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Appointing an Estate Trustee During Litigation

In its recent decision, Baran v Cranston, the Divisional Court provides a helpful summary of the principles applied by the court when determining if the appointment of an Estate Trustee During Litigation (“ETDL”) is appropriate.

As a starting point, the court outlines the Superior Court of Justice’s statutory authority to appoint an ETDL. Section 28 of the Estates Act provides that an ETDL may be appointed “pending an action touching the validity of the will of a deceased person, or for obtaining, recalling or revoking any probate or grant of administration…” Additionally, Rule 75.06(3)(f) of the Rules of Civil Procedure expressly authorizes the court to appoint an ETDL on an application or motion for directions.

The court then looked to the jurisprudence for further support that an ETDL may be appointed even where the validity of a will is not in issue. In McColl v McColl, an ETDL was appointed, notwithstanding the fact that the validity of the will was not in issue. In McColl, the court ultimately appointed an ETDL “based on the conflict and the trustee’s lack of experience in managing a business.”

In Mayer v Rubin, the court set out that the appointment of an ETDL may be required (even where the validity of the will is not in issue) where the parties’ duties as fiduciaries are inconsistent with their ongoing litigation interests. The appointment of an ETDL will also be necessary where there is a trustee who is in an adversarial position towards a co-trustee or beneficiary, and who therefore, should not be left in charge of trust property.

After having reviewed the relevant statutory provisions and jurisprudence, the Divisional Court went on to note some of the factors that will be considered by the court in determining whether or not it should exercise its discretion to appoint an ETDL:

The Divisional Court also approved the lower court’s summary of the legal principles factored into its decision to appoint an ETDL, which included, among others:

Thanks for reading!

Sydney Osmar