ORDERS GIVING DIRECTIONS - PART III
If an executor/estate trustee is in a position of conflict in respect of a proceeding, an estate trustee during litigation may need to be appointed by the Court. This appointment may be addressed in an Order Giving Directions. If the parties are unable to agree upon the appropriate estate trustee during litigation, that issue can be put to the Court. Security is generally required to be posted unless the estate trustee during litigation is a trust company. If appointed, the estate trustee during litigation will be appointed pending final resolution or settlement of the litigation and/or order of the Court.
An Order Giving Directions often includes a provision that a Certificate of Appointment of Estate Trustee During Litigation be issued to the estate trustee during litigation subject to the filing of the necesssary supporting application. If a Certificate of Appointment of Estate Trustee has already been obtained prior to the Order, the Order should provide for the return of that Certificate to the Registrar.
In the event that an estate trustee during litigation is required, one might consider including a provision in the Order setting out the reasonable remuneration that the estate trustee during litigation may charge. A remuneration agreement may often be negotiated and attached to the Order as a schedule. Increasingly, trust companies are insisting on such agreements. If the estate trustee during litigation is to be entitled to pre-take its compensation (subject to the ultimate approval of the Court upon the termination of the appointment), same can be specified. Parties may also wish to negotiate a provision in the order regarding the authority of the estate trustee during litigation.
Typically, it is confirmed in the Order that the estate trustee during litigation is authorized to exercise those powers given by law to an administrator including those set powers under the Estates Act. The Order might also specifically authorize the estate trustee during litigation to do certain acts such as obtaining real estate appraisals, selling real estate and/or other assets of the estate such as articles of personal, domestic or household use. Liberty for the estate trustee during litigation to appoint an agent or agents and to seek such assistance from time to time as the estate trustee during litigation may consider necessary for the purpose of performing their duties may be considered and included in whole or in part. The parties may, for legitimate reason, wish to limit the estate trustee during litigation's powers and/or ability to seek assistance without the prior knowledge and/or consent of the parties.
Where there is concern over the dissipation of the subject assets, but the parties agree that it is not necessary for an estate trustee during litigation to be appointed, notwithstanding circumstances that may support same, a provision that none of the assets of the subject estate be invested, transferred, expended, dissipated, distributed or otherwise dealt with except with prior written consent of all the parties or Court Order may be included in the Order. The provision might further set out that no party shall transfer funds from, draw cheques on, direct payment from or withdraw funds from certain bank accounts and investements without the prior written consent of the parties or Court Order. The parties may be able to agree that the assets of the estate shall be invested by the parties, jointly, failing which the assets shall be invested in guaranteed investment certificates or term deposits. If the parties are aware of certain payments that must be made by the estate, (e.g. the utilities for real estate owned by the estate) the Order might specifically provide that those regular payments are to continue unless the parties consent in writing or the Court orders otherwise.
Where there is an allegation that funds have been improperly removed from the estate, the parties may agree that an accounting shall be provided by the subject person at first instance. Where it is unclear whether an estate trustee during litigation needs to be appointed and the parties are unable to agree upon whether a non-dissipation provision should be included, the request for a "freeze" of the estate's assets and/or of the assets of a particular individual (who as part of the claim is alleged to have improperly removed assets from an estate) will, in all likelihood, have to be argued before a Judge on a substantive basis as opposed to a procedural basis, as such relief may be considered injunctive in kind.
Have a great day, Craig. --------
