August 5th | 2014
In the well-known case of Re Toronto General Trusts and Central Ontario Railway (1905), 6 O.W.R. 350 (H.C.), five central factors should be considered by the audit judge in arriving at the amount of an executor’s compensation. The maximum fee for obtaining probate and distributing the assets is %5 with management of capital charges available over and above that where appropriate.
Those factors are:
(1) the size of the trust;
(2) the care and responsibility involved;
(3) the time occupied in performing the duties;
(4) the skill and ability shown; and
(5) the success resulting from the administration.
The later case of Re Atkinson,  O.R. 685,  3 D.L.R. 609 (C.A.) added some helpful clarifying comments on the s. 61(1) discretionary power, especially on the use of “percentages” to establish the level of compensation.
The Court said at p. 698 [O.R.]:
If these statutory provisions are properly borne in mind, then in many instances the proper compensation may well be reflected by the allowance of percentages, but the particular percentages applied, or any percentages, are not to be regarded as of paramount importance; they should be employed only as a rough guide to assist in the computation of what may be considered a fair and reasonable allowance; the words of the statute override everything else and that fair and reasonable allowance is for the actual ‘care, pains and trouble, and time expended’. In some estates, indeed perhaps in many, no fairer method can be employed in estimating compensation than by the application of percentages. In others, while percentages may be of assistance, it would be manifestly unreasonable to apply them slavishly and to do so would violate the true principle upon which compensation is always to be estimated.
It can readily be recognized that, depending upon 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 trustee’s 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.