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Fraudulent Executor Ordered to Pay Costs

Fraudulent Executor Ordered to Pay Costs

Kyle estate 2017 BCSC 752 held that an executor who misappropriated trust funds was denied the legal costs of defending the pursuit of those assets and either double costs or special costs were awarded against the executor on the basis of public policy, rather than the costs be borne by the estate.

The executor had been removed by court order, and it was determined that approximately $450,000 had been misappropriated from estate funds by him.

He was not forthright with his mother and siblings regarding what appeared by them to be sums missing from the estate of the deceased, had obtained a grant of probate of the will of the deceased without disclosing the joint account, and had failed to meet the onus of showing that it was the intention of the deceased to make an absolute gift of the monies in the joint account to himself.

The court also found that the former executor undertook almost 2 years of misdirection and deceit to knowingly permit inaccurate information to be conveyed by the estate lawyer and was not honest, complete or neutral in disclosing the benefits he had received from the deceased.

The other beneficiary was awarded full indemnification for his legal costs and expenses as a result of pursuing a claim against the former executor.

In a proceeding involving the misconduct of an executor or trustee, including where the executor has acted dishonestly and in breach of fiduciary obligations, the beneficiary may obtain an award of special costs against the executor personally and, if the executor is a beneficiary under the estate, these costs can come out of the executor share of the estate. Szpradowski v Szpradowski Estate (1992) 44 ETR 89

Szpradowski at para. 227 stated ” there is no reason why the estate of the legatee, should bear the cost of which the executor put the estate “-

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