Who Can Order a Passing of Accounts?
Section 31(1) of the Substitute Decisions Act, 1992 (“SDA“) provides that an attorney or guardian of property has power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will. This broad power raises an obvious potential for abuse. The SDA attempts to minimise this by imposing numerous duties on attorneys and guardians of property aimed at ensuring they exercise their power solely in the best interest of the incapable person. The real ‘teeth’ however come from section 42(1) of the SDA which allows the court to order an attorney or guardian of property to pass their accounts. A ‘passing of accounts’ requires the court to assess the propriety of each individual expense incurred by an attorney or guardian of property on an incapable person’s behalf over a specified period of time and to decide which expenses should be allowed and which expenses should be disallowed. It is a time consuming and expensive process for all involved.
A court will not order a passing of accounts without first being requested to do so and not just anyone can make this request. Sections 42(3) and (4) of the SDA set out who may petition for a passing of accounts:
42 (3) A guardian of property, the incapable person or any of the persons listed in subsection (4) may apply to pass the accounts of the guardian of property. 1992, c. 30, s. 42 (3).
42 (4) The following persons may also apply:
1. The grantor’s or incapable person’s guardian of the person or attorney for personal care.
2. A dependant of the grantor or incapable person.
3. The Public Guardian and Trustee.
4. The Children’s Lawyer.
5. A judgment creditor of the grantor or incapable person.
6. Any other person, with leave of the court.
Section 42(4)(6), above, grants the court discretion to allow “any other person” to request a passing of accounts. How is this discretion to be exercised? The applicable test was articulated by Justice Henderson in Ali v. Fruci [2006] O.J. 1093 as follows:
a) The applicant must have a genuine issue in the welfare of the grantor of the power of attorney;
b) It must be reasonable to believe that a court hearing the matter may order the attorney to pass accounts.
That case involved a request by an incapable person’s great niece for leave to commence an application to compel the attorney for property to pass her accounts. The request was granted.
In considering the first branch of the test the court noted that the applicant had a life long relationship with the incapable person, had arranged personal care services for her in the past, had been attending her medical appointments for many years and had previously been appointed as her attorney for property and personal care.
In considering the second branch of the test, the court noted that the incapable person is 98 years old and may have dementia and that her current attorney had refused to inform the applicant of her actions and had prohibited and limited contact with family members.
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Written by: WEL Partners
Posted on: May 30, 2017
Categories: Commentary
Section 31(1) of the Substitute Decisions Act, 1992 (“SDA“) provides that an attorney or guardian of property has power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will. This broad power raises an obvious potential for abuse. The SDA attempts to minimise this by imposing numerous duties on attorneys and guardians of property aimed at ensuring they exercise their power solely in the best interest of the incapable person. The real ‘teeth’ however come from section 42(1) of the SDA which allows the court to order an attorney or guardian of property to pass their accounts. A ‘passing of accounts’ requires the court to assess the propriety of each individual expense incurred by an attorney or guardian of property on an incapable person’s behalf over a specified period of time and to decide which expenses should be allowed and which expenses should be disallowed. It is a time consuming and expensive process for all involved.
A court will not order a passing of accounts without first being requested to do so and not just anyone can make this request. Sections 42(3) and (4) of the SDA set out who may petition for a passing of accounts:
42 (3) A guardian of property, the incapable person or any of the persons listed in subsection (4) may apply to pass the accounts of the guardian of property. 1992, c. 30, s. 42 (3).
42 (4) The following persons may also apply:
1. The grantor’s or incapable person’s guardian of the person or attorney for personal care.
2. A dependant of the grantor or incapable person.
3. The Public Guardian and Trustee.
4. The Children’s Lawyer.
5. A judgment creditor of the grantor or incapable person.
6. Any other person, with leave of the court.
Section 42(4)(6), above, grants the court discretion to allow “any other person” to request a passing of accounts. How is this discretion to be exercised? The applicable test was articulated by Justice Henderson in Ali v. Fruci [2006] O.J. 1093 as follows:
a) The applicant must have a genuine issue in the welfare of the grantor of the power of attorney;
b) It must be reasonable to believe that a court hearing the matter may order the attorney to pass accounts.
That case involved a request by an incapable person’s great niece for leave to commence an application to compel the attorney for property to pass her accounts. The request was granted.
In considering the first branch of the test the court noted that the applicant had a life long relationship with the incapable person, had arranged personal care services for her in the past, had been attending her medical appointments for many years and had previously been appointed as her attorney for property and personal care.
In considering the second branch of the test, the court noted that the incapable person is 98 years old and may have dementia and that her current attorney had refused to inform the applicant of her actions and had prohibited and limited contact with family members.
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