COURT OF APPEAL FOR ONTARIO

CITATION: Armitage v. The Salvation Army, 2016 ONCA 971

DATE: 20161222

DOCKET: C62019

Sharpe, Pepall and Hourigan JJ.A.

BETWEEN

Sharon Armitage

Applicant (Respondent)

and

The Salvation Army

Respondent (Appellant)

Anthony J. Frost, for the appellant

Anya-Deane Best, for the respondent

Heard: November 30, 2016

On appeal from the judgment of Justice Timothy D. Ray of the Superior Court of Justice, dated March 23, 2016, with reasons reported at 2016 ONSC 2043.

Hourigan J.A.:

[1] The respondent was the attorney for property for Morley George Wiltse, and the executor of his estate upon his death. The appellant is the sole beneficiary under Mr. Wiltse’s will.

[2] The respondent brought applications to pass her accounts as attorney for property and as estate trustee. The appellant filed notices of objection in both proceedings.

[3] The application judge granted the passing of accounts for both attorney for property and estate trustee, and approved the amount claimed by the respondent as compensation in its entirety.

[4] On appeal, the appellant advances the same arguments raised below. Specifically, it says that the claim for compensation as attorney for property is statute-barred, and that the quantum of compensation claimed is excessive and unreasonable.

[5] For the reasons that follow, I would dismiss the appeal.

Background Facts

[6] The respondent was appointed Mr. Wiltse’s attorney for property and personal care in 1990, 2001, and 2007. In 2007, the respondent, who is a realtor, discussed with Mr. Wiltse the possibility of selling his home. He provided his signed agreement and she listed the residence. She received a commission of $7,500 on the sale of the property. $10,000 was paid to have the house emptied of its contents and to distribute the items to family members of Mr. Wiltse, for which she was reimbursed out of the proceeds of the sale.

[7] Mr. Wiltse died on February 5, 2013. On September 5, 2013 the respondent submitted her claim for attorney compensation, and on January 30, 2015 she issued a notice of application for the passing of accounts. She filed a further application for the passing of the estate accounts on January 30, 2015.

[8] Before the application judge, the respondent sought compensation totalling $34,034.29 for her services as attorney for property, and $11,679 for her services as estate trustee.

[9] The appellant disputed the respondent’s entitlement to compensation as attorney for property on the basis that the claim was not made within the general two-year limitation period under the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. It also objected to the compensation for that work, in part, because many of the receipts and disbursements occurred through automatic transfers.

[10] Regarding the estate trustee’s accounts, the appellant’s primary objections were that the compensation sought was excessive given the relatively modest size of the estate, and that the respondent had already been compensated as attorney for property.

Decision of the Application Judge

[11] On the issue of the limitations defence, the appellant relied on s. 40(1) of the Substitute Decisions Act, 1992, S.O. 2002, c. 30 (the “SDA”), which provides that an attorney for property “may take annual compensation.” The application judge rejected the appellant’s submission that this provision means that the end of each year of service triggers the beginning of a two-year limitation period for an attorney to claim compensation. He noted that if the legislature wished to create a limitation period that is triggered annually, it would have been very simple to use language to say so clearly.

[12] The application judge held that the date of the deceased’s death, which terminates the continuing power of attorney, triggers the limitation period. In this case, the respondent had two years from February 5, 2013 to bring an application to pass her accounts and to seek her compensation. The application judge found that she had met that deadline.

[13] The application judge also rejected the submission that the respondent was required to produce evidence of her services to Mr. Wiltse’s prior to his death for his authorization or comment. He held that the attorney for property’s only obligation is to maintain accounts, and that the SDA set out a process to review the attorney for property’s services and expenditures, independent of Mr. Wiltse’s views.

[14] Having determined that the respondent’s claim for compensation as attorney for property was not statute-barred, the application judge approved the requested compensation of $34,034.29. In doing so, the application judge considered and dismissed the appellant’s objections. In particular, he held that although there were a number of recurring payments requiring little in the way of services, the 3% rate provided for in O. Reg 26/95, s.1, which was passed under the SDA, is an average, contemplating that there are more onerous tasks and less onerous tasks.

[15] The application judge also held that the respondent’s commission on the sale of the deceased’s home and the $10,000 cost to empty the house prior to selling it were appropriate. He noted that the law permits a realtor acting as attorney to charge for services separate and apart from the attorney services, and that the respondent’s calculation for compensation was based on the net proceeds of the home, so she was not “double-dipping”.

[16] The application judge then considered the respondent’s accounts as executor. He rejected the appellant’s argument that the compensation should be reduced because the respondent carried out most of the work while she was attorney for property, prior to assuming the role of executor. The application judge concluded that the estate was modest and required modest services, resulting in modest compensation. He fixed the executor’s compensation at the requested amount of $11,679.

Issues

[17] This appeal raises the following issues:

(i) Should the respondent be denied compensation as power of attorney on the basis that she is statute-barred?

(ii) If the answer to issue (i) is no, was the compensation awarded for services as attorney for property and/or executor unreasonable in the circumstances?

Analysis

(a) Limitations Defence

[18] As noted above, the application judge was of the view that the running of the general two-year limitation period under the Limitations Act, 2002 was triggered on the death of Mr. Wiltse. As the respondent brought the application to pass her accounts within two years of the death of Mr. Wiltse, her claim was not time barred.

[19] While I agree with the result reached by the application judge, I disagree with his conclusion that the Limitations Act, 2002 had any application in the circumstances of this case. As I will discuss below, in my view, the Limitations Act, 2002 does not apply because compensation for an attorney for property through the passing of accounts process does not constitute a “claim” within the meaning of the Limitations Act, 2002.

[20] It is useful to briefly consider the nature of compensation for attorneys for property and how the passing of accounts process works. An attorney for property is a fiduciary and has an obligation under s. 32(6) and 38(1) of the SDA to, among other things, keep accounts of all transactions involving the property.

[21] The attorney for property may bring an application to the Superior Court to have his or her accounts approved. Through that process, the attorney for property may also seek court approval of compensation for his or her services. The responding parties to the application have an opportunity to file a notice of objection to the accounts, and to object to the compensation that the attorney for property proposes to take or has taken.

[22] Where the attorney for property has not commenced an application for the passing of accounts, an interested party may bring an application under s. 42(1) of the SDA to compel the passing of accounts.

[23] As noted by Matthew Furrow and Daniel Zacks in their very recent article “The Limitation of Applications to Pass Accounts” (2016) 46 Adv. Q. 2, historically in Ontario there was no statutory limitation period for the passing of accounts. The only bars were the equitable defences of laches and acquiescence. The question becomes whether the enactment of the Limitations Act, 2002 changed the law and imposed the general two-year limitation period on claims for compensation for attorney for property.

[24] At first blush it would appear that such claims might be captured by the general limitation period. The Limitations Act, 2002 was designed to comprehensively deal with all manner of civil claims, whether grounded in equity, law, or statute. There are specific carve outs in the legislation for claims that are not subject to the Act. It is arguable, therefore, that if compensation for attorneys for property was intended to be exempted from the general limitation period it would have been specifically exempted under the Limitations Act, 2002.

[25] The difficulty with that argument is that the Limitations Act, 2002 applies only to the assertion of a “claim”, and a claim is defined in the Act as follows: “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission.”

[26] The appellant submits that the right under the SDA to seek compensation is a new statutory right and, as with all rights, where there is a right there must be a remedy. Further, the appellant argues that the respondent’s claim for compensation fits within the statutory definition of a claim. Counsel for the appellant submits that in seeking compensation at this time the respondent has suffered a loss because she chose not to seek self-help and take her compensation earlier. He goes on to argue that this loss is the result of the respondent’s omission in failing to claim compensation earlier.

[27] I am unable to accede to this rather circular argument. The fact is that in seeking court approval of the passing of accounts, an attorney for property is not seeking redress for any loss, injury, or damage. Rather, he or she is seeking approval from the court of his or her actions in managing the property, including approval for compensation previously taken or now sought. A passing of accounts application is the opposite of remedial; it is a process that seeks a court order that no remedy is necessary with respect to the accounts: see Furrow and Zacks, at pp. 9-10. Thus, the passing of accounts does not fit within the first part of the Limitations Act, 2002 definition of claim.

[28] An application for the passing of accounts also does not fit within the second part of the statutory definition of claim. Where the definition speaks of an act or omission, it must surely refer to an action taken or not taken by a third party that has the effect of causing loss, injury, or damage. It would be a strange result if a limitation period could not be triggered until the party asserting the claim took an action or omitted to do something.

[29] The result, in my view, is that a passing of accounts under the SDA is not subject to the two-year general limitation period found in the Limitations Act, 2002.[^1] The common law in that regard was not changed with the enactment of that legislation. Consequently, the only defences available are the equitable defences of laches and acquiescence, neither of which were asserted in the present case.

(b) Reasonableness of Compensation

[30] Under the SDA, an attorney for property is entitled to claim compensation as part of the passing of accounts process. That compensation is fixed under the regulations passed pursuant to that statute. However, the court has the authority under s. 42(8)(a) to adjust the attorney’s compensation in accordance with the value of the services performed.

[31] The appellant concedes that as part of the passing of accounts it is within the discretion of an application judge to adjust the compensation claimed. It is well established that this court will not lightly interfere with the exercise of discretion by a court below. Interference is only justified where the judge has made an error in principle or has acted unreasonably in weighing the relevant principles: R v. Savoury (2005), 2005 CanLII 25884 (ON CA), 200 C.C.C. (3d) 94 (Ont. C.A.), at para. 26.

[32] The very same objections raised before the application judge are asserted in this court. Nowhere does the appellant specify where the application judge erred in principle or unreasonably exercised his discretion. The appellant’s reassertion of its objections amounts to nothing more than an invitation to this court to redo the very thorough analysis of the application judge. That is obviously not the function of this court and I would decline that invitation, especially given that I see no error in the application judge’s analysis of the appellant’s objections.

Disposition

[33] I would dismiss the appeal.

[34] The respondent as the successful party is entitled to her costs of the appeal. She seeks $10,000 all-in on a partial indemnity basis. The appellant takes no objection to that figure. Accordingly, I would order that the Salvation Army pay the respondent costs of the appeal in the amount of $10,000, inclusive of fees, disbursements, and taxes.

“W. Hourigan J.A.”

“I agree Robert J. Sharpe J.A.”

“I agree S.E. Pepall J.A.”

Released: December 22, 2016

“RJS”

[^1]: I do not mean to categorically provide that the Limitations Act, 2002 has no applicability to the passing of accounts process under the SDA. In particular, it may be that the filing by a beneficiary of a notice of objection after an attorney has sought a passing of accounts is a claim within the meaning of the Limitations Act, 2002. However, I leave this determination to another case where it arises directly on the facts.