Author: Kira Domratchev, Partner, Gowling WLG
Estate Trustees During Litigation (“ETDL” or “ETDLs”) are appointed pursuant to section 28 of the Estates Act, R.S.O. 1990, c. E.21 while litigation is ongoing between the beneficiaries and a neutral third party is needed to manage the estate in the interim. Under that provision, an ETDL “…has all the rights and powers of a general administrator, other than the right of distributing the residue of the property…”
Typically, the appointment of an ETDL is effected by way of an Order Giving Directions (with a Certificate of Appointment of ETDL to follow) wherein the purview of the appointment is confirmed and additional specific powers or restrictions, if any, are also included. For example, if the estate operates a going-concern business that needs to continue operations, an ETDL may require additional authority to continue running it on behalf of the estate.
While appointing an ETDL is usually straightforward, issues may occasionally arise. For example, if a third‑party claim is brought against the estate, can the ETDL defend it?
ETDL’s Authority to Defend
Section 38(2) of the Trustee Act, R.S.O. 1990, c. T.23, addresses actions against executors and administrators, including ETDLs:
Actions against executors and administrators for torts
(2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person’s property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong. [emphasis added]
Despite the language of this provision, an ETDL’s power to defend a claim is not limited to torts. In para. 50 of Ingram v Kulynych, 2024 ONCA 678, the Ontario Court of Appeal confirmed that this provision is not restricted to tortious conduct.
Key Takeaway
If an ETDL is served with a claim, they should have the ability to defend it, without the requirement of an additional court order, unless the order for the original appointment included a restriction in that regard.
