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Succession law, liquidator's liability: a lack of cooperation from the liquidator is not sufficient to allow the heirs or legatees to get the liquidator removed and replaced when he was appointed by will

Succession law, liquidator's removal, legal fees. In a recent judgment, the Superior Court was asked to decide whether or not the liquidator of a succession had failed in its duties by refusing to transmit to the plaintiffs, the heirs, information relating to the deceased's succession and the inventory of the succession. In addition, the Court was asked to determine whether or not the defendant personally owed the legal fees incurred. (Gosselin v. Gosselin, 2012 QCCS 4540).

THE FACTS

In 2002, the testator, Émilien Gosselin, designated, in his will, his sister Marie-Marthe Gosselin as liquidator of his succession. Émilien Gosselin died in 2008. Having taking note of the will, the plaintiffs, heirs of the estate, communicate with Marie-Marthe Gosselin, the defendant, in order to obtain information concerning the content of the succession and the necessary steps for its liquidation, but by October 2008, the plaintiffs have not yet received the requested information. Two of the plaintiffs send formal letters to the defendant requesting that a copy of the report and the inventory of the succession be sent to them. These letters are never dealt with by the defendant, who believes that she has already fulfilled her duties as liquidator and that she need not worry about any further communication. A motion to introduce proceedings for the prepayment of a portion of the legacy is finally submitted to the Court of Quebec in December 2009 by one of the plaintiffs.

In September 2010, the defendant's lawyer finally transmits the succession’s inventory to all the heirs and in January 2011, the plaintiff's lawyer files a motion to introduce proceedings for the removal and replacement of the defendant as liquidator.

THE REPLACEMENT OF THE SUCCESSION’S LIQUIDATOR

To begin, the Superior Court makes reference to the principle established by the courts and confirmed in the recent Court of Appeal’s decision of Roy v. Roy, 2012 QCCA 305. According to this principle, the removal and replacement of a liquidator must always be analyzed on a case-by-case basis and remains an extreme measure, especially when the liquidator in question has been personally designated by the testator. The Court explains that this principle can be justified by the fact that the testator designates a person he knows, he trusts and that he considers able to act, as liquidator in the circumstances.

In addition, the Court notes that the only assets belonging to the deceased at the time of death were banking investments and, consequently, the defendant could have easily informed the heirs of the content and value of the succession. In fact, since the death of Émilien Gosselin, this information was available. The obligation to make an inventory of the succession is not subject to any statutory period but, according to the Superior Court, the liquidator should proceed in making an inventory as soon as he possibly can after taking office as the succession's liquidator. Under ss. 802 and 1309 of the Civil Code, the defendant must act with prudence, diligence, honesty, loyalty and always in the best interest of the heirs. In this particular case, the Court decides that the liquidator lacked transparency and prudence in refusing to provide the heirs, upon request, with copies of the deceased’s bank statements. Moreover, the defendant failed to not only annually report her administration, but also to provide the heirs with all documents relating to the administration of the succession.

However, bearing in mind the principle that the removal and replacement of a liquidator is an extreme measure, the Court is of the opinion that defendant’s failure is not a sufficient reason to proceed in her removal and replacement as administrator.

LEGAL FEES IN SUCCESSION LAW

Furthermore, the Superior Court explains that it is the defendant's reluctance to disclose the value of the deceased's succession that led to the present conflict and resulted in significant delays in the settlement of the liquidation of the succession. Seeing as the only assets belonging to the succession consisted of banking investments, it was easy for the defendant to produce an inventory well before September 2010. As the liquidation of the succession was not a complicated task in this particular case, the conflict between the liquidator and the heirs could have been quickly resolved. The Superior Court concludes that the liquidator's refusal to respond to the correspondence addressed to her and the fact that she stubbornly refused to provide the plaintiffs with the information that they were entitled to are unacceptable behavior on the part of the defendant. However, the Court notes that the plaintiffs, including their attorneys, are partly responsible for this situation, as a settlement outside of Court was clearly a possibility. The Superior Court therefore limits the legal fees and the expenses incurred by the defendant to $ 10,000, and decides that the defendant must personally assume these costs. Dubé Légal inc., Montréal succession law lawyers.