Anna Chen, associate Gowling WLG (Canada) LLP

The importance of a fiduciary (whether a trustee, an attorney for property or an estate trustee) to keep proper books of account cannot be understated.  This is an obligation required of the fiduciary to prove he or she administered the trust, property or estate prudently and honestly.  The importance of keeping accounts and the consequence of not doing so have been addressed again in the recent decision Last v Last, 2025 ONSC 1407.

In Last, the deceased made a continuing power of attorney for property (“CPAP”) appointing her son Craig as the sole attorney.  Craig managed the deceased’s assets further to the CPAP from 2016 to 2021, when the deceased died.  In December 2017, the deceased received a considerable settlement payment as a result of a serious automobile accident ($792,936 with $22,936 paid to Craig in trust for the deceased and the balance of $770,000 paid into a structured annuity to be paid to the deceased over a five year period at approximately $13,575 per month).  However, at the deceased’s death, her accounts contained nominal balances.  The beneficiaries of the deceased’s estate are Craig and the deceased’s other son Glen.

Craig was ordered to pass his accounts, but he did not do so.  In failing to do so, the Court held a negative inference must be made and Craig must be required to reimburse the estate of the funds unaccounted for:

[51]        Craig’s failure to pass the accounts in accordance with Christie J.’s Order means that he is unable to answer most of the questions raised by Glen, and he must lose on the merits.  In Bellefeuille v. Zinn, 2022 ONSC 5027, McCarthy J. stated, at paras. 21 and 25:

In sum, the Defendant was unable to provide a satisfactory accounting for the handling of Irene’s funds during the attorney-ship. To the extent that Exhibit 8 constitutes an accounting, it is incomplete, unsupported, unsubstantiated, and unreliable…

It being unlikely that the funds can be traced or recovered, there is only one remedy available to achieve justice here: the Defendant must make good the funds that she has taken from Irene and for which she has been unable to properly account for. An award of damages for breach of fiduciary duty is entirely appropriate in the circumstances.  [Emphasis added.]

In Last, Glen reviewed the deceased’s account statements and calculated the total amount unaccounted for from the deceased while she was alive or from her estate to be approximately $1,489,502, which included e-transfers to Craig in the total amount of $125,150, gambling in the total amount of $59,388, and miscellaneous unexplained purchases in the total amount of $34,345.90.  The Court found that there were sufficient evidence in the record to support some of the amounts, bringing the total unaccounted for amount down to $1,047,156.

The Court ordered that Craig’s share of the estate be reduced by $523,578 (50% of the amounts unaccounted for) and Craig shall make payment to Glen in the amount of the shortfall, if any, between $523,578 and the net payment received by Glen as a beneficiary of the estate.

The Court further ordered that Craig pay Glen’s costs for the application on a substantial indemnity scale as the litigation was made necessary because of Craig’s failure to comply with a Court order and provide the accounting necessary for Glen and the Court to properly review Craig’s management of Jacqueline’s assets.

Lesson: as a fiduciary, you need to ensure that you keep record of all transactions incurred from the onset of your management of the asset, trustee or estate.  You could be held personally liable for transactions that you cannot account for.  It is helpful to retain professional advice and assistance from the onset to ensure that your records are properly kept, and to help avoid personally liability.