Smith Estate

2025 BCSC 922 Smith Estate

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Smith Estate, 2025 BCSC 922 Date: 20250516 Docket: P15050 Registry: Chilliwack In the Matter of the Estate of William Charles Benson Smith, Deceased Before: Associate Judge Krentz (as Registrar) Reasons for Decision Counsel for Ian C.B. Smith, co-executor (via videoconference): P.B. Newman Eric W.B. Smith, co-executor, appearing in person (via videoconference): E.W.B. Smith Place and Dates of Registrar's Hearing: Chilliwack, B.C. November 6, 2024 December 16, 2024 Written Submissions Received: January 8 & 16, 2025 Place and Date of Decision: Chilliwack, B.C. May 16, 2025 Table of Contents INTRODUCTION.. 3 BACKGROUND.. 3 SUMMARY OF ORDERS. 13

INTRODUCTION [1] This appointment was taken out pursuant to the Order of Justice Stephens made on April 16, 2024. In para. 1, the Court ordered: c) there be a reference to the registrar to conduct an assessment in relation to the accounts of Ian Smith as co-executor of the Estate, including the executor's remuneration, and to fix and approve the accounts and executor's remuneration from 11/May/2021 to the date of pronouncement of this order; d) there be a reference to the registrar to conduct a review of any legal bills accrued by Ian Smith in his capacity as co-executor of the Estate from 11/May/2021 to the date of pronouncement of this order, pursuant to Section 71 of the Legal Professions Act, (SBC 1998), c.

9.

BACKGROUND [2] Ian C.B. Smith and Eric W.B. Smith are brothers and co-executors of the will of their late father, William Charles Benson Smith. As both parties share the same surname, I will refer to them by their given names, meaning no disrespect. [3] Mr. William Smith died on January 20, 2016. A grant of probate was issued on July 29, 2016. [4] The real property of the estate was located on Benson Road in Victoria, BC. The property sold for $1,335,000 in January 2020. [5] In July 2020, a distribution from the estate was made to Ian for approximately $570,000 and to Eric for approximately $547,000. [6] An application to pass accounts came on for hearing before Associate Judge Robertson in July 2021 and on September 2, 2021, she made the following orders: 1. the accounts of lan C.B. Smith covering the period of 20/Jan/2016 to 10/May/2021 be passed as presented, and specifically: a) the sum of $15,583.07 claimed by lan C.B. Smith in relation to expenses he incurred during the course of the administration of the estate of William Charles Benson Smith (the "Estate") is allowed; b) the sum of $2,041.00 claimed by Eric W.B. Smith in relation to expenses he incurred during the course of the administration of the estate of the Estate is allowed; c) the legal accounts payable to Cook Roberts LLP in the amount of $4,770.61 are allowed subject to a $117.60 (inclusive of taxes)

deduction; d) the accounting fees of Grant Thornton in the amount of $2,701.13 is allowed; e) the legal fees payable to Patrice B. Newman Law Corporation up to and including July 15, 2021 in the amount of $22,193.95 is allowed; f) the claim by lan C.B. Smith for indemnity in relation to the Speculation Tax is not allowed; g) lan C.B. Smith is entitled to a total payment of $31,986.99 out of the Estate for executor's remuneration; h) Eric W.B. Smith is entitled to a total payment of $2,000.00 out of the Estate for executor's remuneration; and i) Eric W.B. Smith to pay lump sum costs to lan C.B. Smith in the amount of $2,772.00 (inclusive of tax) payable out of any further distributions that Eric W.B. Smith may be entitled to from the Estate. [7] On July 4, 2024, Ian filed an appointment for the passing of his accounts pursuant to the order of Justice Stephens. The appointment was set for hearing on November 6, 2024. [8] On August 26, 2024, Eric filed an appointment seeking various relief, including a passing of accounts of Ian prior to May 2021, a matter that had already been dealt with by Associate Judge Robertson. [9] Both appointments came on before me on November 6, 2024. At that time, I dismissed the appointment filed by Eric, with special costs payable to Ian. I then proceeded with Ian's appointment. [10] At the hearing before Justice Stephens, Ian sought sole authority

over matters concerning the administration of the estate, so that he could make the final distributions necessary to fully administer the estate. Contrary to the allegations made by Eric, both Associate Judge Robertson and Justice Stephens found no misconduct by Ian which would prevent him from exercising the powers of an executor going forward. [11] Justice Stephens further found that due to the disagreement between the executors, the administration of the estate had ground to a standstill due to their inability to reach agreement on matters concerning the estate. He found it was appropriate for one executor to wind-up the estate and that should be Ian. [12] After coming to that conclusion, Justice Stephens directed that there be a reference to the Registrar as previously noted. He further ordered that each party bear their own costs of the applications before him. [13] The hearing before me proceeded by way of affidavits and submissions. Ian filed a supplemental statement of account affidavit on October 25, 2024, that was for the period from May 11, 2021 to November 6, 2024. The value of the assets of the estate as of May 11, 2021 was $81,171.76 which was funds held at Coast Capital and in the trust account of Cook Roberts LLP, the law firm that handled the sale of the Benson property. The trust account was closed in October 2022, so the remaining estate funds were held at

Coast Capital. [14] After being granted sole authority to administer the estate, Ian instructed Doane Grant Thornton ("DGT") to file income tax returns for the estate for the years 2021, 2022 and 2023. The cost to prepare those returns was $4,635.23. The assessment notice for 2023 indicated a balance owing of $2,822.65. Ian paid that from the estate account. [15] Pursuant to a previous order made by this Court, both parties were required to reimburse the estate in the sum of $50,000. During the hearing before Justice Stephens, Ian paid his $50,000 to the estate. On May 31, 2024, Eric paid his $50,000 to the estate. The only other assets that came into the estate was a modest amount realized from the sale of memorabilia. [16] On July 18, 2024, pursuant to the order made by Associate Judge Robertson, Ian paid out the executor fees, that being $31,069.48 to himself and $2,000 to Eric. Apparently, Eric did not cash in his cheque. [17] Prior to the collapsing of the Cook Roberts LLP trust account, a number of other payments were made pursuant to the order of Associate Judge Robertson, of approximately $48,000. [18] As of November 6, 2024, the estate assets were valued at $95,954.08, which comprises of funds held at Coast Capital. The liabilities included the sum of $1,759.97 owing to Cook Roberts LLP, that was personally paid by Ian. [19] The accounting work that still needs to be

done is the issuance of a T3 trust income tax return and T4 slips that will be issued to the executors in relation to their remuneration. DGT has advised that the anticipated cost for preparing these final filings, including applying for a clearance certificate, will be in the range of $3,000-$4,000. [20] Ian seeks to holdback another $10,000 for miscellaneous items. [21] With respect to remuneration for this reporting period, Ian is seeking a capital fee of 5% of the value of the assets, which fee would be $4,797.73. The gross income earned by the estate since May 11, 2021 is $1,160.35. Ian claims an income fee of 5% of that amount, which is $58.02. Ian also seeks a care and management fee for the reporting period in the sum of $1,239.88. [22] Ian has paid to Patrice Newman Law Corporation legal fees during the reporting period in the sum of $51,301.11. The fees plus tax total $47,132.40 and the disbursements, both taxable and non-taxable, total $4,160.71. [23] However, a significant portion of those legal fees were incurred with respect to the applications that were heard by Justice Stephens. As previously noted, he ordered that each party bear their own costs for those applications. [24] Attached to Ian's Affidavit #8 and marked as Exhibit ʺMʺ is a listing of the legal services that were rendered and the disbursements that were incurred. [25] Also filed at the hearing before

me is Affidavit #2 of Patrice Newman and attached to the affidavit are copies of her accounts issued to Ian during the reporting period. In her affidavit, Ms. Newman deposes that she reviewed all of her accounts and deducted all fees and disbursements that relate to the applications that were heard by Justice Stephens. Ian claims $20,916.70 after allowing for Justice Stephens' cost order. [26] During his submissions, Ian acknowledged that the account dated April 7, 2023 should be deducted in its entirety as it relates to the applications that were heard by Justice Stephens. Accordingly, he acknowledges that the sum of $2,912 should be deducted from the $20,916.70 that was claimed. [27] Eric takes issue with most of the lawyer's accounts. For example, he submits that services rendered in the November 16, 2021 account in the sum of $3,108.28 includes matters that are not appropriate in relation to the administration of the estate. He refers to matters such as lawyer's conference with outside lawyers, dealing with the appeal of the Robertson order, preparing for and attending at a settlement hearing and correspondence between himself and Ms. Newman. His position is that only $1,647.43 should be allowed for that account. [28] With respect to the account dated December 13, 2021 in the sum of $312.80 and the account dated August 16, 2022 in the sum of $733.37, Eric submits that some

of the fees relate to internal communications or are part of the executor's regular duties and should not be passed on to the estate. [29] With respect to the account dated September 12, 2023 in the sum of $3,073.85, Eric submits that this account should not be allowed as it appears to be mostly related to the applications that were later heard by Justice Stephens and that some of the services related to internal communications that should not be passed onto the estate. [30] With respect to the account dated June 10, 2024 in the amount of $939.19, Eric submits that the invoice in its entirety relates to the applications that were heard by Justice Stephens. [31] Lastly, with respect to the invoice dated October 18, 2024 in the sum of $7,077.24, Eric submits that some of the services also relate to Justice Stephens' order. [32] The considerations as to the reasonableness of the lawyer's accounts is determined pursuant to s. 71 of the Legal Profession Act. The court is to have regard to the factors set out in s. 71(4) as follows: (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. [33] Ms. Newman is a senior lawyer having been called to the Bar in 2003. I find that her rate of $450 per hour is a reasonable rate, given her experience. As commented upon by Associate Judge Robertson and Justice Stephens, the administration of the estate had a significant level of complexity and difficulty, largely caused by the conduct of Eric. The order that was made by Associate Judge Robertson on September 2, 2021 had to be settled by the Registrar, as Eric refused to sign the draft order. Furthermore, Eric filed a notice of appeal of the Robertson order but did not pursue it. [34] Throughout these proceedings, Ian had to defend himself against the various serious allegations made by Eric, such allegations including breach of fiduciary duty, mismanaging estate assets and acting in conflict with the estate. Neither Associate Judge Robertson or Justice Stephens found merit in those allegations. [35] I find that Ms. Newman brought a high level of skill and specialized knowledge in dealing with a difficult matter, largely brought on by the conduct of Eric. Nonetheless, while the legal accounts may be reasonable in the work undertaken, I must ensure that there is properly deducted from the totality of the accounts

any services that relate to the applications heard by Justice Stephens. [36] Accordingly, I am allowing the following accounts in the stipulated amount: · November 16, 2021: $3,108.28; · December 13, 2021: $312.80; · August 16, 2022: $733.37; · September 12, 2023: $3,073.85; and · October 18, 2024: $7,077.24. [37] The total legal fees allowed as of October 18, 2024 is $14,305.54. I am not allowing any portions of the accounts dated April 7, 2023 and June 10, 2024, as I find that they are for services relating to the applications before Justice Stephens. [38] With respect to Ian's entitlement to remuneration, an executor is entitled to remuneration for his work for the estate, with the court setting that amount if the parties are unable to agree to it. Any such remuneration cannot be greater than 5% of the gross aggregate value of the estate, including capital and income. [39] Ian Smith is claiming the highest percentage available to him. In determining the percentage, the court is to consider the magnitude of the estate, the time occupied in administrating the estate, and the skill and ability involved in administering the estate. [40] During the reporting period, the assets of the estate comprised of funds in a trust account and/or a financial institution. The amount involved was relatively modest. The transactions were also minimal, which included paying liabilities of the

estate and arranging filings with the Canada Revenue Agency ("CRA"). [41] I find an appropriate remuneration should be set at 2%. The amount I allow for a capital fee is $1,919.09 and an income fee of $23.21. [42] Some of the factors to be taken into consideration in determining whether any care and management fee should be allowed and, if allowed, the extent of such care and management fee (not exceeding 0.4% of the average market value of the assets of the estate), include the following: (a) the value of the estate assets being administered; (b) the nature of the estate assets being administered--such as an active business, a farm, real property held for investment or appreciation, a portfolio of investments and the type of such investments; (c) the degree of responsibility imposed upon the trustee by the terms of the will or other instrument, including the length or duration of the trust; (d) the time expended by the trustee in the care and management of the estate; (e) the degree of ability exhibited by the trustee in the care and management of the estate; (f) the success or failure of the trustee in the care and management of the estate; (g) whether or not some extraordinary services had been rendered by the trustee in the care and management of the estate. [43] I find that based on the above factors there should be no allowance for a care and management fee. While I

accept that Ian brings with him a certain level of expertise and ability, during this reporting period the assets of the estate comprised of funds held in a bank account or trust account that did not require any measurable degree of management, while the value of the estate was modest. [42] I will allow the fees paid by Ian personally to Cook Roberts LLP in the sum of $1,759.95 as being a necessary expense in relation to administration of the estate. I am further allowing the holdback for the final preparation and filings with the CRA in the sum of $4,000 and another $10,000 for miscellaneous holdback. [43] On December 16, 2024, at the conclusion of the second day of the hearing and with the agreement of the parties in order to bring about a conclusion to the administration of the estate without the necessity of further registrar hearings, I directed the parties to provide written submissions with respect to the special costs ordered against Eric and with respect to additional legal fees incurred by Ian from October 19, 2024 to January 9, 2025. [44] With his written submissions, Ian provided his lawyer's time records that indicate his legal fees, taxes and disbursements incurred during that time period are $9,873.87. Of that amount, Ian Smith submits that the legal fees relating to the dismissed application and special costs ordered against Eric are $2,174.93. [45] With respect

to special costs that I ordered on November 6, 2024, Ian should be fully reimbursed for legal fees incurred in opposing Eric's application, that was dismissed on that date. This required Ian to respond to an affidavit of Eric that had attached to it approximately 60 pages of exhibits. I find that the special costs claimed in the sum of $2,174.93 to be appropriate and it should be paid to Ian out of Eric's share of the estate. [46] With respect to the legal fees incurred by Ian Smith since October 19, 2024, there were two days of hearing and written submissions were provided by both parties. [47] Attached as Appendix ʺAʺ to Ian's written submission is a list of legal services provided up to and including December 20, 2024, with the last entry being the drafting of written submissions. As previously indicated, I allowed in its entirety the account dated October 18, 2024, which included services up to that date. I note that Appendix A includes a number of services rendered up to October 18, 2024, which includes "reviewing final bank statements and finalizing affidavit for client" on that date. That happens to be the same service that is included in the October 18, 2024 account. [48] As there appears to be a duplication of services, I am only allowing the services indicated in Appendix A from October 30, 2024 to December 20, 2024. The fee for those services is $4,455. There is a

further two hours claimed for January 6, 2025, which presumably was with respect to finalizing the written submissions. I will also allow an additional amount of $900. Accordingly, I will allow legal fees incurred since October 19, 2024, in the sum of $5,355 plus taxes in the sum of $642.60. [49] Likewise, with respect to disbursements, I allow the disbursements that were incurred after October 18, 2024, in the sum of $555.57. The additional legal fees paid to Patrice Newman are allowed in the sum of $6,553.17. [50] Rule 25-13(7) of the Supreme Court Civil Rules [SCCR] provides that unless otherwise ordered on an application, any costs payable pursuant to an application for the passing of accounts or fixing of a personal representative's remuneration must be assessed as special costs. As well, if costs are to be paid from the estate, the court may direct out of what portion of the estate or property the costs are to be paid: SCCR, R. 14-1(16). [51] If a beneficiary unreasonably refuses to approve the accounts of an executor, thereby requiring a formal passing of accounts, the beneficiary may be ordered to pay costs of the other party out of his share of the estate. In addition, the court may also order costs against the beneficiary for actions that unnecessarily lengthen the hearing. [52] I find that the positions taken by Eric were largely without merit and did serve to

prolong the hearings. However, he was successful with respect to some of his submissions that led to a reduction of the lawyer's accounts for the reporting period. Accordingly, there were some issues that may have warranted the need for the formal passing of accounts. Accordingly, I order that of the legal fees that I allowed in the sum of $6,553.70, that 50% be paid out of Eric's share of the estate and the other 50% shall be paid by the estate.

SUMMARY OF ORDERS [53] In summary, I make the following orders. a) The following accounts are allowed in these amounts: i) Cook Roberts LLP: $1,759.97; ii) Patrice Newman Law Corporation to October 18, 2024: $14,305.54; iii) Patrice Newman Law Corporation from October 19, 2024 to January 9, 2025 (50% to be paid by the estate and 50% to be paid out of Eric's share of the estate): $6,553.17; iv) special costs to be paid by Eric to Ian, out of Eric's share of the estate: $2,174.93; v) executor's remuneration to be paid to Ian: $1,942.30; vi) holdback for accounting fees: $4,000; and vii) miscellaneous holdback: $10,000. [54] I direct that Ian's counsel shall prepare and submit through Court Services Online ("CSO"), a revised draft of the Registrar's Report based on the orders that I have made. Furthermore, the final portion of the Report should be amended to indicate that the material provided at this hearing consists of: 1) Order of Justice Stephens made on April 16, 2024; 2) Affidavit #8 of Ian Smith filed on October 25, 2024; 3) Affidavit #2 of Patrice Newman filed on October 30, 2024; 4) Affidavit #10 of Eric Smith filed on October 2, 2024; 5) Affidavit #11 of Eric Smith filed on December 3, 2024; 6) Written submissions of Ian Smith filed on January 8, 2025; and 7) Written submission of Eric Smith filed on January 16, 2025. "Krentz A.J."