Is dysfunction between trustees a sufficient basis to remove a trustee?

British Columbia, Canada


The following excerpt is from Re: Newton Trust, 2014 BCSC 882 (CanLII):

In Wilson v. Heathcote, 2009 BCSC 554, Mr. Justice Cohen considered the dysfunction between trustees as providing a proper basis to remove a trustee. He canvassed the law regarding the removal of a trustee and concluded that the manner and conduct of the impugned trustee “at times has been the major contributor to the breakdown in the relationship between the trustees” (at para. 78).

In Mailing v. Conrad, [2003] O.J. No. 735 (S.C.J.), the court held that the removal of the executor was justified because there had been a number of instances where he had been either adversarial or uncooperative in the administration of the estate. The court stated at paras. 17 and 18: I agree with the applicants' position that notwithstanding the "majority clause" the lack of co-operation by the respondent would continue to make the job of the other executors difficult if not impossible. The nature of the respondent's behaviour, including threatening to take legal action against his co-executors, cannot be resolved by the "majority clause". The applicants are right to be cautious in the face of the allegations by the respondent and apparent threats of litigation. On these facts, I find that the respondent's hostility and lack of co-operation make it improbable that the executors would be able to administer the estate …the continuation of the respondent's role of executor or trustee would be detrimental to the estate.

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