Can an estate trustee move to strike a beneficiary’s Notice of Objection to Accounts in the face of their Application to Pass Accounts, based on any of the Limitations Act, 2002, and/or laches and acquiescence? This was the discreet, though important, issue considered by the Ontario Superior Court of Justice in Wall Estate, 2018 ONSC 1735.
Background
Marjorie Ann Wall died in 2005, leaving behind an estate with an approximate value of $3,000,000.00. She was survived by her two children, Elizabeth Wall and Bruce Wall.
Pursuant to the terms of the deceased’s will, the bulk of the estate was to be left to her two children in trust until they reached the age of 60. The will further provided that Ian Paul Shaw, the deceased’s solicitor right up to the time of her death, was to become estate trustee. Mr. Shaw would have absolute discretion to pay funds Ms. and Mr. Wall during their lifetimes until they reached age 60. At the time of the hearing of this matter, Mr. Wall had passed away before reaching age 60, while Ms. Wall was 54.
The estate contained a complex mix of assets. Mr. Shaw managed these assets and made investments in the years following the deceased’s death, but it was his accounting of his time and efforts that was the source of this dispute. Much of the case, in fact, turned on the nature and happenings of a number of meetings that were held annually at Mr. Shaw’s office. Mr. Shaw characterised those meetings as “accountings” where Ms. Wall, as surviving beneficiary, would attend and approve the estate accounts prepared for her review and of the compensation taken by Mr. Shaw over a period of time. Ms. Wall, for her part, thought such a characterization of those meetings was “nonsense” and described a “sham” of a process designed to get her to release Mr. Shaw (which she did not do) without her knowledge and without independent legal advice.
On October 9, 2014, Ms. Wall brought an application to compel Mr. Shaw to pass his accounts. Ms. Wall was successful and on January 15, 2015, Mr. Shaw was ordered to pass his accounts from the date of the deceased’s death to the date of his removal as estate trustee.
On June 2, 2015, Ms. Wall filed a 13-page objection to accounts. On January 12, 2016, Mr. Shaw brought a motion to strike Elizabeth’s objections. Mr. Shaw did not dispute the fact that he had to pass accounts for the period ordered. Rather, he argued that he did not need to respond to the objection to accounts by reason of the Limitations Act, 2002, and/or laches and acquiescence.
On the Limitations Act, 2002
Much of the Court’s decision turned on whether a notice of objection constituted a “claim” within the meaning of the Limitations Act, 2002. Simply put, if it did, then the two-year general limitation period found in the act would apply and Ms. Wall would be out of time to raise objections.
Justice Mulligan was not satisfied, however, that a notice of objection amounted to a “claim” within the meaning of the act. A notice of objection, he reasoned, did not involve a person seeking redress for loss, injury or damage. Rather, it involved a beneficiary seeking answers to questions about steps taken by an estate trustee during the administration of an estate. This, the Court concluded, did not rise to the level of a “claim” as contemplated by the Limitations Act, 2002.
On Laches
The Court cited the definition of “laches” found in Black’s Law Dictionary: “Unreasonable delay in pursuing a right or claim – almost always an equitable one – in a way that prejudices the party against whom relief is sought.” The Court also looked to the 1874 English decision of Lindsay Petroleum Co. v. Hurd which provides that the length of delay and the nature of the acts done during that delay are important circumstances which warrant consideration.
Upon reviewing the above two authorities, Justice Mulligan concluded that the doctrine of laches had no application in this case. The Court held that there was no prejudice to Mr. Shaw, as estate trustee, from Ms. Wall’s delay in pursuing her right to seek answers to the questions she had about the estate administration.
On Acquiescence
Justice Mulligan considered the Supreme Court of Canada case M. (K.) v. M. (H.) in his review of the principle of acquiescence. In that case, the Supreme Court reviewed the primary and secondary meanings of acquiescence: acquiescence in the first sense is akin to estoppel, wherein a person stands by and watches the deprivation of their rights; in the second sense, acquiescence is an element of laches in that a person delays seeking a remedy despite full knowledge of the deprivation and their right to a remedy.
On review of the evidence, Justice Mulligan was not satisfied that the annual meetings outlined above, or the fact that Ms. Wall may have initialed some statements provided by Mr. Shaw, amounted to acquiescence.
Conclusion
The motion to strike the notice of objections was dismissed and Mr. Shaw was required to provide a response to Ms. Wall’s objections.
It is possible that the outcome of the motion may have been different had Mr. Shaw waited until the hearing of the application to raise the defences of limitations, laches, and acquiescence. In this case, the application had not moved beyond the objection and response phase, which is, for the most part, an exchange of information about the estate administration. The Court held that the Limitations Act, 2002, does not apply to requests for information. However, after Mr. Shaw delivers his response to Ms. Wall’s objections, Ms. Wall may raise allegations of wrongdoing and seek damages against Mr. Wall at the hearing of the application to pass accounts. The decision leaves open the possibility that Mr. Shaw may raise the Limitations Act, 2002, and/or laches and acquiescence as defences at that time.
[1] https://www.youtube.com/watch?v=JnsJ185yDEU
