SUPREME COURT OF Nova Scotia
Citation: Allsopp et al. v. Edgar Graham Estate, 2023 NSSC 249
Date: 20230731
Docket: Annapolis Royal, No. 513744
Probate File No. AR-6139
Registry: Annapolis Royal
Between:
Kristina Allsopp, Derek Hann and Darren Hann
Applicants
v.
Earl Wayne Graham, Executor of the Estate of Edgar Graham
Respondent
Judge: |
The Honourable Justice Muise
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Heard: |
December 21, 2022 in Digby, Nova Scotia
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Counsel: |
Richard Norman, for the Applicants Brian Casey, KC, for the Respondent |
By the Court:
INTRODUCTION
[1] Edgar Graham passed away on July 26, 2019. His will named Earl Wayne Graham and Darlene Graham joint personal representatives of his estate. Darlene renounced, leaving Wayne as the sole executor. He was granted probate on January 27, 2020.
[2] March 24, 2022, the Applicants filed a Notice of Application seeking an order compelling the Executor to pass accounts. On May 18, 2022, by agreement, the matter was set to December 21, 2022 for hearing, on the understanding that the Executor would be presenting his Accounts and the Applicants would be contesting them.
[3] The Applicants are of the view that: the Executor breached his fiduciary duties, causing loss to the Estate, so he is not entitled to any commission and should reimburse the Estate for the loss; and, the Proctor’s fees claimed, as well as the cost of the appraisals obtained by the Executor, are not reasonable, so the Executor should be personally responsible for at least some of them.
[4] The Executor is of the view that: he met or exceeded the requisite standard of conduct; and, in the circumstances, the Proctor’s fees are reasonable and the cost of the appraisals is a proper expense of the Estate.
ISSUES
1. What is/are the applicable standard(s) of conduct for the Executor in the case at hand?
2. Did the Executor breach his duties as trustee of the Estate?
3. Are the Proctor’s fees reasonable?
4. Should the cost of the appraisals obtained by the Executor be paid out of the Estate?
5. What, if any, commission is the Executor entitled to?
LAW AND ANALYSIS
ISSUE 1: WHAT IS/ARE THE APPLICABLE STANDARD(S) OF CONDUCT FOR THE EXECUTOR IN THE CASE AT HAND?
[5] The Executor submits there are different standards of conduct for the Executor depending on whether: the Will gives him absolute discretion; he is acting on professional advice; or he is otherwise conducting the affairs of the Estate.
[6] The Applicants submit there is only one standard of care and diligence, ie. “that of a person of ordinary prudence in managing their own affairs”.
[7] There is no dispute that, as a general rule, that is the applicable standard:
Cushman Estate v. MacEwen, 2018 NSSC 320, para 28; Waters, Gillen and Smith, Waters’ Law of Trusts in Canada, Fifth Edition (Thomson Reuters Canada Limited, 2021 – Toronto), p. 1038.
[8] In relation to matters for which a will expressly grants the executor discretion, particularly absolute discretion, the court’s power to intervene is altered. As stated at paragraphs 47 and 48 of Walters v. Walters, 2022 ONCA 38:
[47] The court’s approach in Canada to intervention with the exercise of a trustee’s discretionary power is described in Waters’ Law of Trusts in Canada at p. 989: “The court will intervene, however, if (1) the decision is so unreasonable that no honest or fair-dealing trustee could have come to that decision; (2) the trustees have taken into account considerations which are irrelevant to the discretionary decision they had to make; or (3) the trustees, in having done nothing, cannot show that they gave proper consideration to whether they ought to exercise the discretion.” …
[48] To sum up, court intervention into the exercise or failure to exercise a discretionary power flows from a trustee’s fiduciary status. The court may intervene even where the testator has conferred an absolute discretion on the trustee. Mala fides and improper consideration of extraneous matters are encompassed by this analytical framework. …
[9] This strikes a balance between giving effect to the intentions and directions of the testator and maintaining judicial oversight: Waters, pp. 1049 – 1053.
[10] It supports the Executor’s position that the “so unreasonable” standard applies to exercise of “absolute discretion”.
[11] The Applicants, relying on paragraph 50 of Critchley v. Critchley, 2006 NSSC 219, submit that discretionary powers must be exercised “properly”, in the sense of complying with the Trustee Act, R.S.N.S. 1989, c. 479, not just in good faith. However, in that case, the will directed the types of investments that had to be made and only allowed the trustees to choose the investments amongst those directed that they deemed appropriate. Unlike the case at hand, the relevant clause in that case did not use the general discretion language, nor the absolute discretion language, referenced at paragraphs 47 and 48 of Walters v. Walters. Therefore, Critchley does not detract from the higher standard of intervention noted in Walters, for express grants of discretion, particularly absolute discretion.
[12] Express wording in a will or in statute may also exonerate executors from liability for action or inaction falling below the general standard: Waters, p. 1040.
[13] In the case at hand, Clause 9 of the Will authorizes the Executor to “act on the opinion or advice of or information obtained from any lawyer … or other expert” and Clause 8 provides that if he does so, in good faith, he shall not be subject “to liability of any kind”.
[14] This supports the Executor’s contention that the “in good faith” test applies to acting on professional advice. However, it is not so much a separate standard as an application of the express exoneration principle. As submitted by the Applicants, it serves the same function as Section 64 of the Trustee Act. Section 64 only comes into play to excuse a breach of trust, not to determine whether one occurred.
[15] The Executor argues he has met the “ordinary prudence of a person managing their own affairs” test. Obviously, if that is the case, he has surpassed the other standards or tests outlined.
ISSUE 2: DID THE EXECUTOR BREACH HIS DUTIES AS TRUSTEE OF THE ESTATE?
[16] The Applicants allege the Executor committed the following breaches of trust:
- He sold assets below market value.
- He did not act in good faith.
- He inappropriately relied on the Proctor’s advice.
[17] I will address each one in turn.
Value Obtained on Sale of Assets
[18] The assets of the Estate included 14 lots of land that were primarily woodlands with some portions being agricultural lands or lands previously used for agricultural purposes. The Executor, through the Proctor, obtained an appraisal of those properties from Earle Miller, a Registered Professional Forester and Accredited Timberland Valuator. The purpose of the report was to determine the respective values of the lands, in 1971 and in 2019, and submit them to the Canada Revenue Agency (“CRA”), so that capital gains could be assessed.
[19] Mr. Miller provided a report dated November 25, 2019 (the “Miller Report”). It valued the lands in five blocks, three of which were comprised of multiple lots. It opined that the total value of the five blocks, as of October 2019, was $295, 298. That was higher than the Provincial property tax assessment values which totalled $263,800.
[20] Mr. Miller did not testify. The Applicants objected to the admissibility of his report for its truth. It was admitted for the fact that the Executor received the information in it and relied on it in his ensuing actions.
[21] The Proctor did not testify. The Applicants objected to the admissibility of any statements attributed to him as being hearsay. Similarly, they were admitted for the fact that the Executor received that information, relied on it and acted on it. The Executor confirmed that in his evidence, including by confirming his agreement with the summary of their discussions contained in the letter of October 9, 2020, from the Proctor to the Beneficiaries and to the lawyers representing some of them.
[22] Edgar Graham, prior to his passing, had agreed to sell Block 4 to his nephew, Cortland Graham, for $25,000. However, he passed away before the sale took place. The Miller Report valued Block 4 at $26,108. The Executor saw himself as honour-bound to complete a sale to Cortland. He proposed selling him Block 4 at the higher price. Cortland agreed and the sale was completed in early October 2020.
[23] In August 2020, the Executor had consulted with the Proctor regarding sale of the lands. They concluded the following. It would be advisable to have expert advice as to the up-to-date market value of the properties. Mr. Miller was chosen because he was familiar with the properties and he was known in the forestry industry as a knowledgeable and respected valuator and appraiser with a reputation for honest dealings.
[24] During that same consultation, the Proctor suggested it might be worthwhile to solicit an offer from Mr. Miller. The Executor agreed but directed that he should not be invited to make an offer until after the Proctor had obtained his “advice and opinions as to prices and the methods of selling the land”. The Proctor informed the Executor he met with Mr. Miller on August 11, 2022 and obtained the requested information before soliciting an offer from Mr. Miller for the four blocks that would remain after the sale to Cortland. The information obtained from Mr. Miller, and relayed to the Executor, was that the value of the lands had decreased for multiple reasons which I will discuss later.
[25] Mr. Miller offered to buy the four remaining blocks for $244,255, even though he had appraised them at $269,190 the previous year. The Proctor recommended to the Executor that he should accept the offer. The Executor instructed the Proctor to accept that offer for reasons which I will outline later.
[26] During the August consultation, the Proctor had raised the potential that Mr. Miller would be in a conflict of interest if he purchased property he had appraised. The Executor was concerned about the optics of selling the lands to the person who appraised them without providing others an opportunity to do so. The Proctor advised the Executor that the Will authorized him to sell the lands without the consent of the Beneficiaries. However, he still preferred the comfort of knowing that “a comfortable and sufficient number of beneficiaries” generally approved, or at least did not object to, the sale. He at least wanted to know their feedback on the issue.
[27] The Executor understood the Proctor sent a letter dated October 9, 2020 to the Beneficiaries and counsel representing at least some of them. It outlined, among other things, the background to, and the reasons for, the proposed sale It also asked them to contact the Proctor or the Executor regarding whether they approved of the sale.
[28] Several of the Beneficiaries contacted him and expressed their approval verbally.
[29] On October 13, 2020, Ben Corkum, on behalf of Kristina Allsopp and Derek Hann, left a message for the Proctor asking if he intended to proceed with the sale, without specifying whether his clients opposed or supported it. Derek Hann had received the letter by email on October 9, as had their lawyer. It appears that Derek Hann also forwarded the email to Kristina Allsopp. She deposed that she received it on October 9, 2020.
[30] On October 14, 2020, Mr. Miller’s company, Curmae Limited, entered into a written agreement with the Executor to buy the remaining four blocks at the price he had re-evaluated and offered.
[31] On October 29, 2020, Mr. Corkum emailed the Proctor stating that: his clients did not consent to the offer made by Mr. Miller; it did not appear to be an arm’s length transaction; and it was a conflict of interest on Mr. Miller’s part. He added that, if the sale was proceeded with, his clients would bring an application against the Executor.
[32] The sale of the lands to Curmae Limited closed on December 11, 2020, at the agreed price of $244,255. With the addition of the $26,108 received from Cortland for Block 4, the total sale price for all five blocks was $270,363.
[33] The Proctor retired in December 2020 and was later replaced by the New Proctor he recommended.
[34] The Applicants obtained a Valuation Report regarding the five blocks from James Stephens, Real Estate Consultant and Professional Appraiser. It is dated April 29, 2022. It opined that the total value of the lands, at their highest and best use, with an exposure time of 6 to 12 months, as of November 25, 2019, was $434,000. However, it considered subsequent sales and marketing history, and assumed the continuation of the market conditions in place as of April 2022. In addition, it did not comment on Blocks 1 and 5 being landlocked, including whether an easement could be obtained and at what price.
[35] In response to the Applicants’ challenge to the sales of the lands, the Executor, on the suggestion of the New Proctor, obtained an Appraisal Report from Kenneth Young, Accredited Appraiser and Right of Way Appraisal Certified by the International Right of Way Association. It is dated May 31, 2022, but values the lands as of September 30, 2020, at their highest and best use, with an exposure time of 3 to 12 months, at a total of $336,085. It also uses subsequent sales information. It makes note that Blocks 1, 3 and 4 had been harvested of mature timber within recent years. It further states that Blocks 1 and 5 do not have road frontage or rights of way but assumes “a form of access” is achievable or that past access would continue unobstructed. As with the Stephens Report, it assumes the market conditions at the time will continue, noting that the 2020 statistics had shown a 20% increase in properties sold and a 25% increase in price. However, it held open the possibility of negative impacts of the COVID-19 Pandemic. It reserved the right to revise the valuations in light of the market uncertainties created by the COVID-19 Pandemic.
[36] Mr. Young agreed, on cross-examination, that Block 2 included an additional piece across the road that was roughly 4.5 acres in size that he had not included in his valuation. He agreed that would provide additional value beyond the $11,385 value he had provided for 11 acres. However, he was not asked and did not say how much it would add.
[37] The Applicants submit that it did not meet the standard of ordinary prudence, and was thus improper, for the Executor to do the following: rely on the valuations in the Miller Report; sell the lands to Mr. Miller; and sell lands at the prices obtained. The reasons advanced for these submissions include the following:
- Mr. Miller was not an approved appraiser. Thus, his preparation of the Report contravened Section 17 of the Real Estate Appraisers Act.
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- The Executor only solicited an offer from one person, ie. the same person who had valued the properties, without looking into other potential buyers or marketing opportunities.
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- Mr. Miller was in conflict when he formulated an offer, as he knew what he had valued the land at and offered less.
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- By the Fall of 2020, lumber demand and prices were starting to increase, and property values were rising, so the Executor ought to have sought a new appraisal.
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- The Executor sought approval from the Beneficiaries but did not wait for their responses.
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- He also ought to have delayed the sale of the properties to see how the market would change.
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- The Stephens Appraisal valued the properties at $434,000, some $140,000 higher than the Miller Valuations.
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[38] The Executor submits that his actions met the standard of a “person of ordinary prudence in managing their own affairs” for reasons which include the following:
- The Proctor identified Mr. Miller as an individual to conduct the appraisal for tax purposes and retained him on behalf of the Estate. He was a Registered Professional Forester and Accredited Timberland Valuator.
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- The Executor does not know Mr. Miller and has never met him.
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- After the taxes had been taken care, the Executor wanted to sell the properties so that he could distribute the estate assets.
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- By then, the only local buyer of pulpwood had ceased operation. Nova Scotia was in the midst of the Covid-19 Pandemic. That created uncertainty as to how to proceed.
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- Edgar Graham, while alive, had agreed to sell Block 4 to his nephew Cortland Graham for $25,000. Though the Executor felt honour-bound to sell the land to Cortland, he renegotiated the price to match the Miller Appraisal valuation, being $26,108.
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- The Executor, in August 2020, discussed, with the Proctor, alternative sale methods, including listing with the realtor, advertising and inviting expressions of interest. They also considered the impact of the pulp mill closure and of the access issues regarding Blocks 1 and 5. They determined that an updated opinion regarding the current value of the properties was advisable, due to the unknowns and variables at the time. Mr. Miller was the logical expert to turn to because of his expertise, reputation, and knowledge of the lands as previously noted.
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- It was the Proctor who suggested inviting an offer from Mr. Miller. However, they determined that invitation would only be advanced after obtaining Mr. Miller’s advice and opinions relating to updated values and potential methods of selling.
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- The Executor was informed of Mr. Miller’s updated views. They included the following. The increased demand for saw logs appeared to offset the lower pulpwood prices. However, the major historical purchasers of timberlands were no longer doing so, leaving few, if any, purchasers or harvesters having the financial means to purchase all four blocks. In addition, any purchasers would likely require documented access to the lands and there were clear access issues in relation to Blocks 1 and 5.
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- The Proctor, based on the information he had and his knowledge of the forestry industry, concluded that Mr. Miller’s information and observations were correct, that it would be fruitless to list with a real estate agent and other advertising and soliciting would raise little, if any, interest. If it did, it would likely be only for single lots. Mr. Miller’s company had the means to purchase all remaining lands. Purchase by him would provide the best results for the Estate.
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- On behalf of the Estate, the Proctor solicited an offer in early August, 2020. Mr. Miller ultimately delivered an offer for the four remaining blocks in early September, 2020. As requested by the Proctor, where the offer was less than the previous valuation, Mr. Miller provided reasons for the decrease.
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- The reasons included that: obtaining an easement to Block 1 would cost $8000; it was unknown whether any easement to Block 5 could be obtained and it was primarily made up of softwood making it lower in value due to the closure of the pulp mill and Covid; and, Block 2 may require surveying, subdivision and time to obtain the required value.
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- The Proctor recommended to the Executor that the offer be accepted. The Executor expressed concerns about the optics of having the person who valued the lands purchase them. The Proctor explained to him that Mr. Miller had valued the properties long before he was consulted to provide an updated evaluation and opinion as to market conditions, and he had provided his views regarding decreased value without knowing he would be asked to make an offer. In addition, even when he made the offer, he did not know what marketing approach the Estate would take.
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- The Executor agreed it was in the best interests of the Estate and knew he did not need the permission of the Beneficiaries; but, wanted the comfort of knowing a “comfortable and sufficient number” of beneficiaries supported the sale.
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- The Proctor sent a letter to the Beneficiaries and counsel representing at least some of them. Some verbally expressed their agreement. None expressly voiced their disagreement until Mr. Corkum sent the Proctor an email on October 29, 2020 on behalf of two of the Applicants.
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- By then, the agreement of purchase and sale had already been completed on October 14, 2020. The transaction closed December 10, 2020.
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- At that time, the Executor had the express support of multiple beneficiaries, and, only up to three beneficiaries out of 18 had expressed any opposition. So, he understood, when the sale of the properties closed, that he had the support of at least 83% of the beneficiaries. When he entered into the agreement of purchase and sale, he understood he had 100% support as he was not aware of anyone having objected.
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- In addition, by not proceeding with the sale, he would have breached a binding agreement of purchase and sale.
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- In those circumstances, it was not unreasonable for him to proceed with the sale.
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- Further, he was relying upon the advice of the Proctor, as the will authorizes him to do, and, he was doing so in good faith, making it such that the will expresses that he should be relieved of liability notwithstanding any loss that may result.
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- He was a 71-year-old farmer with no experience acting as an executor and no experience in valuing land or timber. The Proctor had been Edgar Graham’s lawyer for the last 15 years of his life. The changes to valuation brought about by Covid, the pulp mill closure and the access issues made sense, and it was only a 10% decrease. At the time (ie. August to October 2020) Nova Scotia was still on lockdown, except for the Atlantic Bubble. There would be a delay and expense associated with marketing properties in another way, such as listing them with the realtor, which he understood would likely attract a 5% commission. Being in his 70’s, it made sense that he would want to wrap up the Estate. The mature timber had already been harvested off the properties. It would be a long time before the properties could produce income from the sale of saw logs. Plus, he understood the Beneficiaries were entitled to their share of the Estate reasonably promptly after the tax clearance certificate, which had been obtained. Also, the Miller valuation was about 10% higher than the tax assessment. Those points, in addition to the provisions noted in the will, made it reasonable for him to rely on the Proctor’s advice in relation to obtaining the Miller appraisal, update and advice, and relying on them.
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- Hiring a totally new appraiser would have incurred additional costs for the Estate, the Young Appraisal having cost the estate $9200. In addition, he considered that it would delay the winding up of the Estate. The Stevens Appraisal took 121 days to obtain and the Young Appraisal took 85 days. That seemed a waste of money and time given that Mr. Miller had arrived at his evaluations at a time when there was no indication he would be solicited to purchase the properties, and thus was independent.
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- At the time, there was significant uncertainty regarding rural property sales in Nova Scotia because of Covid.
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- The majority of people who sell their own property do not hire an appraiser. Some rely on the advice of their realtor, irrespective of whether they are accredited land appraisers. The CRA accepted Mr. Miller’s appraisal. |
[39] The Executor also advances arguments based upon the net gains that would have been achieved if the properties sold at the valuations in the subsequent appraisals. Those arguments are based on hindsight gained through those appraisals and the assumption that the properties would have sold for the appraised values. I will leave those arguments aside for now.
[40] I agree that the reasons the Executor advances do support a finding that he acted with the ordinary prudence of a person managing their own affairs. The following points also support that finding.
[41] Section 2(2) of the Real Estate Appraisers Act, S.N.S. 1998, c. 25, provides, among other things, that:
Nothing in this Act applies to or prevents
(a) the practice of any occupation, calling or profession authorized by an Act of the Province;
…
(c) a person carrying out functions that may include, in
part, the practice of real estate appraisal, if the person does not represent that person to be a real estate appraiser;
[42] Mr. Miller did not represent himself to be a real estate appraiser. He represented himself to be a Registered Professional Forester, under the Foresters Association Act, S.N.S. 1999 (2nd Sess.), c. 6, and an Accredited Timberland Valuator. Valuing lands was known to be part of his business. Therefore, he would at least fall under the S. 2(2)(b) exception.
[43] Further, even if that was not the case, the Proctor had recommended Mr. Miller and the Executor followed that recommendation. Especially given his Timberland Valuator accreditation, there was nothing suggesting Mr. Miller was not qualified. It was reasonable for the Executor to follow the Proctor’s recommendation without engaging in his own legal research regarding whether Mr. Miller was authorized to conduct the appraisal.
[44] Both the Stephens Report and the Young Report assume continuation of the marketing conditions in place as of the Spring of 2022. The Young Report also makes reference to 2020 statistics showing increase in properties sold and in price. Those statistics were not available when Mr. Miller provided his valuations. Therefore, even though they provide retroactive valuation dates, the two additional reports are still using the benefit of hindsight in arriving at those evaluations.
[45] As noted at paragraphs 48 and 49 of Critchley v. Critchley, supra, an executor is not expected “to be infallible nor a guarantor of the safety of the estate assets” nor “to defend against complaints based on the advantage of hindsight”.
[46] In the late summer and fall of 2020, the Executor also did not have the benefit of being able to review statistics from 2020. The effects and duration of the Pandemic were still uncertain. That is highlighted by the comments of Mr. Young, even in the spring of 2022, about a year and a half later, that he reserved the right to revise his evaluations in light of the market uncertainties created by the Covid 19 Pandemic. By that time, the effects of the Pandemic on the market ought to have been much clearer.
[47] In addition, the litigation appraisals either do not mention the access issues or assume that access will be available. Those are not insignificant issues. Lack of access to one’s property can render it relatively unusable. Expensive access can render it financially unviable. It was an issue that the Executor knew affected at least two of the Blocks.
[48] The assumptions and retrospective analyses used in those reports makes them much less helpful in assessing the appropriateness of the Executor’s decisions in the summer and fall of 2020.
[49] It is, however, noteworthy that they both use an exposure time of up to 12 months. By the Fall of 2020, the Estate had already been opened about two thirds of a year. Under Section 70 of the Probate Act, S.N.S. 2000, c. 31, the presumptive deadline for distributing the Estate is 12 months from the grant of probate. That would have been January 27, 2021. The sale of the properties occurred approximately one month before that.
[50] Considering the points outlined by the Executor, and the additional points I have noted, I find that, in the circumstances as they existed at the time, he did act with the ordinary prudence of a person managing their own affairs. In hindsight, he may have been able to obtain more for the properties if he had held off. However, we cannot judge his actions with the benefit of hindsight. At the time, the information he had was that it was uncertain whether the values of the properties would increase, stay the same or diminish.
[51] I will also briefly comment on the Executor’s arguments based upon the net value that would have accrued to the Estate if the properties had been sold at the prices in the Young Report.
[52] As argued, the following would reasonably have to be deducted from the Young Report values: additional capital gains tax; the cost of the appraisal report; the cost of obtaining access to the lands as it would not be reasonable to expect the purchaser to buy land at full market value without access; and a Real Estate Commission of likely 5%. Considering those deductions, the net amount that the Estate would have gained is $296,985 less the cost of access to Block 5, with some minimal adjustment for the additional roughly four and one-half acres he overlooked in relation to Block 2. Instead, he acquired, for the Estate,
$270,363, which is over 90% of that net amount, without having to wait up to 12 months, and without incurring the risk of a downturn in the market for woodlands, especially for the large acreages in the case at hand (i.e. blocks of 113, 126, 162 and 243 acres in size).
[53] So, even if the Executor had known what the Young Report would say, he still would have met the standard of the person of ordinary prudence managing their own affairs by proceeding with the sale.
[54] The Applicants submit that, after receiving a report stating what the Young Report says, the Executor might reasonably be having been expected to secure a third report. I disagree. There would have been nothing at the time signalling the need to obtain a third report.
[55] As stated in James MacKenzie, Feeney’s Canadian Law of Wills, Fourth Edition (LexisNexis Canada Inc. 2000 – Toronto), at § 8.57:
“Executors are only liable to do their best and if they honestly do their best, they are not liable for errors in judgment; the standard expected of them is purposely not made to onerous by the law, so as to encourage persons to accept a position as executor.”
[56] To expect the Executor in the case at hand to have second-guessed the advice of the Proctor and the opinion of Mr. Miller, and to have had confidence that the property could be sold at a higher price within a reasonable period of time, despite the continuing uncertainties at the time, would be imposing too onerous standard on him. It would effectively require him to have accurately predicted the future.
[57] The Executor presents the case of Estate of Sigrun Zibara v. St. Pierre, 2022 NSSC 357, as a comparison case providing additional support for his position. In that case, the Executor was a lawyer who had practiced over 40 years and had significant experience dealing with estates. He sold the testatrix’ home for 65% of its appraised value. He did not seek approval from either of the two beneficiaries. The agreement of purchase and sale was signed July 7, 2021, when the 2020 property sales statistics would have been available and the impact of Covid on the market better known. He had considered the appraisal but rejected it. Further, the report provided an exposure time of up to 690 days which could delay the closing of the estate, and listing would add expense. The Court found that the executor carried out the sale “with the degree of prudence and care that he would have brought to bear had he been selling his own home” and “acted, at all times, reasonably”.
[58] The Applicants in the case at hand attempted to distinguish that case by pointing out that the deceased had told the executor that “it was her wish that the home be sold to her tenants”. However, she did not express the wish that it be sold at 65% of fair market value. Nevertheless, the court concluded the executor met the requisite standard in carrying out that wish.
[59] In the case at hand, the Executor renegotiated a higher price with Cortland that was consistent with the Miller valuation, even though Edgar Graham had agreed to sell to Cortland at a lower price. He sold the remaining lands at the value adjusted in accordance with access, pulp market and Covid uncertainty issues. He understood he had the support of most of the Beneficiaries. He did not have a higher appraisal at the time. He obtained over 90% of the net value that could potentially have been obtained in accordance with the appraisal he obtained about 1.5 years after-the-fact. Plus, as a first-time executor, he was nowhere near as experienced and qualified to handle an Estate as the executor in Zibara, and properly relied on the Proctor’s advice. Furthermore, unlike the real property in Zibara, which was a rental property, the lands in the case at hand were not earning income for the Estate. So, there was less reason to hold on to them longer.
[60] Therefore, there is much more reason to find that the Executor in the case at hand acted with the ordinary prudence of a person selling their own lands.
[61] Consequently, in relation to the sale of the lands, the Executor has met the higher standard of conduct. So, he obviously clearly meets the “so unreasonable” standard, and there is no indication he considered irrelevant factors. He has never met and does not know Mr. Miller, and he, as a Beneficiary, would only benefit from getting the highest price reasonably obtainable within a reasonable time. So, there is no indication of mala fides in the sale of the properties.
Whether Executor Acted in Good Faith
[62] The Applicants raised points which they submit indicates a lack of good faith on the part of the Executor. Some are irrelevant as they relate to actions taken by the Executor when he was acting as Edgar Graham’s attorney pursuant to a power of attorney. The others include the following:
- He located a large amount of cash in the deceased’s home in early August 2020. He did not include it in the inventory sworn August 13, 2020. He only included it in the updated inventory filed October 2020.
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- He and the Proctor were generally unresponsive to the Beneficiaries throughout the administration of the Estate.
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- He delayed the accounting of the Estate such that the Applicants had to make application to compel him to do so.
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[63] The Executor responded as follows:
- When he signed the Inventory on August 13, 2020, he had only found some of the cash while cleaning up the residence. So, he did not know what value to put. It was only on August 24, 2020, that multiple people convened at the house to complete the search for, and inventory, the cash. In addition, when he attended at the Proctor’s office to sign the Inventory, it had already been prepared. He lived in the Annapolis Valley and the Proctor was in Truro. Therefore, it was hard to make arrangements to sign.
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- He, not being a professional, relied on the Proctor’s advice.
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- He did not delay the accounting. After the woodlands were sold in late 2020, the Proctor retired, and there was a change of proctor. The accounts were prepared and sent to the then lawyer for the beneficiaries on June 10, 2021. It was only on December 7, 2021, that the present lawyer for the Applicants responded. On December 13, 2021, he contacted the Court to get dates. Dates in August or December 2022 were offered. Due to the need for a further appraisal arising from the Applicants challenging the sale price, the parties settled on the December 2022 dates. The passing of accounts was heard then.
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- He wrote to all the Beneficiaries and the lawyers for at least some of the Applicants on October 9, 2022, regarding the proposed sale of woodlands. It asked the recipients to respond by telephone or email or fax, suggesting a quick response was expected from anyone who wished to object. At least two of the Applicants received it electronically that day. None of the others objected and some voiced their support. On October 13, 2020, the former lawyer for the Applicants left a phone message for the Proctor asking if the sale was proceeding. The agreement of purchase and sale was signed the next day, October 14, at a time when there was no expressed objection. It was only on October 29, 2020 that the Applicants voiced objection. He had already committed to the sale at that point. |
[64] I accept the Executor’s explanation for why he did not require the Proctor to change the August 13 inventory before signing it. It is reasonable and does not raise any bad-faith concerns, as he included, in the October Amended Inventory, all the cash, after it was accounted for later in August.
[65] The evidence on this Application shows that communications to the Beneficiaries or their lawyers, regarding the Estate, originated from the Proctor. There is no evidence that the Executor controlled the timing of those communications. Obviously, the Proctor would have to charge the Estate for the time required to prepare them. It would not be in the interests of the Estate to require the Proctor to respond to every inquiry by a Beneficiary. The Executor, having never acted in that capacity before, relied on the Proctor doing his job properly. The Beneficiaries have not pointed to any notices or communications that they did not receive and were entitled to receive. They have not shown a lack of good faith based on non-communication.
[66] I have already found that the Executor acted honestly and reasonably regarding the sale of the woodlands. He demonstrated utmost good faith in soliciting input from the Beneficiaries even though he had no obligation to do so. It would have not been unreasonable for the Proctor to have interpreted the phone message to him on October 13, asking if the sale was proceeding, as indicating it was not opposed. Otherwise, one would have expected the message to say his clients were opposed or that he needed more time to consult with them to determine their position. The end of the “Executor’s Year” was fast approaching, the Proctor would soon retire, there was a risk of the woodland values dropping even more, and, even when the Applicants voiced their opposition on October 25, after the agreement to sell had been entered into, that was only a dissention from 1/6 of the beneficiaries. Others had expressly stated their approval. In those circumstances, the Executor did act in good faith in proceeding with the sale.
[67] There was no reason for him to do otherwise, as he would only have been acting to his own personal detriment. It would have reduced his share of the Estate and his commission for acting as executor.
[68] There is no real accounting delay attributable to the Executor. He was trying to move things along by selling the woodland within the presumptive deadline. The retirement of the first Proctor and the need to bring another proctor on was beyond his control. There would inevitably be some delay inherent in that transition. Yet, the accounts were still prepared and sent to the lawyer for the Beneficiaries by June 10, 2021, which was still within the 18 months prescribed for giving an accounting in s. 69 of the Probate Act. The delay thereafter was due to the Applicants changing lawyers, delaying in responding, and challenging the sale price which necessitated commissioning of appraisal reports. There is nothing in the reasons for delay which suggests bad faith on the part of the Executor.
[69] It is noteworthy that: the Applicants raised delay as an issue, even though the bulk of it arose from their own action; and they have advanced the inconsistent argument that the Executor ought to have obtained other appraisals for the woodlands. Obtaining the appraisals would have created up to months of delay. The exposure times in the appraisals presented would have extended the sales themselves to well beyond the deadline for accounting, perhaps even by about a year. Their approach suggests that they take no responsibility for their role in the delay and have an unrealistic expectation of the standard that must be met by an executor. If an executor were to satisfy their complaints, they would have to know for sure what the properties would sell for at some point in the future, obtain that price almost immediately and get a relatively quick date from the Court to finalize accounts. The Applicants appear to be requiring the Executor to meet such a standard to show good faith.
[70] I disagree with their expectations.
[71] For the reasons outlined, I find that the Executor has acted in good faith.
Whether Executor Appropriately Relied on the Proctor’s Advice
[72] The Applicants submit that the Executor improperly relied on the Proctor’s advice regarding the sale of woodlands to Mr. Miller, and that the advice to hire Mr. Miller to appraise the properties was, itself inappropriate, because he was not qualified to conduct it. They add that the Executor had experience valuing properties because he sold properties for Edgar Graham while he was alive, using a power of attorney. In addition, his seeking beneficiary approval shows he did not blindly follow the Proctor’s advice.
[73] The Executor submits that he relied on that advice in good faith and it was appropriate to do so for the following reasons. The Will authorizes him to hire a hire and act on a lawyer’s advice. The Proctor had been Edgar Graham’s lawyer for about the last 15 years of his life. The Executor is a 71-year-old farmer who had never been an executor and had no experience valuing land or timber. Since, the properties were woodlands, not residential properties, it made sense to hire someone with forest valuation skills. The valuation provided, being about 10% over tax assessment values, seemed reasonable, as did the reasons provided for the diminished valuations. The Proctor raised legitimate concerns about expense and delay associated with trying other sales approaches.
[74] I agree that it was appropriate for the Executor to rely on the Proctor’s advice for the reasons advanced by him, plus the reasons which follow.
[75] The CRA accepted Mr. Miller’s valuations. His valuation expertise was specific to woodlands. The properties in question, except for one, were large blocks of woodland. The Executor testified there was no indication it was not a solid appraisal.
[76] As the properties were never marketed, it is unknown what type of offers, if any, listing the property would have attracted.
[77] The Executor did assist Edgar Graham in selling properties by using his power of attorney to sign documents. However, they were all sold through the lawyer who was the first Proctor, using tax assessment values, with no appraiser being hired, and the agreements for all sales having been reached between Edgar Graham and the buyers.
[78] The concern he had which led to seeking input from the Beneficiaries was the perceived conflict of interest arising from Mr. Miller having been the one who offered a valuation opinion on the lands. He felt the appraisal and offer were reasonable. He did not personally have any reservations about the sale. He only wanted the input of the Beneficiaries because he would feel more comfortable with their support. Though the Proctor did not think it was necessary to consult the Beneficiaries, he is the one who raised the issue of perceived conflict of interest in the first place. They discussed the matter, and he agreed it was a good idea to seek their input.
[79] The Executor acknowledged that he could have strayed from the Proctor’s advice. However, he would not because he was a good lawyer.
[80] In the circumstances, the Executor properly relied on the Proctor’s advice.
Conclusion on Whether Executor Breached Any of His Duties as Trustee of the Estate
[81] Based on the foregoing, I find that the Applicants have not established that the Executor breached any of his duties as trustee of the Estate.
ISSUE 3: ARE THE PROCTOR’S FEES REASONABLE?
[82] The Applicants submit that only about $20,000 of the fees paid to the Proctor’s firm are reasonable for the following reasons:
- Some of the services invoiced are dated before Edgar Graham passed away. The Estate did not exist during that time.
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- The invoices include large blocks of services without associated specific dates and hours of work, and with not all tasks or who performed them being indicated. That leaves the Court unable to assess the reasonableness of the time and effort spent on the tasks.
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- There was no evidence from the initial Proctor to satisfy the Court that his accounts were reasonable.
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- The initial Proctor did not complete the probate process.
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- He provided highly questionable advice. It included: hiring an unqualified appraiser; soliciting an offer from that appraiser; and completing the agreement of purchase and sale before hearing back from the Beneficiaries.
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- There is no retainer letter or information regarding the fees agreed to.
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- Part of the fees charged relate to the initial Proctor and his wife attending at the residence of Edgar Graham, examining and sorting the cash, making inquiries into the value of coins, and taking the bills to the bank to be deposited. These are not normally considered “legal services”. |
[83] They are of the view that the Executor ought to be responsible for all amounts exceeding $20,000 if the Estate is not reimbursed for it by the Proctor’s firm.
[84] The Executor responds that the Proctor’s fees are reasonable for the following reasons:
- The pre-death work totaling $6500 is indicated as having been completed from March 15 to June 19, 2019. Edgar Graham passed away July 26, 2019. The bill for that legal work, even though it was not invoiced before Edgar Graham passed, is still a debt for which the Estate is responsible.
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- The account is detailed.
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- The work described and the corresponding fees appear to be proper.
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- The value of the Estate was $484,000 and the 14 parcels of land that were sold had to be migrated.
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- In Zibara, the legal fees were $19,816 exclusive of HST. There was only one piece of real property sold. |
[85] Even though the accounts do not include the time spent on various tasks, nor any hourly rates, they do contain lengthy and very detailed descriptions of the services provided. That facilitates assessing the reasonableness of the legal fees charged. The references I will make to the services provided are but brief overviews.
[86] In addition, the bill for services rendered from August 26 to December 15, 2020 notes that 37.5 hours were billed but charged as only 32.45 hours. That provides additional detail to assess reasonableness.
[87] In Zibara, there was a trust issue to be looked into and some investigation required relating to whether one of the beneficiaries was legally competent. However, there was no indication regarding whether the real property had to be migrated.
[88] In the case at hand, the fee relating to the sale of the 14 parcels of land was, itself, $20,400 plus HST. That included migration of 14 parcels. The parties agreed that $1000 per migration would be a reasonable figure. The Proctor also had to prepare an agreement of purchase and sale and deal with the lawyer for Courtland Graham, regarding five of the parcels. He further had to prepare an agreement of purchase and sale and deal with the solicitor on the other side regarding the sale of the 10 parcels to Curmae Limited, i.e. Mr. Miller’s company. As already canvassed when discussing the reasonableness of that latter sale, there were also extensive correspondence and communications with the Executor regarding that transaction and closing related matters. Considering these points, the $20,400 is a reasonable fee.
[89] I agree that the $6500 for services rendered to Edgar Graham before he passed away is clearly a debt for which the Estate is responsible. The firm could not reasonably be expected to have rendered the account before his passing as the transaction was only concluded after he passed. The amount appears reasonable as it involved services, including migration, related to the sale of three parcels of land. There were also agreements of purchase and sale prepared. There was a need to examine boundary lines and legal descriptions to determine that what had been referred to as a 50-acre parcel of land was more like a 100-acre parcel. That necessitated obtaining new instructions through Wayne Graham. That bill also included communications with Wayne Graham regarding information required by the accountant for preparation of income tax returns. In the circumstances, $6500 was a reasonable fee.
[90] That leaves the fees for other legal services provided to the Estate from August 26 to December 15 of 2020, totalling $10, 538.24, plus HST and disbursements. Those services were charged as 32.45 hours even though 37.5 hours were noted as having been spent. That works out to an hourly rate of just under $325 per hour. The bill says the legal services were provided by James F. Richards, QC (now KC). For a lawyer of his level of experience in 2020 that was a very fair hourly rate.
[91] The following is an overview of the work charged on that invoice:
- preparation for and participation in a lengthy initial conference with the Executor regarding probate and estate administration matters, which also included an outstanding agreement of purchase and sale for real property;
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- communications with the lawyer for the purchaser in that outstanding agreement;
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- searching and examining Property Online reports for all real property owned by the deceased and related individuals, which amounted to 21 parcels;
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- examination of the deeds to determine ownership, including multiple-owner parcels;
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- providing mapping and graphics to the Executor;
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- multiple communications with counsel for at least one of the Applicants, including written correspondence and providing documentation;
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- preparation for and participation in further conferences with the Executor including discussing the requirements for the Application of the Grant of Probate and the duties of a personal representative;
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- obtaining information for the probate application and preparing same;
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- looking into and retaining Earle Miller to prepare an appraisal for capital gains purposes, including preparing an engagement letter;
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- preparing and arranging for execution of renunciation by the co-executrix;
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- conferences with Mr. Miller regarding issues related to the land parcels, including access issues, which also required communications with government departments and examination of 21 relevant parcels in an attempt to resolve access issues;
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- applying for probate;
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- discussions with the Executor regarding the Miller appraisal of the 14 parcels of land; and,
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- generally, all matters relating to the administration of the estate with the exception of the Application for Passing of Accounts. |
[92] I also highlight that this work included a very lengthy letter dated October 9, 2020, to the Beneficiaries and counsel for at least some of the Applicants, explaining how the Estate had been handled and why, as well as seeking input into the sale of lands to Mr. Miller. The content of that letter makes it clear that there were extensive discussions between the Proctor and the Executor.
[93] The Applicants point to the portion of that letter dated October 9, 2020 which indicates that the Proctor and his wife attended at the deceased’s home and assisted the people there in sorting and inventorying items, which included cash, including inquiring into the value of specific coins. They submit that is not normally considered “legal services”.
[94] That is correct. However, that task is not listed on the invoices. Further, it is noteworthy that the Proctor decided to do that after the Executor had informed him that they had located thousands of dollars of cash and asked for advice as to how to deal with it and any further cash found. Further search uncovered a total of $126,458.80 in cash. In those circumstances, the Proctor’s advice and assistance in ensuring multiple people were present for a properly recorded and inventoried search was reasonable and, as it turns out, wise. I say “wise” because of the unestablished allegations of breach of trust raised by the Applicants. If the Executor had found and inventoried the cash by himself or only with the assistance of family or friends, that would have given the Applicants more reason to distrust him. The presence of a professional, such as the Proctor, would have helped to eliminate such suspicion. However, even with that having occurred, the Applicants still raised an issue regarding the reporting of cash located on the successive inventories filed with the Probate Court.
[95] In those circumstances, it would have been reasonable and appropriate for the Proctor to have charged for those services.
[96] It is not uncommon for Proctors to perform work that is generally considered that of the personal representative, particularly where, as in the case at hand, the personal representative is inexperienced and unsophisticated in estate matters. That becomes a factor in determining the executor’s commission. It does not make the Proctor’s services ones that cannot appropriately be charged.
[97] All tasks undertaken were necessary in the circumstances of this Estate. The time charged to complete them appears reasonable. As noted, the hourly rate was very fair.
[98] Therefore, I find all of the fees the Proctor’s firm charged the Estate to be reasonable, particularly considering the following:
- the obvious time and effort required and spent;
- the special skill required by the multitude of land parcels and the issues associated with them;
- the level of experience of the Proctor; and,
- the results obtained.
[99] In relation to this last point, the Applicants suggested that the results were poor because the Proctor provided “questionable” advice related to the Miller appraisal, the sale to Mr. Miller and the fact that the estate administration was not fully completed.
[100] For reasons already noted in discussing whether the Executor breached his duties as trustee of the Estate in selling the lands at the Miller appraisal values, I find that the advice provided, and steps taken, by the Proctor were reasonable and appropriate in the circumstances existing at the time. As noted at paragraph 101 of Zibara, that is the relevant time to assess the reasonableness.
[101] In addition, the Proctor’s advice facilitated liquidation of a very large number of parcels of agricultural lands and timberlands, some with significant access issues, within the Executor’s Year. Many estates with less liquidation challenges take much longer than that. Listing the properties would have incurred greater expenses, taken more time, and still not ensured a better net return. In that sense, the Proctor’s advice resulted in good results for the Estate, considering the state of affairs at the time.
[102] The HST is required. There is no dispute that the disbursements are reasonable and necessary. I agree that they are.
ISSUE 4: SHOULD THE COSTS OF THE APPRAISALS OBTAINED BY THE EXECUTOR BE PAID OUT OF THE ESTATE?
[103] The cost of the Miller Report was $3427.48. The cost of the Kenneth Young Report was $9200.
[104] The Applicants object to the Estate being responsible for either of the two appraisals obtained by the Executor for the following reasons:
- Mr. Miller was not qualified to give a real estate appraisal. |
- Mr. Young’s appraisal fee was too high and his appraisal would not have been necessary if the lands had been properly appraised in the first place. |
- The fee for the appraisal prepared for the Applicants was only $3450 for the initial report and an additional $575 for a supplementary report. |
[105] The Executor responds as follows.
[106] Mr. Miller valued the Timberland properties for CRA purposes and they accepted the valuations. Plus, the Executor acted reasonably in accepting the Proctor’ s advice to retain Mr. Miller.
[107] The Young appraisal was only required because the Applicants raised a dispute regarding the value of the lands. It was prudent and reasonable for the Executor to follow the New Proctor’s advice that he obtain a second appraisal.
[108] In addition, the Applicants have argued that the Executor ought to have obtained another appraisal in preparation for the sale of the lands, even though he already had the Miller Report. As such, by opposing payment of the Young Report costs, they are presenting inconsistent arguments.
[109] Therefore, the Executor submits that he should be indemnified by the Estate for the cost of those appraisals.
[110] I agree completely with the Executor on those points and add that which follows.
[111] Mr. Miller was an Accredited Timberland Valuator. That is primarily what was being valued. In that sense, he, arguably, was better placed than the general real estate appraisers to value the properties.
[112] I cannot gauge the reasonableness of Mr. Young’s fee based only on the fee charged by the appraiser hired by the Applicants. Although it is much higher, there is no other evidence to show that it is an unreasonable fee. The Executor would not have been aware of the fee charged to the Applicants when he paid Mr. Young’s fee. In addition, the cost to the Estate of challenging that fee and the uncertainty of the outcome of any legal proceedings associated with it, made it reasonable for the Executor to pay the fee charged.
[113] In those circumstances it was reasonable for him to pay Mr. Young’s account and he ought to be reimbursed for it.
[114] For these reasons, I find that the appraisal fees in question are properly expenses of the Estate, as opposed to being expenses that should be borne by the Executor.
ISSUE 5: WHAT, IF ANY, COMMISSION IS THE EXECUTOR ENTITLED TO?
[115] The Applicants submit that the Executor should not receive any commission for the administration of the estate because he has breached his fiduciary duty and he ought not be relieved from liability, for the breaches, under Section 64 of the Trustee Act.
[116] In support, they cite Zaradic Estate (Re), 2021 BCSC 1037. In that case, the executors had tried to sell the property of the estate to their daughter for less than half of its market value, after having been told that it was below market value. The sale was stopped. However, the court found that if it had gone through, the beneficiaries would have been “swindled out of 50% of the estate’s value, and the executor’s daughter, their only child, would have thereby profited”. In that case, the court properly concluded that the actions of the executors were “sufficiently egregious to disentitle them to any fee”.
[117] The situation in the case at hand is far different.
[118] Even if, in retrospect, it had turned out that the value of the lands in question were, at the time, worth what the Stephens Report opined that it was, in comparison with Zaradic Estate, the loss to the Estate would have been minimal, particularly considering the additional expenses, delay and taxes that would have been incurred to acquire the higher price. As already indicated, significant changes occurred between the Miller Appraisal and sale, on the one hand, and the availability of data regarding the post-sale trend of rising land values in Nova Scotia associated with the Covid 19 Pandemic.
[119] For the reasons already canvassed at length, I found that the Executor did not commit any breach of trust in obtaining and relying upon the Miller Appraisal and selling the land to him.
[120] In addition, Mr. Miller was not connected to the Executor in any way. The Executor did not know him and has never met him.
[121] For these reasons, the Applicants have not shown that the Executor committed any act which would warrant reducing his commission.
[122] As the Executor pointed out, the executor in Zibara was awarded a 5% commission, in an estate where the “amount received by the personal representative” was in the range of $1,188,000. That executor was only responsible for selling one piece of real property. He had sold it for $260,000 even though he had an appraisal indicating it was valued at $404,000. Otherwise, the estate consisted of three RBC accounts and specifically bequeathed jewelry. The time expended by the executor was not significant. He had, however, recognized legal issues relating to a trust for one of the beneficiaries and sought legal advice. There were also some moderately complex tax issues for him to deal with.
[123] In comparison, the work required by the Executor in the case at hand was much more significant, and the estate value is much lower. Therefore, there would be at least as much reason to also award of 5% in the case at hand.
[124] However, the Executor is only seeking a 3.5% commission, and the “amount received” by him is only $484,270.45.
[125] S. 76 of the Probate Act S.N.S. 2000, c. 31, states:
“On the settlement of an estate, the personal representative may be allowed, over and above all actual and necessary expenses as appear just and reasonable, a commission not exceeding five percent of the amount received by the personal
representative … .”
[126] S. 62 of the Probate Court Practice, Procedure and Forms Regulations made under Section 106 of the Probate Act S.N.S. 2000, c. 31, among other things, states:
(1) A commission paid to a personal representative of an estate pursuant to Section 76 of the Act is for all services performed by the personal representative to complete the administration of the estate including distribution of the estate.
….
(3) In deciding the amount of the commission to allow to a personal representative pursuant to Section 76 of the Act, a court may consider the following:
(a) the size of the estate;
(b) the care and responsibility involved in administering the estate;
(c) the time the personal representative was occupied in performing their duties;
(d) the skill and abilities shown by the personal representative;
(e) the success resulting from the personal representative’s administration of the estate.
[127] The Court in Rustig Estate (Re), 2002 NSSC 210, at paragraph 33, confirmed that where “the preliminary threshold has been established in that the ‘amount received’ came into the estate, then in deciding the quantum of the commission pursuant to s. 76 of the Probate Act a court in the exercise of its discretion may consider all relevant factors, including” the five enumerated factors in s. 62 of the Regulations.
[128] At paragraphs 36 and 37 the court provided the following guiding comments:
[36] With respect to size, two examples make it clear that size alone is not the determining factor:
Example ‘A’ - In an estate consisting solely of $200,000. of Guaranteed Investment Certificates with no named beneficiary or the estate named would require very little administration by an executor. Essentially determinating their maturity, distribution, re-investment, etc. in a timely manner. Also, exploring the protection available through Canada Deposit Insurance, some straight forward tax considerations and the usual procedural steps, concluding with remittances, to heirs. etc.
Example ‘B’ - In contrast, the estate which has a value of $50,000. comprised of a home, title to which was in the deceased’s name alone, occupied by the estranged wife of the testator raising Matrimonial Property Act issues, a mortgage in arrears, a volume of debts that must be paid and several heirs and creditors requiring a volume of notices and who are determined to make life miserable for everyone, including the executor.
[37] It would likely follow that in example ‘B’, the executor would have earned the
maximum commission allowable and in example ‘A’, a just and reasonable commission might well be in the range of 2 to perhaps a maximum of 3 per cent.
[129] As the diametrically opposed examples in the Rustig Estate case illustrate, in a large estate requiring very little work a small percentage of the amount received may constitute sufficient or even excessive compensation; and, conversely, in a small estate requiring significant work, even a percentage at or near the maximum might be barely sufficient or even insufficient as reasonable compensation. Therefore, the size of the estate can be a factor requiring adjustment of the percentage that might reasonably apply when considering only the remaining relevant factors.
[130] On the other hand, a very large estate generally demands more care and attention for the simple reason that there are more assets at stake.
[131] In the case at hand, the Estate was of moderate size ($484,000), though less than half that in Zibara.
[132] There was comparable care and responsibility involved in administering it. Though there was no concern regarding the competence of any of the Beneficiaries in the case at hand, there were much more beneficiaries to ascertain and deal with, 18 in all, as opposed to the two in Zibara. Some of them, i.e. the Applicants, were children of a niece or nephew of Edgar Graham who resided in other provinces. The Executor in the case at hand had to contend with the Estate being comprised of many large tracts of timberland, already mostly denuded of large timber, some with significant access issues, at a time when the local pulp mill had closed and there was significant uncertainty over the impact of the Covid 19 Pandemic on woodland property values. In addition, he had to clean out Edgar Graham’s residence and, while doing so, engage in an extensive search and inventorying of a lot of hidden cash. The executor in Zibara simply sold the residence to the tenants who were already living there. There was no cleaning up or searching involved. The nature of the real property did not have any complicating features.
[133] The fact that the Proctor also attended at the residence to assist in dealing with the cash does not warrant a reduction below 3.5% as it did not meaningfully diminish the Executor’s work. Rather, it provided independent professional oversight to help ward off bad-faith claims.
[134] The Executor did not provide a breakdown of the time he expended in performing his duties as personal representative. However, based upon his affidavit and the Proctor correspondence attached to it, he did spend a substantial amount of time performing his duties. In that regard, it is noteworthy that he lived in the Middleton area and the Proctor’s office was in Truro. Consequently, each time he attended at the lawyer’s office would have used up roughly ½ day in travel alone. I highlight that he has, nevertheless, not claimed any travel expenses. In addition, the challenge to his administration of the Estate, and his good faith in handling it, has necessitated an even greater input of time and effort on his part.
[135] As a farmer around 70 years of age, he did not possess any special skills and abilities to act as personal representative. However, as I have found, he acted prudently and reasonably in engaging Edgar Graham’s longtime lawyer to be the Proctor and in following that lawyer’s advice. He also showed wisdom in identifying potential issues with, and seeking the comfort of having beneficiary support for, the sale of lands to Mr. Miller.
[136] In the end, he sold all the timberlands within the Executor’s Year, at a price which, in the circumstances existing at the time, was reasonable. He did so despite access issues and the difficult and uncertain real estate climate I have already referred to. He then submitted, to the Beneficiaries, or their lawyers, a draft statement of accounts within the deadline set in the Probate Act. Therefore, he successfully administered the Estate. The delay from that point is attributed to the Applicants’ tardiness, as well as their challenges, and available court dates.
[137] For these reasons, it does appear to be just and reasonable to award the Executor the 3.5% commission he requests.
CONCLUSION
[138] For the foregoing reasons, I reach the following conclusions on the issues outlined:
- The Executor did not breach his duties as trustee of the Estate.
- The Proctor’s fees are reasonable. I tax and allow them in the amounts billed on the invoices in Schedule D of the Accounts.
- The costs of the appraisals obtained by the Executor should be paid out of the Estate.
- The Executor is entitled to the 3.5% commission he requests.
[139] The Applicants have not otherwise challenged the accounting itself. To the extent that the Executor has been able to up to this point, it appears to be complete, proper and in order.
[140] However, there are some portions which remained blank awaiting the outcome of the within Application. Those include the Proctor’s Legal Fees and Disbursements, the Personal Representative’s Commission, and the Balance for Distribution.
[141] I have set the Executor’s Commission at 3.5% of $484,270.45.
[142] I have approved the Proctor’s Legal Fees and Disbursements included in the Account of the Executor and the documents supporting it. However, there is still the issue of the fees and costs related to the within contested Application for Passing of Accounts.
[143] That issue still has to be finalized before the Balance for Distribution can be calculated.
[144] The disbursements noted in the Account include a $10,000 retainer paid to Boyne Clarke, the firm of the lawyer representing the Executor in this Application. Whether that retainer will be sufficient or not, and whether there will be further disbursements to add to Schedule D of the Account, will depend upon what fees and disbursements are approved, and on what, if any, costs of this Application one party or the other is ordered to pay.
[145] Otherwise, I approve and pass the Accounts.
COSTS
[146] If the parties are unable to agree on costs, I will receive submissions in writing on the issue.
ORDER
[147] I ask counsel for the Executor to prepare the order.
Pierre Muise, J.