Where Estate Trustees live beyond walking distance from an estate property, and need to attend at it for the sake of administering the estate, this can raise questions regarding the rights of Estate Trustees to charge mileage.
In the 1996 case of Heron Estate (Re), the Court held that mileage is not an expense that is included in compensation. The remuneration of Estate Trustees for expenses they incur in the court of their duties is instead dictated by Section 23.1 of the Trustee Act, R.S.O. 1990, c. T.23 which states that “A trustee who is of the opinion that an expense would be properly incurred in carrying out the trust may, (a) pay the expense directly from the trust property; or (b) pay the expense personally and recover a corresponding amount from the trust property.” This is of course subject to the discretion of the Court which has the right to subsequently disallow the payment or recovery if the expense was not properly incurred in carrying out the trust.
Questions about when mileage have been charged, and the rate at which it will be allowed, has been determined on a case-by-case basis by the Court. For instance, in a 2000 case, Andrachuk Estate, the Court held that the Estate Trustees were not entitled to be compensated at a rate of $0.35 per kilometre for time spent driving to and from the deceased’s house, because the deceased would not have expected the Estate Trustees to spend hours driving across the GTA to attend at the house in order to clear it, and because it was an ordinary expense incurred in carrying out one’s duties as Estate Trustee, which was made more onerous through their own actions.
In Szewczyk v Szewczyk Estate the Court determined that an amount of $0.25 per kilometre was appropriate, but that the expense of $20.00 per hour for the work done was inappropriate because the tasks required no particular expertise. The Court instead awarded the Estate Trustees just over minimum wage as an hourly rate, which the Court determined was reasonable for work that included removing garbage and sorting through papers, and did not award the Estate Trustees anything for the time spent travelling.
In Thompson Estate v Olley, the trustee reimbursed himself for a mileage and labour claim related to the cleaning and repair of a cottage at a rate of $15.00/hour plus 55 cents/kilometre, the Court considered the expense reasonable. Although the Estate Trustee could have had others do that work, he would still have spent time and gas to oversee the work performed by the available local labourers, who in that case would have charged $10.00 more an hour than the Estate Trustee charged the estate. The Estate Trustee also involved others in helping him with the work, and kept track of the specifics such as the days of the work, who did the labour, and how many hours it took. As such, the Court determined that the total bill was not unreasonable. The Estate Trustee also showed that the work he completed increased the sale price of the cottage.
The most recent case to consider mileage charged by an Estate Trustee is Swearengen v Aho, a case from Thunder Bay where the Court approved a mileage claim of 6.5 kilometres a day for checking on the property at a rate of $0.40 per kilometre.
Taken together, there is no clear or definitive answer on when it is most appropriate to charge for mileage. It is clear that Estate Trustees are entitled to be reimbursed for their reasonable expenses in administering an estate, and that if the will does not exempt the Estate Trustees from accounting for the expenses they incur, the Court wants to see that the Estate Trustees have limited the expenses such as mileage charged to the estate. Where the work to be done is unsophisticated, could be completed by someone locally, or where the Estate Trustee’s presence is not necessary, claims for mileage are less likely to be approved.
Whether mileage can be charged, and the amount that can be reasonably charged, will depend on the circumstances of each case, but in all cases the Estate Trustee should be sure to document their mileage if they plan to charge the estate for it.