October 13, 2023

By Brian Babcock

In 2018, the Ontario Court of Appeal ruled that the basic limitation of two years under the Limitations Act does not prevent objection to the parts of estate accounts that are over two years old.

The passing of accounts is usually done at the end of the estate administration. In ongoing trusts or estates, they should be done more frequently, but that was not what happened in Wall v. Shaw. It would hardly have been fair for the objector to be penalized for the delay of the trustee. Of course, the Court of Appeal conducted a thorough technical analysis, but trusts are all about equity, so equity prevailed.

THE ISSUE

Since 2018, courts have struggled to decide how far Wall v Shaw goes to apply to other time-limit issues in estate matters.

The passing of accounts, once considered routine, has become increasingly contentious, just like other estate disputes, as we experience the largest inter-generational transfer of wealth in recorded history. That makes not missing a time limit a more frequently visited issue.

THE CASE(S)

In Van Ruymbeke v. Van Ruymbeke, a Superior Court judge considers this and summarizes some of the answers to date:

• An application by a trustee to pass accounts is not subject to the Limitations Act.
• An originating process brought for the purpose of compelling an attorney to pass accounts. Such an application, in my view, is clearly a “claim” within the meaning of the Limitations Act. The rules for the passing of accounts of an attorney largely parallel those of trustees.

The basic limitation applies to claims, so the court in the Estate of Celeste Dos Santos found that the application was too late.

In Van Ruymbeke, the judge determined that a trial of an issue was necessary on a preliminary issue was necessary to decide whether or not the application to compel the passing of accounts was timely, so that issue was not decided, though every party incurred significant legal costs.

TAKEAWAYS

• Do not be like the March Hare in Alice in Wonderland and be late for a very important date;
• As in other matters, if an issue of estate administration arises, seek advice from a lawyer EARLY. Even if you do not proceed immediately, you should inquire about time limits;
• Answers to time-limit questions are not always black and white;
• There may still be more to be heard from the courts on how time limits apply in various estate disputes. Start your proceeding early to avoid limitation problems. If you might have already missed the limitation date, get legal advice about whether your facts might make it worth arguing that preliminary issue;
• Existing law makes it worthwhile to pursue certain issues in passing of accounts rather than bringing an action. [1]

WHAT WEILERS LLP CAN DO FOR YOU

Our team of estate lawyers act as advisors to trustees and attorneys on a wide range of estate issues, including assisting in the timely preparation and passing of accounts.

If you are a trustee, attorney or potential other interested person affected by a dispute about accounts, Weilers LLP can provide a reliable opinion. If it is necessary to go to court to determine the issue, the Weilers LLP litigation team works closely with the estate planning team to provide effective advocacy in all types of estate litigation, including everything from pets to pearls. We also frequently advise or represent parties referred to us by outside lawyers who act as advisors but do not handle litigants. Their confidence in us is reassuring and an ongoing reflection of our abilities.

[1] Or at least so suggest Daniel Zack Matthew Furrow in “Revisiting Limitations and Passing of Accounts in Ontario: A Comment on Wall v Shaw”, 50 Advocates Quar. 279 at 297