How Can I Avoid Passing Accounts?

March 30, 2021 Natalia R. Angelini Litigation Tags: , 0 Comments

Some of the most challenging and expensive estate litigation I’ve dealt with involves accounting disputes. As such, it comes as no surprise to see that in some instances fiduciaries resist agreeing to requests to apply to the court to pass their accounts.**

In Ontario, although a fiduciary may be asked to pass accounts by a beneficiary or someone else the court determines has a financial interest, there is no statutory obligation to pass accounts. If the fiduciary does not agree to do so, the issue can be addressed before the court. Although obtaining such an order is often not difficult, the court has the discretion to deny the request.

Obvious grounds of denial may include the lack of a financial interest. For instance, an alleged creditor who had not yet proven the debt was denied the ability to compel a passing of accounts (see Workman v Colson, [1997] OJ No 1577). Further, in Klatt v Klatt Estate, a case where the beneficiary’s interest was contingent, a passing was not forced upon the trustee (although notably there were additional facts that lent to that conclusion).

With no absolute right to compel a passing, the court may also refuse to order a passing where there is no default on the part of the trustee. This was the outcome in Gastle v Gastle, where the fiduciary responded to the concerns raised and agreed to submit to cross-examination. The court did, however, leave open the ability to revisit the issue after the cross-examination.

Other circumstances where a request to pass accounts may be denied include when the ask is made before the executor has a reasonable opportunity to attend to the administration within a year after death (see McEwen v. Little), and when the associated costs are disproportionate to the value of the estate (see Painter v. Painter Estate).

Although the above instances may provide some comfort to fiduciaries, it is better to avoid disagreement on the issue if possible, which may be achievable with active steps to progress the administration in a timely way and with periodic informal accountings being provided to the beneficiaries.

Thanks for reading and have a great day,

Natalia R. Angelini

**For a more thorough review of the issue, I suggest reading Melissa Saunders’s OBA paper entitled When Will Courts Decline to Exercise Discretion to Order a Passing of Accounts?, which aided me in writing this blog.

Leave a reply

Your email address will not be published. Required fields are marked *

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

TRY HULL E-STATE PLANNER SOFTWARE

Hull e-State Planner is a comprehensive estate planning software designed to make the estate planning process simple, efficient and client friendly.

Try it here!

CATEGORIES

ARCHIVES

TWITTER WIDGET

  • The latest episode of our podcast is now live! Hull on Estates #624 – Worsoff and Virtual vs. In-Person Examinatio… https://t.co/oblkloPaYh
  • Today's article: Substantial Compliance and the Dalla Lana Decision Read the full blog here:… https://t.co/Iy4CjZJN4L
  • Will the new test for limitation periods in New Brunswick affect claims in Ontario? Diana Betlej tackles this ques… https://t.co/CBalefszVu
  • The Law Society of Ontario provides assistance and guidance when you are trying to locate a Will. Read today's art… https://t.co/3voWfQDRfq
  • Last Friday’s blog references a recent report on the difficult issues arising when dealing with digital assets. Re… https://t.co/lQTMhdu2ez
  • Today's article: Applying the new standard for limitation periods. Read the full blog here:… https://t.co/Lk7Q3W2BSZ