A recent decision by the British Columbia Court of Appeal has transformed the approach for commencing a proceeding on behalf of the estate of a deceased person in British Columbia. Hoggan v. Silvey, 2022 BCCA 176, began with a dispute among siblings. When Marjory Hoggan (“Marjory”) passed away in 2018, she left behind an estate valued at approximately $367,000 to be distributed equally among her three daughters: Lorna, Louise, and Linda. Lorna’s husband Ray was appointed as executor of Marjory’s estate. This may seem like straightforward testamentary instruction – and it was. However, the dispute did not arise from the funds contained in the estate; it arose from the funds that weren’t.
Before Marjory’s death, she had a close relationship with her daughter Lorna and Lorna’s husband Ray (together, the “Silveys”). They saw each other five to six times per week, and the Silveys often assisted Marjory with errands and household tasks. As Marjory’s health began to deteriorate in the early 2000s, she granted Lorna power of attorney and added Lorna as a joint account holder on her bank account. Over the next several years, and before Marjory’s death, Lorna made out various cheques to herself from the joint account she held with Marjory. In total, at least $153,000.00 was transferred from the joint account to the Silveys before Marjory’s final estate was accounted for. These missing funds became the source of the dispute between Louise, Lynda, and the Silveys. Louise and Lynda attempted to rely upon section 151 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (“WESA”) to bring forth an action against the Silveys on behalf of Marjory’s estate. Section 151 of the WESA outlines the requirements for commencing proceedings on behalf of the estate of a deceased person, and reads (in part):
(3) The court may grant leave under this section if
(b) it appears to the court that it is necessary or expedient for the protection of the estate or the interests of a specified person for the proceeding to be brought or defended.
Previous case law interpreted section 151 to contain three separate requirements that all need to be satisfied in order for the court to grant leave to commence an action on behalf of a deceased person’s estate. These requirements were that:
- There is an arguable case;
- The potential relief outweighs the inconvenience to the estate cause by the litigation; and
- The proceedings are in the best interests of the estate.
The trial judge in this case felt that Louise and Lynda had not met all three of these requirements due to the impact on the value of the estate that potential litigation proceedings could bring. However, the Honorable Justice Bennet, writing on behalf of the British Columbia Court of Appeal, did not agree with this ruling nor this cumbersome interpretation of s.151(3)(b) of the WESA. The Honorable Justice Bennet determined that the two instances of the word “or” contained in s.151(3)(b) of WESA are indicative of legislative intent for separate – not cumulative – factors. Instead of three separate requirements that all must be satisfied, four factors are present that each offer a path to bring an action on behalf of the estate of a deceased person if:
- It may be necessary to protect the interests of the estate;
- It may be expedient to protect the interests of the estate;
- It may be necessary to protect the interests of a specified person; OR
- It may be expedient to protect the interests of a specified person
Using this disjunctive approach, it is possible to meet the standard of s.151(3)(b) if any one of the above four factors are present. Accordingly, the British Columbia Court of Appeal determined that Louise and Lynda were permitted to commence an action against the Silveys on behalf of Marjory’s estate regardless of whether the potential relief from the proceedings was outweighed by the inconvenience to the estate.
If you have any questions, need advice or assistance with an estate accounting, please contact Miller Thomson’s Estate Litigation team.