In Ontario, an estate trustee is required to retain counsel to represent the estate in court proceedings. Rule 15.01(1) of the Rules of Civil Procedure states: “[a] party to a proceeding who … acts in a representative capacity shall be represented by a lawyer.”
Despite this rule, sometimes an estate trustee may try to proceed without the assistance of counsel. For example, in the recent case of Scarangella v. Oakville Trafalgar Memorial Hospital, 2024 ONSC 5518, the estate trustee commenced litigation on behalf of the deceased’s estate on her own, without counsel, and sought an order from the court permitting her to continue to act in a representative capacity on behalf of the estate. The court declined to grant the relief sought, even after considering rule 2.03, which permits the court to dispense with compliance with any rule “where and as necessary in the interest of justice.”
If an estate trustee chooses to flout the rule and not retain counsel to represent an estate, even after the court gets involved, the consequences could be quite serious, as demonstrated by the Alberta Court of Appeal’s recent decision in Konkolus v Balanko, 2024 ABCA 363. In this case, the personal representative of the estate – the deceased’s daughter – was held in contempt of court for refusing to retain counsel.
The proceedings began in 2022, when the deceased’s other daughter, a beneficiary of the estate, brought an application for directions which resulted in the court ordering that counsel be retained to represent the estate. The personal representative appealed, but was unsuccessful: see Konkolus v Balanko, 2023 ABCA 303. Long before the appeal was heard, however, the personal representative was held in contempt for failing to comply with the order to retain counsel. She could be held in contempt, notwithstanding the appeal, because she did not apply for a stay of the order pending the appeal. Despite the personal representative’s explanation that the estate could not afford to retain counsel, the lower court found that she was in civil contempt, as the applicant established beyond a reasonable doubt that:
- the lower court’s order stated clearly and unequivocally what the personal representative was required to do;
- the personal representative had actual knowledge of the order; and
- the personal representative intentionally failed to do what she was directed to do under the order.
The court gave the personal representative half a month to purge her contempt by retaining counsel. Eventually, the personal representative did comply with the order, but not by the deadline set by the court. She hired a lawyer for the estate more than eight months after she was held in contempt and more than six months after her appeal was dismissed and the Court of Appeal directed that “counsel must be retained to address the court or judge on behalf of the Estate.”
While the personal representative appealed the court order holding her in contempt, that appeal was also dismissed – the Court of Appeal held that the lower court applied the correct legal test and made no palpable and overriding error.
It is not clear if an estate trustee would have been ordered to retain counsel in similar circumstances here in Ontario, if the estate could not afford to retain counsel. In Scarangella, Justice Doi indicated that where access to justice is an issue, such as where an estate lacks the financial means to retain counsel, the court may use rule 2.03 to dispense with this requirement.
It also is not clear whether an estate trustee would be held in contempt for failing to comply with an order to retain counsel, if the estate were relatively impecunious. Justice Shore pointed out in Auciello v Yao, 2023 ONSC 5188 that a party can defend a contempt application if they have “a reasonably held belief that there was a good reason to disobey the order.” In Alberta, in comparison, a good reason to disobey a court order appears to be immaterial on a contempt application. As noted by the Court of Appeal in Konkolus, “[i]t is no answer … that the order was improper or should not have been granted. A court order is valid and enforceable unless and until it is set aside.”
A final question to ponder is what the consequences would be if an estate trustee were to be held in contempt of court for failing to retain counsel. The Alberta Court of Appeal only addressed costs in Konkolus – it is unknown whether a further sanction was imposed. In Ontario, if an estate trustee is found in contempt under rule 60.11(1), often they will be given an opportunity to purge themselves of their contempt before a penalty is imposed. If the contempt is not purged, however, penalties may include imprisonment, a fine, being ordered to do or refrain from doing an act, paying costs, or being ordered to comply with a court order: see rule 60.11(5). In the Estate of Allan Taylor, 2014 ONSC 3421, the court imposed a different penalty after holding the estate trustee in contempt for failing to pass accounts for the estate – ordering the estate trustee to be removed. Such a penalty may also be fitting if an estate trustee were held in contempt for refusing to retain counsel.
Thank you for reading, and have a great day!
Ian.