SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-12-1973-00ES
DATE: 20130328
RE: WILLIAM GEORGE JEFFERY, as estate trustee of the ESTATE OF MARY HOOKE, deceased
Applicant
- and –
LYNNE JOHNSON and JOANNE McCALLUM
Respondents
BEFORE: André J.
COUNSEL:
William G. Jeffery, Applicant and Solicitor for the Applicant
Douglas G. Loucks, for the Respondents
AMENDED ENDORSEMENT
Corrected decision: The text of the original endorsement was corrected on March 27, 2013 and the description of the sentence replaced in the corresponding paragraph in the original endorsement is as follows:
Para. 20 now reads: Accordingly, I find that Mr. Jeffery is entitled to fair and reasonable compensation of $13,094.74 for the work he performed in the estate as trustee and as solicitor. I am advised that he has received $3,951.98 for Executor’s Compensation and $6,835.90 in settlement of his Probate Account for a total of $10,787.88. Therefore, the amount owing to Mr. Jeffery by the Estate is $2,306.86.
André J.
[1] Before Mary Hooke died on December 8, 2010, she appointed solicitor, William George Jeffery, trustee of her estate. Mr. Jeffery handled the estate in accordance with his deceased client’s wishes and then claimed compensation in the amount of $21,900.93 for the work he did from December 8, 2010 to November 30, 2011. Mr. Jeffery filed a Notice of Application to Pass the Accounts with the court. Ms. Lynne Johnson, one of Mary Hooke’s beneficiaries, has filed a Notice of Objection to the Accounts on the ground that the compensation claimed is excessive and unreasonable.
OBJECTIONS RAISED BY THE APPLICANT
[2] After administering the estate, Mr. Jeffery, submitted two sets of accounts, one related to his role as estate trustee and the other related to the solicitor’s work he performed in administering the estate.
[3] He originally claimed $21,900.93 as Executor’s Compensation but before the hearing of Ms. Johnson’s application, he revised the amount claimed as Executor’s Compensation to $10,287.84.
[4] Ms. Johnson nevertheless objects to the payment of this amount for two reasons namely:
The 2.5% claimed of Capital Receipts should be reduced to 2% or $1,264.84.
The 2.5% of Capital Disbursements, or $1,483.52 claimed should be disallowed given that no substantive work was done by Mr. Jeffery that warrants this compensation.
[5] Ms. Johnson also objects to the legal fees of $6,000.00 (exclusive of disbursements) claimed by Mr. Jeffery on the following grounds:
It does not reflect the simple and uncomplicated nature of the work done in winding up the estate.
There is overlapping between what Mr. Jeffery claims for compensation in his role as Trustee and as Solicitor.
THE LAW
[6] Section 6(1) of the Trustee Act provides that a trustee is entitled to such fair and reasonable allowance for the care, pains, trouble and the time expended in administering the estate.
[7] In assessing the appropriateness or otherwise of an executor’s compensation, five factors should be considered namely;
the size of the trust;
the care and responsibility involved;
the time occupied in performing the duties;
the skill and ability shown; and
the success resulting from the administration.
See Toronto General Trusts and Central Ontario Railway (1905), 6 O.W.R. 350.
[8] In some cases, proper compensation may be attained by the allowances of percentages. These percentages however, should be employed only as a rough guide to assist in the computation of what may be considered fair and reasonable compensation. The reliance on percentages in some cases may violate the true principle of fairness and reasonableness upon which compensation should be estimated. See Re Atkinson, 1951 101 (ON CA), [1952] O.R. 685 (C.A.) at page 698.
[9] While a practice has developed in Ontario, of awarding compensation on the basis of 2½ percentage against the categories of Capital Receipts, Capital Disbursements, Revenue Receipts and Revenue Disbursements along with a management fee on the gross value of the estate, these fees will not be automatically or routinely allowed. See: Jeffery Estate (Re), [1990] O.J. No. 1852, page 4. (Ont. Surrogate Ct.).
ANALYSIS
[10] Both parties concede that the work involved in carrying out Ms. Mary Hooke’s wishes as set out in her will was relatively simple and uncomplicated. Neither did it require an inordinate amount of time. Furthermore, the trustee conceded that there were a couple of errors in the administration of the estate. He suggests however, that he is entitled to claim compensation based on the accepted tariffs that he has relied upon in the determination of his compensation, both as counsel and as trustee.
[11] Courts however, have made it clear that the determination of fair and reasonable compensation does not necessarily involve maintaining fidelity to fixed percentages. These percentages do not confer a licence to charge at rates that do not reflect the time spent, complexity of the work performed or the value of the estate. In this matter, the value of the house, the main asset of the estate, is approximately $425,000. This was, by all accounts, a relatively uncomplicated estate to administer. The work was completed within a year. The transfer of title did not even involve a trip to the local Registry. There were no court proceedings to deal with. The work performed did not require great skill and ability. Indeed, for someone of Mr. Jeffery’s experience level, he has been practicing law since 1975, the work involved can only be described as routine.
[12] In my view, given the quantum and nature of the work involved in fulfilling his work either as trustee or counsel, reliance on these 2.5 percentages in this case is unwarranted. Such reliance results in compensation that is unfair and unreasonable. They cannot be applied just because, as Mr. Jeffery asserts, they have been the York Law Association’s recommended percentages for trustees and lawyers involved in this type of work. In certain cases, they may well be justified but not in every case as Mr. Jeffery seems to suggest.
[13] Accordingly, the compensation of $10,287.84 claimed to executor’s compensation will be reduced in the following manner:
The 2.5% of capital receipts claimed will be reduced from $1,582.32 to $1,264.84.
The 2.5% of capital disbursements claim will be reduced from $1,483.52 to $500.00.
[14] The total amounts of Executor’s Compensation will therefore be $8,986.84.
[15] Mr. Jeffery also claims fees of $6,037.50, rounded to $6,000, on the work he performed in probating the will. The fee is based not on the complexity of the work done, size of the estate, time the work consumed, or quality of work done but by adherence to fixed percentages set by the York Law Association on an estate value of $425,000. To that extent, the amount claimed cannot be held to constitute fair and reasonable compensation. A more realistic figure would be $4,000 plus HST or $4,052 plus disbursements of $49.47 and HST of $6.43 for a total of $4,107.90.
[16] The third expense queried by the Applicant, Ms. Johnson relates to cost of transfer of title first to the Trustee and then to Ms. Johnson. Mr. Jeffery charged $673.03 and $684.33 respectively. Ms. Johnson suggests that this is in effect one transaction that justifies one fee.
[17] Mr. Jeffery counters by submitting that he was requested to do two separate transactions rather than one and accordingly, was entitled to charge for each. He could not simply transfer title from the estate to Ms. Johnson.
[18] In my view, these fees are appropriate given the fact that two separate transfers had to be performed by Mr. Jeffery.
CONCLUSION
[19] Ms. Johnson’s objections to the passing of accounts is substantially upheld. Accordingly, the Trustee Compensation is reduced from $10,287.84 to $8,986.84, while the amount claimed for probating the will is reduced from $6,835.90 to $4,107.90. Therefore, his total compensation for the work as Trustee and for probating the will is $13,094.74.
[20] Accordingly, I find that Mr. Jeffery is entitled to fair and reasonable compensation of $13,094.74 for the work he performed in the estate as trustee and as solicitor. I am advised that he has received $3,951.98 for Executor’s Compensation and $6,835.90 in settlement of his Probate Account for a total of $10,787.88. Therefore, the amount owing to Mr. Jeffery by the Estate is $2,306.86.
[21] Regarding costs, each party must submit a two to three page summary of their position together with a draft Bill of Costs. This must be submitted within fifteen (15) days of today’s date.
[22] The parties must submit a draft judgment on Passing of Accounts to my attention, based on the above decision.
André J.
Released: March 28, 2013
COURT FILE NO.: CV-12-1973-00ES
DATE: 20130328
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
William George Jeffery, as estate trustee of the Estate of Mary Hooke, deceased
Applicant
- and -
Lynne Johnson and Joanne McCallum
Respondents
AMENDED ENDORSEMENT
André J.
Released: March 28, 2013