Tag: compensation claims
In Ontario, the courts have held that personal care compensation must be “reasonable”. To determine what is “reasonable” the courts must take into consideration the specific circumstances in each case. Factors to be considered were set out in the hallmark case Re Brown,  O.J. No. 5851, 31 E.T.R. (2d) 164, which include:
- the nature and extent of the services provided;
- the need for the service;
- the qualifications of the person providing the services;
- the value of such service; and
- the period over which the services were provided.
In the recent case Childs v Childs, 2015 ONSC 4036, Justice Tranmer was asked to determine whether a child of an incapable woman should be awarded compensation for providing care to her mother. In doing so, Justice Tranmer considered not only the factors set out in Re Brown but also identified additional factors that should be considered when the court is called upon to make an order for personal care compensation in the context of a parent and child relationship.
Eileen Childs has four adult children: Michael, Andrew, Peter and Caroline. She raised all of them from birth with her late husband. As Eileen’s battle with Alzheimer’s dementia and other health challenges got progressively worse, it became clear to her children that she could no longer manage her property and care for her person. Although Eileen had significant liquid assets available to cover the cost of proper homecare, her children could not agree on the care their mother was to receive.
It was Eileen’s wish to remain living in her own home. To grant this wish her daughter, Caroline, moved into her mother’s home to provide full-time in-house care and support. Eileen’s sons, Michael and Andrew also provided some care to their mother for a short period of time.
The issue to be addressed by Justice Tranmer was whether Caroline was entitled to be compensated for the in-house care that she provided to her mother.
In granting Caroline a $500 monthly stipend for compensation, Justice Tranmer makes it clear that “a child should not be paid to care for an ailing mother” but nonetheless acknowledged the principle that a guardian or attorney for personal care may be reasonably compensated for personal care provided to an incapable person. In considering the reasonableness in this case, he identified three additional factors that should be considered by the court, namely:
- the financial circumstances of the incapable person at the time the request for compensation is made;
- whether the payment of compensation poses a risk to the incapable person’s finances; and
- any sacrifices made or losses suffered to undertake the care of a parent.
In light of Justice Tranmer’s decision it appears that when a child is making a claim for personal care compensation they must keep in mind that they may not be entitled to receive compensation for the care that they provide if the payment of compensation would have a negative consequence on their parent’s finances.
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Trustees often run into difficulties when they pay themselves compensation prior to passing their accounts. They are said to have "pre-taken" compensation, meaning having paid themselves compensation prior to passing their accounts. Fortunately for guardians of property (and attorneys), section 40 of Ontario’s Substitute Decisions Act allows guardians to pay themselves compensation at intervals during the guardianship before passing their accounts:
(2) The compensation may be taken monthly, quarterly or annually.
Amounts taken monthly or quarterly could be divisions of a calculated "annual" amount, but this provision contains no element requiring equal divisions. Regardless of how the property guardian takes compensation, any payment is subject to court approval. Clients applying for guardianship should always be advised specifically of this point: if the court later disagrees with the compensation taken, the guardian may have to repay such amounts. This holds true even where the Management Plan pursuant to which the guardian is managing the incapable person’s property authorizes the compensation the guardian has taken.
This raises another important consideration for lawyers in the application for guardianship stage. Any compensation taken, or claimed later on a passing of accounts, should not be inconsistent with the provisions of the Management Plan. Because the right to compensation is statutory, as are the prescribed percentages (though subject to discretionary reduction by the court), there is no need to declare an intention to take compensation in the Management Plan. But if the Management Plan contains a provision disclaiming compensation, for instance, no compensation should be taken during the guardianship.
Have a great day,
Christopher M.B. Graham – Click here for more information on Chris Graham.
Welcome to my week of blogs.
The Substitute Decisions Act is silent when it comes to the issue of compensation for personal care guardians. Section 40 of the SDA addresses compensation for property guardians, but there is no corresponding provision for personal care guardians (though regard can be had to section 68(4) of the SDA).
I was recently before Brown, J. in Toronto Estates Court in respect of a request for compensation by a personal care guardian (the decision is not yet reported). The property guardian, who I represented, supported the request for compensation, but the PGT questioned the amount requested and wondered whatever happened to “natural love and affection”.
In coming to his decision, Brown, J. applied the analysis set out in Cheney v. Bryrne, which he found was applicable to claims for compensation by personal care guardians. Brown, J. also applied, by analogy, the approach applied by the court to claims for compensation by property guardians. The test regarding the reasonableness of compensation claims was set out in Re: Brown (1999), 31 E.T.R. (2d) 164 (link not available).
According to Brown, J., the evidence before him clearly demonstrated that the incapable needed the services provided by the personal care guardian. He was also satisfied that the personal care guardian was providing the services to the incapable with care and devotion and that her services were of a high quality and went well beyond what was ordinarily expected. Moreover, the incapable obviously could afford to pay for the services (not an insignificant factor). In considering the level of compensation, Brown, J. was satisfied that the amount claimed was reasonable and in the best interests of the incapable. He therefore approved the compensation claimed.
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Listen to Calculating Compensation
This week, Ian and Suzana discuss the number of emails they received last week about cross-reference analysis and compensation. Ian references 5 cases that are important to this subject:
1. Logan vs Laing – Ontario Court of Appeal
2. Toronto Railway Trust
3. Re. Knoch (1982)
4. George William Trust
5. Re. Jeffrey
They explain and continue talking about calculating compensation and how to audit the claim for compensation.
Listen to The Question of Compensation and Complaints.
This week on Hull on Estates and Succession Planning, Ian and Suzana discuss the question of compensation and complaints regarding compensation.