Watson v Strong 2016 BCSC 1897 dealt with a passing of accounts claim for executor’s fees by a removed executor that was rejected by the court. The court instead awarded %4.5 fees on an interim basis to the executor who replaced the removed executor, with a further .5% fees when the estate is finalized.
The court outlined the criteria for determining executor’s remuneration and then listed all the reasons why the removed executor was not entitled to any fees.
45 Executor’s remuneration is contemplated by the will and by s. 88 of the Trustee Act, R.S.B.C. 1996, c. 464. The executor is entitled to a fair and reasonable allowance of a maximum of 5% of the gross aggregate value of all the assets of the estate for his or her care, pains and trouble and his or her time spent on the executorship.
46 The criteria to be considered in determining the executor’s remuneration are as follows:
a) the magnitude of the trust (or estate);
b) the care and responsibility involved;
c) the time occupied in the administration of the estate;
d) the skill and ability demonstrated;
e) the success achieved in the final result (McColl, Re (1967), 65 W.W.R. 110 (B.C. S.C. [In Chambers])).
1. Marian’s claim to Executor’s Remuneration
47 Applying the criteria as required, I have determined that Marian has not applied any skill or ability in her role as executor to justify any executor’s remuneration. She is a major cause of the excessive delay in getting Elwell Street sold, and of the associated legal expenses. I would be illogical to award a fee in light of the unnecessary delay and expense that Marian has caused. Marian says she spent 262 hours taking junk to the dump, arranging for curbside pick-up of junk by the City of Burnaby, and attending the property when the City of Burnaby bylaw inspector attended. The attendance of the bylaw inspector was due to debris on the property. The letter from the City dated September 13, 2013 to Marian and Rick refers to twelve previous Licence Office letters regarding a complaint about a sawmill business being operated on the property. The sawmill business was Gordon’s. The letter goes on to say:
A site inspection conducted on 2013 September 10 revealed: a dismantled portable saw, an accumulation of rough cut lumber, lumber, used building materials, construction debris, pieces of metal, sign, fridge drawer, sink, hand truck, rowing machine, seat from a [sic] automobile, wooden boxes, several pieces of outdoor furniture and various forms of debris stored on the property.
48 The letter states the City requires removal of all of the items listed and the lumber to be neatly stacked.
49 Finally, the City issued a ticket on August 22, 2014 based on the unsightly property. Rick appealed the ticket, but lost. The adjudicator noted that the City worked with the owner’s representative for three years to clean up the property and allowed debris to remain until the property was vacated on May 26, 2014. A second ticket was issued September 26, 2014 for unsightly property. In my view, it was inevitable that the City would take action regardless of Marian having attended the bylaw inspections. The bylaw inspector’s supervisor wanted him to close the file. It was inevitable that the patience of the City would eventually run out and a ticket would be issued. In any event, if Marian had not obstructed the timely sale of the property, the unsightliness issue would not have lingered as long as it did.
50 Marian says she preserved the property and because of her refusal to agree to an earlier sale of the property, the property increased in value and therefore, she should receive a care and management fee. Before being removed as executor, Marian resisted Rick’s attempts to sell Elwell Street. She wanted to buy the property herself, but had no realistic way of doing so.
51 The other beneficiaries wanted the property sold. If the property had been sold earlier, each beneficiary would have received his or her share to invest as he or she wished. Marian’s self-interest conflicted with her duties as executor to act for the benefit of all beneficiaries. I do not consider Marian’s hindering of the sale of the property a point in her favour in her claim for an executor’s fee.
52 Marian’s conduct as executor has resulted in her being removed by court order. That order was based on Marian obstructing the proper administration of the estate. She is responsible for the estate having to spend money on legal fees that would otherwise go to the beneficiaries.
53 Further, she has refused to claim the principal residence exemption (“PRE”) which would save the estate $60,000, $15,000 of which would go into her own pocket. She was only willing to claim the PRE if she were paid $30,000 for executor’s fees and that the estate dropped its claim for special costs. Needless to say, the offer was rejected. Even if I were to award Marian executor’s remuneration for junk clearing and attending at the property during the bylaw inspections, the amount of that fee would be very modest and eclipsed by the $60,000 she is costing the estate by refusing to claim the PRE. Marian’s own legal counsel advised her to claim the PRE and to leave her claim for executor’s remuneration to be determined by the court. Her refusal to claim the PRE is unreasonable. Marian still has the opportunity to act reasonably and claim the PRE because she is within the time limit for re-filing. She testified that “it’s still on the table”, which I take to mean that she may decide to claim the PRE. It is in her own interests to claim the PRE, even if she is not motivated by the interests of the other beneficiaries. If she requires some professional accounting assistance to re-file, Rick, as executor, might consider covering her reasonable accounting fees for this purpose. Such fees would be a reasonable estate expense.
