Removal Or Passing Over of Executor?
Introduction
Cases involving the removal of executors are common. Cases in which a party asks the court to pass over an executor are rare. although they do occur. A recent case is Kinnear v White.[1] In brief, an executor can be removed if she has assumed her office by seeking probate. She can be passed over if she has not done so. Of course, the court will not act unless the applicant establishes that the conditions for removal or passing over exist. Those conditions are largely the same for both kinds of application. The issue arose again in Sassano v Iozzo.[2]
Facts
The testator died in 2011, predeceased by her husband and survived by her two daughters, Carmelina Sassano (the ‘Applicant’) and, Gioseppina Iozzo (the ‘Respondent’). By her Will she appointed both the Applicant and Respondent her executors. The principal asset of the estate was a house in Toronto. When the Applicant divorced her husband in 1985, she moved into the house with her mother. The Will gave the house to the executors in trust to permit the Applicant to continue to reside in the house until the first of four conditions occurred, one of which was when the Applicant voluntarily left the house with the intention of taking up permanent residence elsewhere. Until one of the conditions occurred, the Applicant could live in the house free of rent or other financial obligations, except that she had to pay all the utilities. Apart from that, the estate was to pay all property related expenses, including repairs and the payment of property taxes. The two sisters never applied for probate.
In 2023 the Applicant notified the Respondent that she intended to take up permanent residence elsewhere because of her inability to maintain the property due to her physical limitations and because the property needed major repairs. The Applicant testified that her relationship with the Respondent became strained because they disagreed about where the testator should live as her health declined. The Applicant paid the taxes personally and called the Respondent in 2012 to tell her that they would have to obtain a loan to repair the house’s roof. However, the Respondent hung up on her. Other repairs were also necessary. She testified further that she tried to reach the Respondent through her lawyer and through a real estate agent whose assistance she sought and who confirmed her evidence. The Respondent ignored them, and her husband told the agent that his wife had no interest in the property or in the estate and asked the agent and the Applicant never to bother them again.
The Applicant then brought this Application in which she sought an order removing the Respondent as executor, an order granting the Applicant leave to apply for probate, and an order for costs on a full indemnity basis.
The Respondent did not appear on the Application, although duly served.
Analysis and Judgment
Justice Sanfilippo began his analysis by noting that the court has an inherent jurisdiction to remove an executor, which is embodied in section 37(1) of the Trustee Act.[3] However, by reference to Chambers Estate v Chambers,[4] and Windsor v Mako,[5] he noted that while an executor can be removed once she has obtained probate, until then she can only be passed over. Since the Respondent had not applied for probate, she could therefore not be removed but could only be passed over.
His Honour then noted that the grounds for passing over are the same as the grounds for removing an executor. He cited many cases that speak of the grounds for removal, note that removal should be done only on the clearest of evidence, and confirm that the main guide should be the welfare of the beneficiaries.
Justice Sanfilippo stated that this was not a case in which the Respondent intermeddled in the administration of the estate but rather one in which she abdicated any duty as executor. His Honour noted that the case was like Kinnear, mentioned above, where the executor had not applied for probate, had not taken any steps to administer the estate, and had ignored court orders. He noted that an executor can be passed over when she has endangered trust property, citing Di Michele v Di Michele,[6] and found that the Respondent was endangering the principal asset of the estate by refusing to act in concert with the Applicant, despite numerous efforts by several people urging her to become involved. In addition, the welfare of the Applicant required that the Respondent be passed over as executor. Thus, the Respondent’s failure to take up her role as named executor impeded the proper administration of the estate and the welfare of one of the beneficiaries. Although passing over a named executor is a remedy of last resort, it was necessary in this case. His Honour noted that section 37(4) does not require the court to appoint a replacement and therefore ordered that the Applicant be constituted the sole executor with leave to apply for probate.
Justice Sanfilippo also found that the full indemnity costs sought by the Applicant were fair, reasonable, and appropriate and directed that they be paid out of the Respondent’s share of the residue.
—
[1] 2022 ONSC 276. It was one of the cases I considered in a blog in February 2023. See https://welpartners.com/blog/2023/02/removal-and-passing-over-of-executors-and-administrators/
[2] 2024 ONSC 1517.
[3] RSO 1990, c T.23.
[4] 2013 ONCA 511, para 90.
[5] (2008) 43 ETR 3d 255 (Ont SC), para 35
[6] 2014 ONCA 261.
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Written by: Albert Oosterhoff
Posted on: July 25, 2024
Categories: Commentary, WEL Newsletter
Introduction
Cases involving the removal of executors are common. Cases in which a party asks the court to pass over an executor are rare. although they do occur. A recent case is Kinnear v White.[1] In brief, an executor can be removed if she has assumed her office by seeking probate. She can be passed over if she has not done so. Of course, the court will not act unless the applicant establishes that the conditions for removal or passing over exist. Those conditions are largely the same for both kinds of application. The issue arose again in Sassano v Iozzo.[2]
Facts
The testator died in 2011, predeceased by her husband and survived by her two daughters, Carmelina Sassano (the ‘Applicant’) and, Gioseppina Iozzo (the ‘Respondent’). By her Will she appointed both the Applicant and Respondent her executors. The principal asset of the estate was a house in Toronto. When the Applicant divorced her husband in 1985, she moved into the house with her mother. The Will gave the house to the executors in trust to permit the Applicant to continue to reside in the house until the first of four conditions occurred, one of which was when the Applicant voluntarily left the house with the intention of taking up permanent residence elsewhere. Until one of the conditions occurred, the Applicant could live in the house free of rent or other financial obligations, except that she had to pay all the utilities. Apart from that, the estate was to pay all property related expenses, including repairs and the payment of property taxes. The two sisters never applied for probate.
In 2023 the Applicant notified the Respondent that she intended to take up permanent residence elsewhere because of her inability to maintain the property due to her physical limitations and because the property needed major repairs. The Applicant testified that her relationship with the Respondent became strained because they disagreed about where the testator should live as her health declined. The Applicant paid the taxes personally and called the Respondent in 2012 to tell her that they would have to obtain a loan to repair the house’s roof. However, the Respondent hung up on her. Other repairs were also necessary. She testified further that she tried to reach the Respondent through her lawyer and through a real estate agent whose assistance she sought and who confirmed her evidence. The Respondent ignored them, and her husband told the agent that his wife had no interest in the property or in the estate and asked the agent and the Applicant never to bother them again.
The Applicant then brought this Application in which she sought an order removing the Respondent as executor, an order granting the Applicant leave to apply for probate, and an order for costs on a full indemnity basis.
The Respondent did not appear on the Application, although duly served.
Analysis and Judgment
Justice Sanfilippo began his analysis by noting that the court has an inherent jurisdiction to remove an executor, which is embodied in section 37(1) of the Trustee Act.[3] However, by reference to Chambers Estate v Chambers,[4] and Windsor v Mako,[5] he noted that while an executor can be removed once she has obtained probate, until then she can only be passed over. Since the Respondent had not applied for probate, she could therefore not be removed but could only be passed over.
His Honour then noted that the grounds for passing over are the same as the grounds for removing an executor. He cited many cases that speak of the grounds for removal, note that removal should be done only on the clearest of evidence, and confirm that the main guide should be the welfare of the beneficiaries.
Justice Sanfilippo stated that this was not a case in which the Respondent intermeddled in the administration of the estate but rather one in which she abdicated any duty as executor. His Honour noted that the case was like Kinnear, mentioned above, where the executor had not applied for probate, had not taken any steps to administer the estate, and had ignored court orders. He noted that an executor can be passed over when she has endangered trust property, citing Di Michele v Di Michele,[6] and found that the Respondent was endangering the principal asset of the estate by refusing to act in concert with the Applicant, despite numerous efforts by several people urging her to become involved. In addition, the welfare of the Applicant required that the Respondent be passed over as executor. Thus, the Respondent’s failure to take up her role as named executor impeded the proper administration of the estate and the welfare of one of the beneficiaries. Although passing over a named executor is a remedy of last resort, it was necessary in this case. His Honour noted that section 37(4) does not require the court to appoint a replacement and therefore ordered that the Applicant be constituted the sole executor with leave to apply for probate.
Justice Sanfilippo also found that the full indemnity costs sought by the Applicant were fair, reasonable, and appropriate and directed that they be paid out of the Respondent’s share of the residue.
—
[1] 2022 ONSC 276. It was one of the cases I considered in a blog in February 2023. See https://welpartners.com/blog/2023/02/removal-and-passing-over-of-executors-and-administrators/
[2] 2024 ONSC 1517.
[3] RSO 1990, c T.23.
[4] 2013 ONCA 511, para 90.
[5] (2008) 43 ETR 3d 255 (Ont SC), para 35
[6] 2014 ONCA 261.
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