Estate administration is finally moving into the 21st century.
Thanks to a July 7 Ontario Superior Court ruling, estates advertising for creditors are now allowed to publish online notices instead of running newspaper ads.
Why must estates advertise at all? An executor can be sued if they distribute an estate without advertising for creditors. In fact, the executor (known in Ontario as an estate trustee) may be required to personally reimburse the deceased’s creditors for amounts owing.
If the executor provides appropriate notice to creditors, however, Ontario’s Trustee Act says the executor will not be held personally liable.
Newspaper versus online
Some provinces, such as British Columbia, require executors to publish creditor advertisements in print newspapers. Ontario’s legislation is silent on the method of advertising; however, the convention since the 1900s has been for executors to advertise in local newspapers. That’s because of a 1907 court case where a judge stated that executors should advertise for creditors in newspapers where creditors are thought to be located.
Fast forward 110 years to 2017. Advertising for creditors in newspapers can be prohibitively expensive. Fewer people read print newspapers. And, creditors are likely to search for the name of a debtor on the Internet.
The July 7 decision, which acknowledged these factors, revolved around an estate that had advertised for creditors on a website called NoticeConnect.com, which is based in Toronto. The executor advertised for creditors on NoticeConnect, which cost less than advertising in newspapers, and then applied to the courts for express permission to do so.
As part of the evidence presented, several leading estate practitioners added their opinions, saying that few creditors respond to notices to creditors published in print newspapers.
The court ruled in the executor’s favour, saying he satisfied his duty to advertise for creditors and that he was therefore entitled to liability protection.
It’s unclear whether the ruling applies to other online services, since NoticeConnect was explicitly mentioned in the ruling. Other services may have to obtain their own rulings.
Nonetheless, the court has confirmed that online notice to creditors is an effective method for service that entitles an executor to the liability protection provided by the Trustee Act. Tell executor clients in Ontario that they can consider online notice in future.
Holly LeValliant is an estate litigation lawyer with Mills & Mills LLP who acted in the case for the executor with the co-operation of NoticeConnect, along with David Mills.