The Ontario Superior Court of Justice recently had to address a situation where an estate trustee significantly failed to keep proper records of their dealings with an estate over an almost 20-year period in Flowers v. Flowers.[1]
Background
Olga Flowers (the “Deceased”) passed away on May 11, 2007, having been predeceased by her husband. The Deceased had a will dated May 14, 2004 (the “Will”) which names her daughter, Donna (the “Applicant” or the “Estate Trustee”) as estate trustee. The Will divides the residue of her estate to her four children equally.
The Applicant was issued a Certificate of Appointment of Estate Trustee with a Will on October 17, 2007. At the time the certificate was issued, there were no objections to the Applicant’s appointment, including by the Applicant’s brother, John David Flowers (the “Respondent”). As of the date of the hearing, June 4, 2026, the Deceased’s estate had yet to be completely administered.
Throughout the almost 2-decade period since the Applicant was appointed as estate trustee, she failed to keep proper records of the estate’s assets and her dealings with them.
The Estate Trustee was unable to provide complete account documentation in relation to the Deceased’s bank accounts. The Respondent suggested that, when considering the Deceased’s pension income, the proceeds of sale from her home, and income accrued from the Ottawa condo, the court should draw an adverse inference that the Deceased’s estate held more liquid assets than the Estate Trustee suggests, and that she should be made to pay damages for the funds for which she cannot account.
In January of 2023, the Respondent commenced an application seeking an order that the Applicant pass her accounts as estate trustee, to which the Applicant consented to. In February of 2024, the Applicant commenced this application to pass accounts, following which, the Respondent brought a contempt motion claiming the Applicant was in breach of the consent order to pass her accounts, noting that the form of accounts did not comply with the Rules of Civil Procedure,[2] and argued that they didn’t allow him to meaningfully review the Applicant’s administration of the estate. Notably, the Applicant’s evidence was in the form of a narrative affidavit, rather than being supported by an affidavit verifying accounts. It also did not include any statement of accounts.
One thing that the Respondent did learn from this accounting, however, was that the Applicant had transferred $272,538.78 to her counsel in trust from the Deceased’s estate. Following this, an Estate Trustee During Litigation was appointed.
Although the Applicant conceded that the accounts could not be passed in their current form, she sought a “just and final resolution that is proportionate to the size of the modest estate and that considers her sincere efforts to bring the administration of the estate to a close”. The Respondent sought an order depriving the Estate Trustee of compensation for her administration of the estate, an order that she repay the amounts that she caused to be depleted from the estate, and costs on a full indemnity scale.
Passing of Accounts
Despite the Applicant recognizing that the accounts were not adequate in their current for, Justice Akbarali, rightfully, laid out the general principles surrounding passing of accounts.
Rule 74.17(1) of the Ontario Rules of Civil Procedure provides that “[e]state trustees shall keep accurate records of the assets and transactions in the estate.” It also sets out a list of items that shall be included in the accounts filed with the court, including, inter alia:
- a statement of the assets at the date of death;
- an account of all money received and disbursed;
- a statement of the assets that are unrealized at the closing date of the accounts;
- a statement of the money and investments, and liabilities, at the closing date of the accounts; and
- a statement of the compensation claimed by the estate trustee.[3]
Citing Wall v. Shaw,[4] the court also noted that the Estate Trustee has a clear duty to keep proper books of account and to be ready at all times to account for the trust property for which they are bound to administer. Justice Akbarali found that the Applicant here failed to meet that duty. Her application to pass accounts did not establish the assets that the estate held at the time of the Deceased’s death and there was no accounting of the funds received by the Estate Trustee and the funds disbursed.
Objections and Damages
With respect to the funds paid to the Applicant’s lawyers from the Deceased’s estate, the Applicant claimed that she had repaid the estate. However, Justice Akbarali noted concerns with whether this was actually the case. The Applicant also admitted to only borrowing $185,000 from the estate in her personal capacity, stating that the $272,538.78 figure came from her own personal funds. The court found the Applicant’s evidence overall to not be credible, given her limited ability to disclose complete information about the estate’s assets and her dealings with them. In any event, co-mingling her personal funds with the estate’s funds amounted to self-dealing in the court’s eyes. As such, the court made a formal declaration that the Applicant’s accounts are not passed.
With regards to the Respondent’s objections and whether damages should flow from those objections, Justice Akbarali underwent a thorough examination of the limited accounting provided by the Applicant. The court noted that the Respondent’s approach to his damages claim has been to adopt assumptions that were as generous to his position as possible, asking the court to draw adverse inferences to fill gaps in evidence.
To that point, the court held that the goal of a passing of accounts is not to punish an estate trustee, but rather to hold the trustee to account, and where there has been delinquency or self-dealing, to ensure that the estate is made whole. As such, although Justice Akbarali noted that she was prepared to draw adverse inference where they are warranted and principled, she would not draw adverse inferences in a speculative fashion, citing the ONSC case of Last v. Last, where Charney J there noted:
In the absence of a formal accounting, it is impossible to calculate the precise amount that was misappropriated by Craig between 2015 and 2021. Given Craig’s failure to comply with the Order of Christie J. and provide an accounting, it is appropriate to draw an adverse inference against Craig with respect to most of these bank transfers and other charges.[5]
Following from this, the court reasoned that in order to reach a just conclusion of what damages ought to be awarded, the court must consider the evidence before it, considering only what damages are proved on the record. Accordingly, Justice Akbarali underwent a thorough examination of the evidence before the court and ultimately found that the current value of the liquid assets in the estate ought to be $279,350. As the Applicant had transferred $272,538.22 to her lawyers, that left $6,811.22 unaccounted for. Accordingly, the court ordered the Applicant to pay that sum back to the estate personally. While some of the funds transferred to the Applicant’s lawyers remained in trust, there was a significant portion of it depleted to pay for her legal costs. The question on how to deal with these depleted funds was not addressed, as the court opted to address the issue during its costs analysis, which was ultimately adjourned for further submissions from the parties.
Additionally, the court noted that the Applicant had “done just about as poor a job as possible in keeping her accounts” making a proper accounting impossible. That, in addition to her self-dealing, made it appropriate to deny her any entitlement to compensation.
Final Thoughts
This decision is a good exercise of a fundamental principle of estate administration – that an estate trustee must keep proper records and be able to account for all of their dealings with the estate that is entrusted to them. Although in these circumstances, the court only (as of yet) ordered a modest sum of repayment to the estate, Justice Akbarali made it clear that this was in no way a vindication of her conduct. In fact, the modest sum of repayment was a reflection of the lack of proof of the claim before the court, which in my opinion flowed directly from the Estate Trustee’s own failings to keep records and disclosure them to the Respondent. It could be very well likely that further funds from the estate were misappropriated by the Applicant, but her lack of record keeping makes that impossible to discern. In such a circumstance, it is the beneficiaries who are meant to shoulder the loss, and not the Estate Trustee.
Now that isn’t to say that the Estate Trustee is in the clear. As mentioned, Justice Akbarali has yet to make a decision on costs, and there is certainly a possibility that the Applicant will have to pay for her legal costs personally, and not out of the estate’s funds, given the court’s admonishment of her conduct. This decision serves as a stark reminder for all estate trustees of the importance of remaining diligent in keeping clear records of all estate dealings. Even if a trustee is doing their best to administer an estate, failing to maintain proper records could ultimately result in significant cost awards against them, with no entitlement to compensation from the estate.
—
[1] Flowers v. Flowers, 2026 ONSC 3524
[2] Rules of Civil Procedure, RRO 1990, Reg 194
[3] Ibid at Rule 74.17
[4] Wall v. Shaw, 2018 ONCA 929, at paras. 23
[5] Last v. Last, 2025 ONSC 1407
Written by: Mark Polese
Posted on: August 6, 2026
Categories: Commentary
The Ontario Superior Court of Justice recently had to address a situation where an estate trustee significantly failed to keep proper records of their dealings with an estate over an almost 20-year period in Flowers v. Flowers.[1]
Background
Olga Flowers (the “Deceased”) passed away on May 11, 2007, having been predeceased by her husband. The Deceased had a will dated May 14, 2004 (the “Will”) which names her daughter, Donna (the “Applicant” or the “Estate Trustee”) as estate trustee. The Will divides the residue of her estate to her four children equally.
The Applicant was issued a Certificate of Appointment of Estate Trustee with a Will on October 17, 2007. At the time the certificate was issued, there were no objections to the Applicant’s appointment, including by the Applicant’s brother, John David Flowers (the “Respondent”). As of the date of the hearing, June 4, 2026, the Deceased’s estate had yet to be completely administered.
Throughout the almost 2-decade period since the Applicant was appointed as estate trustee, she failed to keep proper records of the estate’s assets and her dealings with them.
The Estate Trustee was unable to provide complete account documentation in relation to the Deceased’s bank accounts. The Respondent suggested that, when considering the Deceased’s pension income, the proceeds of sale from her home, and income accrued from the Ottawa condo, the court should draw an adverse inference that the Deceased’s estate held more liquid assets than the Estate Trustee suggests, and that she should be made to pay damages for the funds for which she cannot account.
In January of 2023, the Respondent commenced an application seeking an order that the Applicant pass her accounts as estate trustee, to which the Applicant consented to. In February of 2024, the Applicant commenced this application to pass accounts, following which, the Respondent brought a contempt motion claiming the Applicant was in breach of the consent order to pass her accounts, noting that the form of accounts did not comply with the Rules of Civil Procedure,[2] and argued that they didn’t allow him to meaningfully review the Applicant’s administration of the estate. Notably, the Applicant’s evidence was in the form of a narrative affidavit, rather than being supported by an affidavit verifying accounts. It also did not include any statement of accounts.
One thing that the Respondent did learn from this accounting, however, was that the Applicant had transferred $272,538.78 to her counsel in trust from the Deceased’s estate. Following this, an Estate Trustee During Litigation was appointed.
Although the Applicant conceded that the accounts could not be passed in their current form, she sought a “just and final resolution that is proportionate to the size of the modest estate and that considers her sincere efforts to bring the administration of the estate to a close”. The Respondent sought an order depriving the Estate Trustee of compensation for her administration of the estate, an order that she repay the amounts that she caused to be depleted from the estate, and costs on a full indemnity scale.
Passing of Accounts
Despite the Applicant recognizing that the accounts were not adequate in their current for, Justice Akbarali, rightfully, laid out the general principles surrounding passing of accounts.
Rule 74.17(1) of the Ontario Rules of Civil Procedure provides that “[e]state trustees shall keep accurate records of the assets and transactions in the estate.” It also sets out a list of items that shall be included in the accounts filed with the court, including, inter alia:
Citing Wall v. Shaw,[4] the court also noted that the Estate Trustee has a clear duty to keep proper books of account and to be ready at all times to account for the trust property for which they are bound to administer. Justice Akbarali found that the Applicant here failed to meet that duty. Her application to pass accounts did not establish the assets that the estate held at the time of the Deceased’s death and there was no accounting of the funds received by the Estate Trustee and the funds disbursed.
Objections and Damages
With respect to the funds paid to the Applicant’s lawyers from the Deceased’s estate, the Applicant claimed that she had repaid the estate. However, Justice Akbarali noted concerns with whether this was actually the case. The Applicant also admitted to only borrowing $185,000 from the estate in her personal capacity, stating that the $272,538.78 figure came from her own personal funds. The court found the Applicant’s evidence overall to not be credible, given her limited ability to disclose complete information about the estate’s assets and her dealings with them. In any event, co-mingling her personal funds with the estate’s funds amounted to self-dealing in the court’s eyes. As such, the court made a formal declaration that the Applicant’s accounts are not passed.
With regards to the Respondent’s objections and whether damages should flow from those objections, Justice Akbarali underwent a thorough examination of the limited accounting provided by the Applicant. The court noted that the Respondent’s approach to his damages claim has been to adopt assumptions that were as generous to his position as possible, asking the court to draw adverse inferences to fill gaps in evidence.
To that point, the court held that the goal of a passing of accounts is not to punish an estate trustee, but rather to hold the trustee to account, and where there has been delinquency or self-dealing, to ensure that the estate is made whole. As such, although Justice Akbarali noted that she was prepared to draw adverse inference where they are warranted and principled, she would not draw adverse inferences in a speculative fashion, citing the ONSC case of Last v. Last, where Charney J there noted:
In the absence of a formal accounting, it is impossible to calculate the precise amount that was misappropriated by Craig between 2015 and 2021. Given Craig’s failure to comply with the Order of Christie J. and provide an accounting, it is appropriate to draw an adverse inference against Craig with respect to most of these bank transfers and other charges.[5]
Following from this, the court reasoned that in order to reach a just conclusion of what damages ought to be awarded, the court must consider the evidence before it, considering only what damages are proved on the record. Accordingly, Justice Akbarali underwent a thorough examination of the evidence before the court and ultimately found that the current value of the liquid assets in the estate ought to be $279,350. As the Applicant had transferred $272,538.22 to her lawyers, that left $6,811.22 unaccounted for. Accordingly, the court ordered the Applicant to pay that sum back to the estate personally. While some of the funds transferred to the Applicant’s lawyers remained in trust, there was a significant portion of it depleted to pay for her legal costs. The question on how to deal with these depleted funds was not addressed, as the court opted to address the issue during its costs analysis, which was ultimately adjourned for further submissions from the parties.
Additionally, the court noted that the Applicant had “done just about as poor a job as possible in keeping her accounts” making a proper accounting impossible. That, in addition to her self-dealing, made it appropriate to deny her any entitlement to compensation.
Final Thoughts
This decision is a good exercise of a fundamental principle of estate administration – that an estate trustee must keep proper records and be able to account for all of their dealings with the estate that is entrusted to them. Although in these circumstances, the court only (as of yet) ordered a modest sum of repayment to the estate, Justice Akbarali made it clear that this was in no way a vindication of her conduct. In fact, the modest sum of repayment was a reflection of the lack of proof of the claim before the court, which in my opinion flowed directly from the Estate Trustee’s own failings to keep records and disclosure them to the Respondent. It could be very well likely that further funds from the estate were misappropriated by the Applicant, but her lack of record keeping makes that impossible to discern. In such a circumstance, it is the beneficiaries who are meant to shoulder the loss, and not the Estate Trustee.
Now that isn’t to say that the Estate Trustee is in the clear. As mentioned, Justice Akbarali has yet to make a decision on costs, and there is certainly a possibility that the Applicant will have to pay for her legal costs personally, and not out of the estate’s funds, given the court’s admonishment of her conduct. This decision serves as a stark reminder for all estate trustees of the importance of remaining diligent in keeping clear records of all estate dealings. Even if a trustee is doing their best to administer an estate, failing to maintain proper records could ultimately result in significant cost awards against them, with no entitlement to compensation from the estate.
—
[1] Flowers v. Flowers, 2026 ONSC 3524
[2] Rules of Civil Procedure, RRO 1990, Reg 194
[3] Ibid at Rule 74.17
[4] Wall v. Shaw, 2018 ONCA 929, at paras. 23
[5] Last v. Last, 2025 ONSC 1407
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