IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Sangha (Re),

 

2018 BCSC 54

Date: 20180116

Docket: P160055

Registry: Vancouver

In the Matter of Surjit Kaur Sangha, Deceased

 

 

Before: District Registrar Nielsen

 

Report and Recommendation

Counsel for the Executors:

K. Frempong

Counsel for Beneficiary, Jodhbir Sangha :

N. Chang

Place and Dates of Hearing:

Vancouver, B.C.

December 4, 5, 6, 7,
8, 14 and 18, 2017

Place and Date of Report and Recommendation:

Vancouver, B.C.

January 16, 2018


 

Table of Contents

introduction. 3

THE reference. 3

issues. 5

background. 5

Analysis. 8

The Jewellery. 8

Loan of Sarbjit Deol 13

Legal fees incurred in the administration of the estate. 14

Costs of the passing of accounts. 20

Executor’s remuneration. 21

Application of the factors. 23

(a) Magnitude of the estate. 23

(b) Care and responsibility. 23

(c) Time occupied in the administration of the estate. 24

(d) Skill and ability of the executor 24

(e) Success achieved in the final result 25

(f) Amount of remuneration. 26

Disposition. 26


 

introduction

[1]             This is a report and recommendation on the passing of accounts of an executor in the estate of Surjit Kaur Sangha, who died January 7, 2011, leaving a last will and testament dated May 18, 2010, and probate obtained on May 29, 2012. The deceased was 59 years old when she died.

[2]             Mr. J. Sandhar and Mr. S. Deol were appointed executors pursuant to the will. Mr. Deol renounced his role as executor early on and a Mr. G. Khalon took his place. Mr. Deol had virtually no role in the administration of the estate, nor did Mr. Khalon. It was Mr. Sandhar who played the sole active role of executor of the estate.

[3]             Mr. Sandhar is the brother of the deceased. The sole beneficiary of the estate is Mr. Jodhbir Sangha, the son of the deceased. The deceased had another son who had predeceased her, and an adopted daughter. There is no provision in the will for the adopted daughter, and I have received no evidence in this regard. The deceased was predeceased by her husband.

[4]             The passing of accounts took place over seven days. Oral evidence was given by Mr. Sandhar, the executor; Mr. Sangha, the beneficiary; Mr. Van Twest, the first lawyer for the executor and the estate; Mr. Frempong, the second lawyer for the executor and the estate; Ms. Claire, a jewellery store owner and purchaser of the deceased’s jewellery; and Mr. Bhalla, a goldsmith and jeweller.

THE reference

[5]             This reference is atypical. Unless the court otherwise orders, pursuant to Supreme Court Civil Rule 25‑13(5), the registrar is to produce a certificate which is binding on the parties. Supreme Court Civil Rule 25‑13(5) provides:

Certification of results

(5)   Unless the court otherwise orders, if the court directs the registrar to conduct an inquiry, assessment or accounting under subrule (3) (b),

(a)   the registrar must, by certificate in Form P39, certify the result of the inquiry, assessment or accounting, and

(b)   if filed under Rule 18-1 (9), the certificate is binding, subject to appeal, on the persons interested in the estate who

(i)   had notice of the inquiry, assessment or accounting,

(ii)   consented to the accounts or the remuneration, or

(iii)   are the subject of an order made under Rule 18-1 (20) (b).

[6]             With the consent of the parties, the Court made the following order on February 10, 2017:

THIS COURT ORDERS that:

1.         There be a reference to the registrar to pass the accounts of Jaswinder Sandhar and Gurpreet Singh Khalon, Executors of the will and trustee of the estate of Sirjit Kaur Sangha, (the “Executors”) covering the period from the date of death of the deceased, being January 7, 2011 through the date of the hearing before the registrar.

2.         The Statement of Accounts filed with the Statement of Accounts Affidavit on January 20, 2015 in Supreme Court of British Columbia, Vancouver Registry Action S120278 stand as the Statement of Accounts of the Executors, subject to any updating thereof by the Executors.

3.         Either the Executors or the sole beneficiary Jodbir Sangha (the “Beneficiary”) be at liberty to set an appointment for a pre-hearing conference regarding the passing of accounts.

4.         In examining the accounts of the Executors, the registrar will include in the examination of the accounts, a determination of the value of the jewellery of the deceased as set out in the safety deposit box listing of the deceased from the Bank of Montreal dated February 3, 2011, what happened to that jewellery, whether the Executors received full value for the jewellery, and recommend whether the value of the jewellery, if found to be missing, should be returned to the estate by way of a judgment or set-off against monies owing to the Executors, if any, equivalent to the value of the missing jewellery.

5.         the registrar will recommend a fair and reasonable allowance to the Executors with respect to their administration of the estate during the period from January 7, 2011 through the date of the hearing before the registrar for their care, pains, trouble, and time expended in and about the administration.

6.         the registrar will determine the liability of the Estate and the Beneficiary for the loan advanced by Mr. Sarbjit Deol which was used to pay probate costs. The registrar will determine whether the Beneficiary must indemnify the Executors for the loan.

7.         the registrar will determine the liability of the Estate and the Beneficiary for the accounts of the solicitors retained by the Executors to process the probate and to defend the Estate in Supreme Court of British Columbia, Vancouver Registry Action S120278. The registrar will determine if the solicitors’ accounts are reasonable and determine whether the Beneficiary must indemnify the Executors for the solicitors’ accounts. The registrar will recommend what costs or special costs, if any, the Beneficiary must pay to the Executors in Action #S120278.

8.         the registrar will determine what costs or special costs, if any, the Estate and the Beneficiary must pay to the Executors for this reference and accounting.

9.         The result of the registrar’s inquiry will be stated in the form of a report and recommendation to the court.

[7]             Pursuant to the consent of the parties and the Court’s order, this is a report and a recommendation.

issues

[8]             The issues between the beneficiary and the executor are:

1.     the sale of the deceased’s jewellery;

2.     the remuneration of the executor;

3.     the obligation to reimburse of the executor the amount of the loan taken out to pay the costs of probate;

4.     the reasonableness of the legal fees charged to the estate; and

5.     the costs of the passing of the accounts.

background

[9]             When the deceased died on January 7, 2011, her estate consisted of a home in Vancouver on East 51st Avenue (the Vancouver home), with a relatively small mortgage in the amount of $86,888.21; jewellery in a safety deposit box; a 2001 Toyota 4Runner; an RRSP GIC; and an investment account which contained mostly gold stocks. At the date of death, the estate was valued at $984,555.19.

[10]         At the time of the deceased death, the beneficiary and his family were living in the basement suite of the deceased’s home.

[11]         The executor arranged for the Toyota 4Runner to be transferred to the beneficiary shortly after the deceased’s death.

[12]         On February 3, 2011, both the beneficiary and the executors attended the Bank of Montréal in order to open the deceased’s safety deposit box. The box was opened at the bank and the contents consisting of gold jewellery were identified and itemized. There were a total of 37 items listed, consisting of 58 individual pieces of jewellery.

[13]         The Vancouver home could not be immediately transferred to the beneficiary as the will provided it was to be held in trust for him until he turned 45 years of age. The will provides in part:

4.         I DIRECT my Trustee to transfer the residue of my estate to my son JODHBIR SINGH SANGHA on his 45th birthday. If my son JODHBIR SINGH SANGHA dies before his 45th birthday, then equal share of my residue of my estate shall be divided equally between my brothers JASWINDER SINGH SANDHAR and JASBIR SINGH SANDHAR or to the survivor if one of them has predeceased me.

5.         SHOULD MY SON JODHBIR SINGH SANGHA so desire to continue to reside in my residence at, 3212 51 Avenue, Vancouver in the Province of British Columbia V5S 1S4, till his 45th birthday, then I DIRECT my Trustee to not to sell the property and to allow my son to live rent free in the upstairs provided that all other expenses including but not limited to property taxes, utilities and maintenance are paid by my son.

6.         I AUTHORIZE my Trustee to deal with the basement of my residence in the best possible way he thinks just and fit including but not limited to renting or leasing the same.

[14]         The will was eventually varied by court order dated May 25, 2015, to allow for the immediate transfer of the Vancouver home to the beneficiary. The executor did not oppose the beneficiary’s application in this regard. The Court’s order varying the will provides:

2.         the Will be varied by removing paragraphs 4, 5, and 6 by replacing them with the following:

I DIRECT my Trustee to transfer the residue of my estate to my son Jodhbir Singh Sangha if he survives me.

[15]         The Vancouver home was transferred to the beneficiary on April 22, 2016, at which time the 2016 B.C. assessment value was $2,281,000.

[16]         The beneficiary took issue with the will, and in particular the provision that he was not to take title to the Vancouver home until his 45th birthday. The beneficiary commenced a legal action on January 12, 2012 challenging the will and alleging undue influence on the part of the executor.

[17]         Matters became further complicated when the beneficiary discovered that the deceased’s bank records disclosed financial transactions between 2004 and 2009 in the amount of approximately $300,000, some of which was paid to the executor. The beneficiary’s amended notice of civil claim filed February 11, 2014 itemized the amounts as follows:

13.       The Plaintiff has requested that the Defendant Executors account for monies missing from the estate as follows:

a.         $65,000 taken by the Defendant Jaswinder Sandhar on September 29, 2005 and not returned;

b.         $13,000 taken by Kamljit Mahli on November 18, 2014 and not returned;

c.         $80,000 withdrawn from the deceased’s bank account of which $70,000 was delivered to persons unknown in September 2005;

d.         $15,000 US withdrawn from the deceased’s bank account and delivered to persons unknown in March 2009;

e.         A $49,500 pre-payment of a third party mortgage in June 2005;

f.          A $136,163.04 removal of funds from her bank account in June 2005.

[18]         The commencement of the legal action by the beneficiary against the executor fractured what relationship there had been between them. As a result of the beneficiary’s lawsuit, the executor retained counsel. Unfortunately, the estate lacked funds. Consequently, the executor made the decision to sell the deceased’s jewellery in order to raise funds for the estate to fund the litigation. This was to become a central issue of dispute between the beneficiary and the executor. In addition, the executor borrowed money from a private lender in order to finance the obtaining of probate.

[19]         When the executor sold the jewellery he failed to obtain proper documentation of the sale contemporaneous with the event. The executor crafted a document concerning the sale of the jewellery, a year after the fact, and had the purchaser sign it.

[20]         The beneficiary is predeceased by his father, brother and mother. The jewellery had immeasurable sentimental value to him. The jewellery represented milestones in his life, and that of his deceased family. The jewellery instilled memories of his father, mother and brother. Its value to him far exceeded its value when measured in its weight as gold. The beneficiary still possesses several pieces which belonged to his father and brother. He wears them constantly as they provide a measure of comfort to him. He had also hoped to pass on his mother’s jewellery to his own children, had the collection remained intact.

[21]         The sale of the jewellery was handled badly, and considering the fact that a legal action had been commenced with allegations directed against the executor, the failure to appropriately document the sale demonstrated a level of naivety and incompetence on the part of the executor. In this regard, the executor contributed to the difficulties which arose in the administration of estate.

[22]         The legal action commenced by the beneficiary was eventually discontinued. The money that had passed between the deceased and the executor between 2004 and 2009 could either be accounted for, or was not linked to the executor. It was agreed by the parties that the issues pertaining to the jewellery, the loan taken by the executor to pay probate costs, the reasonableness of legal fees, and the executor’s fees, were all matters which could be resolved in the passing of accounts.

Analysis

The Jewellery

[23]         Following the sale of the jewellery the beneficiary located previous appraisals that the deceased had obtained. The beneficiary testified the deceased would store her jewellery in a safety deposit box and when it was removed to be worn, she would have it cleaned and appraised at the same time. The beneficiary further testified that it was the deceased’s practice to keep her jewellery under lock and key as years before the family had been the victims of a burglary which resulted in some of the deceased’s jewellery being stolen.

[24]         The beneficiary submits that the value of the deceased’s jewellery was roughly $85,335.50. This figure is arrived at by using the weights described on the various appraisals located by the beneficiary, the price of gold per gram, less the duplicated pieces of jewellery from the various appraisals.

[25]         Evidence was provided by both Ms. Claire and Mr. Bhalla concerning how jewellery is appraised and sold. For the most part, their evidence in this regard was in tandem. An appraisal typically represents what the jewellery would cost in the event it was purchased within the retail market. The appraisal does not represent what a jeweller would pay for the jewellery if it was sold back to them. Prices offered for jewellery which is sold back to a jeweller is a reflection of its weight in gold, after the removal of any stones, taking into account the current price of gold per gram, and a further amount calculated as a cost of refining. In essence, any jewellery sold back to a jeweller is a valuation of its weight in gold less the costs of refining.

[26]         Shortly after the deceased’s death, the beneficiary and executor attended the Bank of Montréal where the safety deposit box was opened and the jewellery identified and listed. No photographs were taken of the jewellery, nor was it weighed.

[27]         The executor testified that while at the Bank of Montréal both he and the beneficiary agreed that the estimated value of the jewellery was $10,000 for the purpose of the administration of the estate. The beneficiary denies any such agreement. I do not find an alleged agreement to be a significant factor as the value of the jewellery was a function of its weight in gold. Any agreement to the contrary would not change this fact.

[28]         The executor testified that when he eventually sold the jewellery, he took all the jewellery in the safety deposit box to two different jewellery stores where he obtained a price from each for the purpose of sale. Ultimately he sold the jewellery to the store operated by Ms. Claire who offered the best price based on its gold value as measured by the gram. The best price offered and obtained was $10,100.

[29]         Before its purchase by Ms. Claire, the jewellery was weighed after all the stones and pearls were removed. This resulted in the accepted offer of $10,100. The executor did not photograph the jewellery which was sold, nor did he obtain a documented itemization of what was sold from Ms. Claire contemporaneous with the event. Indeed, the document signed by Ms. Claire, was drafted a year after the sale, by the executor, for Ms. Claire’s signature. This was done after the value of the jewellery became an issue in the litigation.

[30]         Given the fact that the executor was being sued by the beneficiary, to sell the jewellery in this fashion, without any appropriate documentation or photographs, was a recipe for disaster.

[31]         The beneficiary was extremely upset at the action taken by the executor. It lacked an appropriate transparency, involved an absence of consultation, and gave rise to mistrust on the part of the beneficiary.

[32]         Ms. Claire recalled purchasing the jewellery from the executor for $10,100 however, she could not recall whether she bought 37 items or 58 pieces, nor could she recall what precisely she bought. This is understandable given the passage of time and the fact that the value of the jewellery, from her point of view, is determined entirely by its weight in gold. Identification of the individual pieces from her perspective would be irrelevant.

[33]         The executor testified that the stones and pearls which were removed from the jewellery were thrown away as they had no value. Both Ms. Claire and Mr. Bhalla testified that the stones had no value, although the pearls may have. Mr. Bhalla further testified that precious stones are typically not put in gold settings as the settings are too soft and the stones would simply fall out and get lost. Stones that are typically put in these sorts of settings are worthless.

[34]         The executor did not inquire of the beneficiary whether he wanted the stones which had been removed from the jewellery.

[35]         The beneficiary harbors the belief that the executor did not sell his mother’s jewellery as he testified. Rather, it is the beneficiary’s belief that the executor sold his own gold jewellery for the $10,100, and has kept the beneficiary’s family’s jewellery to himself. The beneficiary admits that this is only his “belief”.

[36]         The beneficiary’s belief is grounded in the appraisals he found in the deceased’s possession which lists specific weights for the various pieces of jewellery which he believes were in the safety deposit box. In my view, this belief is also fuelled by the lack of consultation and documentation surrounding the sale of jewellery, and the beneficiary’s emotional and sentimental attachment to it.

[37]         The beneficiary further believes that given the sentimental nature of the jewellery, his mother would have never sold any of the pieces. Many of the jewellery pieces were purchased as a result of milestones in his mother’s life, and represent memories in this regard.

[38]         The difficulty with the beneficiary’s belief is the lack of evidence to support it. There is no way of knowing whether the deceased sold, lost, or gave away any of the jewellery prior to her death, or whether the jewellery identified in the appraisals located after the fact, were indeed in the safety deposit box when the items were listed at the bank.

[39]         Further, although the beneficiary believes his mother would never sell any of her jewellery due to sentimental reasons, we have no way of knowing whether she actually did so, or not. Indeed, the beneficiary’s notice of civil claim alleges at paragraph 13(f) that his deceased mother did sell things with sentimental value;

13. (f)     February 12 2005 the Testator approached the JODHBIR SANGHA and said “I can’t afford the payment on 2nd property” JODHBIR SANGHA replied “if you need more money me and RENA (SANGHA) will help out with payments “, Testator replied “no I am putting it up for sale you cant do anything about it “, JODHBIR SANGHA replied “you and your brothers already sold family multi million dollar business for pennies, why mom why you doing this your selling all of our memories of KAM and DAD “, JODHBIR SANGHA then said “I will take realty sign off every morning before work “, Testator then left her home saying “I am going to stay at my brothers (JASWINDER SANDHAR) home “ (56 E50th Avenue Vancouver B.C. Canada);

[underlining added]

[40]         The deceased had an adopted daughter for whom there was no provision in the will. I have heard no evidence concerning whether she may have been given any of her mother’s jewellery. During the second lawyer’s evidence I inquired whether that question had been put to her and he indicated that it had not. It is an unknown without any evidence to support it. I raise this scenario only to illustrate that other possibilities exist when there is no requirement for evidence to support those possibilities or beliefs. I pause to note that I found the beneficiary to be very genuine in his testimony. I have no reason to doubt his truthfulness. However, I also found the executor to be equally genuine.

[41]         The executor testified he removed the jewellery from the Bank of Montréal safety deposit box, took it to be appraised by two jewellery stores, and then eventually sold it for $10,100, that being the highest amount offered.

[42]         The deceased and the executor had a prior financial relationship which extends back seven years prior to her death. The evidence shows money passing between them as early as 2004. The deceased appointed her brother the executor of her will. The financial transactions between the deceased and her brother, and the fact that the deceased appointed her brother as her executor, gives rise to the inference that the deceased trusted him.

[43]         The beneficiary’s evidence was that his mother did not discuss her financial affairs with him. The prior financial transactions between his mother and his uncle, the executor, were unknown to him prior to his mother’s death.

[44]         I believe the executor’s evidence in regard to the disposal of the jewellery. In my view, its monetary value was equal to the amount paid, being $10,100.

[45]         It is also my view that the executor’s actions with respect to the jewellery were high-handed and incompetent, but not dishonest. The executor’s actions in this regard were also taken in the honest belief that they were necessary in order to fund the estate and defend the legal action taken by the beneficiary. It is a matter properly taken into account when assessing his remuneration.

[46]         I recommend the value of the jewellery be assessed at $10,100.

Loan of Sarbjit Deol

[47]         In order to pay legal fees and obtain a grant of probate, the executor borrowed a total of $18,240 at a rate of 5.7%. The estate lacked funds and it was necessary to obtain a grant of probate in order to administer the estate. The grant of probate facilitated the transfer of the Vancouver property from the executor to the beneficiary which is an obvious benefit to him.

[48]         The objection of the beneficiary to the loan is that the rate of interest is simply too high, and the beneficiary would have funded the obtaining of probate, if asked, without any interest costs.

[49]         Given the circumstances which included a lawsuit by the beneficiary against the executor and a lack of funds in the estate, it was not unreasonable for the executor to seek a loan in order to fund the obtaining of probate. The terms of the loan are reasonable in the circumstances and the beneficiary derived a tangible benefit from the grant of probate, that being the transfer of the Vancouver property into his name.

[50]         I recommend the loan be the recoverable as billed.

Legal fees incurred in the administration of the estate

[51]         The bulk of the legal fees incurred by the executor concern the legal action taken by the beneficiary against the estate and the executor. That legal action was eventually discontinued in its entirety by the beneficiary.

[52]         The court’s order of February 10, 2017 directs the registrar to determine the liability of the estate in this regard.

[53]         Beneficiaries ordinarily have standing to challenge legal bills if an executor seeks to be indemnified for the lawyer’s bill from the estate. A beneficiary has been found to be “a person charged” for the purposes of s. 64 of the Legal Profession Act,  S.B.C. 1998 c. 9, (the LPA):  see Johnston, Johnson & Co. v. Morrison Estate, 2009 BCSC 217 and Re Chute Estate, 2014 BCSC 344.

[54]         In the circumstances, the provision of s. 71 of the LPA applies. Section 71 of the LPA states:

Matters to be considered by the registrar on a review

71   (1) This section applies to a review or examination under section 68 (7), 70, 77 (3), 78 (2) or 79 (3).

        (2) Subject to subsections (4) and (5), the registrar must allow fees, charges and disbursements for the following services:

(a) those reasonably necessary and proper to conduct the proceeding or business to which they relate;

(b) those authorized by the client or subsequently approved by the client, whether or not the services were reasonably necessary and proper to conduct the proceeding or business to which they relate.

       (3) Subject to subsections (4) and (5), the registrar may allow fees, charges and disbursements for the following services, even if unnecessary for the proper conduct of the proceeding or business to which they relate:

(a) those reasonably intended by the lawyer to advance the interests of the client at the time the services were provided;

(b) those requested by the client after being informed by the lawyer that they were unnecessary and not likely to advance the interests of the client.

       (4) At a review of a lawyer’s bill, the registrar must consider all of the circumstances, including

(a) the complexity, difficulty or novelty of the issues involved,

(b) the skill, specialized knowledge and responsibility required of the lawyer,

(c) the lawyer’s character and standing in the profession,

(d) the amount involved,

(e) the time reasonably spent,

(f) if there has been an agreement that sets a fee rate that is based on an amount per unit of time spent by the lawyer, whether the rate was reasonable,

(g) the importance of the matter to the client whose bill is being reviewed, and

(h) the result obtained.

       (5) The discretion of the registrar under subsection (4) is not limited by the terms of an agreement between the lawyer and the lawyer’s client.

[55]         The executor incurred legal fees in amount of $95,898.31. The total fees billed by the first lawyer were $25,779.91 and the total fees charged by the second lawyer were $70,118.40.

[56]         The estate’s first lawyer issued a total of nine invoices. The first dated January 31, 2012 was in the amount of $2,800; the second dated February 11, 2012 was in the amount of $2,800; the third dated April 12, 2012 was in the amount of $5,611.20; the fourth dated June 20, 2012 was in the amount is $3,643.92; the fifth dated June 21, 2012 was in the amount of $2,622.20; the sixth dated September 5, 2012 was in the amount of $2,332.15; the seventh dated December 15, 2012 was in the amount of $1,680; the eighth was dated June 4, 2013 in the amount of $2,352; and the ninth was dated July 13, 2013 in the amount of 1,938.44.

[57]         In addition to the services itemized in these accounts, the first lawyer did work for the estate between July 2013 and July 2014, for approximately a year, for which he did not issue a bill or charge for his services. The lawyer believed the matter was close to settlement during this time, and keeping legal fees down to a minimum would be a way in which to facilitate the chances of settlement. He also testified he felt that as he was unable to bring the matter to a conclusion, he would not charge for his time. Therefore, the total amount billed being $25, 779.91 involves a deduction of approximately a year of fees that could have otherwise been claimed.

[58]         The first lawyer who acted for the executor was called to the bar in 1976 and has over 40 years at the bar. He is a general practitioner doing civil litigation. He has “some experience” with probate work.

[59]         During the course of the retainer he billed as high as $350 per hour and at times below $175 per hour. It was his hope that if legal fees could be kept to a minimum, there was a greater chance of settlement.

[60]         During the course of his retainer, the first lawyer dealt with the legal action initiated by the beneficiary by filing the response to civil claim. The executor and adopted daughter were interviewed, and the issues were identified. The first lawyer also prepared a list of documents.

[61]         The first lawyer assisted the executor in dealing with a life insurance claim that was ultimately rejected, assisted with Revenue Canada matters, assisted with the allegation surrounding the jewellery and alleged loan/misappropriation of money from the deceased occurring between 2004 and 2009. In this regard, ledgers needed to be created and financial documents received.

[62]         In addition, the first lawyer obtained letters probate for the executor and facilitated the transfer of the property from the deceased to the executor.

[63]         The first lawyer was also of the view that settlement was possible. In furtherance of this objective, numerous letters and emails were exchanged between the first lawyer and the beneficiary’s lawyer. Ultimately, the matter did not settle and the first lawyer decided that the file needed a fresh approach. To this end, the second lawyer was approached and eventually retained.

[64]         Section 71(2) of the LPA provides that, subject to subsections (4) and (5), the registrar is to allow fees that were necessary and proper to the conduct of the proceeding, and must consider all the circumstances, including those factors enumerated in s. 71(4) of the LPA.

[65]         While the first lawyer’s efforts to settle the matter were unsuccessful, he did obtain probate and attended to numerous tasks on behalf of the estate. The lawyer’s decision to forgo a year’s worth of billings for work done, more than offsets the results obtained. In my view, the services provided by the first lawyer were reasonably necessary and proper. The $25,779.91 billed and paid is a fair fee for the services provided when all the circumstances and factors in s. 71 are considered and the matter is viewed globally.

[66]         The jurisdiction of the registrar to take a global approach was confirmed by the court in Hutchison v. Victoria Golf Club, 2009 BCSC 644 at paras. 79 through 82 where the Court stated:

79     While the reasons do not provide a mathematical roadmap to the amount allowed, they provide a sound foundation upon which to understand the basis of the registrar's decision. In Walker v. Schober, 2008 BCCA 19, 77 B.C.L.R. (4th) 186, the Court of Appeal reviewed the decision of this court, in overturning a decision of the registrar that reduced the solicitor’s bill from $21,055 to $6,000.

80     The registrar in that case characterized his task as to include consideration “... in a global sense, [of] the value of the services that have been rendered on the client’s behalf”. The Court of Appeal took issue with there being a requirement on the registrar to “address every item of evidence” and with this Court failing to apply a deferential approach to the findings of the taxation officer, at para. 36.

81     A review of the Solicitor’s authorities supports this global approach. For example, in Nathanson, Schacter & Thompson LLP v. Inmet Mining Corp. 2007 BCSC 724, 72 B.C.L.R. (4th) 291, at issue was whether the client should be premium billed for result, beyond the amounts previously billed and paid. Registrar Blok refused to allow a fee of $10,000,000 as claimed by the appellant law firm, restricting the fee to the amount already billed and paid, which included a premium, of $5,248,835. That was a “fair fee”, which was not disturbed on appeal to this court.

82     There are many examples of registrar’s applying such a global approach, see for example, Belding v. Campbell 2009 BCSC 379, Jose v. Jeffrey B. Johnston Law Corporation 2009 BCSC 186, Davis & Company v. Jiwan et al, 2006 BCSC 658, affirmed on appeal to this court 2007 BCSC 1775, and on further appeal 2008 BCCA 494, leave to appeal to the S.C.C. refused April 23, 2009, [2009] S.C.C.A. No. 30. Thus in Davis & Company v. Jiwan et al, Registrar Sainty in paragraph 287 in setting the fee said “In my opinion, taking into account all of the factors set out above and which are applicable to this matter, I find the reasonable fees payable by the clients to the solicitors is $700,000”. The fees set reduced those of the law firm which were originally $915,889.88.

[67]         I recommend the $25,779.91 billed by the first lawyer be allowed in full.

[68]         Turning to the accounts of the second lawyer retained by the executor, the second lawyer billed a total of $70,118.40 in three invoices dated March 18, 2015 in the amount of $22,358.28; December 30, 2016 in the amount of $17,349.84 and finally, December 7, 2017 in the amount of $30,410.28.

[69]         The three bills covered the time period from December 16, 2014 to the end of December 7, 2017 which was the conclusion of the fourth day of the seven day hearing of this passing of accounts. I pause to note that the second lawyer began acting for the executor in August 2014, but did not begin billing the estate or the executor until December 2014.

[70]         The second lawyer was called to the bar in 2006 and has practised consistently for the last 11 years. Since 2012 the lawyer has been a sole practitioner doing civil litigation, and some corporate work filing annual reports.

[71]         When first retained, the second lawyer’s rate was $300 per hour and he did not increase this hourly rate during the course of the retainer.

[72]         When the second lawyer was initially retained he needed to review the entire file in order to familiarize himself with the litigation. Also, the beneficiary had filed an amended notice of civil claim which required a response. The response was filed December 31, 2014.

[73]         As the estate was without funds, the lawyer began drafting an application to take control of the Vancouver property and obtain the rents being paid by the tenants. The application was never made. Instead, the lawyer opted to seek an order that the beneficiary’s action be struck, directions with respect to the Wills Variation Act portion of the claim, and an order for the passing of accounts.

[74]         On March 6, 2015 the executor’s application and the beneficiary’s application to vary the will by way of summary trial was scheduled to be heard. The Court directed an accounting, and permitted the executor to raise $25,000 for the estate using the estate’s assets as collateral. The balance of the both applications were adjourned.

[75]         On May 25, 2015, the beneficiary successfully had the will varied so that the Vancouver home could be transferred to him immediately, rather than when he turned 45 years of age. The executor did not oppose the beneficiary’s application.

[76]         Negotiations continued and both the beneficiary and the executor changed their legal positions. It was decided that the legal action ought to be discontinued and the passing of accounts proceed. An examination for discovery of the executor took place on December 13, 2016. On January 12, 2017, the beneficiary discontinued his legal action against the executor.

[77]         A further court application took place on February 10, 2017 which resulted in the court’s order defining the parameters of this report and recommendation.

[78]         Three pre-hearing conferences before the registrar took place, the first on June 3, 2015, the second on April 4, 2017 and the third and final pre-hearing conference took place on November 1, 2017.

[79]         Finally, the passing of accounts was heard over the course of seven days on December 4 through 8, December 14 and 18.

[80]         From the beginning of the second lawyer’s retainer in December 2014 to the resolution of the matter on December 18, 2017 there is a substantial amount of correspondence, involving letters and emails. There were six court hearings, and several consent orders which were negotiated. Each of court hearings required the preparation of materials and the review of the beneficiary’s material.

[81]         The executor was examined for discovery which required preparation and attendance. Finally, the passing of accounts itself required a total of seven days.

[82]         Considering all the circumstances arising in the administration of the estate, the various court attendances, and those factors specifically enumerated in s. 71(4) of the LPA, I have reached the same conclusion regarding the second lawyer’s accounts as the first. In my view, when the accounts of the second lawyer are viewed globally, the amount billed is reasonable and represents a fair fee.

[83]         Accordingly, I recommend the second lawyer’s fees as billed be allowed in full.

[84]         As the executor has been reimbursed his legal costs associated with the cost of defending the beneficiary’s legal action, I would further recommend that no additional party-and-party costs be awarded in relation to the discontinuance of that legal action.

[85]         A portion of the fees billed and found by me to represent a fair fee involved fees incurred during the passing of accounts. Therefore, I intend to address the issue of the costs associated with the passing accounts.

Costs of the passing of accounts

[86]         The usual order in relation to the costs of the passing of accounts is that the executor receive the costs of the passing accounts as special costs. Supreme Court Civil Rule 25‑13(7) provides:

Special costs

(7)   Unless the court on an application otherwise orders, if costs are payable under an application under subrule (1), those costs

(a) must be assessed as special costs, and

(b) may be assessed without an order of the court,

and Rule 14-1 (3) and (5) applies.

[87]         I see no reason to depart from the usual order that the estate pay the executor’s costs of the passing of accounts as special costs, and I so recommend.

Executor’s remuneration

[88]         The executor is seeking remuneration of 4% of the capital of the estate, being $91,644. He is not seeking a care and management fee.

[89]         The statement of accounts affidavit calculates the gross value of the capital assets of the estate at $2,291,100. This value was calculated taking into account the Vancouver home’s 2016 BC assessment value of $2,281,000 and the sale of the jewellery at $10,100.

[90]         The legal principles relevant to a registrar’s passing accounts, including the calculation of an executor’s remuneration are summarized in Bernhard v. Wist, 2011 BCSC 101 at paras. 98 through 108 where the Court states:

98     Section 99 (1) of the Trustee Act, provides as follows:

(1) Unless his or her accounts are approved and consented to in writing by all beneficiaries, or the court otherwise orders, an executor, administrator, trustee under a will and judicial trustee must, within 2 years from the date of the granting of the probate or letters of administration or within 2 years from the date of his or her appointment, and every other trustee may at any time obtain from the court an order for passing his or her first accounts, and he or she must pass his or her subsequent accounts at the times the court directs.

99     In order to account to the beneficiaries, the executor must provide:

1) an account showing of what the original estate consisted;

2) an account of all monies received; and

3) an account of all monies remaining on hand.

Campbell v. Hogg, 39 O.W.N. 85, [1930] 3 D.L.R. 673 (Ont. P.C.).

100     Section 88 of the Trustee Act governs executor’s remuneration. The executor is entitled to:

a) a maximum of 5 per cent of the gross aggregate value of the estate;

b) a maximum of 5 per cent of the income earned during the administration of the estate; and

c) an annual “care and management fee” of 0.4% of the average market value of the assets.

101     However, the percentages stipulated in s. 88 are not necessarily to be applied in every calculation of remuneration. The percentages provide a rough guide to assist in appropriate computation of the executor’s remuneration: Re Turley Estate (1955), 16 W.W.R. 72 (B.C.S.C.). In the end, the court must be satisfied that the compensation claimed “bears some reasonable relationship to the work and responsibility involved”: Re La Chance, (1955) 15 W.W.R. 141 (B.C.S.C.).

102     Various factors are to be considered when determining the appropriate executor’s fee. Those factors include the magnitude of the estate, the care and responsibility involved, the time occupied in the administration, the skill and ability displayed and the success (or lack thereof) achieved in the administration: Re McColl Estate (1967), 65 W.W.R. 110 (B.C.S.C.). Similar, but not the same, types of considerations apply with respect to a care and management fee: Re Pedlar (1982), 34 B.C.L.R. 185 (S.C.).

103     In terms of calculating the capital fee, the gross aggregate value of the estate is the realized value of the original assets of the estate.

104     If the estate suffers any losses as a result of an executor’s actions (or inaction), the executor is obliged to repay the estate, with interest. The interest is calculated pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 79, unless there is a finding that the executor has used estate monies for his or her own benefit. In that circumstance, the executor may be required to pay compound interest (see Waters, D.W.M., Waters’ Law of Trusts in Canada, 3rd edition at pp. 1228-1229).

105     An adverse inference may be drawn against an executor’s reliability if he or she fails to produce relevant documents as requested by the beneficiaries or ordered by the court:  Booty v. Hutton, [1996] B.C.J. No. 2286 (S.C.).

106     The executor is entitled to be reimbursed from the estate for a solicitor’s bill for legal services rendered provided that those legal costs have been reasonably and properly incurred and do not relate to work that could have been performed by the executor. Fees paid for any services that could have been performed by the executor should be deducted from the executor’s remuneration: Re Lloyd Estate (1954), 12 W.W.R. (N.S.) 445.

107     Furthermore, an executor is not entitled to employ a solicitor to do work that the executor could do, such as ordinary letters, attendances, paying insurance premiums and the like, attending to banking matters and other ordinary duties that do not require the skill or expertise of a solicitor: Sharp v. Lush (1879), 10 Ch. 468 applied in Re Smith, [1972] 2 O.R. 256 (Surr. Ct).

108     As a matter of practice, the solicitor’s charges may be included in the executor’s fee if the court finds that the executor could have done the work himself.

Application of the factors

(a) Magnitude of the estate

[91]         At the date of death being January 7, 2011, the estate was valued at $984,555.19. The estate’s most significant asset was the Vancouver property which was valued at $927,000. At the date of death, the Vancouver property had a mortgage of $86,880.21.

[92]         The other remaining assets were a Toyota 4Runner valued at $3,000 and the money from three bank accounts which had a total value of $43,205.19 as of the date of death. The bulk of the assets were static, requiring minimal active administration or participation on the part of the executor.

(b) Care and responsibility

[93]         The beneficiary submits the executor had very little care and responsibility with respect to the estate and its assets and I would tend to agree. The responsibilities of the executor in relation to the estate’s assets were minimal. However, the executor did follow the typical steps which had to be taken in order to obtain probate.

[94]         The beneficiary, not the executor, organized the funeral for his mother, obtained the death certificate, and informed the executor of the various banks where the deceased held accounts.

[95]         The executor delegated the task of the corresponding with the Revenue Canada, Sun Life (with respect to a life insurance policy), refinancing of the Vancouver property, the transfer of Vancouver property to the estate’s two lawyers during the course of administration. The costs associated with these tasks will have been fully recovered by the estate in the event that my recommendations are followed.

[96]         With the exception of a single income tax return, the taxes were attended to by the beneficiary. The Vancouver property was managed by the beneficiary who paid the taxes, expenses and collected the rents.

[97]         The executor did liquidate the bank accounts and sell the jewellery.

[98]         The primary care and responsibility exercised by the executor over the course of the estate was instructing counsel and participating in the legal action commenced by the beneficiary against the executor and the estate.

(c) Time occupied in the administration of the estate

[99]         The executor did not keep timesheets of his time spent in relation to the administration of the estate. The executor would travel to India each year and did not have email access which presented some problems. He did however have a phone number at which he could be contacted.

[100]     The actual work done by the executor was not complex or time-consuming. Again, the majority of the executor’s time spent in relation to the estate involved the legal action brought by the beneficiary.

(d) Skill and ability of the executor

[101]     I agree with the submission of the beneficiary that skill and ability were not the hallmarks of the executor’s administration of the estate. The sale of the deceased’s jewellery was handled in the worst possible way. For reasons already discussed, the events surrounding the sale of the jewellery and the manner in which it was conducted led to deep-seated mistrust on the part of the beneficiary, and took from him items of immeasurable sentimental value. Further, the executor threw away the stones and pearls removed from the jewellery without consulting the beneficiary.

[102]     However, the actions of the executor have to be viewed in context. The beneficiary had commenced a legal action against him in relation to the estate and his role therein. Direct communication between executor and the beneficiary had effectively ceased. Communication between the two was done through counsel. There was no money in the estate to fund the defence of the action except for that which could be raised by the sale of the jewellery.

[103]     The executor did facilitate the seamless transfer of both the Toyota 4Runner to the beneficiary as well as the Vancouver property. In order to do the latter, the will needed to be varied. The executor did not oppose the beneficiary’s application to this end.

(e) Success achieved in the final result

[104]      In terms of the success achieved in the final result, the bank accounts were liquidated and the assets with the exception of the jewellery were transferred to the beneficiary. The executor immediately transferred the Toyota 4Runner to the beneficiary and facilitated the transfer of the Vancouver property once the will was varied. The transfer of the Vancouver property to the beneficiary and the discontinuance of the beneficiary’s legal action are significant successes.

[105]     The Vancouver property was maintained and managed entirely by the beneficiary throughout the administration of the estate.

[106]     The executor can take no credit for the increase in the value of the Vancouver property which forms the bulk of the estate.

[107]     In my view, the fiasco surrounding the jewellery diminishes the success achieved in the final result. The issues surrounding the jewellery occupied a significant amount of time on this passing of accounts. Had the executor handled the sale of the jewellery in a more open and transparent manner, this passing of accounts may have been unnecessary.

[108]     Further, not all assets of an estate can be measured monetarily. The jewellery had substantial meaning and sentimental value to the beneficiary. He is predeceased by his father, his brother, and his mother. The jewellery represented mementos of his deceased loved ones and marked milestones in their lives which formed part of his memories. Having heard the evidence of the beneficiary, I believe the loss of the jewellery has impacted his ability to obtain closure and a measure of comfort he might have had if the jewellery had remained intact and been passed on to him. Indeed, it was the beneficiary’s stated wish to eventually pass the jewellery on to his children.

[109]     The loss of the jewellery was a significant loss to the estate when viewed through the lens of the sole beneficiary.

(f) Amount of remuneration

[110]     The executor claims 4% of the capital for a fee of $91,644 in remuneration. The beneficiary submits that remuneration of less than 1% in all the circumstances would be appropriate.

[111]     In my view, taking all the factors into account, remuneration of the low end of the scale is appropriate.

[112]     I recommend that the executor be awarded the lump sum of $35,000 as his total remuneration.

Disposition

[113]     I recommend as follows:

1)    the value of the jewellery be set at the $10,100 obtained from its sale;

2)    the accounts of both lawyers be reimbursed in full as billed;

3)    the executor be awarded his costs on the passing of accounts as special costs. The remaining special costs still outstanding on the passing of accounts would be limited to 3 days following December 7, 2017, being December 8, 14, and 18;

4)    that no party-and-party costs be payable by the beneficiary to the executor in relation to the discontinuance of the legal action as those costs are encompassed in the lawyer’s fees and will have been paid, as billed, if the recommendations herein are followed;

5)    that the estate be liable for the loan advanced by Mr. Deol to the executor to pay for the probate costs, and that loan be repaid in full;

6)    that the executor receive a lump sum amount of $35,000 as his total remuneration;

7)    that the accounts of the executor be passed with the exception of the amounts noted herein.

All of which is respectfully submitted.

Dated at Vancouver, British Columbia this 15th day of January, 2018.

“District Registrar Nielsen”