Court confirms repayment orders but sets aside inheritance deduction
The Alberta Court of Appeal has upheld orders requiring a daughter to repay unaccounted-for funds to her mother's estate and removing her and her husband as personal representatives, but overturned a direction to deduct $518,595 from her inheritance.
In Silva Estate (Re), 2026 ABCA 325, the court allowed the appeal in part, finding that the chambers judge had jurisdiction to order repayment and remove the representatives but could not determine an offset against the daughter's inheritance before resolving the will's validity.
The dispute arose after the deceased moved from Ontario to Alberta in 2020 and executed a new will naming one daughter as personal representative and her husband as alternate. The deceased also appointed the daughter under an enduring power of attorney.
Following the mother's death in December 2021, her other daughter commenced proceedings seeking an accounting, restrictions on the appellant's authority and repayment of improperly distributed estate assets. She also contested the validity of the will.
The chambers judge found that the appellant failed to account properly for funds handled under the power of attorney. She ordered repayment of an unproven $506,000 gift, US$500,693 transferred from Costa Rican property, and $59,025 in unexplained registered retirement income fund withdrawals.
The appellant argued that the chambers judge lacked jurisdiction to order restitution because the application did not expressly plead that remedy.
The Court of Appeal rejected that argument, citing s. 10(4) of Alberta's Powers of Attorney Act, which grants courts broad discretion in accounting applications. The court found that the respondent had specifically requested repayment and that the appellant suffered no surprise or prejudice.
The court also upheld removing the appellant and her husband as personal representatives under the court's statutory and inherent jurisdiction. It relied on findings concerning breached fiduciary duties, unexplained expenditures and risks to the remaining estate. The court also upheld the appointment of a neutral representative to administer the estate.
However, the court overturned the direction to deduct $518,595 from the appellant's residual inheritance. That amount represented the difference between the estimated $400,000 construction cost of a house and the $918,595 ultimately spent.
The court held that the appellant continues to hold the $518,595 in trust pending final estate distribution. Still, the chambers judge could not direct its deduction from her residual share in the accounting application.
