When a court gives a party a specific direction or order, it must be followed and complied with. However, it is not uncommon for a party to act contrary to such direction or to fail to adhere to the specific requirements of an order. A recent decision from the Ontario Superior Court of Justice shows that even in matters of estate litigation, a trustee who ignores a court order might find themselves in a precarious financial situation.
Trustee fails to follow testator’s directions in will
In the case of Queripel v Shaddock, the deceased died in February 2002 and was survived by her three children and five adult grandchildren. The deceased had a will, dated June 28, 1996, which was not challenged. On August 8, 2022, the deceased’s daughter, “LQ,” and another individual (“LE”) obtained a Certificate of Estate Trustee with a Will to act as Estate Trustees of the deceased’s estate.
The deceased’s will provided that a fund was to be set aside for “RS,” who was the deceased’s son. He was never married and did not have any children. The fund was to be comprised of $50,000 as well as the deceased’s residence, which RS was to be able to live in until he passed away. The money was supposed to be added to a trust from which RS could draw upon. In addition, should RS decide he no longer wished to live in the deceased’s house, it was to be sold with the proceeds added to the trust so that he may find another place to live.
Brother of trustee moves into new residence
The will also provided that upon RS’ death, the deceased’s residence was to be sold with the net sales proceeds being added to the fund, which would then be distributed in equal shares amongst the living grandchildren once they reach 21 years of age.
The remainder of the estate was divided into three equal shares, with each of the deceased’s children receiving an equal share.
In 2002, RS decided that he wanted to move, and the Estate Trustees purchased a condominium for him in October, where he lived until his death in 2022. LQ’s co-trustee passed away between purchasing the new home and RS’s death, leaving LQ to act alone in this capacity.
Trustee fails to communicate with all beneficiaries
Despite the deceased’s will directing that her residence be sold upon RS’ death, with the funds to be distributed amongst all surviving grandchildren, the Court learned that, except for a single email on March 31, 2023, the trustee had not communicated with the three grandchildren who were not her own children. Even when email correspondence was sent, it was the trustee’s daughter who reached out on her mother’s behalf.
While there was no contact between the trustee and the other three grandchildren, the trustee had received communication from the Court. The Court wrote that a title search had been done on the property which RS resided in, which showed that a title lien had been registered against the property for payment of condo fees and expenses. The moving parties in this case, namely the deceased’s surviving son and his three children, wrote to the trustee in February 2022, asking for an accounting and explanation of the lien.
Beneficiaries seek removal of estate trustee
In April 2022, the trustee was served with a Motion Record requesting an order for her to pass her accounts and subsequently commence the distribution of estate assets. This order was made in June 2022 but went unanswered.
In July 2022, the trustees’ surviving brother and his three children paid the outstanding condo fees and expenses in the amount of $6,366 to discharge the lien registered against the condominium. This action was followed up by a motion to remove the trustee from her position in November 2022.
By the time that motion was heard in December 2022, the trustee acknowledged that she had received all communications from the moving parties but that she needed more time to get her accounting in order. Nevertheless, the Court removed her as Estate Trustee and appointed her surviving brother, “CS”, as the succeeding Estate Trustee.
Beneficiaries seek punitive damages
The moving parties sought damages of $175,147 to compensate them for property taxes, condo fees, legal expenses, banking fees and more, as the legal fees alone, which LQ incurred, accounted for nearly $126,000. They also sought punitive damages of $100,000, which are damages designed to act as a punishment against a party. In support of this claim, CS and his children claimed that there had been significant in resolving this issue, substantial expenses incurred, and LQ, in her capacity as Estate Trustee, provided no communication to the parties, nor did she act in compliance with previous court orders.
The Court noted that as the Estate’s Trustee, LQ had a fiduciary duty to the estate and its beneficiaries. The Court found that the trustee breached her fiduciary duty by failing to communicate with the beneficiaries for 20 years between the death of her mother and her removal as Estate Trustee.
Further, the Court noted LQ’s failure to provide an accounting to the beneficiaries was a factor to consider, in addition to the fact that she resided at the condominium RS lived in following his death and did not pay rent during that time.
Court orders punitive damages against former estate trustee
Overall, the Court found that CS and his children had incurred substantial expenses as a result of the former Estate Trustee’s failure to meet her fiduciary duties and administer the estate in accordance with the will.
The Court ordered LQ to pay damages to the estate of $175,147.98 due to a breach of fiduciary duty, in addition to punitive damages in the amount of $50,000.
Contact the Litigation Lawyers at Campbell Litigation for Trusted Representation in Estate Disputes
The experienced estate litigation team at Campbell Litigation, led by Richard Campbell, understands that estate disputes can be time-consuming, expensive, and emotionally draining during a difficult time. It is common for us to work with beneficiaries and trustees seeking to enforce a will, trust, or estate or challenge one. To speak with a member of our team regarding estate administration or estate dispute concerns, call us at 519-886-1204 or reach out to us online.
