In our last blog, we reviewed the procedural steps that need to be taken upon a litigant’s death and what steps a litigant’s executor must take in order to continue a lawsuit. But what happens if a litigant’s executor (the “Trustee”) (and/or the beneficiaries) has a sober second look at the lawsuit and decides that the deceased litigant’s case is not particularly strong and they don’t want to obtain an order to continue with the proceeding?
Under Ontario law, all fiduciaries, including estate trustees, have a right to compensation for their time and efforts. This right is derived from the common law, statute, and the instrument creating or governing the relationship, such as a will or continuing power of attorney (as the case may be). However, the question of when a fiduciary is entitled to compensation depends on several factors. In examining this question, this blog will examine the statutory framework for compensation of attorneys and trustees, the common law rule against “pre-taking” compensation and its exceptions, and the consequences that may arise from breach of the rule.
The short answer is no, but in reality, this question is much more nuanced and complicated than people think.
The death of a party during a lawsuit almost inevitably complicates the litigation. In this first in a series of blogs, we set out the procedural steps that must be taken in order to proceed with the lawsuit following the death of a party.
There is a tension between the two sometimes conflicting goals of protecting testamentary freedom and permitting sui juris beneficiaries to enjoy their property without undue restrictions. Testamentary freedom is a hallmark of the common law in democratic societies that support the rule of law and property rights generally. Accordingly, testators are, for the most part, legally entitled to dispose of assets as he or she wishes.
Anecdotally, it appears that a rising number of court cases involve beneficiaries or co-trustees trying to remove a “rogue” executor.
It is reasonably easy to imagine many of the possible reasons for which a trustee or executor may be removed from their position by the Court. Perhaps he appropriated trust property for his own benefit, delayed in taking the steps necessary to administer the trust or estate, failed to account for trust property, or was otherwise clearly incompetent in the role.
The friction between Peter and Michael was long standing and intense. While the reported case does not specifically say so it appears that the arguments over their mother’s investments was just another platform of expression for their mutual animus. While Peter may have been the executor of his grandfather’s estate Michael was his mother’s litigation guardian.
Will a court remove an executor where there is disagreement, friction, or hostility between the trustees and the beneficiaries? Is friction in of itself enough to warrant removal? One of the cases that highlights the Courts’ efforts to grapple with these questions is Rose v. Rose.
If one reviews the secondary authorities one of the grounds listed warranting the removal of an executor is “substantial breach of trust”.