Ontario Court Urgently Removes Estate Trustee at Case Conference Over Health Concerns and Non-Compliance

Ontario Court Urgently Removes Estate Trustee at Case Conference Over Health Concerns and Non-Compliance

Case Summary: Panchyshyn v. Pietron

Overview

In the Ontario Superior Court of Justice case Panchyshyn v. Pietron (April 15, 2025), Justice FL Myers issued an endorsement addressing an urgent case conference concerning the administration of the estate of Mike Panchyshyn. The Applicants, Joe and Ted Panchyshyn, sought to remove their sister, Kathryn Pietron, as the executrix and trustee of their late father’s estate due to delays and non-compliance with court orders. The Respondent, Ms. Pietron, cited health issues as a reason to delay proceedings.

Background

The Applicants initiated legal action in 2023 to compel Ms. Pietron to produce their father’s will, prevent her from disposing of estate assets, and pass her accounts. Key issues included delays in providing the will and listing the estate’s major asset—a farm property—for sale, which required two court orders. A consent order by Justice Dietrich on November 27, 2024, mandated disclosure of specific documents within 30 days, but Ms. Pietron failed to comply.

Case Conference and Urgent Hearing

During a case conference on April 2, 2025, the Applicants sought to schedule a motion to remove Ms. Pietron as estate trustee. Ms. Pietron requested an adjournment, citing a doctor’s note (unsworn and redacted) indicating she needed a 12-week leave due to significant health challenges. Justice Myers expressed concern that her health prevented her from fulfilling her duties, including complying with the disclosure order and managing the farm’s sale. An urgent hearing was scheduled for April 7, 2025, to address her health claims and the estate’s administration.

Key Issue: Ms. Pietron’s health-related request for a delay raised urgent concerns about her ability to manage the estate, particularly with the farm actively listed for sale.

Outcome of the Urgent Hearing

At the April 7, 2025 hearing, Ms. Pietron provided some of the outstanding disclosures but did not present medical evidence to support her health claims, citing privacy concerns. Justice Myers found her assertion of intending to fulfill her duties inconsistent with her prior claim of needing months away due to health issues. Invoking the court’s inherent jurisdiction and Rule 74.15 of the Rules of Civil Procedure, the court:

• Removed Ms. Pietron as executrix and trustee on an interim basis to protect the estate’s administration, pending the Applicants’ motion for permanent removal or further court order.
• Appointed Joe and Ted Panchyshyn as interim executors and trustees, vesting the estate’s property in them.
• Reserved costs for the judge hearing the permanent removal motion.

Justice FL Myers relied on a combination of statutory provisions, procedural rules, and the court’s inherent jurisdiction to justify the interim removal of Kathryn Pietron as estate trustee and the appointment of the Applicants as interim executors and trustees. Below is an overview of the key legal authorities and principles cited in the endorsement, with hyperlinks to the relevant legislation and case law where available:

1. Trustee Act, RSO 1990, c T.23
   • Justice Myers referenced sections 5 and 37 of the Trustee Act, which provide the court’s authority to remove and appoint trustees. These sections allow for a final order to remove a trustee but were noted as not directly applicable for an interim removal due to procedural requirements, such as naming all beneficiaries as parties (Rule 9.01(2)(c) of the Rules of Civil Procedure). The court determined that a final removal under the Trustee Act was inappropriate at this stage, as only three of the 22 residuary beneficiaries were parties to the proceeding (para. 26–30).
   • Principle: The court exercises caution in removing a trustee chosen by the testator, requiring clear evidence that the trustee’s actions endanger the trust’s administration, as supported by Meuse v. Taylor, 2022 ONSC 1436 (para. 28).
2. Rules of Civil Procedure, RRO 1990, Reg 194
   • The court invoked Rule 50.13(6) to justify making an interlocutory order at a case conference. This rule empowered the court to address the urgent situation caused by the Respondent’s health-related inability to fulfill her duties, as notified in the April 2, 2025, endorsement (para. 33).
   • Additionally, Rule 75.06(3)(f) was considered, which allows for the appointment of an estate trustee during litigation. Although the Respondent’s counsel argued this rule was inapplicable without a grant of probate, Justice Myers left open the possibility of its relevance but did not rely on it directly (para. 36).
   • Rule 74.15(1)(i) was cited as supporting the court’s authority to make “an order providing for any other matter that the court directs” in estates proceedings, providing a flexible basis for the interim order (para. 42).
3. Estates Act, RSO 1990, c E.21
   • The court considered section 28 of the Estates Act, which allows for the appointment of an administrator pending litigation over a will’s validity or probate. However, this provision was deemed inapplicable since the dispute did not involve the validity of the will or a grant of probate (para. 35).
4. Inherent Jurisdiction of the Court
   • Justice Myers relied heavily on the court’s inherent jurisdiction to ensure fairness and protect the welfare of beneficiaries, particularly in the absence of a specific statutory or procedural rule authorizing an interim removal. This jurisdiction includes the duty to safeguard the estate’s administration from endangerment, such as the Respondent’s admitted inability to manage the farm sale or comply with prior court orders (para. 41).
   • The court cited Gonder v. Gonder Estate, 2010 ONCA 172 (paras. 21, 24, 41, and 42) and Mayer v. Rubin, 2017 ONSC 3498 (paras. 26–33) to support the principle that the court can intervene to protect beneficiaries when a trustee’s actions or inactions pose an urgent risk (para. 41).
5. Fiduciary Duties and Beneficiary Welfare
   • The court emphasized the paramount importance of the welfare of the beneficiaries, a principle guiding trustee removal cases. The Respondent’s health-related submission that she required a three-month leave from her duties created an urgent risk to the estate, particularly with the farm property actively listed for sale and outstanding disclosure obligations under a prior court order (para. 40). This risk justified the interim intervention, consistent with the court’s duty to ensure proper estate administration.

Analysis

Justice Myers carefully distinguished between a final removal under the Trustee Act, which requires a formal application with all beneficiaries as parties, and an interim removal necessitated by the urgent circumstances presented at the case conference. The absence of a specific rule or statute for interim removals was addressed by invoking the court’s inherent jurisdiction and the flexible authority under Rule 74.15(1)(i). The decision balanced the testator’s choice of trustee with the immediate need to protect the estate, particularly given the Respondent’s health-related incapacity and the critical stage of the farm sale process.

Significance

This case highlights the court’s authority to act swiftly to protect estate beneficiaries when an executor’s health or inaction jeopardizes the administration of estate assets. It underscores the importance of compliance with court orders and the court’s willingness to use its inherent jurisdiction to ensure fairness and proper estate management, even on an interim basis.

Date of Endorsement: April 15, 2025
Court: Ontario Superior Court of Justice
Judge: FL Myers J