The recent case of Choquette v Viczko offers guidance on when an executor is required to seek a beneficiary’s consent to sell land. It also explains when no such consent is needed.

Facts:

Joseph Viczko died on September 10, 2011. In his September 24, 2010, will he named his daughter, Donna Boots, as executor and trustee. The primary beneficiaries under the will were Ms. Boots and Joseph Viczko’s other children, Yvonne Choquette and David Viczko.

Certain land was to be sold and the proceeds divided amongst Yvonne and Donna. The relevant wording was as follows:

d. I DIRECT my Trustee to distribute my estate as follows:

1. It is my intention to sell the W1/2 12-39-27 W2, or any other farmland that I own, (all such farmland herein being described as my farmland), while I am living and distribute the proceeds of sale equally between my daughters YVONNE CHOQUETTE of Cudworth, Saskatchewan and DONNA BOOTS, of Saskatoon, Saskatchewan share and share-alike. However, if I still own my farmland at the time of my death, then my farmland shall be sold by my Trustee and the proceeds divided equally between my daughters YVONNE CHOQUETTE and DONNA BOOTS.
2. If YVONNE CHOQUETTE predeceases me or fails to survive me for 30 days from the date of my death, then her one-half interest in the proceeds of the sale of my farmland shall be divided equally among the children of YVONNE CHOQUETTE for their own use and benefit absolutely.

…

Ms. Boots had W1/2 12-39-27 W2 appraised, and she and David Viczko ultimately entered into an agreement for David Viczko and his wife Jennifer Viczko (“the Viczkos”) to purchase the land for the appraised value. The sale was completed, and the land was transferred to the Viczkos on February 23, 2012.

Objection to the land sale by Yvonne Choquette:

After the land had been transferred, Ms. Choquette objected to the sale to the Viczkos. Ultimately she commenced an action, in which she seeks to have the sale of the land set aside and the land returned to the estate. She relied on the provisions of s. 50.5 of The Administration of Estates Act, SS 1998, c A-4.1. That provision holds that an executor shall not sell land “for the sole purpose of distributing the estate among the persons beneficially entitled to it unless those persons concur in the sale.”

However, the provision also gives the court the power to approve the sale of the real property if the court is satisfied that it is in the interest and to the advantage of the estate of the deceased and the persons beneficially interested in it.

Ms. Choquette asserted that the combination of s. 50.5 of the Act and clause 3(d)(i) of the will means that the land sale is invalid because it proceeded without the consent of Ms. Choquette, who is a person “beneficially entitled” within the meaning of s. 50.5(1).

Issue 1: Is Yvonne Choquette a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act?

The court held that Yvonne Choquette was not a beneficiary whose consent to the sale of the land was required under s. 50.5 of The Administration of Estates Act?

The court held that s. 50.5(1) refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the sale of the real property.

But more importantly,   the Court found there was no operation of s. 50.5.  Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for legislative authority to sell the land.

Because of the direction in the will (i.e. to authorize the executor to sell the land), s. 50.5 of the Act does not apply to the circumstances at all

Issue 2: Should the court approve the sale of the land to David Viczko under s. 50.5(4) of the Act?

Even if Ms. Choquette had been required to be consulted, the Court would have given its approval to the sale, over her objection. The court held that the sale was for fair market value, and was necessary to advance the estate administration. Moreover, the sale took place 9 years ago, and to undo it would be very complicated, and incur needless costs:

[40]  The circumstances are these. The sale of the land implemented the testator’s intentions. There is no dispute that the sale was for fair market value. There is no prejudice to Ms. Choquette in the sale being approved, because she will benefit from the fair market value sale that was directed by the testator. The other parties, and Ms. Choquette as well, would be prejudiced considerably by the sale not being approved. The sale to the Viczkos took place nine years ago. Reversing that sale, including addressing David Viczko’s farming of the land for the past nine years, would plunge the estate – along with the individual parties – into a morass of complication and the promise of even more litigation. Approving the sale would permit administration of the estate to move towards a conclusion.

In short, before a beneficiary (who is merely entitled to the proceeds of land, but not actually the land itself) tries to object to a sale of the land, they should examine if they are truly entitled to object to the sale.  

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Today’s post comes from Wagner Sidlofsky LLP, a well-known estate law blog.

The article talks about the importance of creating a contemporaneous evidentiary record of a parent’s intention when gifting property to their adult children.

If a parent places an adult independent child on title to property, there is often a dispute after death as to whether the child was intended to get the property outright, or, hold it for the parent’s estate

The article provides good guidance on what written evidence you should keep if you add your child to a property. It can help avoid a very expensive fight later.

The article by Estate Law Canada can be viewed here. 

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.