Foster Estate v. Foster

Foster Estate v. Foster Court Supreme Court Date 2025-10-06 Citation 2025 NSSC 317 Docket Ken, No. 527749 Judge/Registrar/Adjudicator Gatchalian, Gail L. (Honourable Justice) Document Type Decision Decision Content SUPREME COURT OF Nova Scotia Citation: Foster Estate v. Foster, 2025 NSSC 317 Date: 20251006 Docket: Ken, No. 527749 Registry: Kentville Between: Michael Foster as Personal Representative of the Estate of Ruth Charlene Foster Applicant v. Bonny Foster and Robert Foster Respondents Motion by the Respondents for Order Requiring Interim Distribution Judge: The Honourable Justice Gail L. Gatchalian Heard: September 22, 2025, in Kentville, Nova Scotia Counsel: David Hutt and Quila Gillott, for the Applicant Peter Rumscheidt, for the Respondents By the Court: Introduction [1] Ruth Charlene Foster passed away on August 29, 2020. She is survived by her three adult children: Michael Foster, Bonny Foster and Robert Foster. For clarity, I will refer to the parties by their first names. In doing so, I mean no disrespect. Michael, Bonny and Robert are the sole beneficiaries of the Estate, and are to share equally in the residue. Michael is the personal representative of the Estate. [2] Bonny and Robert have filed a motion asking me, sitting as a Judge of the Probate Court, for an order requiring Michael to make a further interim distribution of the proceeds of the Estate to the beneficiaries in the amount to $75,000 each, pending the application to pass accounts. [3] The parties agree that the Probate Court has the jurisdiction to order an interim distribution. [4] Bonny and Robert say that the court should exercise its discretion to order Michael to make a further interim distribution of $75,000 to each beneficiary because: • Michael’s desire to wait until the entire Estate administration is complete is not reasonable. • If the court does not order a further interim distribution, Bonny and Robert will suffer prejudice in the form of lost investment income. • Bonny and Robert do not have to show financial hardship to justify an order for a partial distribution. • Ample money will be left to pay for the legal fees associated with the passing of accounts. • It has been approximately 56 months since the Grant of Probate was issued, far beyond the “executor’s year.” • Michael engaged in a type of “extortion” when he said that he would not make a further interim distribution unless Bonny and Robert agreed to participate in a judicial settlement conference. • It would do justice between the parties to order a further partial distribution. [5] Michael says that the court should not interfere with his discretion because: • As the will grants Michael absolute discretion to make decisions about distributions, the court should only interfere with his discretion if his decision is so unreasonable that no honest or fair-dealing trustee could have come to that decision: see Allsopp v. Edgar Graham Estate, 2023 NSSC 249 at paras.8-10. • He has already exercised his discretion under the will to make two interim distributions. • He decided that he should maintain a significant reserve to cover future legal expenses because legal expenses incurred by the Estate in this litigation have been greater than anticipated. [6] Neither party found any Nova Scotia cases dealing with the power of the Probate Court to order a personal representative to make an interim distribution. Bonny and Robert relied on the following cases from other jurisdictions for the factors that the court should take into account in determining whether to exercise its discretion to order a personal representative to make an interim distribution: Zanrosso Estate (Re), 2021 BCSC 2664; Reznik v. Matty, 2013 BCSC 1346; and Parson v. McGovern, 2014 ONSC 1785. Michael does not dispute the relevance of the factors set out in those decisions, but says that the factors do not justify the order sought in this case. I find those cases to be persuasive. [7] The burden lies on Bonny and Robert to justify an order requiring Michael to make a further interim distribution pending the court’s on the application to pass accounts: see Zanrosso Estate at para.16. [8] Based on Allsopp, Zanrosso Estate, Reznik and Parson, I find that the following factors are relevant to the court’s exercise of discretion in this case: • the wording of the will • whether Michael failed to exercise his discretion • if Michael did not fail to exercise his discretion: ο Michael’s decision to make a further interim distribution conditional on Bonny and Robert’s agreement to participate in a judicial settlement conference ο whether Bonny and Robert are in need of money or will suffer undue prejudice if the court does not order a further interim distribution ο whether there has been a delay in administering the Estate ο the timing of the hearing to pass the accounts ο whether sufficient funds will remain to cover the Estate’s legal expenses ο what would do justice between the parties See Allsopp, ibid.; Reznik at paras.29-32 and 37-38; Zanrosso Estate at paras.15-16; and Parson at para.41. [9] Before I consider these factors, I will first explain why I find that the Probate Court has the jurisdiction to require a personal representative to make an interim distribution of the proceeds of an estate. Jurisdiction of Probate Court to Order Interim Distribution [10] Under the Probate Act, S.N.S. 2000, c.31, a personal representative may apply to the Probate Court for an order that they may distribute the proceeds of an estate [s.82(1)(a)], and the court may give direction with regard to the time for distribution and the notice that must be given [s.82(2)]. Neither the Act nor the Probate Court Practice, Procedure and Forms Regulations, N.S. Reg 119/2001 explicitly allow for beneficiaries to make an application for an order for an interim distribution. [11] Nonetheless, I find that the Probate Court has the jurisdiction to order a personal representative to make an interim distribution of the proceeds of an estate pursuant to its broad powers under s.8(1)(c) of the Act, which states that the Probate Court has the power to “effect and carry out the judicial administration of the estates of deceased persons through their personal representatives, and hear and determine all questions, matters and things in relation thereto necessary for such administration” (emphasis added). Absolute Discretion Granted Under the Will [12] The will grants Michael an absolute discretion to make distributions of the Estate assets as he considers appropriate: … IN ORDER to carry out the provisions of my Will, I give my Trustee the following powers to be used in the exercise of an absolute discretion at any time: … MY Trustee may make any division, distribution or allocation of the assets of my estate in specie and at such valuations as my Trustee in the exercise of an absolute discretion considers appropriate. In determining such valuations, my Trustee may consider future expectations relating to such assets as my Trustee in the exercise of an absolute discretion considers appropriate, including any tax liability or credit. Any decision of my Trustee in this regard shall be binding on all the beneficiaries of my estate. [emphasis added] [13] In light of the absolute discretion granted to Michael under the will, the court should only intervene if: (1) his decision is so unreasonable that no honest or fair-dealing trustee could have come to that decision; (2) he has taken into account considerations which are irrelevant to the discretionary decision he had to make (which is not an argument being made by Bonny and Robert); or (3) Michael, in having done nothing, cannot show that he gave proper consideration to whether they ought to exercise the discretion: Allsopp at paras.8-10, citing Walters v. Walters, 2022 ONCA 38 at paras.47-48. A trustee’s fiduciary duty, bad faith and improper consideration of extraneous matters are encompassed by this analytical framework: Allsopp at para.8, citing Walters at para.48. This approach strikes a balance between giving effect to the intentions and directions of the testator and maintaining judicial oversight: Allsopp at para.9. Failure to Exercise Discretion? [14] Michael did not fail to exercise his discretion as personal representative under the will. He made an initial interim distribution of $150,000 to each beneficiary on August 16, 2024. In February of 2025, Bonny and Robert requested a further distribution of $100,000 each. In April of 2025, they changed their request to $150,000 each. Bonny and Robert provided Michael with their draft motion materials on June 23, 2025, in which they revised their position to seek a further interim distribution of $125,000 each. Michael decided to distribute $50,000 each instead. He distributed the $50,000 bank drafts on or about June 26, 2025. At the hearing of the motion, Bonny and Michael, taking into account the interim distribution of $50,000 each, revised their position to seek a further interim distribution of $75,000 each. [15] This factor weighs against interfering with Michael’s discretion. [16] I will next consider whether Michael’s decision is so unreasonable that no honest or fair-dealing trustee could have come to that decision, taking into account: (a) Michael’s condition of participation in a judicial settlement conference, (b) any evidence of financial need or undue prejudice; (c) any delay in administering the Estate; (d) the timing of the passing of accounts; (e) whether sufficient funds will remain to cover the Estate’s legal expenses; and (f) what would do justice between the parties. Condition of Judicial Settlement Conference [17] Bonny and Robert rely on the decision in Brighter v. Brighter Estate, [1998] O.J. No.3144 for the proposition that it was improper for Michael to make a further distribution conditional on their agreement to participate in a judicial settlement conference. The court in Brighter held that “[t]he executor has no right to hold any portion of the distributable assets hostage in order to extort from a beneficiary an approval or release of the executor’s performance of duties as trustee, or the executor’s compensation or fee”: at para.9 The decision in Brighter does not assist Bonny and Robert. It is distinguishable. In Brighter, the executor advised that she was going to distribute the shares to two beneficiaries and would hold the third beneficiary’s share until he signed the waiver and release of executor: see Parson at para.35. Michael did not threaten to withhold Bonny and Robert’s share until they signed a release and approved his compensation. Despite his initial stance, Michael made a further interim distribution of $50,000 each, and is moving forward with the application to pass accounts. [18] This factor does not support the order requested by Bonny and Robert. Evidence that Bonny and Robert Need the Money or Undue Prejudice [19] There is no evidence that Bonny or Robert needs the money. [20] Bonny and Robert may suffer some prejudice in the form of lost investment income should I decline to order a further interim distribution, but such prejudice cannot be characterized as “undue” in the absence of any evidence that Bonny and Robert need the money. [21] This factor weighs against interfering with Michael’s discretion. Delay in Administering the Estate [22] Michael obtained the grant of probate on January 8, 2021. Michael filed an application under s.71 of the Probate Act to pass the accounts of the Estate on June 26, 2024. Bonny and Robert filed a joint Notice of Objection to the passing of accounts on July 16, 2024. The delay in administering the Estate from January 8, 2021 to June 26, 2024 weighs in favour of ordering a further interim distribution. The Hearing to Pass Accounts [23] The contested application to pass accounts is scheduled to be heard before me on November 12 and 13, 2025, approximately five weeks from the date of this decision. This factor weighs against interfering with Michael’s discretion. Would Sufficient Funds Remain? [24] As of August 29, 2025, the Estate account had $330,883.98 in it. [25] The only Estate expenses remaining are Michael’s request for a gift of $60,329.64 in lieu of a commission, to which Bonny and Robert object, Michael’s request for approximately $1329 for administering his father’s estate, and legal expenses. The Estate received a Tax Clearance Certificate from the Canada Revenue Agency on May 3, 2024. [26] If I grant the motion for an interim distribution of $75,000 each, for a total $225,000, and Michael’s request for a gift of $60,329.64 is approved, approximately $45,500 would be left in the Estate account to cover legal expenses. [27] I accept Michael’s evidence that the amount of legal costs involved in his administration of the Estate have been difficult to predict, and that they have been more expensive than anticipated. This is the second motion in this matter. The first motion was a motion brought by Bonny to testify by video at the passing of accounts, which I heard and dismissed: Foster Estate v. Foster, 2025 NSSC 251. At the hearing of that first motion, Michael testified in cross-examination that the Estate had already spent over $100,000 in legal fees, and that there was an outstanding legal bill of $11,000. That would have been before the Estate was invoiced for the first motion and for the present motion for an interim distribution. There have been multiple affidavits filed in the application to pass accounts. Seven witnesses have been subject to discovery examinations. The two-day application to pass accounts will result in further legal fees. It is possible that one of the parties will appeal my decision. [28] In light of the above, I cannot conclude that Michael’s decision to make a further interim distribution in the amount of $50,000 each rather than $125,000 each, as requested by Bonny and Robert, is so unreasonable that no honest or fair-dealing trustee could have come to that decision. What Order Would do Justice Between the Parties? [29] In light of all of the above-noted factors, I conclude that it would not do justice between the parties to grant the order requested by Bonny and Robert. The will grants Michael an absolute discretion to make distributions as he considers appropriate. He has exercised the discretion given to him by the will, having already made two interim distributions totalling $600,000, which represents over half the value of the Estate. His decision not to make a further interim distribution of $75,000, as requested by Bonny and Robert, is not so unreasonable that no honest or fair-dealing trustee could have come to that decision, given: (a) the testator’s direction that Michael be granted absolute discretion to make distributions as he considers appropriate; (b) the two interim distributions made to date; (c) the absence of any evidence that Bonny and Robert are in need of the money or that they will suffer undue prejudice if they must await the determination of the passing of accounts; (d) the fact that application to pass accounts will be heard in just over one month from the date of this decision; (e) the legal expenses incurred by the Estate to date, which have been more than expected; (f) the legal expenses incurred in the two interlocutory motions; (g) the legal costs that will be incurred in preparing for and attending the application to pass accounts, and (h) the possibility of an appeal and associated legal costs. Conclusion [30] The motion of Bonny Foster and Robert Foster for an order requiring the Personal Representative, Michael Foster, to make a further interim distribution is dismissed. [31] If the parties cannot agree on the costs of this motion, I will receive written submissions from Michael Foster within two weeks of this decision, and from Bonny Foster and Robert Foster within one month of this decision. Gatchalian, J.