While BC Courts have the power to remove executors and administrators, it is rarely exercised. Our Courts have held that “not every act of misconduct should result in removal”. You may wonder, then, what misconduct would result in removal of an executor or administrator? The BC Supreme Court answered this question last Friday, in the Estate of Forbes McTavish Campbell.
Mr. Campbell died intestate in 2011. As he was divorced at the time, his three children were appointed as co-administrators in April 2012. The estate in BC was modest, and appeared to have been reduced in size by Mr. Campbell’s caregiver. Apparently, the caregiver absconded with $175,000 in cash, the deceased’s car, proceeds of a mortgage against real property (allegedly obtained through forgery), and certain other assets. The administrators reported the losses to the police, and investigations were made but had not resulted in an arrest at the time of the application.
The administration of the estate had come to a halt. Two of the administrators wished to move forward with administration, but the third refused to do so. The two administrators’ lawyer made a detailed and reasonable written plan to move forward with the administration of the estate. The third administrator’s response email advised that he would communicate with the lawyer, but at a cost of $300 per email, $500 per telephone call, and $1,500 per letter. As you may imagine, this offer was not accepted by the two administrators (and was not well received by the Court either).
Ultimately, the two administrators brought an application to have the third removed. The Court found that the third administrator’s behaviour was so unreasonable and uncooperative that he must be removed. Some (but by no means all) examples of the improper behaviour included:
- advising the Court at the hearing that he was holding an envelope containing evidence he had uncovered demonstrating that the two administrators had colluded with the caregiver in defrauding the deceased, but refusing to allow the two administrators to know the contents of the envelope;
- insisting that he need not communicate with his co-administrators until they each first paid him almost $40,000;
- showing himself to be “unable to communicate in a mature and civil fashion”. Rather, his emails were “condescending and thoroughly disrespectful in tone and content” and “relentlessly juvenile, profane and intemperate”.
The Court noted that the test on a removal application was the welfare of the beneficiaries of the estate. The Court then referenced section 158 of the new Wills, Estates and Succession Act, which permits a Court to remove an administrator. The specific grounds for removal referenced in this case were in s. 158(3)(f):
- unable to make the decisions necessary to discharge the office of personal representative;
- not responsive; or
- otherwise unwilling or unable to or unreasonably [refusing] to carry out the duties of a personal representative.
The Court found that the third administrator’s behaviour met these grounds, and ordered that the third administrator be removed.
The Court found the third administrator’s “reprehensible behaviour” was so egregious as to be deserving of an order that he personally pay the costs of the co-administrators on a special costs basis. The Court did so not only as a form of “punishment of a wayward party”, but also to “serve as a warning to others entrusted with the important duties of administering estates: trustees who engage in this sort of nonsense will pay a high price.”
I understand that the third administrator has indicated he will be appealing this order. If so, stay tuned for the next chapter…