In the decision of CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al (“Szewczyk”),[1] the Court considered discretionary actions taken by a trustee of a testamentary trust.
Background
Szewczyk concerned the Estate of Jennie Szewczyk (the “Deceased”), who died in 2018. The Deceased was survived by her three sons, Edward Szewczyk (“Edward”), John Szewczyk (“John”) and Robert Szewczyk (“Robert”).[2]
The Deceased executed Primary and Secondary Last Will and Testaments (collectively the “Wills”), which establishes two testamentary trusts, namely:
- The John Szewczyk Testamentary Trust (the “John Trust”); and
- The Szewczyk Grandchildren’s trust (the “Grandchildren’s Trust”).
The residue of the Deceased’s Estate is bequeathed to Edward and Robert through various trust structures.[3]
The decision in Szewczyk follows a history of litigation between John and Edward concerning the testamentary trusts, specifically with regards to the calculation of the annuity that John is entitled to from the John Trust. The Grandchildren’s Trust has an interest in the annuities paid out by the John Trust because, when John dies, the residue of the John Trust flows to the Grandchildren’s Trust or, if it the Grandchildren’s Trust no longer exists, to the grandchildren themselves.[4]
CIBC Trust Corporation (“CIBC”) acts as Trustee for the John Trust. Prior decisions in this matter have been concerned the funding of the John Trust.[5] In one such decision, the Court determined that the terms of the Wills permit for the one-time indexing of John’s annuity between January 1, 2018, when the Wills were executed, and October 2018, when the Deceased passed away. After that point, the Court determined that the only increases in his annuity that John was entitled to receive were $5,000.00 increases once every five years, beginning five years after the Deceased’s death.[6]
The Court directed the overpayment owing by John. Moreover, that the overpayment was to be collected by deferring the next increase of $5,000.00 to a later date.[7]
CIBC as Trustee subsequently made calculations which John argued were miscalculated because they did not use the correct Consumer Price Index (CPI) chart and does not measure CPI from the correct date. In response, CIBC argued that calculation is a matter that is within the discretion of the Trustee.[8]
Legal Issue
The central issue for the Court to determine was whether CIBC as Trustee had discretion to determine the calculation of the indexing factor.
The Court highlighted the following passage by Justice Cullity in Trustees’ Duties, Powers and Discretions – Exercise of Discretionary Powers:
The settlor or testator is relatively free to define the scope of a power as he pleases and the ability of the trustee to exercise it in a particular manner may depend not only on its terms but on the overall context provided by other provisions of the trust instrument, the purpose – often unstated or stated only in the most general terms – for which the power was conferred, the nature of the trust property and the changing circumstances of the beneficiaries.[9]
This has been the historic approach taken by Courts in Ontario. For instance, in the 1933 decision of Re: Rutherford,[10] Court of Appeal found that the power of a trustee to convert property “as they see fit” created a discretion as to the manner of the conversion but not as to the time of the conversion.[11]
The Deceased’s Wills both include provisions on the Indexing Factor and the Trustee’s discretion:
- Indexing Factor. For any given date (hereinafter in this Paragraph 42 of this Primary Will referred to as the “Relevant Date”) the “Indexing Factor” shall mean the number of dollars (expressed to the nearest one-tenth of one cent) which as at the Relevant Date shall have the same purchasing power in Canada as the sum of ONE DOLLAR ($1.00) had on January 1, 2018, provided that in no event shall the Indexing Factor be determined to be less than ONE DOLLAR ($1.00); and in so determining the Indexing Factor my Trustees shall rely, whenever possible, upon the applicable Consumer Price Index (All Items) or upon any successor index thereto, adjusted for intervening modifications; and such determination of the Indexing Factor by my Trustees shall be conclusive and binding on all the beneficiaries of my Primary Estate for all purposes of this Will.[12] (emphasis added)
This provision indicates that the Trustee of the John Trust is to use the CPI where possible but is otherwise granted discretion to make the calculation. To this point, Justice Lemay noted that:
The Trustee would have to exercise that discretion in good faith but there is no suggestion that there is any bad faith in respect of the Trustee’s calculation. Indeed, John’s counsel simply appears to be arguing that the calculation is wrong. In my view, that is not enough. In the absence of a claim of bad faith, the Trustee had the discretion to calculate this amount and exercised that discretion.[13] (emphasis added)
Accordingly, the Court found that CIBC as Trustee is entitled to an Order confirming the correctness of their calculations.[14]
Concluding Comments
The decision in Szewczyk highlights the nature of trustee decision-making and discretion awarded to them in carrying out their duties and obligations. It is worth noting that the Courts will scrutinise the discretion of a trustee when their actions are made in bad faith and in breach of their standard of care. In this regard, the following passage from Widdifield on Executors and Trustees, is instructive:
The trustee cannot be criticized for lack of training or experience, but the court will try to enforce good faith, proper motives, and a minimum of good judgment. The law requires that the trustee turn his mind to his various tasks and exhibit the same degree of diligence in the exercise of his discretion as would be expected from a man of ordinary prudence in the management of his own affairs.[15]
—
[1] CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al, 2026 ONSC 1059 (“Szewczyk”).
[2] Szewczyk at para 2.
[3] Szewczyk at para 3.
[4] Szewczyk at paras 1 and 2.
[5] See CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al, 2025 ONSC 3382 (CanLII).
[6] Szewczyk at paras 4 and 5.
[7] Szewczyk at para 5.
[8] Szewczyk at paras 6 and 7.
[9] Szewczyk at para 21.
[10] Re: Rutherford, [1933] O.R. 707 (ON CA)
[11] Szewczyk at para 22.
[12] Szewczyk at para 14.
[13] Szewczyk at paras 14 and 20.
[14] Szewczyk at para 35.
[15] Widdifield on Executors and Trustees, (6th edition) at 2.3 (emphasis added); citing Learoyd v. Whiteley (1887), 12 App. Cas. 727 (U.K. H.L.); Tabor v. Brooks (1878), 10 Ch.D.273 (Eng. Ch. Div.); Bell, Re (1923), 23 O.W.N. 698 (Ont. H.C.).
Written by: Oliver O'Brien
Posted on: March 12, 2026
Categories: Commentary
In the decision of CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al (“Szewczyk”),[1] the Court considered discretionary actions taken by a trustee of a testamentary trust.
Background
Szewczyk concerned the Estate of Jennie Szewczyk (the “Deceased”), who died in 2018. The Deceased was survived by her three sons, Edward Szewczyk (“Edward”), John Szewczyk (“John”) and Robert Szewczyk (“Robert”).[2]
The Deceased executed Primary and Secondary Last Will and Testaments (collectively the “Wills”), which establishes two testamentary trusts, namely:
The residue of the Deceased’s Estate is bequeathed to Edward and Robert through various trust structures.[3]
The decision in Szewczyk follows a history of litigation between John and Edward concerning the testamentary trusts, specifically with regards to the calculation of the annuity that John is entitled to from the John Trust. The Grandchildren’s Trust has an interest in the annuities paid out by the John Trust because, when John dies, the residue of the John Trust flows to the Grandchildren’s Trust or, if it the Grandchildren’s Trust no longer exists, to the grandchildren themselves.[4]
CIBC Trust Corporation (“CIBC”) acts as Trustee for the John Trust. Prior decisions in this matter have been concerned the funding of the John Trust.[5] In one such decision, the Court determined that the terms of the Wills permit for the one-time indexing of John’s annuity between January 1, 2018, when the Wills were executed, and October 2018, when the Deceased passed away. After that point, the Court determined that the only increases in his annuity that John was entitled to receive were $5,000.00 increases once every five years, beginning five years after the Deceased’s death.[6]
The Court directed the overpayment owing by John. Moreover, that the overpayment was to be collected by deferring the next increase of $5,000.00 to a later date.[7]
CIBC as Trustee subsequently made calculations which John argued were miscalculated because they did not use the correct Consumer Price Index (CPI) chart and does not measure CPI from the correct date. In response, CIBC argued that calculation is a matter that is within the discretion of the Trustee.[8]
Legal Issue
The central issue for the Court to determine was whether CIBC as Trustee had discretion to determine the calculation of the indexing factor.
The Court highlighted the following passage by Justice Cullity in Trustees’ Duties, Powers and Discretions – Exercise of Discretionary Powers:
The settlor or testator is relatively free to define the scope of a power as he pleases and the ability of the trustee to exercise it in a particular manner may depend not only on its terms but on the overall context provided by other provisions of the trust instrument, the purpose – often unstated or stated only in the most general terms – for which the power was conferred, the nature of the trust property and the changing circumstances of the beneficiaries.[9]
This has been the historic approach taken by Courts in Ontario. For instance, in the 1933 decision of Re: Rutherford,[10] Court of Appeal found that the power of a trustee to convert property “as they see fit” created a discretion as to the manner of the conversion but not as to the time of the conversion.[11]
The Deceased’s Wills both include provisions on the Indexing Factor and the Trustee’s discretion:
This provision indicates that the Trustee of the John Trust is to use the CPI where possible but is otherwise granted discretion to make the calculation. To this point, Justice Lemay noted that:
The Trustee would have to exercise that discretion in good faith but there is no suggestion that there is any bad faith in respect of the Trustee’s calculation. Indeed, John’s counsel simply appears to be arguing that the calculation is wrong. In my view, that is not enough. In the absence of a claim of bad faith, the Trustee had the discretion to calculate this amount and exercised that discretion.[13] (emphasis added)
Accordingly, the Court found that CIBC as Trustee is entitled to an Order confirming the correctness of their calculations.[14]
Concluding Comments
The decision in Szewczyk highlights the nature of trustee decision-making and discretion awarded to them in carrying out their duties and obligations. It is worth noting that the Courts will scrutinise the discretion of a trustee when their actions are made in bad faith and in breach of their standard of care. In this regard, the following passage from Widdifield on Executors and Trustees, is instructive:
The trustee cannot be criticized for lack of training or experience, but the court will try to enforce good faith, proper motives, and a minimum of good judgment. The law requires that the trustee turn his mind to his various tasks and exhibit the same degree of diligence in the exercise of his discretion as would be expected from a man of ordinary prudence in the management of his own affairs.[15]
—
[1] CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al, 2026 ONSC 1059 (“Szewczyk”).
[2] Szewczyk at para 2.
[3] Szewczyk at para 3.
[4] Szewczyk at paras 1 and 2.
[5] See CIBC Trust Corporation, as Trustee of the John Szewczyk Testamentary Trust v. Szewczyk, et al, 2025 ONSC 3382 (CanLII).
[6] Szewczyk at paras 4 and 5.
[7] Szewczyk at para 5.
[8] Szewczyk at paras 6 and 7.
[9] Szewczyk at para 21.
[10] Re: Rutherford, [1933] O.R. 707 (ON CA)
[11] Szewczyk at para 22.
[12] Szewczyk at para 14.
[13] Szewczyk at paras 14 and 20.
[14] Szewczyk at para 35.
[15] Widdifield on Executors and Trustees, (6th edition) at 2.3 (emphasis added); citing Learoyd v. Whiteley (1887), 12 App. Cas. 727 (U.K. H.L.); Tabor v. Brooks (1878), 10 Ch.D.273 (Eng. Ch. Div.); Bell, Re (1923), 23 O.W.N. 698 (Ont. H.C.).
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