In my last blog post, I wrote about Justice Mulligan’s recent decision in Re Shaw Estate, 2018 ONSC 1735, and the question of whether a notice of objection filed in a passing of accounts by an Estate Trustee is a “claim” pursuant to the Limitations Act, 2002.

Upon concluding that the notice of objection was not a “claim” – and thus was not statute-barred – on the facts, Justice Mulligan went on to consider the application of the defences of laches and acquiescence.

The Defences of Laches and Acquiescence

The Court turned to the definition of “laches” in Black’s Law Dictionary, which defines it to be “[u]nreasonable delay in pursuing a right or claim – almost always an equitable one – in a way that prejudices the party against whom relief is sought.” The Court also looked to the decision of Lindsay Petroleum Co. v Hurd, [18740 JCJ No 2, which held that the length of the delay and the nature of the acts done during the interval are two important circumstances when considering the question of laches.

Justice Mulligan also cited to the Supreme Court of Canada’s decision in MK v HM, [1992] SCJ No 85, which considered the basic principles surrounding laches and acquiescence:

Acquiescence is a fluid term susceptible to various meanings depending upon the context in which it is used…the first being a synonym for estoppel, wherein the plaintiff stands by and watches the deprivation of her rights and yet does nothing.  This has been referred to as the primary meaning of acquiescence.  Its secondary sense is as an element of laches – after the deprivation of her rights and in the full knowledge of their existence, the plaintiff delays.  This leads to an inference that her rights have been waived.  This, of course, is the meaning of acquiescence relevant to this appeal.  The final stage is a confusing one, as it is sometimes associated with the second branch of the laches rule in the context of an alteration of the defendant’s position in reliance on the plaintiff’s inaction.

Application in Re Shaw Estate

Turning to the facts in Re Shaw Estate, there was evidence that there were meetings between the Estate Trustee and the testator’s children but a dispute about what happened at those meetings. The Estate Trustee asserted that copies of his accounts were presented to the testator’s daughter at the meetings, and that she (along with her brother before he passed away) approved the Estate Trustee’s accounts and claim for compensation. There was evidence that the beneficiaries had initialed the statements presented at these meetings.

In her affidavit evidence filed in response, the testator’s daughter denied the Estate Trustee’s characterization of these meetings. It was her evidence that the accounts were presented to her over lunch, and that she did not receive fulsome information regarding investments or bank account statements.

Although there were material facts in dispute as between the Estate Trustee and the objecting beneficiary, it was undisputed that the testator’s daughter had not signed a release and that the Estate Trustee had not passed his accounts. It was also undisputed that copies of the annual accounts were not sent to the testator’s daughter in advance of the meetings, and that no arrangements were made for her to obtain independent legal advice.

After reviewing the factual evidence, Justice Mulligan concluded that the doctrine of laches did not apply. Justice Mulligan also held that the annual meetings and the initialing of the statements did not lead to a finding of acquiescence in the present case.

Lessons to be Learned from Wall Estate

For estate trustees and fiduciaries seeking to have their accounts and their claim for compensation approved without the necessity of a formal passing of accounts, the Court’s decision in Re Wall Estate is an important reminder regarding the best practices to be followed.

Generally speaking, it is prudent for a fiduciary in such a situation to provide the beneficiaries with a copy of his or her accounts and carefully document any discussions with the beneficiaries regarding the accounts. It is also prudent for a fiduciary to recommend that the beneficiaries obtain independent legal advice regarding the accounts and obtain a form of release for the accounting period.

Thank you for reading,

Umair Abdul Qadir