Judge designated trust corporation as estate trustee, family trust’s replacement trustee
The Ontario Court of Appeal has ordered a stay pending appeal of the provisions of a judge’s order replacing the trustees, upon finding that removing trustees whom the deceased individual specifically chose was a serious issue for determination.
In Di Santo v. Di Santo Estate, 2022 ONCA 671, the application judge issued an order doing the following:
- removing John Di Santo, Carmela Di Santo, Stacy Mitchell, and Tony Di Poce as estate trustees for Vincent Di Santo’s estate
- removing John, Mitchell, and Di Poce as trustees of the Vincent Di Santo 2003 family trust
- ordering CIBC Trust Corporation to be the estate trustee during litigation and the family trust’s replacement trustee
- requiring OJCR Construction Ltd. to make certain interim funding payments to the respondent, Ottavio Di Santo
- awarding the respondent the application’s costs of $80,000.
John, Carmela, Mitchell, Di Poce, and OJCR filed an appeal, set to be heard on Dec. 7, challenging the order’s provisions removing and replacing the trustees. The parties brought three motions in the interim:
- the appellants sought a stay of the order’s provisions removing the named trustees and replacing them with CIBC Trust, pending the appeal’s disposition
- the respondent requested an order lifting a stay of the costs order
- the respondent asked for an order quashing or staying the appeal.
The Ontario Court of Appeal granted the appellants’ stay motion by staying the following portions of the application judge’s order: paragraphs 1 to 35, the part of paragraph 36 requiring OJCR to make payments to the respondent, and paragraphs 37 and 38. The appellate court dismissed the respondent’s two motions.
Appellant’s stay motion granted
It was in the interests of justice to stay the order’s provisions removing and replacing the trustees, given that all three factors of the test in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 favoured a stay, the appellate court said.
First, the court determined that the appeal raised a serious issue – specifically whether the application judge improperly removed and replaced the trustees named by the deceased person. This case involved $70 million in assets and a complex relationship among certain entities – the estate, the family trust, and their underlying businesses. These circumstances magnified the concerns about the intrusion on the deceased’s intention, the court said.
Second, the court decided that the administration and financial health of the entities would potentially suffer irreparable harm, including through enormous business disruptions and financial upheaval, if a stay was not ordered.
Lastly, the court found that the balance of convenience clearly favoured granting the stay. The respondent would suffer no prejudice, the court said.
Respondent’s motions dismissed
The appellate court dismissed the motion to lift the stay of the costs order. The court saw no basis for lifting the stay because filing the appeal automatically stayed the costs order under r. 63.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
The motion to quash or stay the appeal also failed for two reasons. First, the court ruled that the appeal should not be quashed for lack of jurisdiction. Since the appellants were challenging the trustees’ removal and replacement, the appellate court had the jurisdiction to hear those orders, which were final.
Second, the court held that the appellants did nothing to disentitle them from moving forward with their appeal. They made all the payments that the judge’s order required and acted reasonably and promptly in connection with the order’s other aspects, including regarding the disclosure and passing of accounts.
