When the validity of a will is challenged, it can take many months (or sometimes years) to reach resolution. In the interim, the estate assets must continue to be administered by an administrator pendente lite. In Ontario, the administrator pendente lite is more commonly called an Estate Trustee During Litigation (“ETDL”).

We previously blogged on the principles applied by the Court when determining if the appointment of an ETDL is appropriate.

Generally, except in unusual circumstances, the Court will not appoint one of the litigants as an ETDL. The rule for the necessity of a neutral ETDL was established years ago in the Ontario Court of Appeal’s decision in Re Bazos. However, in Re Bazos, Gale J.A. also stated that the rule is not an absolute one, and will be departed from, but only in a very strong case.

This begs the questions: what is a “strong case” and what comprises unusual circumstances which would enable a litigant to be appointed as ETDL?

The criteria for what will be considered a “strong case” remains somewhat vague, but Hansen v. Hurley provides a fair summary of relevant caselaw. Hansen v. Hurley concerned an application by the executors named in two wills for an Order that they be appointed as ETDLs.

The application was opposed by the common law partner of the deceased who was the principal beneficiary under the will, and also by one of the beneficiaries under the earlier will.

The deceased and his common-law partner had travelled to Mexico where the deceased died. The Mexican police classified the death of the deceased as homicide and had issued an arrest warrant for his partner.

In Hansen v. Hurley, Justice Rosenberg provided some clarity. He applied the analysis from (Wood Estate (Re), unreported, where the Court appointed a trust company as ETDL, which trust company was named co-executor under an impugned will. The other co-executor, who was disputing the will on the grounds of lack of testamentary capacity and/or undue influence, objected to the appointment. The impugned will had been prepared by the trust company, and an employee of the trust company was a witness to the will and was likely going to be called as a witness to the litigation. In granting the requested appointment, the Court considered the following factors:

1. All other interested parties, aside from the objecting co-executor, had either provided their consent to, or indicated that they did not oppose, the appointment;
2. The trust company had assumed the duties of executor since the death of the deceased approximately nine months earlier, and there had been no allegations of impropriety or criticism raised as to the manner in which the estate had been administered to date;
3. The trust company would remain as executor of the estate, regardless of the outcome of the litigation, since it was also named as executor pursuant to a codicil to the previous will of the deceased. Accordingly, the trust company had no vested interest in the outcome of the litigation; and
4. The estate was a relatively modest one and it was argued that if an independent ETDL were to be appointed, it would be necessary for the trust company which had been administering the estate since the death of the deceased to pass its accounts to date, which would result in an unnecessary expense to the estate.

After applying the above considerations, Justice Rosenberg considered two more factors before allowing the applicants’ appointment as administrators pendente lite:

1.         There was no other proposed administrator before the Court who had consented to act. Justice Rosenberg noted it may be that application could be made reasonably quickly to appoint an alternative administrator and it may be that such an application, even if opposed, could be determined quite expeditiously. On the other hand, the application might be opposed and might not be quickly disposed of. In either event, there would be a period when the estate would have no one at the control. This, Justice Rosenberg remarked, was a most undesirable situation.

2.         There were serious accusations made against the principal objector. That was an unusual circumstance. It was unlikely that any alternative administrator would not be obliged to view with some concern the position of the estate with regard to the objector until the very serious allegations against him had been determined.

To date, the Court continues to be very cautious in departing from the rule in Re Bazos, unless the Court is satisfied that unusual circumstances apply. A thorough review of Hansen v. Hurley is a great aid in determining whether a case may fall into the unusual circumstances criteria necessary to satisfy departure from the rule.

Thank you for reading.

Tsvetomira Niklin