This post has been written by Pierre-Paul Persico, Partner, at Fasken LLP
A liquidator who is also a beneficiary and continues occupying the deceased’s home does not, by itself, breach the duty owed to the estate. But the moment that occupation is formalized through a self-dealing transaction, made without beneficiary consultation or court authorization, the conflict becomes concrete and can, on its own, justify removal, regardless of whether other aspects of the administration were handled properly. A recent Quebec Superior Court decision, Succession de Papadakis, 2026 QCCS 763, rendered on February 24, 2026, illustrates just how firmly this principle is applied.
The Legal Principle
Under the Civil Code, an estate liquidator administers the property of others: Articles 802, 1309 and 1310 CCQ require the liquidator to act prudently, diligently and loyally, and Article 1312 CCQ bars the liquidator from becoming a party to a contract affecting the administered property without express beneficiary or court authorization. Removing a liquidator, particularly one appointed by the testator, is nonetheless an extreme measure, reserved for cases of malfeasance, conflict of interest, or a lack of loyalty and diligence. The tension this creates is real: courts must protect liquidators from being second-guessed out of their role by disgruntled co-beneficiaries, while still enforcing the standard firmly once a genuine self-interested transaction is shown.
Succession de Papadakis shows both sides of that balance.
The Facts
Five siblings were involved following the death of their mother at age 78. Her will named all five children as universal legatees in equal shares, but a later codicil appointed one sibling as sole liquidator, signed around the time this sibling had launched separate oppression proceedings against the others over his role in the family business, a dispute that coloured the litigation.
The other four siblings sought to remove him as liquidator, alleging negligent administration and a conflict of interest arising from a residential lease he signed, in his own name and as liquidator, letting himself and his spouse keep living in the family home.
He had lived in that home his entire life and continued residing there with his spouse and child after his mother’s death. Without consulting the other beneficiaries, he executed a lease with the estate, signing on behalf of the estate as lessor and, with his spouse, as lessees, for an indeterminate term at $3,000 per month. The other beneficiaries wanted the home sold, either to him at fair market value or to a third party; he refused to commit to either option even at trial, more than two years later.
They argued the rent did not reflect market value: the estate incurred nearly $49,000 in house expenses in the lease’s first year against only $36,000 in rent, and it also paid pool repairs, appliances, and storage costs benefiting him and his family, plus $12,000 toward his personal legal fees in the unrelated oppression proceedings. Much trial time was also spent on a secondary dispute over which entity, the estate or a separate family trust, owed substantial taxes triggered by the mother’s death; the court found this confusion genuine but largely irrelevant.
Applying the Principle
The court rejected most negligence claims against the liquidator: he had acted diligently in the early liquidation steps; his estate inventory, though late and in the wrong form, caused no prejudice; his handling of foreign property was not proven negligent; and his annual accounting, while imperfect, met the legal threshold since the beneficiaries never requested the documentation they later complained about.
But the lease was fatal. By signing it with himself and his spouse as tenants, without consulting the other beneficiaries, the liquidator placed himself in a serious conflict of interest and breached Article 1312 CCQ. His justifications for staying, tied to tax questions that actually related to the family trust rather than the estate, were without merit, particularly since the estate appeared manifestly solvent. In treating the residence as his own property and refusing even at trial to commit to purchasing or vacating it, he placed himself in a serious conflict of interest justifying his removal. The court appointed an independent notary as replacement liquidator and dismissed his counterclaim seeking a declaration of abuse and reimbursement of legal fees.
Why It Matters
For practitioners, the case underscores two points: the prohibition on self-dealing requires beneficiary authorization or court approval before a liquidator transacts with estate assets for personal benefit; and courts will look past ancillary disputes to focus on whether the liquidator’s conduct toward the core estate asset served the beneficiaries or his own interests. Refusing, even at trial, to choose between buying an asset at fair value or selling it can itself be the clearest evidence of the conflict the Code is designed to prevent.
