In the 2012 case of Haines v. Haines Estate 2012 ONSC 1816, Justice Nolan had these words of caution for the litigants:

“It is a trite observation that the longer estate related litigation continues, the more that bitterness and resentment festers. As well, all the parties, . . .would do well to keep in mind the experience of the beneficiaries in Charles Dickens’ Bleak House – by the time the long, bitter litigation ended, all of the assets of the estate had been used up in legal costs and there was nothing left for the beneficiaries.”

This was from the decision from two competing applications for the removal of executors. One application was brought by the son of the deceased and beneficiary of the Estate to have all three appointed executors removed. The second application was brought by two of the executors to have the third executor removed. All three executors were also children of the deceased and siblings of the first applicant.

The main asset of the Estate was a farm that was being operated by one of the executors, the first applicant, and the widow of the deceased. They described themselves as the “Farm Group”. The “Farm Group” was aligned in the litigation to have all three executors removed and replaced by a third party lawyer. The “Non-Farm Group” was the remaining two executors who wanted the third “Farm Group” executor removed.

The “Farm Group” alleged that the “Non-Farm Group” executors should be removed as they had failed to find replacement financing for the farm when the bank gave them notice that it would no longer provide financing. The “Non-Farm Group” alleged that the “Farm Group” executor was the main root of distrust amongst the executors and that he had an obvious conflict as he wanted to acquire the farm.

In reviewing the test for removing executors, Justice Nolan confirmed that the court had jurisdiction to remove executors under section 37.1 of the Trustee Act and at common law. She also canvassed the leading cases for the following principles:

1. The court will not lightly interfere with the testator’s choice of estate trustee;
2. Clear evidence of necessity is required;
3. The court’s main consideration is the welfare of the beneficiaries; and
4. The estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the trust; and
5. Courts will more readily intervene to remove an executor in circumstances in which the hostility is between executors.

Based on the affidavit evidence before her, Justice Nolan concluded that the two “Non-Farm Group” executors should remain and the third “Farm Group” executor should be removed. She found that he was the “executor who has been the executor primarily responsible for creating the climate of distrust that has been the root cause of the failure of the executors to effectively carry out their duties to all of the beneficiaries. [He also] has an obvious conflict because he wants to acquire the farm.”

Justice Nolan ended her decision with the warning above about prolonged litigation and the depletion of the Estate assets, which was particularly apt in this situation where the estate really only had one asset, the farm.

For more information on the removal of estate trustees see the paper written by Kimberly Whaley for the LSUC Estate Litigation Essentials 2012 “The Removal of Executors” and the article published in The Lawyers Weekly on November 30, 2012 called “Executor Exit: Removing a Trustee”.