Removal of Executor - Estate of Forbes McTavish Campbell

Sometimes executors fail to execute the duties of their positions with sufficient attention or integrity. In Estate of Forbes McTavish Campbell, the BC Supreme Court removed one of three executors in a rare exercise of that power. The executor was also required to pay special costs of the proceeding- a higher amount of costs reserved for parties who act especially reprehensively. 

Robert, Lauren and James Campbell were the three executors of their father’s estate. They were also the three beneficiaries of the estate. Their father having passed away in 2011, the lack of communication and activity coming from their brother James with regard to the administration of their father’s estate was annoying Robert and Lauren. James was living in his father’s former residence.

Initially James was unresponsive. Further attempts to contact James were met with a puzzling response: the writer indicated that nobody with the name James Campbell resided at the address and suggested that the person being sought after did not even exist. At one point, Robert and Lauren obtained legal counsel and had their lawyer write a letter to James setting out their position and how they thought the estate should be administered moving forward. James responded that he would charge $300 for each email received, $500 for each phone call he had to attend to and $1,500 for each letter.

Following this, James was unwilling to take any action with regard to the estate until his siblings paid him $40,000 for the time and effort he had already put in to the administration of the estate and to compensate him for the time he had spent dealing with the estate at the neglect of his movie business. As a result, accounts for the estate had not been passed and were overdue.

At paragraph 24 of its reasons for judgment, the court stated:

It is to be expected that trustees may fall well short of perfection in the course of administering trusts. Mistakes will be made. However, these errors I have just referenced are not in the category of careless mistakes or errors in judgment. On the contrary, I find that this is reprehensible behaviour that calls out for reproof and rebuke. Aside from punishment of a wayward party, one of the valid purposes of a special costs order is deterrence. Perhaps a special costs order such as this will serve as a warning to others entrusted with the important duties of administering estates: trustees who engage in this sort of nonsense will pay a high price.

The Court found that James’ behaviour was reprehensible and ordered him to pay special costs. Special costs are only awarded when the court considers the party’s actions call for reproof and rebuke.

Client Alert:  This case should be a warning to other unreasonable executors that the court can remove them from their position and special costs could be awarded against them.
Any party with an interest in the estate may apply to the court to have an executor removed. When there are multiple executors and one of them is acting unreasonably, the other executors may apply to the court to have the underperforming executor removed.

This remedy is not easily granted, and there are different provisions applicable in different provinces, but the pertinent considerations are largely parallel throughout. Ultimately, the welfare of the beneficiaries of the estate is the crucial consideration.

Advisor Alert:  In British Columbia, section 158 of the Wills, Estates and Succession Act permits the Court to remove an executor of an estate or a trustee of a trust. The things to be considered in this analysis are whether the executor is:

1. unable to make the decisions necessary to discharge the office;
2. not responsive; or
3. otherwise unwilling or unable to or unreasonably [refusing] to carry out the duties of a personal representative.

The crux of the analysis is whether the acts or omissions of the executor endanger the trust property or show a want of honesty or proper capacity to execute the duties of reasonable fidelity.