The recent Saskatchewan King’s Bench decision in Mang v. Hofer offers a reminder of the threshold criteria that an applicant must meet in order to become the administrator of an intestate estate.

For context, when a deceased dies without a will their estate falls into intestacy. If so, an administrator is appointed by the Court to distribute the estate property as per The Intestate Succession Act, 2019. This legislation governs situations in which there is will. Most typically the person who applies to be appointed administrator is a family member of the deceased. On rare occasions a creditor of the deceased may apply to be the administrator of the estate. Whether or not a creditor is appointed as administrator will depend on whether their application meets all of the legal requirements imposed by law. In Mang, the application by the creditor did not meet those requirements.

Background:

The factual background in Mang included the below:

1. Michah Shapir Mang (“Mang”) claimed that he was a creditor of Leandra Lynne Newman (“Newman”). Mang sued Newman and two other people for injuries sustained when three people attacked him at a party (“Lawsuit”);
2. Mang later discontinued his claims as against the two other defendants. Mang then sought to continue his claim against Newman but then discovered that Newman had died in March 2021;
3. After Newman’s death, Mang then took steps to appoint a third-party lawyer (not the same lawyer who is discussed in this case comment) as the administrator ad litemof the estate of Newman (“Estate”). An administrator ad litem is a person appointed by the Court to make decisions for an estate during a lawsuit. This is typically done when there is no appointed administrator who is already administering the estate;
4. On March 3, 2024, the Court appointed the third party lawyer as administrator ad litem in of the Estate of Leandra Newman. By July 2024, the Lawsuit had been settled. It appears that the administrator ad litem entered into Minutes of Settlement (“Minutes”) to resolve Mang’s claim. The Minutes provided for the below:

1. Newman, personally, would pay Mang $180,000.00 to settle the action. By this time Newman had been dead for about three years, and so it was odd that the Minutes did not refer to Newman’s “Estate” as the entity required to pay such sum; and
2. Mang agreed to discontinue the Lawsuit upon the Minutes being signed. He did so in July 2024.

5. To actually liquidate and distribute an intestate estate there must be an administrator. The administrator will itemize the assets, sell them, produce liquid sale proceeds, pay all lawful professional fees, taxes and debts etc. At the end of this process there will be a pool of money left over that can be distributed to the beneficiaries of the intestate estate;
6. Mang thus required someone to step in and act as administrator of the Estate for the purpose of liquidating assets and distributing them. As a creditor of the Estate (under the Minutes) Mang had an interest in ensuring that the Estate got liquidated and distributed;
7. The decision in Mang therefore dealt with the application by Mang for letters of administration in the Estate. Interestingly, Mang did not wish the letters to be granted to Mang directly. Rather, Mang requested that the Court granted letters of administration to his personal lawyer (“Lawyer”), the same Lawyer who had acted for Mang when the Minutes were negotiated with the administrator ad litem of the Estate;
8. Newman had a common law spouse, Wesley Hofer (“Hofer”). Hofer indicated that he was cohabiting with Newman when she died on March 27, 2021 and they had continuously cohabited for over two years prior to that date. Hofer alleged that they had a spousal relationship. Thus, Hofer stood to be a beneficiary in the Estate;
9. Mang had not previously notified Hofer when Mang had appointed an administrator ad litem for the Estate and had negotiated the Minutes. Hofer only learned about such developments after the fact.

Issue:

This case comment focuses on the below issues which were discussed in Mang:

1. Issue 1: Was it appropriate to appoint the Lawyer as the administrator of the Estate?
2. Issue 2: What was the appropriate disposition on costs?

Decision in Mang:

The Court dismissed the application to appoint the Lawyer as administrator.

1. Issue 1: Was it appropriate to appoint the Lawyer as the administrator of the Estate?

The Court had serious concerns with the application to appoint the Lawyer as the administrator of the Estate. Out of the various deficiencies in the application, the below points are important for estate administration lawyers to bear in mind.

First, the Court did not find any jurisdiction to make the order. The Court noted that:

1. The Court had no evidence that Newman lived in Saskatchewan when she died; and
2. The Court had no evidence that Newman owned property in Saskatchewan when she died.

The Court was troubled by the lack of any evidence of what property the Estate even owned. Typically, the Court is presented with carefully compiled information on all of the assets which the deceased own and their value. In contrast, this application simply put the word “unknown” in relation to the listing of Estate property:

23      It appears [the Lawyer] relies on  4(1)(a)(ii): Newman lived outside Saskatchewan but left property here when she died. What property? [The Lawyer’s] statement of property, which she purports to verify by affidavit, says “unknown” in answer to every category of property in the statement. Section 4(1)expressly requires “proof” of the matters listed in subsection (a). In fact [the Lawyer] has tendered no proof at all of Newman owning any property here….

[emphasis added]

Second, the Court noted that the applicant Lawyer had no priority to be appointed. The Court noted that The King’s Bench Rules set out a clear priority of which persons are eligible to be appointed:

16-24 If the deceased died intestate, the persons entitled to apply for a grant of administration are the following in order of priority:

1. spouse of the deceased;
2. children of the deceased;
3. grandchildren and other issue of the deceased taking per stirpes;
4. father or mother of the deceased;
5. siblings of the deceased;
6. nephews and nieces of the deceased;
7. next of kin of the deceased of equal degree of consanguinity;
8. creditors of the deceased;
9. the official administrator.

[emphasis added]

The Court noted that Mang, a creditor, ranked second-last in priority. The spouse, Hofer, ranked first in priority. Thus, Mang had not established that he (much less his Lawyer) had priority to apply to be the administrator. Related to this, Rule 16-26 required that Mang clear off the interests of those with a greater priority in the Estate. Here, Mang had not obtained a court order or renunciation to clear off the prior rights of Hofer.

A third problem was that the Lawyer herself had no beneficial interest in the Estate property. It must be noted that Mang and his Lawyer are two distinct people in law.

Here, there was no power of attorney given by Mang in favour of the Lawyer. Thus, it was not appropriate to appoint the Lawyer to personally be the administrator of the Estate. Rule 16-25 requires that an applicant has a beneficial interest in the property to be administered. Here, the Lawyer personally had no stake or legal interest in the Estate property.

A fourth problem was that the Lawyer would be in a conflict of interest if they were appointed as the administrator of the Estate. An administrator of the Estate is bound in law to administer it in the interests of all Estate beneficiaries, and not to prefer the interests of an Estate creditor over the interests of the Estate beneficiaries. Here, Hofer had an interest in the Estate property. Thus the Lawyer as administrator would need to administer the Estate in the interest of the Estate beneficiary (Hofer). However, at the very same time, the Lawyer would be wearing a second hat, given the Lawyer’s existing solicitor-client relationship with Mang (a creditor).

33 None of this has been done. The originating application expressly contemplates Ms. Gebhart somehow being granted status as administrator as Mang’s “representative”. Nowhere in Saskatchewan law is this contemplated. Further, as is explored below, there is a professional and ethical dimension to this proposed course of action. Mang contemplates Ms. Gebhart — his lawyer, hired to collect $180,000 from a settlement entered into by a dead woman — would represent his interests. But that is not what an administrator does. The duty of administrators is partly reflected in para. 4 of the affidavit of applicant. The conflict issues seem obvious.

…

48      An administrator must assess and balance claims and interests. An administrator having a real or perceived bias or partiality toward any involved party should not be the administrator. The circumstances of this case speak for themselves. It is so clear [the Lawyer] is headed for trouble that I simply cannot understand how she did not see it, either before appearing in chambers or during, when the issue was specifically raised with her.

49      Again, the Law Society’s Codeis instructive:

4-1A lawyer must not act or continue to act for a client where there is a conflict of interest, except as permitted under this Code.

50      I will not belabour this point. It seems to me to be clear and obvious that [the Lawyer] is headed into a conflict situation. She acted adverse in interest to Newman and/or her estate when she acted on Mang’s collection matter. She cannot now act for that estate and Mang at the same time. She should not be the administrator of this estate as a “representative” of Mang or otherwise.

Given all of these deficiencies in the application, the Court dismissed the application.

2. Issue 2: What was the appropriate disposition on costs?

The Court was frustrated with the shortcomings in the application. These led the Court to order substantial costs against Mang:

57      …. As noted by this decision, numerous concepts were engaged. The material was not voluminous, true. But a page count does not solely determine complexity. A lot of work was required to untangle the mess that was plunked down before the Court.

58      The principle of general application is that costs follow the event, and the costs of a chambers matter ought to be determined right at that time. Having regard to all the considerations set out in Part 11 of our Rules and the applicable cases, I set the costs that Mang must pay to Hofer at $2,000.00, payable in any event of the cause and payable within 90 days of this decision. Further, these costs must be fully paid before any further steps are taken by or on behalf of Mang in this matter or regarding the Newman estate.

Conclusion:

The Court dismissed the application in its entirety. The Court also made an order prohibiting the Lawyer (or members of her law firm) from acting as administrator in the Estate of Leandra Newman.

Mang v. Hofer offers a reminder of the importance of carefully reviewing the legal requirements which govern your Court application. You need to methodically examine all legislation, rules or other legal requirements which your application must meet. You must then cross-reference them against the evidence supporting your own application. You must ensure that your application comprehensively meets each of the requirements.

The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.