In Lacroix v. Kalman, the court declined to order a passing of accounts in a modest estate due to the inordinate expense of such a proceeding. Instead, the judge ordered financial information to be disclosed to Paul Lacroix.
Paul Lacroix sought to compel his sister and co-estate trustee, Paulette Kalman, to pass her accounts as attorney for property of their mother, Viola Lacroix, after she died. Paulette had lived at home with her parents since the mid-1980s. In 1994, after her husband died, Viola appointed Paulette as attorney for property. In 2009, Viola began to exhibit symptoms of progressive, and worsening, memory loss.
Paul alleged that Paulette had dwindled an account that was held jointly in Viola and Paulette’s name. Paul alleged that Paulette withdrew a lump sum of $10,118.22 and transferred monthly amounts pay for car payments. Paulette claimed that the lump sum was to pay for her car loan, and was transferred at Viola’s direction, since the car was largely for Viola’s benefit.
Declining to order a passing of accounts, Justice Maddalena held that after 2009, Paulette was a fiduciary with a “strict obligation to account.” Ideally, Paulette should have kept detailed and specific records, but she unintentionally did not do so. Instead she continued to administer her mother’s affairs as she did before Viola became incapable. Justice Maddalena also found that both Paulette and Viola contributed money to the joint account and that Viola was able – when lucid – to instruct the payment for a gift for Paulette’s niece, as well as for the car loan.
Relying on the reasoning in McAllister Estate v. Hudgin, Justice Maddalena dismissed the motion to compel Paulette to pass her accounts as attorney for property given the estate was only a modest size (a formal application to pass accounts would deplete the estate). However, she ordered disclosure of “as much information as possible” to address Paul’s concerns.
The take away is that an application to pass accounts may not be proportionate for relatively modest estates. Instead, disclosure of bank statements (or VISA statements) may be all that is required of the attorney for property to account to a beneficiary (however, a trustee should always make best efforts to keep all receipts).
In McAllister, the case referenced by Justice Maddalena, the court ordered disclosures of banking information as a first step to resolving the dispute between the applicant and respondent. The court allowed the applicant beneficiary to apply to court for further directions if the disclosures suggested the attorney was misbehaving. The ultimate relief sought by the applicant to require a passing of accounts was therefore not disposed of, unlike Lacroix.
The reason for the different outcomes may be because the court in McAllister noted that serious issues had been raised in the application. In Lacroix, Justice Maddalena seemed to accept that the issues raised had already been adequately explained. And indeed, in McAllister, the court awarded costs in favour of the applicant, despite not granting the central relief sought.