By Jeff Jiehui Li
Pursuant to s. 35 of the Estates Act, an administration bond is generally required before a court can appoint a person to be the trustee of an estate. The bond is not required in certain situations, some of them are specified in statutes. Normally, a prospective trustee is required to post a bond if (1) the executor resides out of the province; (2) a person has died with a will, but fails to name an executor; and (3) a person has died without a will.
To obtain a bond is often not easy, however. There are many hurdles to overcome before a bond is issued, including sometimes the very unreasonable conditions stipulated by the bond issuer. In the worse scenario, the trustee will find that to obtain a bond is impossible, or does not make sense to manage the estate with an expensive bond. In this situation, the trustee should consider applying to the court to dispense with the administration bond. Pursuant to s. 37(2) of the Estates Act, a judge may “at any time under special circumstances reduce the amount of or dispense with the bond.”
In Re Estates of Robert Henderson and Eugenia Zagaglia, issued at the end of 2008, Justice D Brown identified the information that should be addressed in affidavits filed in support of a request to dispense with a bond. This includes:
(i) the identity of all beneficiaries of the estate;
(ii) the identity of any beneficiary of the estate who is a minor or incapable person;
(iii) the value of the interest of any minor or incapable beneficiary in the estate;
(iv) executed consents from all beneficiaries to the appointment of the applicant as estate trustee and to an order dispensing with an administration bond should be attached as exhibits to the affidavit.
(v) the last occupation of the deceased;
(vi) evidence as to whether all the debts of the deceased have been paid, including any obligations under support agreements or orders;
(vii) evidence as to whether the deceased operated a business at the time of death and, if the deceased did, whether any debts of that business have been or may be claimed against the estate, and a description of each debt and its amount;
(viii) if all the debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt – amount and name of the creditor – and an explanation of what arrangements have been made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.
In a more decision in Re Andrews Estate (2009), Justice Brown further clarified the requirements regarding the application for dispensing with the bond. In the case there were two executors applying to dispense with a bond, but only one of them filed an affidavit containing the information required by Re Henderson. The court office rejected it on the basis that each executor had to swear an affidavit. The applicants re-filed the materials with two affidavits sworn respectively by the two applicants. Yet the court office rejected it again swearing their own affidavits, as the affidavit did not specify that it was made in support of a motion to dispense with a bond.
Justice Brown rejected the reasoning of the court office in both instances. First, he ruled that one affidavit for both applicants, as “filing two affidavits that say essentially the same thing does not result in ‘more powerful evidence’; it simply creates unnecessary additional paperwork.”
With respect to the second refusal, Justice Brown found that there was nothing in the Estates Act or Rules of Civil Procedure that required the specific type of language to be included. At the end, Justice Brown granted the application, and apologized to the applicants for the delay and inconvenience.
Well done, Justice Brown.
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