Ontario Court Rules on Trustee Dispute, Reduces Fees, and Examines Litigation Cost

Case:  Antzon v. Rogovsky, 2025 ONSC 915 (CanLII)

Faina Rogovsky passed away on December 24, 2016, leaving a last will and testament dated December 20, 2016. The will was not contested and named her son, Josef Rogovsky, as the sole estate trustee. The will provided that Josef and his sister, Elena Antzon, would share equally in the residue of the estate.

The estate’s primary assets included a condominium in Etobicoke, Ontario, known as the Annie Craig Property, and a condominium in Acapulco, Mexico, which was later determined to have no market value due to outstanding liabilities. The estate also included a safety deposit box containing jewelry.

Josef began administering the estate by consolidating estate assets into a bank account, managing the properties, and providing updates to Elena. Initially, the siblings worked together, but tensions arose over delays in selling the Annie Craig Property. Josef explained that the COVID-19 pandemic affected the timing of the sale. By late 2022, communications between Josef and Elena had deteriorated, leading to litigation in 2023.

Elena filed an application to remove Josef as estate trustee, alleging that he mismanaged the estate and failed to distribute assets fairly. She also requested an interim passing of accounts and raised multiple objections, including whether Josef should be reimbursed for $86,870.68 he advanced to the estate (later narrowing her challenge to $6,925.07) and whether Josef was entitled to trustee compensation of $51,669.57.

Josef responded with an application for an interim passing of accounts to seek approval of his administration. Elena initially raised seventy-one objections but later reduced them to two key issues: Josef’s claim for reimbursement and his entitlement to trustee compensation.

Decision

Justice Sanfilippo dismissed Elena’s application to remove Josef as estate trustee. In the lead-up to the hearing, Elena abandoned almost all of her claims, including the removal application. The judge found no basis to remove Josef, as there was no evidence that he mismanaged the estate or acted improperly.

Josef’s passing of accounts was approved, with minor modifications. The court determined that Josef should be reimbursed $6,925.07 for estate expenses he personally covered. While the judge noted that Josef’s approach—making numerous small loans to the estate—was not the most efficient way to manage expenses, there was no reason to deny him reimbursement for money he had actually spent.

Josef’s request for trustee compensation was partially granted. While he initially sought $51,669.57, the court reduced this amount to $32,000.00 plus HST. In reaching this decision, the judge removed certain transactions from Josef’s calculations, including registered accounts that passed outside the estate. The court also considered whether Josef’s handling of estate funds unnecessarily complicated the administration and concluded that a reduction in compensation was appropriate.

The issue of costs was left to be determined at a later hearing. The court noted that the litigation had become disproportionately extensive relative to the financial matters at stake.

Significance of the Case

This decision highlights key issues in estate administration, particularly in disputes between trustees and beneficiaries. It reaffirms that a trustee will not be removed without clear evidence of wrongdoing. The ruling also underscores that while trustees are entitled to fair compensation, their actions in managing the estate can influence the amount they ultimately receive.

The case further demonstrates the importance of proper record-keeping in estate administration. Josef’s practice of advancing small amounts to the estate and then reimbursing himself made the accounting more complicated than necessary. Although he was still entitled to compensation, the court reduced the amount to reflect these inefficiencies.

Finally, the decision serves as a cautionary example of how estate disputes can escalate into costly and unnecessary litigation. Despite filing numerous objections, Elena abandoned most of her claims before the hearing, and the remaining financial issues were relatively minor. The court’s comments on costs suggest that excessive litigation over small disputes may not be looked upon favorably.

This case is a reminder that trustees should maintain clear records, communicate transparently, and manage estate assets efficiently. It also demonstrates that courts will generally uphold a testator’s choice of trustee unless there is strong evidence to justify removal.

In estate litigation, courts have discretion in awarding costs, and the general principles governing cost awards in passing of accounts cases are:

• If an estate trustee is successful, their legal costs are typically paid from the estate unless their conduct is found to have contributed to the dispute.
• If a beneficiary raises legitimate concerns about estate administration, they may also be entitled to costs from the estate.
• If litigation is found to be unnecessary or excessive, the unsuccessful party may be ordered to personally bear some or all of the costs.

In this case, Josef, as estate trustee, largely prevailed. Elena’s removal application was dismissed, and she abandoned most of her claims before the hearing. The court approved Josef’s passing of accounts, with minor modifications, and awarded him a reduced but still significant amount of trustee compensation. Given these findings, it is likely that Josef will seek to have his legal costs paid from the estate.

Elena, on the other hand, aggressively pursued 71 objections, yet only two remained for adjudication. Since most of her claims were abandoned, she risks an adverse cost award. If the court determines that her litigation tactics were excessive or unreasonable, she could be ordered to personally cover some of the estate’s legal expenses, rather than having them deducted from estate funds.

The court’s comments on costs suggest that it will carefully scrutinize whether the legal expenses incurred were justified. When a party abandons most of their claims before trial, it strongly indicates that the litigation could have been avoided or resolved earlier. Beneficiaries who engage in broad, unfounded objections run the risk of being penalized in costs.

Trustees also need to be mindful of cost consequences. If a trustee mismanages the estate or fails to keep clear records, they may be personally responsible for legal costs incurred due to their own actions. However, in this case, Josef was found to have administered the estate properly, meaning he is in a strong position to seek costs from the estate, rather than personally.

This case serves as a reminder that estate litigation can be extremely costly, and both trustees and beneficiaries should take steps to avoid unnecessary expenses:

• Beneficiaries should carefully assess their claims before proceeding to litigation. Raising excessive objections, only to abandon them later, can result in an adverse cost award.
• Trustees should ensure their records are clear and transparent, reducing the likelihood of disputes that require judicial intervention.
• Early mediation or negotiation may prevent estate funds from being depleted by litigation costs.
• Lawyers should warn clients about cost consequences, particularly when the legal fees risk outweighing the amounts in dispute.

The court has reserved its final decision on costs, but given that Josef was largely successful, Elena may face significant cost consequences for pursuing an overly aggressive litigation strategy that yielded minimal results.

At Bobila Walker Law, we focus on estate litigation, including passing of accounts, trustee compensation disputes, and trustee removal applications. Daniel Walker is an experienced estate litigation lawyer, ensuring estates are administered properly while protecting the rights of trustees and beneficiaries.

If you require assistance with an estate dispute, passing of accounts, or trustee-related matters, contact us at 416-847-1859 to discuss your case and explore the best path forward.