Time was when Ontario, along with all other common law jurisdictions had executors and administrators. These are persons who administer a deceased person’s estate and are sometimes referred to by the collective title ‘personal representatives’. An executor may have to obtain letters probate to administer the estate. In the case of an intestate estate, the court can appoint an administrator to administer the estate. Similarly, if the deceased died with a will, but failed to appoint an executor, or the named executor predeceases the testator or is unable or unwilling to take on the office, the court can appoint an administrator with the will annexed.
But all that changed in Ontario in 1994 when new rules were drafted and incorporated into the Rules of Civil Procedure[1] to replace the former Probate Rules. Since then, executors, administrators, and administrators with the will annexed are referred to promiscuously as ‘estate trustees’. Similarly, ‘letters probate’, ‘letters of administration’, and ‘letters of administration with the will annexed’ are now referred to as “certificate of appointment of estate trustee’. Well, not quite, for r. 74.01 defines ‘certificate of appointment of estate trustee’ as ‘letters probate, letters of administration or letters of administration with the will annexed’. Similarly, it defines ‘estate trustee’ as ‘an executor, administrator or administrator with the will annexed’. For some reason, the rule does not redefine the collective term ‘personal representative’.
The need for the definitions in r. 74.1 is probably in part because the several statutes dealing with estates were not amended to change the terminology. Thus, for example, the Estates Act[2] still speaks of ‘letters probate’, ‘grant of probate’, or simply ‘probate’.[3] And it also continues to speak of ‘letters of administration’.[4] Indeed, the Rules themselves continue to speak of executors and administrators, and about probate and administration.[5] Finally, the Estates Administration Act[6] continues to define ‘personal representative’ a ‘an executor, an administrator, or an administrator with the will annexed’,[7] and it uses that collective term in the rest of the Act.[8]
So why did Ontario adopt the term ‘estate trustee’ and related terms in the Rules in 1974 and why was this change not carried forward into the statutes? The Ontario Law Reform Commission recommended the adoption of the term ‘estate trustee’ in a 1991 report on the administration of estates.[9] The Commission took the view that, in general, the position of personal representatives should be assimilated to that of trustees, except as regards the initial appointment to their office. It said:
Thus, personal representatives should have the same administrative powers as trustees, and should be subject to the same rules governing transmission of their office, liability to others, compensation for their efforts, and suspension and termination of their office.[10]
However, the report then went on to say:
In furtherance of our recommendation to assimilate the office of personal representative to that of a trustee, we recommend that a new term should be used to signify this change. Whether appointed by the will or the court, personal representatives are to be called ‘estate trustees’.
The Commission did recognize that not all distinctions between personal representatives and trustees are insupportable.[11] Certainly those that reflect functional differences should be retained, but others are merely historical anomalies.[12]
I agree with the basic premise of the Commission. In many cases the differences between the two offices do not make sense and thus assimilation of the powers and obligations of trustees should generally apply also to personal representatives. Most of the Commission’s detailed recommendations are excellent and they should have been adopted.
However, I disagree strongly with the Commission’s recommendation to adopt the new term ‘estate trustee’ for several reasons.
- It is true that the Commission recognized that some differences remain between the two offices. But the new term disregards those differences and in effect equates the offices of personal representative and trustee for all purposes. And that, in my view, is extremely dangerous. I have written extensively about the importance of recognizing and applying the continuing distinct roles of courts in the exercise of their probate and construction functions.[13] I have also written about the distinction between executors and trustees as regards the title to the property they administer.[14] In the latter article I highlighted the point that executors are not trustees by reference to the opinion of Viscount Radcliffe in the leading case, Commissioners of Stamp Duties (Queensland) v. Livingston.[15] His Lordship made it clear that beneficiaries under a will and on an intestacy do not have a property interest in the property under administration, since the full, unfragmented title is in the executor or administrator while the administration continues. His Lordship noted that executors and administrators do have various fiduciary duties, but that those duties do not convert the office into a trust. In that context his Lordship said:
What equity did not do was to recognise or create for residuary legatees a beneficial interest in the assets in the executor’s hands during the course of administration. Conceivably, this could have been done, in the sense that the assets, whatever they might be from time to time, could have been treated as a present, though fluctuating, trust fund held for the benefit of all those interested in the estate according to the measure of their respective interests. But it never was done. It would have been a clumsy and unsatisfactory device from a practical point of view; and, indeed, it would have been in plain conflict with the basic conception of equity that to impose the fetters of a trust upon property, with the resulting creation of equitable interests in that property, there had to be specific subjects identifiable as the trust fund. An unadministered estate was incapable of satisfying this requirement. The assets as a whole were in the hands of the executor, his property; and until administration was complete no one was in a position to say what items of property would need to be realised for the purposes of that administration or of what the residue, when ascertained, would consist or what its value would be.[16]
In that article I also explained that the statutory ‘trust’ created by s. 2(1) of the Estates Administration Act[17] is not a true trust, since its purpose was simply to make the interests of the beneficiaries equitable so that they would no longer be subject to artificial destruction by the common law remainder rules and their derivatives.[18]
By calling executors and administrators ‘estate trustees’ the rules give the impression that they are trustees just as much and in the same way as someone who has been appointed a trustee is. One might think that this is not so, but the danger is real. See, for example, r. 74.16. It deals with the passing of estate accounts and provides:
Rules 74.17 and 74.18 apply to accounts of estate trustees and, with necessary modifications, to accounts of trustees other than estate trustees….[19]
This rule clearly equates the two offices, but in my opinion this is an egregious error. A personal representative is not a trustee.
It seems that courts on occasion will also equate or confuse the two offices. Arguably that is what happened at first instance in Re Milne Estate,[20] in which Justice Dunphy stated incorrectly that a will is a form of trust and, although the matter was still in the probate stage, he purported to interpret an asset allocation clause.[21] The case was reversed on appeal.[22]
- I think that it was a mistake to make the change in the Rules in any event since the change was not made in the governing statutes. Surely the latter govern and the Rules should not diverge from them.
- Ontario is the only common law jurisdiction that has adopted this change. So we stick out like sore thumb and we constantly have to explain to our clients and to lawyers in other jurisdictions what the terms ‘estate trustee’ and ‘certificate of appointment of estate trustee’ mean.
- Now we are stuck with cumbersome titles, such as ‘certificate of appointment of estate trustee’ instead of the simple ‘letters probate’ and ‘letters of administration’.
In my opinion therefore the change was a foolish one and ill-advised. I assume that someone on the Rules Committee in 1994 thought the new title ‘estate trustee’ was a great idea and adopted it. But no matter how the change came about, I believe that it was an error and we ought to go back to the old terminology.
—
[1] R.R.O. 1990, O. Reg. 194, as amended, rr. 74 and 75.
[2] R.S.O. 1990, c. E.21.
[3] Ibid, e.g., ss. 6, 7, 11(1). See also Macdonell, Sheard and Hull on Probate Practice, 5th ed. by Ian M. Hull and Suzana Popovic-Montag (Toronto: Carswell, 2016), p. 295.
[4] Ibid. s. 1. And see Macdonell, ibid., p. 311.
[5] See, e.g., rr. 9.01, 9.02, and 9.03.
[6] R.S.O. 1990, c. E.22.
[7] Ibid., s. 1. And see identical definitions in s. 1(1) of the Succession Law Reform Act, R.S.O. 1990, c. S.26, and in s. 1 of the Trustee Act, R.S.O. 1990, c. T.23.
[8] See, e.g., ss. 2(1), and 3.
[9] Ontario Law Reform Commission, Report on Administration of Estates of Deceased Persons (Toronto, 1991)
[10] Ibid., p. 2
[11] Ibid., pp. 6, 13-17.
[12] Ibid., p. 11.
[13] Albert H. Oosterhoff, ‘The Discrete Functions of Courts of Probate and Construction’ (2017), 46 Adv. Q. 316.
[14] Albert H. Oosterhoff, ‘Locus of Title in an Unadministered Estate and the Law of Assent’ (2018), 48 Adv. Q. 41.
[15] [1965] A.C. 694, [1964] 3 All E.R. 692 (P.C. Qld.)
[16] Ibid. p. 708 A.C.
[17] R.S.O. 1990, c. E.22.
[18] Oosterhoff, ‘Locus of Title’. footnote 14, supra, §2.7.
[19] Emphasis supplied.
[20] 2018 ONSC 4174 (S.C.J.)
[21] See my blogs, ‘What Is a Will and What is the Role of a Court of Probate’, http://welpartners.com/blog/2018/09/what-is-a-will-and-what-is-the-role-of-a-court-of-probate/; ‘What Is a Will and What is the Role of a Court of Probate Redux: Re Milne and Re Panda’. http://welpartners.com/blog/2018/11/what-is-a-will-and-what-is-the-role-of-a-court-of-probate-redux-re-milne-and-re-panda/.
[22] 2019 ONSC 579 (Div. Ct.).
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Written by: Albert Oosterhoff
Posted on: May 20, 2021
Categories: Commentary, WEL Newsletter
Time was when Ontario, along with all other common law jurisdictions had executors and administrators. These are persons who administer a deceased person’s estate and are sometimes referred to by the collective title ‘personal representatives’. An executor may have to obtain letters probate to administer the estate. In the case of an intestate estate, the court can appoint an administrator to administer the estate. Similarly, if the deceased died with a will, but failed to appoint an executor, or the named executor predeceases the testator or is unable or unwilling to take on the office, the court can appoint an administrator with the will annexed.
But all that changed in Ontario in 1994 when new rules were drafted and incorporated into the Rules of Civil Procedure[1] to replace the former Probate Rules. Since then, executors, administrators, and administrators with the will annexed are referred to promiscuously as ‘estate trustees’. Similarly, ‘letters probate’, ‘letters of administration’, and ‘letters of administration with the will annexed’ are now referred to as “certificate of appointment of estate trustee’. Well, not quite, for r. 74.01 defines ‘certificate of appointment of estate trustee’ as ‘letters probate, letters of administration or letters of administration with the will annexed’. Similarly, it defines ‘estate trustee’ as ‘an executor, administrator or administrator with the will annexed’. For some reason, the rule does not redefine the collective term ‘personal representative’.
The need for the definitions in r. 74.1 is probably in part because the several statutes dealing with estates were not amended to change the terminology. Thus, for example, the Estates Act[2] still speaks of ‘letters probate’, ‘grant of probate’, or simply ‘probate’.[3] And it also continues to speak of ‘letters of administration’.[4] Indeed, the Rules themselves continue to speak of executors and administrators, and about probate and administration.[5] Finally, the Estates Administration Act[6] continues to define ‘personal representative’ a ‘an executor, an administrator, or an administrator with the will annexed’,[7] and it uses that collective term in the rest of the Act.[8]
So why did Ontario adopt the term ‘estate trustee’ and related terms in the Rules in 1974 and why was this change not carried forward into the statutes? The Ontario Law Reform Commission recommended the adoption of the term ‘estate trustee’ in a 1991 report on the administration of estates.[9] The Commission took the view that, in general, the position of personal representatives should be assimilated to that of trustees, except as regards the initial appointment to their office. It said:
Thus, personal representatives should have the same administrative powers as trustees, and should be subject to the same rules governing transmission of their office, liability to others, compensation for their efforts, and suspension and termination of their office.[10]
However, the report then went on to say:
In furtherance of our recommendation to assimilate the office of personal representative to that of a trustee, we recommend that a new term should be used to signify this change. Whether appointed by the will or the court, personal representatives are to be called ‘estate trustees’.
The Commission did recognize that not all distinctions between personal representatives and trustees are insupportable.[11] Certainly those that reflect functional differences should be retained, but others are merely historical anomalies.[12]
I agree with the basic premise of the Commission. In many cases the differences between the two offices do not make sense and thus assimilation of the powers and obligations of trustees should generally apply also to personal representatives. Most of the Commission’s detailed recommendations are excellent and they should have been adopted.
However, I disagree strongly with the Commission’s recommendation to adopt the new term ‘estate trustee’ for several reasons.
What equity did not do was to recognise or create for residuary legatees a beneficial interest in the assets in the executor’s hands during the course of administration. Conceivably, this could have been done, in the sense that the assets, whatever they might be from time to time, could have been treated as a present, though fluctuating, trust fund held for the benefit of all those interested in the estate according to the measure of their respective interests. But it never was done. It would have been a clumsy and unsatisfactory device from a practical point of view; and, indeed, it would have been in plain conflict with the basic conception of equity that to impose the fetters of a trust upon property, with the resulting creation of equitable interests in that property, there had to be specific subjects identifiable as the trust fund. An unadministered estate was incapable of satisfying this requirement. The assets as a whole were in the hands of the executor, his property; and until administration was complete no one was in a position to say what items of property would need to be realised for the purposes of that administration or of what the residue, when ascertained, would consist or what its value would be.[16]
In that article I also explained that the statutory ‘trust’ created by s. 2(1) of the Estates Administration Act[17] is not a true trust, since its purpose was simply to make the interests of the beneficiaries equitable so that they would no longer be subject to artificial destruction by the common law remainder rules and their derivatives.[18]
By calling executors and administrators ‘estate trustees’ the rules give the impression that they are trustees just as much and in the same way as someone who has been appointed a trustee is. One might think that this is not so, but the danger is real. See, for example, r. 74.16. It deals with the passing of estate accounts and provides:
Rules 74.17 and 74.18 apply to accounts of estate trustees and, with necessary modifications, to accounts of trustees other than estate trustees….[19]
This rule clearly equates the two offices, but in my opinion this is an egregious error. A personal representative is not a trustee.
It seems that courts on occasion will also equate or confuse the two offices. Arguably that is what happened at first instance in Re Milne Estate,[20] in which Justice Dunphy stated incorrectly that a will is a form of trust and, although the matter was still in the probate stage, he purported to interpret an asset allocation clause.[21] The case was reversed on appeal.[22]
In my opinion therefore the change was a foolish one and ill-advised. I assume that someone on the Rules Committee in 1994 thought the new title ‘estate trustee’ was a great idea and adopted it. But no matter how the change came about, I believe that it was an error and we ought to go back to the old terminology.
—
[1] R.R.O. 1990, O. Reg. 194, as amended, rr. 74 and 75.
[2] R.S.O. 1990, c. E.21.
[3] Ibid, e.g., ss. 6, 7, 11(1). See also Macdonell, Sheard and Hull on Probate Practice, 5th ed. by Ian M. Hull and Suzana Popovic-Montag (Toronto: Carswell, 2016), p. 295.
[4] Ibid. s. 1. And see Macdonell, ibid., p. 311.
[5] See, e.g., rr. 9.01, 9.02, and 9.03.
[6] R.S.O. 1990, c. E.22.
[7] Ibid., s. 1. And see identical definitions in s. 1(1) of the Succession Law Reform Act, R.S.O. 1990, c. S.26, and in s. 1 of the Trustee Act, R.S.O. 1990, c. T.23.
[8] See, e.g., ss. 2(1), and 3.
[9] Ontario Law Reform Commission, Report on Administration of Estates of Deceased Persons (Toronto, 1991)
[10] Ibid., p. 2
[11] Ibid., pp. 6, 13-17.
[12] Ibid., p. 11.
[13] Albert H. Oosterhoff, ‘The Discrete Functions of Courts of Probate and Construction’ (2017), 46 Adv. Q. 316.
[14] Albert H. Oosterhoff, ‘Locus of Title in an Unadministered Estate and the Law of Assent’ (2018), 48 Adv. Q. 41.
[15] [1965] A.C. 694, [1964] 3 All E.R. 692 (P.C. Qld.)
[16] Ibid. p. 708 A.C.
[17] R.S.O. 1990, c. E.22.
[18] Oosterhoff, ‘Locus of Title’. footnote 14, supra, §2.7.
[19] Emphasis supplied.
[20] 2018 ONSC 4174 (S.C.J.)
[21] See my blogs, ‘What Is a Will and What is the Role of a Court of Probate’, http://welpartners.com/blog/2018/09/what-is-a-will-and-what-is-the-role-of-a-court-of-probate/; ‘What Is a Will and What is the Role of a Court of Probate Redux: Re Milne and Re Panda’. http://welpartners.com/blog/2018/11/what-is-a-will-and-what-is-the-role-of-a-court-of-probate-redux-re-milne-and-re-panda/.
[22] 2019 ONSC 579 (Div. Ct.).
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