In the Estate of Nordby, 2023 ONSC 821, an executor was committed to prison for contempt of court for breaching a court order to pass accounts.
Jennifer Lynn Nordby died on January 23, 2013. Her Will appointed her father, Harold Nordby, as estate trustee and named her two children, one of whom was a minor, as beneficiaries. Mr. Norby obtained probate on October 30, 2013. The value of the estate at death was $205,660.
The Children’s Lawyer, who represented the interest of the minor child, made multiple requests of Mr. Nordby to provide an account of the estate assets, which he failed to do.
On April 12, 2017, the Children’s Lawyer obtained a court order requiring Mr. Nordby to file accounts of the estate and bring an application to pass accounts within 60 days. The order was personally served upon him.
While Mr. Nordby provided some banking information to the Children’s Lawyer between September and November 2017, he did not file accounts or commence an application to pass accounts as he was ordered to do.
Since then, the Children’s Lawyer attempted on several occasions to contact Mr. Nordby by telephone and by mail, but he never complied with the court order.
On August 11, 2022, the Children’s Lawyer then brought a motion for contempt. Despite being served with the motion, Mr. Nordby failed to appear at the hearing. At the motion, Mr. Nordby was found to be in contempt of the order. However, Mr. Nordby was given an opportunity to purge his contempt by filing an application to pass accounts within 60 days.
As Mr. Nordby failed to purge his contempt, on December 22, 2022, the Children’s Lawyer moved for a penalty. At the hearing, Mr. Nordby appeared and advised he was seeking legal counsel and the hearing was adjourned.
At the January 26, 2023 return date of the motion, Mr. Nordby’s counsel appeared and advised he had been retained two days early, and sought a 60 day extension to allow Mr. Nordby to purge his contempt by filing the application to pass accounts. The Children’s Lawyer sought a penalty of 30 days imprisonment due to Mr. Nordby’s failure to purge his contempt and his long-standing breach of a court order despite his fiduciary position.
Rule 60.11(5) of the Rules of Civil Procedure provides that where a finding of contempt is made, the court may order that the person in contempt:
(a) be imprisoned for such period or on such terms as are just;
(b) be imprisoned if the person fails to comply with a term of the order:
(c) pay a fine;
(d) do or refrain from doing an act;
(e) pay such costs as are just; and
(f) comply with any other order that the judge considers necessary.
In considering the case law, the court noted previous decisions where an executor was sentenced to prison time for failing to pass accounts. In this case, the breach was longstanding, as the Children’s Lawyer had requested information from Mr. Nordby for over five years. Mr. Nordby was previously warned by the court that the punishment for contempt could include imprisonment and he was given numerous opportunities to comply. The court was critical of his decision to retain counsel a mere two days before the penalty motion. Moreover, Mr. Nordby was an estate trustee, who, despite having been advised of his obligation to pass accounts, showed a complete disregard for his duties as the executor of an estate of which his grandchildren were beneficiaries, and the order of the court.
The court declined to impose a fine, and instead concluded that the paramount consideration of the penalty was deterrence and to foster respect for and compliance with court orders. The punishment of imprisonment would make Mr. Nordby and the public “sit up and take notice”. Mr. Nordby was sentenced to five days imprisonment. Mr. Nordby was also given an additional 60 days to pass his accounts.
No matter how modest the estate, an executor must take the duty to pass his accounts seriously, and must obey court orders compelling him to do so. If the executor fails to comply, the court is prepared to hold the executor in contempt, and if the executor fails to purge the contempt, to sentence the executor to jail time. By doing so, the court sends a message to the executor and to the public at large that the court’s processes must be obeyed and respected. Executors who fail to account therefore do so at their peril.