Executor Trustee Removed For Delay

Executor Trustee Removed For Delay

Re Collett Estate 2017 BCSC 473 is the most recent of a judicial trend to remove an executor trustee for delay in the distribution and finalization of an estate.

In Collett the deceased died in 2008 and was removed as a result of the inordinate delay in finalizing a simple estate in a timely manner.

In Dirnberger Estate, 2016 BCSC 439, this Court wrote as follows in deciding to remove an executor as a result of his delays:

[13] The duty of an executor is to settle the affairs of the deceased and to distribute the estate in accordance with the terms of the will in a timely manner. Mr. Chase has failed to do this.

[14] I have concluded that Mr. Chase must be removed as trustee. I have reached this conclusion for two reasons. His actions demonstrate that he lacks the necessary capacity to act as trustee. . . . There is as well a want of reasonable fidelity.

[15] With regards to the first reason, this is a simple estate that has not been distributed more than four years after probate.

[16] In Levi-Bandel v. McKeen, 2011 BCSC 247, Justice Butler stated at paras. 21 and 23:

[21] . . . it is not only an act of misconduct that can be grounds for removal of a trustee. A failure to act can amount to grounds for removal . . . .

. . .

[23] . . . I have little difficulty in concluding that [the executor’s] inaction and her intransigence caused unnecessary delay. Her refusal or reluctance to proceed with the administration of the estate amounts to a want of reasonable fidelity and a failure to carry out her duties.

 Justice Butler further stated:

19      The test for removal of an executrix or trustee is not contentious. The leading authority in British Columbia remains the decision in Conroy v. Stokes, [1952] 4 D.L.R. 124 (B.C. C.A.). In Conroy, the Court of Appeal considered whether it was expedient to remove one trustee and appoint a replacement when some of the beneficiaries were dissatisfied with the way the trustee was handling the estate. The court confirmed at 126-127 that the main test for removal of a trustee is the welfare of the beneficiaries:

In Letterstedt v. Broers (1884), 9 App. Cas. 371, their Lordships of the Judicial Committee held that the main principle upon which the jurisdiction of Courts of Equity has been exercised to remove old trustees and substitute new ones in cases requiring such a remedy, is the welfare of the beneficiaries of the trust estate. 

20      In Letterstedt v. Broers [(1884), L.R. 9 App. Cas. 371 (South Africa P.C.)], the court noted that it is not every act of misconduct that should result in removal of a trustee, only acts or omissions which endanger the trust property or show “a want of honesty or a want of proper capacity to execute the duties, or a want of reasonable fidelity.”

21      However, it is not only an act of misconduct that can be grounds for removal of a trustee. A failure to act can amount to grounds for removal. In Scott v. Scott, [1991] 5 W.W.R. 185 (Sask. Q.B.), Baynton, J. relied on the inherent jurisdiction of the Saskatchewan Court of Queen’s Bench to remove a trustee where the actions of one trustee in refusing to sign cheques or provide an accounting produced a stalemate amongst the trustees. His refusal was motivated by his wish to be compensated by the trust for caring for one of the principals of the trust. He refused to sign cheques or provide the accounting until he was paid. The court found that the trustee’s deliberate failure to act placed him in breach of his fiduciary duties to the beneficiaries of the trust.

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