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Estates - Wills - Estate Trustees

. Cain v Harnett

In Cain v Harnett (Div Court, 2023) the Divisional Court commented on costs reimbursement, including legal cost awards, for estate trustees:
[7] In Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101, at para. 82, the Court of Appeal confirmed that estates trustees are entitled to be indemnified for all reasonably incurred costs, including legal costs. The Court of Appeal further held that courts have the authority to make “blended” costs orders, including on appeal. A blended costs order is appropriate if the losing party’s conduct unnecessarily increased the costs of litigation, but some costs were necessarily incurred to ensure that the estate is properly administered.
. Feinstein v. Freedman

In Feinstein v. Freedman (Div Ct, 2021) the Divisional Court considered the awarding of trustee's fees and a conflict issue:
[64] The trial judge went on to deal specifically with the submission that the respondent’s compensation should be reduced in accordance with guidelines that have become known in estate matters as “the tariff”. The tariff is based on the decision in Re Jeffery Estate (1990), 39 E.T.R. 173 (Ont. Surr. Ct.), in which Killeen J. held that, in Ontario (p. 178):
a practice has developed of awarding compensation on the basis of 2 1/2 per cent percentages against the four categories of capital receipts, capital disbursements, revenue receipts and revenue disbursements, along with, in appropriate cases, a management fee of 2/5 of 1 per cent per annum on the gross value of the estate…
[65] Killeen J. held that the result of this calculation should be measured against five factors identified in the earlier case of Re Toronto General Trusts Corp. and Central Ontario Railway (1905), 6 O.W.R. 350 (H.C.), to determine whether the tariff amount is appropriate. The five factors identified in Toronto General Trusts are (p. 354):
(1) the size of the trust;

(2) the care and responsibility arising from the size of the trust;

(3) the time occupied in performing the duties of trustee;

(4) the skill and ability displayed by the trustee; and

(5) the success resulting from the trustee’s efforts.
[66] The decision in Jeffrey Estate was approved of by the Ontario Court of Appeal in Laing Estate v. Hines (1998), 1998 CanLII 6867 (ON CA), 41 O.R. (3d) 571, 167 D.L.R. (4th) 150, at para. 9.

....

[105] Section 61(1) of the Trustee Act provides:
A trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice.
[106] As the Court of Appeal noted in Laing Estate, the fixing of compensation under s. 61(1) “is far from an exact science”: para. 10. Once the tariff has proven inadequate, the exercise becomes a highly discretionary one. Counsel for the appellants demonstrated this during argument when he was asked how this court might arrive at a more appropriate amount of compensation. He suggested a reduction of 30 to 40 percent based on nothing more than a “holistic review” of the accounts. The trial judge’s reduction of the respondent’s account appears to have been undertaken on a much more precise and principled basis than the one suggested by counsel for the appellants.

[107] As counsel for the respondent points out, after referring to the shortcomings in the respondent’s work as trustee, the trial judge reduced the compensation sought by exactly $65,000 (from $289,197 to $224,197). This coincides perfectly with the number of months the respondent acted as trustee, as the trial judge mentioned in para. 4 of his reasons, and represents a reduction of precisely $1,000 per month. Thus, contrary to the submissions of the appellants, how the trial judge arrived at the amount of compensation is clear. The final question is whether the amount arrived at was fair and reasonable.

[108] In Laing Estate, the Court of Appeal reaffirmed that the trial judge’s discretion should not be interfered with unless “there is an error in principle, or if, in its opinion, the amount allowed is grossly insufficient or excessive” ( para. 10). I can find no error in principle, nor does the amount allowed appear to be excessive.


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Last modified: 14-07-23
By: admin