Often, a will-maker or the settlor of a trust will appoint more than one person to act as co-executors or co-trustees. Unfortunately, disagreements between co-executors and co-trustees frequently arise. Sometimes this results in deadlock, and the administration of the estate or trust cannot move forward. One available remedy is an application to removal or replace one or more of the executors/trustees.

In the recent B.C. Supreme Court decision of De Bonis (Re) 2023 BCSC 713, the applicant sought the removal of herself and her brother as co-executors and trustees of their parents’ estates. She sought the appointment of an independent trustee (a trust company) to administer the estates. In her view, she and her brother were unable to work together and they were in a deadlock on a number of issues relating to administration of the estates. She also argued that her brother was in a conflict of interest because of a right of first refusal in his favor with respect to one of the main assets of the estates.

The brother opposed the application, and took the position that if his sister wished to be removed, then she could be removed and he could remain as the sole executor. He also denied the existence of a conflict of interest.

The Court removed both siblings as executors, and replaced them with the independent trust company.

In doing so, the Court made the following observations about the law and the considerations of the court when hearing an application to remove executors:

• A will-maker has the right to choose their executor, and their decision is entitled to deference and will only be interfered with if there is clear and cogent evidence to do so;
• The executor’s acts or omissions must be of such a nature to endanger the administration of the estate;
• The Court’s main consideration is the welfare of the beneficiaries (collectively, not just the interests of a particular beneficiary);
• Four categories of conduct can warrant removal:
  • Endangerment of trust property;
  • Want of honesty;
  • Want of proper capacity to execute duties; and
  • Want of reasonable fidelity.
• The existence of friction between the executor and one or more beneficiaries is generally, in and of itself, not sufficient to warrant the removal of the executor. However, animosity can be relevant to whether it hampers the proper administration of the estate. A finding of wrongdoing is not necessary;
• Removal is not meant to punish past misconduct, but past misconduct that is likely to continue will often be sufficient to justify removal;
• An executor’s conflict of interest may warrant removal. However, not all perceived or actual conflicts of interest will give rise to the removal of an executor. But f the executor is in a conflict of interest, actual or perceived, and it is to the detriment of the beneficiaries, the executor must be removed.

In De Bonis, the Court was not convinced that the siblings will ever be capable of cooperating effectively with one another in their roles as co-executors. Even if the applicant was removed, and her brother remained as sole executor, the Court was still concerned that the orderly administration of the estates would be delayed by new disagreements, miscommunications, or misunderstandings. It was in the best interests of the beneficiaries for both executors to be removed and replaced with an independent and neutral executor. The Court also found a conflict of interest justifying removal. The Court made clear that there was no wrongdoing by either co-executor. Rather, there was an impasse that could not be overcome while they remained as executors.

The Court in De Bonis observed that the relationship between the two siblings was dysfunctional long before their parents passed away. In light of this, it should not have been a surprise when this dysfunction continued after death when they were required to act together as co-executors. This case serves as a good reminder that you should give careful consideration to your selection of executor, and if you have decided to have more than one executor then the people that are appointed need to be able to work together.