Superior Court of Justice
Court File No.: CV-16-0030-00ES Date: 2020-10-29
Between:
Carol Parker Plaintiff
- and -
Donna Lix, Lois Rogala and Chris Vaclav Defendant(s)
Counsel: Morris Holervich, for the Plaintiff Robin Clinker, for the Defendant(s)
Heard: October 26, 2020, at Thunder Bay, Ontario
Before: Mr. Justice W. D. Newton
Reasons On Motion
Overview
[1] This is a motion to approve the passing of accounts for the estate of the late Mary Spooner, who died on April 2, 2015.
[2] I note at the outset that after argument of this motion, counsel for Ms. Parker provided the supplementary affidavit that was filed but not before me. I have reviewed it together with the other material provided by both parties
[3] Ms. Parker was the estate trustee. The will was challenged based on undue influence and in May 2018 the parties executed Minutes of Settlement. The settlement provided that Ms. Parker and the responding parties would each receive 20% of the residue of the estate. The estate had assets, comprised primarily of investments, slightly in excess of $600,000. The Minutes of Settlement provided that Ms. Parker would receive about $59,000 for her legal fees, which were to be paid out of the estate. The responding parties would receive about $67,000 for their legal fees, which were also to be paid out of the estate. The settlement agreement also provided as follows:
- Any additional or further legal costs reasonably incurred by any of the parties in bringing this matter to a final conclusion and including in connection with the administration of the Estate, shall be paid out of and by the Estate.
[4] The parties further agreed that Ms. Parker would proceed to administer the estate in accordance with the Will and that Ms. Parker would account to the responding parties "from time to time as may be reasonably requested."
[5] On this motion, the parties agree that the estate accounting is to be approved. What is contested are the following:
- Additional legal fees of $21,335.31 ($9000 already having been paid) of Ms. Parker's counsel for administration of the estate;
- Estate trustee compensation in the amount of $7500;
- The responding parties legal fees of $5842.10; and
- The costs of this motion.
The Estate
[6] As noted, the estate consisted primarily of investments. Receipts came from seven sources: two bank accounts, a CNR pension, a London Life payment, the Ontario Trillium Benefit and a CRA refund. Of the total proceeds of $617,688.05, $603,494.67 came from one investment account.
[7] On the disbursement side, apart from legal fees, tax returns had to be prepared for a few years. The taxes payable and accounting fees are not in dispute. Legal fees included fees payable to the prior lawyer for the estate plus reimbursement for legal fees related to the estate litigation as noted above.
Legal Fees for Estate Administration
[8] Ms. Parker argues that clause 3 of the Minutes of Settlement contemplate that Ms. Parker, who was elderly, would require the assistance of counsel to administer the estate and that there is no basis for challenging the fees. Further, counsel for Ms. Parker argues that excessive questioning by the responding parties account for some of the legal costs.
[9] The opposing parties challenge the legal fees for estate administration as unreasonable and argue that:
- The hourly rate charged by counsel for executor work, between $350 and $400 per hour, is excessive;
- The hourly rate charged by the lawyer's assistant, between $125 and $175 per hour, is excessive;
- There was significant duplication of time between the lawyer and his assistant;
- The lawyer's assistant billed for purely administrative tasks which should have been included as part of the lawyer's hourly rate;
- The delay in the administration of the estate caused increased costs and duplication;
- Some of the unbilled time claimed relates to the cost of this motion and, as such, is not estate administration costs; and
- The total time claimed is excessive given the tasks required to administer this noncomplex estate.
[10] Not all times billed by the law firm are challenged. Counsel for the opposing parties prepared a very helpful, colour-coded summary of the time entries challenged.
[11] As noted, this was not a complex estate. Funds had to be received from seven sources only. The bulk of the estate came from one investment account. Apart from preparing income tax returns, which was handled by an independent accounting firm, and remitting those taxes, little was required and certainly nothing of a complex legal nature. I agree with the submission for counsel for the opposing parties that, on its face, the amount claimed for legal fees is excessive.
[12] Having scrutinized the challenged docket entries for lawyer and legal assistant work, I agree with counsel for the opposing parties that the challenged legal fees should be reduced by 50% as it relates to the executor work. The reduction therefore will be $5022.85 inclusive of HST. Similarly, I agree that the claim for $7316.75 for work performed by the legal assistant is also excessive. The work performed by the legal assistant was administrative and therefore properly reflected within the lawyer's fee as overhead. In any event, the amount claimed for legal assistant rates is clearly excessive given the nature of this estate. Accordingly, I would deduct all fees claimed for the legal assistant. I also agree that some of the time claimed for executor fees properly relates to the preparation of this motion and that delay was also a factor. Accordingly, I reduce the fees claimed by a further $2500 in consideration of those factors. Therefore, the amount payable by the estate for legal fees related to the administration shall be a further $6395.40.
[13] As to the claim by counsel for Ms. Parker that some of the excess fees related to requests made by counsel for the opposing parties, I note that the Minutes of Settlement impose upon Ms. Parker the duty to account to the opposing parties. Given the apparent delays, the requests for progress reports were not unreasonable.
Estate Trustee Compensation
[14] There was no evidence before me from the Trustee as to the steps undertaken by her in the administration of estate. In this case, the evidence was that the work required to administer the estate was performed by the law firm and there is nothing before me to suggest that there was anything else required of Ms. Parker other than signing authorizations. Accordingly, I conclude that executor compensation is adequate by reason of the award for legal fees noted above.
Responding Parties Legal fees
[15] Initially, counsel for Ms. Parker took no issue with the legal fees claimed by the opposing parties as properly payable under clause 3 of the Minutes of Settlement. In reply, counsel for Ms. Parker argued that some of the fees claimed were excessive. I note that only one entry of 0.1 hours was claimed for the law clerk and that the balance of the entries claimed by counsel are very small time entries for email and other correspondence to opposing counsel and others. Nothing stands out as unreasonable in the circumstances. Therefore, opposing parties' legal fees of $5842.10 are to be paid from the estate.
[16] All other accounts are approved as submitted.
Costs of this Motion
[17] Counsel for the parties made submissions that costs in the range of $4000-$6500 would be appropriate. The opposing parties were predominantly successful on this motion. The opposing parties shall have their costs payable by Ms. Parker fixed in the amount of $5500 plus HST.
[18] If the parties need to address any computational errors, they may make an appointment to do so.
"Original signed by"
The Hon. Mr. Justice W.D. Newton
Released: October 29, 2020
COURT FILE NO.: CV-16-0030-00ES DATE: 2020-10-29
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Carol Parker Plaintiff
- and -
Donna Lix, Lois Rogala and Chris Vaclav Defendant(s)
REASON ON MOTION Newton J.
Released: October 29, 2020 /cjj