Tag: Estate Litigation

28 Sep

Could Robot Pets Help with Loneliness in Elderly People?

Rebecca Kennedy Elder Law Tags: , , , , , , , , , , , , 0 Comments

An issue that we see all too often with older adults, and which was exacerbated throughout the pandemic lockdowns, is that they can be lonely and isolated. With spouses who pass away, and children and grandchildren having their own lives, our elders may end up spending a great deal of time on their own. They may feel that they don’t want to bother their family members by calling, or asking them to visit.

According to this New Yorker article from earlier this year, loneliness and isolation can have a serious impact on an elderly person. Without anyone to call, or anyone to check on them, an older adult could remain on the ground for a long time after a fall, or be living in unsafe or unhygienic conditions. From a medical perspective, loneliness is thought to result in a heightened inflammatory response, which can increase the risk of a number of conditions including dementia, depression, high blood pressure, and stroke. All this to say that loneliness is a serious problem. And it has the potential to impact many people; the article notes that nearly thirty per cent of Americans over 65 years of age live by themselves, and that forty-three per cent of Americans over 60 years of age identify as lonely.

An interesting project that has popped up in recent years involves distributing robot pets to elderly people. A study published in 2020 found that elderly users who interacted with the robotic pets for sixty days reported greater optimism and sense of purpose, and were sometimes less lonely.

Anecdotal comments from some older adults who were given a robot pet indicate that even though they know the pet isn’t real, at times it can feel real. One owner noted that he had put out water for his cat, even though he knew she wouldn’t drink it, but that he likes to “kid around with her” about this. Frequently, owners of the pets like and interact with their pet so much that the batteries run out.

Some critics are concerned that it may be indecent for us to offer robotic company as an alternative to human company. However, the difficulty seems to be that there is a lack of human company.

Although this approach may not be for everyone, that it has had some success with a number of users so far is, in my view, a positive thing. If younger generations can rely on technological innovations to improve our everyday lives, the same should apply to older adults. The robotic pets are not intended to replace human companionship, but if it helps alleviate loneliness, it seems to me to be worth trying.

Thanks for reading,

Rebecca Rauws

 

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27 Sep

The Power of Testamentary Charitable Giving

Rebecca Kennedy Charities Tags: , , , , , , , , , , , , , 0 Comments

This month marks the beginning of the Will Power campaign, led by the CAGP Foundation and the Canadian Association of Gift Planners.

Will Power is designed to show Canadians the power they have to make a difference with their Wills by leaving charitable gifts.

Many Canadians feel that if they leave a charitable gift in their Will, it will take away from gifts and support for their loved ones, who they also wish to benefit as part of their estate plan. But according to CAGP and the CAGP Foundation, leaving even 1% of one’s estate to charity can still “have an enormous impact on your cause, while still leaving 99% of your estate to your family…You don’t have to choose between your loved ones and the causes you care about when planning your Will.” The Will Power website has a helpful legacy calculator, which can help with visualizing what it means to leave a gift to charity, and still be in a position to benefit your loved ones.

Some people may think that they need to have a very large estate to be able to make a meaningful gift to charity. But regardless of the size of the gift, it can still make a difference. Will Power estimates that if only 3.5% more ordinary Canadians included a gift in their Will in the coming decade, the result would be $40 billion in gifts to charitable causes.

Another aspect of charitable giving to consider is the tax benefit of doing so. Depending on the nature of your assets at the time of your passing, and any estate planning steps, there could be significant taxes payable on death. Making a testamentary gift to a cause that is important to you could result in a reduction of the amount of taxes to be paid.

For more information, and helpful links, you can check out this press release from Will Power.

Thanks for reading,

Rebecca Rauws

 

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03 Sep

When Enough Is Enough: Ending Estate Claims

Hull & Hull LLP Estate & Trust, Litigation Tags: , , , 0 Comments

Sometimes, the court will say that enough is enough. It will put the brakes on frivolous estate litigation. 

One such case is the Court of Queens’ Bench of Alberta decision of Re Klein. There, the deceased died in 2012. She was survived by her three children, who were the beneficiaries of her estate. The estate appears to have consisted of a real property, and some bank accounts.  Notwithstanding the apparent straightforwardness of the estate, it appears that multiple proceedings were commenced as between the beneficiaries and the estate trustee in relation to the estate. 

On August 27, 2021, after various earlier court attendances, Justice Graesser put a stop to the litigation. The matter was before the court as two of the beneficiaries sought further disclosure of banking activity in relation to a $99.25 deposit into the estate account. 

In the decision, Justice Graesser reviewed the history of the estate administration and the evidence of the parties. He concluded that there was no merit in requiring the estate trustee to make any further disclosure. He noted the “proportionality” provisions of the Rules of Court. While the estate trustee may not have accounted perfectly, “Any further work, by [the estate trustee] or by the Courts in receiving or reviewing any further information or submissions, would be completely disproportionate to the magnitude of any possible failings.”

Enough Is Enough

Justice Graesser also noted the court’s readiness to dismiss frivolous claims as an abuse of process. “I subscribe to [ACJ Rooke’s] comments about the need for a cultural shift in civil litigation and to save the Courts and the litigants themselves from frivolous litigation.”

Justice Graesser pointed out that the estate trustee had previously passed her accounts, rendering may of the current complaints by the beneficiaries as res judicata. Further, the passage of time had rendered many of the claims by the estate trustee against the beneficiaries as statute-barred.

While the judge determined that he could not strike claims without hearing from the parties, he was able to continue a stay of proceedings, and not allow any of the parties to take any further steps without leave of the Chief Justice. The parties were, however, permitted to move to dismiss any existing claims. 

Justice Graesser concluded by advising: “I do not encourage the parties to continue their disputes in Court. From my extensive review of the Court filing from its beginning, I am satisfied that the parties have nothing to gain by continuing their fight.”

Thanks for reading.

Paul Trudelle

26 Aug

Can an Estate be Sued 30 Years Later?

Juanita Valencia Estate Litigation, General Interest, In the News, News & Events Tags: , , , , , 0 Comments

A baby in a swimming pool reaching for a $1 bill. Music lovers would instantly recognize this description as the album cover of Nirvana’s 1991 album “Nevermind.”

Until recently, Spencer Elden – the baby in question – embraced the fame that came with being on the cover of one of the most recognizable albums of all time. Elden even recreated the notorious photo several times over the last 30 years to mark the album’s 10th, 20th, and 25th anniversaries. In those photos, Elden is wearing swimming trunks.

Earlier this week, Elden made headlines when the media learned that he was suing the parties involved for sexual exploitation. Elden argues that his parents never authorized the use of his photograph for the Nirvana album, and that the band used the image to promote their music at his expense. Elden is seeking $150,000.00 USD in damages from each of the 15 defendants, which include the photographer Kirk Weddle, the surviving band members, and Kurt Cobain’s Estate.

Elden’s lawsuit has many people wondering: can an Estate be sued 30 years after an incident took place?

In California, where Elden began his lawsuit, victims of sexual abuse crimes who were children at the time of the alleged incident have until their 40th birthday or 5 years from the date that they discovered their abuse to file a civil action.

What if this claim had been commenced in Ontario? On March 9, 2016, the Limitations Act, 2002, S.O. 2002, c. 24 Sched. B was amended to remove all limitation periods for civil claims based on sexual assault. Therefore, assuming that a judge would find that Elden’s lawsuit can be properly classified as sexual abuse, Elden would be well-within his rights in bringing this claim.

However, if a judge ultimately found that Elden’s claim is not a civil claim based on sexual assault, different limitation periods would apply. Generally, the Limitations Act, 2002, provides an individual with two years from the date on which a claim is “discovered” to commence a claim before it is statute barred. However, individuals intending to commence a claim against someone who has died, such as Kurt Cobain, must also consider the much stricter limitation period imposed by section 38 of the Trustee Act, R.S.O. 1990, c. T.23.

Section 38 of the Trustee Act imposes a strict two year limitation period from the date of death for any individual to commence a claim against a deceased individual in tort. This limitation period is much more strict, as it is not subject to the same “discoverability” principle as the limitation period imposed by the Limitations Act. We have previously blogged about the limitation period imposed by section 38 of the Trustee Act here.

It remains to be seen whether Elden will be successful in his claim. However, this case should serve as a reminder to Estate Trustees and solicitors that Estates may be held accountable for events that took place well before the Deceased’s death, depending on the nature of the claim.

Thank you for reading,

Juanita Valencia

15 Jul

What kind of Evidence is needed in an Uncontested Guardianship Application?

Rebecca Kennedy Guardianship Tags: , , , , , , , , , , 0 Comments

Guardianship litigation can be messy and upsetting to those involved in such proceedings, particularly when there are multiple family members fighting over who should act as guardian.

It is also possible for a guardianship application to be brought on an uncontested basis, meaning that no one is opposing the appointment of the proposed guardian. That being said, given that the appointment of a guardian is a serious restriction on a person’s liberty, the courts do not take guardianship appointments lightly, and still have strict requirements for evidence, even in uncontested guardianships.

Pursuant to s. 22(1) of the Substitute Decisions Act, 1992 (the “SDA”), and s. 55(1) of the SDA, the court may appoint a guardian of property and/or personal care for a person who is incapable of managing property and/or personal care if, as a result of that incapacity it is necessary for decisions to be made on his or her behalf by a person authorized to do so.

Least Restrictive Course of Action

Sections 22(3) and 55(2) of the SDA provide an important restriction on the court’s ability to appoint a guardian, requiring that a court not appoint a guardian if it is satisfied that the need for decisions to be made will be met by an alternative course of action that is less restrictive of the person’s decision-making rights than the appointment of a guardian.

In particular, if a person has made a power of attorney for property or personal care naming the individual(s) who they wish to make decisions on their behalf in the event of their incapacity, the court may be reluctant to appoint a guardian and override the person’s own choice of a substitute decision-maker. Accordingly, a guardianship application should include evidence as to whether the alleged incapable person has executed powers of attorney, and what efforts the applicant has made to determine whether powers of attorney exist.

It is also important to remember that even if a person is incapable of managing their property or personal care, he or she may still be capable of making a power of attorney in this regard. Allowing a person to name their own substitute decision maker will of course be less restrictive of his or her decision-making rights than the court imposing a guardian on him or her. Accordingly, a person’s capacity to make powers of attorney should always be considered in the context of a guardianship application, and evidence in this regard should be provided to the court.

Furthermore, if a person is capable of naming his or her own attorney by executing powers of attorney, it may be possible to avoid the costs of a guardianship application, which can be significant.

A Finding of Incapacity is Required

There is also a statutory requirement in s. 58(1) of the SDA that the court make a finding of incapacity in order to appoint a guardian. The court will require evidence in support of a finding of incapacity. Most frequently, this will take the form of a capacity assessment by a trained capacity assessor.

Sometimes applicants are hesitant to obtain a capacity assessment of an alleged incapable person, either due to the cost of the assessment, fear of upsetting the person, or some other reason. While these concerns are understandable, it is important that the court be provided with evidence sufficient to allow it to make the finding of incapacity. Otherwise, it will not be able to appoint a guardian. The cost of the capacity assessment will almost certainly be less than the cost of bringing a guardianship application, only to be unsuccessful when the court is unwilling to appoint a guardian without adequate evidence to satisfy it as to incapacity.

A capacity assessment is also useful as it may reveal that an alleged incapable person does have some level of capacity. As noted above, a person may be capable of executing a power of attorney, even if he or she is incapable of managing his or her own property or personal care. In that case, a guardianship application may be able to be avoided altogether.

Thanks for reading,

Rebecca Rauws

 

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13 Jul

British Columbia & Wills Variation: Who is Entitled to Dependant’s Support?

Rebecca Kennedy Support After Death Tags: , , , , , , , , , , , , , , 0 Comments

In Ontario, the Succession Law Reform Act, R.S.O. 1990, c. S.26 allows a deceased person’s dependants, to whom the deceased has not made adequate provision for his or her proper support, to seek an order for support to be made to the dependant out of the deceased’s estate. In order to qualify as a “dependant”, a person must be a spouse, parent, child, or sibling of the deceased “to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.” There are therefore several conditions for a person to be able to obtain an order for dependant’s support:

  1. they must have one of the required relationships with the deceased (spouse, parent, child, or sibling);
  2. the deceased must have been providing them with support, or have a legal obligation to provide support, immediately before the deceased’s death; and
  3. any provision made for the person in the deceased’s Will (if any) must be inadequate.

British Columbia deals with dependant’s support differently than Ontario. In B.C.’s Wills, Estates and Succession Act, S.B.C. 2009, c 13, s. 60 provides that if a testator does not make adequate provision for the proper maintenance and support of his or her spouse or children in his or her Will, the court may order the provision that it thinks adequate, just, and equitable in the circumstances for the spouse or children out of the testator’s estate. Unlike the Ontario law, it is not a requirement that the testator had been providing support to his or her spouse or children prior to death. This difference is significant because in Ontario, independent adult children are typically not able to obtain dependant’s relief as they do not meet the requirements of a “dependant”. In BC case law, there is also a greater emphasis on a testator’s moral duty to his or her dependant’s than there is in Ontario.

The BC Supreme Court decision in Jung v Poole Estate, 2021 BCSC 623 provides an example of how the difference in the law in Ontario vs. B.C. can result in vastly different outcomes.  In Jung v Poole, the testator was survived by his two twin daughters, Courtney and Chelsea. Courtney and Chelsea’s mother had been dating the testator when she became pregnant. The testator suggested an abortion but the mother chose to keep the twins, and raised them as a single mother without any involvement or financial assistance from the testator. The mother died when the twins were 4 years old, and a custody battle ensued between the testator and the twins’ grandmother on their mother’s side, on the one hand, and a couple who were friends of the mother’s and whom the mother had named in her Will to be the twins’ joint guardians, on the other hand. The testator expressed a desire to be involved in raising the twins at that time.

Ultimately, the court determined that the couple chosen by the mother to be the twins’ guardians would become the twins’ custodial parents. The testator and the grandmother were allowed specific and generous parenting time, access, and consultations regarding major areas of the twins’ lives. However, the testator never exercised any of these rights and, with the exception of one attempt to contact the twins the year after the custody decision, ceased to have any involvement in their lives.

The testator executed two Wills after the custody decision, both of which disinherited the twins. In one Will the testator referred to the twins as his illegitimate children, and in the other he explained that one of his reasons for disinheriting them was that they had not made efforts to contact him.

As stated by the court, if the court concludes that the testator owed a moral obligation to the twins and did not make adequate provision for their proper maintenance and support, the court has the authority to vary the testator’s Will to make the provision for them that, in its view, is adequate, just and equitable in the circumstances.

The court did ultimately conclude that the testator abandoned the twins from the outset, as well as after the custody battle, and had a strong moral obligation to them, which he failed to meet during his lifetime. As a result, the court varied the testator’s Will to provide 35% to each of Courtney and Chelsea, and 15% to each of the two friends of the testator who had been named as estate trustees and sole beneficiaries of his estate. The court was of the view that the testator had blamed the twins for the decision in the custody battle, even though that was beyond the twins’ control, and also blamed them for the lack of relationship, notwithstanding what the court found were valid and rational reasons given by the twins in this regard (including that they were hurt that the testator had wanted their mother to abort them, and the testator’s actions during their lives made it clear to them that he did not want them in his life).

It is unlikely that the same decision would have been reached had this situation occurred in Ontario. The fact that the twins were independent adults, and that the testator had not been providing them with support, nor under a legal obligation to provide them with support, immediately before his death, would likely have resulted in a decision that the twins were not entitled to support, regardless of the unfortunate circumstances between the twins and the testator.

Thanks for reading,

Rebecca Rauws

 

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12 Jul

When is a Matter Truly Urgent?

Rebecca Kennedy Litigation Tags: , , , , , , , , , , , 0 Comments

During the COVID-19 pandemic, our Courts have unfortunately, but necessarily, been impacted. As a result, the Courts have, at times, had to restrict the matters that may be heard to only those that are urgent, as defined by the Notices to the Profession that have been published by the Court. For instance, the Consolidated Notice to the Profession, Litigants, Accused Persons, Public and the Media lists a number of matters that are to be considered urgent. With respect to civil and commercial list matters, this includes “urgent and time-sensitive motions and applications in civil and commercial list matters, where immediate and significant financial repercussions may result if there is no judicial hearing.” Discretion is also granted to allow the Court to decline to hear any particular matter described in the Notice as being urgent, if appropriate, or to allow a hearing that the Court deems necessary and appropriate to be heard on an urgent basis.

Despite the Notices from the Court, there may still be confusion amongst parties as to whether their matter qualifies as “urgent” or not. As The Honourable Justice Myers stated in the recent decision of Nicholas v. Ogniewicz, 2021 ONSC 4442, “Self-induced urgency is not ‘urgent’.”

In Nicholas v Ogniewicz, the issue was that there had been an agreement of purchase and sale with respect to real property, which provided that the purchaser would submit requisitions two weeks prior to closing. Unfortunately, the requisitions submitted by the purchaser were extensive, and as noted in the decision, it was apparent that several of the requisitions could not be physically accomplished before the closing date.

A week after the requisitions were received, the vendor asked for an urgent hearing date, pursuant to the Notice to Profession – Toronto, Toronto Expansion Protocol for Court Hearings during Covid-19 Pandemic, to resolve the validity of the requisitions.

Justice Myers described the current state of the civil list in Toronto as follows:

The civil list in Toronto is building a backlog of motion and application hearings. It is currently suffering unacceptably long timeouts for civil motions and applications due to the effects of the pandemic and a lack of resources. Truly urgent matters are being heard on an urgent basis. But no judge is sitting around waiting for them to come in. They are heard at a cost to other cases waiting in the queue or to case conferences that the judge may have to defer, or to parties waiting for the release of the judge’s reserved decisions that the judge was writing in her non-sitting time.

In the court’s view, in this particular case the time-sensitivity present was self-induced by both sides. It was also noted that no one was at risk of physical injury, the property was not about to suffer irremediable waste, no confidential information was at risk of disclosure or misuse, and no business was at risk of imminent failure or irreparable harm unless misconduct is urgently prevented. Ultimately, the court determined that the matter was not urgent as set out in the Notice to the Profession, and there was no basis for it to jump the queue.

Although there may be a light at the end of the pandemic tunnel, we must all still be mindful of the long-lasting consequences, including the heavy backlog that continues to exist, and will likely continue to exist for some time, in our courts.

Thanks for reading,

Rebecca Rauws

 

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20 Apr

What Evidence is needed to Rebut the Presumption of Resulting Trust?

Rebecca Kennedy Estate Litigation Tags: , , , , , , , , , , , , , 0 Comments

When a parent transfers assets to an adult child, the rebuttable presumption of resulting trust will apply to that transfer. Unless the child can rebut the presumption, it will be presumed that the child was holding the transferred assets in trust for the parent.

But what kind of evidence will be needed to rebut the presumption? Ideally there would be some kind of documentation made contemporaneously with the transfer to support the parent’s intention. If the documentation is lacking, there may be evidentiary issues where the parent has passed away or is incapable, and is not able to give evidence as to his or her intention at the time of the transfer.

In the recent decision of Pandke Estate v Lauzon, 2021 ONSC 123, the court considered two cheques paid by a mother, Carol, to her adult son and daughter-in-law, Steven and Marnee, in the amounts of $35,000.00 and $90,000.00, respectively, shortly before her death. The court reviewed the evidence in determining whether the presumption of resulting trust was rebutted, or whether Carol had intended the cheques to be gifts.

Carol was diagnosed with terminal pancreatic cancer in 2017, and died about a month following her diagnosis. At the time that she was diagnosed, she lived with her husband, William, to whom she had been married since 1992. Following her diagnosis, it was decided that Carol would move in with Steven and Marnee, as William was not physically capable of providing her the care that she would require. Shortly after moving in with Steven and Marnee, Carol provided a cheque in the amount of $35,000.00, payable to Marnee, with a note on the cheque stating that it was “For Rent”. Four days later Carol provided another cheque payable to Steven, in the amount of $90,000.00, with the note on the cheque stating “Medical Expenses”. The total value of the two cheques constituted the majority of Carol’s liquid assets. William, who was the sole beneficiary of Carol’s estate, challenged these payments following Carol’s death.

The court found that the $35,000.00 payment was intended to be a gift by Carol to Steven and Marnee. Part of the evidence on which the court’s conclusion in this regard was based was Marnee’s hearsay evidence of what Carol had told her about why she was making the payment, being that Steven had left his job to care for Carol and she did not want him to suffer financially as a result. The court found that Marnee’s hearsay evidence could be admitted, notwithstanding that it was hearsay, on the basis that it fell within a traditional exception to the hearsay rule (that the statement is adduced to demonstrate the intentions or state of mind of the declarant at the time the statement was made) and under the principled approach to hearsay evidence as it met the necessity and reliability requirements. The court also found that Marnee’s evidence was corroborated by independent evidence.

However, with respect to the $90,000.00 payment, the court found that there was insufficient evidence to rebut the presumption of resulting trust. Although the court admitted Steven’s evidence of statements made by Carol to him as to her state of mind at the time the cheque was signed, the court also raised other concerns with Steven’s evidence. For instance, the reference to “Medical Expenses” noted on the cheque was concerning, as there were no medical expenses, and the court wondered why Carol would not have simply indicated that it was a gift if that is what she intended it to be. The court was also not convinced by a statement that Steven said was made by Carol that she was making the payment because she did not want Steven to suffer financially because he had left work to care for her, given that only a few days before Carol had made the $35,000.00 payment, which paid off Steven’s truck loan, line of credit, and left around $15,000.00 cash to spare. There was also no corroborating evidence of Carol’s intention to gift the $90,000.00 amount to Steven. As a result, Steven held the $90,000.00 in trust for Carol’s estate.

Unfortunately, it is often the case that payments to adult children are challenged after the parent has died. Unless the parent has taken special care to document his or her intention in making the payment, the intention can be difficult to determine with any degree of certainty. Accordingly, a parent making a gift to an adult child should consider seeking legal advice as to the best way to document such a transfer in order to ensure that their intentions will be upheld. From the opposite perspective, if a parent wants to make a transfer on the basis that their adult child will hold the asset in trust for him or her, or his or her estate, the parent should also consider seeking legal advice to ensure that this is properly documented in order to reduce the chance of issues arising in this regard after his or her death.

Thanks for reading,

Rebecca Rauws

 

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05 Apr

A Tale of Substantial Indemnity: Zachariadis Estate v. Giannopoulos

Doreen So Continuing Legal Education, Estate & Trust, Estate Litigation, Executors and Trustees, Litigation, Uncategorized Tags: , , 0 Comments

Dr. Zachariadis was divorced and estranged from his two daughters.  After his divorce, he began a romantic relationship with Ms. Giannopoulos.  They were together for almost twenty years as common law spouses until Dr. Zachariadis’ passing.  A year before his death, Dr. Zachariadis moved in with Ms. Giannopoulos and they had plans to marry.  Dr. Zachariadis transferred his medical practice to Ms. Giannopoulos’ son Aris, and he gave Ms. Giannopoulos a bank draft for $700,000.00 which she deposited into her own bank account.  He died within six months of that bank draft.

Dr. Zachariadis did not have a relationship with his daughters from his first marriage.  He was not invited to their weddings and he has never met his grandchildren.  Dr. Zachariadis died without a Will and his daughters became the estate trustees and beneficiaries of this Estate.  More than two years after Dr. Zachariadis’ passing, the daughters commenced an action against Ms. Giannopoulos to recover the payment of $700,000.00 to her on the basis of breach of trust, fraud at equity, conversion and unjust enrichment.  The action was dismissed on a motion of summary judgment by Justice Koehnen.  The appeal of Justice Koehnen’s decision, 2019 ONSC 6505, and his Honour’s costs order, 2020 ONSC 588, were also dismissed by the Court of Appeal, 2021 ONCA 158.

 

On the motion for summary judgment, Justice Koehnen found that the daughters were statute barred by section 38(3) of the Trustee Act in failing to commence their claims within two years of Dr. Zachariadis’ death.  The daughters failed to make out any fraudulent concealment on Ms. Giannopoulos’ part that would toll the operation of section 38(3).  Rather, Justice Koehnen found that there was no positive obligation on Ms. Giannopoulos’ part to tell the daughters about the payment, and he found that the payment was a gift in any event.  All of which were upheld by the Court of Appeal.

The Court of Appeal also found that there was no basis to interfere with Justice Koehnen’s costs order.  The Estate and the daughters, in their personal capacities, were ordered to pay Giannopoulos costs of $199,602.46 on a substantial indemnity scale.   The allegations of fraud in the underlying claim were unsupported and pursued to the end.  Justice Koehnen noted that the daughters could have pursued their claims on the basis of constructive trust and resulting trust without going so far as alleging fraud.  The daughters were also found to have taken unnecessarily aggressive steps and to have lengthened the proceeding due to their lack of cooperation with Ms. Giannopoulos’ counsel while Ms. Giannopoulos’ offers to settle were weighed against them.  Issue was also taken with the length of the daughters’ materials which were noted to be in violation of the page limits and other formatting requirements for facta.    Lastly, Justice Koehnen rejected the daughters’ argument that they were only pursuing the claim to ensure the due administration of the Estate and out of their concern that the Estate would have sufficient funds to pay its CRA liability. Interestingly enough, Justice Koehnen commented that, if that were the case, the daughters could have simply turned over the claim for CRA to pursue.

Thanks for reading!

Doreen So 

30 Mar

How Can I Avoid Passing Accounts?

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.

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