The New Brunswick Court of Queen’s Bench had strong words when it recently handed down a contempt order to an executor in an estate dispute.

Background

In Jensen v Jensen Estate, 2020 NBQB 8, the deceased’s wife commenced an action seeking relief against her husband’s estate including ownership of the marital home and payment of certain funds. This was the second marriage for both. A son from the deceased’s first marriage was the executor of his father’s estate.

Prior to trial, the parties agreed to transfer the marital home to the wife and to sell another property, with the wife’s permission. The funds from the sale were to be held in trust in the husband’s estate until the action was resolved. Shortly thereafter, the wife died, and the trial was adjourned. Her beneficiaries and heirs obtained an order to continue the action on behalf of her estate. A court order was issued accordingly, which also included, among other things, an order prohibiting further assets from the husband’s estate from being transferred or disposed of, except as necessary to pay taxes or expenses by law.

Despite this non-dissipation order, the executor of the husband’s estate wrote cheques in the amount of seven thousand dollars each to some beneficiaries. Further, land owned by the estate was transferred to one of the beneficiaries of the estate.

Contempt Motion

The sole issue before the court was whether the executor was in contempt of the court order and what the appropriate remedy would be.

Under section 76.06 of the New Brunswick Rules of Court, NB Reg 82-73, if the court finds a person guilty of contempt, it may make any order it considers necessary, “including an order that:. . .(b) he be imprisoned if he fails to comply with a term or condition of the order, (c) he pay a fine, . . (f) he pay costs and expenses as may be just, (g) he comply with any other order which the court considers necessary, . . .” ^[1]

In his defence, the executor conceded that the payments out of the estate and the conveyance of the property was “not in compliance” with the court order, but he argued that “he did not believe he was violating the spirit of the order”.^[2] The executor argued that as the property was sold, he believed that they could release some of the funds from the sale to some of the beneficiaries. He argued he was not in contempt as he had not “deliberately and willfully” breached the order.^[3]

Justice DeWare referred to the New Brunswick case of Stone v Stone (1989), 99 NBR (2d) 352 (QB):

Disregard for orders of the court cannot be tolerated. The crux of the issue of a motion for contempt is not whether the Court erred in making its initial order; the issue at hand is that court orders must be followed. To allow litigants to vary court orders to satisfy their personal judgment will of course make the role of the Court meaningless and will place the administration of justice in disrepute. [emphasis by Justice DeWare]^[4]

Justice DeWare concluded that “there is no question” that the executor was “in contempt” of the order. The fact that the executor did not intend to violate the spirit of the order was no defense. Also, the fact that he believed he could release some of the funds from the sale to some of the beneficiaries was irrelevant. He could not dispose of any assets of the estate other than to pay taxes or necessary expenses: “The wording of the order could not be clearer”.^[5]

However, Justice DeWare also found that “the more challenging issue is to determine the appropriate remedy”.^[6] The plaintiffs requested that the sums paid out of the estate be returned pending resolution of the action at trial. Referring to Rule 76.06 of the Rules of Court, Justice DeWare concluded that she was “of the view that the appropriate remedy” was for the executor to personally return the $35,000.00 withdrawn from the estate. Justice DeWare noted that:

Court orders are not suggestions. This court order was clear and unequivocal. It is insufficient for [the executor] to suggest it will be difficult to have the monies repaid. That is exactly why the court order was in place – to preserve the assets of the estate for the benefit of all potential beneficiaries. [emphasis in original]^[7]

Justice DeWare found that the executor was in contempt of the court order and was ordered to return $35,000.00 into the estate account within thirty days.

Conclusion

A contempt order is an important tool for a court to uphold the authority of the courts and more fundamentally, the rule of law. When the fair administration of justice is impaired by improper acts by the parties, contempt orders are not only appropriate, they are necessary. It is important to uphold public confidence in the court process. Behaviour that opposes or defies the authority of the court should be deterred and penalized. Nevertheless, due to the serious ramifications of a finding of contempt (as sanctions include possible incarceration of the contemnor); courts have cautiously approached contempt motions in the estates context.