they pursue unnecessary litigation, underscoring the Court’s focus on safeguarding beneficiaries’ best interests.
The Appellants argued that the motion judge erred by denying their request for an adjournment, fixing a holdback amount from the estate without hearing submissions on the proper amount, and removing them as estate trustees. Although the Court dismissed the appeal in its entirety, today’s blog focuses on the Appellants’ latter challenge.
In dismissing the appeal, the Court found no error in the motion judge’s decision to remove the Appellants as estate trustees, emphasizing that such a decision is discretionary and is afforded a high degree of deference. Acknowledging that the test for removing an estate trustee presented a high bar, the Court found that the motion judge correctly set out and applied the test, recognizing that a trustee could only be removed on the clearest of evidence.
In this instance, the motion judge found that, based on the evidence before her, the sole beneficiary had lost all trust in the Appellants for several reasons. For example, the motion judge found that the Appellants had made it difficult for the beneficiary to collect his belongings from the family cottage before selling it. Additionally, the motion judge accepted the expert evidence tendered by the beneficiary that the Appellants unnecessarily triggered a $600,000.00 capital gains tax by selling the cottage to a third party, despite being warned beforehand that tax consequences would ensue.
Accordingly, the motion judge held that “[s]ince the interests of the beneficiaries must be the primary concern of the Court, it is apparent that [the Appellants] should be removed.” The Court found ample evidence supporting the motion judge’s finding that, in the future, it is very likely the Appellants would mishandle the estate, thereby justifying their removal.
In the Court’s view, this appeal was unnecessary as it was not brought in the interests of the estate and depleted estate assets without justification. Consequently, the Court imposed costs personally against the Appellants in the amount of $21,000.00.
For estate trustees, the Court’s decision sends a clear message: exercise prudence and diligence in decision-making, seek legal advice, and thoroughly evaluate the merits of any legal action before proceeding. Trustees should consider whether the action is necessary, whether it benefits the estate, and whether it aligns with their fiduciary duties as a failure to do so could result in personal financial liability.
In conclusion, MacBeth Estate v. MacBeth demonstrates the Court’s ongoing readiness to hold estate trustees personally accountable.
Thanks for reading,