Saskatchewan Estate Litigation Update: Kaushik v Kaushik, 2022 SKQB 135

The recent Saskatchewan Queen’s Bench decision in Kaushik v Kaushik, 2022 SKQB 135, offers an overview of a situation in which multiple persons concurrently seek to be appointed as the sole administrator of an Estate. 

Overview:

1. Sadhna Kaushik applied for appointment as the administratrix of the estate of Daya Chand Kaushik [Daya], her late father;
2. Daya died on June 7, 2019;
3. Daya’s last will and testament dated September 22, 1987, named his wife, Vimla Devi Kauchik [Vimla] as executrix. It directed further that in the event she predeceased him, Rakesh Kaushik [Rakesh], Sadhna’s brother, and one of the respondents on this application, should serve as executor of his estate;
4. Vimla predeceased Daya;
5. To date, no application to have Daya’s will probated had been made, as the original will had been lost;
6. Rakesh, brother of Sadhna, argued that he himself should be appointed as administrator. Rakesh relied on the below facts:

1. On or about August 30, 2016, Daya executed an Enduring Power of Attorney naming Rakesh as his personal and property attorney. Rakesh acted in this capacity until Daya’s death in 2019;
2. However, on or about September 20, 2016, Daya purportedly executed a Revocation of Enduring Power of Attorney setting aside the previous document. However, Rakesh only learned of this after Daya’s death;

7. The six beneficiaries were divided as to their choice of the appropriate administrator of Daya’s estate. Three beneficiaries, Douglas, Sheila, and Hazel signalled their support of Rakesh, and each formally renounced her right to letters of administration in favour of Rakesh.
8. The last two beneficiaries – Elizabeth and Neil – adamantly reject the appointment of either Sadhna or Rakesh to be administrator of Daya’s estate. Instead, they proposed that the parties be directed to attend mediation in an attempt to resolve this dispute.

1. Elizabeth and Neil opposed appointing Sadhna because she allegedly mismanaged the affairs of Vimla’s estate when Sadhna served as her mother’s executrix; and
2. Elizabeth and Neil opposed appointing Rakesh because of his alleged continuing failure to account adequately for monies transferred from Daya’s accounts during the latter years of Daya’s life, even in the face of an order of the court dated August 13, 2020.

9. As for Sadhna, only Sadhna supports an order appointing herself to be the administratrix of Daya’s estate.

Who had priority to apply to administer?

Subsection 13(1) of the Administration of Estates Act stipulated that no letters of administration shall be granted to any person unless:

1. all persons with a prior or equal right have renounced their right to administration; or

2. a judge has made an order dispensing with the requirement to obtain the renunciation of the right to administration of persons mentioned in clause (a)

In the context of this application, this meant Sadhna was not entitled to be appointed administratrix because Rakesh has not renounced his right to administration, and vice versa. Thus, the court had to intervene to break the deadlock between the two siblings.  

The court ultimately appointed Rakesh as administrator:

As the only surviving children of Daya and Vimla, both Sadhna and Rakesh were potentially entitled to apply to be appointed as administrator of Daya’s estate. The question was which of them, if either, is the most appropriate person to serve in that capacity.

The court ultimately found that Rakesh was the preferable person to administer the Estate. The three main factors could be summarized below:

1. Reason 1: First, Daya decided in 1987 to appoint Rakesh as the alternate executor of his estate should Vimla predecease him. Despite Vimla’s death in 2016, at no time prior to his death in 2019 is there any evidence to show that Daya revised his will, let alone executed a new one. This consideration weighed heavily in favour of appointing Rakesh as administrator, by showing the intention of Daya as to who would administer his estate;
2. Reason 2: Rakesh was opposed by some beneficiaries, but he ultimately did have the consent of a majority of the beneficiaries. In addition to himself, Rakesh had the consent of Sheila, Hazel, Douglas, all of whom have formally renounced their rights;
3. Reason 3: The evidence discloses that Rakesh maintained a closer relationship with Daya than did Sadhna;
4. Reason 4: Rakesh purported to act as Daya’s attorney pursuant to the terms of an Enduring Power of Attorney dated August 30, 2016. It is true that there is evidence that Daya revoked this, but no one appeared to learn of this until after Daya’s death. The fact that Rakesh did look after Daya’s affairs for a time, would support a finding that Rakesh was well placed to “convert [Daya’s estate] to the advantage of those who have claims against it, either by paying the creditors or by making the appropriate necessary distributions”.

The one aspect which gave the court pause, was about the allegation that Rakesh had refused to provide an accounting of his handling of Daya’s estate from September 1, 2016 – the approximate date when the enduring power of attorney took effect – to June 7, 2019, the date of Daya’s death.

However, the court found that Rakesh in his affidavit had spoken to the steps he took to comply with the order to account. The court took comfort from the fact that Rakesh had retained local counsel, who would direct Rakesh on how to carry out his responsibilities as administrator in an appropriate and lawful manner.  

Moreover, the court found that, while Rakesh has been slow to provide an accounting of his management of Daya’s affairs, he had now provided one in the requisite form prescribed by The Queen’s Bench Rules. Additionally, his affidavit provides further information respecting his dealings with Daya’s estate while he acted as his father’s attorney.

Moreover, the court was not ultimately swayed by  two findings of profession misconduct made against Rakesh by the discipline committee of his professional regulatory body, the Chartered Professional Accountants of Saskatchewan. While these were stain on a professional’s reputation, they were not enough on its own to disqualify him or her from acting as the administrator or testator of a deceased’s estate.

Outcome and costs order:

The court in Kaushik ultimately appointed Rakesh as administrator, but did require that he obtain a bond. Interestingly, despite the success of Rakesh in this application, the court ordered that each side bear its own costs:

63      I am satisfied that considering all the circumstances, this application was necessary in order to settle the question of who should be appointed administrator of Daya’s estate. A stalemate had occurred between the two people legally authorized to apply for letters of administration. It so happens that it was Sadhna who initiated the application. In my view in the unusual circumstances of this case Daya’s estate should not be burdened with the costs of this application. Rather, I have determined that each party should bear his or her own costs of this application, and I so order.

The reasoning above – that “Daya’s estate should not be burdened with the costs of this application”  – is unusual.

In this situation, the Estate benefited from the clarity of this court order, which finally appointed someone to administer the Estate, and which took the estate out of the administrative limbo it had fallen into. Thus, it would have been entirely customary for the Estate to bear some or all of the legal costs incurred by a newly appointed administrator in his successful application.

Lessons learned:

Kaushik reminds us of the some of the factors which a court will rely on, in a situation of competing applicants for administrator. These factors include:

1. Are there any clues, showing whom the deceased themself had wanted to appoint?
2. Was there a majority among the beneficiaries, as to whom they want to administer the Estate?
3. Had one of the potential applicants ever acted as attorney for the deceased before, thus placing them in a better position to now convert the estate to the advantage of the beneficiaries?