In Canada, attempts to remove an executor are common. These applications are often commenced by disgruntled beneficiaries or frustrated co executors who believe that the person in charge of administering the estate is being unfair and or dishonest. The post reviews some relevant case law to examine under what circumstances an Ontario court decide to remove an executor.
In Canada, Ontario’s courts have the statutory authority to remove executors. Dissatisfied beneficiaries often go to court to compel the removal of the executors and force them to pass their accounts. If the application is successful, the executors are then forced to produce all the records relating their administration of the estate and a new executor is appointed as a replacement. The executors may or may not have done anything wrong. Nevertheless, the beneficiaries’ resentment often stirs controversy and their frustration, mistrust and hostility can result in their asking the court to remove Estate Trustees.
Historically, in Ontario, Canada Courts needed to see evidence of misconduct in order to remove trustees. In Libman v. Feldberg, Mrs. Libman left some money to charities, but the bulk of the estate was left to her daughter. Mrs. Libman’s Will stated that her personal effects were to be given to her daughter, who in her absolute discretion, could decide how they should be divided between herself and Mrs. Libman’s grandchildren. Feldberg, her Estate Trustee, ignored this provision of the Will. He told Mrs. Libman’s niece that she should take whatever she wanted. The daughter found that her mother’s gold bracelet, diamond ring, candelabra and fur coat were gone. Enter the lawyers. Through their efforts, Feldberg was removed as an Estate Trustee, the missing personal effects were retrieved and they recovered $50,000 worth of bonds and valuable coins that had disappeared.
Was the Court’s decision based on the hostility between the beneficiary and Feldberg? The Judge hearing the case relied on Re Davis, a decision of the Ontario Court of Appeal. In that case, Mrs. Davis appointed her friend to be the executrix (the person in charge of administering her estate). The three judges on the Court of Appeal found that ” … the present situation is not any more the fault of the executrix than it is of the beneficiaries…. regardless of what has brought about the present situation,….it is no longer possible for the executrix to exercise (her duties) in a completely impartial and objective manner”. For the Court of Appeal, misconduct was not the issue. What mattered most was the presence of hostility and the inability of an Estate Trustee to be completely impartial and objective in the administration of the estate. In Libman v Feldberg, it was clear that the Court found Feldberg’s administration of the estate wanting. The Court found that he did not carry out his duties “in a completely impartial and objective manner” which resulted in “… a degree of hostility and distrust is so strong, as to make it impossible for the beneficiary to accept Feldberg’s actions…” Apparently, for Ontario Courts, removal of Estate Trustees may no longer only be limited to instances where a Trustee is guilty of misconduct. They key factor seems to be an ability to carry out his/her duties impartially and objectively.