Court File and Parties

CITATION: The Estate of Ingrid Loveman, Deceased, 2016 ONSC 2687

COURT FILE NO.: CV-15-121984-00

DATE: 20160421

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

IN THE MATTER OF THE ESTATE OF INGRID LOVEMAN, Deceased

Application to Pass Accounts

Brent S. J. Cumming for the Estate Trustees

Gwendolyn L. Adrian, for the Beneficiary David Loveman

HEARD: August 5, 2015 and January 7, 2016

DOUGLAS, J.

Overview

[1] In this proceeding the Estate Trustees seek the passing of their accounts regarding their administration of the Estate of Ingrid Loveman, deceased. The accounts are for the period of September 20, 2011 to trial. The Trustees claim compensation payable out of the Estate in the amount of $17,366.28. Increased costs of $16,246.58 (excluding hearing costs) are also sought.

[2] One of the Estate’s beneficiaries, David Loveman, submits that the Trustees have failed to meet the requisite standard of care required of fiduciaries of the Estate. The beneficiary requests that this court disallow a significant number of the claimed expenses and either negate or reduce the Trustee’s claim for compensation for their failures, deficiencies and their actions in preferring the interests of Peter Loveman to those of those beneficiaries.

Factual Background

[3] Ingrid Loveman had 7 children: David Loveman (“David”), Peter Loveman (“Peter”), Iain Loveman, Ingrid Lotto, Douglas Loveman (“Douglas”), Heidi Rigby (“Heidi”) and Dirk Loveman (“Dirk”).

[4] Ingrid Loveman (hereinafter “the deceased” or “Ingrid”) passed away on September 20, 2011.

[5] On July 12, 2006 the deceased prepared a Will (hereinafter “the Will”) which named Peter and Heidi as Estate Trustees.

[6] The Will provided inter alia;

(a) The Trustees were to retain and maintain the land and premises municipally known as 570 Queensville Sideroad, Township of East Gwillimbury out of the residue of the estate for a period of 6 months after her death. At the end of the 6 month period Peter was granted an option exercisable within the following 6 months to purchase the said property from the estate at 70% of its fair market value as of the date of death as determined by independent valuators appointed by the trustees, the cost of which to be paid out of the estate.

(b) Assuming Peter did purchase the lands the trustees were to divide the net proceeds of the sale of the estate property into 6 equal shares, with one such share to 4 of her children (David, Heidi, Douglas and Dirk) and the remaining 2 full shares were to be divided equally into 4 half shares payable to her grandchildren (William David Lotto, Michael David Lotto, who are the children of Ingrid Lotto, and Lena Rigby (“Lena”) and Regina Rigby, who are the children of Heidi and Dan Rigby).

(c) The Trustees were instructed to keep Lena and Regina Rigby’s half shares invested and to pay or apply the income and capital or so much thereof as the trustees in their uncontrolled discretion consider advisable and necessary for their benefit, until each attained the age of 25 years, whereupon the amount remaining would be transferred to their use absolutely.

Preliminary Issue

[7] David raises a preliminary issue with respect to evidence to be relied upon. He objects to the Trustees’ reliance on facts and documents which were not put into evidence in this matter.

[8] In this regard David, in his written submissions, provided a schedule outlining 29 instances of reference by the trustees in their submissions to matters not in evidence.

[9] The Trustees respond to 15 of the raised items.

[10] I do not propose to address or correlate all of these individual items.

[11] I do wish however to make it clear that my decision will be based solely upon evidence properly placed before me in this proceeding. Evidence in this regard will constitute oral testimony, agreed facts and documentary evidence properly tendered and marked as exhibits during the hearing before me. Obviously I am entitled to draw reasonable inferences from the evidence that has been properly put before me.

[12] I would note as well on this issue that pleadings do not form evidence; specifically, in this type of proceeding a notice of objection is not evidence and neither is a reply to a notice of objection. Such documents are merely designed to frame the issues with respect to which admissible evidence must be presented to form the foundation of the court’s deliberations.

The Issues

[13] The issues to be addressed are as follows:

(a) Did the Trustees meet the requisite standard of care in administering the estate?

(i) What was the cause of the delay enclosing the sale of the house?

(ii) For whose benefit did the Trustees act in accepting in the option proffered by Peter?

(iii) Were expenses improperly incurred due to the actions or inactions of the Trustees in respect of carrying costs pertaining to the house and the litigation regarding Lena Rigby?

(b) Did the Trustees fail to realize estate assets?

(c) Did the Trustees misappropriate estate assets to themselves?

(d) Is the amount of compensation claimed by the Trustees “fair and reasonable”?

Analysis

Did the Trustees meet the requisite standard of care in administering the estate? What was the cause of the delay in closing the sale of the house?

[14] A brief review of relevant case law would be instructive.

[15] An estate trustee must exercise the degree of diligence that a person “of prudence would exercise in the conduct of his own affairs” (Duscharme v. Goulden 2010 ONSC 4021).

[16] A trustee may not prefer his or her own interest over that of the beneficiary. The executor is fiduciary to the beneficiaries and cannot deal with them in a manner adverse to their own interest. The trustee or executor must make decisions for the beneficiary and not for himself or herself. A fiduciary is liable for choosing against the interest of a beneficiary (see Martyn, supra, Gibson, Re., 1930 Carswell ONT 62 NBCA, Schroeter Estate, Re., 2001 28073 ONSC).

[17] Estate trustees may be justified in not releasing payments to beneficiaries until their satisfied that beneficiaries would not be taking threatened legal action against the estate as proceeding otherwise could potentially have led to further problems and potentially jeopardize the estate and the administration of it (Denofrio Estate, Re., 2012 ONSC 3408).

[18] Where an estate is threatened by legal proceedings the estate trustees are under an obligation to defend against litigation, preserve the estate and administer the estate in accordance with the terms of the Will and as prudent estate trustees (see Denofrio, Re., supra).

[19] A number of factors contributed to delays in administration of this estate, not all of which were beyond the control of the executors. The primary source of difficulty in administration of this estate is delay in transfer of the house to Peter, which delayed the estate’s access to funds.

House Transfer

[20] Ingrid passed away on September 20, 2011.

[21] The Will instructed the Trustees to retain and maintain the house for a period of 6 months following decease. Upon the expiry of this 6 month period, the Trustees were to grant to Peter an option, exercisable within a further 6 months, to purchase the house at 70% of the price established through 3 appraisals. Thus, the will required the option to purchase to be exercised by September 20, 2012. If Peter chose not to purchase the house within 12 months of decease, the option was granted to Ingrid’s remaining children exercisable in order from oldest to youngest. David would have been next in line.

[22] Peter Loveman “exercised his option to purchase” on September 9, 2012, just a few days short of the anniversary of Ingrid’s passing.

[23] Peter’s interpretation of the Will’s provisions regarding the house is that he need only confirm or notify of his intention to exercise the option to purchase within the second 6 month timeframe referred to above and that the Will provided for no specific date by which the purchase transaction had to be completed.

[24] In my view this is not a reasonable interpretation of the words or the intentions of the Will.

[25] The concise Oxford English Dictionary 12^th^ Edition defines “exercise” in this context to mean: “to use or apply (a faculty, right or process)”. Black’s Law Dictionary, Tenth Edition, says “exercise” means “to make use of; to put into action; to implement the terms of; to execute…”

[26] There are 2 choices with respect to an option to purchase: to purchase or not to purchase. If one is to exercise an option to purchase, then one is to act upon a decision to purchase, not just give notice of the decision. Giving notice of something does not equate with acting upon something.

[27] Acting upon a decision to purchase real property equates with executing an Agreement of Purchase and Sale or otherwise committing to enforceable terms by which the property is to be acquired.

[28] Concluding otherwise would mean Peter was entitled to indefinitely delay purchase of the house and thus indefinitely deprive the beneficiaries of their share of the estate. This cannot have been the intention of the testator; nor is this a reasonable interpretation of the words utilized in the will in this regard.

[29] I am bolstered in this interpretation by the wording of paragraph 3(f) of the Will which defines what is to happen if Peter “…does not agree to purchase the said property in accordance with the immediately preceding paragraph within six (6) months of being entitled to do so, ie. within twelve (12) months after the date of my death…”; in other words, Ingrid is saying Peter must agree to purchase the property within 12 months of her passing. How does one agree to purchase real property? The Statute of Frauds, R.S.O. 1990, c. 19, requires that agreements pertaining to land be in writing; that is, by signing an agreement of purchase and sale, something Peter did not do until much later.

[30] Thus the Will required a binding commitment to a purchase transaction within 1 year of decease; in other words, by September 20, 2012.

[31] If I am wrong in this, there would still be a requirement that the transaction be completed within a reasonable time (Shackleton v. Hayes 1953 114 ONCA) and (Erin Estate, Re., 2012 NSSC 2992).

[32] In my view, a reasonable time beyond that contemplated by the Will would see a transaction concluded by no later than December 31, 2012, or over 3 months after the contemplated deadline.

[33] Peter testified that he did not have access to funds immediately in order to purchase the house. He testified that he owned 2 properties in Toronto but I received no evidence regarding when he had listed those properties, or either of them, or that he was having difficulty in selling either property. I therefore have no basis on which to conclude that he was making reasonable efforts to secure funds to finance the purchase.

[34] Peter’s decision to postpone the purchase transaction until he had sold his properties was convenient to him, but not to the estate and the estate beneficiaries. Thus he breached his fiduciary duty to the estate by preferring his interests to those of the estate and the estate beneficiaries.

[35] With respect to financing the house purchase, Peter testified that he could have obtained equity financing in order to close the purchase of the house; however, he did not do so because selling his other properties first was his most economical option. Thus Peter put his interests ahead of those of the estate and the estate beneficiaries.

[36] I also agree with the submission on behalf of David that it was not prudent for an option to purchase to be accepted that defined neither purchase price nor closing date. It was not until May 31, 2013, 8 months following the purported exercise of the option by Peter that a value was finally agreed upon for the house, being $595,000.00, 70% of which was the price according to the terms of the Will.

[37] Ultimately the house was not transferred to Peter until early February 2014 after Lena signed the Minutes of Settlement on January 13, 2014.

[38] As a result of the findings above, carrying costs with respect to the house (mortgage, real property taxes, home insurance, necessary utilities and reasonable repairs) should not be carried by the estate following December 31, 2012.

[39] Further, cable and internet charges would not be necessary to maintain the house following decease. A two month grace period is reasonable following decease for the estate trustees to cancel these services. Therefore, cable and internet charges incurred after November 30, 2011 forward should not be borne by the estate.

Delay in Application for Probate

[40] There were additional delays with respect to the house transfer. One of them resulted from the failure of the trustees to apply for probate until September 2012, with the certificate appointing estate trustees not being issued by the court until January 3, 2013.

[41] As to why the application for probate was not initiated until September 2012, Peter testified that he and Heidi had to pay the probate fees personally because there was an Order in place restraining dealing with the estate assets within the context of Lena’s application, that Order being dated May 2013; however, there is no explanation provided for failure of the trustees to pursue an application for probate in advance of September 2012.

[42] It appears likely that Peter delayed making application for probate until it became necessary and from his perspective it did not become necessary until he had decided to purchase the house in August or September 2012. Such reasoning places Peter’s interests before those of the estate and the estate beneficiaries.

[43] Peter testified that he paid the probate fees on October 22, 2012, 13 months after decease. According the Succession Law Reform Act no application for dependant’s relief may be made after 6 months from the grant of letters probate. In this case letters probate were granted on January 3, 2013, approximately two and a half months after payment of the probate fees. Had the trustees acted with reasonable promptness and prudence the letters probate would likely had been granted before the end of 2011 thus triggering the 6 month limitation period which would have expired well before Lena raised her dependant’s claim in March 2013. Thus the delay exposed the estate to a claim that would likely have been time limited had the Trustees acted with prudence.

[44] Had the Trustees adhered to the time frames stipulated by the Will, even with an extension to December 31, 2012, the litigation initiated by Lena would likely have been altogether avoided as Lena would have received her estate entitlement and the initiation of her dependant’s claim would have been time limited.

Lena Rigby Litigation

[45] Lena contacted the Estate’s Solicitor Warren Rumack through counsel by way of letter dated November 28, 2012. In that letter it was alleged that Lena lived under the care of the deceased from September 2009 until September 2011. No specific claims were advanced. Concerns were expressed regarding alleged conduct of the Trustees.

[46] David alleges that a letter from counsel dated February 11, 2013 (Exhibit #10) confirms the estate trustees refused to respond to Lena’s counsel or to provide requested items. Acceptance of this submission would require treating the letter as evidence of the truth of its content. The letter is clearly hearsay in that it purports to quote statements made by Warren Rumack, from whom I received no evidence at trial. The letter cannot be relied upon to support this allegation.

[47] By way later dated March 19, 2013 (Exhibit #14) Lena’s counsel requested an interim distribution of $20,000.00 and monthly payments of $2,000.00 until Lena’s share of the estate was fully distributed. There is also a warning regarding a claim for dependant’s relief.

[48] Mr. Gasee on behalf of the estate responded by way of letter dated March 22, 2013 (Exhibit #15) confirming that the estate had no cash as the primary asset (the house) had not been sold. Mr. Gasee advised that Peter was arranging funding to close the purchase of the house. Mr. Gasee further advised that his instructions were to “vigorously oppose” Lena’s claims for early distribution and dependant’s relief.

[49] In May 2013 Lena commenced her application. On May 31, 2013 there was an order restraining the sale of the house.

[50] In June 2013 Peter sold one of his real properties and thus had access to funds to contribute to the purchase of the house.

[51] In October 2013, the parties to the Lena Rigby litigation participated in mediation and Minutes of Settlement arose therefrom. The Minutes were executed by all beneficiaries except for David who withheld his signature until shortly before a motion before Justice Vallee on June 24, 2014. The settlement of Lena’s claims for dependant’s relief and her share of the Estate were for an all-inclusive and undifferentiated sum of $45,000.00. Peter testified that the $45,000.00 was comprised of $25,000.00 for her share of the Estate and $20,000.00 for dependant’s relief. His evidence in this regard differed somewhat from that of Mr. Gasee who characterized the settlement as being comprised of $27,500.00 for Lena’s share of the estate plus $17,000.00 for her dependant’s claim. For my purposes I am relying on the content of the Minutes which do not specify the constituent elements of the settlement figure of $45,000.

[52] Both Trustees confirmed that they were prepared to pay Lena her share of the estate earlier than called for under the Will (Lena was 21 years of age at the time of the deceased’s passing and the Will provided for distribution at age 25). This evidence however is contradicted somewhat by the content of Mr. Gasee’s letter to Lena’s lawyer dated March 22, 2013, wherein he states his “instructions for now are to vigorously oppose” Lena’s claims. Mr. Gasee also expresses interest in discussing the matter with Lena’s counsel. I find that while the Trustees may have been open to early payment of Lena’s share of the estate, that position was not communicated to Lena early enough, if ever, to avoid commencement of the litigation that followed. There is no evidence that the Trustees ever communicated to Lena their willingness to contemplate early payment before the Minutes were executed.

[53] I note that at the time that Lena initiated her claim Peter was dealing with serious health issues. In early 2013 he underwent a triple bypass surgery and there were complications following thereafter resulting in his hospitalization for a couple of months and his distraction from issues pertaining to administration of the estate. The trustees cannot be faulted for delays of approximately 3 months in early 2013 as a consequence. Having said this Mr. Gasee was nevertheless in receipt of actionable instructions from the Trustees in early 2013, as evidenced by his correspondence to Lena’s counsel.

[54] While pursuant to s. 67 of the Succession Law Reform Act the trustees are prohibited from distributing the estate until the court has disposed of the application where an application is made and notice is served on the estate trustees (except upon consent of all persons entitled), this prohibition does not prevent a personal representative from making reasonable advance for support to dependants who are beneficiaries.

[55] In my view there was good reason to doubt the merit of Lena’s claim as a dependant of the estate. Lena herself did not testify at the trial of this application. The preponderance of the evidence I did hear leads me to conclude that Lena had been living away from the house while staying in residence at school while pursuing her studies. There is no evidence about monies flowing from the deceased to Lena. Thus I conclude it was reasonable for the Trustees to resist Lena’s claim for dependant’s relief, at least initially.

[56] Lena was a beneficiary of the estate and resistance by the Trustees of Lena’s request for an early distribution was supportable by the terms of the Will, which provided for distribution at the age of 25 years (subject to the discretion of the Trustees).

[57] However, and importantly, the absence of funds from the estate from which to pay an early distribution to Lena is attributable to delays associated with transfer of the house to Peter. Had such funds been available I find it likely, given the Trustees’ evidence of their openness to early payment to Lena of her share of the estate, that such payment would have been made. As Lena was not initially pursuing a dependant’s claim I also find it likely that early payment would have avoided this additional claim by Lena.

[58] For these reasons, the estate shall not be responsible for the legal fees and disbursements relating to the Lena Rigby litigation. Such shall be the responsibility of the Trustees.

Lena Rigby’s Survivorship Benefits

[59] With respect to the survivorship benefits issue, I am not persuaded that the delays in responding to Lena’s request in that regard put the estate at any disadvantage. The survivorship application was based in part upon an acknowledgment as to Lena’s residence at the time of decease and there was some considerable dispute in that regard. Further, Peter Loveman was at the time dealing with serious health issues. For these reasons I do not attribute anything blameworthy to the estate trustees in this respect.

Claims for Gasoline Expenses

[60] Peter Loveman has claimed gasoline expenses for attending at the house to check on its condition, check on Dirk and pick up mail. Heidi resided just a very short distance away and there is no reasonable explanation for why Heidi as co-trustee could not have picked up the mail. There is also no reasonable explanation for why mail being delivered to the house could not have been redirected to Peter’s address in order to avoid his attendance at the house to pick it up. I also find that there is an inconsistency in Peter’s position that Dirk’s presence in the house benefitted the estate in that he was able to care for the premises and maintain same while at the same time expressing a need to be at the house in order to check on Dirk and his well-being.

[61] I find therefore that the claim for gasoline expense reimbursement is excessive and I therefore reduce same to$750.00.

Funeral, Debts at Death and Warren Rumack Legal Costs

[62] David takes no issue with respect to the expenses incurred related to the funeral, debts at death and legal costs related to Warren Rumack’s legal work to probate the Will and the cost associated with clearing title to the house. It is conceded that these are legitimate expenses.

Claims Against Dirk

[63] No expenses will be allowed to be deducted from the estate in respect of any alleged claim involving Dirk advanced by the Stiver, Vale, Lech, Monteith Firm. There is no evidence upon which it might reasonably be concluded or inferred that the estate bore any responsibility for this claim, even though the satisfaction piece made reference to releasing claims against the estate. This appears to have been a claim against Dirk by the Stiver, Vale firm with no real connection or potential for liability to the estate. Therefore, no expense in this regard will be deducted from the estate.

Vehicle Maintenance

[64] Expenses incurred by Peter in relation to maintaining Ingrid’s car will be allowed. This was an estate asset that was deserving of reasonable maintenance and Peter was utilizing the vehicle to an extent at least in performance of his responsibilities as estate trustee.

Did the Trustees Fail to Realize or Misappropriate Estate Assets?

The Trailer

[65] The appraisal regarding the house secured by Peter excluded the trailer. Peter testified that he did so because he believed the trailer belonged to Dirk. In his reply testimony he testified that he thought that his mother had bought the trailer from David’s wife. David was uncertain in his testimony regarding ownership of the trailer. Ultimately there is no satisfactory evidence before me upon which I might conclude that ownership of the trailer resides in anyone in particular, including the estate. Therefore, no issue arises in respect of administration of the estate. I also note that I am satisfied on the evidence before me that the trailer had minimal if any value and its income earning capacity would have been insignificant at the time of Ingrid’s passing.

The Shed

[66] On the evidence before me the shed was built by Dirk and paid for by Dirk before Ingrid’s passing. The appraisal dated May 31, 2013 (Exhibit #7), included the shed (referred to at the bottom of the first page of the Residential Appraisal Report form). As it was included in the valuation of the house it is appropriate for the shed to be transferred as a fixture with the house.

Ingrid’s Personal Property and Collectibles

[67] Peter admitted that he retained all of Ingrid’s personal property and the entire house contents when he purchased the house although he indicated as well that no one had requested or expressed any interest in any of the contents, including David. He also indicated that he was willing to give any of the collectibles to anyone expressing any interest. He testified that the garage contents belonged to Dirk as did the kitchen appliances which were purchased by Dirk after Ingrid’s passing.

[68] There is no evidence contradicting Peter’s evidence regarding ownership of the garage contents and the kitchen appliances. No issue therefore arises.

[69] The Will is silent with respect to specific disposition of contents. There is no evidence as to value of the contents owned by Ingrid at the time of her decease.

[70] The beneficiaries may have a desire to share in some of the contents. Therefore the Trustees shall within 10 days notify the beneficiaries in writing (including email) of an invitation to identify any items of personal property owned by Ingrid on September 20, 2011 in which they have some interest. If the Trustees are unable or unwilling to distribute the contents as proposed within 45 days a further attendance before me may be scheduled.

Rent from Jennifer Elliot

[71] Jennifer Elliot testified that she had lived at the house from May 15, 2013 to December 31, 2013. She paid $100.00 per week in rent and provided cleaning services for the house. She paid her rent in cash to Dirk and did not receive any receipts.

[72] This is a minimal amount of rent, apparently established informally as between Jennifer Elliot and Dirk.

[73] The house being the property of the estate, rental income pertaining to the house is also property of the estate. The Trustees’ fiduciary duties would include developing an awareness of these monies and thereafter accounting for same to the estate. It appears they have failed to do so.

[74] Ms. Elliot’s tenancy commenced endured for approximately 33 weeks. At $100 per week at results in $3,300 before accounting for taxes. I have no evidence to assist me regarding applicable tax rates, so I will deduct 25% and reduce the monies unaccounted for by the Trustees in this regard to $2,475.

Rent from Paul Thorpe

[75] Jennifer Elliot testified that Paul Thorpe was renting the trailer while she was renting a room in the house. She testified that Paul moved out shortly before she did and that he was gone by December 2013. Peter testified as to his awareness that Paul Thorpe was living in the trailer at the time of Ingrid’s passing and that he remained there until late 2011. David also testified regarding Mr. Thorpe but it is not clear to me from David’s testimony that his evidence is based upon his personal knowledge rather than from information that he has gathered from others. I am also unaware as to how much Mr. Thorpe was paying by way of rent.

[76] Peter testified that he understood that the rental monies collected by Dirk from Mr. Thorpe were used to fill the oil tank.

[77] The evidence in this regard is uncertain; however, it is the duty of the Trustees to gather the necessary information and account for monies owing to the estate.

[78] I conclude that the Trustees did not expend the kind of effort that might reasonably be expected in the circumstances to ascertain precisely what was being received by way of rent and to account for those monies.

[79] Jennifer Elliott was paying rent of $100.00 per week. It is reasonable to infer that Paul Thorpe’s rent was in that realm.

[80] Therefore, rental income of $100.00 per week from Paul Thorpe from September 20, 2011 to December 31, 2012 is 66 weeks at $100.00 per week or $6,600.00. A reduction of 25% brings the unaccounted for rental income to $4950.00.

Is the Amount of Compensation Claimed by the Trustees Fair and Reasonable?

[81] Section 61(1) of the Trustee Act states:

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.

[82] A trustee is entitled to be reimbursed only to the extent that an expense was reasonably incurred for the administration of the estate and the distribution of the estate (Martyn v. Taylor 2003 43893 ONSC).

[83] In Atkinson Estate, Re., the Ontario Court of Appeal indicated that the convention of applying established percentages based on the Court’s recognized tariff, usually 2.5% of capital and revenue amounts received and disbursed, should not be adhered to slavishly:

…depending on the idiosyncrasies of the particular estate, the care, pains and trouble and time expended may be disproportionate to the actual size of the estate. A small, complex estate may make more demands upon the trustees care and time and skill than a much larger estate of a simpler nature: conversely, even in a large estate with many complex problems, assessment of the compensation by the adoption of what might be said to be “the usual” percentages would result in a grossly excessive allowance… (Atkinson, Re., 1952 17 ONCA)

[84] Trustee compensation is determined by referring to the tariff rate and then cross-referencing the rate to 5 factors:

(a) The size of the trust

(b) The care and responsibility involved

(c) The time occupied in performing the duties

(d) The skill and ability shown; and

(e) The success resulting from the administration (Fareed v. Wood 2005 22134 ONSC)

[85] In the case before me the total estate was worth a little over $600,000.00. The primary asset of the estate was the house. There were 2 bank accounts totalling approximately $10,000.00. There was virtually no debt.

[86] The Will provided a formula setting out how to obtain the value of the house, who had the first rights of purchase and timelines for action. In short, this was a relatively modest estate with few complicating features.

[87] The Lena Rigby litigation became a complicating feature as a consequence of the trustees` failure to proceed in a prudent manner.

[88] The level of care and responsibility required was modest given the few complicating features of the estate and the specificity contained in the Will regarding disposition of the primary asset of the estate.

[89] While the Trustees did not maintain time dockets, and such are to be preferred, the absence of same does not by itself preclude compensation to estate trustees. The consequence however is that the court must attempt to determine a fair and reasonable level of compensation based on imprecise information.

[90] This was a very modest estate and very straight forward, but for problems arising as a result of delays described above.

[91] The amount claimed by the Trustees for reimbursement with respect to estate costs and expenses is outlined in Section iii, Capital Disbursements, subsections b and c of the accounts (Exhibit #17).

[92] In this case, the estate trustees claim compensation based on the usual percentages of 2.5% of capital and revenue amounts received and ultimately disbursed, despite it is submitted, the increased time and complexity required to administer the estate as a result of responding to litigation against Dirk, litigation commenced by Lena and the continuous objections raised by David. These are submissions that I reject for the reasons outlined above.

[93] As indicated above there is no obligation of the trustees to maintain time records although such is certainly preferred and would make the task of the court easier in accessing an appropriate level of compensation.

[94] I was struck however by Peter’s surprising lack of understanding or awareness of the presence of tenants at the property (Jennifer Elliot and Paul Thorpe) who, I am satisfied on the evidence of Jennifer Elliot, were present at the house as tenants prior to transfer of ownership to Peter. Given his reported number of attendances at the property it is difficult to understand his failure to develop a complete and accurate understanding of who the tenants were and what they were paying for rent and when their tenancies came to a conclusion. This leads me to conclude that while Peter may well have attended at the property on numerous occasions, he was not necessarily directing his attention to estate issues on all or even most of those occasions. As a consequence, rental monies were not accounted for as set out above.

[95] David argues that copies of the Will were not distributed to the beneficiaries until almost 10 months after Ingrid’s passing; however, Peter gave evidence that a copy of the Will was present on the kitchen table at the house and was accessible to anyone who attended the house for review while additional copies of the Will were made available to everybody in June of 2012. There is no evidence that the beneficiaries did not have an opportunity to inform themselves as to the contents of the Will prior to June 2012. I make no findings on this evidence adverse to the Trustees.

[96] I would agree with David’s submission that no special skills or abilities were required in addressing the relatively straight forward nature of this estate.

[97] Regarding success associated with the Trustees’ administration of this estate, I have outlined above my conclusion that the Trustees’ failure to act in a reasonably timely way resulted in Lena having a viable claim against the estate for dependant’s relief and actually cost the estate additional monies in this respect.

[98] The delays caused by the Trustees also delayed the beneficiaries’ access to the use of their inheritance, and incurred additional carrying charges regarding delayed transfer of the house to Peter.

[99] Although I have found that the Trustees did not act reasonably in pursuing administration of the estate promptly, the circumstances before me here fall well short of the “gross indifference” described in Gibson Estate, Re., 1930 278 (MB CA), 1930 Carswell Man. 62 (MBCA). In that case the court refused to award any compensation where it was found that executor showed gross indifference to his duty.

[100] David submits that the Trustees should receive no compensation or, alternatively, compensation should be reduced to 1% or less.

[101] In Pachaluck v. DiFebo 2009 20705 (ONSC), compensation was reduced to 1.5% in a simple estate with a sole significant asset plus a few bank accounts and GIC.

[102] In Hill estate, Re 1994 Carswell ONT 3945 (ONCJ), the amount of compensation was reduced to 1% of capital receipts and disbursements in a relatively simple estate with virtually all liquid assets that took 7 months to administer. There were no invest decisions and the time involved was minimal.

[103] It is clear on the evidence that David’s actions presented some roadblocks to progress; however, those actions were primarily focused on the Lena Rigby litigation which, as I have set out above, would likely have been avoided had the Trustees proceeded in a timely fashion.

[104] David seeks an order that the Trustees be required to pay interest on the use of the proceeds of sale of the house for the 486 days that the sale did not close and that further pay interest on the amounts of early compensation taken. Given the terms of judgment that follow I decline to award this relief.

[105] The Trustees’ claim for enhanced compensation of $1,440.00 based on the calculation of 120 hours of work at $12.00/hour is not warranted in the circumstances I have described herein.

[106] The claim for $1,334.00 regarding accounting for preparation of account involved in this Passing of Accounts is reasonable and the Trustees should be compensated for this expense.

Order

[107] For the foregoing reasons, Order to go as follows:

(a) The Trustees shall, within 30 days, prepare amended draft Accounts reflecting the following:

(i) Legal fees and disbursements, regarding the Lena Rigby litigation shall be borne by the Trustees and not the Estate

(ii) Mortgage, property taxes, home insurance, gas and hydro costs regarding the house shall not be borne by the Estate after December 31, 2012.

(iii) Cable television and internet expenses shall not be borne by the Estate after November 30, 2011.

(iv) The gasoline expense reimbursement shall be reduced to $750.00.

(v) Any expenses incurred in relation to defending and settling the claim against Dirk Loveman shall not be borne by the Estate.

(vi) Total rental income of $7,425 shall be accounted for.

(vii) The claim for enhanced compensation shall be removed.

(b) If the parties are unable to agree regarding the content of the Amended Estate Accounts a further appearance before me shall be scheduled and each party shall deliver at least 7 days prior to attendance their proposed draft Amended Estate Accounts.

(c) If the parties are able to agree on the form of the Amended Estate Accounts reflecting the above they shall notify me in writing through my assistant at Barrie whereupon such accounts will be approved.

(d) The Trustees’ compensation shall be 1.75% of capital and revenue amounts received and disbursed as set out in the Amended Estate Accounts to be approved hereafter as set out above.

(e) Within 10 days the Trustees shall notify the beneficiaries in writing (including email) of an invitation to each beneficiary to identify any items of personal property owned by Ingrid Loveman on September 20, 2011 which they have desire to retain. If there is no response within 14 days the Trustees may dispose of the said personal property in their discretion. If there is a response within 14 days the Trustees shall distribute personal property as may be agreed or as may be determined by me upon further attendance at court on a date to be fixed by the Trial Coordinator in the absence of agreement.

(f) Parties may make written submissions on costs (limited to 3 pages excluding Bills of Cost and offers) as follows:

(i) Applicant within 45 days

(ii) David Loveman, within 60 days

(iii) Reply by Applicant if desired, within 65 days.

Douglas, J.

Released: April 21, 2016