Case comment: Marzolf v Marzolf, 2025 SKKB 214

The Saskatchewan decision in Marzolf v Marzolf, 2025 SKKB 214 considered when the Court will approve a sale of Estate farmland over the non-consent of certain beneficiaries.

Factual Background:

1. Dorothy Marzolf passed away on February 3, 2024, leaving an estate primarily composed of 42 parcels of farmland. Her will directed that the estate be divided into nine equal shares for her children, with provisions for grandchildren if any child predeceased her;
2. Three children were named as executors: Helen, James, and Mitchell. After James’s death, Helen and Mitchell became the acting executors and obtained probate in June 2024;
3. The estate lacked sufficient cash reserves to distribute all land to beneficiaries unless such transfers were done on a tax-deferred basis. As they were unable to reach consensus among beneficiaries on how to deal with the land, the executors negotiated a sale of 26 parcels to one beneficiary, David Marzolf, and sought court approval for this sale under s. 50.5 of The Administration of Estates Act (“AEA”). Some of the beneficiaries opposed the sale.

Issue:

The court identified two main issues:

1. Issue 1: Whether the application for approval of the sale could be decided summarily?
2. Issue 2: Whether the proposed sale was in the interest of the estate and the persons beneficially interested in it?

Determination in Marzolf v Marzolf

1. Issue 1: Whether the application for approval of the sale could be decided summarily:

The Court found that it could in fact determine this matter summarily. The material facts were not  contested. The executors’ evidence, including an affidavit and an appraisal report, was not challenged by reply affidavit or cross-examination.

2. Issue 2: Whether the proposed sale was in the interest of the estate and the persons beneficially interested in it?

The Court found that it could in fact determine this matter summarily. The material facts were not  contested. The executors’ evidence, including an affidavit and an appraisal report, was not challenged by reply affidavit or cross-examination.

The court approved the sale for several reasons:

1. Testator’s Authority: The will granted broad discretion to the executors to sell estate property (para 32);
2. Efforts to achieve consensus: The executors attempted mediation and multiple proposals for in specie distribution, but it had proven impossible to reach consensus (para 33);
3. Expert valuation: The sale price exceeded the appraised value, and the appraisal was updated to reflect recent market conditions (paras 36-37);
4. Practical benefits: The sale avoided realtor commissions and also resolved property-specific issues (e.g., liability for an abandoned grain elevator, fencing, equipment placement) (paras 38-39);
5. No viable alternatives: Crucially, the Court appeared to place emphasis on the fact that the dissenting beneficiaries did not propose a workable alternative to the sale (para 40).

Conclusion in Marzolf

The court concluded that the sale was to the advantage of the estate and its beneficiaries. The executors were granted the order sought, with costs payable from the estate.

Marzolf offers various lessons for practitioners. These include:

1. If you act for executors, compile evidence that the executors have made attempts to achieve consensus:

1. If you may need to later ask a court to make an order, executors should make diligent efforts to achieve consensus among beneficiaries and document all proposals, negotiations, and communications. This record can be vital if court intervention becomes necessary;

2. Section 50.5 applications can be determined summarily in appropriate situations:

1. Applications for approval of a sale under s. 50.5(5) may be determined summarily where the material facts are not genuinely in dispute, particularly where appraisal evidence is unchallenged by rebuttal evidence or cross‑examination;
2. Reliable, independent appraisals are essential, especially when asset values are disputed. Courts give significant weight to expert reports, particularly when such evidence is unchallenged by rebuttal evidence;

3. Beneficiaries do not have a veto:

1. The presence of dissenting beneficiaries does not preclude court approval if the executors’ actions are transparent, reasonable, and in the best interests of maximizing value in the estate.

Consistency of Marzolf v Marzolf, with the decision in Choquette v Viczko, 2021 SKQB 167

The 2025 Marzolf decision does not mention a Saskatchewan decision in Choquette v Viczko, 2021 SKQB 167, which was decided in 2021. In Choquette, the will directed the sale of certain farmland and distribution of the proceeds between certain children. The issue in Choquette was whether s. 50.5 applied and required the executors to first secure approval to any land sale.

According to Choquette, s. 50.5 did not operate if a beneficiary was only entitled to the proceeds of a land sale, as distinct to possessing an entitlement to the land itself.

The court in Choquette held the below:

24      Therefore,  50.5(1)refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the saleof the real property. Therefore, the answer to this question is “no”. Ms. Choquette is not a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act.

Choquette also declared that where is a direction in the will to sell land, and distribute the proceeds, s. 50.5 simply does not apply to that situation. That is because the terms of the will already provide sufficient authority for the executor to sell estate land:

27             Put another way, s. 50.5 is an enabling provision, not a restricting provision. It enables an executor to sell real estate where the executor is not otherwise empowered to do so. Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for authority to do so.

Summarized to its essence, Choquette  held the below:

1. Where s. 50.5 of the AEA applies, a sale of estate land for the purpose of distribution requires either the unanimous consent of those beneficiaries who are beneficially entitled to the real property, or court approval where such consent cannot be obtained;
2. However, Choquette suggests that s. 50.5 does not apply in every case where estate land is sold. In particular, the provision does not apply where beneficiaries are entitled only to the proceeds of sale rather than the land itself, nor where the will expressly directs a sale of the land and distribution of proceeds, in which case the executor acts under the authority of the will rather than the statute.

It was therefore interesting that the judge in Marzolf proceeded as if s. 50.5 did apply, and required court approval for the sale.

In Marzolf, it did not appear that the will gave the beneficiaries any right to receive the land in specie. The decision described the terms of the will as follows:

[6]           In her Last Will and Testament, Dorothy directed that her entire Estate be divided into nine equal shares, and that one such share should be delivered to each of her children. 

Had Choquette been considered, the reasoning in Marzolf might have been different, potentially removing the formal purely legal requirement for court approval under s. 50.5 in those circumstances.

The benefit of securing consent

That said, regardless of Choquette, there is a difference between the “legal requirement” for court approval, and, the “practical advisability” of obtaining court approval in a given situation.

The executors in Marzolf ultimately proceeded in a prudent way.  The executors sought advance seeking court approval prior to any sale of estate land. It always provides peace of mind to an executor if they first obtain court approval when they intend to dispose of a major estate asset and there is beneficiary opposition to a proposed sale.

In other words, nothing in  Choquette prevents a beneficiary from suing an executor, if the executor sold estate farmland without advance approval and it is proven that the sale was for undervalue or otherwise was not in the interest of the beneficiaries. To proactively obtain court approval prevents the executors from dealing with the cost and delay of a later lawsuit, in relation to that sale.