Written on January 21, 2013 – 8:50 am | by Justin de Vries
I recently came across two passing of accounts cases that I thought were worth sharing.
In Re Ronson Estate, 2000 CarswellOnt 1299 (ONSC), Mrs. Workman had been caring for her father before his death. Mrs. Workman’s sister, Mary, applied to compel Mrs. Workman to pass her accounts after he died. Mary objected on several grounds to the accounts when they were presented. Justice Morin, showing admirable flexibility, held:
“The accounts presented for passing as contained in the application were dismally inadequate. … With the assistance of counsel, to whom I am indebted, we were, at the beginning of the hearing, able to identify the issues arising on the passing of these accounts as between the Committee, Mrs. Workman, and the objector, Mary Simpson. It was decided that rather than require Mrs. Workman to put her accounts in proper form, the application to pass accounts would be proceeded with and that the issues as identified would be resolved and disposed of by me on the basis of the available evidence. In that respect, I heard viva voce evidence from the Committee, Mrs. Workman, and her husband Earl Workman.”
The Court accepted nearly every one of Mary’s objections, as well as her proposed solutions. For example, Mr. Workman (husband of the guardian) put in a claim for compensation for work done on the farm of the incapable. He billed for his time at a rate of $100/week, for a total of $9,600. The Court could not find any evidence that an agreement existed between the incapable father and Mr. Workman to perform this work. The Court could have dismissed Mr. Workman’s claim outright, but accepted Mary’s “more reasonable” suggestion that a lower rate of compensation be allowed instead. Justice Morin held:
“I have great doubts whether Mr. Workman is entitled to be paid anything from the estate on account of the work performed at Mr. Ronson’s [the deceased] farmhouse as described by Mr. Workman in his evidence. … I am satisfied that some work was done at the farm residence by Mr. Workman over the period of time indicated. In my view, the objector’s counsel is being extremely reasonable in suggesting that a reasonable claim for Mr. Workman would be forty-eight visits (every two weeks) at $50.00 per visit for a total of $2,400. In all of the circumstances, I find that Mr. Workman was entitled to be paid out of the estate that amount of money on account of that work.”
In Re Kalczynski, the Court appears to have applied a “discount” to the amount being claimed by the estate trustee, though it did not call it that. The deceased named one of her three daughters as attorney for property. The daughter “hired” herself as her mother’s care worker and then attempted to claim compensation from her mother’s estate for the work she performed before her mother’s death. Justice Ramsay held:
“Given the conflict of interest that the trustee created by hiring herself, in my view any such payment is subject to close scrutiny. … I do not think that it was reasonable for the trustee to expect to be paid close to the rate that she would have been paid by her employer for giving service to an arm’s length client, especially in view of the fact that she was at the same time hiring outside help. I disallow all but $34,500 of the amount claimed for personal care provided by the trustee. That is, I allow $1,500 a month for personal care for 23 months.”
The Court applied a similar “discount” to the amount charged by the daughter for her mother’s room and board. Although no explanation is given for how the Court reached its conclusion, the Court justified its reduction on the grounds that a trustee’s claims must be both reasonable and subject to close scrutiny.
Happy Litigating and Pray for Snow,