Docket: CACV2350 Neil Sinclair Appellant - v. -, 2013 SKCA 123

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 123 Date: 2013-11-20 Between: Docket: CACV2350 Neil Sinclair Appellant - and - Joan Sinclair Respondent Coram: Richards C.J.S., Lane and Herauf JJ.A. Counsel: Stefania A. Fortugno for the appellant Jay D. Watson for the respondent Appeal: From: Q.B.S. No. 660/2010, J.C. Saskatoon Heard: June 24, 2013 Disposition: Appeal dismissed Written Reasons: November 20, 2013 By: The Honourable Mr. Justice Lane

In Concurrence: The Honourable Chief Justice Richards The Honourable Mr. Justice Herauf Lane J.A. [ 1 ] This appeal arises from a dispute over their mother’s estate between the appellant who was named alternate executor and the respondent, his sister, who is the executrix of the estate. The parties are the only and equal beneficiaries of the estate. The estate consists of the mother’s home located on a legal subdivision of approximately 80 acres, appraised at $423,000, and $118,736.34 in funds held in two bank accounts.

A term in the testatrix’s holograph will provided the home was to be sold within one year of the testatrix’s death which occurred on October 4, 2010. The essential issue between the parties is – the respondent wants to sell the property and the appellant, for various reasons, does not want the property sold. [ 2 ] The matter before us is further complicated because there is another dispute between the parties involving the estate of their father who died on September 24, 2010, a few days before the mother. In the father’s will, the parties are the sole beneficiaries but are co-executors.

The mother and father divorced in 1989 with the mother residing in and retaining title to her home property. The father and the appellant had continued to carry on ranching together on the father’s nearby property while the appellant continued to live in the home of his mother. He has resided in that home most of his life.

I will further touch on this particular dispute. [ 3 ] The differences referred to in the subject dispute led the respondent to make an application to revoke the letters probate issued to her, while renouncing her right to administer the estate, and to appoint instead an independent solicitor to act as administrator. This application was responded to by an application by the appellant to remove the respondent as executrix and instead to have himself appointed as the sole executor of the estate. Both applications were heard at the same time.

The Chambers judge, relying mainly on the provisions of s. 17 of The Administration of Estates Act , S.S. 1998, c. A-4.1 (the “ Act ”), ordered the letters probate issued to the respondent be revoked and a named independent solicitor was appointed administrator of the estate. The Chambers judge, also in his reasons, referred to the Court’s inherent jurisdiction to make such an order. The appellant appeals the resulting order. [ 4 ] On appeal, counsel advised us more fully of the dispute regarding the father’s estate.

On application by the respondent herein to obtain similar relief, i.e. the appointment of an independent administrator, the Chambers judge granted her the relief sought. This application was opposed by the appellant herein who, in light of his sister’s application, applied to be named sole executor. All applications involving both estates were heard by the same Chambers judge on the same date and the same independent administrator was appointed to handle both estates.

The resulting order from the applications pertaining to the father’s estate was not appealed—the parties indicating this was because of the value of the assets in issue. The result of all of this was that the Chambers judge had before him the full scope of the issues in dispute between the parties. [ 5 ] The material filed before us did not include any material regarding the dispute over the father’s estate, reference only being made to the dispute concerning the mother’s estate.

It was only on questioning by the Court that more details were provided giving a more extensive view of the issues before us. [ 6 ] I now turn to this appeal. [ 7 ] The relevant provisions of the mother’s will provided she left everything to the two children, to be divided equally, with a specific direction her residence was “to be sold after my demise within the year.” It has now been nearly three years since her death and the appellant continues to live in the home while opposing any sale. I.

POSITIONS OF THE PARTIES The Appellant [ 8 ] The appellant says his only connection to his parents is the family home and the ranch he jointly ran with his father. In his affidavit, he claims the direction in the will to sell the home was made only to prevent the father from manipulating his way back into the home after the parents’ divorce. He claims the reason for the provision no longer exists. He has made proposals to purchase the land but on conditions including an instalment purchase agreement or a land swap.

He says the land could appreciate greatly because it is near the City of Saskatoon and he says nearby land has been subdivided resulting in an increase in value of the land. He argues that if the land is sold by the respondent before it is subdivided both of them will lose a substantial amount of money. He is further concerned that if the property is sold he may not be the buyer. [ 9 ] The appellant makes allegations of deceit on the part of the respondent because she transferred the monies in the two accounts into her own account.

The Respondent [ 10 ] The respondent maintains she had always been prepared to account for the monies and recognizes the monies are estate monies. She wants the property to be sold in compliance with her mother’s wishes but cannot get the appellant to agree. She says the appellant simply will not vacate the property to allow it to be sold. If the land is put up for sale, her brother will have the chance to buy it but he keeps looking for more favourable purchase provisions and has no intention of complying with the testatrix’s wishes.

She is unable to get the appellant to agree to a sale and her ability to administer the estate is at an impasse. She argues the only way to have the estate administered according to the wishes of the testatrix is to have an independent administrator appointed and she is prepared to renounce

her position to obtain that objective. II. The Decision of the Queen’s Bench Chambers Judge [11] The Chambers judge found it obvious the parties could not cooperate in any way in regards to the administration of the estatebecause each had their own agenda and special interest in the sale and distribution of the estate assets. He noted it was, at that time, twoyears since the death of the mother, and nothing had been resolved in spite of the issuance of the original letters probate.

He found theparties were unable “to relate to each other for the administration of the estate in any reasonable manner.” He relied on s. 17 of the Act toappoint an independent administrator. The provision reads as follows: 17(1) A judge may appoint any person that the judge considers appropriate to be the administrator of an estate: (

a) where: (

i) a person dies intestate; (ii) a person dies leaving a will without having appointed an executor who is willing and competent to take probate; or (iii) the executor is, at the time of the death of the deceased, resident outside Saskatchewan; and (

b) where, by reason of the insolvency of the estate or other special circumstances, it appears to the judge tobe necessary or convenient to appoint as administrator, of all or part of the property of the deceased, some person other than the personwho, by law, is entitled to a grant of letters of administration.

(2) Letters of administration granted pursuant to subsection (1) may be as limited as the judge considers appropriate.

(3) An administrator appointed pursuant to subsection (1) shall give any security that the judge directs. [12] The Chambers judge found there were special circumstances which made it necessary to appoint another person as administrator. [13] He then referred to this Court’s decision in Figley v. Figley, 2012 SKCA 36, 393 Sask. R. 44 and particularly referencing para. 31,regarding the Court’s inherent jurisdiction. The paragraph reads: [31] But, in the end, none of this is fatal to the appellants. It has been repeatedly held that the Court of Queen's Bench has an inherentjurisdiction to remove executors.

See, for example: Ocean Man Trust, Re (1993), (SK CA), 113 Sask. R. 179 (C.A.).This seems to be the proper jurisdictional basis from which to approach the appellants' application. III. Argument [14] The appellant argues the Chambers judge misinterpreted s. 17(1)(

a) and (

b) by reading the word “and” disjunctively rather thanconjunctively. He argues that under the provision, there are specific pre-conditions which must exist before a judge can appointsomeone other than the person entitled by law to grant letters of administration. He contends a disagreement, lack of communication, orthe parties’ self-interests are not sufficient elements to remove an alternate executor.

It is not uncommon for an executor to be named abeneficiary and, if self-interest was a criterion for removal of an executor, as determined by the Chambers judge, such a decision wouldopen the floodgates to judicial interference in the administration of estates. [15] The appellant further contends that when his sister renounced her rights as executrix, the Court had no option but to name him asexecutor.

He has priority of appointment under the provisions of s. 10 of the Act and Rule 704(1) of The Queen’s Bench Rules. [16] Referring to the basis for the exercise of the Court’s inherent jurisdiction, the appellant says there was no evidence of anymisconduct on his part and the only evidence of misconduct was that of the respondent, who he says illicitly and surreptitiously removedthe monies from the accounts and transferred the monies into her own account. [17] The appellant argues the appointment of a third-party administrator is contrary to a guiding principle set out, for example, in Figleythat such appointment should not be undertaken lightly.

He says the respondent has demonstrated a “want of honesty” and a “want of

reasonable fidelity” by transferring the monies, which are situations found from the jurisprudence to justify the removal of a trustee. Hehimself has demonstrated character, integrity and loyalty to his family over the years. He concludes he ought to have been namedexecutor when his sister renounced and the Chambers judge erred in law in not appointing him. [18] The respondent argues the word “and” in s. 17(1)(a), under a principled approach to statutory

interpretation, is disjunctive and s.17(1)(

b) is not dependent on the application of s. 17(1)(a). Such an

interpretation allows the Court, where there are specialcircumstances, to meet the overriding statutory objective which is the maintenance of a system for the proper and timely administrationof estates. The respondent says special circumstances do exist because the conflicting self-interests in this case result in a stalemate withno prospect of resolution. She also urges the Court to consider the decision rendered in the father’s estate appointing an independentadministrator.

The estates have existed since 2010 without any resolution and the differences simply cannot be resolved. [19] She contends the appellant cannot argue his conduct has been completely above reproach. He is focused on his own self-interestand simply does not want the property sold, contrary to the wishes of the testatrix. Further, he fails to recognize the testatrix appointedthe respondent as executrix. [20] The respondent agrees the removal of an executor is a serious step which should not be taken lightly.

She agrees with theprinciples as set out in Figley. [21] The respondent states that the prevention of the sale is contrary to the expressed wish of the testatrix. To maintain the status quowould simply allow the appellant to either preserve the estate in its present state of inactivity or choose to serve his self-interest inpriority to the other beneficiary. IV. Decision [22] The Chambers judge’s decision rested on two bases:

section 17 of the Act and the inherent jurisdiction of the Court. [23] As stated, the appellant argues s. 17(1)(

a) and (

b) should be read conjunctively and the respondent argues they should be readdisjunctively. On a plain reading of the section, there are two potential meanings. One reading could mean that a judge can only appointa new administrator where the situations in (i), (ii), or (iii) exist and the insolvency of the estate or other special circumstances in (

b) alsoexist—this being the appellant’s position. Or it could be read to mean that a judge can appoint a new administrator where any of thesituations in (

a) or (

b) exist—the respondent’s position and that of the Chambers judge. [24] There is an obvious ambiguity which must be resolved. The author in Sullivan on the Construction of Statutes, 5th ed.(Markham: LexisNexis, 2008) states at p. 84, “Ambiguity must be resolved one way or another and it may be resolved on somewhatspeculative grounds.” [25] She discusses problems surrounding the use of the word “and” and “or” at p. 81 of Statutory

Interpretation, 2d ed. (Toronto: IrwinLaw, 2007): Both “and” and “or” are inherently ambiguous. “And” is always conjunctive in the sense that it always signals the cumulation of thepossibilities listed before and after the “and.” However “and” is ambiguous in that it may be joint or joint and several. In the case of ajoint “and” every listed possibility must be included: both (

a) and (b); all of (a), (b), and (c). In the case of a joint and several “and,” allthe possibilities may be, but need not be, included: (

a) or (

b) or both; (

a) or (

b) or (c), or any two, or all three. In other words, the jointand several “and” is equivalent to “and/or.” From this, a re-reading of the

section is no less ambiguous. A provision that the court may appoint an administrator where (

a) a persondies intestate and (

b) special circumstances exist does not make it clear as to whether both (

a) and (

b) must exist in order for the court tobe able to appoint an administrator. [26] The courts can look to the practicalities to obtain a workable result. In Berardinelli v. Ontario Housing Corp., (SCC), [1979] 1 S.C.R. 275, Estey J. said at p. 284, “…When one

interpretation can be placed upon a statutory provision which wouldbring about a more workable practical result, such an

interpretation should be preferred if the words invoked by the Legislature canreasonably bear it…,” which takes us to a history of the section. [27] “It is well established that the evolution of a provision may be looked at by courts to help determine its meaning or purpose, toresolve conflict among competing provisions, or to detect drafting errors” (Statutory

Interpretation, p. 291). The author goes on to statethat ambiguity may not be a prerequisite but an ambiguity clearly does exist in the case before us. [28]

Section 17 is easily traced back to The Surrogate Courts Act, S.S. 1907, c. 10 which read as follows: General power as to appointment of administrator under special circumstances 59.

Where a person has died wholly intestate as to his property or leaving a will affecting property but without having appointed anexecutor thereof willing and competent to take probate or where the executor was at the time of the death of such person resident out ofSaskatchewan and it appears to the court to be necessary or convenient in such case by reason of the insolvency of the estate of thedeceased or other special circumstances to appoint some person to be the administrator of the property of the deceased or of any part ofsuch property other than the person who if this

section had not been enacted would by law have been entitled to a grant of administrationto such property it shall not be obligatory upon the court to grant administration of the property of such deceased person to the personwho if this

section had not been enacted would by law have been entitled to a grant thereof; but the court in its discretion may appointsuch person as the court thinks fit upon his giving such security, if any, as the court directs; and every such administration may be as

limited as the court thinks fit. [emphasis added] [29] I say easily traced because the

section remained virtually the same until 1992 when that Act was repealed and the relevant sectionswere merged with The Queen’s Bench Act, R.S.S. 1978, c. Q-1 becoming s. 109 of that Act.

The wording was changed to simply tidy upand simplify some of the language but there was no change in substance (Saskatchewan, Legislative Assembly, Debates and Proceedings(Hansard), 22nd Leg., 1st Sess., (10 August 1992) at 2164-2166). [30] In 1998, all of the provisions relating to the administration of estates were removed from The Queen’s Bench Act and placed in TheAdministration of Estates Act without any change in the wording.

The stated purpose was to make the provisions more readily apparent(Saskatchewan Legislative Assembly, Debates and Proceedings (Hansard), 23rd Leg., 3rd Sess., (1 June 1998) at 1470). [31] It seems apparent the original purpose of the legislation was to give a general power to the Surrogate Court to appoint anadministrator by reason of the insolvency of the estate or “other special circumstances.” The Court was given wide discretion to appointany person the Court thought fit and to limit the administration as it saw fit. [32] As a practical matter, giving the courts a broad power allows the courts to respond to situations such as that before us where theparties themselves cannot resolve the issues.

In my view, this purpose, i.e. giving jurisdiction to the Court to appoint an administrator inspecial circumstances, was continued in the present legislation. Thus, the purpose and meaning of the legislation has not changed sincethe original enactment. This means the ambiguity must be resolved in favour of the respondent and it was open to the Chambers judge toappoint another administrator in the circumstances. [33] It was also open to the Chambers judge to rely, as he did, on the Court’s inherent jurisdiction.

There is no argument the Court hasan inherent jurisdiction to remove executors, see, for example: Ocean Man Trust, Re (1993), (SK CA), 113 Sask. R.179 (C.A.). The principles to be considered have a lengthy jurisprudential history and Lord Blackburn in Letterstedt v.

Broers (1884), 9A.C. 371 (P.C.) referred with approval the following passage from Story’s Equity Jurisprudence at pp. 385-386: Story says, s. 1289, "But in cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees whohave abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts ofEquity to adopt such a course.

But, the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or awant of proper capacity to execute the duties, or a want of reasonable fidelity." It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicatedby Story is merely ancillary to its principal duty, to see that the trusts are properly executed ... It must always be borne in mind thattrustees exist for the benefit of those to whom the creator of the trust has given the trust estate ...

In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyondthe very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries. Probably it is not possible to laydown any more definite rule in a matter so essentially dependent on details often of great nicety.

But they proceed to look carefully intothe circumstances of the case. [34] This authority was also relied on in Figley at para. 32 and it is noted in that latter case the general approach has been consistentlyapplied in Saskatchewan (for example, the parties herein both make reference to, and rely on, Matiko v. Matiko, 2002 SKQB 273). [35] The parties agree the exercise of the judicial discretion to remove an executor is a sensitive one not to be undertaken lightly (see,for example, Figley, ibid. at para. 46 and Surminsky v.

Ulmer Estate, 2000 SKQB 209 at para. 2) and that the overriding duty of theCourt is to ensure the trust will be properly executed and the main guide must be the welfare of the beneficiaries. [36] The parties also agree there cannot be a want of honesty or proper capacity or reasonable fidelity on the part of an executor. [37] The appellant’s argument the respondent has demonstrated a want of honesty or reasonable fidelity is, in my view, overstated. Therespondent throughout has maintained she recognizes the monies in the bank accounts are estate monies which must be accounted for.

Ifshe used the monies for her own account, the greater valued asset is the land and, should it be sold, she will have to account for thetransferred monies. Thus, the appellant will not suffer any loss from the transfer of the monies. Although the respondent ought to haveplaced the monies in a trust account, she has recognized her on-going duty to account for the monies. It is understandable in thecircumstances why she would want to act quickly given the relationship between her and the appellant.

In any event, it is not necessaryto decide whether the respondent should be removed as executrix because she is prepared to step aside voluntarily if a third party isappointed to administer the estate. As explained below, this is the order which will be sustained. [38] The appellant, on the other hand, has maintained a position which is directly contrary to the expressed direction of the testatrix. This position clearly states he is not prepared to properly execute the trust.

Further, his argument the land should not be sold until thereare circumstances, if ever, which will satisfy his own personal self-interest clearly indicates he is not concerned about the welfare of theother beneficiary—which would lead to the trust not being managed for the welfare of the beneficiaries. It is possible, should theappellant refuse to sell the land, the respondent will never receive her share of the inheritance.

One can only interpret the appellant’sposition as trying to have the best of both worlds—continuing to occupy the property for as long as he wants and, perhaps, at some futuretime which he himself determines, contemplating sale. [39] The appellant has stymied the attempts of the chosen executrix to deal with the estate. It is of some question why, if there is apotential for a significant increase in value as he argues, he has not made a clear and unequivocal offer to purchase the land. Although it

is an assumption, it is likely the testatrix herself knew of the potential increase of the value of the land when she died in 2010. The significant potential growth of the nearby City of Saskatoon was evident, yet she chose not to amend her will. Further, his argument that the provision requiring sale no longer has a basis seemingly has no merit.

From the comments of counsel, the divorce was in approximately 1989, more than 20 years before her death, and again in the intervening period the testatrix chose not to amend her will, suggesting she had not changed her position she wanted the land sold within one year of her death. [ 40 ] In exercising his discretion, the Chambers judge clearly considered both the proper exercise of the trust and the welfare of the beneficiaries.

It is clear that to appoint the appellant as executor would simply substitute one’s self-interest for another, would be contrary to the expressed wishes of the testatrix and would likely harm one of the beneficiaries. [ 41 ] The appeal is dismissed with costs in the usual manner. DATED at the City of Regina, in the Province of Saskatchewan, this 20th day of November, A.D. 2013. “Lane J.A.” Lane J.A. I concur “Richards C.J.S.” Richards C.J.S. I concur “Herauf J.A.” Herauf J.A.