Estate trustees, attorneys for property, guardians of property and trustees of a trust (collectively referred to here as “fiduciaries”) are all obligated to keep detailed records, or accounts, of their management of assets. Fiduciaries can be compelled to pass accounts by those with an interest in the trust property or by those with a close relationship to the trust on an application to compel an accounting. A fiduciary may also volunteer to present their accounts to the court in a formal application to pass accounts.
Accounts passed in a formal application must meet certain enumerated criteria. In the estates context, for accounts to be in proper court format, they must fulfill the criteria listed in rule 74.17 of the Rules of Civil Procedure. In the attorney or guardian context, formal accounts must contain the criteria listed in Ontario Regulation 100/96 under the Substitute Decisions Act.
As it is costly and time consuming to go through the steps in a formal court application and have accounts prepared in court format, those who wish to see a fiduciary’s accounts will often first ask for information to be disclosed in an “informal accounting”. As an informal accounting is not guaranteed to be satisfactory, parties seeking informal accounts will often maintain their right to compel a formal accounting later on.
Importantly, an application to pass accounts or compel an accounting may go further than the mere production of the accounts in the specified format; it gives the parties an opportunity seek the court’s direction on the next steps in the proceeding, and to object and demand more information about specific transfers.
At the end of the process, the court may approve the accounts, grant or adjust the trustee’s /guardian’s / attorney’s compensation, or order that any funds taken be repaid.