Laboucane Estate, 2011 ABQB 253

Court of Queen ’ s Bench of Alberta Citation: Laboucane Estate, 2011 ABQB 253 Date: 20110427 Docket: ES13 02016 Registry: Ft. McMurray Court File Number ES13 02016 Court Court of Queen’s Bench of Alberta (Surrogate Matter) Judicial District Ft.

McMurray Estate Name Estate of Alvina Laboucane Applicants (Plaintiffs) Elaine Tatum and David Laboucane Respondents (Defendants) Barbara Tatum, Edgar Tatum, Shirley McKay, Lynda Key Elaine Tatum, Betty Ann Tatum, Gwen Plouffe, Gerald Laboucane, Darlene Tatum and Alvina Tatum _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J. Strekaf _______________________________________________________ I. Introduction [ 1 ] This application arises out of the estate of Alvina Laboucane, who died on April 20, 2002 (the “Estate”).

Elaine Tatum and David Laboucane (the “Applicants”) are applying to pass their accounts for the period of April 20, 2002 to November 27, 2008, during which time they were acting as co-executors of the Estate of their late mother. Elaine Tatum and David Laboucane are each seeking to be reimbursed from the Estate for expenses they paid personally in relation to the Estate. Elaine Tatum is also seeking compensation for services that she performed for the Estate.

[ 2 ] Lynda Key, the current personal representative of the Estate, is applying for an order directing that Elaine Tatum and David Laboucane be required to return the sum of $173,201.13 to the Estate, due to their alleged mismanagement of Estate assets. [ 3 ] The application proceeded by way of a viva voce hearing on March 31, 2011 and April 1, 2011, at which time Elaine Tatum and David Laboucane both testifed and were cross-examined.

In addition, reliance was placed upon various affidavits filed in this proceeding, including affidavits of David Laboucane sworn September 19, 2008 and March 11, 2010, of Lynda Key sworn July 23, 2010 and February 11, 2011, of Shirley McKay sworn February 10, 2010 and January 31, 2011, of Betty Ann Tatum sworn October 5, 2009 and of Darlene Tatum sworn July 25, 2009. II. Findings of Fact [ 4 ] I have made the following findings of fact. Alvina Laboucane resided near Janvier or Chard, Alberta, which is located approximately 120 km south east of Fort McMurray, near the Janvier Reserve.

She operated a gas bar and convenience/general store known as the Pioneer General Store, which was located beside her home, and a farming/ranching enterprise on leased land approximately 10 km from her home. Alvina Laboucane died testate on April 20, 2002 at the age of 75. Her funeral was held on April 25, 2002. In her will executed on April 18, 2002, she appointed Elaine Tatum and David Laboucane to be her trustees and directed that the residue of her estate was to be divided equally amongst 11 of her children. [ 5 ] The application for the Grant of Probate was prepared by Thomas Maccagno, who had been Ms.

Laboucane’s lawyer, and was executed by Elaine Tatum and David Laboucane on September 13, 2002. The net value of the Estate set out in the Initial Inventory on the NC7 was $350,585.00, which was comprised of land ($250,000), bank accounts ($14,585), five vehicles ($32,000) and livestock ($54,000). The Grant of Probate was issued on October 1, 2002. [ 6 ] Both Ms. Tatum and Mr. Laboucane were residing in Fort McMurray at the time of their mother’s death. Neither was particularly sophisticated as to business matters nor had either previously acted as an executor.

The Estate involved the liquidation of the ranching operation and the general store business carried on by the deceased and the disposition of her home, all located in a relatively isolated community near the Janvier Reserve. [ 7 ] Following the funeral, the Applicants proceeded to deal with the assets of the Estate, by taking the following steps. [ 8 ] On May 3, 2002, the Applicants opened an estate bank account at the Royal Bank and transferred into it the bank balances from their mother’s personal and business bank accounts. [ 9 ] Ms.

Tatum prepared an inventory of her mother’s possessions, both at the store and in her home. The deceased’s personal property and the inventory from the store were distributed amongst the beneficiaries. [ 10 ] Ms. Tatum and Mr. Laboucane decided to keep the cattle so that they could feed off the grazing lease and gain weight, before being sold at auction in the fall. In October 2002, the cattle generated $42,516.44, after deducting commissions and other sales expenses. From April 2002 until the cattle were sold Ms.

Tatum resided largely at the home in Janvier to deal with the inventory at the store and to care for the cattle which needed to be checked on a daily basis. While the deceased had some assistance with the cattle before she died, the principal person who was assisting her became ill and died shortly thereafter. As Ms. Tatum was not satisfied that there was an appropriate responsible individual to care for the cattle in the area, she commuted back and forth between Fort McMurray.

She used the purple 1995 Ford Truck that was part of the Estate as she had no other vehicle at the time. [ 11 ] After the cattle were sold and Ms. Tatum was no longer spending several days a week at the Chard home, she arranged to rent out the home to the local school teacher for $300/month, until he became ill and left the area. The home was vandalized while it was vacant. In October 2004, Gilbert Janvier agreed to rent the home for $500/month but, after paying for one month, advised that it was too expensive and refused to pay further rent. Mr. Laboucane decided it was preferable to have Mr.

Janvier remain in the premises rent free as he was paying the utilities for the house and occupying the premises, which prevented further vandalism. The Estate only recovered

rent for seven months over the period of more than six and one half years until the property was sold in December 2007. [ 12 ] The Estate owned farm machinery, which had not been included in the listing of assets in the NC7. The farm equipment was transported to Nisku where it was sold at the Ritchie Bros auction in July 2003, generating approximately $26,000 after commissions. [ 13 ] Prior to Ms. Laboucane’s death, the Fort McMurray fire marshall had expressed concerns about the gas tanks located at the store. After she died, Mr.

Laboucane was advised by the fire marshall that if the tanks were not removed, that the fire marshall would arrange to have that done and send the Estate the bill. Mr. Laboucane obtained a quote from a company from Fort McMurray to perform the work. The tank removal was ultimately done in May 2003 by Consum Consulting, a company owned by Mr. Laboucane and his brother Ed Tatum, at a price that matched the quote. The cost to the Estate of the gas tank removal was $31,779. [ 14 ] The real property owned by the Estate was listed for sale with a realtor commencing in November 2002 after the cattle were sold.

The listing was somewhat sporadic and the property was finally sold in December 2007 for $210,000. [ 15 ] While Ms. Tatum and Mr. Laboucane were active in dealing with the Estate during 2002 and 2003, little happened with the Estate thereafter. Ms. Tatum moved away from Fort McMurray in mid 2004. The Estate expenses exceeded the receipts and the only remaining asset was the real property in Janvier, which was not generating any income.

There was no accounting or reporting provided to the other beneficiaries. [ 16 ] On July 13, 2007, one of the residuary beneficiaries, Shirley McKay, brought an application to compel Elaine Tatum and David Laboucane to formally pass their accounts. On September 7, 2007, Justice Eidsvek ordered Elaine Tatum to produce copies of all documentation relating to the Estate by November 15, 2007.

That did not occur. [ 17 ] On November 29, 2007, Justice Nation ordered Elaine Tatum to produce copies of all Estate documentation in her possession by December 31, 2007 and to jointly pass accounts with David Laboucane by February 28, 2008, failing which she was to appear in court on April 24, 2008 to show cause why she should not be held in contempt. Costs for service of $577.83 were awarded against Elaine Tatum. The deadlines were not met, nor were the costs paid. [ 18 ] On April 24, 2008, Justice Kent ordered Elaine Tatum to pass her accounts by June 9, 2008.

That did not occur. [ 19 ] On August 5, 2008, Justice Graesser ordered David Laboucane and Elaine Tatum to file either an accounting or an affidavit as to why they could not do so by August 30, 2008 and awarded costs of $2,000 against them. [ 20 ] David Laboucane engaged the accounting firm of Kinal Brown & Associates to prepare a

Summary of the Income and Disbursements of the Estate, which was included in an affidavit filed by him on September 19, 2008. [ 21 ] On November 27, 2008, Elaine Tatum and David Laboucane were removed as Personal Representatives of the Estate and were replaced with Lynda Key and Shirley McKay, pursuant to an order of Justice Sanderman. [ 22 ] In December 2008, the documents and statements which represented the accounting records for the Estate that had been maintained by David Laboucane and Elaine Tatum were provided to the Estate’s new counsel.

Lynda Key and Shirley McKay retained the accounting firm of Meyers Norris Penney who prepared a report (“MNP Report”) in June 2009 which summarized the income received and expenses incurred from the date of death to December 31, 2008, based on the information provided. According to Ms. Key, the MNP Report concluded that approximately $116,053.42 was used by the former personal representatives, David Laboucane and Elaine Tatum, for matters not properly related to the Estate. [ 23 ] On March 17, 2010, Justice Macleod approved the passing of accounts of Shirley McKay and Lynda Key for the period

November 27, 2008 to February 8, 2010, awarded Lynda Key compensation in the amount of $1,705.18 for disbursements made by her to be paid from the residue of the Estate and discharged Shirley McKay as a Personal Representative of the Estate. He directed that the issues of whether Elaine Tatum and David Laboucane should be required to return to the Estate funds owing to the Estate as a result of their management of the Estate assets, interim distribution of the Estate and the payment of costs to Elaine and David from the Estate be adjourned to a special application to be heard on May 28, 2010.

He awarded Shirley McKay and Linda Key their costs on a solicitor and client basis to be paid from the residue of the Estate. [ 24 ] On August 12, 2010, Justice Germain directed that the matter proceed by way of viva voce hearing and set deadlines. Costs of $2,400 plus disbursements were awarded against Elaine Tatum and David Laboucane in favour of the Estate.

Costs of $2,400 plus mileage for return travel between Lac La Biche, Alberta and Fort McMurray at $0.52 per kilometre were awarded against David Laboucane and Elaine Tatum in favour of Gerald Laboucane. [ 25 ] On December 1, 2010, David Laboucane and Elaine Tatum provided an accounting for the period during which they had been personal representatives of the Estate (the “Accounting”). III. The Relevant Law [ 26 ] The legal representatives of an estate can be required to make an accounting before the court of their administration of the estate pursuant to

section 45 of the Administration of Estates Act , R.S.A. 2000, c. A-2, as amended.

Section 47 provides that on passing the accounts of the legal representatives of the estate the court may inquire into and adjudicate on claims of misconduct, neglect or default on the part of the legal representative. [ 27 ]

Part 3 of the Surrogate Rules deal with an accounting. Rules 97 and 98 impose an obligation on a personal representative to provide an accounting of the administration of the estate to the beneficiaries at regular intervals, by way of providing financial statements containing specified information. The accounting is to be provided every two years after the date of death, unless otherwise ordered by the court. [ 28 ] Personal representatives who are administering an estate are trustees who owe fiduciary duties to the beneficiaries of the estate. Pursuant to

section 41 of the Trustee Act , R.S.A. 2000, c. T-8, as amended, the court may relieve a trust from personal liability for a breach of trust where the trustee has acted honestly and reasonably and ought fairly to be excused. IV. Issues [ 29 ] There are four issues to be addressed on this application: 1. Should the Applicants’ Accounting be approved? 2. Is the Estate entitled to damages from Elaine Tatum and David Laboucane? 3. Should Elaine Tatum and David Laboucane be entitled to reimbursement of their expenses? Should Elaine Tatum be entitled to compensation for the services she provided to the Estate? 4. How should costs be addressed? V. The Accounting

[ 30 ] I am satisfied that the Accounting provides a reasonably detailed accounting of the Estate over the period of April 20, 2002 through November 23, 2008. While there are some expenses that were not identified and revenue not accounted for, I am satisfied that these discrepancies are relatively minor and the Accounting is approved, subject to the items addressed below. VI.

Claims by the Estate for Damages against David Laboucane and Elaine Tatum [ 31 ] On the passing of accounts of the legal representative on an estate, the court may “inquire into and adjudicate on a complaint or claim by a person interested in the taking of the account of misconduct, neglect or default on the part of the legal representative, and the court, on proof of the claim, may order that the legal representative be charged with any sum by way or damages or otherwise that it considers just, in the same manner as if the legal representative had received the sum” (

section 47 (

b) of the Administration of Estates Act ). [ 32 ] The Estate, through its current personal representative Lynda Key, is claiming the amount of $173,201.43 from Elaine Tatum and David Laboucane due to their misconduct and neglect arising out of: (

a) conversion of trust property for their personal use; (

b) failure to provide documentation that accounts for all of the Estate assets; and, (

c) failure to realize on Estate assets in a timely manner and wasting of Estate property. [ 33 ] Elaine and David deny that they should be found liable as they argue that they acted in good faith throughout this matter in attempting to carry out their duties as co-executors of the Estate. They acknowledge that they are not sophisticated people who are experienced in such matters and assert that while they did not maintain sophisticated accounting records, they have accounted for the receipt and disbursement of all assets within a few dollars.

It is their position that the administration of the Estate was difficult because it involved the liquidation of a general store and a small farming operation located in a remote area. If there was any failure on their part, they should be relieved from liability as they acted honestly and reasonably throughout. [ 34 ] The claims by the Estate will be addressed in turn. A. Conversion of Trust Property for Personal Use 1. 1995 Ford Truck. [ 35 ] The Estate claims that Ms. Tatum appropriated a 1995 Ford Truck that was part of the Estate for her own use.

The Estate seeks damages from the Applicants for the value of the vehicle and for the vehicle expenses incurred by the Estate. [ 36 ] One of the assets listed in the NC7 Application for a Grant of Probate was a 1995 Ford Truck valued at $10,000. Elaine has had possession of that truck since 2002. The current value of the truck is estimated to be $1,000.

According to the Accounting provided by the Applicants, expenses in the amount of $15,861.17 were incurred by the Estate from 2002 - 2004 for repairs, maintenance, registration and insurance of the truck. [ 37 ] Elaine Tatum and David Laboucane state that the value placed on the truck of $10,000 in the NC7 was an overstatement and that the truck was not worth more than $4,000 at the time of death. They state that they were instructed to put down approximate or estimated values on the NC7.

It is their position that the truck was used and maintained by the Estate so that Elaine Tatum could provide ongoing care for the cattle and look after the property. Both of the Applicants acknowledge that the vehicle was also used by Elaine Tatum for her personal purposes to some extent.

[ 38 ] The Estate claims that the Applicants should be charged $10,000 for the truck and, if not charged the full amount of vehicle expenses incurred by the Estate, that they should at least be assessed 25% of the 2002 vehicle expenses of $7,109.25 ($1,777.31), 90% of the 2003 vehicle expenses of $4,388.10 ($3,949.29) and 90% of the 2004 expenses of $4,363.82 ($3,927.44) for a total of $19,654.04. [ 39 ] I accept that the truck was used by Ms. Tatum both for Estate purposes and for personal purposes. I am of the view that the all of the vehicle expenses for 2002 should be the responsibility of the Estate as Ms.

Tatum spent much of that year commuting back and forth from Janvier to Fort McMurray to care for the cattle. Thereafter, Ms.

Tatum should be responsible for 50% of the vehicle expenses incurred by the Estate during 2003 and for 75% of the vehicle expenses incurred by the Estate in 2004, for a total of $5,466.92, to reflect her personal use. [ 40 ] I accept that $10,000 is the best evidence of the value of the vehicle at the time of the deceased’s death, in the absence of any further information being presented at the application beyond the Applicants’ assertion that it was worth only $4,000.00 at the time of death.

I note that if the vehicle was only worth $4,000.00, the decision to expend $6,288.76 on the vehicle in 2002 over and above the insurance and registration costs would be questionable. [ 41 ] The amount awarded to the Estate against the Applicants in respect of the vehicle is reduced from $10,000 to $7,500 to reflect a reduction in the value of the vehicle between April 2002 and August 2004 when Ms. Tatum left Fort McMurray and appropriated the vehicle to her full time personal use. [ 42 ] While it was Ms.

Tatum that had the use of this vehicle, damages are awarded jointly and severally against both Applicants as they both had signing authority and co-operated or acquiesced in the misuse of Estate property. 2. Personal Expenses [ 43 ] The Estate is seeking to recover damages for personal expenses of Elaine Tatum that were paid for by the Estate. The Applicants concede that personal expenses of Elaine Tatum in the amount of $6,576.07 which did not relate to the Estate were paid by the Estate.

The Estate is entitled to damages from both of the Applicants in this amount on the basis that they both had signing authority or cooperated or acquiesced in this misuse of Estate property. B. Failure to Provide Documentation to Account for all Estate Assets [ 44 ] The Estate is seeking to recover damages of $66,833.07 in respect of matters where the Applicants failed to document their dealings with Estate assets.

Executors who are unable to produce receipts for expenses they have charged to an estate may be required to reimburse the estate for those amounts: Re Lefebvre Estate, 2007 ABQB 195 , 419 A.R. 347, per Gill J. at paras. 38 - 39. 1. Store Inventory. [ 45 ] The Estate is claiming $53,947.45 from the Applicants as reflecting the inventory of the store operated by the deceased that was not accounted for by the Applicants to the beneficiaries.

This amount was calculated in the MNP Report based upon a handwritten inventory which Lynda Key states was completed by the deceased as at December 21, 2001 (approximately three months prior to her death) which totalled $82,407.75. That amount was adjusted to reflect a reduction for some outdated product and for the distribution of some items to beneficiaries. [ 46 ] Elaine Tatum denies that the inventory sheets (which are undated) were in her mother’s handwriting.

She claims that the inventory was substantially reduced at the time of her mother’s death from what it had been in the past as her mother had been ill for the past year and was planning to sell the store. Elaine Tatum and her sister-in-law Tara prepared an inventory of the store, that contained significantly fewer items.

[ 47 ] The reduction in the store’s inventory is consistent with the information shown on the Estate’s tax return. The Applicants state that they had discussions with the other beneficiaries as to whether the inventory from the store and their mother’s personal effects should be sold at auction or divided amongst the 11 children. It was agreed that the inventory would be divided amongst the beneficiaries and that the bulk of the food from the store would go to Gerald Laboucane who was experiencing some personal difficulties at the time.

The division was largely done by Elaine Tatum and David Laboucane’s wife Tara. They tried their best to make the piles relatively equal. Ms. Tatum’s diary contains numerous references to creating 11 piles. The other beneficiaries either picked up their pile or their items were dropped off by Ms. Tatum. [ 48 ] I accept Ms. Tatum’s evidence that the store’s inventory was distributed amongst the 11 beneficiaries in accordance with an agreement reached amongst the beneficiaries and dismiss the Estate’s claim in this regard. 2.

Bank of Nova Scotia Account [ 49 ] The Estate claims that the Applicants failed to account for the proceeds from the deceased’s bank account at the Scotia Bank in the amount of $9,649.31. [ 50 ] The deceased had a business bank account at the Scotia Bank in Fort McMurray for the Pioneer General Store, which had a balance of $10,255.94 at March 28, 2002 ($9,649.31 after taking outstanding cheques into account based on the bank reconciliation prepared prior to the deceased’s death). The balance of this account at the time of the deceased’s death, some three weeks later, according to the NC7 was only $1,585.00.

The Applicants state that they were unable to do anything with any funds in the deceased’s bank accounts after her death, other than deposit the funds into an Estate bank account. Unfortunately they have not produced a copy of the bank statement for April 2002 which would indicate what happened with the bulk of the funds in this account after March 28, 2002.

It should be noted that the NC7 showed the balance for the Royal Bank account to be $13,000 and for the Scotia Bank account to be $1,585.00 for a total of $16,585.00 whereas the combined amount actually deposited into the Estate bank account when it was initially set up on May 3, 2002 was $20,160.39. As a result, it appears that the bank balances shown in the NC7 understated the total balance of the deceased’s bank accounts at the time of her death. [ 51 ] There is no doubt the Applicants’ record keeping in this regard has not been ideal.

This issue could have been completely addressed if the bank account records for the relevant period were made available by the Applicants.

However, as I accept the Applicants’ explanation that the full amount of the bank balance in both bank accounts was transferred into the Estate bank account on May 3, 2002, the Estate’s claim in this regard is dismissed. 3. 1985 GMC Truck [ 52 ] The Estate is seeking $6,000 from the Applicants to reflect the value of a 1985 GMC 2500 Truck that was listed on the NC7, which was not accounted for as part of the Estate. [ 53 ] The Applicants’ position is that the truck in question was wrongly included in the NC7.

They state that their mother did not own a 1985 GMC 2500 Truck, which is a ¾ ton truck, but that she had owned a black 1988 Chev 1500 truck, which is a ½ ton truck. However, she had given that truck to Jim Cardinal, Elaine Tatum’s former spouse, prior to her death.

Elaine Tatum produced copies of a vehicle insurance certificate in her name dated February 2002 and repair bills in the name of Ed Tatum/Consum Contracting in respect of that vehicle dated 2000, both of which predated the death of the deceased. [ 54 ] The Applicants had no explanation for why a 1985 GMC 2500 truck was listed on the NC7, other than that was done in error. I accept that this vehicle was included in the NC7 by mistake and dismiss the Estate’s claim with respect to this vehicle. 4.

Unidentified Expenditures [ 55 ] The Estate seeks to recover the amount of $2,616.31 from the Applicants, which reflects unidentified expenditures on the

Accounting provided by them. As there were no receipts for these expenditures or any indication of what they represent, I am not satisfied that these amounts were properly charged to the Estate. The Estate is entitled to recover this amount back from the Applicants. 5. Funds not Deposited [ 56 ] The Estate seeks to recover $620 from the Applicants, in respect of funds payable to the Estate that were not reflected in the Accounting. The amount is made up of $500 rent from Mr. Janvier and $120 representing the Pepsi deposit refund. Mr. Laboucane testified that the $500 rent was paid by Mr.

Janvier in cash, which was used to purchase supplies to repair the damage caused by vandals at the Chard property and to pay for some of the repair work. I accept this explanation and dismiss the Estate’s claim for this amount. [ 57 ] With respect to the $120, while it may well have been deposited into the Estate account as part of the deposit of August 16, 2002, the records are not sufficient to reach this conclusion. As a result, the Estate is entitled to recover the amount of $120 from the Applicants. C.

Failure to Realize Assets in a Timely Manner and Wasting of Estate Property [ 58 ] Executors have a duty to realize upon estate assets in a timely manner, as was recognized in the following excerpt from J. MacKenzie, ed., Feeney’s Canadian Law of Wills , 4 th ed., looseleaf (Markham, Ont: Lexis Nexis, 2000) at para. 8.17 [footnotes omitted]: The executor must not unreasonably delay in getting in the assets and settling the affairs of the estate and will be personally responsible for any loss occasioned by undue delay.

There is no hard and fast rule as to what constitutes undue or unreasonable delay, but it is the practice to speak of the executor’s or administrator’s year and the courts attach importance to the question whether the alleged failure to convert or realize assets that resulted in the loss to the estate occurred within or beyond a year. Therefore, all investments that are not proper to retain should be realized within a year of the testator’s death or, in the case of an administration, within a year of the date of the grant.

Normally, too, other residuary property should be liquidated and distribution made within one year. [ 59 ] The most significant asset of the Estate was the real property, being the deceased’s residence and store in Chard, Alberta, which was attributed a value of $257,000 in the NC7. This value was based upon appraisals obtained by the deceased in 1995 of $170,000 for the store and $87,000 for her home. [ 60 ] The property was not sold until December 2007, more than five years after the death of the deceased, for a price of $210,000.

The Estate’s position is that the Applicants failed to make adequate attempts to sell the property as it was only listed sporadically (e.g. from November 22, 2002 - July 31, 2003, November 24, 2003 - May 31, 2003, May 4, 2005 - October 21, 2005 and April 19, 2007 - December 6, 2007). [ 61 ] The Applicants state that they tried to sell the property but they only received one other offer of $100,000, which they rejected. [ 62 ] I am satisfied that reasonable efforts were made to sell the property up until May 31, 2003. Thereafter, the property was only listed for 14 months of the next 4 ½ years.

No explanation was provided as to why the property was not listed for sale for approximately two years from June 1, 2003 until May 3, 2005 or for approximately 18 months from October 22, 2005 until April 18, 2007. [ 63 ] The property in Chard, Alberta was occupied by Gilbert Janvier from October 2004 to December 2007. Mr. Janvier had originally agreed to pay $500/month and provided one month’s rent. He complained the rent was too high and refused to pay any further rent.

As he was paying the utilities and providing security for the property, the executors let him stay. [ 64 ] Where an executor permits tenants to live rent-free in estate property and the court is satisfied that the property was capable of earning rent money for the estate during that period of time, the executor can be held responsible to the estate for the rental income that was lost as a result: Re Sowa (Estate) , 2003 ABQB 761 per Veit J., at para. 3.

[ 65 ] The Estate is claiming $22,500 representing lost rent, that is, from January 2004 to October 2007 at $500/month, excluding October 2004 for which rent was paid. As Mr. Janvier moved into the property in October 2004, the basis for claiming rent from January 2004 - October 2004 is unclear. [ 66 ] While I am not satisfied that the Applicants would have been successful in renting the property for $500/month given its remote location, there is insufficient evidence that they took reasonable steps to generate revenue pending the sale of the property. I am prepared to accept that it was reasonable to have Mr.

Janvier remain in the property rent-free for security reasons for some period of time, however, I am not satisfied that it was reasonable that this arrangement would continue for approximately three years, which may not have been the case if the property had been more actively marketed. [ 67 ] The Estate is entitled to damages from the Applicants in the amount of $5,000 for their delay in marketing the property while the property was not generating revenue, while costs for utilities and property taxes continued to be incurred. [ 68 ] The Estate paid $9,047.10 to Surmont Sand & Gravel Ltd., a company owned by David Laboucane, to remove shelving from the Pioneer General Store.

The shelving was taken to auction but not sold and ultimately discarded. The removal expense was a benefit to David but a worthless expense to the Estate. The Estate’s position is that the executors should have obtained an appraisal of the shelving before removing it for sale. D. Penalty [ 69 ] The Estate is also asking the court to impose a penalty of $8,000.00 on the Applicants for executor misconduct. I decline to do so as I am satisfied that the charges awarded against them and the costs award addressed below is sufficient sanction for their conduct. VII.

The Applicants’ Claim for Reimbursement of Expenses and Compensation [ 70 ] As outlined above, both Elaine Tatum and David Laboucane are seeking reimbursement for expenses which they incurred personally on behalf of the Estate. In addition, Elaine Tatum is also seeking compensation for the services she provided to the Estate. [ 71 ] Compensation for personal representatives and reimbursement of expenses incurred by them are dealt with in

Schedule 1,

Part 1 of the Surrogate Rules, which provides in part: 1(1) Personal representatives may receive fair and reasonable compensation for their responsibility in administering an estate by performing the personal representatives’ duties.

(2) Compensation paid to a personal representative is for all the services performed by the personal representative to complete the administration of the estate including distribution of the estate and conclusion of any trusts. ... 2 The following factors are relevant when determine the compensation charged by or allowed to personal representatives: (

a) the gross value of the estate;

(

b) the amount of revenue receipts and disbursements; (

c) the complexity of the work involved and whether any difficult or unusual questions were raised; (

d) the amount of skill, labour, responsibility, technological support and specialized knowledge required; (

e) the time expended; (

f) the number and complexity of tasks delegated to others; (

g) the number of personal representatives appointed in the will, if any. ... 5 The compensation once determined must be shared among the personal representatives in proportions agreed to among the personal representatives or as ordered by the court. ... 9 Personal representatives are entitled to reimbursement for expenses properly incurred by them in the administration of the estate, including the following: (

a) expenses reasonably incurred by the personal representatives in carrying out their duties; (

b) fees or commissions to agents, including lawyers, accountants, real estate agents, securities brokers, investment advisors, appraisers, auctioneers and other professionals, engaged to perform estate administration services or to buy or sell estate property.

David Laboucane’s Expenses [ 72 ] David Laboucane is seeking reimbursement in the amount of $18,735.82 for the following expenses incurred by him personally in respect of the Estate: Property taxes and utilities for the Janvier properties from 2004 - 2008 $ 8,697.22 Professional Fees paid to Thomas Maccagno $ 204.00 Accounting Fees paid to Kinal Brown & Associates $ 787.50 Account of Surmont Sand & Gravel Ltd. for dismantling the shelving $ 9,047.10 Total: $18,735.82 [ 73 ] After 2004, the Estate did not have sufficient funds in the Estate bank account to pay for ongoing utility expenses and property taxes in respect of the Janvier properties.

As a result, these expenses were paid personally by Mr. Laboucane. The amount of $8,697.22 sought to be recovered by David Laboucane for property taxes (including penalties) and utilities (beyond those paid by Mr. Janvier) is based upon the MNP Report, which was a document commissioned by and put in evidence by the Estate. I am satisfied that these amounts were paid by Mr. Laboucane in respect of the Estate, and that they should be recoverable by him. I also accept that Tom Maccanyo’s account of $204 and the Kinal Brown account of $787.50 represent expenses of the Estate that were paid for by Mr.

Laboucane, for which he has not yet been reimbursed, and for which he should be reimbursed. [ 74 ] David Laboucane states that before closing of the sale of the real property the purchaser insisted that the shelving in the store be removed. Mr. Laboucane had his company Surmont Sand & Gravel Ltd. remove the shelving at a cost of $9,047.10. The cost was in

part due to the care taken to salvage the shelving so that it could be transported to Nisku, to be sold at auction. Unfortunately the shelving only generated proceeds of $29.15. Mr.

Laboucane did not obtain an appraisal of the value of the shelving or an estimate from a third party as to the costs of removing the shelving before having the work done by his company. [ 75 ] The Estate takes the position that the invoice from Surmont Sand & Gravel Ltd. in the amount of $9,047.10 for removing the shelving should not be recoverable as the expense was inappropriate and likely charged for the sole purpose of generating income for Mr.

Laboucane’s company. [ 76 ] While it may have been preferable to have obtained an appraisal or an estimate from a third party before incurring an expense of this magnitude, I am not satisfied that was necessary in the circumstances given the location of the store. Further, while in hindsight it may be apparent that the cost of removing the shelving in order to preserve it for resale was not justified, I accept that the cost was reasonably incurred in good faith with the expectation that salvaging the shelving for sale at auction would be in the best interests of the Estate. Mr.

Laboucane is entitled to be reimbursed for the expenses incurred by Surmont in relation to the removal of the shelving. Elaine Tatum’s Expenses and Claim for Compensation [ 77 ] Elaine Tatum is seeking reimbursement of $1,916.74 for food ($429.05 and $48) and flowers ($959.79 and $479.90) which she purchased at the time of the funeral for which she has not been reimbursed. The receipts provided for food were a Costco till receipt dated April 23, 2002 in the amount of $429.05 and a visa slip from Fiddler’s Food & Gas in Lac La Biche in the amount of $48 dated April 27, 2002.

I am satisfied that both of these receipts constitute expenses incurred by Ms. Tatum on behalf of the Estate, for which she should be reimbursed. While the Fiddler’s visa slip is dated after the funeral which was held on April 25, 2002, I accept Ms. Tatum’s explanation that family members stayed around and continued to meet at the hall for a couple of days thereafter. [ 78 ] Ms.

Tatum seeks to recover $1,439.69 for the cost of flowers for the funeral based upon a debit slip from Bunches dated April 22, 2010 in the amount of $479.90 and a Bunches’ till receipt marked “COPY” in the amount of $959.79 dated April 22, 2010. The Estate disputes that Ms. Tatum is entitled to be reimbursed for these expenses based upon Affidavit evidence from Shirley McKay and Darlene Tatum. It is their evidence that Darlene Tatum and Lynda Key had agreed to personally split the cost of the flowers for the funeral. Shirley McKay, Darlene Tatum, Elaine Tatum and Lynda Key attended at Bunches to select flowers.

When it was time to pay, Elaine Tatum asked if Lynda Key would give her cash and let Elaine put Lynda’s half of the bill on her debit card as she had exceeded her ATM cash withdrawal limit. I am satisfied that this is what occurred and deny Elaine Tatum’s claim for recovery of the flower expenses. [ 79 ] Elaine Tatum seeks compensation in the amount of $15,000 for services that she provided to the Estate. Ms. Tatum maintained a detailed diary from May 2, 2002 - December 11, 2002 in which she recorded in detail the activities she performed in relation to the Estate and the time associated with those activities.

The diary is 150 pages long and indicates that she spent 991.5 hours from May to September, 2002 and a further 200 hours between October and December, 2002. She acknowledged on cross-examination that not all of the hours listed relate to hours for which she is seeking to be compensated. I have reviewed the diary in detail and am satisfied that the hours shown generally appear reasonable for the items described and are primarily with respect to matters that relate to the administration of the Estate.

Her counsel suggests that $15,000, based upon 1,000 hours at $15/ hour, is reasonable and appropriate compensation. [ 80 ] Notwithstanding that there were some difficulties and delays with respect to some aspects of the administration of the Estate, Ms. Tatum did a tremendous amount of work on Estate matters in 2002 and there is no doubt that administering the Estate constituted a major disruption in her life. Ms. Tatum had young children at the time and spent much of the period from May through October 2002 residing in Janvier to care for the cattle.

She hired a nanny for three months at a cost of $900 per month, which she is also claiming. While her nanny expenses are not recoverable from the Estate, I am satisfied $15,000 is appropriate compensation for the services that she provided to the Estate. In reaching this conclusion I have taken into account that this calculation does not include all of her recorded hours, or any compensation for services that she provided to the Estate after 2002. VIII. Costs [ 81 ] The Estate is seeking solicitor and client costs in this matter.

The costs incurred prior to the hearing of this application were in the amount of $37,431.82.

[ 82 ] While costs in estate litigation are often borne by the estate, that principle will not apply where that would be unjust in the circumstances.

Solicitor and client costs have been awarded against an executor in circumstances where there was “protracted litigation due to the conduct of one party, personal use of estate funds, failure to disclose and conduct by a party that should not be sanctioned”: Re Mittelstadt Estate , 2002 ABQB 656 per Nation J. at paragraph 29, or for costs incurred by beneficiaries in attempting to force an executor “to fufill his duties and in having him removed for his breaches of duty and failures to comply with court orders”: Re Gibbons Estate , 2009 ABQB 587 per Shelley J., at paragraph 20. [ 83 ] In this case, the Applicants proceeded with considerable diligence during the first two years following the death of their mother to deal with the Estate which involved dividing the deceased’s personal property and the store inventory amongst the 11 beneficiaries, the care and disposition of cattle, the remediation of a gas tank site, the disposal of farm equipment and the care of a house and store in a relatively remote location.

However, thereafter the Applicants failed to actively market the real property, whose retention was costing the Estate utility costs and property taxes while generating no rental income. Most importantly, the Applicants failed to account in any way to the other beneficiaries for more than five years, which led to an application by Shirley McKay to compel an accounting. Despite four court orders which directed that an accounting be provided between September 19, 2007 and August 8, 2008, no accounting information was made available to the other beneficiaries until September 19, 2008.

The Applicants were subsequently replaced as personal representatives of the Estate on November 27, 2008. It was not until December 10, 2010 that the Accounting which forms the basis for this application was produced.

No explanation was provided by the Applicants at the hearing of this application as to why they failed to provide an earlier accounting and, in particular, why the court orders to do so were not complied with. [ 84 ] In my view, the Applicants’ conduct in failing to account for five years and for failing to respond to the court orders is the type of misconduct by executors that justifies an award of solicitor and client costs. The Estate is entitled to recover its solicitor and client costs up to December 10, 2010, when the Accounting was provided.

Thereafter, I am of the view that the legal costs incurred by the Estate in relation to this application should be borne by the Estate. The Applicants are responsible for their own legal costs throughout. IX.

Conclusion [ 85 ] The Accounting provided by the Applicants is approved, subject to the modifications described herein. [ 86 ] David Laboucane is entitled to recover $18,735.82 from the Estate as reimbursement for Estate expenses incurred by him personally. [ 87 ] Elaine Tatum is entitled to recover $479.90 from the Estate as reimbursement for Estate expense incurred by her personally and to compensation from the Estate in the amount of $15,000 for services provided by her to the Estate. [ 88 ] The Applicants are jointly and severally liable to the Estate for damages in the amount of $26,188.34, as outlined below, and the Estate is entitled to judgment against them in that amount: Appropriation of the 1995 Ford Truck $ 7,500.00 Personal Use of the 1995 Ford Truck $ 5,466.92 Personal Expenses $ 6,576.07 Unidentified Expenses $ 2,616.31 Unrecorded Deposits $ 120.00 Damages for delay in renting the home $ 5,000.00 Total: $27,279.30

[ 89 ] While the Applicants are jointly and severally liable to the Estate for these items, as between David Laboucane and Elaine Tatum, Ms. Tatum is responsible for $19,542.99 in respect of the 1995 Ford Truck and the Personal Expenses. [ 90 ] The Estate is entitled to solicitor and client costs from the Applicants up to December 10, 2010. Thereafter, the Estate is entitled to its costs in relation to this application from the Estate.

The Applicants are responsible for their own legal costs throughout, with the exception of those legal fees already addressed in the Accounting. [ 91 ] The Estate is entitled to set-off any amounts owed to David Laboucane or Elaine Tatum as reimbursement for expenses, as compensation or as beneficiaries of the Estate against the damages awarded against them. Heard on the 31 st day of March and 1 st day of April, 2011. Dated at the City of Ft. McMurray, Alberta this 19 th day of April, 2011. J. Strekaf J.C.Q.B.A. Appearances: Crista C.

Osualdini McLennan Ross LLP for the Respondent Robert Gillespie for David Laboucane and Elaine Tatum