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Delegating the Power to Appoint Executors

Time was when judges and academic writers got their knickers in a twist over the supposed principle that it is impermissible to delegate your testamentary power. This principle was actually of relatively recent vintage but was repeated in judgments by the highest courts. But only in dicta.[1] However, all of these cases involved the issue of certainty of objects in trusts and did not address the question of the validity of powers of appointments in wills.[2] And powers of appointment are, in a very real sense, a method of delegating one’s testamentary power

In fact, testators had employed general, special, and hybrid powers for a long time and the question of their validity was never raised. This may have been because wills were treated as the equivalent of deeds, at least until the Wills Act[3] and such powers are perfectly valid in deeds.

The “principle” seems to have died of its own accord and many cases have held that testators are indeed entitled to use powers of appointment in their wills to dispose of their property if they so desire. The issue was raised in Ontario in Re Nicholls.[4] In that case Krever J.A., who delivered the Court’s judgment, confirmed that the use of powers of appointment in wills is valid.[5]

I was recently asked the related question whether a testator may delegate her power to appoint executors/estate trustees. It is interesting that this issue was never raised in the context of the discussion of the “principle” that you can’t delegate your testamentary power. This is surprising, because the delegation of your power to appoint executors is also a testamentary power. On the other hand, it is not surprising, because there are a number of cases of long-standing which hold that you can delegate your power to appoint executors. I shall discuss those cases and the principle in general in what follows. But first I want to address the ability of as settlor or testator to delegate the appointment of trustees.

A settlor of an inter vivos trust or a testator who creates a testamentary trust in her will may name persons who can appoint the trustees of the trust or replacement trustees and also remove them. Thus, for example, she may name specific people, such as her siblings to appoint trustees or successor trustees,[6] or she may name a charity to do so.[7] Such powers must be drafted carefully and as broadly as possible, so that their terms cannot be questioned. If they are not, litigation may ensue.[8] Such powers can be very useful, especially in trusts that are likely to last some time, since people familiar with the trust at a later point in time may be better able to appoint suitable trustees.

If the trust does not delegate the power to appoint trustees or successor trustees, resort can be had to statutory powers of appointment. For ease of reference, I shall refer to Ontario’s Trustee Act,[9] but the legislation in other provinces contains similar provisions. These also recognize the right of the trustee’s creator to nominate a person to appoint trustees and to make other provisions for the appointment of trustees. Section 3 of the Act permits the appointment of a replacement trustee by a nominee or the surviving or continuing trustees in the circumstances mentioned in the section (death, desire to be discharged, absence from the province, inability, conviction of indictable offence, bankruptcy, etc.). Section 4 provides that the sole or last surviving trustee may also appoint a replacement trustee by his will. Both sections also appear to allow the appointment of additional trustees. By implication these sections therefore allow a nominee or continuing trustees to remove a trustee for the reasons listed.[10] Section 6(a) also provides that on the appointment of a new trustee the number of trustees may be increased. However, under these non-judicial appointment provisions the number of trustees can be increased only when replacing a trustee.

Alternatively, persons interested in a trust can turn to the court.[11] The court has inherent jurisdiction to appoint and remove trustees. However, this jurisdiction has largely been codified. Thus, under s. 5 of the Ontario Act the court may appoint new trustees either in substitution for or in addition to existing trustees.

By virtue of the definitions of “trust” and “trustee” in s. 1 of the Act, these sections also apply to the appointment of personal representative. However, those definitions do not apply to the retirement of personal representatives. Section 2(1) of the Act permits a trustee who wishes to retire to do so with the consent of the other trustees, provided there are more than two trustees. But subsection (2) provides that this section does not apply to personal representatives. Only the court can remove a personal representative under s. 37.[12]

But what about the delegation of the power to appoint executors? As mentioned above, there are a number of cases, some quite old, that recognize the right to delegate this power. Some of the earlier ones were decided under the law of probate developed over the centuries by the Ecclesiastical Law Courts, before the law of probate was transferred to secular courts.[13] This indicates that ecclesiastical law saw no difficulty with such a delegation. And it seems that the Ecclesiastical Courts did not think that the enactment of the Wills Act[14] had an adverse effect on the power.[15] Modern texts therefore state categorically that such delegation is permissible.[16]

The appointment of an executor is a testamentary act and therefore it can only be made by a testamentary instrument.[17] The delegation of the power to appoint an executor is also a testamentary act and therefore it follows that it must also be made by a testamentary instrument.

One of the earliest reported cases that recognized the right to delegate the power to appoint an executor is Re Cringan.[18] The testator died in Scotland. He did not appoint executors by his will, but the will provided, “It is left to the Legatees mutually to appoint two intelligent and trust worthy persons to execute this deed . . .” His brothers and sisters in Scotland, who were the legatees, appointed two persons as executors. Their appointment had been admitted by a Scottish court, but it had not granted probate. There were assets in England, so a motion was brought in the Prerogative Court in England that probate be given to the two appointees. The court was initially reluctant to do so, until reassured by the deputy registrar that this was common practice.[19]

Another early case is Moss v. Bardswell.[20] It involved an unusual will. Henry Davies began his will by directing that all his debts be paid. Then he devised and bequeathed his real and personal property to trustees. And only then he appointed his brother William Davies executor. He gave William power to appoint substituted trustees to act with him or to succeed him. Thus, Henry made a clear distinction between his trustees and his executor. By his will William appointed Bardswell his executor and also as trustee under Henry’s will. But he did not prove Henry’s will. Bardswell proved William’s will. A banking firm was a creditor of Henry’s and called on Bardswell to prove Henry’s will, so that it could recover its debt. The court held that William had not been given the power to appoint another executor with him of Henry’s will and no such power was given to him incidentally. Consequently, Bardswell was not an executor according to the tenor.[21] Therefore, by appointing Bardswell his executor, William could not and did not appoint him as executor of Henry’s will. The case therefore recognizes that if the testator has conferred the power to delegate the appointment of an executor (which he did not in this case) the power and an appointment under it will be valid.

A person who has been given the right to appoint an executor may, depending upon the language of the testator’s will, appoint herself.[22]

The right to name someone to appoint an executor has been recognized in Canadian cases.[23]  The cases follow some or all of the English cases and texts mentioned above.

An early case is Wright v. Stackhouse.[24] The testator, Benjamin Smith, named five persons as his executors, but directed in the will that they, or the majority of them should appoint another two named persons as executors in case one or more of the original five should die, refuse to act, or become incapable. The five proved the will and later appointed the other two and second probate was granted to them. The executors then brought an action against the defendants, who had endorsed a promissory note that was held by Benjamin Smith at his death. The defendants claimed that the Surrogate lacked power to issue probate to the other two appointees. However, the court held, applying the English cases: “It seems quite clear that a testator may thus delegate to other persons the right of appointing executors”.[25]

Re Cleghorn,[26] a later case, affirms this right. The testator appointed a trust company her sole executor and trustee. Her will gave a number of devises and bequests to family and several charities, as well as annuities to her sons and her daughter-in-law. By the second codicil to her will she declared that the trust company’s continued existence was useful for the charities, but because of the annuities she also appointed as co-executors and trustees two of her sons and another person to be periodically elected or appointed by her sons and daughter-in-law or their heirs. Two of the sons and the third person were accordingly appointed co-executors and trustees. The court again followed the English cases and declared that probate should be granted to the trust company and the three appointed persons.

It is significant that the testator need not give the power to her existing executors, but can name others, such as her legatees, instead, as in Cringan.[27]

I have seen wills in which the testator appoints his solicitor to act as his executor and then goes on to state that the solicitor’s partners may appoint a successor from among their number. Such a provision is valid, but it poses significant drafting problems. You will need to provide, among other things, for the possible dissolution of the partnership, or its merger with another firm.[28]

It is thus quite clear that a testator may nominate others to appoint executors, provided he does so in his will or a codicil. Thus, it cannot be done informally or otherwise outside a testamentary instrument. It is a useful power when administration of an estate may continue for some time, as Cleghorn illustrates.[29]

—-

[1]    See, e.g., Attorney-General v. National Provincial & Union Bank of England et al., [1924] A.C. 262 (H.L.) at 268, per Viscount Haldane; Chichester Diocesan Fund & Board of Finance (Inc.) v. Simpson et al., [1944] 2 All E.R. 60 (H.L.) at 62, per Viscount Simon L.C.; and ibid. per Lord Macmillan; Tatham v. Huxtable (1950), 81 C.L.R. 639 (Austr. H.C.). at 655, per Kitto J.; and Lutheran Church of Australia v. Farmers’ Co-operative Executors & Trustee Ltd. (1970), 121 C.L.R. 628 (Austr. H.C.).

[2]    For a recent case in which the court held that the testator created a trust rather than a general power of appointment, see Hanson v. Mercredi, 2014 ABCA 216, 98 E.T.R. (3d) 1. The court held the trust void because the objects were uncertain.

[3]    (1837) 7 Will. 4 & 1 Vict., c. 26.

[4]    (1987), 57 O.R. (2d) 763, 34 D.L.R. (4th) 32 (C.A.). And see my comment on the case, “Wills — Delegation of Will-Making Power — General Powers of Appoint­ment — Validity” (1988), 9 Estates and Trusts Journal 1-12.

[5]    For academic comment on the issue, see: D.M. Gordon, “Delegation of Will-Making Power” (1953), 69 L.Q. Rev. 334; D.M. Gordon, Comment (1955), 33 Can. Bar Rev 955; D.M. Gordon, Commentary (1955-56), 7 Res Judicatae 253; F.C. Hutley, “The Delegation of Will-Making Powers” (1956), 2 Sydney L. Rev. 93; Hardingham, “The Rule against Delegation of Will-making Power” (1974). 9 Melbourne U.L. Rev. 650. And see Oosterhoff on Wills, 8th ed. by Albert H. Oosterhoff, C. David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters/Carswell, 2016), §4.7.

[6]    See, e.g., Saunders v. Bradley (1903), 6 O.L.R. 250 (C.P.), affirmed (1905), 6 O.W.R. 436 (C.A.). The Supreme Court of Canada dismissed a further appeal for lack of jurisdiction and also an application for special leave to appeal, sub nom., Bradley v. Saunders (1906), Cout. S.C. 380. Thus, the appointment made under the power to appoint was valid. The unusual citation stands for Coutlee’s Unreported Supreme Court Cases.

[7]    See, e.g., Re Robertson, [1948] O.R. 764, [1948] 4 D.L.R. 606 (H.C.).

[8]    See Waters Law of Trusts in Canada, 4th ed. by Donovan W.M. Waters, Mark Gillen, and Lionel Smith (Toronto: Thomson Reuters/Carswell, 2012), pp. 852-54, where these two cases are discussed.

[9]    R.S.O. 1990, c. T.23.

[10]   The Saskatchewan Trustee Act, S.S. 2009, c. T-23.01, s. 15(5) speaks of “the person nominated in a trust instrument for the purpose of appointing and removing trustees” (emphasis supplied). However, s. 14 says that this provision does not apply to the appointment and removal of executors and administrators.

[11]   Ibid. s. 16(1).

[12]   For modern versions of these provisions, see Uniform Trustee Act, 2012, http://www.ulcc.ca/en/uniform-acts-new-order/current-uniform-acts/633-trusts/trustee-act/1255-uniform-trustee-act, ss. 5-11. However, these do not apply to personal representatives, see. s. 62. See also Trustees Act, S.N.B. 2015, c. 21, ss.8-16, which adopted most of the Uniform Act.

[13]   For a detailed discussion of that transfer, see Albert H. Oosterhoff, “The Discrete Functions of Courts of Probate and Construction” (2017), 46 Adv. Q. 316, §2.1.

[14]   Footnote 3, supra. This is the ancestor of the Canadian wills statutes in all the common law jurisdictions.

[15]   See Jackson and Gill v. Paulet (1851), 2 Rob. Eccl. 344, 163 E.R. 1340.

[16]   See, e.g., Williams on Wills, 10th ed. by Francis Barlow, Richard Wallington, Susannah L. Meadway, and James MacDougald (London: LexisNexis, 2014), §25.1 (“Williams, Wills”);Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 21st ed. by Alexander Learmonth, Charlotte Ford, Julia Clark, and John Ross Martyn (London: Sweet & Maxwell, 2018), §6-29 (“Williams, Executors”); Theobald on Wills, 18th ed. by John G. Ross Martyn, Jane Evans Gordon, Alexander Learmonth, Charlotte Ford, and Thomas Fletcher (London: Sweet & Maxwell, 2016) (“Theobald”); Macdonnell, Sheard and Hull on Probate Practice, 5th ed. by Ian M. Hull and Suzana Popovic-Montag (Toronto: Thomson Reuters/Carswell, 2016), p. 245 (“Macdonnell”). See also Halsbury’s Laws of England, 5th ed., vol. 103, §§610(2), 611 (“Halsbury”).

[17]   Williams, Wills, §25.1; Theobald, §31.002; Macdonnell, pp. 207, 242; Halsbury, §610(1); Re Fraser (1870), L.R. 2 P. & D. 193 at 186, per Lord Penzance. And see also Hollwey v. Adams (1926), 58 O.L.R. 507 (H.C.); Hanton v. White, [1956] O.W.N. 775 (Master)

[18]   (1828), 1 Hagg. Ecc. 548, 162 E.R. 673.

[19]   See also Re Deichman (1842), 3 Curt. 123, 163 E.R. 376, to the same effect.

[20]   (1860), 3 Sw. & Tr. 187, 164 E.R. 1242

[21]   That is, an executor not expressly named, but whose appointment is implied by the will. See, e.g., Weir v. Beers (1978), 24 N.B.R. (2d) 627, 48 A.P.R. 628 (Q.B.).

[22]   Re Ryder (1861), 2 Sw. & Tr. 127, 164 E.R. 941, where the will permitted the appointor to appoint “someone”. See, e.g., Re Harmer Estate (1978), 24 N.B.R. (2d) 704, 48 A.P.R. 704 (Q.B.).

[23]   It is interesting that Williams, Wills, also cites some of these cases.

[24]   (1863), 10 N.B.R. 450 (C.A.).

[25]   Ibid., p. 452.

[26]   [1931] O.R. 31, [1931] 2 D.L.R. 865 (C.A.).

[27]   Footnote 18, supra.

[28]   For suggested wording of such a provision, see Theobald, §§31.003, 31.004.

[29]   Footnote 26, supra.

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