Case between siblings arises from suit over land, marina business claims
The Ontario Court of Appeal has varied a decision to remove a man’s personal liability for a $100,000 loan from his sister to settle prior litigation brought by their eldest brother and reflect that the estate was solely liable.
In Macpherson v. Wyszatko Estate, 2025 ONCA 576, a couple purchased land in East Gwillimbury and built two marinas on it in 1963. They had five children named Teddy, Julia, Richard, Irene, and Edmund.
The father passed away in 1990, with his will leaving half of his interest in the marina business to Teddy. In 2010, after a dispute, Teddy sued his mother and his siblings except Julia.
In 2011, the mother executed a will leaving the business to Richard and dividing the rest of the estate among her children except Teddy. She named Julia, Richard, and Irene her estate trustees. She died a year later.
In 2014, Teddy settled his lawsuit for $485,000 and released all his claims to the land and the business. Richard took charge of the marina operations and registered the business in his own name. He made Julia and Irene pay $100,000 each for the settlement of Teddy’s suit.
Julia later applied to the Ontario Superior Court of Justice for directions. In June 2023, Justice Suzan Fraser ruled mostly in Julia’s favour and ordered Richard and Irene to pay her $104,722.39 in partial indemnity costs.
The judge directed Richard to pay the estate $2,000 in monthly occupation rent and noted that an appraisal could set an appropriate amount if the parties disagreed on the quantum.
On appeal, Richard asked the appeal court to order a new hearing and set aside the cost award. He alleged that the judge made palpable and overriding errors in determining the facts and costs, failed to give the proper weight to some evidence, and improperly exercised her discretion.
Appeal denied
The Court of Appeal for Ontario dismissed the appeal except to vary the first and second paragraphs of the application judge’s final order to remove Richard’s personal liability for the loan, legal fees, and interest, and state that only the estate was liable for those amounts.
First, the appeal court rejected Richard’s argument that Julia was not entitled to repayment for the fees she paid to lawyers or the interest she spent on the loan. The appeal court ruled that the judge correctly found that Julia was not party to the proceedings with Teddy and had no obligation to finance the settlement.
The appeal court noted that the judge said Julia made the loan to the estate, but asked both the estate and Richard personally to pay the loan, interest, and fees. The first and second paragraphs of the judgment then directed the estate and Richard to pay the loan.
The appeal court held that the estate should pay the loan, legal fees, and interest, given that Richard had no personal liability to pay those sums.
Second, the appeal court disagreed with Richard’s assertion that the judge erroneously ordered him to pay the estate occupancy rent when she had no evidence before her regarding this issue.
The appeal court deemed the judge justified in directing Richard to pay occupation rent and determining that he ran the marinas for his own benefit, not on the estate’s behalf.
The appeal court ordered Richard to comply with his obligation to pay rent. The appeal court directed the parties to abide by the appraisal procedure the judge provided and request the appointment of an estate trustee to tackle this issue if none existed.
