Procedural fairness tends to be an issue that comes up in administrative law cases; it puts at issue “what it is appropriate to require of a particular authority in the way of procedure … the nature of the power exercised by it and the consequences of the power of the individuals affected”: see Inuit Tapirisat of Canada et al. v. Leger et al., 1978 CanLII 3650 (Fed. C.A.) at 717.
While arguments premised on procedural fairness are not explored that often in wills and estates cases, they certainly can be effective. For example, in Saller v. Ferguson, 2017 ONSC 4077, an order was set aside and a new trial was ordered on the basis of procedural fairness. The estate trustee in that case had applied to pass his accounts and a beneficiary objected. At the hearing, the court granted a variety of orders sought by the beneficiary, including an order removing the estate trustee and requiring him to pay over $400,000 in damages for breach of fiduciary duty and negligence, to re-pay executor’s compensation that he pre-took, plus $75,000 to the beneficiary. The Divisional Court found that the process adopted by the lower court was “wholly inadequate” and failed to provide procedural fairness on a number of bases. Not only should a trial have been ordered, but the Divisional Court found that the lower court failed to even address whether a trial was required with the parties. Procedural fairness also required the lower court to consider a number of defences in response to the beneficiary’s allegations, and to review the process to be followed with the parties, as the estate trustee was unrepresented.
While procedural fairness carried the day in Saller, it is not always an effective basis to appeal court decisions related to estate administration, as demonstrated by the British Columbia Court of Appeal’s recent decision in Klassen v. Cornies, 2023 BCCA 420. The appellant’s argument in this case – that an order removing the executor and trustee of the estate ought to be reversed on the basis of procedural fairness due to the loss of a potential strategic advantage– was not accepted by the court.
The executor and trustee was removed in this case on the basis of conflict of interest. In addition to serving as the executor and trustee of the estate, he had also been the deceased’s counsel, had prepared the will (which was being challenged by the deceased’s children), and was a beneficiary of the estate. The executor was removed since the will challenge would require him to defend his work as a solicitor, plus he had an interest in protecting his entitlement to share in the estate as a beneficiary, and he also had a potential role to play as a witness in the litigation.
The day that the removal application was heard, the court was also scheduled to hear applications brought by the executor, including an application to sever claims made by the deceased’s children, and an order for an immediate summary trial. Before removing the executor, the first issue considered by the court was whether both parties’ applications should be heard at the same time, and whether they should be adjourned for a lengthier hearing. After observing that there was not enough time to hear all of the applications together that day, the court found that the applications did not need to be heard together, since the executor’s application was “a separate matter having to do with the litigation itself, and is really unconnected to the question of whether he should remain as executor and trustee, which seems to me to be quite discrete.” The judge also was not persuaded that there would be injustice or prejudice if the matters were not heard together: see Cornies v. Cornies Estate, 2022 BCSC 2349.
On appeal, the executor argued that all of the applications should have been adjourned by the lower court, and that as a result of the determination of the removal application, he was denied procedural fairness. He also applied to put new evidence before the court addressing his “strategic interest in joining the applications.”
The British Columbia Court of Appeal dismissed the appeal, holding that the loss of a potential strategic advantage – in this case, joining a summary judgment application to the respondents’ removal application – did not amount to procedural unfairness. The Court also found that there was no evidence of procedural prejudice arising from the lower court’s decision, as “[t]he appellant was prepared to proceed if both applications were heard at the same time,” which meant that he was prepared to respond to the application seeking his removal.
If you’re interested in seeing how other appellate courts have handled issues related to procedural fairness in the context of estate litigation, consider reading Edgecombe v. Nicholas, 2023 NLCA 19 and McCabe v. Kowalyshyn, 2022 SKCA 56.
Thank you for reading and have a great day!