Motion to Amend Judgment on Passing of Account Statute Barred
Canada Trust v. Ross 2019 ONSC 1165
Gordon Ross was one of the beneficiaries of the Estate of Sarah Grafton. Sarah Grafton, the testator died in 1971. Gordon Ross brought a motion, subsequent to a Judgment on Passing of Accounts of Canada Trust, for relief which included an order that the Passing of Accounts be amended. All of the provisions of the testator’s Will were administered in the Estate, except for the life interest granted to the testator’s daughters, Margaret and Mary, in respect of a cottage property. In 2013, pursuant to an Order Giving Directions, the sale of the cottage property was completed. In 2015, Margaret died.
Gordon Ross, one of Margaret’s sons, argued that Margaret had made capital expenditures on the cottage property during her life and, as a result, the Judgment should be amended to show a liability to the estate of Margaret. Gordon Ross argued he never received the application for the passing of accounts and, pursuant to Rule 17.07, the Estate Trustee, Canada Trust, and the responding beneficiaries did not oppose Rule 16.07 of the Rules of Civil Procedure being applied so that Gordon Ross’s claim on behalf of Margaret’s estate could be considered. In addition, although Gordon Ross was not the Estate Trustee during Litigation in respect of Margaret’s estate, and, therefore, despite the fact he had no legal status to act on behalf of Margaret’s estate to advance a claim against the Estate of Sarah Grafton for reimbursement of capital expenditures made by her on the cottage property, Canada Trust and the respondent beneficiaries advised the court that they would allow the question of the entitlement of Margaret’s estate to seek reimbursement from the Estate to go forward rather than await for the appointment, at some future time, of an estate trustee to advance the claim.
Canada Trust and the responding beneficiaries took the position on the motion that, inter alia, the claim advance by Gordon Ross on behalf of Margaret’s estate was barred by the Limitations Act, 2002, S.O. 2002, c.24. One of the arguments made by Gordon Ross was that the Limitations Act had no application to a claim advanced in the context of a passing of accounts.
Justice Broad rejected the argument and dismissed his motion. Broad J. held that the claim brought on behalf of the estate of Margaret against the Estate of Sarah Grafton was barred by the Limitations Act. Broad J. reviewed the decision of Wall v. Shaw, 2018 ONCA 929 (C.A.) which held that by filing a notice of objection in response to an estate trustee’s application to pass accounts, a beneficiary is not commencing a proceeding in respect of a claim within the meaning of s. 4 of the Limitations Act, 2002. Citing paragraph 24 of the Wall v. Smith decision, the court reasoned that a judge, on a passing of accounts, only has the power to enquire into a complaint or claim by a person interested in the taking of the accounts that financial loss to the estate or trust fund has occurred. Upon proof of such claim, the judge may order the estate trustee to pay such sum to the estate or trust fund.
At paragraph 28 of the decision Broad J noted:
“There is no provision in the Estates Act for the Court, on an Application to Pass Accounts, to inquire into a claim by an alleged creditor of the estate, or a claim by a beneficiary on behalf of an alleged creditor (as in the case at bar), for payment by the estate to such creditor.”
A claim by Margaret’s estate, if successful, would not result in payment to the Estate. Gordon Ross could not have filed a notice of objection pursuant to rule 74.18 to advance the claim on behalf of Margaret’s estate. The court reasoned that the motion “to show a liability to the Estate of Sarah Margaret Ross” was a “claim” within the meaning of s. 4. of the Limitations Act, 2002. Section 1 of the Limitations Act defines “claim” as “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission.” Gordon Ross was asserting that the Estate omitted to reimburse Margaret for capital expenditures made by her for the cottage property, and as a result, her estate suffered a loss.
The court when on to discuss when Margaret Ross ought to have discovered her “claim”. The court found that there were three dates, all of which were more than 2 years before Margaret’s death, where the discoverability principle applied. She failed to bring a claim to remedy her loss prior to the expiry of the two year limitation period. Accordingly, her claim was barred by the Limitations Act, 2002.
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Written by: WEL Partners
Posted on: March 13, 2019
Categories: Commentary
Canada Trust v. Ross 2019 ONSC 1165
Gordon Ross was one of the beneficiaries of the Estate of Sarah Grafton. Sarah Grafton, the testator died in 1971. Gordon Ross brought a motion, subsequent to a Judgment on Passing of Accounts of Canada Trust, for relief which included an order that the Passing of Accounts be amended. All of the provisions of the testator’s Will were administered in the Estate, except for the life interest granted to the testator’s daughters, Margaret and Mary, in respect of a cottage property. In 2013, pursuant to an Order Giving Directions, the sale of the cottage property was completed. In 2015, Margaret died.
Gordon Ross, one of Margaret’s sons, argued that Margaret had made capital expenditures on the cottage property during her life and, as a result, the Judgment should be amended to show a liability to the estate of Margaret. Gordon Ross argued he never received the application for the passing of accounts and, pursuant to Rule 17.07, the Estate Trustee, Canada Trust, and the responding beneficiaries did not oppose Rule 16.07 of the Rules of Civil Procedure being applied so that Gordon Ross’s claim on behalf of Margaret’s estate could be considered. In addition, although Gordon Ross was not the Estate Trustee during Litigation in respect of Margaret’s estate, and, therefore, despite the fact he had no legal status to act on behalf of Margaret’s estate to advance a claim against the Estate of Sarah Grafton for reimbursement of capital expenditures made by her on the cottage property, Canada Trust and the respondent beneficiaries advised the court that they would allow the question of the entitlement of Margaret’s estate to seek reimbursement from the Estate to go forward rather than await for the appointment, at some future time, of an estate trustee to advance the claim.
Canada Trust and the responding beneficiaries took the position on the motion that, inter alia, the claim advance by Gordon Ross on behalf of Margaret’s estate was barred by the Limitations Act, 2002, S.O. 2002, c.24. One of the arguments made by Gordon Ross was that the Limitations Act had no application to a claim advanced in the context of a passing of accounts.
Justice Broad rejected the argument and dismissed his motion. Broad J. held that the claim brought on behalf of the estate of Margaret against the Estate of Sarah Grafton was barred by the Limitations Act. Broad J. reviewed the decision of Wall v. Shaw, 2018 ONCA 929 (C.A.) which held that by filing a notice of objection in response to an estate trustee’s application to pass accounts, a beneficiary is not commencing a proceeding in respect of a claim within the meaning of s. 4 of the Limitations Act, 2002. Citing paragraph 24 of the Wall v. Smith decision, the court reasoned that a judge, on a passing of accounts, only has the power to enquire into a complaint or claim by a person interested in the taking of the accounts that financial loss to the estate or trust fund has occurred. Upon proof of such claim, the judge may order the estate trustee to pay such sum to the estate or trust fund.
At paragraph 28 of the decision Broad J noted:
“There is no provision in the Estates Act for the Court, on an Application to Pass Accounts, to inquire into a claim by an alleged creditor of the estate, or a claim by a beneficiary on behalf of an alleged creditor (as in the case at bar), for payment by the estate to such creditor.”
A claim by Margaret’s estate, if successful, would not result in payment to the Estate. Gordon Ross could not have filed a notice of objection pursuant to rule 74.18 to advance the claim on behalf of Margaret’s estate. The court reasoned that the motion “to show a liability to the Estate of Sarah Margaret Ross” was a “claim” within the meaning of s. 4. of the Limitations Act, 2002. Section 1 of the Limitations Act defines “claim” as “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission.” Gordon Ross was asserting that the Estate omitted to reimburse Margaret for capital expenditures made by her for the cottage property, and as a result, her estate suffered a loss.
The court when on to discuss when Margaret Ross ought to have discovered her “claim”. The court found that there were three dates, all of which were more than 2 years before Margaret’s death, where the discoverability principle applied. She failed to bring a claim to remedy her loss prior to the expiry of the two year limitation period. Accordingly, her claim was barred by the Limitations Act, 2002.
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