Alberta Court of Appeal resolved unusual case with fairness, allowed executor access to estate funds

The Alberta Court of Appeal has allowed the advancement of funds to an estate’s co-executor to cover litigation costs against the estate.

In Kerswell v. Mayhew, 2022 ABCA 349, Simmone Kerswell was named co-executor of her late brother’s approximately $7 million estate. The other co-executor was their niece, a Ms. Benoit.

However, Benoit misappropriated $700,000 from the estate. Despite a judgment against her, recovery of the amount was considered unlikely.

Kerswell appealed some directions of the case management judge, particularly those preventing her from questioning one witness before trial and presenting another witness at trial. She also challenged the judge’s failure to grant an additional $200,000 from the estate to pay for her defence.

The appellate court found no basis to interfere with the case management judge’s direction as to the presentation of witnesses.

Court resolved case with fairness, allowed executor access to funds

As to the additional indemnification, the appellate court agreed that trustees are entitled to indemnification including costs of an action reasonably defended. But these trustees are entitled to indemnification only when successful, or after the results are known, said the court.

The appellate court ruled that while funding is not ordinarily made available in advance of the action, this was a “most unusual case.” It was not alleged that Kerswell misappropriated funds or benefited from Benoit’s misappropriations, said the court. Further, without funding, Kerswell would be forced to represent herself and could lose a case she could win if represented by counsel, said the court.

Thus, in these unusual circumstances, the appellate court found that it was fair and appropriate that Kerswell have access to further funding to properly defend herself.