2019 NLSC 51, 2019 NLSC 51

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Chippett Estate (Re) , 2019 NLSC 51 Date : February 28, 2019 Docket : 201604E3002 In The Matter of the Estate of Ralph Glendore Chippett, late of the City of Corner Brook, in the Province of Newfoundland and Labrador, Deceased Before: Justice George L. Murphy Place of Hearing: Corner Brook, Newfoundland and Labrador Date of Hearing: December 18, 2018

Summary: An Administratrix of the estate of her late spouse had commenced an action against the said estate in her personal capacity claiming a division of matrimonial property. The Administratrix applied for an order under section 71(2) of the Family Law Act that the Pubic Trustee be appointed as legal representative of the estate in relation to the claim for division of matrimonial property. She wished to remain as Administratrix for all other purposes. The Court dismissed the Application. Appearances: Melissa May Appearing on behalf of Mae Pittman- Chippett Donald J. Gallant, Q.C. Appearing on behalf of Lisa Martel

Authorities Cited: STATUTES CONSIDERED: Family Law Act , R.S.N.L. 1990, c. F-2 . REASONS FOR JUDGMENT Murphy, J. : INTRODUCTION [ 1 ] This is my decision on an Interlocutory Application (the “Interlocutory Application”) brought by Ms. Mae Pittman-Chippett, the Administratrix of the estate of her late husband, Mr. Ralph Glendore Chippett seeking an order of this Court pursuant to section 71(2) of the Family Law Act , R.S.N.L. 1990, c. F-2 (the “ Act ”). The particular order requested is that the Public Trustee be appointed as the Administrator of the estate of the late Mr.

Chippett in relation to claims for division of matrimonial property brought by Ms. Pittman- Chippett against the said estate. background [ 2 ] Mr. Chippett passed away on August 20, 2016. At the time of his passing he was married to Ms. Pittman-Chippett. As previously noted, she is the Applicant on the Interlocutory Application. [ 3 ] Subsequent to his passing, Ms. Pittman-Chippett applied for and was granted Letters of Administration in respect of the estate of Mr. Chippett. The Letters of Administration were issued by this Court on June 6, 2017. [ 4 ] On August 21, 2017, Ms.

Pittman-Chippett commenced an Originating Application (the “Originating Application”) in this Court with the estate of Mr. Chippett as Respondent. In her Originating Application she requested an order for an equal division of matrimonial property. This Originating Application was brought by Ms. Pittman-Chippett in her personal capacity. [ 5 ] The Interlocutory Application was initially brought on an ex-parte basis; however, I directed that the matter proceed on an inter-partes basis and that notice of the Application be provided to the persons entitled to share in the estate of Mr. Chippett, those being Ms.

Pittman-Chippett, who obviously already had notice, and Ms. Lisa Martel, the daughter of Mr. Chippett. [ 6 ] The Interlocutory Application was heard by this Court on December 18, 2018 and at that time the Court heard from counsel for both Ms. Pittman-Chippett and Ms. Martel. the law [ 7 ]

Section 71 of the Act provides as follows: 71(1) An executor or administrator of a deceased spouse may enter into an agreement with the surviving spouse as to the ownership or division of property under this Act .

(2) Where an executor or administrator of a deceased spouse is the surviving spouse, the public trustee may act in the place of the executor or administrator under subsection (1). position of the parties [ 8 ] Counsel for Ms. Pittman-Chippett takes the position that section 71(2) of the Act is intended to cover situations such as that arising in this case. There is an obvious conflict of interest between the role of Ms. Pittman-Chippett as Administratrix of the estate of her late spouse and her claim in her personal capacity against the estate for a division of matrimonial property.

It is argued that section 71(2) should be interpreted so as to authorize this Court to grant an order appointing the Public Trustee as Administrator of the estate of Mr. Chippett for the sole purpose of handling the defence of the claim for the division of matrimonial property. Ms. Pittman-Chippett would remain Administratrix for all other purposes. [ 9 ] Ms.

Martel by her counsel takes the position that she would prefer to have an independent person such as the Public Trustee take over as Administrator of the estate of her late father for all purposes instead of for the limited purpose of dealing with the claim against the estate for division of matrimonial property. analysis [ 10 ] It appears that there are no reported cases in this jurisdiction which interpreted or commented upon section 71(2) of the Act .

Further, counsel could not refer me to and I could not find any reported cases which had interpreted a similar provision in other jurisdictions. Thus, I am left to interpret section 71(2) without the assistance of case law precedent. [ 11 ] On a plain reading of section 71(1) of the Act , it merely authorizes an executor or administrator of a deceased spouse to enter into an agreement with the surviving spouse as to ownership of or division of property.

Similarly, section 71(2) simply allows the Public Trustee to act in the place of the executor or administrator where the executor or administrator is the surviving spouse as is the case here. Thus, the Public Trustee could enter into an agreement with Ms. Pittman-Chippett as to ownership or division of property under the Act . In the absence of an agreement, does the

section in question authorize the Public Trustee to in essence step in as Administrator of the estate for the purpose of defending the matrimonial property claim or trying to negotiate a settlement of that claim while allowing Ms. Pittman-Chippett to remain Administratrix for all other purposes? That is the question to be answered in this case. [ 12 ] I see a significant distinction between the entering into of an agreement as to the ownership of or division of property and litigation over the ownership of or division of property.

The entering into of an agreement generally means that there is no dispute or conflict over the ownership or division of property or that any dispute or conflict has been resolved by the agreement. However, the existence of litigation over the ownership of or division of property generally means there is some dispute or conflict between the parties to that litigation, namely the estate and the surviving spouse. [ 13 ] I realize that litigation may result in some negotiated resolution; however, it is impossible to predict based on the limited facts before me in this case whether a negotiated resolution is likely.

I note that the claim for division of matrimonial property does not specify which property Ms. Pittman-Chippett claims to be matrimonial property. I note as well that the Inventory and Valuation filed by Ms. Pittman-Chippett when she applied to be appointed Administratrix of the estate of Mr. Chippett showed a total value of $415,750.05 plus an unspecified value for shares held by Mr. Chippett in Fortis and Sunlife. I do not know which of this property Ms. Pittman- Chippett claims to be matrimonial property. In short, there is no way of knowing if an agreement between the estate and Ms.

Pittman- Chippett on the ownership or division of property will be reached. [ 14 ] I fail to see how the words of section 71(2) of the Act can be interpreted to permit the Public Trustee to act in the place of an administratrix for the purpose of defending a claim for division of property against the estate by that administratrix or trying to negotiate a settlement of that claim in circumstances where there is no way of knowing if an agreement on ownership or division of that property is likely to be reached.

In fact, it is my view that section 71(2) does not extend beyond circumstances where an agreement exists. [ 15 ] I realize that my

interpretation of section 71(2) means that it would apply only in limited circumstances where the surviving spouse as executor or administrator of an estate reaches an agreement with the estate on the ownership or division of property. The logical question one might ask is when or how could such an agreement be reached given the inherent conflict between the personal interest of the surviving spouse on a matrimonial property claim and her duty as legal personal representative of the estate.

Notwithstanding such conflict, there can certainly be cases where there is no dispute or disagreement between the beneficiaries of the estate and the surviving spouse as to the ownership or division of property. In such cases, an agreement on ownership or division of property could be made between the surviving spouse and the estate with the consent of the beneficiaries and assuming there are no creditors of the estate or none who would be prejudiced.

Section 71(2) would cover such a scenario and allow the Public Trustee to step in to the role of legal representative of the estate for the limited purpose of entering into the agreement covering the ownership of or division of property. There may be other circumstances which section 71(2) would cover; however, my role in this matter is not to try and determine all of the circumstances in which it would apply. Instead, my role is more limited and that is to determine whether it applies in the factual circumstances before me in this case. I have determined it does not. [ 16 ] I am emboldened in my

interpretation of section 71(2) by the common law rule that a trustee (which includes an executor or administrator) can be removed where there is a disqualifying conflict between the personal interest of the trustee and her/his duty as trustee. I note that it is not every conflict that would justify removal. It depends on the significance of the conflict. In my view, a conflict as exists in this case is significant enough to warrant the removal of Ms.

Pittman-Chippett as Administratrix. [ 17 ] By claiming an ownership interest in certain assets of the estate on the basis of a claim for division of matrimonial property under the Act , she is placing herself directly in opposition to her duty to the estate beneficiaries. [ 18 ] Ms. Pittman-Chippett is one of the estate beneficiaries and obviously the conflict does not impact her; however, the other estate beneficiary is the daughter of Mr. Chippett. To the extent Ms.

Pittman-Chippett is successful in her claim for division of matrimonial property, the amount of estate assets available for distribution will be correspondingly diminished and the daughter of Mr. Chippett will be correspondingly disadvantaged. [ 19 ] I cannot imagine a greater conflict than that which exists in this case where Ms. Pittman-Chippett’s claim has put her directly in opposition to her duty as Administratrix to the daughter of Mr. Chippett. [ 20 ] Thus, the situation we have here is a disqualifying conflict of interest which would warrant the removal of Ms. Pittman- Chippett as Administratrix.

If the legislature wanted to allow a person with a disqualifying conflict of interest to simply have the Public Trustee act in their place for a limited purpose, as is requested in this case, rather than be removed as Administratrix then ought to have used very clear language. They did not. Section 71(2) does not cover the circumstances before the Court in this case and the Interlocutory Application is therefore dismissed. [ 21 ] While I have found that the circumstances in which Ms.

Pittman-Chippett finds herself constitutes a disqualifying conflict of interest, I make no order for her removal as Administratrix at this time given the limited relief sought in the Interlocutory Application. However, it would be inappropriate for Ms. Pittman-Chippett to continue to act as Administratrix given her claim against the estate and the appropriate course of action as long as she intends on pursuing that claim is to resign as Administratrix of the estate of Mr. Chippett. This Court, upon the application of Ms. Pittman-Chippett, Ms.

Martel or any other interested party, will have to determine who should be appointed as legal representative of the estate of Mr. Chippett in place of Ms. Pittman-Chippett.

[ 22 ] I make no order as to costs on this Application at this time but retain jurisdiction to deal with the issue should either Ms. Pittman-Chippett or Ms. Martel wish to make submissions on the issue of costs. If either of these parties does wish to make submissions on the issue of costs, they are to contact the Court within thirty (30) days of the date of this judgment to request a hearing date, at which time I will hear their submissions. _____________________________ George L. Murphy Justice