Estate Planning

Passing the Damm Accounts: Proper Format for Accounts of a Guardian

By Hull and Hull LLP

 In the matter of Estate of Divina Damm, 2010 ONSC 5119 (CanLII), Justice Brown reflected on the form of accounts to be used upon the filing of an application by a guardian for property to pass accounts.

Justice Brown noted that in passing accounts of a guardian, s. 42(6) of the Substitute Decisions Act, 1992 provides that "the procedure in the passing accounts is the same … as in the passing of executors' and administrators' accounts".

Rule 74.17(1) of the Rules of Civil Procedure specifies in detail the form of accounts to be filed. The Rule requires:

(a)        an itemized accounting of assets under administration, cross-referenced to entries showing the disposition or partial disposition of the assets;

(b)        an account of all money received;

(c)        an account of all money disbursed;

(d)       where investments are made, an account setting out all money paid to purchase investments, and money received by way of repayment or realization of assets in whole or in part;

(e)        a statement of all unrealized original assets at the end of the accounting period;

(f)        a statement of all money and investments at the end of the accounting period;

(g)        a statement of all contingent or other liabilities at the end of the accounting period;

(h)        a statement of compensation claimed; and

(i)         such other statements and information as the court requires. 

If the will or the trust deals separately with income and capital, the accounts are to show separately the receipts and disbursements of capital and income.

In the matter before Justice Brown, the accounts were said to lack the detail required by the Rules, and provided information at the "30,000 foot" level. Justice Brown felt that he could not hear the matter without greater particularization of the accounts. The accounts did not comply with the Rules; due to this lack of particularity, a question arose as to whether a respondent served with the accounts could properly understand the conduct of the guardian; and the Court could not link the particulars of the judgment (which sets out specific amounts for revenue receipts and disbursements and capital receipts and disbursements) to the evidence.

While he rejected the application, Justice Brown raised the question of whether the Rules should be amended so as to allow for a simpler form of accounts for smaller estates. However, until a rule change, all accounts must comply with the format set out in Rule 74.17(1).

Thanks for reading,

Paul Trudelle

Full post as published by Toronto Estate Law Blog on November 29, 2010 (boomark / email).