



COURT OF APPEAL FOR ONTARIO

CITATION: Armitage v. The Salvation Army, 2016 ONCA 971

DATE: 20161222

DOCKET: C62019

Sharpe, Pepall and Hourigan JJ.A.

BETWEEN

Sharon Armitage

Applicant (Respondent)

and

The Salvation Army

Respondent (Appellant)

Anthony J. Frost, for the appellant

Anya-Deane Best, for the respondent

Heard: November 30, 2016

On appeal from the judgment of Justice Timothy D. Ray of
    the Superior Court of Justice, dated March 23, 2016, with reasons reported at
    2016 ONSC 2043.

Hourigan J.A.:

[1]

The respondent was the attorney for property for Morley George Wiltse,
    and the executor of his estate upon his death. The appellant is the sole
    beneficiary under Mr. Wiltses will.

[2]

The respondent brought applications to pass her accounts as attorney for
    property and as estate trustee. The appellant filed notices of objection in
    both proceedings.

[3]

The application judge granted the passing of accounts for both attorney
    for property and estate trustee, and approved the amount claimed by the
    respondent as compensation in its entirety.

[4]

On appeal, the appellant advances the same arguments raised below.
    Specifically, it says that the claim for compensation as attorney for property
    is statute-barred, and that the quantum of compensation claimed is excessive
    and unreasonable.

[5]

For the reasons that follow, I would dismiss the appeal.

Background Facts

[6]

The respondent was appointed Mr. Wiltses attorney for property and
    personal care in 1990, 2001, and 2007. In 2007, the respondent, who is a
    realtor, discussed with Mr. Wiltse the possibility of selling his home. He
    provided his signed agreement and she listed the residence. She received a
    commission of $7,500 on the sale of the property. $10,000 was paid to have the
    house emptied of its contents and to distribute the items to family members of
    Mr. Wiltse, for which she was reimbursed out of the proceeds of the sale.

[7]

Mr. Wiltse died on February 5, 2013. On September 5, 2013 the respondent
    submitted her claim for attorney compensation, and on January 30, 2015 she
    issued a notice of application for the passing of accounts. She filed a further
    application for the passing of the estate accounts on January 30, 2015.

[8]

Before the application judge, the respondent sought compensation totalling
    $34,034.29 for her services as attorney for property, and $11,679 for her
    services as estate trustee.

[9]

The appellant disputed the respondents entitlement to compensation as attorney
    for property on the basis that the claim was not made within the general two-year
    limitation period under the
Limitations Act, 2002,
S.O. 2002, c. 24,
    Sch. B. It also objected to the compensation for that work, in part, because
    many of the receipts and disbursements occurred through automatic transfers.

[10]

Regarding the estate trustees accounts, the appellants primary
    objections were that the compensation sought was excessive given the relatively
    modest size of the estate, and that the respondent had already been compensated
    as attorney for property.

Decision of the Application
    Judge

[11]

On the issue of the limitations defence, the appellant relied on s.
    40(1) of the
Substitute Decisions Act, 1992,
S.O. 2002, c. 30 (the 
SDA
)
,
which provides that an attorney for property may take annual
    compensation. The application judge rejected the appellants submission that
    this provision means that the end of each year of service triggers the
    beginning of a two-year limitation period for an attorney to claim
    compensation. He noted that if the legislature wished to create a limitation
    period that is triggered annually, it would have been very simple to use
    language to say so clearly.

[12]

The application judge held that the date of the deceaseds death, which
    terminates the continuing power of attorney, triggers the limitation period. In
    this case, the respondent had two years from February 5, 2013 to bring an
    application to pass her accounts and to seek her compensation. The application
    judge found that she had met that deadline.

[13]

The application judge also rejected the submission that the respondent
    was required to produce evidence of her services to Mr. Wiltses prior to his
    death for his authorization or comment. He held that the attorney for propertys
    only obligation is to maintain accounts, and that the
SDA
set out a
    process to review the attorney for propertys services and expenditures,
    independent of Mr. Wiltses views.

[14]

Having determined that the respondents claim for compensation as attorney
    for property was not statute-barred, the application judge approved the
    requested compensation of $34,034.29. In doing so, the application judge considered
    and dismissed the appellants objections. In particular, he held that although
    there were a number of recurring payments requiring little in the way of
    services, the 3% rate provided for in O. Reg 26/95, s.1, which was passed under
    the
SDA
, is an average, contemplating that there are more onerous
    tasks and less onerous tasks.

[15]

The application judge also held that the respondents commission on the
    sale of the deceaseds home and the $10,000 cost to empty the house prior to
    selling it were appropriate. He noted that the law permits a realtor acting as
    attorney to charge for services separate and apart from the attorney services,
    and that the respondents calculation for compensation was based on the net
    proceeds of the home, so she was not double-dipping.

[16]

The application judge then considered the respondents accounts as
    executor. He rejected the appellants argument that the compensation should be
    reduced because the respondent carried out most of the work while she was
    attorney for property, prior to assuming the role of executor. The application
    judge concluded that the estate was modest and required modest services,
    resulting in modest compensation. He fixed the executors compensation at the
    requested amount of $11,679.

Issues

[17]

This appeal raises the following issues:

(i) Should the respondent be denied compensation as power of
    attorney on the basis that she is statute-barred?

(ii) If the answer to issue (i) is no, was the compensation
    awarded for services as attorney for property and/or executor unreasonable in
    the circumstances?

Analysis

(a)

Limitations Defence

[18]

As noted above, the application judge was of the view that the running
    of the general two-year limitation period under the
Limitations Act, 2002
was triggered on the death of Mr. Wiltse. As the respondent brought the
    application to pass her accounts within two years of the death of Mr. Wiltse,
    her claim was not time barred.

[19]

While I agree with the result reached by the application judge, I
    disagree with his conclusion that the
Limitations Act, 2002
had any application in the circumstances of this
    case.
As I will discuss below, in my view, the
Limitations Act,
    2002
does not apply because compensation for an attorney for property
    through the passing of accounts process does not constitute a claim within
    the meaning of the
Limitations Act, 2002.

[20]

It is useful to briefly consider the nature of compensation for
    attorneys for property and how the passing of accounts process works. An
    attorney for property is a fiduciary and has an obligation under s. 32(6) and
    38(1) of the
SDA
to, among other things, keep accounts of all
    transactions involving the property.

[21]

The attorney for property may bring an application to the Superior Court
    to have his or her accounts approved. Through that process, the attorney for
    property may also seek court approval of compensation for his or her services.
    The responding parties to the application have an opportunity to file a notice
    of objection to the accounts, and to object to the compensation that the
    attorney for property proposes to take or has taken.

[22]

Where the attorney for property has not commenced an application for the
    passing of accounts, an interested party may bring an application under s.
    42(1) of the
SDA
to compel the passing of accounts.

[23]

As noted by Matthew Furrow and Daniel Zacks in their very recent article
    
The Limitation of Applications to Pass
    Accounts (2016) 46 Adv. Q. 2,
historically in Ontario there was no
    statutory limitation period for the passing of accounts. The only bars were the
    equitable defences of laches and acquiescence. The question becomes whether the
    enactment of the
Limitations Act, 2002
changed the law and imposed the
    general two-year limitation period on claims for compensation for attorney for
    property.

[24]

At first blush it would appear that such claims might be captured by the
    general limitation period. The
Limitations Act, 2002
was designed to
    comprehensively deal with all manner of civil claims, whether grounded in
    equity, law, or statute. There are specific carve outs in the legislation for
    claims that are not subject to the Act. It is arguable, therefore, that if
    compensation for attorneys for property was intended to be exempted from the
    general limitation period it would have been specifically exempted under the
Limitations
    Act, 2002.

[25]

The difficulty with that argument is that the
Limitations Act, 2002
applies
    only to the assertion of a claim, and a claim is defined in the Act as
    follows: a claim to remedy an injury, loss or damage that occurred as a result
    of an act or omission.

[26]

The appellant submits that the right under the
SDA
to seek
    compensation is a new statutory right and, as with all rights, where there is a
    right there must be a remedy. Further, the appellant argues that the
    respondents claim for compensation fits within the statutory definition of a
    claim. Counsel for the appellant submits that in seeking compensation at this
    time the respondent has suffered a loss because she chose not to seek self-help
    and take her compensation earlier. He goes on to argue that this loss is the
    result of the respondents omission in failing to claim compensation earlier.

[27]

I am unable to accede to this rather circular argument. The fact is that
    in seeking court approval of the passing of accounts, an attorney for property
    is not seeking redress for any loss, injury, or damage. Rather, he or she is
    seeking approval from the court of his or her actions in managing the property,
    including approval for compensation previously taken or now sought. A passing
    of accounts application is the opposite of remedial; it is a process that seeks
    a court order that no remedy is necessary with respect to the accounts: see
    Furrow and Zacks, at pp. 9-10. Thus, the passing of accounts does not fit
    within the first part of the
Limitations Act, 2002
definition of
    claim.

[28]

An application for the passing of accounts also does not fit within the
    second part of the statutory definition of claim. Where the definition speaks
    of an act or omission, it must surely refer to an action taken or not taken by
    a third party that has the effect of causing loss, injury, or damage. It would
    be a strange result if a limitation period could not be triggered until the
    party asserting the claim took an action or omitted to do something.

[29]

The result, in my view, is that a passing of accounts under the
SDA
is not subject to the two-year general limitation period found in the
Limitations
    Act,

2002
.
[1]
The common law in that regard was not changed with the enactment of that
    legislation. Consequently, the only defences available are the equitable
    defences of laches and acquiescence, neither of which were asserted in the
    present case.

(b)

Reasonableness of Compensation

[30]

Under the
SDA
, an attorney for property is entitled to claim
    compensation as part of the passing of accounts process. That compensation is
    fixed under the regulations passed pursuant to that statute. However, the court
    has the authority under s. 42(8)(a) to adjust the attorneys compensation in
    accordance with the value of the services performed.

[31]

The appellant concedes that as part of the passing of accounts it is
    within the discretion of an application judge to adjust the compensation
    claimed. It is well established that this court will not lightly interfere with
    the exercise of discretion by a court below. Interference is only justified
    where the judge has made an error in principle or has acted unreasonably in
    weighing the relevant principles:
R v
.
Savoury
(2005), 200
    C.C.C. (3d) 94 (Ont. C.A.), at para. 26.

[32]

The very same objections raised before the application judge are
    asserted in this court. Nowhere does the appellant specify where the
    application judge erred in principle or unreasonably exercised his discretion.
    The appellants reassertion of its objections amounts to nothing more than an
    invitation to this court to redo the very thorough analysis of the application
    judge. That is obviously not the function of this court and I would decline
    that invitation, especially given that I see no error in the application
    judges analysis of the appellants objections.

Disposition

[33]

I would dismiss the appeal.

[34]

The respondent as the successful party is entitled to her costs of the
    appeal. She seeks $10,000 all-in on a partial indemnity basis. The appellant
    takes no objection to that figure. Accordingly, I would order that the
    Salvation Army pay the respondent costs of the appeal in the amount of $10,000,
    inclusive of fees, disbursements, and taxes.

W. Hourigan J.A.

I agree Robert J.
    Sharpe J.A.

I agree S.E. Pepall
    J.A.

Released: December 22, 2016

RJS





[1]

I do not mean to categorically provide that the
Limitations
    Act, 2002
has no applicability to the passing of accounts process under the
SDA
. In particular, it may be that the filing by a beneficiary of a
    notice of objection after an attorney has sought a passing of accounts is a
    claim within the meaning of the
Limitations Act, 2002
. However, I leave
    this determination to another case where it arises directly on the facts.


