Case remitted for NL Supreme Court to apply frivolous and vexatious test to disinherit beneficiary
While agreeing with an executrix that a beneficiary’s request to remove her triggered a will’s no-contest clause, the Newfoundland and Labrador Court of Appeal remitted the matter for an application of the frivolous and vexatious test for disinheriting a beneficiary.
Franklin Estate (Re), 2026 NLCA 30, revolved around the will of a testator who passed away on Aug. 6, 2019. The will named his three children, including the appellant and the respondent, as his beneficiaries. The will designated the respondent as executrix.
The will’s no-contest clause provided that a beneficiary would forfeit their entitlement by bringing litigation – except for judicial interpretation or directions during estate administration – relating to any provision of the will.
Newfoundland and Labrador Supreme Court proceedings
On Aug. 15, 2024, before the Supreme Court of Newfoundland and Labrador, the appellant applied to remove the respondent as executrix. The appellant alleged that the respondent failed to administer the estate, provide sufficient accounting, and comply with an interim accounting order.
On Nov. 27, 2024, the respondent applied to enforce the no-contest clause.
In the appellant’s removal application, a judge refused to remove the executrix.
In the respondent’s no-contest application, another judge enforced the no-contest clause and ordered the appellant to pay the estate Column 3 costs. The applications judge determined that:
- The appellant’s removal application breached the no-contest clause and disentitled her from her inheritance
- The benefits the appellant might have received would be part of the estate residue, subject to distribution under the will
The appellant challenged the applications judge’s decision in the no-contest application.
Newfoundland and Labrador Court of Appeal remits matter
Because the applications judge failed to apply the frivolous and vexatious test, the Court of Appeal of Newfoundland and Labrador set aside his decision and remitted the matter to the NL Supreme Court for a rehearing.
The new hearing would determine whether the appellant’s removal application was frivolous and vexatious. If it were not frivolous and vexatious, the no-contest clause would be unenforceable based on the removal application.
The appeal court did not order appeal costs.
Standard of review of correctness
The NL Court of Appeal used the standard of correctness to review the applications judge’s application of the legal test, which involved a legal question, and his legal conclusion, which did not rely on the factual matrix.
Removal application triggered no-contest clause
Upon applying the standard of correctness, the NL Court of Appeal affirmed the applications judge’s determination that the removal application triggered the no-contest clause.
The appeal court explained that the no-contest clause sought to discourage only elective adversarial litigation, not legitimate judicial oversight.
The appeal court ruled that the removal application, which challenged the testator’s express intention in his will to appoint the respondent as executrix, did not fall within the no-contest clause’s two exceptions.
Given that one exception involved directions during administration, the appeal court pointed out that the appellant could have applied for directions about the executrix’s estate administration instead of requesting the executrix’s removal.
Judge didn’t apply frivolous and vexatious test
“The common law has long recognized that no-contest clauses are enforceable by the court to disinherit a beneficiary in circumstances where the court finds the proceeding brought by the beneficiary to be frivolous and vexatious,” Justice Glen L.C. Noel wrote.
The NL Court of Appeal saw an error in the applications judge’s enforcement of the no-contest clause without making factual findings and applying the requisite test for whether the removal application was frivolous and vexatious.
The appeal court explained that enforcing the no-contest clause without such factual findings would prevent a beneficiary from applying to remove the executrix in any circumstances.
The appeal court emphasized that it should strike a balance between the testator’s express intention to prohibit any litigation in connection with the will’s provisions and the courts’ judicial supervisory role over estate administration.
Previous estate law cases by appeal courts
Here are some other recent trusts and estates law decisions by Canada's appellate courts.
Despite three siblings’ agreement to the grant of an appeal, the Saskatchewan Court of Appeal issued a July 29 decision dismissing the appeal and confirming the correctness of the chambers judge’s order for a trial to prove their mother’s will in solemn form.
The Alberta Court of Appeal made a July 3 decision denying an appeal brought by the estate’s current personal representative, who wanted the estate’s prior personal representatives to disclose certain estate-related documents that a chambers judge had considered privileged.
A three-justice panel of the Ontario Court of Appeal issued a Feb. 3 decision refusing to reconstitute itself as the Divisional Court to address an application for leave to appeal from a Superior Court order interpreting s. 21.1 of Ontario’s Succession Law Reform Act, 1990.
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