Sunday, December 04, 2011

When to Go to Court, and When to Settle.

Anytime you are involved in a will or estate dispute you have recourse to the courts. Sometimes it is difficult to resolve a problem without the involvement of a judge. Certain cases need to be decided by a judge. On the other hand, many disputes are best resolved by negotiations. Two Supreme Court of British Columbia decisions, both released the same day, November 25, 2011, illustrate this point well.

In Re: Brooks Estate, 2011 BCSC 1606, Mr. Justice N. Smith was asked to interpret a homemade will. The will said:

“I leave my property [address and legal description of the real property] to my brother George Brooks [address] Executor with Power of Attorney. Also my accounts at Royal Bank of Canada Merritt B.C.”
This was followed by the names of five of the will-maker’s nieces and nephews, and then the words “I would all the people named above to share equally in my estate.”

George Brooks argued that the will-maker intended for him to receive the house and the bank accounts, with the rest of the will-maker’s estate to be shared among the nieces and nephews.

Mr. Justice Smith noted the remainder of the assets in the estate was only worth about $500. It was unlikely that the will maker meant such a small amount when he wrote that they would “share equally in my estate.” The plain meaning of the word “estate” included all of the estate assets.

Accordingly, Mr. Justice Smith interpreted the will to mean that all of the will-maker’s assets would be divided equally among George Brook and the nieces and nephews.

He also ordered that the costs of all of the parties be paid out of the estate. He noted that it was appropriate for George Brooks as the executor to bring the question to court:

“[19] Given the positions of the parties, the petitioner as executor had a duty to seek guidance from the court and it was in the interest of all parties that he do so. I therefore order that the special costs of all parties be paid from the estate.”

Contrast Mr. Justice Smith’s remarks above, with the Court’s plea to the parties in Hansen v. Hansen, 2011 BCSC 1601, to settle their disputes out of court.

Hansen concerns a dispute among siblings over how one of them, the executor of their father’s will handled the administration of his estate. The executor’s siblings were critical of her handling of their father’s house. It is not clear from the reasons for judgment what precisely their claims were, but in an earlier hearing on a passing of the executor’s accounts, the Registrar found that she had delayed too long in marketing the house, and did not receive an appropriate amount of income from the property for the estate. The Registrar also disallowed some of her expenditures.

As noted above, the executor had passed her accounts before the court, a process that included a two-day hearing before the Registrar. It appears that the executor’s siblings were also suing her for negligent handling of the estate. The executor brought an application to dismiss their claims on the basis that the subject matter of their claims had already been dealt with at the passing of accounts.

Mr. Justice Leask heard the executor’s application. Although he expressed some sympathy for her position, he held that the passing of accounts decided the amount of the executor’s remuneration, but the court had not rendered a decision on the other claims. The executor’s siblings were entitled to proceed with those claims.

In his decision, Mr. Justice Leask quoted Master Tokarek at an earlier hearing:

[17] In the course of the hearing, Master Tokarek said:
... I don't know why you people can't agree on things instead of spending money on the court system.
(Transcript p. 8, lines 35-37)
[18] Later he said:
And I don't understand why people just don't do a reasonable thing. Like any other settlement, sometimes you have to give a little that you don't want to give. And sometimes you have to eat crow a little bit and just back off and do it. Because there's a practical result and there's a principled result. And the principled result, which I – is fine, but it costs money to get to a principled result. The practical result is usually the most efficacious way, least expensive way, to do what needs to be done.
(Transcript p. 13, lines 25-35)
After dismissing the executor’s application, Mr. Justice Leask concluded:

[23] I cannot leave this matter without joining my voice to Master Tokarek's plea. This matter should be settled between the parties. The family is tearing itself apart and wasting money and emotional energy on disputes with little or no economic justification. Please stop.

[24] This is a sad case.

[25] Who would be an executor? The dead cannot thank you; and the living will not.

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