The plot is old. “Sister against Sister” is the title of an American silent drama film released on March 4, 1917. Since then, human nature has not changed much and so the same drama is still encountered on occasion by lawyers today. On May 24, 2022, the British Columbia Court of Appeal released its decision in Hoggan v. Silvey, 2022 BCCA 176 which was a case involving a dispute between three sisters and the estate of their mother. The appeal was from a chambers judge’s refusal to remove an executor of an estate and denial of leave to bring an action. The Court of Appeal allowed the appeal in part, with leave granted to bring an action by two of the sisters against the third and her husband who was the executor, but not removing the executor at that stage of the proceedings. The facts involved cheques for substantial amounts having been made from the account of the deceased prior to her death. The Court of Appeal held that the chambers judge erred in finding that there was no arguable case. The executor would not bring an action for recovery of the funds involving the cheques. To commence an action the two sisters would need leave of the court under section 151(3) of the Wills, Estates and Succession Act, SBC 2009:
“(3)The court may grant leave under this section if
(a)the court determines the specified person seeking leave
(i) has made reasonable efforts to cause the personal representative to commence or defend the proceeding,
(ii)has given notice of the application for leave to
(A)the personal representative,
(B)any other specified persons, and
(C)any additional person the court directs that notice is to be given, and
(iii)is acting in good faith, and
(b)it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.”
The application for leave under section 151(3) of the Wills, Estates and Succession Act, SBC 2009 does not always require that the proposed action be in the best interests of the estate. The Court of Appeal held that leave may also be granted if the action is necessary or expedient to protect the interests of a specified person, and not the estate itself. This is the first time that s. 151 had been considered by the Court of Appeal. There was a discussion on the similarities with corporate law and the test, which assesses whether it is in the best interests of the company to bring a derivative action, to the question is it in the best interests of the estate to permit someone other than the executor to bring an action. Both s. 151 of Wills and Estate Succession Act and s. 233 of Business Corporations Act, SBC 2002, c 57 give the court discretion as to whether to make the order sought by using the words the court “may” grant leave. There are indeed similarities between a derivative action. However, the Court also noted the differences. A company is usually an ongoing entity so it needs to “not be immobilized by litigation” and “an estate is generally not in a comparable situation.”
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