In a recent Ontario Superior Court decision, the court reiterated the principles for determining executor compensation when applying for a passing of accounts.

In the Estate of Olga G. Suboch, 2021 ONSC 8246, one of the beneficiaries brought an application to deny the estate trustee any compensation for his role as Estate Trustee, or at least to allow only reduced compensation. The court had to determine based on the Estate Trustee’s conduct and on the factors set out in Laing Estate v Hines, 1998 CanLII 6867 whether compensation would be appropriate in the circumstances.

Janine, the applicant, raised several objections to the accounts, including technical points that would make a minimal monetary impact on an estate valued at over $10 million. The court found that an estate trustee is not required to meet a standard of perfection, but rather the standard of a person using ordinary care and diligence in managing their own affairs. Since the estate was complex, the court found that the Estate Trustee had acted honestly and in good faith, and therefore the accounts had met the standard of care that was required.

Janine further argued that the Estate Trustee was not fair to her when he administered the estate and his conduct was sufficient to deny him compensation. However, the court reiterated that animosity between a beneficiary and estate trustee is not enough to deny the estate trustee compensation. There are five factors to consider when determining an estate trustee’s compensation concerning the administration of the estate.

The five factors as per Laing v Hines are:

(i) Magnitude of the trust;

(ii) Care, responsibility and risks assumed by the fiduciary;

(iii) Time spent by the fiduciary in carrying out his/her responsibilities;

(iv) Skill and ability required and displayed by the fiduciary; and

(v) Results obtained and degree of success associated with the efforts of the fiduciary

The court applied the factors to the facts of the case and found that the Estate Trustee had to manage an estate that had a value of over $10 million, he spent over 500 hours on administration matters and the assets increased in value under his administration. Therefore, based on all the evidence before the court, the Estate Trustee was awarded $267,859.96 as compensation.

The court further awarded costs against Janine in the amount of $20,000 for the application and a further $35,000 in costs awarded to the Estate Trustee for the passing of accounts application, which would be taken from Janine’s share of the estate.

This recent case confirms that a beneficiary’s opinion of an estate trustee’s conduct or lack of fairness in administering the estate is insufficient to deny the estate trustee compensation. All the factors must be considered in light of the surrounding evidence.

Beneficiaries must be cautious when bringing such applications against estate trustees because not only does it delay the wrapping up of the estate, but it may cost the beneficiary a portion of their share.

Thank you for reading.

Mohena Singh