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Wednesday, July 9, 2014

Allegations against executor denied, and special costs awarded against the accuser

There has been an interesting case from the BC courts that deals with allegations against an executor. The facts of the case, Watson v. Strong, are complicated, but I'll try to streamline them here.

Rosamund Watson passed away, leaving four executors who were also beneficiaries (that alone should warn us that a problem is coming). The four people were three of her four children, Theresa, William, and Marian. Her fourth child, Gordon, was not named, but his son, Aaron, was named. Theresa and Aaron renounced as executors, and Marian was removed by the court, leaving William to act alone as executor.

The only asset in the estate was a home worth around $1,000,000. Gordon had lived in this property with his mother for over 20 years, and Marian moved in later. The executor wanted them out so that he could sell the property. The sale was urgent because there was $40,000 in unpaid property tax and there was a risk that the house could be lost. The executor paid part of the outstanding taxes from his own pocket to prevent loss of the house.

An order of the court delayed the sale for 60 days to allow Marian to try to get financing to make an offer on the house. When the 60 days was up, the executor tried to put a For Sale sign on the property, which led to an incident that required the police to attend. In the meantime, Gordon stated that he could move out any time, taking with him the trees he had planted, as long as he was paid enough to buy a new property on Vancouver Island. He said that he wanted his share of the estate up front, even though he was not a beneficiary. He had somehow decided that the 1/4 of the estate that was going to his son was "really" for him.

Things went from bad to worse, and soon Gordon was accusing the executor and his lawyer of obtaining the Probate by way of fraud. He posted a notice on the door of the property warning away prospective buyers. He tried to have the executor held in contempt of court. He reported the lawyer to the Law Society. None of this had any effect, because Gordon had no evidence of any wrong-doing. None of his accusations had any basis in truth. He was trying to use the law to assert a legal position he did not hold.

The judge ordered that Marian and Gordon had to move out immediately. Gordon was to have $3,000 in moving expenses. Marian could make an offer on the property like anyone else, but the property was to be listed immediately.

Finally, the judge decided that he was going to award "special costs" against Gordon. The amount wasn't specified, though it will be in the thousands of dollars, and the judge said he'd decide the amount based in part on the behaviour of the parties going forward. He awarded these costs because he said Gordon had made very serious allegations against the executor and his lawyer, none of which were substantiated. Since Gordon is not a beneficiary of the estate, this cannot be set-off against any inheritance, so Gordon is going to have to come up with the money from his own resources.

This case goes to show that if you are going to accuse an executor of fraud, you'd better have some facts to back you up. The fact that you don't like the will or how things are going, or you don't want to do what the executor asks, doesn't mean there has been fraud.

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