Trevor Todd and Jackson Todd have over sixty years combined experience in resolving estate disputes including obtaining interim distributions of estate assets
Ii Re Hartin Estate 2025 BCSC 2092 the deceased died in 2019 leaving a substantial estate.
There was an initial distribution of assets but after several more years the applicant sought but was refused a substantially greater interim distribution from the courts.
The court instead ordered further disclosure of accounts and for confidentiality
A summary of the law pertaining to the court’s discretion to order an interim distribution.
[38] The court has the authority to order an interim distribution of estate assets further to its general jurisdiction. The court in Zanrosso Estate (Re), 2021 BCSC 2664, referring to Reznik v. Matty, 2013 BCSC 1346 stated at para 14:
… That case involved an estate whose distribution was still outstanding 12 years after the death of a testator. Its assets were worth over $600,000 and there had been just one interim distribution of $100,000. There was also evidence of need for the funds provided by one of the beneficiaries. Ultimately, the Court ordered a $40,000 interim distribution from the estate. It did so by reference to the concept of “assent”, which was described as “an acknowledgement by a personal representative that an asset is no longer required for the payment of the debt, funeral expenses or general legacies”: Reznik v. Matty, 2013 BCSC 1346, at para. 37. Mr. Justice Funt wrote at para. 44:
In the circumstances of this case, where the administration of the Estate has taken already over a decade and there is significant value and liquidity, the executor’s assent should be compelled.
[39] In Reznik, supra, the court held that the outstanding liabilities does not prevent the assent of part of the residue at para 47:
North J. in Austin also considered the argument that outstanding liabilities should prevent assent of part of the residue. He stated:
Then, further, it is suggested that it is not reasonable to suppose the executors would have assented here, when there are outstanding liabilities. I do not see anything unreasonable in that. No doubt, if there were shown to be very large outstanding liabilities, and the question was whether assent had been given with respect to the only remaining available asset, there would be something in it. But there is nothing in it. There is no improbability in the inferring an assent because there are outstanding liabilities, unless you see the executor would be prejudiced by giving his assent, and it is impossible to say that, unless the other assets with respect to which he has not assented are clearly insufficient to meet the liabilities.
[Emphasis added]
[40] Hecht v. Reid, 1991 CanLII 963 (BC CA), and Davis v. Burns Estate 2016 BCSC 1982 at para. 31 set out factors to be applied when deciding whether to exercise the court’s discretion to make an interim distribution:
- the amount of the benefits sought to be distributed as compared to the value of the estate;
- the claim of the beneficiaries on the testator;
- the need of beneficiaries for money; and
- the consent of the residuary beneficiary to the proposed transfer.
[41] While these factors are usually considered in the context of leave to make an interim distribution when there is an outstanding wills variation proceeding, the court in Zanrosso Estate accepted, at para. 16, that these factors provide guidance on how to exercise discretion to make an interim distribution generally. The Zanrosso Estate court clarified that the Hecht factors are not an exhaustive list.
[42] In Zanrosso Estate, the court also considered whether there had been a delay with respect to distributing the estate, although the court found that there had been no such delay in that case.
[43] In Antonias Estate (Re), 2021 BCSC 2388, the court ordered a distribution of 527,938.64, leaving $447,000 in the estate for fees. The age and vulnerability of the beneficiaries (their ages ranged from 76- 89) and the large holdback contributed to the courts decision to do so.
[44] In Antonias Estate, the court provided that if the liabilities of the estate were to exceed the remaining reserve account, the beneficiaries would reimburse and indemnify the executor for their share of any such shortfall. The court found this would balance the appropriate prejudice between any delay in distribution and the need for the executor to be fully protected from being personally liable.
[45] Ruth states that she has no opposition to a similar indemnity order linked to any interim distribution I would order, and points out that she agreed to the same without issue with respect to the 2024 interim distribution.
[46] In McGovern Estate v. McGovern, 2014 ONSC 1785 at para 41, the court considered whether an executor acted with mala fides or if the executor has behaved unreasonably or breached their fiduciary duty, duty of good faith, and fairness to the beneficiaries.
[47] The respondents say the cases relied on by the applicant can be readily distinguished.
[48] In Reznik, for example, the court relied upon the doctrine of “assent” to compel an interim distribution due to factors such as the length of administration (12 years) and when there was “significant value and liquidity” (para. 43). The court also noted that there were “few remaining outstanding or anticipated costs” (para. 6) .
[49] The respondents maintain those facts are not present here.
[51] The respondents point out that the issue in Antonias Estate was whether the executors could hold back the distribution as ransom for a release, and that the executor was seeking a holdback that was significantly higher than any known liabilities of the estate, neither of which is the case here.
[52] Finally, the respondents point out that in Zanrosso Estate the court dismissed an application by a residuary beneficiary to compel the personal representative to make an interim distribution. Justice Brongers agreed that the court had the jurisdiction to make such an order but stated that “an order compelling a distribution of the estate over the objection of the personal representative should only be made in exceptional circumstances with the burden lying on the applicant to justify the issuance of an order.” (at para. 16)
[53] Here, the personal representative is objecting to the distribution, as are three of the four beneficiaries. Of course, Deana herself, the executor, is one of the three objecting beneficiaries.
[54] In Zanrosso Estate, Justice Brongers found that the executors had been discharging their responsibilities in a reasonable and prudent manner in the circumstances. Factors he considered to dismiss the application included: (1) there had already been a significant interim distribution to the beneficiaries; (2) a lack of any evidence of need by the applicant beneficiary; (3) the delays in the administration of the estate were caused by pre-emptive litigation against the estate brought by the applicant and his threats of future litigation and (4) the executors were waiting for a clearance certificate from the CRA before making a further distribution.
[55] On the latter point, the court noted the executors’ potential personal liability and “the uncertainty surrounding the capital gain tax treatment of the estate’s primary asset.” (Zanrosso Estate at para. 18).
[56] The factors cited in Zanrosso Estate bear many similarities to the present case. While I do not find that Ruth’s efforts to obtain information and apply for an interim distribution has been the primary cause of delay in the administration of this case, I find the rest of the factors to be relevant.
