I practise in the area of estate litigation and am often reminded of the importance of having a clearly drafted Will.

A good recent example comes from the decision in Poole v Dailey, 2020 SKQB 226.
The deceased had left his estate between his two children, Brian and Patricia, on the below terms:

1. Patricia was to receive the home at Regina Beach provided she met certain conditions. The clause read as follows:
   

   Further, provided that my said daughter takes physical possession of the said residential property within three months from the date of my death and occupies that property as her residence, then I direct that the said residential property and all contents shall be transferred to my said daughter, to be hers absolutely, subject only to any mortgage which may be registered against the property at the date of my death.

2. the residue was then to be shared equally between Brian and Patricia.

The issue before the Court in Poole was thus: Had Patricia taken physical possession of the Regina Beach home, within 3 months of Earl’s death on August 1, 2015?

Regrettably, the Will did not define in black and white terms, what would trigger a finding of “occupancy” or “residency”.

A trial was held. The parties each called evidence to support their own position. Brian argued that Patricia had not resided in the home within 3 months. He relied on:

1. the fact that he often drove by the home during the relevant period, and did not often note evidence of Patricia residing at the home;
2. The water metre readings that Brian had recorded from the home. Brian suggested that an average person uses 100 gallons of water a day.

However, the Court did not find that Brian had qualified himself as an expert witness, for the purpose of introducing expert testimony.

Patricia in turn argued that she had in fact resided in the home within 3 months. She relied on the below:

1. over the course of August and September 2015, she had moved her things out of the home in Regina, and into the home at Regina Beach;
2. Patricia had reconnected with a girlfriend from high school, at Regina Beach and entertained her cousins in her home at Regina Beach. Patricia’s friend testified to this;
3. There was nothing in the evidence that suggested that Patricia was not being truthful about her occupation of the Regina Beach home.

Ultimately, the Court, therefore, found that Patricia had in fact occupied the Regina Beach home, as prescribed by the will. As such, Patricia Dailey was entitled to absolute title of the property.

Poole offers a practical lesson on the importance of having a carefully defined Will. Here, the costly proceeding could perhaps have been avoided had the Will defined what exact criteria would constitute “occupancy” or “residency”.

The Court’s ruling on costs:

Interestingly, the Court in Poole did not award Patricia her legal costs out of the Estate. The Court held that the proceeding was intended to advance Patricia’s personal interests in the estate. As such, Patricia’s legal fees should not be borne by the estate.
This finding may attract comment. Traditionally, in estate matters, legal fees for successful parties have often been awarded out of the estate. Moreover, they are often paid on the “solicitor client” scale (meaning dollar for dollar costs). The reasoning has traditionally been that the estate should bear the cost of any proceeding aimed at determining the true intention of the deceased, or, of any proceeding caused by an ambiguity for which the deceased was responsible. Such traditional reasoning would have appeared to apply equally in Poole.
It is too early to tell if the costs aspect of Poole may be an outlier decision, or, if it signals a broader departure in Saskatchewan from the prior approach to legal costs in estate matters.

A recent case from the Saskatchewan Court of Appeal clarifies that a beneficiary who seeks an estate accounting is not required to show possible wrongdoing by the trustee before an accounting can be ordered.

Background:

The late Franklin Bryant was a beneficiary under his mother’s will.

Franklin’s executor had concerns about how Franklin’s mother’s estate had been administered. This led Franklin’s estate to ask a Queen’s Bench Chambers judge to require the executrix of the mother’s estate to provide an accounting. The Chambers judge declined to make the order requested, in large part on the basis that there was no evidence of misconduct in the administration of the estate.

Queen’s Bench decision:

The Queen’s Bench judge first found that s. 35(1) of Administration of Estates Act did not apply here. Section 35 of the Administration of Estates Act only applied where there had a grant of letters probate or letters of administration. If probate was granted, an accounting was due within 2 years.

Here, however, the Will of Franklin’s mother did not receive probate. As such, the Queen’s Bench judge found s. 35(1) to be inapplicable.

Second, the Queen’s Bench judge seemed to suggest that an accounting should only be ordered when there was some suggestion of wrongdoing by the executor. The Queen’s Bench judge wrote as follows:

[20] Just because the court has the inherent jurisdiction to order an accounting, does not mean it should. I want to be clear that there is no evidence before me that there has been misconduct such that an accounting is necessary. The applicant believes that an accounting will show what has happened to the Corporation’s assets but, as I have indicated, the assets of the Corporation did not pass through the estate of [the Mother]. At the hearing, it became apparent that the applicant was seeking information on his late father’s share in the Corporation that, upon his death, became part of his estate. An accounting of the administration of [the Mother’s] estate will not yield the type of information the applicant seeks. To the extent that the applicant wants information on how the executrix disbursed the bequests, much, if not all, of that was set out in her affidavit.

Court of Appeal decision:

The question on appeal was whether the Chambers judge erred in declining to order an accounting of the administration of Franklin’s mother’s estate.

The Court held that an accounting should have been ordered. The court relied on section 55 of The Trustee Act, which provides as follows:

55 (1) On the request of a beneficiary of the trust, or the beneficiary’s property attorney or property guardian, a trustee shall provide an accounting to the beneficiary.
(2) If a beneficiary of the trust, or the beneficiary’s property attorney or property guardian, has been unable to obtain an accounting from the trustee in accordance with subsection (1), the beneficiary of the trust, or the beneficiary’s property attorney or property guardian, may apply to the court for an order directing the trustee to provide an accounting to the court or to the beneficiary.
(3) Notwithstanding anything to the contrary in the terms of a trust, if a beneficiary of the trust or other interested person has requested information concerning the accounts of a trustee, and the trustee has refused to comply with the request in a reasonable and timely manner, the court may order the trustee to pass accounts in accordance with section 54.

Section 2(h) of The Trustee Act defines “trustee” to mean, among other things, “an executor or administrator”. 

The Court of Appeal held that s. 55 imposed an unavoidable obligation on a trustee to provide an accounting.

[33] In broad terms, it is entirely appropriate to understand s. 55(1) as imposing an unavoidable obligation on a trustee to provide an accounting. That kind of duty is consistent with, and reflects, the fundamental nature of the relationship between a beneficiary and a trustee. Being able to hold a trustee to account ensures that the trustee discharges its fiduciary obligations.
…
[40] In this case, it was entirely reasonable for Franklin’s estate to request an accounting. The following points inform my conclusion in this regard:

1. The Mother died in November of 2015. Her estate was not probated.
2. Christian averred that, notwithstanding many requests for a copy of the Mother’s will, Dorothy had refused to provide one. Dorothy responded by saying only that Christian had not asked “directly” for a copy of the will.
3. Dorothy averred that, prior to his death, Franklin had “received funds as a named beneficiary, or joint account holder”. However, she also said, “I am not aware of the particulars of these payments or amounts”.
4. Dorothy explained that the bulk of the Mother’s assets were “jointly held” and thereby were “automatically transferred to the name of the individual with who the assets were jointly held”. But, she provided no detail as to the nature of those assets or information about the individuals who had held them jointly with the Mother.
5. The only other bequests distributed to beneficiaries, according to Dorothy, were $2,000 for each grandchild, an amount that she averred had been personally delivered to Christian, and $1,000 for each of several designated beneficiaries (who were not identified), including Christian and his siblings. These funds were said to have come from an investment when it had matured. Christian takes issue with this and avers that he and his siblings received only $1,000 each.
   

Franklin’s estate was also held entitled to costs, payable by the Mother’s estate, in the usual way. If there were no assets in the Mother’s estate with which to pay costs, they were to be paid by Dorothy personally because, in the circumstances here, there was no reasonable basis for her to refuse the request for an accounting.

Lesson learned:

Bryant Estate makes clear that an accounting must not be lightly denied.

As per the clear language of s. 55(1), a beneficiary is entitled to an accounting as a matter of course on making a reasonable request. The beneficiary has no obligation to show cause or present a justification for that request.

The Court of Appeal did however clarify that frivolous requests for an accounting could be denied by the Court. Examples of frivolous examples could include the below:

1. A request for accounting that is made too closely on the heels of another accounting might be unreasonable on the basis that not enough time has passed;
2. Second, where the situation concerning the administration of a trust makes a request for an accounting unreasonable. Thus, for example, if the administration of an estate is on the very brink of being completed, it might be unreasonable to request an accounting until matters have been finally wrapped up;
3. Third, at some point in time, it may become simply too late in the game for a beneficiary to properly expect an order requiring an accounting. This might be the case, for instance, if a request for an accounting is made many years after the time by which it might have been expected that the administration of an estate would have been completed.

Every determination of reasonableness will, of course, always be fact-specific.

A side question not raised in Bryant Estate, was whether a party in the position of Franklin’s estate could also simply rely on the inherent jurisdiction of the Court of Queen’s Bench to secure an order for an accounting. That specific question will therefore have to await the guidance of a future court.

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