Although a well-intentioned testator may choose to appoint two or more personal representatives to avoid the perception of favouritism or help balance the load of estate administration, it can be difficult to obtain unanimity on all decisions in practice. As such, the majority rule clause is a silent architect in the background of testamentary documents and estate planning

Although it is a relatively discrete provision within a will, a majority rule clause plays a pivotal role in determining how decisions are made regarding the administration of an estate and disputes between personal representatives. This clause often takes center stage when multiple beneficiaries find themselves at the crossroads of differing opinions on the management of assets, the sale of property, or other critical matters about the deceased’s estate. 

This blog post will explore how the courts treat majority rule clauses in light of a recent decision from the Court of Appeal of Alberta, in which three of the four personal representatives sought to obtain probate without first obtaining the fourth personal representative’s renunciation or signature on the probate application. 

Appellants and Respondent Disagree Over Property Value

In the recent case of Brodylo Estate (Re), the matter came before the Court through appeals arising from an application for probate. The key issue before the Court was whether the chambers judge erred by giving ancillary directions to the estate’s personal representatives to help determine values for a probate application. On appeal, the appellants/applicants argued that the will’s majority rule clause prevented a chambers judge from providing such instructions. 

Before her death on October 20, 2019, the deceased (“MB”) executed a will appointing her four children, “LB,” “RB, “JB” (the “appellants”) and “EB” (the “respondent”) as joint representatives and the sole beneficiaries of her estate with equal residual entitlement. In December 2020, the appellants filed a probate application, while the respondent did not sign the requisite forms as she disagreed with some of the information contained within the application. In particular, she was concerned about the value of the deceased’s home and surrounding 9.93 acres of land. She paid for an appraisal valued at $993,000, while the appellants claimed it was $12.925 million. The parties also disagreed on the value of shares and loans from a corporation and an amount charged by the appellants for legal fees on work done under their mother’s power of attorney. 

Chambers Judge Provides Directions Regarding Disputed Fees and Assets

The appellants applied to the Chambers Judge for:

  • Directions and advice pursuant to section 49 of the Estate Administration Act;
  • A direction that they be allowed to file a revised NC1 Application and NC2 Affidavit; and 
  • A grant of probate. 

The chambers judge determined that the appellants had not fulfilled their obligations under section 5(1) of the Estate Administration Act regarding the respondent’s legitimate request for information. As such, the appellant’s request for probate without obtaining the respondent’s renunciation or signature was dismissed. The chambers judge instead provided the parties with advice and directions on the steps to take if the parties could not agree on the dispute fee and asset values, which provided that the parties should apply to the court for a determination which could “include the appointment of a third party to act as the personal representative and/or a chartered professional accountant to resolve the financial reporting and valuation disputes.”

Appellants Argue Chambers Judge Failed to Give Effect to Majority Rule Clause

On appeal, the appellants challenged the directions given by the chambers judge, arguing that the will contained a ‘majority rule’ clause, which provided that “If at any time my trustees are unable to agree regarding any matter in connection with my estate, I direct that the decision of a majority of my trustees shall govern and shall be binding on all persons concerned notwithstanding that any one or more of my trustees or their families may be personally interested in the matter in dispute.” 

When the matter came before the Court of Appeal, the revised probate application was submitted, and the probate was granted. As such, the sole issue before the Court was whether the chambers judge had jurisdiction to provide ancillary directions. In the appellant’s view, the chambers judge “failed to give effect to the majority rule clause” and “exceeded her jurisdiction by making the directions she did.” 

Court of Appeal Finds Chambers Judge Considered Majority Rule Clause

The Court of Appeal found that the chambers judge had considered the majority rule clause but found that it “could not be used to override the fiduciary duties of the personal representatives to each other” or to “deny one personal representative the material information used by the others to make estate decisions.” The primary concern of the chambers judge was the “stark difference” between the parties’ respective values assigned to the property. 

The appellants argued that there was no circumstance in which the Court could intervene given the presence of the majority rule clause, as none of the acts of the majority were illegal. However, the Court explained that courts retain “a supervisory jurisdiction in the face of a majority rule clause. While such a clause may reflect a testamentary intention that the personal representatives avoid going to court if they do not agree, such intention cannot oust the court’s supervisory role.”

Court of Appeal Finds Chambers Judge’s Directions Were Based on a “Practical and Common-Sense Approach”

The Court emphasized that it may intervene where “the majority fails to disclose material information necessary for the minority personal representative to assess the validity of the majority’s position.” As such, the chambers judge determined that the majority rule clause could not be used to require a personal representative to swear an affidavit in support of the probate application, which she did not believe to be true. 

Ultimately, the majority rule clause did not prevent the chambers judge from providing the directions and advice that she did. The chambers judge gave advice and directions to help remove the gridlock that prevented probate of the estate, which was what the appellants had asked for. Accordingly, the Court of Appeal found that the chamber’s judge made no reviewable error in her “practical and common-sense approach to the gridlock in the administration of this estate.” The Court explained that the Estate Administration Act and Surrogate Rules allow the court to issue directions, and estate administration, in this case, could not proceed without the court’s direction. 

The Wills and Estate Lawyers at Getz Collins and Associates Provide Practical Legal Advice on Estate Planning Matters

The knowledgeable team of will and estate planning lawyers at Getz Collins and Associates in Calgary and Strathmore help clients develop a clear plan and strategy best suited to their needs during the estate planning process. We help clients address unique considerations and make the best efforts to help mitigate future disputes between personal representatives and beneficiaries by drafting sound testamentary documents. We also help personal representatives navigate the nuances of estate administration and probate matters. 

Getz Collins and Associates happily represents clients throughout Alberta from our offices in Calgary and Strathmore. To learn how we can help you prepare for your future, please call us at 587-391-5600 or contact us online.