An analysis of Rule 9.01 and Dawson and Harris v. Dawson (Estate) and Dawson et al.
What if the person you are suing dies before the lawsuit has been completed? The answer starts with Rules 11 and 9.01.
We will be dealing with Rule 11 later in our series. For the purposes of this blog, it suffices to say that Rule 11 deals with the transfer of interest or liability to another party by virtue of assignment, bankruptcy, death or other means. When a party to a lawsuit dies, the proceeding is stayed. At that point, any interested person may file the material necessary for the registrar to issue an order to continue – reigniting the lawsuit.1
But the question is, against whom?
Rule 9.01 states,
“A proceeding may be brought by or against an executor, administrator or trustee as representing an estate or trust and its beneficiaries without joining the beneficiaries as parties.” (emphasis added)
The rule’s use of the word “may” suggests that it is permissive, not mandatory. One could argue that, had the rules sought to make it mandatory for a proceeding to be brought by or against an executor, it would have used the word “shall” instead. While that’s certainly logical, the case law says something else. But before we address the law, something very basic to this discussion has to be understood. An estate is not a legal person. It cannot sue or be sued.2 As explained by Cameron J., of the Ontario Superior Court, in Fong v. Louie, 3
A right of action belonging to an estate can only be asserted by the estate. The conduct of litigation on behalf of the estate is the prerogative and responsibility of the estate trustee provided he is carrying out his duties in representing the estate and beneficiaries. The beneficiary of the action is the estate, not its beneficiaries. Any proceeds of the litigation must first be applied to the liabilities of the estate. Only after satisfying the liabilities of the estate can a distribution be made to the beneficiaries.
Arguably, one might conclude that the failure to name the executor as a defendant or respondent makes the proceeding void ab intitio since only an executor can bring or defend a proceeding against an estate. Again, while that seems like it makes sense that is not the law. Remember that Rule 2.01(1) states “A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court.” Moreover, Rule 9.01 of the Rules of Civil Procedure is used to ensure that substance trumps technicalities.4 If a defendant dies before a proceeding is initiated or in the middle of the lawsuit and there is no appointed representative of the estate, then this Rule provides a roadmap for how to deal with the matter.
In Dawson and Harris v. Dawson (Estate) and Dawson et al.,5 a lawsuit was initiated against Josephine Dawson in 2018. During the course of the litigation Josephine passed away. The plaintiff obtained an order to continue the application against the estate of Josephine Dawson, deceased. When issuing the application, the title of proceedings failed to identify anyone in a representative capacity for Josephine’s estate, but one of the defendants (Anthony) happened to be both the estate trustee of Josephine’s estate and a respondent personally.
Given that the law requires the trustee to be named, and having in mind the applicant failed to do so, the question is whether that failure constituted grounds to dismiss the application.
The court identified two rules that come into play when someone dies in the middle of a lawsuit:
- Under Rule 9.03(2) the failure to identify anyone in a representative capacity for Josephine’s estate does not result in the proceeding being a nullity; and
- As set out in Rule 9.03(6), that failure does, however, give rise to the consequences as “No further step in a proceeding referred to in subrule (2), (3), (4) or (5) shall be taken until it is properly constituted and, unless it is properly constituted within a reasonable time, the court may dismiss the proceeding or make such other order as is just.”
Accordingly, the judge ordered that the title of proceeding had to be amended so that the name of the respondent would no longer be “The estate of Josephine Dawson, deceased,”, but would be described instead as “Anthony Vikram Dawson, in his capacity as the Estate Trustee of the Estate of Josephine Dawson, Deceased.”
Conclusion and Takeaways
Trustees are responsible for and in charge of estate administration.6 However, notwithstanding that only an executor can represent the estate in a lawsuit, the failure to properly name the executor is not fatal to the lawsuit if it is properly constituted in a reasonable period of time.
If a party has a lawsuit against an estate and does not know who the executor is, that does not preclude initiating proceedings. There may be limitation period issues or concerns that the person who has access to the estate assets may be dissipating them to thwart judgment. In such cases, it makes sense to start the proceedings, name the estate as a party and later bring a motion pursuant to Rule 9.02 to appoint a litigation administrator to represent the estate for the purposes of the proceeding and then rely on Rule 9.03(2) to have the title of proceedings amended to ensure that the proceeding is properly constituted once the estate has an executor or administrator.
One of the key things to remember is that the law ensures that the estate trustee is involved in the litigation to ensure that there are guardrails on the issue of costs. As the Court of Appeal explained in paragraph 14 of Westover Estate v. Jolicouer – Court of Appeal for Ontario
Estate trustees are generally “entitled to be indemnified for all reasonably incurred costs in the administration of an estate”: Brown v. Rigsby, 2016 ONCA 521, 350 O.A.C. 236, at para. 11. Saddling estate trustees personally with legal costs where litigation was caused by the testator might well discourage them from initiating reasonably necessary legal proceedings to ensure the due administration of an estate: Sawdon, at para. 86; Gicas, at para. 72. However, this is not an absolute rule. A court may order otherwise if an estate trustee has acted unreasonably or in substance for their own benefit, rather than for the benefit of the estate: Geffen v. Goodman Estate, [1991] 2 S.C.R. 353, at p. 391; Sawdon, at para. 82. That is the case here.
If there is no executor or administrator, Rule 9.02 comes into play and a litigation administrator must be appointed. It is beyond the scope of this blog to review Rule 9.02 in full, but suffice it to say that it’s part of the regime put in place to ensure that an estate is properly represented during the course of litigation so that a party is in charge and can bear the responsibility of carrying the litigation and costs.
- RULE 11 TRANSFER OR TRANSMISSION OF INTEREST
Effect of Transfer or Transmission
11.01 Where at any stage of a proceeding the interest or liability of a party is transferred or transmitted to another person by assignment, bankruptcy, death or other means, the proceeding shall be stayed with respect to the party whose interest or liability has been transferred or transmitted until an order to continue the proceeding by or against the other person has been obtained. R.R.O. 1990, Reg. 194, r. 11.01; O. Reg. 14/04, s. 9.
Order to Continue
11.02 (1) Where a transfer or transmission of the interest or liability of a party takes place while a proceeding is pending, any interested person may, on filing an affidavit verifying the transfer or transmission of interest or liability, obtain on requisition from the registrar an order to continue (Form 11A), without notice to any other party. R.R.O. 1990, Reg. 194, r. 11.02 (1).
(2) An order to continue shall be served forthwith on every other party. R.R.O. 1990, Reg. 194, r. 11.02 (2).
Failure to Obtain Order to Continue Action
11.03 Where a transfer or transmission of the interest of a plaintiff takes place while an action is pending and no order to continue is obtained within a reasonable time, a defendant may move to have the action dismissed for delay, and rules 24.02 to 24.05 apply, with necessary modifications. R.R.O. 1990, Reg. 194, r. 11.03. ↵
- See
- Paragraph 27 of The JSL Trust v. Razor Logic Systems Inc., 2020 CarswellOnt 8339, 2020 ONSC 3603, 321 A.C.W.S. (3d) 65 which provides, “….it seems clear that a trust is not, on its own, a justiciable entity. The wording of r. 9.01 is permissive in that a proceeding “may be brought by a trustee”. The wording is not mandatory or limitative. Nevertheless, as the Nest Respondent’s cited authority notes, ‘trust’ is the term used to describe an equitable relationship. Courts have long held that, at common law, trusts are not legal entities with the status or capacity to commence legal proceedings: see United Services Funds v. Richardson Greenshields of Canada Ltd./Richardson Greenshields du Canada Ltée (1987), 16 B.C.L.R. (2d) 187 (B.C. S.C.), at p. 9; Robinson Engineering Co. v. Wasabi Resources Ltd., (1988), 31 C.P.C. (2d) 241 (Alta. Q.B.) at pp. 8-9; Taylor Ventures Ltd., Re, 2005 BCSC 11, 10 C.B.R. (5th) 104 (B.C. S.C.), at paras. 53-55; Williamson v. Williamson, 2020 BCSC 108, 35 R.F.L. (8th) 96 (B.C. S.C.) para. 25.”
- Paragraph 22 of Santos et al v. Coghlan et al, 2023 ONSC 4862 (CanLII), where Associate Justice A. Kaufman says, “The starting point in the analysis is that a trust is not a legal entity capable of suing or being sued. Trustees hold ownership of trust assets and legal actions may be taken in their name”
- Paragraph 57 of Lis v. Korol et al, 2024 ONSC 1316 (CanLII), where Fowler Byrne J. says, “A trust is not a legal entity capable of suing or being sued. Trustees hold ownership of trust assets and legal actions may be taken in their name.”
- Paragraph 2 Wittenberg v. Wittenberg Estate, 2015 CarswellNS 679, 2015 NSCA 79, (2015) N.S.J. No. 339, 1146 A.P.R. 176, 256 A.C.W.S. (3d) 998, 364 N.S.R. (2d) 176, 8 E.T.R. (4th) 221.
- Paragraph 1 of Peters v. Great-West Life Assurance Company, 2024 NSCA 21 (CanLII),
- See Cannon v. Funds for Canada Foundation, (2010) O.J. No. 3486 (Ont. S.C.J.) at paras. 64-66:
64. The trust is, however, most correctly described as a relationship. Waters quotes at p. 3 from G.W. Jeeton and L.A. Sheridan, The Law of Trusts, 10th ed.
A trust is the relationship which arises whenever a person (called the trustee) is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (of whom he may be one, and who are termed beneficiaries) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustees, but to the beneficiaries or other objects of the trust.
65. It is well-established that a trust itself does not have legal personality – it operates through its trustees… It is also held accountable through its trustees.
66. The trustee derives his, her or its powers from the trust instrument … Where a third party suffers an injury as a result of the use of the trust funds, or as a result of actions of the trustee … then the third party is entitled … to look to the trustee for redress … It is through the trustee that compensation is obtained.
- See Cameron J.’s comments at paragraph 6 of Fong v Louie, 1999 CarswellOnt 3070 Ontario Superior Court of Justice (Commercial List) ↵
- The thesis statement of the Rules is set out in Rule 1.03 (1) which states that these rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act. O. Reg. 258/98, rule 1.03 (1). ↵
- Dawson and Harris v. Dawson (Estate) and Dawson et al., 2024 ONSC 3132 (CanLII), (Dawson) ↵
- It is beyond the scope of this blog to deal with the entitlement of beneficiaries to sue on behalf of an estate. For those interested in this topic please see the blog on our website entitled, “When can a beneficiary of a trust enforce the rights of a trustee in equity?” which can be found on line at When can beneficiary of a trust enforce the rights of a trustee in equity? ↵
