You have an emotional connection to your late grandfather’s cottage. Your mother and your grandfather’s estate trustees hate each other. You don’t think that they will treat you fairly if you want to buy the cottage. Is this sufficient reason to remove the estate trustees? The Ontario Superior Court of Justice’s answer is “No”.
In Woolnaugh v Dare et al, 2016 ONSC 4013, one of the testator’s grandchildren applied to court to remove the two estate trustees. The applicant and her family had enjoyed the use of the testator’s cottage for many years. The cottage was not mentioned in the testator’s will but the testator left a signed memorandum which indicated his wish that the applicant be allowed to use the cottage until the end of the summer of 2015. Although not bound by this precatory language, the estate trustees allowed the applicant to occupy the cottage until September 2015, at which point they intended to sell it.
The deadline passed and instead of vacating the cottage, the applicant commenced an application for an interlocutory injunction to restrain the sale, allow the applicant to use the cottage rent free until the end of October 2016 and remove the estate trustees.
The interlocutory injunction was rejected and the applicant left the cottage. The only issue that remained before the court was the removal application.
The applicant argued that there was a decade long rift between her mother and the estate trustees, including litigation. As such, the court should draw a reasonable inference that the estate trustees transferred their antipathy towards the applicant, which would in turn adversely affect her ability to purchase the cottage for fair market value. The applicant said that her emotional attachment to the cottage gave her an interest in it which went beyond her interest as a beneficiary of the estate.
The Court rejected the applicant’s position, holding that the evidence provided would not support the court to exercise its discretion to remove an estate trustee in accordance with the following principles:
(1) the court will not lightly interfere with the testator’s choice of estate trustee;
(2) clear evidence of necessity is required;
(3) the court’s main consideration is the welfare of the beneficiaries; and
(4) the estate trustees’ acts or omissions must be of such a nature as to endanger the administration of the trust.
The applicant’s emotional attachment to the cottage did not provide her with a higher legal interest in the cottage than any of the other beneficiaries. Instead, the estate trustees owed a duty to the applicant and the other beneficiaries to realize the estate assets, including the cottage, at the highest possible value. There was no evidence that the estate trustees’ plan to list the cottage for sale would prevent the applicant from submitting an offer to purchase it, nor that the estate trustees would refuse to accept an offer from the applicant which beat other competitive offers (and while not noted by the court, if the estate trustees did so, the applicant and the other beneficiaries would have their remedies against the estate trustees).