Tag: Passing of Accounts
In this episode, Craig Vander Zee and Paul Trudelle discuss various issues relating to the removal of trustees, including the considerations when negotiating the removal of trustees and their replacement. They discuss Craig’s recent presentation at an Ontario Bar Association continuing legal education program.
The outcome in most types of litigation is pretty simple – you lose, you pay. How much you pay usually depends on various factors, including how the parties conducted themselves during the litigation, whether any offers to settle were exchanged and on what terms.
The unique thing about estate litigation, however, is that historically, regardless of whether you were triumphant or defeated, the estate often bore the expense of the proceeding.
As most estate lawyers already know, however, things are changing. One speaker at the Ontario Bar Association’s 2007 Trusts and Estates conference explained the following trends arising out of more recent court decisions:
• Will Challenge – when unjustified allegations are made against a defendant, the plaintiff may be ordered to pay the defendant’s costs
• Will Interpretation – when a Will does not need interpreting or when its provisions are not unclear, the party requesting its interpretation may be denied its costs
• Dependant Support Claim – successful claimants may have to bear their own costs when the court considers factors (similar to those applied in other litigation) that weigh in favour of such a result
• Passing of Accounts – when executors neglect or refuse to furnish accounts, fail to keep proper records or mismanage estate funds, they may be ordered to pay the costs of the successful beneficiaries
I am pleased to see such modifications to traditional cost principles, as in my view it will deter unfounded litigation being brought by those mistakenly of the view that the estate will foot the bill.
Today, I want to consider limitation periods in the context of a passing of accounts.
For lawyers, limitation periods are more of a curse than a blessing. While it provides a client with certainty, the conscientious lawyer is always nervous that a limitation period is approaching or has already passed. The first question a lawyer should ask a prospective client is when a claim or cause of action first arose.
Currently, I am embroiled in a complex estate passing of accounts. The issue of whether the beneficiaries of an estate are out of time in which to claim damages pursuant to section 49 of the Estates Act is very much in play.
A passing of accounts is essentially an estate audit. The executor is required to account for his/her actions to the beneficiaries. An executor will often be required to bring a court application to have the accounts approved. Beneficiaries can object to specific transactions and/or the compensation claimed by the executor. The beneficiaries can also seek damages against the executor on a passing of accounts as a result of misconduct, neglect or default. The issue is whether the two year limitation period set in the new Ontario Limitation Act, which came into force January 1, 2004, applies to a passing of accounts and a claim for damages.