The recent case, Dewaele v. Roobroeck,[1] provides an excellent review of the law on removing an executor. In particular, it deals with the removal of co-executors when their actions or inactions compromise the administration of an estate.
Eric and Rose Roobroeck owned a number of farm and other properties, as well as farm machinery and equipment and various items of personal property, including a number of firearms. Eric died in 2016 and Rose died in 2018. Eric’s will named Rose his executor and left his net estate in trust for Rose for life. After Rose’s death, subject to certain option provisions regarding the home farm, Eric’s estate was to be distributed equally among their three children, the applicant, Rachel, and the respondents, Richard and Ronald. Rose’s will named the three children her executors. Her will contained similar option provisions and directed that the residue of her estate should be divided equally between the three children The option regarding the home farm expired, so that property fell into the residue of Rose’s estate.
The children disagreed about the valuation of the estate assets, ownership of the firearms, and how and when to distribute the estate. This led to an impasse in the administration of the estate. In 2019 the court made an order on consent (the ‘Sheard Order’) appointing a named qualified appraiser to appraise the farm property and equipment, as well as all personal property other than the firearms. The order incorporated minutes of settlement in which the parties agreed to retain the appraiser By a further order in 2019 ( the ‘Arrell Order’) the court directed Richard and Ronald to provide a detailed list of the firearms and information showing who owned them – the estate or one of the sons – and if the latter how and when they acquired them. There was only some compliance with the Arrell Order, but the brothers refused to approve the format of the order. Richard claimed that the firearms belonged to him, or were given to him by Eric and Rose. However, he failed to provide any evidence of their value or ownership.
The brothers also refused to accept the valuations made by the appraiser appointed by the Sheard Order and therefore they refused to sign the Application for the Certificate of Appointment of Estate Trustee with a Will,[2] or the cheque to pay the estate administration tax that must accompany it. However, they did not provide alternative appraisals by qualified appraisers. The brothers also refused to authorize the estate accountant to complete and file adjusted income tax returns for both estates. The accountant advised the executors that if they could not agree on the values of the estate assets, the deadline for planning regarding the farm property rollovers would expire on the third anniversary of Rose’s death.
Rachel then brought this application for a number of remedies:
(a) approval of the form of the Arrell Order;
(b) further directions and information regarding contested estate assets in the possession of Richard;
(c) an order that one of the brothers sign the cheque that must accompany the application for appointment of estate trustee; and
(d) an order removing the brothers as co-executors and appointing Rachel as sole executor.
In this blog I shall focus principally on the latter request for relief.[3]
Sheard J. found that the brothers’ refusal to move forward with the administration of the estate, including the filing of income tax returns, because they disagreed with the valuations of the appraiser, ‘has or is likely to result in serious negative consequences for the estate’ (paragraph 43). Then she reviewed the law about removing an executor or trustee.[4] She gave an excellent summary of this law and it is well-worth including it in this blog:
50 Courts have an inherent power to remove a trustee when circumstances require such as when the continuance of the trustee would be detrimental to the execution of the trusts under the will.[5]
51 Unless the will provides otherwise, executors appointed pursuant to a will are subject to the “general principle that if there are several executor chores of a will, their decision must be unanimous . . . [W]hen there is no provision for a majority vote, all executors must act in concert”[6]
52 Not every mistake or neglect of duty or inaccuracy of conduct of trustees would justify the removal of an executor. “Acts or omissions must be such as to endanger the trust property or to issue a want of honesty or a want of property capacity to execute the duties, or a want of reasonable fidelity.[7]
53 That past misconduct is likely to continue in the future will often be enough to justify removal and, in some cases, dissension and animosity amongst trustees has been held justify the removal without any finding of misconduct.[8]
54 Estate trustees must act jointly. If the animosity of an estate trustee or estate trustees is such that it rises above mere fiction and the application judge is satisfied that the “due administration” of the estate would be compromised, then the removal of the estate trustee is justified.[9]
55 Where the continued administration of the trust with due regard for the interests of its beneficiaries has by virtue of the situation between the trustees become impossible or improbable, the court is justified in removing a trustee.[10]
56 Conflict between a trustee and a beneficiary alone may be insufficient grounds on which for a court to interfere with a testator’s choice of executor and there must be evidence that the trustee is unable to exercise their duties in an impartial and objective manner. The “courts will readily intervene however, if conflict is between co-Trustees”[11]
57 A court will remove a trustee when there is an obvious conflict between their personal interest in their duties as trustees.[12]
Based on the evidence, her Honour found that Richard and Ronald were unable to exercise their duties in an impartial and objective manner and that the administration of the estate would be compromised if they were not removed. Consequently, she ordered the removal of Richard and Ronald and further that Rachel remain as the sole executor of the estates. Her Honour also made a number of complementary orders to facilitate the administration.
In my opinion these were the correct orders in the circumstances. Moreover, her Honour applied the law correctly. It was particularly helpful that she drew a distinction between the case where the dispute exists between the executors and the beneficiaries and the case where the problem exists between the executors. This distinction is not always kept in mind in the case law.
The case illustrates the problems that can arise when testators fail to give careful consideration to selecting their executors. They may appoint all their children for fear that if only some are appointed the others will be offended. That is a laudable concern, but their most important concern should be the most efficient administration of their estates. And that may mean that they should appoint someone outside the family as their executor. This case should also encourage testators’ legal advisors to address this issue and give sound advice on the selection of executors when they take instructions for wills, in order to prevent problems such as arose in this case.
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[1] 2020 ONSC 7534.
[2] In passing, I note that the former practice of referring to this document as an application for letters probate was so much simpler and more correct. See my recent blog, ‘Why does Ontario Have Estate Trustees?’ https://welpartners.com/blog/2021/05/why-does-ontario-have-estate-trustees/
[3] See also Oosterhoff on Trusts, 9th ed. by Albert H. Oosterhoff, Robert Chambers, and Mitchell McInnes (Toronto: Thomson Reuters/Carswell, 2019), §13.4 on the topic of removal of trustees.
[4] The court has an inherent power to remove a trustee, but s. 37(1) of the Trustee Act, R.S.O. 1990, c. T.23 empowers a court to remove an executor. However, the grounds for removal are the same for the two offices. In passing, the Ontario Law Reform Commission concluded in its Report on Administration of Estates of Deceased Persons (Toronto, 1991), pp.2, 6-7, 11-15, that many of the special rights, powers, and obligations of and provisions regarding executors are accidents of history and many of them ought to be assimilated to those that pertain to trustees. Section 37 of the Trustee Act is one such provision.
[5] Evans v. Gonder, 2010 ONCA 172 (Ont. C.A.), at para. 26 quoting from Lord Blackburn in Letterstedt v. Broers (1884), 9 A.C. 371 (South Africa P.C.). See also, St. Joseph’s Health Centre v. Dzwiekowski, 2007 CarswellOnt 7642 (S.C.J.), 2007 CanLII 51347 at paras. 25-27 [Dzwiekowski].
[6] Re Kaptyn Estate, 2009 CarswellOnt 2160 (S.C.J.), 2009 CanLII 19933, at para. 16.
[7] Dzwiekowski, at para. 25.
[8] Dzwiekowski, at paras. 29, 30.
[9] Chambers v. Chambers, 2013 ONCA 511, at 98, 99.
[10] Venables (Litigation Guardian of) v. Gordon Estate, 2012 ONSC 956, at para. 30, quoting Re Consiglio, 1973 CarswellOnt 861 (C.A.), 1973 CanLII 681.
[11] Venables, at para. 31.
[12] Gabriele Estate v. Gabriele, 2015 ONSC 6035, at para. 24; see also Re Kostiw Estate, Re, 2007 CarswellOnt 3369 (S.C.J.)], 2007 CanLII 19423.
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This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
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Written by: Albert Oosterhoff
Posted on: May 31, 2021
Categories: Commentary
The recent case, Dewaele v. Roobroeck,[1] provides an excellent review of the law on removing an executor. In particular, it deals with the removal of co-executors when their actions or inactions compromise the administration of an estate.
Eric and Rose Roobroeck owned a number of farm and other properties, as well as farm machinery and equipment and various items of personal property, including a number of firearms. Eric died in 2016 and Rose died in 2018. Eric’s will named Rose his executor and left his net estate in trust for Rose for life. After Rose’s death, subject to certain option provisions regarding the home farm, Eric’s estate was to be distributed equally among their three children, the applicant, Rachel, and the respondents, Richard and Ronald. Rose’s will named the three children her executors. Her will contained similar option provisions and directed that the residue of her estate should be divided equally between the three children The option regarding the home farm expired, so that property fell into the residue of Rose’s estate.
The children disagreed about the valuation of the estate assets, ownership of the firearms, and how and when to distribute the estate. This led to an impasse in the administration of the estate. In 2019 the court made an order on consent (the ‘Sheard Order’) appointing a named qualified appraiser to appraise the farm property and equipment, as well as all personal property other than the firearms. The order incorporated minutes of settlement in which the parties agreed to retain the appraiser By a further order in 2019 ( the ‘Arrell Order’) the court directed Richard and Ronald to provide a detailed list of the firearms and information showing who owned them – the estate or one of the sons – and if the latter how and when they acquired them. There was only some compliance with the Arrell Order, but the brothers refused to approve the format of the order. Richard claimed that the firearms belonged to him, or were given to him by Eric and Rose. However, he failed to provide any evidence of their value or ownership.
The brothers also refused to accept the valuations made by the appraiser appointed by the Sheard Order and therefore they refused to sign the Application for the Certificate of Appointment of Estate Trustee with a Will,[2] or the cheque to pay the estate administration tax that must accompany it. However, they did not provide alternative appraisals by qualified appraisers. The brothers also refused to authorize the estate accountant to complete and file adjusted income tax returns for both estates. The accountant advised the executors that if they could not agree on the values of the estate assets, the deadline for planning regarding the farm property rollovers would expire on the third anniversary of Rose’s death.
Rachel then brought this application for a number of remedies:
(a) approval of the form of the Arrell Order;
(b) further directions and information regarding contested estate assets in the possession of Richard;
(c) an order that one of the brothers sign the cheque that must accompany the application for appointment of estate trustee; and
(d) an order removing the brothers as co-executors and appointing Rachel as sole executor.
In this blog I shall focus principally on the latter request for relief.[3]
Sheard J. found that the brothers’ refusal to move forward with the administration of the estate, including the filing of income tax returns, because they disagreed with the valuations of the appraiser, ‘has or is likely to result in serious negative consequences for the estate’ (paragraph 43). Then she reviewed the law about removing an executor or trustee.[4] She gave an excellent summary of this law and it is well-worth including it in this blog:
50 Courts have an inherent power to remove a trustee when circumstances require such as when the continuance of the trustee would be detrimental to the execution of the trusts under the will.[5]
51 Unless the will provides otherwise, executors appointed pursuant to a will are subject to the “general principle that if there are several executor chores of a will, their decision must be unanimous . . . [W]hen there is no provision for a majority vote, all executors must act in concert”[6]
52 Not every mistake or neglect of duty or inaccuracy of conduct of trustees would justify the removal of an executor. “Acts or omissions must be such as to endanger the trust property or to issue a want of honesty or a want of property capacity to execute the duties, or a want of reasonable fidelity.[7]
53 That past misconduct is likely to continue in the future will often be enough to justify removal and, in some cases, dissension and animosity amongst trustees has been held justify the removal without any finding of misconduct.[8]
54 Estate trustees must act jointly. If the animosity of an estate trustee or estate trustees is such that it rises above mere fiction and the application judge is satisfied that the “due administration” of the estate would be compromised, then the removal of the estate trustee is justified.[9]
55 Where the continued administration of the trust with due regard for the interests of its beneficiaries has by virtue of the situation between the trustees become impossible or improbable, the court is justified in removing a trustee.[10]
56 Conflict between a trustee and a beneficiary alone may be insufficient grounds on which for a court to interfere with a testator’s choice of executor and there must be evidence that the trustee is unable to exercise their duties in an impartial and objective manner. The “courts will readily intervene however, if conflict is between co-Trustees”[11]
57 A court will remove a trustee when there is an obvious conflict between their personal interest in their duties as trustees.[12]
Based on the evidence, her Honour found that Richard and Ronald were unable to exercise their duties in an impartial and objective manner and that the administration of the estate would be compromised if they were not removed. Consequently, she ordered the removal of Richard and Ronald and further that Rachel remain as the sole executor of the estates. Her Honour also made a number of complementary orders to facilitate the administration.
In my opinion these were the correct orders in the circumstances. Moreover, her Honour applied the law correctly. It was particularly helpful that she drew a distinction between the case where the dispute exists between the executors and the beneficiaries and the case where the problem exists between the executors. This distinction is not always kept in mind in the case law.
The case illustrates the problems that can arise when testators fail to give careful consideration to selecting their executors. They may appoint all their children for fear that if only some are appointed the others will be offended. That is a laudable concern, but their most important concern should be the most efficient administration of their estates. And that may mean that they should appoint someone outside the family as their executor. This case should also encourage testators’ legal advisors to address this issue and give sound advice on the selection of executors when they take instructions for wills, in order to prevent problems such as arose in this case.
—
[1] 2020 ONSC 7534.
[2] In passing, I note that the former practice of referring to this document as an application for letters probate was so much simpler and more correct. See my recent blog, ‘Why does Ontario Have Estate Trustees?’ https://welpartners.com/blog/2021/05/why-does-ontario-have-estate-trustees/
[3] See also Oosterhoff on Trusts, 9th ed. by Albert H. Oosterhoff, Robert Chambers, and Mitchell McInnes (Toronto: Thomson Reuters/Carswell, 2019), §13.4 on the topic of removal of trustees.
[4] The court has an inherent power to remove a trustee, but s. 37(1) of the Trustee Act, R.S.O. 1990, c. T.23 empowers a court to remove an executor. However, the grounds for removal are the same for the two offices. In passing, the Ontario Law Reform Commission concluded in its Report on Administration of Estates of Deceased Persons (Toronto, 1991), pp.2, 6-7, 11-15, that many of the special rights, powers, and obligations of and provisions regarding executors are accidents of history and many of them ought to be assimilated to those that pertain to trustees. Section 37 of the Trustee Act is one such provision.
[5] Evans v. Gonder, 2010 ONCA 172 (Ont. C.A.), at para. 26 quoting from Lord Blackburn in Letterstedt v. Broers (1884), 9 A.C. 371 (South Africa P.C.). See also, St. Joseph’s Health Centre v. Dzwiekowski, 2007 CarswellOnt 7642 (S.C.J.), 2007 CanLII 51347 at paras. 25-27 [Dzwiekowski].
[6] Re Kaptyn Estate, 2009 CarswellOnt 2160 (S.C.J.), 2009 CanLII 19933, at para. 16.
[7] Dzwiekowski, at para. 25.
[8] Dzwiekowski, at paras. 29, 30.
[9] Chambers v. Chambers, 2013 ONCA 511, at 98, 99.
[10] Venables (Litigation Guardian of) v. Gordon Estate, 2012 ONSC 956, at para. 30, quoting Re Consiglio, 1973 CarswellOnt 861 (C.A.), 1973 CanLII 681.
[11] Venables, at para. 31.
[12] Gabriele Estate v. Gabriele, 2015 ONSC 6035, at para. 24; see also Re Kostiw Estate, Re, 2007 CarswellOnt 3369 (S.C.J.)], 2007 CanLII 19423.
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This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
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