Earlier this week I blogged about rule 9.01 of the Rules of Civil Procedure and the circumstances in which beneficiaries must be named as parties to estate litigation. Although rule 9.01(2) provides a fairly comprehensive list of the claims for which beneficiaries must be named as parties, the list is not exhaustive, as there are additional claims not mentioned by rule 9.01(2) for which the beneficiaries must be named as parties. Amongst these claims are claims for support as a dependant under Part V of the Succession Law Reform Act (the “SLRA”), which require you to serve all beneficiaries and other interested parties before any order for support may be made.
The requirement to serve all beneficiaries with any claim for support is directed by s. 63(5) of the SLRA, which provides:
“The court shall not make any order under this section until it is satisfied upon oath that all persons who are or may be interested in or affected by the order have been served with notice of the application as provided by the rules of court, and every such person is entitled to be present and to be heard in person or by counsel at the hearing.”
The phrasing in s. 63(5) that you must serve all persons “interested in or affected” by the support order is broader than the phrasing under rule 9.01, as it could apply to individuals other than beneficiaries depending on the financial circumstances of the estate. I have previously blogged, for example, about the priority of support orders under s. 2(3) of the Creditors’ Relief Act over all other judgment debts other than those owed to the crown when an estate is insolvent. Should the circumstance arise in which funds which otherwise would have paid a debt or liability of the estate are instead paid to a dependant for support under the authority of the Creditors’ Relief Act you would arguably be required to have first served such affected creditors under s. 63(5) of the SLRA as an individual “interested in or affected” by the order.
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Estate litigation is somewhat unique in that it frequently impacts the interests of individuals who may not actively be advancing or defending the claim, namely the other beneficiaries. Although there are obvious examples of claims which could impact beneficiaries, including challenges to the validity of a Will under which the beneficiary has an interest, as any claim by or against an estate carries the prospect of increasing or decreasing the funds available to be distributed any claim could conceivably impact the interests of other beneficiaries. This raises an interesting question. Should the beneficiaries personally be named as parties to any litigation relating to the estate so they can be provided the opportunity to advance or defend any claims which could affect their interests, or can the executor or trustee alone represent the interests of the estate or trust and the beneficiaries by extension?
Rule 9.01 of the Rules of Civil Procedure states that a proceeding may be brought by or against an executor or trustee without joining the beneficiaries as parties unless the matter concerns one of the exceptions noted by rule 9.01(2), which are:
- to establish or contest the validity of a will;
- for the interpretation of a will;
- to remove or replace an executor, administrator or trustee;
- against an executor, administrator or trustee for fraud or misconduct; or
- for the administration of an estate or the execution of a trust by the court.
Rule 9.01 confirms that simply because litigation involves an estate or trust it does not necessarily follow the beneficiaries must be named as parties to the litigation, as many claims may be brought by or against the executor and/or trustee alone even if the results of the litigation could impact the interests of beneficiaries. The ability for the executor and/or trustee to represent the estate or trust alone is consistent with the powers provided by section 48(2) of the Trustee Act, which authorizes the executor or trustee to settle any claims on behalf of the estate or trust without the consent of the beneficiaries so long as the settlement was entered into in “good faith”.
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