Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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The recent Manitoba decision of Estate of Marion Warren Gandy and Estate of Frank Richard Gandy, 2011 MBQB 78 (CanLII) considered whether running errands, entertainment, and time otherwise spent in connection with a disabled beneficiary was compensable work for an estate trustee.

In the matter, the trustees of the estates of Frank Gandy (“Frank”) and Marion Gandy (“Marion”) applied to the court to pass the accounts of their respective estates, and the motions to pass the accounts were heard together.  This was a second passing of accounts for both estates.

By way of background, Frank and Marion were married to each other, and died within months of each other. Their adult son, Ian, was mentally disabled and under the jurisdiction of the Public Trustee of Manitoba. Frank appointed his nephew Donald, Donald's wife, and his lawyer as the trustees of his estate. Marion appointed the same trustees for her estate.  By the second passing of accounts application, Frank’s estate was valued at less than $300,000 and Marion’s estate was valued at less than $140,000.

At the hearing, Donald sought $5,000 in compensation for time expended in respect of Frank's estate and a further $5,000 in compensation for time expended in respect of Marion's estate. No objection was filed by the Public Trustee of Manitoba. However, one of the beneficiaries objected to the compensation sought. The beneficiary stated that the time spent by Donald in connection with the estates for which he claimed compensation was spent largely on: "Running errands, entertainment and time spent in connection with lan".  In the circumstances, the Court held that these concerns relating to the compensation were valid. The Court stated that “While it is commendable that Donald undertake various tasks for Ian, he does so as a family member, and there is no justification for the type or amount of remuneration sought.”  Further, despite dockets maintained by Donald, the Court stated that “It is impossible in the circumstances to ascertain with any degree of accuracy how much time was spent by Donald on work for which he might appropriately be recompensed in each estate.” Accordingly, the Court reduced the compensation payable to Donald to $2,000 in the case of Frank’s estate and $2,500 in the case of Marion’s estate.

Thanks for reading,

Saman Jaffery

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Further to yesterday’s blog, in the case of McDougall Estate, the beneficiary complained about the trustee’s compensation on the passing of her accounts. In issue was whether the trustee’s compensation should be reduced because she:

1. Made an improper distribution to a charity that was not authorized by the Will.
2. Failed to make an inventory of the contents of the deceased’s house and failed to offer the beneficiary any of the deceased’s personal effects.
3. Pre-took compensation.
4. Paid too much in legal fees out of the estate.

The court found that even though the charitable gift failed because it was not a specified amount or share, the trustee’s interpretation of the Will was not unreasonable and the trustee was not liable for an innocent mistake, made in good faith. She was therefore not required to reimburse the estate and should not have her compensation reduced.

The contents of the house were of little value and had to be cleaned out for sale. The trustee never received any indication from the beneficiary that there was anything of sentimental value that she wished to receive. In the circumstances, the Court found that the compensation should not be reduced for the manner in which the trustee dealt with the personal effects.

The trustee pre-took compensation of 5% of the value of the estate as originally calculated but, after adjustments, she admittedly overpaid herself by $1,163.24. Estate trustees ought not to pre-take compensation unless authorized in the trust document or by approval of the executor’s accounts by the beneficiaries. The proper remedy was payment of interest on the amount pre-taken. Accordingly, the trustee was ordered to repay $1,163.24 plus interest of $360 to the estate.

It was not unreasonable for the trustee to seek legal advice to respond to the inquiries from the beneficiary’s lawyer. While amounts paid to respond to questions about the administration of the estate were not at first instance a proper charge to the estate, such costs were allowed because they were properly incurred by her to respond to the beneficiary’s challenges to her administration of the estate.

The payment of legal fees from the estate that ought to have been paid by the estate trustee is a form of pre-taking of compensation and so the estate trustee was liable for interest on that amount, which was fixed at $70.00.

Sharon Davis - Click here for more information on Sharon Davis. 

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On March 30, 2011, the Family Law Section and Trusts and Estates Section of the Ontario Bar Association are holding a joint event to meet the Province’s new Children’s Lawyer, Ms. Lucy McSweeney. Ms. McSweeney was appointed to the position of Children’s Lawyer for Ontario on September 18, 2010. I understand that Ms. McSweeney’s legal background includes civil litigation, human rights, constitutional and labour law. The Office of the Children’s Lawyer is part of the Ministry of the Attorney General and provides legal services on behalf of children under the age of 18, and in estates, on behalf of the unborn and unascertained, as well.

Ms. McSweeney will address both the Family Law and the Trusts and Estates Sections. This event will allow those in attendance to meet and hear Ms. McSweeney. The program chairs are Dan Goldberg, Senior Counsel, Office of the Children’s Lawyer (Personal Rights) and Susan Stamm, Counsel, Office of the Children’s Lawyer (Property Rights). 

For more information, please contact Blossom Pangowish, OBA Sections Co-ordinator, at (416) 869-0513, ext. 399 or at blossom@oba.org.

See you there.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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Today’s blog is the last in my series this week touching upon certain aspects of preparation for trial/hearing in a contested passing of accounts. The items discussed this week were certainly not meant to be, nor were they, exhaustive. Preparation necessary for a hearing/trial with narrow issues, few documents, few evidentiary concerns and an uncomplicated Estate will obviously be different than a case with numerous issues, voluminous documents, evidentiary issues and a complicated administration. The critical aspect of trial preparation is that it begins at the beginning of a case; not literally, but certainly in the sense of being mindful at pre-trial stages of the evidentiary considerations and how the evidence is to be marshalled and presented.

Aside from ensuring that you have appropriate resource materials at the trial (such as texts dealing with the rules of evidence, the Rules of Civil Procedure, Probate Practice etc.), it is important to have prepared your opening and closing statements (to the extent possible), have prepared the necessary law regarding the substantive issues in dispute (casebook, factum), have addressed costs submissions (organizing offers to settle, preparing a Bill of Costs etc.), and have a trial binder with you at trial for your own use. 

A trial binder may contain the pertinent materials that you would like to have at your fingertips during the trial (ie. pleadings, orders, witness lists, witness summaries, answers to undertakings, listing of the types of evidence, objections, offers to settle etc.). The trial binder will allow you to have quick access to information that you might only have a few minutes or less to locate and quickly review. 

While most contested passings settle at a pre-trial stage, if a trial is necessary, success may hinge on the preparedness of the parties.

Thanks for reading.

Craig R. Vander Zee - Click here fore more information on Craig Vander Zee.

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Today’s blog is a continuation of my blogs this week addressing some aspects of preparation for a trial/hearing in a contested passing of accounts. I briefly touch upon transcripts, the Request to Admit and Witnesses today.

It is important in preparing for trial to review the transcripts of the examinations conducted to assist counsel with locating evidence in the transcripts during trial, including admissions and/or inconsistent statements made by a witness at trial, to address the completeness of questions on the examinations, and whether additional discovery is needed before trial.

If a damages brief is to be provided by the opposing party as a result of an undertaking at examinations or otherwise, one can ensure that it has been provided.

A party may also, further to Rule 51.02 of the Rules of Civil Procedure, at any time, by serving a Request to Admit, request any other party to admit, for the purposes of the proceeding only, the truth of a fact or the authenticity of a document. A copy of any document mentioned in the Request to Admit shall, where practicable be served with the request (unless a copy is already in the possession of the other party).

The opposing party must respond to the Request to Admit as required by the Rules of Civil Procedure, failing which the opposing party will be deemed to admit the truth of the facts asserted in the Request to Admit or the authenticity of the documents referred to in the Request to Admit.  

There may be cost consequences if a party refuses to admit the truth of a fact or authenticate documents which are proven or authenticated during the trial.

Requests to Admit may be effective to: (i) reduce the facts in dispute, (ii) reduce the number of witnesses to be called and/or the examination of a witness, (iii) minimize the costs and length of the trial, and (iv) avoid having to authenticate documents.

With respect to witnesses, amongst other things, it is helpful to make a witness list of anticipated witnesses for each of the parties, prepare a chart of the issues/documents to be proved by each witness and identify and consider the concerns, evidentiary or not, with the evidence and documents to be dealt with by each witness. If the witnesses are experts, the Rules of Civil Procedure have certain requirements. Summons to Witness should also be considered (Rule 53.04) as well as whether an Order excluding witnesses is necessary (Rule 52.06).

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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My blogs over the next three days will touch upon certain aspects of preparation for the hearing of a contested passing of accounts. Today’s blog will relate to the parties, the scheduling of the hearing, and the preparation of documents/productions for trial. 

The issue of whether all of the parties who ought to be involved in the passing are involved, and, if so, whether any of the parties who do not have representation need representation, must be considered. In considering who the appropriate parties are, or should be, the following questions might be asked: Are there self-represented parties?  Have they been notified of all matters related to the proceeding?  Has any party filed a Notice of No Objection to the accounts?  Has anyone filed a Statement of Submission of Rights (if so, have they been served by the applicant/plaintiff with written notice of the time and place of the hearing)?  Is a minor involved (Rule 7.03(2), The Office of the Children’s Lawyer)?  Is there an adult party who is disabled (Rule 7, The Office of the Public Guardian and Trustee)?  Is a representation Order necessary (Rule 10)?

Regarding the scheduling of the hearing, an order of the Court for directions, or otherwise, at any pre-trial stage, or at the pre-trial conference might address same. It may be that the date of the trial, fixed in its length, is to be fixed by the Registrar on a date mutually convenient to the parties.  If, on the other hand, the proceeding is to be set down for trial further to Rule 48 of the Rules of Civil Procedure, that Ruleallows for the proceeding to be set down for trial after the close of pleadings and when a party is ready for trial. In any case, inquiries might be made with the Court office where the trial is to take place to determine what, if any, forms need to be filed with the Court to confirm that the trial is to proceed.

Regarding the preparation of documents/productions for trial, it is critical that the documents in respect of the proceeding be organized prior to trial. If the documents necessary for the trial are not in counsel’s possession when preparing for trial, for whatever reason, they should be obtained prior to trial.  Such documents include, but are not limited to, all pleadings, the estate accounts, certificate of appointment, prior Judgments for passing of accounts, all Orders regarding the passing of accounts, all Notices of Objections (and withdrawals), Statements of Submission of Rights, Consents/Releases of any party, Affidavits of Service, and the documents exchanged between the parties as a result of the Rules of Civil Procedure, any agreement of the parties, and/or Court Order. 

Issues of privilege regarding the documents should also be dealt with prior to trial, if possible.

Thanks for reading.

Craig R. Vander Zee - Click here for more information on Craig Vander Zee.

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 In the matter of Estate of Divina Damm, 2010 ONSC 5119 (CanLII), Justice Brown reflected on the form of accounts to be used upon the filing of an application by a guardian for property to pass accounts.

Justice Brown noted that in passing accounts of a guardian, s. 42(6) of the Substitute Decisions Act, 1992 provides that "the procedure in the passing accounts is the same … as in the passing of executors' and administrators' accounts".

Rule 74.17(1) of the Rules of Civil Procedure specifies in detail the form of accounts to be filed. The Rule requires:

(a)        an itemized accounting of assets under administration, cross-referenced to entries showing the disposition or partial disposition of the assets;

(b)        an account of all money received;

(c)        an account of all money disbursed;

(d)       where investments are made, an account setting out all money paid to purchase investments, and money received by way of repayment or realization of assets in whole or in part;

(e)        a statement of all unrealized original assets at the end of the accounting period;

(f)        a statement of all money and investments at the end of the accounting period;

(g)        a statement of all contingent or other liabilities at the end of the accounting period;

(h)        a statement of compensation claimed; and

(i)         such other statements and information as the court requires. 

If the will or the trust deals separately with income and capital, the accounts are to show separately the receipts and disbursements of capital and income.

In the matter before Justice Brown, the accounts were said to lack the detail required by the Rules, and provided information at the "30,000 foot" level. Justice Brown felt that he could not hear the matter without greater particularization of the accounts. The accounts did not comply with the Rules; due to this lack of particularity, a question arose as to whether a respondent served with the accounts could properly understand the conduct of the guardian; and the Court could not link the particulars of the judgment (which sets out specific amounts for revenue receipts and disbursements and capital receipts and disbursements) to the evidence.

While he rejected the application, Justice Brown raised the question of whether the Rules should be amended so as to allow for a simpler form of accounts for smaller estates. However, until a rule change, all accounts must comply with the format set out in Rule 74.17(1).

Thanks for reading,

Paul Trudelle

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In the recent case of Re Estate of Assunta Marino, 2010 ONSC 5237 (CanLII), the court granted an order to set aside an unopposed judgment passing accounts obtained by the estate trustee, on a Rule 38.11(1) motion brought by a beneficiary who had failed to file a notice of objection to accounts within the prescribed time.  Justice Brown, presiding, applied the test in HSBC Securities (Canada) Inc. v. Firestar Capital Management Corp., 2008 ONCA 894 (CanLII), 2008 ONCA 894, which has three elements: 

(i) whether the motion was brought without delay after the defendant (i.e., the moving beneficiary) learned of the default judgment;

(ii) whether the circumstances giving rise to the default were adequately explained; and

(iii) whether the defendant has an arguable defence on the merits – in order to determine whether the interests of justice favour granting the order.  To that end, the court should consider the potential prejudice to the moving party if the motion were dismissed, the potential prejudice to the respondent if the motion were allowed, and the effect of any order on the overall integrity of the administration of justice. 

The first element was met: time elapsing between the beneficiary learning of the default judgment and the motion was the result of attempted negotiations rather than inactivity, so it was not "delay".  The second element was met by the beneficiary's lawyer filing an affidavit explaining the default.  With respect to the the third element, the beneficiary had raised valid arguable objections, which is analogous to a defence.  The prejudice resulting from a delay in the estate's distribution combined with the fact that the estate trustee had properly engaged the court's legal process to account for his administration was not enough to save the unopposed judgment.  Justice Brown wrote that while the case was close, "significant weight should be given to the need to ensure that fiduciaries fully account for their management of property", and so the order setting aside the default judgment was granted.  Mediation was ordered before further steps in the passing of accounts, and the beneficiary was ordered to pay all of the mediator's costs.

Enjoy your day,

Chris M. Graham - Click here for more information on Chris Graham.

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Billionaire and recently deceased American shopping mall developer Melvin Simon's heirs are fighting over his last will.  Mr. Simon's children from his first marriage are challenging a will that changed the distribution of his estate in favour of his second wife.  Aside from the glamour factor, the case is interesting in that an allegation of fraud was recently dismissed on the grounds that "[t]he complaints fail to allege affirmative misrepresentations that can support a claim of actual fraud".

This illustrates an important point in estate and trust litigation.  Ontario's Rules of Civil Procedure similarly requires pleadings that contain allegations of fraud or breach of trust to contain full particulars:

"Rule 25.06(8)  Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred."

This could theoretically present beneficiaries challenging the actions of a trustee, since the trustee frequently has the particulars and the beneficiaries do not.  In practice, this problem rarely arises because most litigation occurs in the context of a passing of accounts, where it is unnecessary to make allegations against the estate trustee.  Instead, under the procedure in Rule 74, the beneficiaries can simply file and serve a Notice of Objection to Accounts challenging transactions or omissions in the trustee's accounts.

After filing their Notice of Objection to Accounts, the beneficiaries can then bring a motion for an order giving directions (or an order for assistance) that will provide for the disclosure of the particulars they think exist.  After receiving full disclosure, the beneficiaries should in a position to make a better-informed decision on whether to add such allegations to their pleadings. 

Where this process is anticipated, the order should specifically authorize the parties to return to court for further directions.  Of course, it would rarely even be necessary to allege fraud at all, since the facts that support the allegation of fraud can form the basis of an objection to the accounts without using the words "fraud" or "breach of trust", and this can achieve the same practical result without the risks associated with alleging fraud.  Beneficiaries can also avoid the risk of having their pleadings struck at an early stage.  

Have a great day,

Christopher M.B. Graham - Click here to learn more about Chris Graham.

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Rules 74.16 to 74.18 provide the framework for a passing of accounts application.  Rule 74.18(12) is a useful limitation clause that provides counsel with legal authority to attempt to bar new issues from being raised at the hearing:

"(12)  No objection shall be raised at the hearing that was not raised in a notice of objection to accounts, unless the court orders otherwise. "

This provision can be particularly useful in hearings where there are defined objections but the parties are simply going through the accounts, line by line.  It is an especially handy tool to assist the court as legal authority to stop the frivolous allegations or tangents that can side-track hearings. 

Of course, Rule 74.18(2) is subject to the discretion of the court, so the provision's usefulness is limited.  Every hearing is unique, but it is unlikely that a judge would apply this provision to a fresh objection that appeared to have merit, since ultimately it is the court that must be satisfied the accounts are valid. 

 Have a great day,

Christopher M.B. Graham – Click here to learn more about Chris Graham.

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In Re Estate of John Mitchell, the Endorsement of The Honourable Justice Brown clarifies expectations of the court in respect of requests for increased costs on unopposed applications to pass accounts, as the Rules of Civil Procedure contain some ambiguity in this regard.

His Honour notes that Rule 74.18 specifies the materials that must be filed initially on an application to pass accounts and where the application will be unopposed and proceed without a hearing. 

However, the Rule does not expressly stipulate the materials that should be filed where the application will proceed unopposed, but with a request for increased costs so that a hearing must be held. His Honour states that the applicant should ensure that the following materials are filed with the court in such situations:      

·                    proper initial application materials: Rule 74.18(1);

·                    a supplementary application record containing materials specified by Rule 74.18(9);

·                    additional evidence (a simple affidavit) that contains:

·                    the request for increased costs in proper form;

·                    proof of service of the request on all affected parties;

·                    a statement explaining the responses of affected parties to the request; and

·                    the details of and the reasons for the request, either through a detailed bill of costs or an easily understandable copy of the relevant dockets.

His Honour also stresses the importance of this last requirement, as a court cannot conduct a review of the request to ensure it is fair and reasonable without evidence describing the work performed, the time spent, the value of the work or the cost of such work.  Adequate evidence is essential.

Have a good day,

Natalia R. Angelini - Click here for more information on Natalia Angelini

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A recent decision of C.L.B. v. J.B.addressed when it is appropriate for a court file to be sealed. The case involved two minors who had lost a parent in the 9/11 terrorist attacks and had received victims’ compensation. The court ordered that the funds be held in trust and set out a timeline for when the trustees would be required to pass accounts. 

When the trustees later applied to pass accounts, they also brought a motion that the court file be sealed so as to protect the minors’ privacy. 

In considering the motion, Brown J. pointed to the importance of an open and transparent court system. This is not just because public policy favours openness as a way of encouraging the public’s faith in the court system but in addition the public’s right to obtain information about the court system is protected by s. 2(b) of the Charter of Rights and Freedoms. 

Brown J. found that a sealing order should only be granted in the following circumstances:

1.      When there is a serious risk  to an important interest and there is are no reasonable alternatives to preventing the risk; and

2.      When the benefits to granting the order outweigh the negative effects, having regard not just to the interests of the litigants but also the rights of the public. 

Ultimately, Brown J. found that in the circumstances a sealing order was unwarranted. Although the matter involved minors, he pointed out that legal proceedings frequently do and it is far from the norm for the court to order a file sealed. Moreover, he found that there was insufficient evidence before the court that there was a risk of serious harm if the order was not granted. 

He also expressed concern about the possible “deleterious effects” that shielding settlements involving minors or matters involving a fiduciary’s management of a minor’s assets would have on the necessary transparency of a court’s review.   

Finally, he found that a “reasonable alternative” existed – rather than sealing the file, he ordered that the title of proceeding be amended and that any materials filed with the court list the trustees, the names of the trusts, and the minors using only initials rather than full names.  

Have a great day!

Megan F. Connolly 

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The recent decision of Pachaluck Estate v. DiFebo provides a useful example of the costs exposure that parties can face on an application to pass accounts.  

In this case, a beneficiary had objected to the compensation the estate trustee had taken.  The court agreed to an extent – it ordered compensation be reduced (by about $9,700), but not by as much as requested by the beneficiary.    

The court then had to decide the issue of costs.  The executor argued that he had been prudent in his administration of the estate and while the beneficiary was successful in a partial reduction in compensation, she was unsuccessful with regard to most of the objections she had raised. The executor sought fully indemnification for his costs from the estate and argued that the beneficiary should receive partial indemnity costs. 

The beneficiary argued that because she was successful in obtaining a reduction in compensation and because she was unable to get a full accounting until the court had ordered one be produced, her costs should be fully paid by the executor.

The court found that there was a mixed result in its determination of the application to pass accounts.  While the court  agreed the executor had acted in good faith, a reduction in compensation was nevertheless ordered and the court was satisfied that a full accounting would not have been provided absent a court order.

The court was critical of the fact that neither party had served an offer to settle and found that to the extent the estate trustee and beneficiary were entitled to receive costs from the estate it should be on a reduced basis.  Ultimately, the court awarded each less than half the costs that were sought.  

This case is a reminder of some of the perils involved in pursuing a contested passing of accounts.  To begin with, both parties were stuck paying more than half the costs each had incurred personally and, as such, were "out of pocket" in the litigation.  Second, the compensation that was repaid to the estate as a result of the litigation was less than the legal fees that ended up coming out of the estate to reimburse the parties, which begs the question of whether the beneficiary was worse off for pursuing the litigation in the first place.  

Have a great day!

Megan F. Connolly

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Today’s blog is a continuation of my blogs this week addressing some aspects of preparation for a trial in a contested passing. I briefly touch upon transcripts, the Request to Admit and Witnesses today.

It is important in preparing for trial to review the transcripts of the examinations conducted to assist counsel with locating evidence in the transcripts during trial, including admissions and/or inconsistent statements made by a witness at trial, to address the completeness of questions on the examinations, and whether additional discovery is needed before trial.

If a damages brief is to be provided by the opposing party as a result of an undertaking at examinations or otherwise, ensure that it has been provided.

A party may also, further to Rule 51.02 of the Rules of Civil Procedure, at any time, by serving a Request to Admit, request any other party to admit, for the purposes of the proceeding only, the truth of a fact or the authenticity of a document. A copy of any document mentioned in the Request to Admit shall, where practicable be served with the request (unless a copy is already in the possession of the other party).

The opposing party must respond to the Request to Admit within 20 days, failing which the opposing party will be deemed to admit the truth of the facts asserted in the Request to Admit or the authenticity of the documents referred to in the Request to Admit. As such, the Request to Admit should be served at least 20 days before the commencement of the trial, and quite some time before that, if possible, so that counsel will know what facts need not be proved or the authenticity of documents that will not need to be proved.

There may be cost consequences if a party refuses to admit the truth of a fact or authenticate documents which are proven or authenticated during the trial.

Requests to Admit may be effective to: (i) reduce the facts in dispute, (ii) reduce the number of witnesses to be called and/or the examination of a witness, (iii) minimize the costs and length of the trial, and (iv) avoid having to authenticate documents.

With respect to witnesses, amongst other things, it is helpful to make a witness list of anticipated witnesses for each of the parties, prepare a chart of the issues/documents to be proved by each witness and identify and consider the concerns, evidentiary or not, with the evidence and documents to be dealt with by each witness. If the witnesses are experts, Rule 53 of the Rules of Civil Procedure is applicable. Summons to Witness need to be considered (Rule 53.04) as well as whether an Order excluding witnesses is necessary (Rule 52.06).

Thanks for reading.

Craig

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My blogs over the next three days will relate to certain aspects of preparation for the hearing of a contested passing of accounts. Today’s blog will touch upon the parties, the scheduling of the hearing, and the preparation of documents/productions for trial. 

The issue of whether all of the parties who ought to be involved in the passing are involved, and, if so, whether any of the parties who do not have representation need representation, must be considered. In considering who the appropriate parties are, or should be, the following questions might be asked: Are there self-represented parties? Have they been notified of all matters related to the proceeding? Has any party filed a Notice of No Objection to the accounts? Has anyone filed a Statement of Submission of Rights (if so, have they been served by the applicant/plaintff with written notice of the time and place of the hearing)? Is a minor involved (Rule 7.03(2), The Office of the Children’s Lawyer)? Is there an adult party who is disabled (Rule 7, The Office of the Public Guardian and Trustee)? Is a representation Order necessary (Rule 10)?

Regarding the scheduling of the hearing, an order of the Court for directions, or otherwise, at any pre-trial stage, or at the pre-trial conference might address same. It may be that the date of the trial, fixed in its length, is to be fixed by the Registrar on a date mutually convenient to the parties. If, on the other hand, the proceeding is to be set down for trial, Rule 48.01 of the Rules of Civil Procedure allows for the proceeding to be set down for trial after the close of pleadings and when a party is ready for trial. In any case, inquiries should be made with the Court office about where the trial is to take place to determine what, if any, forms need to be filed with the Court to confirm that the trial is to proceed.

Regarding the preparation of documents/productions for trial, it is critical that the documents in respect of the proceeding be organized prior to trial. If the documents necessary for the trial are not in counsel’s possession when preparing for trial, for whatever reason, they should be obtained prior to trial. Such documents include, but are not limited to, all pleadings, the estate accounts, certificate of appointment, prior Judgments for passing of accounts, all Orders regarding the passing of accounts, all Notices of Objections (and withdrawals), Statements of Submission of Rights, Consents/Releases of any party, Affidavits of Service, and the documents exchanged between the parties as a result of the Rules of Civil Procedure, any agreement of the parties, and/or Court Order. 

Issues of privilege regarding the documents should also be dealt with prior to trial.

Thanks for reading.

Craig 

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In the February 2009 edition of The Probator, I reported on the decision of Brown J. in Re McMichael Estate. There, Brown J. clarified the requirement that an application for a Certificate of Appointment be filed in the court office for the county or district in which the testator was living at the time of death.

In the recent decision of Re Pearsall released May 21, 2009, (Court File No. 05-36/09, not yet reported) Brown J. offers further clarification on the issue of where applications involving estates may be commenced. 

Rule 13.1 of the Rules of Civil Procedure provides that a proceeding must be commenced at the place required by the applicable statute or Rule. If no statute or Rule applies, it may be commenced at any court office.

While the Estates Act stipulates where an application for a Certificate of Appointment must be made, no statute or Rule dictates where an application to pass accounts must be brought, whether as Estate Trustee or guardian for property.

Thus, as held by Brown J., an application to pass accounts can be brought in any county, regardless of where the Certificate of Appointment may have been issued.

Thank you for reading.

Paul Trudelle

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An attorney acting under a power of attorney may be required to account to the beneficiaries of the grantor’s estate after the death of the grantor. This is the holding in the decision of McAllister Estate v. Hudgin. Megan Connolly blogged on this case here, on the issue of accounting, and here, on the issue of removal of an estate trustee.

In the May 11/18, 2009 issue of the Law Times, in a comment titled “The duty of an attorney to account”, John O’Sullivan and Lori M. Duffy comment further on the McAllister decision. They note other cases where an attorney for property has been compelled to account to the beneficiaries of an estate after the death of the grantor.

The authors suggest that in light of the duty to account, “the wisest course for a person exercising a power of attorney for property following these decisions is to assume that he or she will be required at some point in the future to account to persons opposed in interest, and to conduct themselves accordingly throughout their tenure as power of attorney.”

The authors go on to suggest that attorneys should, if they can, ensure that the power of attorney document provides protection for the costs that they may be forced to incur in preparing the accounts and passing them before the court.

Thank you for reading,

Paul Trudelle

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The recent decision of Pachaluck Estate v. DiFebo is a useful illustration of when the court is willing to reduce compensation awarded to the trustee for the administration of a simple estate. 

The main assets of the estate were the deceased’s condominium and several bank accounts.  Her will provided that the condo would be sold and its proceeds would be divided amongst several grandchildren; cash bequests would be made to several individuals; and the residue of the estate would be divided amongst the deceased’s two daughters. 

When the administration of the estate was near completion, the estate trustee brought an application to pass accounts.  One of the residual beneficiaries objected to the accounts in part on the basis that the compensation claimed was over and above that what was warranted in the circumstances. 

In determining what compensation should be allowable, the court considered the five factors articulated in Re Toronto General Trusts and Central Ontario Railway:

(a)   magnitude of the trust;

(b)  care, responsibility, and risks assumed by the fiduciary;

(c)   time spent by the fiduciary carrying out obligations;

(d)  skill and ability required and displayed by the fiduciary; and

(e)   results obtained and degree of success associated with the efforts. 

The court found that while the five factor were useful guidelines, the analysis should be fact specific and sensitive to the specifics of the estate administration in question.  The court also found that the application of a percentage in determining compensation should not be set in stone but should be fact specific. 

In the end, the court decided to reduce compensation.  In considering the sale of the condo, the court found that the administration of the estate with respect to this asset was uncomplicated and straightforward.  With respect to the cash bequests, the court also found that distributing them was simple.  As a result, it ordered the compensation associated with the sale of the condo and the distribution of the proceeds to be reduced to 1.5% while it ordered compensation related to the balance of the estate reduced to 2.0%. 

Have a great day!   

Megan F. Connolly