In Poitras v. Canadian Cancer Society et. al., 2020 ONSC 4935 (CanLII), a decision on a motion, the Estate Trustee/moving party sought an order setting the terms of a release so an interim distribution could be made. The responding party argued that an interim distribution could not be made until other issues were resolved and sought costs. Neither party was successful.
Françoise Poitras died on March 6, 2016. Interestingly, Ms. Poitras made no provision in her will for the distribution of the residue of her Estate following the payment of specific bequests and debts.
In 2017, the Trustee brought an application for directions regarding the distribution of the residue. The court ordered that the residue be distributed equally to eight family members (the “Individual Beneficiaries”) and ten charities who received specific bequests under the will (the “Charitable Beneficiaries”). The same order provided that the Individual Beneficiaries were to execute a release in a form to be drafted by the lawyer for the Charitable Beneficiaries, and approved by the lawyer for the Trustee.
Three years passed and the Trustee and Charitable Beneficiaries were unable to reach an agreement on the wording of the release. As a result, no interim distribution was made.
In July 2019, the Trustee applied to the court for a passing of accounts. The Charitable Beneficiaries objected, taking issue with the form of the accounts provided and the proposed amount of Trustee compensation. The Trustee and the Charitable Beneficiaries were unable to resolve those issues either.
On August 14, 2020, the court heard the Trustee’s motion for an order setting the terms of the release, so they could proceed to make an interim distribution.
In response, the Charitable Beneficiaries argued that the Trustee could not make an interim distribution until the objections to the passing of accounts had been adjudicated or settled, and sought costs against the Trustee for bringing the motion.
The Individual Beneficiaries were frustrated that no interim distribution had yet been made and, further, that they only learned of the motion informally without receiving formal notice.
Justice Gomery found that the Trustee’s application to pass accounts, and the notice of objection to it, do not need to be litigated before the proposed distribution can be made. Her Honour, however, declined to set the terms of the release.
Instead, the parties were directed to iron out the issues under the court’s supervision. Justice Gomery directed that:
1- The Individual Beneficiaries shall be copied on all further proceedings, notices, correspondence and court filings, and shall have a right to attend all future court hearings, case conferences, settlement conferences and mediation.
2- By August 31, just over two weeks of the motion, the Charitable Beneficiaries shall provide the Trustee and Individual Beneficiaries with:
- a summary of remaining objections to the Trustee’s accounts;
- a form of release for interim distribution of funds; and
- a draft bill of costs.
3- By no later than September 14, 2020, the Trustee shall provide the Charitable Beneficiaries and Individual Beneficiaries with:
- their position to the remaining objections;
- a form of release for interim distribution, or confirmation of consent to the form proposed by the Charitable Beneficiaries; and
- a draft bill of costs.
The parties were otherwise directed to file a copy of the above materials with the court when serving them on other parties, and to return for a case conference scheduled roughly 6 weeks after the hearing of the motion.
Whether the above directions end up facilitating any agreement between the parties, and living up to the title of this blog post, is yet to be confirmed.