Executors failed to meet the requisite standard of care in administering estate

Estates and Trusts - Estates - Actions involving personal representatives

Three beneficiaries A, M and P had to bring to court two of their siblings J and WW who were acting as executors of their mother’s estate. WW and J were found in contempt for failing to pass accounts as ordered and were removed as estate trustees, and accountant was ultimately appointed by court to provide forensic accounting of proposed accounts and to prepare proper accounts if possible. WW and J were ordered to pay A, M and P’s costs on substantial indemnity basis fixed at $40,724.28 including $31,121.35 in legal fees plus $4,045.77 HST, and $7,177.16 for disbursements including HST, less $1,600.00 paid by J. Balance of fees of $18,936.15 was to be borne by J and WW were also ordered to pay estate costs of accountants. J and WW were jointly and severally liable to pay costs and disbursements and amounts awarded were to be paid from their distributive share of estate. While J failed to present submissions on costs within timeline given by trial judge it would have been unreasonable to delay costs decision given amount of delay involved. There was no doubt of A, M and P’s success and that WW and J were liable for costs. A, M and P were repeatedly required to seek assistance of court to obtain accounting from trustees and then to enforce order directing accounting to be prepared and filed. There were numerous court proceedings and hearings. Lawyer’s time was reasonable and appropriate in circumstances. J and WW could reasonably have expected to pay costs . Estate could have been consumed in its entirety. Proceeding was made complex by J and WW failing to keep proper accounts, refusing to provide beneficiaries with information reasonably requested with respect to estate, and failing to pass their accounts, even after they were ordered to do so. J and WW failed to meet the requisite standard of care in administering estate, breached their obligations as estate trustees and, particularly WW took advantage of estate for their personal benefit and to detriment of other beneficiaries. Even after they were ordered to pass their accounts they continued their conduct of ignoring their obligations and court orders for reasons personal to them and to detriment of other beneficiaries. J and WW’s conduct demanded cost sanction and substantial indemnity scale was appropriate in circumstances. Despite self-dealing farm was available and was able to be sold for amount that would provide beneficiaries with reasonable distributive share of estate, losses would be paid to significant degree, no executor’s compensation was claimed and no findings of fraud were made.

Jones v. Warbick (2019), 2019 CarswellOnt 3377, 2019 ONSC 1564, L. Sheard J. (Ont. S.C.J.); additional reasons (2019), 2019 CarswellOnt 74, 2019 ONSC 88, L. Sheard J. (Ont. S.C.J.).

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