Clark Wilson
August 14th, 2023
In the decision of Dewberry Estate (Re), 2023 BCSC 1325, the BC Supreme Court considered self-dealing and when it may be allowed… “The Art of the Self-Deal: What Personal Representatives Need to Know”
An executor or administrator of an estate “self-deals” when they purchase the assets of the same estate for which they are a personal representative. In other words, a personal representative cannot “deal” with themselves. This rule against self-dealing reflects a trustee’s fiduciary duty of loyalty to the beneficiaries— i.e. the disposal of trust property to the trustee is a conflict of interest.
There are, however, exceptions to this general rule. Where the court approves, or where all beneficiaries are of full capacity and provide fully informed consent, self-dealing may be authorized.
The trustee has the burden of proving that the sale is necessary and that no other purchaser is forthcoming or likely to come forward within a reasonable time. The trustee must also establish that their own offer is a favorable one and clearly advantageous to the beneficiaries. In the absence of such circumstances, there is no obligation on the beneficiaries to consent to self-dealing.
