A beneficiary has the right to challenge a claim by the executor for remuneration by compelling the executor to pass his or her accounts before registrar of the Supreme Court of British Columbia.
The decision in re Sangha 2018 BCSC 54 outlined the various criteria and law relating to same.
The legal principles relevant to a registrar’s passing of accounts, including the calculation of an executive’s remuneration are summarized in Bernhard v. Wist 2011 BCSC, 101 at paragraphs 98 – 108, where the court states:
98. Section 99(1) of the TRUSTEE act, provides as follows:
1) Unless his or her accounts are approved and consented to in writing by all beneficiaries, or the court orders otherwise, an executor, administrator, trustee under a will and judicial trustee must, within two years from the date of the granting of the probate or letters of administration or within two years from the date of his or her appointment, and every other trustee may, at any time obtained from the court an order for passing his or her first accounts, and he or she must pass his or her subsequent accounts at the times the court directs.
99. In order to account to the beneficiaries, the executor must provide:
- An account showing of what the original estate consisted;
- an account of all monies received; and
- an account of all monies remaining on hand
Campbell v. Hogg 39 OWN 85
100. Section 88 of the TRUSTEE act governs executors remuneration. The executors entitled to:
a) A maximum of 5% of the gross aggregate value of the estate;
b) a maximum of 5% of the income earned during the administration of the estate; and
c) an annual care and management fee of .4% of the average market value of the assets.
101. However, the percentages stipulated in section 88 are not necessary to be applied in every calculation of remuneration. The percentages provide a rough guide to assist in appropriate computation of the executor’s remuneration. Re Turley estate (1955) 16 WWOR 72 BCSC
In the end, the court must be satisfied that the compensation claimed” there’s some reasonable relationship to the work and responsibility involved”
Re La Chance (1955) 15 WWR 141 BCSC
102. Various factors are to be considered when determining the appropriate executors fee. Those factors include :
1) the magnitude of the estate,
2) the care and responsibility involved,
3) the time occupied in the administration,
4) the skill and ability displayed on the success(or lack thereof) achieved in the administration.
Re McColl estate (1967) , 65 WWR 110 BCSC
Similar, but not the same types of considerations apply with respect to a Karen management fee Re Pedlar (1982) 34 BCLR 185 BCSC
103. In terms of calculating the capital fee, the gross aggregate value of the estate is the realize the value of the original assets of the estate.
104. If the estate suffers any losses as a result of an executor’s actions or inaction the executors obliged to repay the estate, with interest the interest is calculated pursuant to the COURT Order Interest Act 1996, unless there is a finding that the executor has used the state monies for his or her own benefit. (In that circumstance, the executor may be required to pay compounded interest ) . See Waters Law of Trusts in Canada 3d addition, at pages 1228 – 1229.
105. An adverse inference may be drawn against an executor’s reliability if he or she fails to produce relevant documents as requested by the beneficiaries or ordered by the court. Booty v. Hutton (1996) BCJ 2286 BCSC.
106. The executors entitled to be reimbursed from the estate for a solicitor’s bill for legal services rendered, provided that those legal costs a been reasonably and properly incurred and do not relate to work that could of been performed by the executor. Fees paid for any services that could have been performed by the executor should be deducted from the executors remuneration. Read Lloyd estate ( 1954) , 12 WWR (NS) 445.
107. Furthermore, an executor is not entitled to employ a solicitor to do work that the executor could do, such as ordinary letters, attendances, pain insurance premiums and the like, attending to banking matters. Another ordinary duties that do not require the skill or expertise of a solicitor. Sharp v. Lush (1879) 10 CH 468 and applied in re-Smith (1972) 2 OR 256.
108. As a matter of practice, the solicitors charges may be included in the executors fees if the court finds that the executor could of done the work himself.