Don’t pass accounts? Go directly to jail.


There was a decision released recently in the case of Walling v. Walling in Ontario that offers a sharp wake-up call for estate trustees. In this case, the estate was divided between two young beneficiaries, and so the funds were held in trust for a number of years. When the younger son reached age 21, and the estate was to be fully distributed, both beneficiaries requested that the accounts be passed (essentially, asking that the executor provide an account of everything that came into the estate and everything that was to be paid out). The executor stalled, however, over a period of almost two years, earning fine after fine from the court for not filing accounts as ordered. Eventually, Justice Fregeau ordered the executor imprisoned for seven days for contempt of court.

While imprisonment is a very rare remedy for any contempt of court proceeding, it is still important to remember that it exists, and that an order to pass accounts can lead to severe consequences if it is ignored for long enough.

You can read the entire decision here.