Court can interfere in estate with executor deadlock: B.C. Supreme Court

Multiple executors couldn't agree on how to dispose of late father's house

Court can interfere in estate with executor deadlock: B.C. Supreme Court

The court has the authority to interfere with the administration of an estate where a deadlock among executors is preventing them from carrying out the terms of a will, the BC Supreme Court has ruled.

The case of Fuller v. Fuller, 2022 BCSC 803 involved the manner in which an estate’s main asset should be disposed of. William Fuller died in 2015, leaving a house in Nanaimo, BC. He appointed as executors of his estate his three children – Susan, David and Katherine.

The executors were granted “uncontrolled discretion” as to when and how the estate should be realized. However, Susan’s relationship with her siblings eventually soured and she raised several concerns about the management of the estate, including an increasing capital gains liability and non-filing of income tax returns. The property was also uninsured. Susan further claimed that David had lived in the house from time to time over the years and he was not motivated to finalize the estate because he intended to purchase the property himself.

David claimed that he had maintained the property since their father’s death at a cost to himself in the range of $80,000. He also alleged that he had been seeking to purchase the property since their father’s death, but his plan had not moved forward because of Susan’s unco-operativeness.

The situation resulted in a deadlock, so Susan filed an application to remove David and Katherine as executors on the ground that it was the only way that the administration of the estate could move forward. David and Katherine, in turn, filed an application which also sought to have Susan removed because “she was actually the impediment to matters progressing.”

The court said that in case of a deadlock among executors, the court could take any action to resolve it, even without a finding of wrongdoing by any of them. In Dunsdon v. Dunsdon, 2012 BCSC 1274, the court ruled that “where there is dissension among the trustees themselves by which the trust administration grinds to a standstill or otherwise hampers the proper administration, the court tends to remove one or more of them.”

However, the court also pointed out that if removing an executor is not the appropriate solution, the court could also order that the property be sold.

In this case, the court found that the estate had languished too long without being wound up and the main steps that were necessary needed to be taken as promptly as possible. The court further said that removing Susan as executor was not the appropriate solution in the interests of all the parties as beneficiaries of the estate.

Susan filed an amended notice which sought to move forward with the sale of the property to David. If he didn’t exercise the option to purchase the property, Susan suggested to list the property as for sale instead. The court agreed with the terms offered by Susan in her amended notice. In the end, the court dismissed the application to have Susan removed as executor of the estate and ordered that the terms sought by Susan in her amended notice of application be granted.

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