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EXECUTORS AND ADMINISTRATORS - Actions against - Negligence - Personal liability 

Thursday, August 12, 2021 @ 5:38 AM  

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Appeal by the plaintiff Best from the dismissal of action for damages. The appellant and the respondent Hendry were sisters. In 1981, their aunt executed a will in which she bequeathed her home to Hendry and the residue of her estate to Best. The respondent Vavasour was the solicitor who prepared the will and was the executor of the estate. The house was sold in 2008. The proceeds of sale were deposited in the aunt’s account. The aunt died in 2011. The estate was composed of cash held in a bank account. Vavasour proposed that Hendry receive the cash equal to the sale proceeds from the house, $145,780, and Best receive the cash balance of $30,238. The sisters accepted the proposal after making an agreement for Hendry to pay Best an additional $40,000 from the proceeds of sale. When Hendry failed to pay the $40,000, Best commenced an action against Hendry claiming she owed Best the monies given to her by Vavasour from the estate and that Vavasour owed her a duty of care and that he was negligent in carrying out his duties, both as the lawyer for the estate and as the executor, and that his negligence caused her loss. 

HELD: Appeal allowed. The trial judge’s failure to apply the doctrine of redemption to the specific bequest in the will was an error. The proceeds of sale of the house deposited into aunt’s bank account three years before she died was not the bequest to Hendry. The bequest to Hendry was a house and contents, not cash proceeds of its sale. When the aunt died, there was nothing in her estate of the nature and character or matching the description, of her specific bequest to Hendry. The situation admitted of no other conclusion but that the bequest to Hendry adeemed. Given that the specific bequest to Hendry had adeemed, Vavasour’s duty was to disburse the cash residue of the estate to Best, as the law required. The judge erred in failing to find Vavasour had breached his duty of trust to Best by negligently carrying out his duty as executor. His proposal to Best and his distribution of the estate were not in accordance with her will or the law. His proposal favoured Hendry over Best, in breach of his duty to act impartially and in the best interests of beneficiaries. His actions fell below the standard expected of a reasonable executor. By relying on extrinsic evidence of Vavasour’s belief, by failing to apply the doctrine of ademption, and by failing to appreciate the trust relationship Vavasour had with Best, the judge erred in determining that his actions did not fall below the standard expected of an executor. His actions, while honest, were not reasonable, and it would not be fair to excuse him and have Best incur the loss. Vavasour’s third party claim against Hendry was allowed in the amount of $35,379, the amount of money Hendry still possessed of the money mistakenly paid to her by Vavasour when she was notified of his mistake and which she must reimburse. She received notice of Vavasour’s third party action while still in possession of some of the $145,780 mistakenly paid to her and ought to have reserved the remainder of the money until the matter was resolved.

Best v. Hendry, [2021] N.J. No. 203, Newfoundland and Labrador Court of Appeal, L.R. Hoegg, F.P. O'Brien and G.D. Butler JJ.A., July 8, 2021. Digest No. TLD-August92021008