CITATION: Armitage v. The Salvation Army, 2016 ONSC 2043
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE ACCOUNTS OF THE ESTATE OF MORLEY GEORGE WILTSE, DECEASED.
BETWEEN:
SHARON ARMITAGE Applicant
– and –
THE SALVATION ARMY Respondent
Anya-Deane Best, for the Applicant
Anthony Frost, for the Respondent
HEARD at BELLEVILLE: March 21, 2016
T.D.RAY, J
1Scott, J made an order for directions, October 27, 2015 which consolidated Actions CV-15-0178-00 and CV-15-0020-00 into this application heard today.
2The issues for this application include the amount and category of compensation being sought by the applicant as attorney for property before the deceased’s death and as executor after his death. The respondent does not take issue with the executor’s compensation sought by the applicant unless the attorney’s compensation claim is allowed, and except where there are equivalent types of claims being sought as an attorney; but opposes her claim for compensation as a property attorney on the grounds that the claim has been delayed without explanation and is limited to three years by virtue of the Limitations Act, the scale is too high, and in any event she performed roles in other capacities for which she received compensation but did not account for same.
3There appeared to be some confusion about the facta from the parties. Since the order of Scott, J consolidated both proceedings, there became only one action, only one factum from each party was expected, and that one factum was to address all the issues.
4The deceased died February 5, 2013. His will names the applicant as his executor. The sole beneficiary under the will is the respondent.
5Prior to the deceased’s death, the applicant had been appointed the deceased’s attorney for property and personal care, in 1990, 2001, and 2007. The deceased’s lawyer prepared the documentation. The applicant had been a long term friend of the deceased and his mother. She is also a real estate agent.
6In early 2006, the deceased was admitted to hospital and then to the Hallowell House Nursing Home where he stayed until his death. The applicant claims that after his admission to hospital, then the nursing home, she performed her duties as his attorney in taking him on outings, bought him clothing and personal items, and filed his income tax returns.
7In 2007, the applicant was of the belief that the deceased’s home should be sold because it was no longer needed, and she felt the money would be more useful to the deceased. After discussing the issue with him and with his signed agreement, she listed the property herself as she was a realtor, and on the sale of the property she received a commission of $7,500.00. The other half of the commission went to the selling agent. In preparation for the sale of the property, she paid to have the house emptied of its contents, and distributed items from the house to family members. She paid those expenses out of the proceeds of the sale.
8She submitted her claim for attorney compensation to the respondent on September 5, 2013 and issued a Notice of Application January 30, 2015. She filed a further application for the passing of the estate accounts January 30, 2015 after being requested to do so by the respondent.
9The applicant conceded the compensation as attorney should be calculated at 3% instead of the claimed 3.5%; and filed an updated statement during argument which totalled $34,024.29. The respondent accepts the accuracy of the statement while continuing to dispute the applicant’s entitlement.
Limitation Period
10The principal issue is the limitation period applicable to the applicant’s claim for attorney compensation. The applicant’s position is that any claim must be commenced within two years of the death of the individual who granted the power of attorney, unless otherwise waived by those who are interested parties. She contends that the Substitute Decisions Act creates the right to compensation, is silent on any limitation period, and uses the permissive “may” in reference to when the claim could be made.1 The respondent agrees that the right to compensation was created by the statute but that the language of the statute in using “may” gives the attorney an option to claim compensation “each year”, which if not taken up by the commencement of proceedings within the following two years is to be treated as abandoned. He argues that a claimant must commence proceedings every three years in order avoid the limitation period. In other words, one is to infer from the statute that the end of each year triggers the beginning of the two year limitation period.
11He contends that the applicant failed to get a written acknowledgement of her claim while grantor was alive, but competent to sign documents, and sat back and waited until after he died. He says that she thereby failed to give the deceased any opportunity to comment on the claims for compensation. The respondent is dismissive of the applicant’s explanation that she was not sure she intended to make a claim until after his death because she was unsure of how long he would live, and unsure of his future financial needs.
12Both counsel tell me that there are no cases on point. However, there are some authorities that may be of assistance, including the Limitations Act, 2002.2 The right to compensation arises from the Substitute Decisions Act, 1992 which provides as follows:
- (1) A guardian of property or attorney under a continuing power of attorney may take annual compensation from the property in accordance with the prescribed fee scale.3
13The continuing power of attorney executed by the deceased in 2007 states that the grantor “authorises the attorney to take annual compensation from my property” in accordance with the regulations under the Act. Other than as stipulated in the section quoted above, there is no reference to a limiting time period or restriction in time for the taking of compensation. The 2001 continuing power of attorney has no provision similar to the 2007 continuing power of attorney, but instead in what is clearly an error stipulates that no compensation is to be claimed by this “power of attorney for personal care”. It is for property, not personal care, suggesting that the wrong form had been used. This does not disentitle the applicant from claiming compensation under the 2001 continuing power of attorney since the above quoted section preserves that right.
14It is common ground that the continuing powers of attorney survive any periods of mental incapacity and are valid until the grantor’s death in February, 2013.
15I do not take the language of the Act or of the continuing powers of attorney to require the attorney to take their compensation annually such that it should be taken to trigger a limitation period if the compensation is not taken. While I accept that the court in Wall v. Independent Police Review Director4 was dealing with a different context, it is some authority for the proposition that use of the permissive “may” does not create a limitation period. More to the point, if the legislature wished to have created an annual limitation period, as suggested by the respondent, it would have been very simple to use language to say so. As a practical matter, I accept that because of the modest circumstances of the grantor, the applicant in this case was not sure she was even going to claim her compensation. She notes in her affidavit that the grantor’s father lived well into his nineties and she did not know what his future financial requirements might be. His death in February, 2013 ended her speculation. His death also terminated the continuing power of attorney. I conclude that it is at that point that the limitation period commenced. It was the triggering event. The applicant had two years within his date of death to commence proceedings, if that was to become necessary, to make her claim for compensation as an attorney.
16I do not accept that the applicant was required to produce to the grantor from time to time during his lifetime evidence of her services in order for him to authorise or comment. The only obligation on the attorney is to maintain accounts. I accept that the practice is to pass accounts under the Substitute Decisions Act, when the incapable person dies.5 Independently of the grantor’s views of the services the Act sets out a process for review of those services and expenditures. Ironically the respondent is permitted to make submissions concerning the attorney compensation claimed by the applicant, which would not have otherwise been available had the applicant made her claim before the grantor’s death, because the respondent’s rights arose only after his death in February 2013.
17I do not accept that the applicant “slept on her rights” to the detriment of the Estate as suggested by the respondent. He referenced Haldenby v. Dominion of Canada General Insurance Co.6 for the principles applicable to limitation periods, one of which frowns on claimants “sleeping on their rights”, and that limitation periods are an incentive to bring their claims in a timely fashion. That case dealt with a limitation period applicable to claims for motor vehicle accident benefits and the stipulation of triggering events, namely a motor vehicle accident in which the plaintiff suffered an insured loss, and a refusal by the insurer to pay. While I accept that the SABS claim involved a contract, the court was faced with interpreting detailed legislation and regulations. That is not the case before me. Under the Substitute Decisions Act, the court has an overriding supervisory authority to ensure that fairness and justice will prevail.
18The applicant’s claim for attorney compensation is not proscribed since these proceedings were commenced within two years following the grantor’s death on February 5, 2013. I accept the claim for attorney’s compensation at $34,024.29.
Balance of Objection to Attorney’s Accounts
19Aside from the limitation argument, the respondent objects to various items of compensation claimed by the applicant as follows:
a. Claims prior to January 1, 2006 not authorised: This complaint has no merit. There was a pre-existing 2001 continuing power of attorney which cover any services before 2006.7
b. Date of exercising the PA is unclear: The respondent says the grantor sold his own house and was continuing to manage his own bank accounts: This complaint has no merit. The evidence is that the grantor was admitted to hospital in 2006 because he was most unwell, and incapacitated. He then went from hospital to a nursing home in Picton where he lived until his death. I accept the applicant’s evidence that she spent considerable time and effort after his admission to hospital in 2006 up until his death in February 2013, driving several times a week from her home in Wellington to Picton, and then to Belleville for various reasons – all to the benefit of the grantor over a 7 year period. There is no evidence that he sold his own house and managed his own affairs after being hospitalized.
c. Capital Receipts: The respondent raises a number of issues.
i. Recurring payments- Indeed there were a great number of recurring receipts in the form of automatic deposits requiring little in the way of services. I accept the 3% rate is an average and contemplates that it would include the most onerous and time consuming of tasks as well those simple less onerous tasks. To embark on an analysis of only those services which are not time consuming invites a further analysis of the very onerous tasks she performed. There is nothing in the evidence to suggest an analysis of that kind is necessary.8
ii. Sale of the Grantor’s house: The respondent complains that payments for real estate commission in the amount of $14,840, and $10,000 to clean out and empty the house should not have been paid and should be deducted. The respondent in argument says she “took $25,000”. Firstly the real estate commission was shared with another agent so the applicant received only $7,500 for her real estate commission. The $10,000 was paid out to have the house prepared for sale, for the removal of trash and garbage, and the movement of his furniture to other family members. The law permits an attorney to charge for services for which the attorney is qualified such as a solicitor or realtor separate and apart from the attorney services9. It is clear that she limited her calculation to the net proceeds, and did not include those other payments in the calculation of her attorney compensation. In other words there was no suggestion of double dipping.
iii. Transfers between accounts: I accept the applicant’s contention that these payments were quite specialized; and while they would appear to be mere transfers requiring no involvement from the applicant, they were not. One fund was from the sale by the OPP of his gun collection and she had to do some particular transfers to satisfy the grantor. In addition she had to transfer money from an investment account so that she could pay the funeral expenses.
d. Capital Disbursements:
i. Recurring Disbursements by automatic withdrawal: While that is true, that there were mortgage payments, and payments to the nursing home etc that were automatically withdrawn, to reduce the compensation on those items invites an analysis of the more onerous services. As noted above, the compensation of 3% takes into account the average.
ii. Purchase of a GIC for $225,000: The respondent argues a lower compensation percentage should apply. I do not agree for the reasons above.
iii. Transfers between accounts: The respondent argues that a reduced percentage should apply to these items. I do not agree for the reasons above.
e. Objections to Accounts:
i. The respondent challenges the payment of $5,460 to a Norman Tendale, $8,670.89 to the grantor personally, payments to herself of $7700 for gas mileage, a payment of $3,468.53 to retail stores and cash payments: I am satisfied from the evidence that the payments were made and that they were justified. The grantor was in a nursing home until he died. The fact that he signed the deed of transfer to his house does not contradict the applicant’s evidence that she was required to perform considerable services for him because he was incapacitated. The applicant’s evidence was that she relied upon the advice from the grantor’s solicitor before making these claims.
Executors Accounts
20The respondent’s position is that if the attorney’s accounts were to be disallowed, then the executor’s accounts would be acceptable. Otherwise they would not. He advances two arguments. First that the only transaction for the executor was the $250,000 GIC; that it was a simple estate, and executor’s compensation should be reduced. Secondly, he contends that the work claimed as the executor had in reality already been done by the applicant as an attorney. He contends that therefore the executor’s compensation should be reduced by 50%.
21It is not an accepted principle of law that the executor’s compensation should be reduced where she had previously been the attorney for property.10 The compensation for an executor is arrived at after a consideration of the following five factors after considering the percentage approach: the size of the estate, the care and responsibility involved, the time occupied in performing the duties, the skill and ability displayed, and the success of the administration.11
22The amount of the estate was $250,000. The disbursements are $204,818.00 with a claim for compensation of $5,120.00, while the receipts are $262,347and a claim for compensation of $6,559.00. The total compensation sought is $11,679.00. This is a modest estate, requiring modest services and deserving of modest compensation. The executor’s compensation is fixed at $11,679.00.
23In summary, I fix the attorney’s compensation at $34,024.29, and the executor’s compensation at $11,679.00.
24If the parties are unable to agree on costs, they may make written submissions of two pages or less addressed to the trial coordinator at Belleville within 15 days, and a further 10 days for reply if any.
Honourable Justice Timothy Ray
Released: March 23, 2016
CITATION: Armitage v. The Salvation Army, 2016 ONSC 2043
COURT FILE NO.: CV-15-0020-00
DATE: 2016-03-23
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SHARON ARMITAGE Applicant
– and –
THE SALVATION ARMY Respondent
REASONS FOR JUDGEMENT
Honourable Justice Timothy Ray
Released: March 23, 2016
Footnotes
- See note 3.
- Limitations Act, 2002, S.O.2002, c. 24, s. 5(3); Wall v. Independent Police Review Director, 2013 ONSC 3312; Re Aber Estate, 2013 ONSC 6363 (S.C.J.), 2015 CarswellOnt 12639, 2015 ONSC 5123, 12 E.T.R. (4th) 42, 256 A.C.W.S. (3d) 995 (Div. Court); Schleihauf Estate, 2014 ONSC 7414 paragraph 4.
- Substitute Decisions Act, 1992, S.O. 1992, c. 30, s. 40
- Supra tab 2.
- Aber Estate, 2013 ONSC 6363 paragraph 17, (obiter comment since the limitation period was not argued)
- 2001 CanLII 16603 (ON CA), 55 O.R (3d) 470, [2001] O.J. No. 3317, (ONCA) paragraph17
- See paragraph 13 above.
- Laing Estate v. Laing Estate, 1996 CarswellOnt 775 (Ont. Div. Ct.) (upheld by the Court of Appeal)
- Jenkins & Scott, Compensation and Duties of Estate Trustees, Guardians, and Attorneys, Canada Law Book, June 2008, page 5-1; Re Miller Estate, (1987) 26 E.T.R. 188 (Ont. Surr. Ct.)
- Aber Estate, Re,(Div Ct) see note 2.
- Laing Estate v. Hines 1998 CanLII 6867 ONCA), (1998), 41 O.R. (3d) 571 (C.A.)
