Robinson v. Estate of Fitch

Robinson v. Estate of Fitch Court Supreme Court Date 2024-07-02 Citation 2024 NSSC 190 Docket 532589 Judge/Registrar/Adjudicator Norton, Scott C. (Honourable Justice) Document Type Decision Decision Content SUPREME COURT OF Nova Scotia Citation: Robinson v. Estate of Fitch, 2024 NSSC 190 Date: 20240702 Docket: 532589 Registry: Halifax Between: Allan Robinson and Clairmont Farm Services Ltd. Applicants v. Estate of Eldon Lamont Fitch (Deceased), Robert Randolph Fitch and Darlene Fitch Respondents DECISION ON MOTION TO APPOINT REPRESENTATIVE Judge: The Honourable Justice Scott C. Norton Heard: June 20, 2024, in Halifax, Nova Scotia Decision: July 2, 2024 Counsel: Rebecca Hiltz-Leblanc, KC, for the Applicants Richard Norman, for the Respondents By the Court: Overview [1] The Respondents make this motion for an order appointing Robert Randolph Fitch (“Randy”) as the sole representative of the Estate of Eldon Lamont Fitch (Deceased) for the purpose of this litigation. [2] In the underlying litigation, the Applicants claim that the late Eldon Fitch fraudulently transferred the title to three properties from Clairmont Farm Services Ltd., a company that he controlled, to Randy Fitch and his wife Darlene. The Applicants seek an order for the reconveyance of the properties to the company. [3] The Estate has not filed a notice of contest. The co-executors are Randy and his sister Tanya Robinson. She is the wife of the Applicant Allan, and a director of Clairmont. Tanya and Randy cannot act independently of each other under the will, and they do not agree about how the Estate should be defended. [4] The sole issue for me to decide is whether Randy Fitch should be appointed as the sole representative of the Estate for the purpose of this litigation. [5] I decline to appoint Randy Fitch as representative of the Estate because he has a personal interest in the outcome of the proceeding. Instead, I order that the co-Executors of the Estate, within one month of this decision, engage a neutral third party to represent the interests of the Estate in this proceeding. Analysis [6] Civil Procedure Rule 36.01(1) permits a party to represent the interests of another person in litigation under a private instrument such as a will or by appointment by a judge. There is little case claw interpreting the authority for a judge to appoint a representative. [7] Clairmont Farm Services Ltd. (“Clairmont”) is a family operated business. Eldon Fitch and Allan Robinson were the only shareholders of Clairmont. Eldon Fitch was the majority shareholder. Eldon Fitch left all his shares in the company to Allan and Tanya Robinson’s son, Mark Robinson. [8] Prior to Eldon Fitch’s passing in 2017, Eldon conveyed real property to Randy and Darlene. The property was owned by Clairmont. The property consisted of three parcels in Kings County, Nova Scotia, bearing PIDs 55349633, 55352041, and 55382014. It is alleged that Eldon Fitch unilaterally effected the transfers without Company knowledge or approval. [9] The Respondents say that Tanya Robinson’s adverse interest in this matter (as spouse of Allan and as a director of Clairmont) creates a conflict which prevents her from acting as a representative of the Estate in this litigation. Tanya Robinson, in her capacity as one of two personal representatives of the Estate, is self-represented and has indicated she takes no position in this proceeding. [10] The Respondents acknowledge that Randy Fitch also has an interest in the outcome of this matter; however, they allege that his interest is aligned with the interests of the Estate. The Respondents assert that it is not possible to hire a third party representative for the Estate. The Estate has no liquid assets and its liabilities may exceed its assets. Its main asset is its shares in Clairmont. To the best of Randy’s knowledge, the Estate remains the majority shareholder of Clairmont. However, it has not been paid dividends and Randy’s efforts to obtain information about what has been happening with Clairmont have not been successful. [11] The Respondents’ assert that the requirements to appoint a litigation guardian in Rule 36.07(5) provide useful guidance, and that by applying those requirements to the current matter, Randy Fitch would make an appropriate representative for the Estate: • He consents to represent the Estate in this litigation. • As a co-executor of the Estate, he already bears this responsibility. • Randy’s relationship to the Estate is well established, he is the son of the Testator and the co-executor of his Estate. [12] In my view, Randy is unable to represent the Estate in his capacity as a co-executor due to a conflict of interest in his personal capacity as a current title holder of the Properties. Canadian jurisprudence is clear that a conflict of interest, actual or perceived, may warrant removal of an executor: Re Thompson, 2023 BCSC 1591. [13] Randy cannot both advance his own interests and those of his wife, while maintaining an even hand in his administration of the Estate, and direct this litigation in the best interest of the Estate, which may well run contrary to his. [14] As to the Respondents’ reliance on the requirements to appoint a litigation guardian under Rule 36.07 as analogous and applicable, the Supreme Court of Canada has considered the criteria to be used in appointing or replacing litigation guardians for a dependent adult. The Court defined a test which turns on the “best interests” of the represented party: Gronnerud (Litigation Guardian of) v. Gronnerud Estate, 2002 SCC 38 (at para. 18). The Court considered the applicable Saskatchewan rules of court, and leading jurisprudence on the criteria to appoint a litigation guardian. One such criterion demands evidence that the litigation guardian is both qualified and prepared to act, and in addition is indifferent as to the outcome of the proceedings (at para. 19). [15] Justice Major, for the majority, highlighted the importance of impartiality for a litigation guardian, stating at para. 20: Indifference by a litigation guardian requires that the guardian be capable of providing a neutral, unbiased assessment of the legal situation of the dependent adult and offering an unclouded opinion as to the appropriate course of action [...] A litigation guardian who does not have a personal interest in the outcome of the litigation will be able to keep the best interests of the dependent adult front and centre, while making decisions on his or her behalf. [emphasis added] [16] Justice Major stated that where there is a “…particularly acrimonious and long-standing dispute among the children concerning their dead parent’s estate”, that “the indifference required to be a litigation guardian is clearly absent” (at para. 21). [17] Here, if Clairmont is successful in its Application, Randy Fitch will no longer have title to the three properties, and title will be returned to the name of the Company. In contrast, the properties would never have been returned to Mr. Fitch personally, nor now his Estate, and so the interests of Randy Fitch and Eldon Fitch (now, his Estate) are not the same. The properties are not the business of the Estate, nor have they or will they ever be considered an asset of Eldon Fitch personally, nor now of his Estate, regardless of the outcome of this proceeding. In short, Randy Fitch is at risk of losing something in this Application. In contrast, the Estate has nothing to lose, and the Estate has nothing to gain. On this basis, the interests between these two parties are not congruent; moreover, these interests may affect the direction of this litigation. [18] Accordingly, a neutral third party should be appointed to represent the Estate. The Public Trustee is an obvious option, as is a member of the Nova Scotia Bar experienced in corporate and property law. Because a representative must act through legal counsel, the expense is reduced if the representative is themself a practising lawyer. As an expense of the Estate, it would be payable in priority to any distribution to the beneficiaries. [19] The motion is dismissed. I decline to appoint Randy Fitch as representative. I order that the co-Executors of the Estate, within 30 days, retain a neutral third party to represent the interests of the Estate in this proceeding. I order that the costs of the representative shall be payable by the Estate in priority to any payments to the beneficiaries. [20] Costs of $750 shall be payable to the Applicants forthwith and in any event of the cause. Randy Fitch shall be personally responsible for payment of the costs because the Notice of Motion was filed by him alone, and not on behalf of the Estate. [21] The Applicants shall prepare an Order accordingly. Norton, J.