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Removal and Passing Over of Executors and Administrators

1. Introduction

There have been quite a number of cases in the last while involving the passing over or removal of executors, and administrators. So I thought that it might be useful to review them together. Hence this potpourri. Even though the principles are largely the same for these different situations, I shall discuss them under the following discrete headings. Removal and passing over of trustees is not mentioned in the recent cases but the rules are much the same for such cases

2. Removal of Executor

Re Kolic Estate.[1]

Last month I wrote a blog on a later application in this estate.[2] The current case deals with an application by a beneficiary for the removal of the executor. The deceased had four children, Mary, Charles, Angela, and Joseph. She appointed Mary her executor. The will devised a 4/6th interest in her house to Joseph, a 1/6th interest to Mary, and another 1/6th interest to Angela, and directed that the house be transferred to them. The will also left the residue of the estate to those three siblings but left only $10,000 to Charles. Mary and Charles continued to reside in the house. Mary was very dilatory in proceeding with the administration of the estate and the administration stalled when Charles brought a will variation action. Joseph brought an application to remove Mary as executor and appointing a lawyer as executor, as well as consequential relief. Joseph and Angela opposed the will variation action, whereas Mary supported it and registered a certificate of pending litigation against the house, thus preventing her from dealing with the house. Joseph argued that Mary did not properly perform her role as executor by, for example, refusing to give him a copy of the will, failing to provide an accounting, and providing inconsistent values of the estate. He and Mary also argued that Mary is in a conflict of interest position and thus ought to be removed.

The matter was heard by Master CP Bouck. Since a Master does not have any inherent jurisdiction, he proceeded only under s. 31 of the Trustee Act,[3] which permits a court to make an order appointing new trustees. He referred to Miles v Vince,[4] in which the British Columbia Court of Appeal in turn referred to Letterstedt v Broers,[5] which has been treated for many years as the fons et origo of the principles that should guide the court in removing a trustee. Although they are well-known, they bear repeating:

  1. If the Court is satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.
  2. The acts or omissions must be such as to endanger the trust property or to show a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity.
  3. In exercising the delicate jurisdiction of removing trustees, the Court’s main guide must be the welfare of the beneficiaries. It is not possible to lay down any more definite rule in a matter that is so “essentially dependent on details often of great nicety.” The Court must proceed to look carefully into the circumstances of the case.
  4. Where a trustee is asked to resign, and if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign.
  5. The lack of jurisprudence in respect of the removal of a trustee reflects that a trustee when asked to do so, will resign.
  6. If, without any reasonable ground, the trustee refuses to do so the court might think it proper to remove him.
  7. Friction or hostility between trustees and the beneficiary is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is not to be disregarded.

The Master concluded that Mary failed properly to preserve the estate assets, pay the debts, and distribute the balance to the beneficiaries. She was also in a conflict of interest by aligning herself with Charles and registering a certificate of pending litigation against the property. Accordingly, the Master granted an order removing Mary as executor and replacing her with the lawyer proposed by Joseph.

Meuse v Taylor.[6]

This case concerned a potentially very expensive painting. Mary Sullivan died in 2020. She owned a painting known as the ‘Sanders Portrait’, purportedly of William Shakespeare and painted during his lifetime. A 2016 appraisal valued it at USD 50 million. It was the primary asset of the estate. It belonged to the testator’s husband, Mr Sullivan, who left it to her. He inherited it from his mother, who brought it with her from England when she immigrated to Canada in the late 19th century. His mother got it from other family members. The Portrait could be traced back to Mr Sullivan’s great-great grandfather, who mentioned it in an inventory of possessions, and from there back to one of Shakespeare’s neighbours, who presumably gave it to an early ancestor of Mr Sullivan. So the Portrait’s provenance was reasonable clear. Nonetheless, its value depends on whether it can be authenticated.

Mr. and Mrs. Sullivan appointed each other as executors with Mr Hale-Sanders, Mr Sullivan’s cousin, as substitute, and failing him David Taylor, Mr. and Mrs. Sullivan’s accountant. Mr Hale-Sanders acted as Mr Sullivan’s executor and after he died as Mrs. Sullivan’s executor, however, he renounced soon after her death. Mr Taylor then assumed the office of executor. Mr Taylor tried to prove the Portrait’s authenticity for many years. He entered into a deed with four other families who might have ownership claims. They recognized that Mr Sullivan owned the Portrait. Some persons claimed that they lent money to Mr Sullivan or were otherwise entitled to be compensated for work they did for them, including Mr Meuse, a law firm that provided legal advice, and an accounting firm.

Mr Meuse brought this application to remove Mr Taylor five years after he was appointed. He raised a number of issues claiming that Mr Taylor lacks the expertise and competence to get a fair value for the portrait, that he failed to act diligently in his duties as executor, and that he involved professionals to transfer the portrait. However, some of the issues he raised happened before Mr Taylor became executor.

Justice Gomery noted that section 5 of the Trustee Act,[7] empowers the court to appoint a replacement trustee, but the court in any event has inherent power to remove a trustee. In paragraph 14 she summarized the principles that govern removal. The test is not that the executor might not have executed his duties perfectly. She referred to St Joseph’s Health Centre v Dzwiekowski,[8] in which the court stated that the test is ‘whether the trust estate is likely to be administered properly in accordance with the fiduciary duties of the trustee and with due regard to the interests and welfare of the beneficiaries’ since removal ‘is intended not to punish trustees for past misconduct but rather to protect the assets of the trust and the interests of the beneficiaries’.

She also quoted from Venables v Gordon Estate,[9] in which Beaudoin J stated:

Our courts are reluctant to interfere with a Testator’s express wishes and remove a Trustee simply because there is a conflict between the Trustee and a beneficiary. There has to be evidence that the Trustee is unable to exercise in a completely impartial and objective manner the very wide discretion they are given under a Will.

Similar comments are found in many removal cases.

Her Honour noted that the issue is not whether Mr Meuse is better qualified, for Mrs Sullivan’s choice of executor is presumptively good, unless compelling evidence shows that leaving him in his office would endanger the estate (paragraph 16).

She decided that Mr Taylor should not be removed. The evidence fell short of establishing that he failed in his duties or that any step he took endangered the administration of the estate. In fact, he had accomplished a good deal (paragraph 20) and the issues raised by Mr Meuse were inconsequential and did not imperil the estate. She found that Mr Taylor’s response to Mr Meuse’s concern about certain transactions was reasonable, that he did not act inappropriately in involving an expert to authenticate, evaluate and potentially sell the Portrait. Nor was the estate prejudiced because Mr Taylor failed to replace a lawyer for the estate who had a conflict of interest immediately after he accepted the office. She also found that Mr Taylor did not lack the knowledge to administer the estate. He did not pre-determine the value of the Portrait and was not predisposed to sell it below market value.

Henderson v Sands.[10]

The testator died in 2019. She appointed her sister, Cheryl Sands, executor and her other sister, Judith Norris, as substitute executor. The will named the testator’s two children, Melissa and Marnie Henderson, as the joint beneficiaries of the estate. Melissa brought an application to remove Ms Sands as executor, passing over the substitute executor, and appointing herself as executor. Melissa made serious allegations about Ms Sands’ conduct as attorney and executor.[11]

In 2020 Justice McEwan made a consent preservation order, directing that the assets of the estate not be transferred, disposed of, distributed, or depleted, save only to pay the testator’s legitimate taxes and liabilities. By another order, Justice Conway continued the order on consent in 2021. The latter order also required Ms Sands to pass her accounts within 60 days. Since Ms Sands had been paying her significant personal legal and accounting fees from the estate, Melissa delivered both orders to TD Bank, and it froze the estate account. Ms Sands therefore brought this motion to allow her to continue to reimburse herself from estate funds. She alleged that she had made full disclosure but was unable to pass her accounts because the estate’s account had been frozen.

Thus, the case does not address the application for removal, but only the question whether the named executor can use estate assets to pass her accounts. While an executor is normally allowed to recover the reasonable costs of preparing her accounts from the estate, Justice Gilmore held that in this case she could not do so because of the preservation order, which did not extend to such costs. In any event, Ms Sands was in a conflict of interest since she is acting for her own benefit. In those circumstances Justice Gilmore applied DeLorenzo v Beresh,[12] and Fenwick v Zimmerman,[13] and held that Ms Sands as well as Melissa must bear their own costs until the litigation is completed. This does not offend public policy or section 23.1 of the Trustee Act.[14]

3. Passing Over Executor

Kinnear v White.[15]

Mr Kinnear made his will in 1999 and named his common law spouse, Arlene White his executor and principal beneficiary. He named his son, Kenneth, as alternative executor. Under the will Ms. White received 51% of the shares in the testator’s corporation and the residue of the estate. The testator’s two children, Kenneth and Katherine were given the other 49% of the corporate shares equally.

Ms. White had done very little in the estate, so the two children brought this application for various relief. In 2020 the court directed Ms. White to provide the applicants’ counsel with a statement of the estate asset, bring an application to pass her accounts in her management of the assets before and after the testator’s death, and attend an examination for discovery. She failed to comply with most of the terms of the order. She said she wanted to retain counsel but has failed to do so.

Therefore the children sought an order passing over Ms. White as executor and naming Katherine as estate trustee during litigation. The court took the view that Mr Kinnear’s wish to have Ms. White as his executor should not be lightly interfered with. Justice Dawe referred to several cases which suggest that passing over a named executor and appointing someone else should be a remedy of last resort and should happen only on the clearest evidence when there is no other solution. In particular, the applicant must demonstrate that if the order is not granted that will prevent the estate from being properly administered.

Justice Dawe found that the applicants had satisfied that heavy burden. The testator died two and a half years ago, Ms White has not applied for probate, and has done nothing else to administer the estate except to consult two lawyers briefly. Moreover, her comments during the hearing gave the judge no reason to believe that she has formed any plan to administer the estate. The applicants allege that the testator had shown signs of cognitive impairment since 2010 and had shown signs of dementia.

The court concluded that Ms. White cannot be counted on to administer the estate properly, whereas the applicants deserve to know whether they stand to inherit anything from the estate and, if so, to receive their requests without delay. It was satisfied that this would not happen unless Ms White was passed over and someone else was appointed.

Kenneth, the alternative executor, supports the proposal to name Katherine as estate trustee during litigation. Since Katherine and Ms. White are clearly in an adversarial position, Katherine would not normally be a suitable appointee. It would be better to appoint a neutral third party. However, professional executors do not work for free and although they are normally compensated out of the estate, it is uncertain whether there are sufficient assets in the estate for that purpose. But the rule that an interested party should not be appointed ETDL is not absolute. In this case appointing Katherine is the only realistic solution. Moreover, Ms. White was responsible for creating the situation and cannot complain if the court appoints an adversarial party to administer the estate. Accordingly, the court granted an order appointing Katherine as ETDL. It also granted most of the applicants’ requests for ancillary orders.

Gefen v Gefen.[16]

The testator’s estate had been engaged in lengthy litigation since 2013. His wife, who was 98 or 99 years old was sole executor and trustee of the estate, but the court had appointed an ETDL. The sons, Harvey and Harry were named alternative executors. Harry brought an application for an order passing over his mother as executor of the estate, as well as himself and his brother as alternative executors. The court made an order that the mother be examined under 39.03 of the Rules of Civil Procedure.[17] The mother was examined in 2022 and Harry took the view that the examination raised concerns about her capacity. Therefore, Harry sought an order for his mother to be formally examined for an assessment of her capacity to instruct counsel and to manage property under section 105 of the Courts of Justice Act,[18] as well an order for interim relief continuing the ETDL pending the completion of the capacity assessment.

The court found that the mother’s capacity was in issue and that there would be potential harm if the assessment was not completed. It concluded that the importance of obtaining an independent and objective assessment outweighed interference with the mother’s privacy. Therefore, the court granted the order for an assessment under section 105. It also held that leaving the ETDL in place on an interim basis was efficient and appropriate.

4. Intestacy

Similar issues can arise on an intestacy, as the following cases illustrate.

Re Berlinguette Estate.[19]

Marlene Louise Berlinguette died intestate in 2017. She was survived by her five children, Cherie, Albert, Lorne, Kellie, and Rene. In 1992 the mother and Albert bought a house as tenants in common in order to qualify for a mortgage. Albert later removed himself from the title. In 2008 the mother added Rene, Lorne, and Kellie as joint tenants with her. In February 2020 Rene, Lorne, and Kellie sold the property for $1.1 million. In April 2020 Cherie filed a notice of civil claim against all her siblings. She claimed that Rene, Lorne, and Kellie held the proceeds in trust for the estate or for her and Albert. She also sought an order appointing her administrator of her mother’s estate. In November 2020 Lorne and Kellie used their share of the proceeds to purchase a new property. In November 2021 Lorne and Kellie filed a notice of dispute in respect of their mother’s estate. And in December 2021 the court removed Albert as defendant from the civil claim and added him as plaintiff.

On Cherie’s application to be appointed administrator of the estate, Lorne and Kellie were the respondents. The issue before the court was whether Cherie can act with detachment and even-handedness and without animosity so that she can be administrator of the estate. She argued that she can because she is entitled to aliquot share of the mother’s estate together with her siblings. The respondents argued that she is not an appropriate administrator since her interests are not aligned with her siblings. They also argue that they are entitled to the proceeds of sale since they were joint tenants of the house with their mother.

The court held that Cherie does not have the consent of the majority of the children to act as administrator and therefore does not qualify under section 130 of the Wills, Estates and Administration Act.[20] For the court to appoint an administrator under WESA, the person must be independent and indifferent to the outcome of the estate’s distribution. In other words, the person must be neutral and not have an actual or perceived conflict of interest. Moreover, as held in Raye v Phillip Estate,[21] ‘In exercising its discretion to appoint an administrator, the court must consider the best interests of the estate and all persons interested in the estate’. Thus, the court dismissed the application.

Letourneau v Summers as Estate Trustee.[22]

Bernold Summers died intestate in 2020, without a spouse of children. Under section 47(3) of the Succession Law Reform Act,[23] the applicant, his mother Verna Letourneau, is the sole beneficiary of his estate. She is 82 years old and because of her age and health she agreed that another of her sons, Arnold Summers, be appointed administrator of the estate. However, Arnold and his counsel failed to communicate in any meaningful way with Verna and failed to respond to her repeated requests to sell Bernold’s house even after she engaged counsel to communicate with Arnold’s counsel. Further, Arnold and his counsel failed to provide Verna with a list of assets and liabilities of the estate. Nor did they give her any updates about the administration even though she asked for them repeatedly.

Arnold claimed that he wanted to buy the property and that he paid debts associated with the house but provided no documentary evidence. Besides, he did not consult Verna about these matters, and she did not know whether Arnold made payments to himself from the estate. Eventually, long after Verna’s request, Arnold listed the property for sale but again failed to consult with Verna. Meanwhile, he rented the house to a friend but provided no evidence about any rent paid, and he failed to account for the contents of the house which he removed.

Verna therefore brought this application to have Arnold removed and another of her sons, Joseph, appointed in his stead.

The court listed some principles mentioned in Meuse v Taylor[24] that the court considers when asked to remove an estate trustee. However, that case was about the removal of an executor, not an administrator and therefore the first principle mentioned, that the court will not lightly interfere with a testator’s choice of executor, is irrelevant. However, other principles are, such as the welfare of the beneficiaries and the possibility that the person appointed may endanger the administration of the estate.

The court concluded that Arnold acted in his own self-interest, contrary to Verna’s wishes. Further, he rented the property and executed an agreement of purchase and sale without consulting Verna and failed to provide any kind of accounting. He also claimed to be a creditor of the estate. Therefore, the court granted the order to remove Arnold and to appoint Joseph in his stead. It also granted supporting orders, including a full accounting by Arnold.

5. Conclusion

It is clear from these cases that the issues raised are similar, whether the matter concerns removal of an executor or an administrator, or if it concerns passing over a named executor or a person in line to be appointed administrator. What is clearly important in all such cases is that the applicant demonstrate by clear evidence that the person sought to be removed or passed over is unqualified and that failure to remove or pass over the person will endanger administration of the estate and will not be in the best interests of the beneficiaries.

[1] 2016 BCSC 1312.

[2] See ‘The Rule in Cherry v Boultbee Redux’, https://welpartners.com/blog/2022/12/the-rule-in-cherry-v-boultbee-redux/.

[3] RSBC 1996, c 464.

[4] 2014 BCCA 289, para 84

[5] (1884), 9 App Cas 371 at 385-89 (PC).

[6] 2022 ONSC 1436.

[7] RSO 1990, c T.23.

[8] 2007 CarswellOnt 7642, para 28.

[9] 2012 ONSC 956, para 31.

[10] 2022 ONSC 2959.

[11] The court referred to Judith Norris as alternate executor, and Ms Sands as Power of Attorney. Both highlighted terms are incorrect. The word alternate suggests that Judith Norris and Ms Sands would take turns back and forth as executor. That is not what the testator intended. The correct term is either alternative or substitute. The term Power of Attorney means a document made by a person in which she appoints an attorney. Thus, the correct term is attorney.

[12] 2010 ONSC 5655, para 24.

[13] 2008 CarswellOnt 4827 para 13. The citation for this case is not given in the Henderson case and the paragraph number in it is incorrect.

[14] RSO 1990, c T.23.

[15] 2022 ONSC 2576.

[16] 2022 ONSC 3378.

[17] RRO 1990, Reg 194.

[18] RSO 1990, c C.43

[19] 2022 BCSC 1098.

[20] SBC 2009, c 13 (‘WESA’).

[21] 2021 BCSC 387 para 27.

[22] 2022 ONSC 4295.

[23] RSO 1990, c S.26.

[24] Footnote 6, supra.


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