The estate's personal representatives could not agree on the values of certain properties
The Alberta Court of Appeal has clarified the court retains a supervisory jurisdiction despite a majority rule clause in a will.
In Brodylo Estate (Re), 2023 ABCA 314, some of the deceased's personal representatives challenged the chamber's judge's decision, giving ancillary directions to assist in determining values for a probate application. They contended that a majority rule clause in the will deprived the chambers judge of the jurisdiction to give those directions.
Before Margaret Brodylo died, she executed a will naming her four children, Leslie, Reid, John, and Ellen, as joint personal representatives and sole beneficiaries. The court rejected their application for probate because only three of the personal representatives—the appellants in this case—signed the requisite forms. The respondent, Ellen, refused to sign as she disagreed with some of the information in the probate application.
The parties disagreed on the valuation of a home and land of the estate, the value attributed to shares and loans of a corporation, and the amount charged by the appellants for their work as attorneys under their mother's power of attorney.
The chambers judge provided advice and directions regarding steps to be taken if the parties could not agree on the value of the disputed assets and fees. The appellants challenged the chambers judge's decision, arguing that the will contained a majority rule clause stating that, "If at any time my trustees are unable to agree regarding any matter in connection with my estate, I direct that the decision of a majority of my trustees shall govern and shall be binding on all persons concerned notwithstanding that any one or more of my trustees or their families may be personally interested in the matter in dispute."
However, the Alberta Court of Appeal ultimately ruled that the chambers judge considered the majority rule clause and found that it could not be used to override the fiduciary duties of the personal representatives to each other. Furthermore, the court said that the clause could not be used to deny one personal representative the material information used by the others to make estate decisions.
The appellants argued that there was no circumstance in which the court could intervene in the face of a majority rule clause. They also said that the court could only intervene if the acts of the majority were illegal. The appeal court, however, clarified that the court retains supervisory jurisdiction in the face of a majority rule clause. According to jurisprudence, while a majority rule clause may reflect a testamentary intention that the personal representatives avoid going to court if they disagree, such intention cannot oust the court's supervisory role.
The appeal court said that the court may intervene if the majority fails to disclose material information, which is necessary for the minority personal representative to assess the validity of the majority's position. In this case, the court noted that the respondent was not satisfied with the information provided by the appellants regarding the contested values of the estate properties. Furthermore, the court agreed with the chambers judge's conclusion that the majority rule clause cannot be used to oblige the respondent to swear an affidavit, which she believed to be false.
Accordingly, the appeal court concluded that the majority rule clause did not prevent the chambers judge from providing the advice and directions that she did. The court emphasized that the Estate Administration Act and Surrogate Rules empower the court to issue directions, and the estate administration could not proceed without the direction of the court.
