The recent decision in Hayes v Swift, 2021 SKQB 132 offers a reminder that beneficiaries should ensure they have real evidence of executor wrongdoing before they bring a court application against an executor.
Facts:
The testator, Bernard William Hayes, had passed away, and his will made specific gifts for his son and two grandchildren These parties were the applicants.
The testator was married to the executor, Ann Swift, when he died. The will provided that Ann received the residue of estate. Letters probate were issued, and the executor duly provided each beneficiary with their specific bequests under will. Ann had shipped the testator’s son several boxes of woodworking tools at a cost of $1,496.25 to the estate. However, the son maintained that there were more tools in the estate. Ann claimed that she had provided all that she had found.
The applicants, who had no lawyer to represent them, applied in court for relief, including for an order directing the executor to deliver woodworking tools. The applicants also sought an accounting from the executor.
Outcome:
The application was dismissed. The Court held that the executor had not wrongly withheld woodworking tools. The executor had identified a box of miscellaneous hand tools which may be considered woodworking tools, but the Court held that the obligation to arrange for and pay the cost of transporting items was on the son. The executor had already incurred $1,496.25 in shipping to send bequeathed woodworking tools to the son. Here, the appraised value of the remaining tools was $2,700, and the cost to ship those tools was approximately $2,000. In considering the shipping costs already incurred by the estate, and the value of the remaining tools, any further expense to the estate would be unduly high in the circumstances. The Court held that if there remained woodworking tools that the son claimed to be entitled to, the son was responsible for the cost of shipping and transportation.
The beneficiaries sought a more detailed inventory of any tools in the estate. However, the Court held that the applicants had not shown that the executor had deliberately withheld any tools from the beneficiaries. The Court refused to order a more detailed inventory;
[64] There is no evidence presented by the applicants, beyond speculation, that the inventory provided by the executor prior to and through this application is incomplete as it relates to any tools, including woodworking tools.
Refusal by the Court to order an accounting:
The applicants had also sought an accounting from the executor. The court dismissed this application. The Court held that the applicants had not shown cause as to why an accounting should be ordered. The Court held that the grandchildren had already received their specific bequests and thus had no further interest in the estate.
The Court held that the executor had properly established a $100,000 trust for the testator’s son, and had duly made all payments required by the will. Thus, the Court held there was no practical purpose for ordering an accounting, as the only remaining property in the estate went to the executor herself.
The Court held that it would be an exercise in futility to require the sole residual beneficiary, the executor, to provide an accounting in this circumstance:
[71] In this case, the applicants have not shown cause as to why this Court should order an accounting. Each of Jeremy Hayes and Amanda Campbell have received their $10,000.00 bequest and they have no further interest in the estate. The executor has established the $100,000.00 trust for Mr. Hayes and made the payments required under the Will. I see no practical purpose for which the applicants seek an accounting when there is a sole residual beneficiary and the financial bequests have been satisfied.
…
[75] It would be an exercise in futility to require the sole residual beneficiary, in her role as executor, to provide an inventory or accounting of an estate to which she now has sole entitlement. The applicants have no further interest in the estate.
Conclusion:
The decision in Hayes v Swift was critical of the unreasonable demands made by the self-represented beneficiaries.
It is not uncommon to see situations in which beneficiaries – some who are well-intentioned, some who are not – seem to wrongly believe that the executor is hiding things from them. In cases where the executor provides all reasonable information, but the beneficiaries are never satisfied, misguided court applications by beneficiaries can arise.
Hayes v Swift shows that courts will readily criticize beneficiaries who pursue meritless concerns all the way to court, incurring expense for all concerned. The Court in Hayes v Swift specifically suggested that the beneficiaries should have sought legal advice, which would have prevented them from acting in a misguided manner:
[85] The applicants’ approach is entirely consistent with the concerns repeatedly identified by this Court when a party receives “legal advice” from a non-party who is completely unfamiliar with the practice of law and who seeks to intervene in a legal proceeding in an uninformed manner. For a party to choose to rely on the “legal advice” of a non-party is to risk incurring costs when this “representation” is misguided and unreasonable.
Moreover, the Court in Hayes awarded costs to the executor, payable personally by the applicants, in the amount of $2200. If the costs were not paid, the beneficiary would not have the opportunity to receive any further tools. This is a stern warning that the Court was not pleased with the behaviour of the beneficiaries.