Carmichael et al. v. Sharpley et al.
[Indexed as: Carmichael Estate (Re)]
46 O.R. (3d) 630
 O.J. No. 83
Court File No. 05-47/99
Ontario Superior Court of Justice
January 14, 2000
Wills and estates — Estate administration — Personal representatives — Superior Court of Justice having jurisdiction to remove executors and trustees who have taken steps to administer estate but who have not obtained letters of probate of will from court.
The applicants sought the removal of two of the executors and trustees under the deceased’s will. The executors had administered the estate without probating the will. A preliminary issue arose as to whether the court has jurisdiction to remove executors and trustees who have taken steps to administer the estate but who have not obtained letters probate from the court.
Held, the question should be answered in the affirmative.
An applicant for the removal of an executor under s. 37(1) of the Trustee Act, R.S.O. 1990, c. T.23 in circumstances where that executor has intermeddled with the estate (i.e., taken steps in its administration without benefit of proving the will) does not have to take steps to oblige that executor to accept or refuse probate before the court can hear the application. The applicant is free to bring such an application for removal under s. 37(1) whether or not that executor has taken out probate of the will once he has assumed the duties of executor and acted in the administration. To find otherwise would require the applicant to take an unnecessary proceeding to validate the status of the executor who has not seen fit to do so himself. Such a requirement merely puts an impediment in the path of a person with a financial interest in the estate who wishes to call a fiduciary to account. There was no issue in this case as to the validity of the will or the identity of the executor. This was not a situation where the title in the executor had to be authenticated. Section 37(6) and (7) of the Trustee Act refers to notations by the registrars on the grants where there is a change in executors for the protection of the public who may rely on the grant as it stands without knowledge of the change. In the circumstances of this case the public would not be misled. All of the persons dealing with the executors of the estate were either the beneficiaries or third parties who had already accepted transactions in the estate without requiring probate as they could have done. There were no policy reasons here for requiring probate with notation of the order removing the executor.
Deutsch (Re) (1976), 18 O.R. (2d) 357, 82 D.L.R. (3d) 567 (H.C.J.); Falk v. Dick,  M.J. No. 748 (Q.B.); Ingalls v. Reid (1865), 15 U.C.C.P.; Silver Estate (Re), Ont. S.C.J., Haley J., December 22, 1999 (unreported); Weil (Re),  O.R. 751, 329 D.L.R. (2d) 308 (H.C.J.), revd  O.R. 888, 30 D.L.R. (2d) 91 (C.A.), consd
Other cases referred to
Allen v. Parke (1866), 17 U.C.C.P. 105; Becker (Re) (1986), 57 O.R. (2d) 495 (Surr. Ct.); Booty v. Hutton,  M.J. No. 410 (Q.B.); Bowerman (Re) (1978), 20 O.R. (2d) 374, 87 D.L.R. (3d) 597 (Surr. Ct.); Grant v. Great Western Railway Co. (1858), 7 U.C.C.P. 438
Statutes referred to
Estates Act, R.S.O. 1990, c. E.27, s. 29(3)
Evidence Act, R.S.O. 1990, c. E.23, s. 49 Land Titles Act, R.S.O. 1990, c. L.5, s. 120
Probate and Surrogate Courts Act, S.U.C. 1793, c. 8 Registry Act, R.S.O. 1990, c. R.20, s. 53
Surrogate Courts Act, S.U.C. 1859, c. 16, s. 1
Surrogate Courts Act, R.S.O. 1970, c. 451, ss. 21, 53(3)
Trustee Act, R.S.O. 1990, c. T.23, ss. 1 “personal representative”, 37(1), (6), (7)
Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.03, 9.03, 10.02, 11.02, 74.06, 74.15(1)(a), 74.18
Authorities referred to Macdonell, Sheard and Hull on Probate Practice, 4th ed. (Toronto: Carswell, 1996), p. 160
RULING on a preliminary issue.
Karon C. Bales and Andrew Lewis, for applicants.
Brian A. Schnurr and Wendy L. Griesdorf, for respondents. Marian Jacko, for Children’s Lawyer.
 HALEY J.: — The applicants seek the removal of two of the executors and trustees under the will of the late John Bernard Woods Carmichael who died on September 19, 1992. The deceased left a will dated November 17, 1988 and two codicils dated March 11, 1992 and August 27, 1992 in which he appointed his wife, Colleen Carmichael, his lawyer Gaylanne Phelan, and his accountant Douglas Sharpley to be his executors. The will provided a life interest to the widow with the residue on her death to go to his issue. Since the death these named executors and trustees have administered the estate without probating the will. The bulk of the estate is made up of shares in privately held corporations. There has been no attack on the validity of the will or the codicils. Difficulties have now arisen regarding the administration and the children seek to remove and replace Gaylanne Phelan and Douglas Sharpley as executors and trustees.
 On the return of the application I raised a preliminary issue with counsel for the applicants and the respondents. The Children’s Lawyer representing minor and unborn issue was served and appeared on the argument of the preliminary issue. Catherine Jill Adolphe did not appear but through her counsel advised that she supported the position of the applicants on this issue.
 The issue before me is this: Does the Superior Court of Justice have jurisdiction to remove executors and trustees who have taken steps to administer the estate but who have not obtained letters probate of the will and codicils from the court?
 Section 37 of the Trustee Act, R.S.O. 1990, c. T.23, as amended to reflect the change in the name of the court from the Ontario Court (General Division) to the Superior Court of Justice, authorizes the court to remove executors:
37(1) The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee, and may appoint some other proper person or persons to act in the place of the executor or administrator so removed.
“Personal representative” is defined in the act as “. . . an executor, an administrator, and an administrator with the will annexed”.
37(6) A certified copy of the order of removal shall be filed with the Estate Registrar for Ontario and another copy with the local registrar of the Superior Court of Justice, and such officers shall, at or upon the entry of the grant in the registers of their respective offices, make in red ink a short note giving the date and effect of the order, and shall also make a reference thereto in the index of the register at the place where the grant is indexed.
(7) The date of the grant shall be endorsed on the copy of the order filed with the Estate Registrar for Ontario. “Grant” is not defined in the Act.
History of the Jurisdiction of the Court
 Mr. Lewis provided the court with a detailed outline of the jurisdiction of civil and English common law courts over matters relating to probate and estates from the 11th century on and the transfer of that jurisdiction to the Ecclesiastical courts and eventually to the Court of Chancery. The Ontario history is also important for the analysis of the cases relating to this issue. In 1793 the Probate and Surrogate Courts Act, S.U.C. 1793, c. 8, established the first Court of Probate in Upper Canada. This Act imported into Upper Canada the testamentary jurisdiction of the Ecclesiastical Courts in England.
 Draper C.J. said in Grant v. Great Western Railway Co. (1858), 7 U.C.C.P. 438 at p. 445:
I have arrived at the conclusion, upon a full consideration of [the Probate and Surrogate Courts Act] that the legislature of Upper Canada intended that the law of England relative to the grant of probate, and the committing of letters of administration, should be the law administered in the courts created by the act of 1793, with the same process, pleadings and practice, unless where our statutes express to the contrary, as were in use in the ecclesiastical courts in England in relation to probates and letters of administration.
 In 1858 the Surrogate Courts Act, S.U.C. 1859, c. 16, s. 1 was enacted in Upper Canada, providing:
Nothing in this act shall extend or be construed to extend to make the Surrogate Courts, held under the provisions of this Act, new Courts . . . but they shall be taken to be to all intents and purposes the same courts as if they had continued to be held under the provisions of the Surrogate Courts Act 1858, or of the Act [Probate and Surrogate Courts Act] thereby repealed . . . .
 The Surrogate Courts Act, R.S.O. 1970, c. 451, s. 21 confirmed that jurisdiction:
21. Subject to The Judicature Act, all jurisdiction and authority in relation to matters and causes testamentary, and in relation to the granting or revoking of probate of wills and letters of administration of the property of deceased persons, and all matters arising out of or connected with the grant or revocation of grant of probate or administration are vested in the several surrogate courts.
 At the same time the Supreme Court of Ontario had jurisdiction which it inherited from the English Chancery court to deal with estate matters except where matters were in the jurisdiction of the Surrogate Court. This was the situation at the time of the decision in Re Deutsch (1976), 18 O.R. (2d) 357, 82 D.L.R. (3d) 567 (H.C.J.) which is discussed below.
 In 1989 with the repeal of the Surrogate Courts Act and the merger of the District Court and the Supreme Court into the Ontario Court (General Division) the respective jurisdictions were melded into that of the new court. With the name change in 1999 that jurisdiction is now exercised by the Superior Court of Ontario.
 In Re Silver Estate (unreported reasons for judgment released December 22, 1999 Ont. S.C.J., per Haley J.) there is a further review of the legislative history and in particular an examination of the differences in treatment for passing title in an estate relating to personalty and to real property. These differences were resolved in Ontario with the passing of the Devolution of Estates Act in 1886 by which both personalty and real property devolved in the same fashion.
 Re Deutsch, supra, was an application under s. 37(1) of the Trustee Act (identical in wording with that quoted above) for the removal of executors named in the will and the appointment of an administrator with the will annexed in their place before any application for probate had been made by the executors. In his decision Reid J., after setting out s. 37(1), observed at p. 359:
I have come to the conclusion that the section does not confer on this Court jurisdiction to make the order sought. No application has yet been made for probate. To grant this application would be to appoint a personal representative before a will is proven. This would by-pass the normal function of the Surrogate Court, which must consider and pass upon the fitness of persons nominated by testators to be their personal representatives . . . .
The legislative scheme shown by the Trustee Act and the Surrogate Courts Act, R.S.O. 1970, c. 451, confers general probate and surrogate jurisdiction on the Surrogate Court and only limited authority in probate and surrogate matters on the Supreme Court. The Supreme Court has no general probate or surrogate jurisdiction.
 Reid J. then referred to Re Weil,  O.R. 751, 29 D.L.R. (2d) 308 (H.C.J.) and  O.R. 888, 30 D.L.R. (2d) 91 (C.A.) in which application had been made to the High Court to appoint a trust company to replace a company which had renounced. No application for probate had yet been filed at the time the application was heard. The Court of Appeal agreed with the motions judge that the Supreme Court did not have power to remove a personal representative before an application for probate had been dealt with by the Surrogate Court.
 Mr. Schnurr argues that the effect of the Deutsch and Weil decisions is to require that s. 37(1) of the Trustee Act be construed strictly and that the court may only act to remove an executor after probate of the will has been granted. This requirement, he argues, is not removed by the merger of the courts.
 Miss Bales, for her part, argues that the requirement for probate before the application of s. 37(1) of the Trustee Act disappeared with the merger of jurisdiction in testamentary matters in this one court and that the ratio of the decision of Reid J. was based solely on a split in jurisdiction between the Surrogate Court and the High Court.
 Section 53(3) of the Surrogate Courts Act, R.S.O. 1970 gave power to the court to refuse a grant of letters of administration with the will annexed or administration to those persons having the first right to administration if the court in its discretion decided to pass over such persons and appoint some other person instead. The same provision is to be found today in the Estates Act, R.S.O. 1990, c. E.27, s. 29(3).
 This passing over may occur where no executor has been appointed in the will or where the executor named is under some legal disability, e.g., is bankrupt or under age. Generally, however, the wishes of the testator will be honoured even if the person chosen is of bad character. In Re Becker (1986), 57 O.R. (2d) 495, the Surrogate Court judge passed over an executor who was in an actual conflict with the beneficiaries under the will. He did not consider the application to remove the executor for conflict was premature (i.e., required probate to issue first, as in Re Weil) but exercised his general discretion to pass over that executor and gave probate to the other named executors. Normally the discretion referred to in s. 29(3) applies to administration only and not to probate.
 If a testator’s chosen executor does nothing to assume his duties as executor the rules provide for an order requiring that person to accept or refuse probate with a view to having some other person appointed to act as administrator with the will annexed. This was the procedure, available only in the Surrogate Court, which prevented the High Court from removing an executor before the grant of probate in Re Deutsch. If it had done so it would have interfered with the testamentary discretion vested in the Surrogate Court in “all matters arising out of or connected with the grant or revocation of grant of probate or administration” (Surrogate Courts Act, R.S.O. 1970, s. 21).
 Now that the Superior Court has the consolidated jurisdiction of both the High Court and the Surrogate Court, it is my view that the same procedural differences continue. If an application were brought now pursuant to s. 37(1) of the Trustee Act for the removal of an executor who has not assumed the administration of the estate such application would be premature as in Re Weil because no steps had been taken under rule 74.15(1)(a) for an order for assistance (formerly citation) requiring that executor to accept or refuse probate. If such an order for assistance were made and if the executor declined probate or did nothing, the way would then be clear for the court to grant administration with the will annexed to some other person. If that executor in response to the order for assistance accepted the office he would have to take some step to assume those duties or apply for a certificate of appointment as estate trustee with a will. On the application for a certificate those having a financial interest in the estate would be entitled to file a notice of objection (caveat) and to attack the executor’s right to a certificate. If, on the other hand, the executor chose to assume the duties of executor by administering the estate but without applying for a certificate I am satisfied that persons having a financial interest in the estate would then have the right to apply for his removal under s. 37(1) without the will having been probated.
 It is the latter case which is before me. No one is attacking the validity of Mr. Carmichael’s will. The executors have been administering the estate since his death in 1992. They have been able to do so without a certificate of appointment. There are, however, other principles that counsel has argued which must be considered before a final determination can be made.
 The principle that an executor’s power springs from the will and not from letters probate (certificate of appointment) has long been accepted in the English jurisprudence and in Ontario. There are three exceptions to the exercise of that power:
1. Third parties dealing with the executor may refuse to accept the authority of the will and demand production of letters probate as authentication of that power. These situations arise on a practical basis, e.g., transfer agents before transferring of publicly traded shares; a debtor who wishes to be sure he is paying the correct person to ensure a proper discharge of the debt.
2. Proceedings involving the executor representing the estate as plaintiff or as defendant. It would seem that in such circumstances the court requires probate as an evidentiary matter. The Evidence Act, R.S.O. 1990, c. E.23, s. 49 provides that probate “in the absence of proof to the contrary” is proof of the validity and contents of the will. Rule 9.03, which contemplates a proceeding by or against an estate through its executor before a grant of probate, implicitly acknowledges this requirement and operates to prevent a nullity in the proceeding if the probate is subsequently obtained. The proceeding is then deemed to have been properly constituted from its commencement. It should be noted that “proceeding” as defined in rule 1.03 “means an action or application”.
3. Where a foreign executor wishes to establish title to estate assets in Ontario he must have his letters probate resealed in Ontario or obtain ancillary letters probate. This requires that he first obtain probate in the primary jurisdiction.
 Mr. Schnurr would have me add a fourth exception, i.e., that before the court will entertain the removal of an executor under s. 37(1) of the Trustee Act the executor must have applied for and obtained a certificate of appointment of estate trustee with a will. He says first that the statutes require it and makes reference to s. 37(6) and (7) (of the Trustee Act) quoted above which require the Estate Registrar for Ontario and the local registrar to make certain notations in their registers recording the order removing a personal representative and appointing a new one, if applicable. Though it is not entirely clear what grant is being referred to, the implication is that it is to a previous grant so that by cross- referencing the current status is clear. If there were no grant the registrar could only enter into the register the order removing a personal representative and appointing a new one (if applicable). Without a prior subsisting grant to an executor the administrative procedures have no meaning. However I am not persuaded that the existence of this administrative duty under the statute is the governing principle for determining whether there must be an existing probate when s. 37(1) of the Trustee Act does not specifically require one.
 Mr. Schnurr also makes reference to the Land Titles Act, R.S.O. 1990, c. L.5 but s. 120 and following sections dealing with transmission of interests following the death of an owner makes no specific reference to requiring probate to support a transmission. It would appear that this is required by regulation only. This is to be contrasted with the Registry Act, R.S.O. 1990, c. R.20, s. 53 which permits the registration of the original will to pass title to real estate without the necessity of probate: see Re Silver Estate, supra, for the possible historical reason for this.
 Mr. Schnurr also argues that the rules require the existence of a probate before an application to remove an executor can be heard. I have already referred to rule 9.03 and the definition of “proceeding” which includes an application as well as an action. Rule 10.02 which appoints a representative to bind an estate where there is no executor or administrator contains no suggestion that an executor to be acknowledged an executor for the purpose of that rule must be one who has obtained probate. Rule 11.01 which provides for an order to continue where a party has died during a proceeding makes no requirement of a probate before such an order will be made in favour of the executor of the estate. Rule 74.18 requires the filing of a certificate of appointment on the passing of accounts of the executor. In this last case I have found that the existence of this requirement in the rule did not result in the executor’s having to obtain such a certificate before his accounts could have placed before the court fo r passing: Re Silver Estate, supra. The rules show a lack of consistency when making reference to executors and, in my view, like the administrative duties in s. 37(6) and (7), cannot be taken to determine the issue.
 Reference was also made to devolution of executorship which requires probate of the will before it can take effect. The principle is stated in Macdonell, Sheard and Hull on Probate Practice, 4th ed. (Toronto: Carswell, 1996), at p. 160: It is only an executor who has proved the will who can transmit the executorship, and, therefore, if the executor named predeceases the testator or dies without having taken probate there must be administration. The administrator of an executor does not succeed to the executorship nor does the executor of someone appointed executor by the Court under the Trustee Act.
 Thus if X is appointed sole executor of A’s estate in A’s will and dies before completing the administration of A’s estate and X appoints Y to be his sole executor Y will succeed to the executorship of A’s estate only if X has probated A’s will. If he has not done so then A’s estate can be completed only by a person appointed as administrator of A’s estate de bonis non administravit.
 Neither of the cases given as authority for this principle: Allen v. Parke (1866), 17 U.C.C.P. 105 and Ingalls v. Reid (1865), 15 U.C.C.P. makes reference to whether the succeeding executor had taken probate of the will of the original executor. Rule 74.06 requires the applicant for a certificate of appointment of succeeding estate trustee with a will (letters double probate) to file with the court the original certificate of appointment, i.e., of the certificate issued to the original executor. There is no requirement for production of a certificate appointing the applicant as executor of the original executor. This would appear to be a gap in the requirements under the rule.
 The respondents rely on the Manitoba case of Booty v. Hutton, an unreported decision of the Manitoba Queen’s Bench,  M.J. No. 410 online: Quicklaw. The case dealt with two related estates but the issues raised were not the same as the issue before me. The judgment discusses a number of the general principles already discussed above but it is not pertinent to this issue.
 Falk v. Dick, also an unreported decision of the Manitoba Queen’s Bench,  M.J. 748 online: Quicklaw similarly was not on all fours with the case before me. It concerned an application to remove an executor whom the court found to be in actual conflict with the beneficiaries of the estate but before that executor had applied for probate or had taken any steps to administer the estate. The court treated the Re Deutsch decision as being based solely on the split jurisdiction which existed at the time. It chose to follow Re Becker, supra, cited as Stadelmier v. Hoffman, and Re Bowerman (1978), 20 O.R. (2d) 374, 87 D.L.R. (3d) 597 (Surr. Ct.) and to pass over the executor whom the parties wished removed based on actual conflict of interest.
 But Falk v. Dick is not a case where the executors have actually administered the estate without benefit of probate. I have already commented on what I perceive to be the correct procedure under the rules in Ontario for bringing a matter such as the one in the Falk case before the court by way of an order to accept or refuse probate and a notice of objection and not by an application for removal under the Trustee Act.
 I now return to the issue before me. Does an applicant for the removal of an executor under s. 37(1) of the Trustee Act in circumstances where that executor has intermeddled with the estate (i.e., taken steps in its administration without benefit of proving the will) have to take steps to oblige that executor to accept or refuse probate before the court can hear the application?
 I am satisfied that the applicant does not and is free to bring such an application for removal under s. 37(1) whether or not that executor has taken out probate of the will once he has assumed the duties of executor and acted in the administration. To find otherwise would require the applicant to take an unnecessary proceeding to validate the status of the executor who has not seen fit to do so himself. Such a requirement merely puts an impediment in the path of a person with a financial interest in the estate who wishes to call a fiduciary to account. There is no issue here as to the validity of the will or the identity of the executor. The beneficiaries wish to place before the court complaints about the administration by the executor.
 This is not a situation where the title in the executor must be authenticated, which is usually done by letters probate though not necessarily so. The Evidence Act, s. 49 provides that the probate is evidence of the validity of the will and its contents in the absence of evidence to the contrary. It makes no mention of confirming the identity of the executor.
 Section 37(6) and (7) of the Trustee Act refers to notations by the registrars on the grants where there is a change in executors for the protection of the public who may rely on the grant as it stands without knowledge of the change. In the circumstances of this case the public would not be misled. All of the persons dealing with the executors of the estate are either the beneficiaries or third parties who have already accepted transactions in the estate without requiring probate as they could have done. There are no policy reasons here for requiring probate with notation of the order removing the executor.
 The application for removal of the executor may proceed without the applicants’ first obtaining probate of the will for the executor whom they wish to remove.
 As this is a novel issue and one which is important for estates practice costs of both parties shall be paid out of the estate on a solicitor and client basis. The costs of the Children’s Lawyer will also be paid out of the estate in the amount agreed by the parties. If this amount cannot be agreed on I can be spoken to.