The Application to Pass Accounts serves an important function in the administration of estates and trusts, providing the beneficiaries with the ability to audit the administration of the estate or trust and raise any concerns through their Notice of Objection.
The procedure that is followed for the Application to Pass Accounts is somewhat distinct from any other court process, with the process being governed by rule 74.18 of the Rules of Civil Procedure. These procedural steps include the filing of the “Notice of Objection” and the “Reply” to the Notice of Objection, processes and documents which are distinct to the Application to Pass Accounts. Although the Application to Pass Accounts process differs in certain ways from a more traditional Application, at its core the Application to Pass Accounts is still an “Application” and not an “Action”, with the process designed to be more summary in process as compared to the typical Action.
I have previously blogged about the procedural differences between an “Application” and an “Action”, and how things like Discovery and Affidavits of Documents, as well as calling witnesses to give oral evidence, are generally not available in an Application. The same generally holds true for an Application to Pass Accounts, with there generally being no Discovery process or witnesses called at the eventual hearing for the passing of accounts, with the summary process designed to be adjudicated on the paper record of the documents contemplated under rule 74.18.
Although the simplified and summary process intended for the Application to Pass Accounts may present many benefits to the parties, including allowing the beneficiaries to pose questions and objections to the trustee without having to resort to potentially prolonged and expensive litigation as provided in a typical Action, it could present some challenges if the claims that are being advanced are complex or seek significant damages as the process may not allow for the full record to be adequately explored.
If the claims or issues which are being advanced in an Application to Pass Accounts are complex, such as for example claims that the trustee was negligent or committed a breach of trust, the summary process designed for the typical Application to Pass Accounts may not provide the depth of procedural process that the claims may deserve. Under such circumstances the parties may seek to direct and/or convert the complex objections into a separate triable issue, thereby potentially opening up the procedural processes more typically reserved for an “Action” such as Discovery or the calling of witnesses to the issue.
The process by which certain objections are directed and/or converted into a separate “triable issue” is governed by section 49(4) of the Estates Act, which provides:
“The judge may order the trial of an issue of any complaint or claim under subsection (3), and in such case the judge shall make all necessary directions as to pleadings, production of documents, discovery and otherwise in connection with the issue.”
Under section 49(4) of the Estates Act the court may direct any objection which fits under section 48(3) of the Estates Act, which includes allegations of breach of trust, to be separately tried before the court, with section 49(4) noting that the judge shall make necessary directions regarding pleadings, Discovery, and the production of documents for the objection.
If an individual wishes to direct an objection to be tried under section 49(4) of the Estates Act such an intention should be raised at the early stages of the Application to Pass Accounts, with an Order being sought which would specifically direct the objection(s) in question to be tried by way of Action. To the extent that such an Order cannot be obtained on consent a Motion may be brought regarding the issue, with the court also being asked to provide direction regarding the procedures to be followed for the triable issue.
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As anyone who has ever watched the show Friends can attest, “breaks” can happen in any relationship. For those attempting to claim common law spousal status however, what impact, if any, do such “breaks” have upon the length of time that the couple has to be together? Do you have to re-set the clock of the relationship after every “break”, or can the “breaks” be ignored?
Part V of the Succession Law Reform Act incorporates the definition of “spouse” from section 29 of the Family Law Act. Section 29 of the Family Law Act in turn defines “spouse” as including “two persons who are not married to each other and have cohabited continuously for a period of not less than three years“. This definition is often what is being referred to when someone says that a relationship is “common law”, with significant corresponding legal rights potentially being given to the two individuals if they are found to be “spouses”.
As the word “continuously” is included in the definition, one would be forgiven for thinking that there cannot be any “breaks” in the relationship, and that you must have a continuous three year period of “cohabitation” for two people to be considered spouses. As we will see below however, this may not necessarily be the case.
I have previously blogged about the factors that the court may look to in determining whether two people are “cohabitating”, with the Supreme Court of Canada in M. v. H. having confirmed that you look to the factors listed in Molodowich v. Penttinen to determine whether to individuals are “cohabitating” to the extent that their relationship becomes spousal. For the purpose of this blog however, the interesting question which follows is whether a couple who otherwise meets enough of the factors from Molodowich to be considered to be “cohabitating”, but had a “break” in their relationship during the three year period, could still be considered “spouses”.
In Boothe v. Gore,  O.J. No. 4376, the Ontario Court of Justice (General Division) provides the following commentary regarding the effect of a “break” on a relationship:
“The law in Ontario recognizes that a man and a woman are considered to have continuously cohabitated, despite that while living together, there might have been separations for varying periods of time before reconciling. Cohabitation does not terminate until either party regards it as being at an end, and, demonstrate convincingly that this is the party’s intent. A brief cooling off period does not convincingly show a settled state of mind that cohabitation has terminated…
The effects of temporary separations depends on the intention of the parties. When one party leaves the other and provides an objective basis to believe that they do not intend to resume cohabitation and the separation lasts for a meaningful period of time, the period of cohabitation could well have been interrupted.” [emphasis added]
As Boothe v. Gore suggests, a “break” in a relationship should not necessarily preclude a finding that two persons are common law spouses. Rather, the court is to attempt to ascertain the intentions of the parties at the time of the “break”, with the spousal status only coming to a close if either of the parties regards the relationship as being “at an end“, or the period of separation lasts for a “meaningful period of time“.
Thank you for reading.