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I think it is clear that where a business has been carried on under such an authority as was
conferred upon the executors by the will of this testator, they would be entitled to a
general indemnity out of the estate as against all persons claiming under the will. But I
take it to be equally clear that they could not, by reason only of such authority, maintain
this right against the creditors of the testator. The executors would, no doubt, be entitled
to carry on a business of the testator for such reasonable time as was necessary to enable
them to sell his business property as a going concern, and would even, as against his
creditors, be entitled to an indemnity in respect of the liabilities properly incurred in so
doing. But, in the present case, the businesses were carried on for a period of three years;
and it is obvious that this was not done merely for the purpose of effecting a sale.
I agree with the contention of the learned counsel for the appellants, that the mere fact
that a creditor stood by under such circumstances and did not immediately take steps to
enforce his debt, would not of itself entitle the executors, as against him, to be
indemnified out of the estate. But when all the circumstances of the case are considered, I
do not think this is the true view of them.
[72] While Stuart J’s decision in Wright v Beatty is not binding on me, Dowse v Gorton is.
These are both good decisions and provide wisdom from the ages that is still valid. Priorities
were not in issue in Netherlands and I do not think the general statement on creditors in that case
modifies or varies the House of Lord’s decision.
[73] In this case, Ms. Atkins was the personal representative of the Estate. The will speaks
from the testator’s death. She did not require a grant of probate to act in that capacity. The
validity of the will was accepted when probate was granted to Mr. MacDonald in August 2020.
[74] The amounts spent by Ms. Atkins include funeral costs. Those are undoubtedly proper
estate expenses, subject only to them being reasonable. The other costs related to preserving the
status quo with the Estate, and the interests the Estate had in Mr. Atkins’ businesses.
[75] I recognize L & K’s arguments that Ms. Atkins was largely paying debts of Estate-owned
companies rather than Mr. Atkins’ personal obligations. In many cases, the corporate veil is key,
and it is important to separate corporate debts from personal debts.
[76] What distinguishes the corporate veil here is that almost the entire value of the Estate (but
for cars and toys) is tied up in the value of the shares it owns in the corporations comprising the
Atkins Group of Companies. If the Estate hopes to realize any value to pay off its creditors and
possibly leave something left for the beneficiary, it will be through the realization of its
investment in these corporate entities. Standing by and watching a potentially viable business, or
potentially valuable piece of land be lost through foreclosure, or devalued by forced sale, or
unmaintained, is not in the Estate’s interests.
[77] Here, I am satisfied from the evidence before me that Ms. Atkins’ intentions were, at
least with respect to the monies she currently seeks reimbursement for, to preserve, maintain and
hopefully improve the Estate’s assets. Payments that might have a personal component to them
or might be challenged as an improper preference in favour of unsecured creditors, have been
excluded from her claim for reimbursement as estate administration costs. She will remain an
unsecured creditor for those payments.