Trevor Todd and Jackson Todd have over 60 years experience in estate litigation including the removal or passing over of an executor.

 

In Re Virdi Estate 2025 BCSC 680 an executor who had a claim against the same estate was passed over due to his conflict of interest and replaced by another person.

The executor’s claim of just  less than $300,000 pursuant to a promissory note would be made against the estate which he was executor and thus placed the executor in a conflict of interest requiring his passing over and substituting of another executor.

 

                The Law

[32]         The court has the authority to remove or pass over an executor and trustee and appoint a substitute personal representative pursuant to ss. 158 and 159 of WESA, s. 31 of the Trustee Act, R.S.B.C. 1996 c. 464, and its inherent jurisdiction: Burke v. Burke, 2019 BCSC 383 at para. 31, citing Mardesic v. Vukovich Estate (1988), 30 B.C.L.R. (2d) 170 (S.C.), 1988 CanLII 3125; Thomasson Estate (Re), 2011 BCSC 481 at para. 19.

[33]         The portions of s. 158, relevant to this hearing are:

s. 158(1) In this section, “pass over” means to grant probate or administration to a person who has less priority than another person to become a personal representative. …

(3) Subject to the terms of a will, if any, and to subsection (3.1), the court, by order, may remove or pass over a person otherwise entitled to be or to become a personal representative if the court considers that the personal representative or person entitled to become the personal representative should not continue in office or be granted probate or administration, including, without limitation, if the personal representative or person entitled to become the personal representative, as the case may be, …

(f) is

(i) unable to make the decisions necessary to discharge the office of personal representative,

to an extent that the conduct of the personal representative hampers the efficient administration of the estate, or …

(4) An order of the court removing a personal representative does not remove that person as a trustee. …

[34]         Section 159 of WESA states that the court must appoint a substitute personal representative where the Court has discharged or removed an executor, unless certain exceptions apply. The court may also concurrently appoint the substitute person as a trustee under the Trustee Act in place of the trustee being discharged or removed.

[35]         Section 31 of the Trustee Act states:

If it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court, it is lawful for the court to make an order appointing a new trustee or trustees, whether there is an existing trustee or not at the time of making the order, and either in substitution for or in addition to any existing trustees.

[36]         In Parker v Thompson (Trustee), 2014 BCSC 1916, at para. 37–38, Chief Justice Hinkson adopted the following summary of guiding principles from Haines v. Haines, 2012 ONSC 1816 at para. 10, pertaining to the removal of an estate trustee:

(1) the court will not lightly interfere with the testator’s choice of estate trustee;

(2) clear evidence of necessity is required;

(3) the court’s main consideration is the welfare of the beneficiaries; and

(4) the estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the trust.

[37]         As summarized in Dunsdon v. Dunsdon, 2012 BCSC 1274 at para. 202:

[202] Put broadly, a trustee may be removed where his or her acts or omissions endanger the trust property or demonstrate a want of honesty, of reasonable fidelity, or of the proper capacity to execute the duties of office:  Conroy v. Stokes 1952 CanLII 227 (BC CA), [1952] 4 D.L.R. 124 (B.C.C.A.). The existence of friction between the trustee and one or more beneficiaries is usually not sufficient, of itself, to justify removal of the trustee: Erlichman v. Erlichman, 2000 BCSC 173; Re Blitz Estate, 2000 BCSC 1596. However, where there is dissension among the trustees themselves by which the trust administration grinds to a standstill or otherwise hampers the proper administration, the courts tend to remove one or more of them. In those instances, misconduct per se is not an essential prerequisite: Re Consiglio Trusts (No. 1) (1973), 1973 CanLII 681 (ON CA), 36 D.L.R. (3d) 658 (Ont. C.A.); Wilson v. Heathcote, 2009 BCSC 554.

[38]         An executor and trustee may be removed or passed over when there is an actual or perceived conflict between their duties as executor and trustee, and their personal interests: Re Ching Estate, 2016 BCSC 1111 at paras. 21–22; Thomasson Estate (Re), 2011 BCSC 481 at para. 23. However, not every actual or perceived conflict of interest necessarily leads to disqualification. Each case turns on its own facts: Burke at para. 43; Hoggan v. Silvey, 2021 BCSC 971 at para. 16, rev’d on other grounds 2022 BCCA 176.

[39]         The fact that an executor asserts that they are a creditor of the estate will not automatically disqualify them from acting as executor; it will only do so where the actual or potential conflict of interest rises to the level of a “disqualifying conflict of interest”: Oates v. Baker Estate, 1993 CanLII 1921 (BC SC), [1993] B.C.J. No. 1293; Bringeland Estate (Re), 2024 BCSC 1546 at paras. 61–64.

[40]         In Bringeland Estate (Re), at para. 72, Justice Stephens set out the following non-exhaustive list of factors the Court should consider in determining whether an executor’s claim on the estate as a creditor is a disqualifying conflict of interest:

(a) has the executor been reasonably transparent about the existence of their claim?;

(b) whether the claim has been quantified by the executor, and the size of their asserted claim if it has been quantified (Brown Estate at para. 22)?;

(c) if not quantified, is there a reasonable explanation for the executor not doing so?;

(d) the passage of time, and the existence of any delay (Kara Estate (Re), 2022 BCSC 923 at para. 24)?;

(e) whether the other beneficiaries oppose the executor continuing despite the executor’s claim?;

(f) whether the executor’s pre-death loan claim creates a legitimate and reasonably held distrust on the part of a beneficiary in the executor’s impartiality?;

(g) whether the asserted pre-death loan endangers the administration of the estate into the future?; and

(h) whether the executor’s conduct with respect to the asserted pre-death loan hampers the efficient administration of the estate (Wills, Estates and Succession Act, S.B.C. 2009, c. 13, s. 158(3)(f) [WESA])?