“Sections 5 and 37 of the Trustee Act, RSO 1990 c. T23, specifically allow the court to order that a trustee or personal representative be removed upon any ground upon which the court may remove any other trustee, and appoint a new trustee in substitution. The relevant parts of these sections read as follows:
5(1) The Superior Court of Justice may make an order for the appointment of a new trustee . . . in substitution for . . . any existing trustee.
37 (1) The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee, and may appoint some other proper person or persons to act in the place of the executor or administrator so removed.
Justice Quinn in Radford v. Wilkins, 2008 CanLII 45548 (ONSC), summarized the relevant factors to be considered when an application is brought to remove a trustee pursuant to the Trustee Act. Although Quinn J. was dealing with a request to remove an estate trustee in that case, his analysis equally applies in the context of requests to remove any trustee. He said:
jurisdiction to remove
[97] The Superior Court of Justice has inherent jurisdiction to remove trustees: see St. Joseph’s Health Centre v. Dzwiekowski, 2007 CanLII 51347 (ON SC), [2007] O.J. No. 4641 (S.C.J.) at para. 25.
[98] In addition, the Superior Court of Justice may remove a personal representative “and may appoint some other proper person or persons to act in the place of the executor . . . so removed”: see s. 37(1) of the Trustee Act.
by whom to be brought
[99] An application to remove an executor may be made by “any person interested in the estate of the deceased”: see s. 37(3) of the Trustee Act.
choice of estate trustee not to be lightly interfered with
[100] “The Court should not lightly interfere with the discretion exercised by a person in choosing the person or persons to act as his executors and trustees”: see Re Weil, 1961 CanLII 157 (ON CA), [1961] O.R. 888 at 889 (C.A.).[14]
clear necessity for removal must be established
[101] Interfering “with the discretion and choice of a person in preparing his last will and testament must be not only well justified but . . . must amount to a case of clear necessity”: see Re Weil, ibid.
removal must be the only course to follow
[102] Removal of an estate trustee should only occur “on the clearest of evidence that there is no other course to follow”: see Crawford v. Jardine, [1997] O.J. No. 5041 (Ont. Ct. (Gen. Div.)) at para. 18, citing Re Tempest (1866), L.R. 1 Ch. 485 and Re Owen (1989), 33 E.T.R. 213 at 215 (B.C.S.C.).
removal to be guided by welfare of beneficiaries
[103] In deciding whether to remove an estate trustee, “the court’s main guide should be the welfare of the beneficiaries”: see Crawford v. Jardine, ibid, citing Letterstedt v. Broers (1884), 9 App. Cas. 371 at 385-387 and Re Anderson (1928), 35 O.W.N. 7 at 8 (H.C.J.).
non-removal must likely prevent proper execution of trust
[104] “It is not every mistake or neglect of duty on the part of the trustees which will lead to their removal. It must be shown by the applicant that the non-removal of the trustee will likely prevent the trust from being properly executed”: see Crawford v. Jardine, ibid.
[105] “[I]t is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to [remove trustees]. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty or a want of proper capacity to execute the duties, or a want of reasonable fidelity”: see Letterstedt v. Broers, ibid, quoting s. 1289 of Story’s Equity Jurisprudence.
removal not intended to punish past misconduct
[106] “The authorities are, I believe, consistent in placing the emphasis on the future administration of the estate, and the risks to which it will be exposed if the trustee remains in office. The question is whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries. The sanction of removal is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 28.
[107] But, “past misconduct that is likely to continue will often be sufficient to justify removal . . .”: see St. Joseph’s Health Centre v. Dzwiekowski, supra, at para. 29.
delay by estate trustee
[108] Where delay is the complaint, the question becomes whether the delay has compromised the estate in any manner and whether it will be repeated.
[109] As well, have the delays been reasonably explained and, if so, should they be excused?
friction alone not a reason for removal
[111] “. . . friction alone is not itself a reason for the removal of trustees”: see Re Joss (1973), 2 O.R. 128 (H.C.J.) at para. 8, citing Letterstedt v. Broers, ibid.
[112] “The question is whether it would be difficult for the trustee to act with impartiality, not whether, in fact, [the trustee] would or would not do so”: see Re Shaw Co. Ltd, 1922 CanLII 97 (SK QB), [1922] 68 D.L.R. 616 (Sask. K.B.), citing In re Lamb; Ex parte Board of Trade, [1894] 2 Q.B. 805 per Lord Esher, M.R.
[113] Friction between co-estate trustees is likely to warrant the removal of either or both of them because it is prone to impact the decision-making process. However, this is a more remote likelihood where the friction is between a trustee and a truculent beneficiary. Of course, in either case, the friction must be of such a nature or degree that it prevents, or is likely to prevent, the proper administration of the trust.”