All About Estates

TIPS ON BRINGING A PASSING OF ACCOUNTS APPLICATION – PART 5 (FINAL THOUGHTS)

Today’s blog will wrap up my series of blogs related to bringing an application to pass accounts (the “Passing Application”).[1]  We will look at how an Executor/Trustee completes the Passing Application and obtains a judgment on passing of accounts.

A Passing Application will either proceed without a court hearing, if no notices of objection to the accounts were filed or if objections were filed but were formally withdrawn OR with a court hearing if there are unresolved objections or if the court refuses to grant an unopposed judgment.  The judgment on passing of accounts approves the accounts of the Executor/Trustee for the period specified in the Passing Application, the payment of compensation to the Executor/Trustee and the legal fees being claimed with respect to the Passing Application (referred to as ‘costs’) of the applicant Executor/Trustee and other parties.

Without a Hearing

A Passing Application that proceeds without a court hearing is often referred to as an unopposed passing or an ‘over the counter’ passing.  All the information is filed in writing so that it can be reviewed by a judge in chambers without the need for the parties to attend in court.  The court should be advised as soon as possible if the court hearing date is not required so that the time can be used for other matters.

Rule 74.18(9)(a) sets out the documents that must be included in the application record of the applicant and the timing for filing it with the court.  The one document that may be a bit confusing if you have not prepared it before is (v) the certificate of a lawyer, as there is no prescribed court form.  We prepare the document in an affidavit format but titled “Certificate of Lawyer” and include only one paragraph in the affidavit that reads “1.  All documents required by sub-clauses (i) to (iv.1) of rule 74.18(9)(a) of the Rules of Civil Procedure are included in the Application Record to obtain a judgment in passing of accounts without a hearing.”

If the applicant or any other party wants to claim costs greater than the amount allowed in Tariff C of the Ontario Rules, which is the “Lawyers’ Costs Allowed on Passing of Accounts Without a Hearing”, they must serve and file a request for increased costs and a costs outline.  Each person making the request must also file a supplementary application record with the court.[2]  The tariff is general in nature and does not contemplate litigation with respect to a Passing Application.  As a result, it is usually necessary to request increased costs as the Tariff C costs only range from $2,500 to $7,500, as determined based on the receipts recorded in the accounts.  However, by requesting increased costs, additional legal fees will be incurred to prepare the additional documents to request the increased costs.

With a Hearing

Rules 74.18(11.5) to (13.2) set out the process and documents required on a contested Passing Application.  Typically the parties attend at court on the initial return date to obtain an order for directions or a scheduling order.  The Toronto region has a practice direction concerning the Estates List. Part V B. of the practice direction sets out the procedure to be followed on Passing Applications.  Part VII A. of the practice direction provides general guidance on draft orders giving directions and B. specifically deals with draft orders giving directions on a contested passing of accounts.  There is also a link to model orders prepared by the Estate List Users’ Committee.  Part VIII of the practice direction deals with mandatory mediation.

“Contested applications to pass accounts can be lengthy, technical, and complicated. … the costs associated with a contested hearing can be exceedingly high, and there is a material risk that parties will not be able to recover legal costs, from the Trust Property or the party opposite. Worse still, parties may be subject to an adverse court award if they are unsuccessful and/or behaved improperly. Clients should be encouraged to act reasonably and to compromise and settle the matter if possible along the way.”[3]

Judgment on Passing of Accounts

There are two forms of a judgment on passing of accounts – Form 74.50 is used for an unopposed Passing Application and Form 74.51 for a contested Passing Application.

When the judgement has been issued by the court on completion of the Passing Application, although not specifically required by the Ontario Rules, our practice is to serve a copy of the judgment on all the persons who were served on the notice of application to pass accounts.

This concludes my blog series on Passing Applications, which I hope you have found helpful.  Thanks for reading.  Please let me know in the comments section if you have any suggestions for future blog topics from the perspective of a law clerk.

 

 

 

[1] The court rules regarding passing of accounts are set out in rules 74.16, 74.17 and 74.18 of the Rules of Civil Procedure (Ontario) (the “Ontario Rules”).

[2] Rule 74.18(11.3).

[3] Melanie Yach and Andrea McEwan, with the assistance of Monica Carinci, Effectively Managing Contested Passing of Accounts Applications, December 12, 2018 at p. 30.

About Betty Laidlaw
Betty Laidlaw is a law clerk in the Trusts, Wills, Estates and Charities group at Fasken, with over 30 years’ experience. Betty has extensive experience assisting executors and trustees in managing complex, high-value estates and trusts. Betty specializes in the administration of estates and trusts and also focuses on estate accounting and estate litigation. Betty has received a Certificate in Estate and Trust Administration (CETA) from STEP Canada which denotes excellence in the industry. With this Certificate, Betty has received professional recognition as a specialist in estate and trust management. Betty is an affiliate member of STEP Canada and an associate member of the Institute of Law Clerks of Ontario. Email: blaidlaw@fasken.com.

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