In Muscat v. Muscat Estate, 2025 ONCA 518[1]., the Court upheld the removal of two estate trustees, following their mishandling of a proposed sale of estate assets to a buyer with a personal connection. In MacBeth Estate v. MacBeth, 2025 ONCA 360[2]., it upheld the removal of trustees after they sold a family cottage without notifying the sole beneficiary, triggering massive tax consequences. In both cases, the Court emphasized that fiduciary duty is a living obligation, not simply a matter of statutory authority.
Muscat v. Muscat Estate: Conflict Ignored, Oversight Invited
Muscat arose from the estate of Dan Muscat, whose primary assets included a jewelry business and its associated real property. His will named Armstrong and Tully as estate trustees, and his son Alexander Muscat—then 16 years old—as the sole residual beneficiary. In February 2023, Armstrong’s romantic partner, Steve Malizia, offered to buy the business for $400,000, well below the $515,000 valuation previously obtained for probate. Alexander, through counsel, objected on the grounds of Armstrong’s conflict of interest and requested that she resign.
Despite these warnings, the trustees recommended acceptance of Malizia’s offer, stating it was the “best available option.” They did not obtain an independent appraisal, conduct any market exposure, or explore alternative purchasers. When Alexander requested Armstrong resign, she refused. Alexander commenced an application for their removal and provided a new valuation indicating the business could be worth as much as $911,550.
The application judge found that Armstrong’s relationship with Malizia created an undisclosed conflict of interest. The trustees’ failure to obtain a fair market valuation or to explore other offers constituted a breach of their fiduciary duties. The court removed both trustees and ordered them to personally pay $56,693.01 in for trial costs and an additional $22,703.44 awarded for the appeal, though it declined to impose further liability under the Trustee Act. The Court of Appeal upheld that decision, confirming that the appearance of partiality, particularly when trustees recommend action in favour of someone with whom one has a romantic relationship, undermines the integrity of estate administration.
MacBeth Estate v. MacBeth: Process Failure, Financial Fallout
In MacBeth Estate v. MacBeth, the Court reviewed a removal order made against Robert and Catherine Hurst, who had been appointed trustees of the estate of Ruth MacBeth. Ruth’s son, John MacBeth, was the sole beneficiary. The estate’s principal asset was a family cottage. The Hursts sold the cottage to a third party without notifying John or offering him the opportunity to acquire it himself. John alleged they obstructed him from retrieving personal belongings from the property prior to the sale, and an expert later confirmed that the sale triggered an avoidable $600,000 capital gains tax.
John brought a motion for their removal. Although the trustees sought an adjournment citing Robert Hurst’s health, the motion judge denied the request and proceeded. During argument, both parties introduced prior settlement offers—John had offered a $100,000 holdback; the Hursts had offered to resign in exchange for a $450,000 holdback. The judge removed the Hursts and imposed a $50,000 holdback to preserve estate funds for potential claims. After John passed away, his estate trustee, Earl Patrick Shea, assumed carriage of the litigation.
On appeal, the Hursts argued that the removal and holdback orders were procedurally unfair. The Court of Appeal rejected that position. It held that the Hursts had ample notice and opportunity to address the issues. The motion judge properly exercised her discretion in removing them, given the breakdown in trust, their failure to communicate, and the preventable $600,000 capital gain liability. It also upheld the $21,000 personal cost award against them, finding the appeal was unnecessary and not brought in the estate’s interest.
The Common Thread: Trust Is the Foundation
Read together, Muscat and MacBeth emphasize that trusteeship is not merely about legal authority—it is about trust, transparency, and a duty to act in the best interests of beneficiaries at all times. Both cases involved trustees who made significant decisions—selling estate assets—without adequate disclosure, valuation, or consultation. Neither case involved embezzlement or theft. The harm arose from a breakdown in process, exacerbated by denial, delay, and a refusal to acknowledge conflict.
These were avoidable outcomes. Had the trustees paused to disclose relationships, seek appraisals, consult with beneficiaries, or engage in facilitated discussions, both matters might have resolved without litigation. Instead, positions hardened, costs escalated, and trustees were ultimately removed with personal financial consequences.
Why Mediation Matters
Mediation offers a different path. In estates involving blended families, commercial assets, or strained relationships, neutrality and confidentiality can make the difference between a repairable misunderstanding and years of litigation. Mediation allows trustees and beneficiaries to safely explore concerns, understand obligations, and prevent errors in administration before they spiral into courtroom battles.
At Patey Mediations, we offer estate-specific mediation services grounded in legal insight and impartial process management. Whether you’re a trustee facing scrutiny, a beneficiary seeking clarity, or counsel looking for a productive alternative to removal motions, we can help parties regroup before irreparable steps are taken.
Fiduciary duty isn’t just a legal standard—it’s a living obligation. When it’s threatened, early mediation may be the last, best chance to preserve it.