Thomasson Estate (Re)

2011 BCSC 481 Thomasson Estate (Re) IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Thomasson Estate (Re), 2011 BCSC 481 Date: 20110414 Docket: P101791 Registry: Vancouver Re: Estate of Agnes Annie Thomasson also known as Nancy Thomasson, Deceased - and - Docket: P101792 Registry: Vancouver Re: Estate of Herbert Thomasson, Deceased Before: The Honourable Madam Justice Gerow Reasons for Judgment Counsel for the applicant, Brian Thomasson: B.D. Rosberg Counsel for the respondent, Alexander Thomasson: M.J. Lecovin Place and Date of Hearing: Vancouver, B.C. March 25, 2011 Place and Date of Judgment: Vancouver, B.C. April 14, 2011 [1] Brian Thomasson, one of two named executors in the wills of Agnes and Herbert Thomasson, applies that Alexander Thomasson ("Alex") be passed over as an executor and seeks to have probate granted to him in both the estate of his mother, Agnes Thomasson, and his father, Herbert Thomasson. Because the two named executors share the same last name I will refer to them by their first names. [2] For the following reasons, I conclude that Alex should be passed over as an executor and probate should be granted to Brian of the estates of Agnes Thomasson and Herbert Thomasson. The right of Alex to apply to be added as a co-personal representative under the grant of probate is reserved. [3] The two deceased had four children, namely the applicant Brian, Alex, Maxine Lillian Rollins and Nancy Edith Mary Roberts, all of whom survived the deceased. Herbert Thomasson died on February 20, 2007, at the age of 92. His will was dated June 3, 1997, and there was a codicil dated November 5, 2001. Agnes Annie Thomasson, also known as Nancy Thomasson, died on January 6, 2010, at the age of 86. Her will was dated June 3, 1997, and there was a codicil dated November 5, 2001. [4] Among the issues to be determined by the executor of both of the estates is the interest of the estates, if any, in the lands and premises located in the City of Surrey and legally described as Parcel Identifier 006-201-814, Lot 11, Section 33 Township 7 NWD Plan 41650 (the "Property"), which were transferred by the deceased to Alex and his wife Christina Rose Thomasson in 2006, and the obligations, if any, owing to the estates in regard to this transaction. Background facts [5] The deceased operated a broiler farm at 19065 52 Avenue, Surrey, B.C. through a company known as N & H Farms Ltd. In 1983, 49% of the company was transferred to Alex. [6] Alex deposes that the transfer of the shares was in consideration for his having worked on the farm part-time while he was in school and full time since 1976. In 1988, the parents sold their 51% interest in N & H to Alex and his former wife for $240,000. By that time, Herbert Thomasson was 76 years old. Prior to the transfer in 1983 and the sale in 1988, appraisals were done of N & H's property. By 2001, Alex had completed paying for his shares in N & H. [7] Brian deposes, that as a result of conversations with his parents, he understood the only consideration Alex paid to their parents for N & H was $900 each month for as long as they lived, and that the transfer of N & H to Alex was made on the basis that he was to receive no further share of the estate owned by the parents. Brian understood Alex was to receive no further share of the estates of their parents because he already received the greatest share of their estates by the N & H transfer to him. Brian further deposes that his father told him that Alex had made payments for a period of approximately 18 months after N & H was transferred, after which no payments were made. Brian deposes that his parents told him they caused their wills to be drawn according to these terms. As well, life insurance was taken out by the parents in the 1980s which named their children, with the exception of Alex, as beneficiaries. [8] The most significant asset owned by the deceased after the transfer of N & H to Alex was the Property. The Property comprises about 9½ acres of land, located approximately 2 kilometres from the broiler farm operation of N & H. [9] The Property was transferred to Alex by the deceased in January 2006, and the transfer was submitted to the Land Title Office for registration in August 2006. [10] Brian deposes that he and his sisters were told the following by their parents: 1. The remainder of their parents' estates after the transfer of N & H to Alex was to be divided between the three of them (excluding Alex) on the death of both of their parents; 2. Each of them recalls that their parents advised them that the forgoing terms had been discussed by their parents with Alex; 3. They have no knowledge of the agreement alleged by Alex transferring the Property to him; and 4. They did not discuss the terms of any agreement transferring the Property to Alex with their parents. [11] Brian and his sisters were aware their parents had transferred the Property to Alex in 2006. [12] In the original 1997 wills, all four children were named as executors. That was changed in the 2001 codicil, which named Brian and Alex as the executors. [13] The evidence is that the parents considered changing their wills in 2006, but no changes were made. The estates of the parents are worth approximately $600,000, exclusive of the Property. Brian and his sisters each received approximately $27,250 from their mother's life insurance policy. [14] Alex's only interest in his parents' estates is as an executor. He is not a beneficiary of either estate. Applicant's position [15] Brian takes the position that it is necessary for the estates to make a proper enquiry into the nature of the transactions between the deceased and Alex relating to the transfer of the Property. Brian believes that such enquiry, and the steps to be subsequently taken by the estates based on the enquiry, must be made independently of Alex. Respondent's position [16] Alex opposes the application to grant probate of the estates to Brian alone. Alex deposes his siblings were aware that he started using the Property in 1999 to store manure and compost on, and knew as far back as 2001 that he was going to purchase the Property as a result of conversations with their parents. Alex deposes he entered into an agreement with his parents with that he and his wife would purchase the Property for $450,000, his parents could continue to reside on the Property, and he and his wife would assist in their care. Alex's evidence is that he and his wife have continued making payments since his mother's death. Since 2006, Alex and his wife have paid the taxes, maintenance and insurance for the Property. [17] Alex submits it is trite law that a person's choice of executor should not be lightly interfered with. On three occasions, the testators confirmed their choice of executors, namely the original wills, the codicils, and the fact they did not change their wills in 2006. As well, there is no suggestion that either of the named executors lacks capacity or has endangered estate property. [18] Alex argues the cases relied upon by the applicant are not relevant to this case because the Property was transferred to him five years ago, not just before the testators' deaths. Analysis [19] Courts are hesitant to interfere with the testator's right to nominate his or her executor. However, the court has both a statutory power under s. 31 of the Trustee Act, R.S.B.C. 1996, c. 464 and an inherent power to remove or pass over a trustee or executor: Mardesic v. Vukovich Estate (1988), 30 B.C.L.R. (2d) 170 (S.C.); McKay v. Howlett, 2003 BCCA 555. [20] Section 31 of the Trustee Act provides: If it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court, it is lawful for the court to make an order appointing a new trustee or trustees, whether there is an existing trustee or not at the time of making the order, and either in substitution for or in addition to any existing trustees. [21] In Mardesic, Finch J. (as he then was) in finding it necessary and expedient to remove the trustee because he was in a conflict of interest with the interests of all the beneficiaries of the estate, noted that s. 31 conferred a very broad power on the court. [22] The test for removal of an executrix or trustee is set out in Conroy v. Stokes, [1952] 4 D.L.R. 124 (B.C.C.A.), where the Court confirmed at 126-127 that the main test for removal of a trustee is the welfare of the beneficiaries: In Letterstedt v. Broers (1884), 9 App. Cas. 371, their Lordships of the Judicial Committee held that the main principle upon which the jurisdiction of Courts of Equity has been exercised to remove old trustees and substitute new ones in cases requiring such a remedy, is the welfare of the beneficiaries of the trust estate. [23] In Re Becker (1986), 57 O.R. (2d) 495 (Ont. S.C.), (sub nom. Stadelmier v. Hoffman), the Court found the executor should be passed over because there was a conflict as a result of the fact the executor could not attack the gift and transfer of properties to him while at the same time maintaining in his personal capacity that the transfers were proper. The Court summarized the findings at 500: In considering the fitness of the respondent to act as an executor I have considered also the duties of an executor in a general way. One duty of an executor is to bring in the estate for distribution among the beneficiaries. If it is perceived, on good grounds, that that important duty is compromised by a personal conflict of interest because the executor will be asked to sue himself to recover what may be a large part of the estate property, he must be passed over. That consideration is particularly important when the action against the executor is for a very significant amount in respect to the size of the estate. [24] In this case, Alex asserts he should not be removed because it would be pre-judging the case. He says that Brian is seeking to overturn the testators' right to nominate an executor. Alex submits that the possibility of a future lawsuit is not sufficient to overturn a testator's right to nominate an executor. He relies on the following cases for the proposition that this is not an appropriate case in which to pass over him as an executor: Re Hautakoski Estate, 2009 BCSC 868; De Cotiis v. De Cotiis, 2008 BCSC 1206; Le Roux v. Shannon, 2009 BCSC 331; and Fawcett Estate v. Steiner, 1998 CarswellBC 625. [25] Brian provided the following authorities in which the courts found a conflict that warranted either passing over or removal of an executor or trustee because of either a potential or actual conflict: Re Becker; Mardesic; Montgomery v. Osborne Estate, 1993 CarswellOnt 3482 (Ont. C.J. (Gen.Div.); Re Maki Estate, 2007 BCSC 1034; and Stern v. Stern, 2010 MBQB 68. [26] It is clear from reviewing the case law that each case turns on its own facts. [27] In this case, Alex is not a beneficiary under either of his parents' wills, and his only interest in the estates is as an executor. The other named executor wants to make enquiries into the transfer of the Property to Alex in order to determine what, if any, interest the estates have in the Property, and what, if any, obligations Alex and his wife have to the estates as a result of the transfer. [28] The application is not to remove Alex as an executor but simply to pass over him so that an enquiry can be undertaken of the transfer of the Property to him and his wife by the deceased in 2006, and a determination can be made if any further actions need be taken in regards to the Property. [29] In the circumstances of this case, it is my opinion that there is a perceived conflict of interest between Alex in his role as an executor and his interest in his personal capacity. If an action is instituted by the executors as a result of the transfer of the Property, it would be against Alex. In my opinion, Alex, in his capacity as executor, cannot attack the transfer of the Property to himself while at the same time maintaining, in his personal capacity, that the transfer of the Property was proper. By making such a finding I am not prejudging the case. I am simply of the view that, in the circumstances of this case, if an action is commenced as a result of the enquiries into the transfer, Alex cannot conscientiously act as a plaintiff in his capacity as an executor in a case where he will be the defendant. [30] As a result I conclude that the passing over of Alex is necessary and expedient. His right to apply to be added as a co-executor under the grant of probate after the enquiry has been completed is reserved. There will be a grant of probate naming Brian as the personal representative of the estate of Herbert Thomasson and the estate of Agnes Annie Thomasson. "Gerow J."