2020 NBCA 12, 2020 NBCA 12

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 24-19-CA WYNN W. MELDRUM, as Executor of the Last Will and Testament of DONALD LINDSEY JOHNSTONE APPELLANT WYNN W. MELDRUM, en sa qualité d’exécuteur testamentaire de DONALD LINDSEY JOHNSTONE APPELANT - and - - et - DEBORAH JOHNSTONE RESPONDENT DEBORAH JOHNSTONE INTIMÉE Meldrum as Executor of the Last Will and Testament of Donald Lindsey Johnstone v.

Johnstone , 2020 NBCA 12 CORAM: The Honourable Justice French The Honourable Justice LaVigne The Honourable Justice LeBlond Meldrum, en sa qualité d’exécuteur testamentaire de Donald Lindsey Johnstone c.

Johnstone , 2020 NBCA 12 CORAM : l’honorable juge French l’honorable juge LaVigne l’honorable juge LeBlond Appeal from a decision of the Court of Queen’s Bench: February 22, 2019 Appel d’une décision de la Cour du Banc de la Reine : le 22 février 2019 History of Case: Historique de la cause : Decision under appeal: 2019 NBQB 37 Décision frappée d’appel : 2019 NBBR 37 Preliminary or incidental proceedings: None Procédures préliminaires ou accessoires : aucune Appeal heard: September 16, 2019 Appel entendu : le 16 septembre 2019 Judgment rendered: February 20, 2020 Jugement rendu : le 20 février 2020

Reasons for judgment by: The Honourable Justice LeBlond Concurred in by: The Honourable Justice French The Honourable Justice LaVigne Counsel at hearing: Wynn W. Meldrum on his own behalf For the Respondent: Monica L. Barley Motifs de jugement : l’honorable juge LeBlond Souscrivent aux motifs : l’honorable juge French l’honorable juge LaVigne Avocats à l’audience : Wynn W. Meldrum en son propre nom Pour l’intimée : Monica L. Barley THE COURT The appeal is allowed in part. The Probate Court’s decision ordering the reimbursement of $288,953.89 by Mr. Meldrum to the estate is set aside. In its place, Mr.

Meldrum is ordered to reimburse $75,822.73 to the estate. The loss of interest award of $20,000 is set aside and substituted with an award of $3,000, payable by Mr. Meldrum to the estate. The appeal of the decision to postpone the determination of all outstanding matters to a later date is dismissed. There will be no award of costs. LA COUR L’appel est accueilli en partie. La décision de la Cour des successions ordonnant à M. Meldrum de rembourser la somme de 288 953,89 $ à la succession est annulée. À sa place, il est ordonné à M. Meldrum de rembourser la somme de 75 822,73 $ à la succession.

L’attribution de 20 000 $ au

titre de la perte d’intérêts est annulée et remplacée par une attribution de 3 000 $ payable à la succession par M. Meldrum. L’appel de la décision de reporter la détermination de toutes les questions qu’il reste à trancher est rejeté. Aucuns dépens ne sont adjugés. The judgment of the Court was delivered by LEBLOND, J.A. I. Introduction [ 1 ] The appellant, Wynn W. Meldrum, was the executor of the estate of Donald Lindsay Johnstone, who passed away on June 11, 2013. In his last Will and Testament, Mr. Johnstone bequeathed 5% of the asset value of his estate to Mr.

Meldrum to be paid in priority to all other bequests. This bequest was to be in lieu of executor’s fees. [ 2 ] Mr. Johnstone then bequeathed a house to his daughter, Danica Johnstone, provided certain conditions were met. [ 3 ] The residue of the estate was divided into three equal portions bequeathed to his wife, the Respondent Deborah Johnstone, and to his two daughters from a previous marriage, Jennifer Dawn Irvin and Kelly Anne Rose Folkins.

[ 4 ] Mr. Meldrum applied to probate Mr. Johnstone’s Will on June 24, 2013. He filed an inventory estimating the value of the estate at $2,700,000. There was evidence before the probate judge to the effect the estate could have a value of as much as $6,500,000, but the actual value was not determined by the judge. The main assets of the estate consisted of shares in two companies wholly owned by Mr. Johnstone: Birchbark Holdings Ltd., which operated a bowling alley; and Birchwood Holdings Ltd., a residential and commercial leasing company, both based in Sackville, New Brunswick. [ 5 ] In July 2013, Ms.

Johnstone advised Mr. Meldrum she took issue with a bequest to her of only one third of the estate. On September 11, 2013, she filed a Notice of Application seeking relief under the Marital Property Act , R.S.N.B. 2012, c. 107 , and the Provisions for Dependents Act , R.S.N.B. 2012, c. 111 . The objective of these proceedings was for Ms. Johnstone to secure a larger portion of the estate for herself.

Therefore, to the extent the shareholdings of the two companies would be at stake, in terms of their apportionment for distribution purposes, issues of corporate, estate and taxation law would be in play. [ 6 ] Additional litigation ensued including, firstly, an application seeking the enforcement of an agreement negotiated to resolve the claims of Ms. Johnstone, Ms. Irvin and Ms. Folkins, and another application seeking an

interpretation of the Will. In total, three Notices of Action, six Notices of Application and several Notices of Motion were filed, consisting of several thousand pages of materials, which led to several hearings as well as a number of case management and settlement conferences. [ 7 ] Mr. Meldrum, a practising lawyer, had not previously been involved in estate litigation of this nature and, as a result, he retained the services of Brian Forbes, Q.C. to assist him. He testified that the marital property application of Ms. Johnstone as well as the litigation initiated by Ms. Folkins and Ms.

Irvin stood to complicate matters considerably and he needed the expertise and resources Mr. Forbes could provide. [ 8 ] The fees paid to Mr. Forbes by the estate are at the heart of this appeal. Given the complexities of the litigation, Mr. Forbes’ involvement was extensive. It is apparent from reviewing the judge’s decision that he was of the opinion Mr. Meldrum had little understanding of the many issues associated with probating this estate, which was why he hired Mr. Forbes. [ 9 ] Between July 11, 2013, when Mr.

Forbes was first retained, and November 17, 2017, the date of his last statement of account, he billed Mr. Meldrum $325,806.50 plus HST for his fees. In addition, he also billed his disbursements, but none of these are in dispute. Nine statements of account were issued and the first eight were paid by Mr. Meldrum with estate funds. The last account was not paid. In total, Mr. Forbes was paid $409,929.38, inclusive of all fees, disbursements and HST. [ 10 ] To the extent of the dispute over the fees charged by Mr. Forbes, this case clearly called for a principled and orderly analysis of Mr.

Forbes’ statements of account. The record before us establishes that counsel for Mr. Meldrum, at the passing of accounts hearing, asked the judge whether he would request a taxation of the accounts and if so, what process he wished to follow. Although counsel for Ms.

Johnstone argued the time had expired to conduct a formal taxation, the judge was initially of the view there was no prescription issue pursuant to the applicable wording of the Law Society Act, 1996 , S.N.B. 1996, c. 89 , and he asked whether he should await the findings of a review officer following a formal taxation before going any further. [ 11 ] Again, counsel for Ms. Johnstone argued the issue was properly before the court and that a taxation would not generate any better information.

The judge, correctly in my view, pointed out that a taxation officer would review the accounts in detail and that, because he expressed having no intention of doing that himself, taxation would be the preferable option to pursue. Obviously, if the judge chose to assess the reasonableness of the accounts himself, which he was certainly entitled to do, he was required, at law, to carefully examine the accounts without necessarily having to do so line by line.

A cursory examination of the accounts though would not suffice. [ 12 ] Rather than pursuing the taxation option, the judge chose to commence hearing evidence at the passing of accounts but indicated that the parties should remain open to taxation later on. [ 13 ] Approximately midway through Ms. Johnstone’s cross-examination of Mr. Meldrum dealing with the Forbes accounts, the judge again raised the prospect of taxation. Indeed, counsel for Mr. Meldrum specifically asked the judge whether Mr. Forbes should be advised of the concerns raised by Ms. Johnstone, to which the judge replied he did not know. [ 14 ] Mr.

Meldrum’s counsel offered to bring Mr. Forbes before the court to introduce his affidavit filed in support of the accounts and to offer him up for cross-examination. In response, counsel for Ms. Johnstone stated, for the record:

That’s not necessary. We don’t take any issue with Mr. Forbes’ affidavit being admitted [into evidence] as submitted and we do not intend on cross-examining Mr. Forbes on his affidavit. [ 15 ] The judge chose to deal with the assessment of reasonableness of the accounts on his own. Although, as I indicated, it was entirely permissible for him to do that, as will be seen, he did not resort to the proper legal principles in conducting his analysis and thus committed reversible error. [ 16 ] The hearing proceeded with most of the evidence before the probate judge purporting to be a taxation of Mr.

Forbes’ accounts, conducted through Ms. Johnstone’s cross-examination of Mr. Meldrum, without the benefit of hearing from Mr. Forbes. While Ms. Johnstone’s counsel initially felt questions relating to Mr. Forbes’ accounts could be answered by Mr. Meldrum, because of his inability to properly address most of them, he was left to either indicate he could not answer or engage in speculation. [ 17 ] The probate judge found Mr. Forbes’ fees to be “grossly excessive” with respect to the work required of him. He arbitrarily found that only 25% of the fees were for the account of the estate, and he ordered Mr.

Meldrum to personally reimburse the estate, forthwith, the remaining 75% which he calculated at $288,953.89 inclusive of HST. In other words, he found that the extensive work done over a four-year period involving all of the activity described below had a value of only $83,784.76 plus HST by his calculations. By my calculations, that amount should be $81,451. There was evidence before the court that Ms. Johnstone’s own legal fees exceeded $200,000 over the same time period, but no one raised any issue as to their reasonableness. There is no question the work required of Mr.

Forbes was far more extensive than the work required of counsel for Ms. Johnstone. [ 18 ] The probate judge also found Mr. Meldrum had failed to invest an amount of approximately $1,000,000 of estate funds in an interest-bearing account for over one year, thus depriving the estate of a return on those funds. He assessed this loss at $20,000 and again, ordered Mr. Meldrum to pay this amount to the estate. [ 19 ] Mr. Meldrum appeals both Orders and alleges other errors which will be dealt with below. [ 20 ] Mr.

Meldrum charged the estate executor’s fees of $8,594.78, but the probate judge denied payment of the same for the reason set out in paragraph one; his bequest was to be in lieu of executor’s fees. That part of the decision is not appealed. [ 21 ] Finally, the judge ordered any outstanding issues could be dealt with at a later date and retained jurisdiction to do so. Mr. Meldrum appeals that part of the decision. [ 22 ] For the reasons set out below, I would allow the appeal, in part, with respect to the Orders of reimbursement of legal fees and payment of interest income.

Relying on the proportionality principle of Rule 1.02.1 of the Rules of Court , (see Johnson v. State Farm Fire and Casualty Company , 2015 NBCA 4 , 429 N.B.R. (2d) 251 ), so as not to increase costs any further for the parties by having the matter returned for a proper assessment, I have conducted my own based on the evidence in the record. I would set aside the Order of reimbursement in the amount of $288,953.89, and I would substitute it with an Order of reimbursement of $75,822.73 plus HST in accordance with the analysis set out below.

I would set aside the loss of interest award of $20,000, and I would replace it by an award of $3,000. Finally, I would deny the appeal of the decision to postpone the determination of outstanding matters to a later date. II. Factual Context [ 23 ] From the moment Mr. Forbes was retained to assist Mr. Meldrum with the litigation matters arising from the administration of this estate, he took on the role of main spokesperson for the estate. In addition to providing Mr. Meldrum advice on estate administration and handling the multiplicity of legal proceedings, Mr. Forbes also pursued the personal bequest to Mr.

Meldrum. There is also evidence to the effect that Mr. Forbes was perhaps doing work which should more appropriately have been done by Mr. Meldrum in his capacity as executor. [ 24 ] Early in the administration of the estate, a potential agreement was negotiated between Ms. Johnstone and her step-daughters, Ms. Irvin and Ms. Folkins, to pay the latters’ bequests. This agreement required corporations owned by Mr. Johnstone, and now operated by Ms. Johnstone, to secure bank financing to pay Ms. Irvin and Ms. Folkins. Because of delay and other complicating

factors, the agreement fell through and was abandoned. The proposed payment would have generated significant tax consequences. [ 25 ] On July 19, 2018, Mr. Meldrum resigned as executor and was replaced by Ms. Johnstone. In the affidavit supporting her position at the passing of accounts hearing, Ms. Johnstone expressed difficulty in understanding Mr. Forbes’ accounts but did not provide any particulars as to what the concerns might be, apart from a general comment about two lawyers working on the file. She does raise the issue of work done by Mr. Forbes relating to Mr.

Meldrum’s personal bequest, but does not point to any specific time entry on any of the accounts relating to this. [ 26 ] The only evidence before the probate judge relating to the reasonableness of the fees charged by Mr. Forbes was the latter’s affidavit in which he states why, in his view, all charges were reasonable. Recall that, notwithstanding Ms. Johnstone’s strong objection to the amounts charged, her counsel expressed no reservations with respect to Mr. Forbes’ affidavit and consented to its admissibility into evidence. Moreover, Ms.

Johnstone’s counsel advised the probate judge she would not seek to cross-examine Mr. Forbes on his statements of account or his affidavit. In the end, Mr. Forbes did not testify. III. Grounds of Appeal [ 27 ] While the Notice of Appeal lists eight grounds of appeal, Mr. Meldrum submits that the grounds can be better categorized in the following manner. He framed his appeal to deal with five key questions: 1) Did the trial judge err in law by failing to provide adequate reasons for his decision:

a) with respect to the loss of income on estate funds?

b) with respect to the reasonableness of the legal fees?

c) with respect to the reasonableness of the disbursements? 2) Did the trial judge err in law and fact by:

a) disregarding material evidence; and/or

b) misapprehending the facts, specifically relating to the reasonableness of the legal fees? 3) Did the trial judge err in law by failing to apply the rule in Browne v. Dunn (1893), 1893 CanLII 65 (FOREP) , 6 R. 67 (U.K.H.L.) ? 4) Did the trial judge err in law by failing to apply the correct standard of care to which an executor is held pursuant to the applicable legislation and jurisprudence? 5) Did the trial judge err in law in postponing the determination of certain matters while allowing other matters to be heard? IV. Analysis [ 28 ] The appeal can be decided by addressing questions 1

a) and

b) and 2

a) and b). The reasonableness of the disbursements charged by Mr. Forbes was not raised by the probate judge and is not a matter before us. It need not be dealt with. [ 29 ] Question 3 relating to the rule in Browne v. Dunn has no application to the case before us. It presumably was raised in relation to Mr. Forbes’ affidavit which, as noted, was admitted into evidence without any objection. The fact it was used for purposes of cross-examination of Mr. Meldrum does not bring the rule into play. See Gillis v. R. , 2014 NBCA 58 , 426 N.B.R. (2d) 1 .

[ 30 ] Question 4 relates to allegations of negligence made during the course of the hearing against Mr. Meldrum in his capacity as executor. However, that issue is subsumed into the questions discussed below and need not be dealt with as a separate issue. [ 31 ] Finally, I find no error was made by postponing the determination of certain matters while allowing others to be heard. The jurisdiction given to the probate judge is sufficiently broad to permit such an Order. [ 32 ] I now turn to the analysis of the four questions required to decide this appeal. A. Fees [ 33 ] The analysis of Mr. Forbes’ affidavit by the probate judge appears to begin at para. 38 of his decision. He provides a

summary of the affidavit along with brief commentary. He does not assess the factors to be reviewed in assessing the reasonableness of lawyers’ accounts generally, or of Mr. Forbes’ accounts specifically. These factors will be discussed below. [ 34 ] The judge refers to the accounts but simply paraphrases Mr. Forbes’ affidavit with respect to each account without making any specific findings as to the reasons why some portion, or all of them, might be unreasonable. [ 35 ] The decision is sprinkled with the judge’s impressions of Mr. Forbes undertaking work Mr.

Meldrum should have been doing as executor, without reference to any specific work or time entry which should be carved out for this purpose. [ 36 ] The judge also refers to the “gift” Mr. Meldrum was bequeathed in Mr. Johnstone’s Will and the fact that Mr. Forbes was charging time to the estate to look after Mr. Meldrum’s interest; but again, no assessment is made by the judge as to what, if anything, should be carved out for this and for what reason. Although, as the judge noted, there was nothing in Mr.

Forbes’ affidavit which deals with this work, the evidence is to the effect that any work done relating to Mr. Meldrum’s personal bequest was done as part of the ongoing negotiations and disputes relating to all the bequests for all beneficiaries. After all, Mr. Meldrum’s bequest, in the end, required a simple mathematical calculation: 5% of the asset value of the estate. [ 37 ] This is perhaps the appropriate time to point out that there is nothing inherently wrong with a solicitor doing work on behalf of an executor relating to a bequest to the latter.

It forms part of the administration of the estate for which the executor is required to account, much as he would with respect to his compensation as executor. The case can therefore be made that the executor is entitled to at least some indemnification for the solicitor’s fees incurred in relation to the work associated with the bequest. Although there is conflicting case law on this point, I subscribe to the principles set out in Kanee Estate (Re) , [1991] B.C.J. No. 3018 (S.C.) (QL) , leave to appeal to B.C.C.A. refused, [1991] B.C.J. No. 2857 (QL) , affirmed [1992] B.C.J. No. 1480 (C.A.) (QL) ; and Furtney v.

Furtney , 2014 ONSC 3774 , [2014] O.J. No. 3063 (QL) which are supportive of the above proposition. [ 38 ] The judge’s legal analysis firstly acknowledges his broad jurisdiction at a passing of accounts hearing under s. 71(1) of the Probate Court Act , S.N.B. 1982, c. P-17.1 .

He correctly notes a judge is specifically empowered “[…] to enter into and make a full inquiry […]” of the administration and distribution of the deceased’s property “[…] in as full and ample a manner as the Court considers necessary, and for such purpose may take evidence […].” The judge also noted the provisions of ss. 71(2), (3) and (9) which provide as follows:

Power of the Court to make inquiry 71

(2) The Court, on passing any accounts under this section, has power to inquire into any complaint or claim, by any person interested in such accounts, of misconduct, neglect or default on the part of the personal representative occasioning financial loss to the estate or trust fund, and the Court, on proof of such claim, may order the personal representative to pay such sum by way of damages or otherwise as it considers proper and just to the estate or trust fund, but any order made under this subsection is subject to appeal. 71

(3) The Court may order the trial of an issue of any complaint or claim under subsection (2), and in such case it shall make all necessary directions as to pleadings, production of documents and otherwise in connection with the issue. 71

(9) Where accounts submitted to the Court are of an intricate or complicated character and in the opinion of the Court require expert investigation, it may appoint an accountant or other skilled person to investigate and to assist it in auditing the accounts. Pouvoir de la Cour d’enquêter 71

(2) La Cour, avant l’approbation des comptes en vertu du présent article, peut s’enquérir de toute plainte ou réclamation adressée par toute personne intéressée aux comptes qui invoque la mauvaise gestion, la négligence ou le défaut du représentant personnel causant une perte financière à la succession ou à son fonds de fiducie; la Cour peut, si elle est convaincue du bien-fondé de la demande, ordonner au représentant personnel de verser à la succession ou à son fonds de fiducie, à

titre de dommages-intérêts ou autre, toute somme qu’elle estime raisonnable pour la succession ou fonds de fiducie; toutefois, toute ordonnance rendue en application du présent

article est susceptible d’appel. 71

(3) La Cour peut ordonner qu’une plainte ou qu’une réclamation fasse l’objet d’un procès en application du paragraphe (2) et, dans ce cas, elle donne toutes directives nécessaires quant aux mémoires, documents à produire ou autres pièces utiles se rapportant au litige. 71

(9) Lorsque la Cour estime que la complexité des comptes qui lui sont soumis requiert les services d’experts, elle peut nommer un comptable ou autre spécialiste pour étudier les comptes et l’aider à en faire la vérification. [ 39 ] I leave for another day the issue of whether the judge could have required the attendance of Mr.

Forbes at the passing of accounts hearing, or whether he could have referred the accounts to taxation, all in accordance with the powers conferred upon him by the Act . [ 40 ] At para. 126, the judge quotes Oosterhoff on Wills and Successions , 7 th ed. (Toronto: Thomson Reuters Canada Limited, 2011), at p. 57, with reference to fees payable to the estate’s solicitor: “The judge has the authority to vary the bill of costs or to refer it for taxation ” (emphasis added).

Although, as noted earlier, the judge raised the prospect of taxation at the beginning of the hearing, he did not pursue it. [ 41 ] Rather than invoke the broad powers at his disposal to assess the reasonableness of Mr. Forbes’ accounts, the judge chose to make arbitrary comments, such as the ones below: […] Furthermore, at all relevant times and in all likelihood , solicitor Forbes always brought to the forefront Mr. Meldrum[’s] bequest interest in all discussions for a settlement between the beneficiaries and how it would be quantified. As a result, Mr.

Meldrum failed to exercise due diligence as a prudent person would in the conduct of his obligations in the exercise of

his duty as executor. In all likelihood , Mr. Meldrum blindly preferred his own interest over that of the other beneficiaries. […] The Court believe[s] that all delays in the administration of this Estate [are] Mr. Meldrum’s fault and [he] must accept his responsibility in that regard. [paras. 121-22, 125] [Emphasis added.] Beliefs or likelihoods, which are not the product of a proper exercise of jurisdiction or discretion, nor the product of a proper assessment of evidence, cannot withstand scrutiny.

It is on that basis the four questions for determination in this appeal will be addressed. [ 42 ] The judge engaged in speculation and conjecture to come to his ultimate conclusion. For instance, rather than properly analyze the basis upon which Mr. Forbes involved a junior lawyer to assist him, he wrote: “He [Mr. Forbes] cannot be serious” (para. 134). Clearly, as an officer of the court, Mr. Forbes is deemed to have been absolutely serious and truthful with respect to all statements deposed in his affidavit. That was the only evidence before the judge.

Without resorting to the tools provided by s. 71(2) of the Probate Court Act to inquire further, the judge’s conclusion is arbitrary. [ 43 ] The judge cites Re: Eisenbeis (Estate of) , 2005 ABQB 229 , [2005] A.J. No. 341 (QL) , for the proposition that an executor may be personally liable for legal fees incurred in excess of what is reasonable in the circumstances. That is a correct statement of the law. But while he acknowledges Mr. Meldrum was unable to explain the entries in Mr. Forbes’ accounts, the judge was not satisfied with Mr. Forbes’ affidavit explanations.

In order to determine the reasonableness of the accounts, the judge needed to draw on his broad jurisdiction, as set out above, and determine, on a principled and orderly basis, what fees were properly attributable to the estate. [ 44 ] The exercise of determining if the fees charged were reasonable in the circumstances must be done judiciously. To the extent the judge may have required assistance to do that assessment, it is available under s. 71(9).

It is not open to the judge to make an arbitrary assessment without the benefit of a meaningful review of the accounts. [ 45 ] In the end, the judge found the fees charged to be “grossly excessive” (para. 136). However, there is nothing in the decision to specifically tell the parties what portions of Mr. Forbes’ accounts he felt were unreasonable and for what reasons.

His failure to do so results in reversible error because, in selecting an arbitrary amount for reasonable fees without a full analysis of the evidence before him, he failed to provide adequate reasons for his decision and either disregarded or misapprehended the evidence before him, thereby committing palpable and overriding error. [ 46 ] The factors the judge was required to assess include: 1) time expended; 2) the complexity of the matter; 3) the skill or experience required to deal with the issues; 4) the customary charges for similar services; 5) whether the lawyers engaged in superfluous procedures or wasted time; 6) whether the lawyers engaged in unreasonable duplication of effort; and 7) the results achieved. [ 47 ] A good example of the process which should be followed in cases like these is illustrated in Tepper Holdings Inc (Re) , 2011 NBQB 311 , 381 N.B.R. (2d) 1 .

The case involved a restructuring of companies, conducted under the Companies’

Creditors Arrangement Act , R.S.C. 1985, c. C-36 . The issue was whether the law firm representing the subject corporations had charged reasonable fees for their services. The firm was found to have acted inappropriately in that it had engaged in superfluous procedures, had wasted time and had multiplied efforts. The judge had to determine a reasonable quantum for fees charged in that proceeding. She did that by proceeding with a detailed examination of each of the accounts. Many of her observations are germane to the case before us. She held that “[t]here must be an overriding principle of reasonableness.

While it is appropriate to look at time spent and hourly rates, it is also necessary to step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable” (para. 72). [ 48 ] On the issue of superfluous procedures, she found that at least three specific motions brought by the lawyers should not have been filed. On the issue of duplication of efforts, she found particulars from the statements of account of nine different lawyers, including three senior lawyers all working together and holding discussions amongst themselves.

While I note that, in the matter before us, there is only one senior lawyer involved with assistance from a junior associate for the reasons set out in Mr. Forbes’ affidavit, there is no reference by the judge to any specific time entries made by them which might be unreasonable. [ 49 ] In Tepper , the judge found the accounts were replete with time entries made by multiple experienced lawyers working on the same material or issues.

She then made the following observations which are relevant to the assessment of the fees which this Court is obligated to make in this case: […] Although I realize that there is always some degree of professional overlap in the sense that less senior professionals are reporting to and discussing their findings with more senior professionals, solicitors with hourly rates of $250, $340, and $400 per hour should not require constant directions from each other.

The level of duplication of experienced counsel set out in the Legal Accounts cannot be endorsed by this Court without additional explanation. [para. 80] [ 50 ] Clearly, the judge’s observations and clear findings in Tepper are reflective of the proper approach to follow in the assessment of the reasonableness of legal fees. [ 51 ] In Tepper , the judge had clear evidence that, for some of the accounts, 50% of one senior lawyer’s time and 60% of another’s were spent on matters unrelated to the restructuring efforts under consideration in that case.

On that basis, the judge applied an initial 50% reduction to the affected accounts. The judge in the matter before us did not do this type of analysis. [ 52 ] Finally, in Tepper , the judge held “[t]he court must exercise its discretion judicially to ensure fairness to counsel, […]” (para. 94).

After considering all the relevant factors that are clearly set out in her decision, and which are unfortunately lacking from the probate judge’s decision in the case before us, she set an amount of fees which represented fair, just and reasonable compensation in the circumstances of that case. [ 53 ] The following is my analysis of the disputed accounts, conducted in accordance with the above principles in mind.

I would note before embarking on the detailed analysis that little to no questions were asked at the hearing about the details contained in each of those accounts. [ 54 ] I begin with the long-standing principle that, generally speaking, fees paid to counsel for legal advice on matters affecting an estate are proper allowances to an executor: Hayes v. Hayes , [1881] O.J.

No. 187 (Ch.) (QL) , at para. 14 . [ 55 ] I would also note that in determining whether an executor, through his solicitor, has acted prudently and properly in dealing with litigation, the court has to examine all of the circumstances, including the manner in which the litigation was conducted as well as the motivations of all parties concerned. Both the executor and solicitor must use their best judgments, taking into consideration the interests of all beneficiaries. See Craven v. Osidacz , 2010 ONSC 6637 , [2010] O.J.

No. 5154 (QL) . [ 56 ] The first invoice of December 3, 2013, covers work done between July 11, 2013, and November 27, 2013. As would be expected during the initial stages of what was shaping up to be complex litigation, Mr. Forbes and his associate, Mr. Girard, were required to consult extensively with Mr. Meldrum and all other counsel for the various parties including Ms. Monica Barley and Mr. Robert Goguen for Ms. Johnstone, Mr. Jack Blackier and Mr. Bruce Logan for Ms. Folkins and Ms. Irvin, and Mr. Jason Dempsey for Danica Johnstone.

There were significant expenditures of time to prepare and draft the initial documentation.

[ 57 ] Counsel for Ms. Johnstone took exception to one of the entries on this account relating to Mr. Girard attending for most of one day at Mr. Meldrum’s office while a safe belonging to the testator was opened and its contents inventoried. However, the evidence establishes all parties had agreed to have a representative attend. [ 58 ] I also note counsel for Ms. Johnstone was in constant communication with Mr. Forbes, and not Mr. Meldrum. This does not support Ms. Johnstone’s argument that some of the work done by Mr. Forbes, as it relates to this account, should have been done by Mr.

Meldrum as executor. [ 59 ] The evidence established initial negotiations between all counsel were intense as filing deadlines were fast approaching. [ 60 ] I reviewed this account in detail. Mr. Forbes charged 53 hours of his time over the four-month period. Mr. Girard charged 25 hours of his time. The total fees exclusive of HST (fees will be expressed net of HST throughout these reasons) came to $19,755. None of the time entries were excessive and there was no obvious unnecessary duplication of effort. I do not discern any basis for reducing this particular account. [ 61 ] With respect to the work done by Mr.

Forbes and his associate leading up to this first invoice, the judge simply stated, at para. 42, that “[l]ittle explanation was given about why so much time had been spent on this file worthy to be charged to the Estate.” The only evidence before the judge as to the reasonableness of the time and fees charged for not only this invoice, but for all the invoices, is contained in the affidavit of Mr.

Forbes who deposed that, “[t]he hours of negotiation, review of financial and accounting information, meetings, review and preparation of pleadings, affidavits, briefs, legal research, attendance in court, and telephone conversations are, in my opinion, justified and reasonable.” [ 62 ] The second account, of May 9, 2014, covers the five-month period from November 25, 2013, to April 30, 2014. Mr. Forbes charged 80.4 hours of his time and Mr. Girard, 61.1 hours. The fees charged were $33,678.

During this time, they were extensively involved in dealing with accountants as well as continuing discussions with all counsel. The work included reviews of financial statements and property appraisals. Settlement discussions involving the claims of Ms. Johnstone, Ms. Folkins and Ms. Irvin were fully engaged. [ 63 ] One of the complaints raised by Ms. Johnstone related to intra-office consultations between Mr. Forbes and Mr. Girard. I note firstly that there is nothing inherently wrong with a senior counsel having the assistance of a more junior member of the firm for the reasons set forth by Mr.

Forbes in his affidavit. This, in the end, results in cost savings to the client. I also note on this account there were several such intra-office consultations which were charged by one of the two lawyers, but not by the other. As should be expected, Mr. Girard, the junior working at a lower hourly rate, did many of the more time-consuming tasks, such as research. [ 64 ] There are entries made by both lawyers on the same day which are typically related to major discussions such as with outside experts.

There were a number of entries for necessary review and preparation time for meetings with opposing counsel, Mr. Meldrum and experts. However, there are many smaller time entries which quickly add up and, in my view, need to be discounted when viewed as a whole as they invariably reflect some duplication of effort. In my view, a reasonable reduction of this account to allow for this factor is 15% or $5,051.70. [ 65 ] The third account, of October 10, 2014, covers the period from May 1, 2014, to September 30, 2014. During these five months, Mr. Forbes charged 136.8 hours and Mr.

Girard charged 29.2 hours for total fees of $42,858. [ 66 ] My impression of this account, again after a detailed review, is that the acknowledged benefit of involving a junior lawyer on the file does not seem to have fully manifested itself. Although there continued to be ongoing preparation time to attend various meetings of the parties, and while everyone seems to have been focused on the laudable objective of settlement, the account, in my view, shows duplication of effort in some respects.

For instance, both lawyers entered a fair bit of time described as “review matter.” There were well over 100 such entries. Although some of these reviews would clearly be warranted as part of other specific work done in conjunction with them, such entries are largely uninformative to the client and, regrettably, to anyone reviewing the same. There is, however, no doubt according to the evidence, much work was done in dealing with all other counsel. [ 67 ] This account also reflects what I would term a disproportionate number of intra-office consultations when compared to the other accounts.

I would reduce this account by 20% or $8,571.60.

[ 68 ] The fourth invoice, dated January 21, 2015, covers the period of October 2, 2014, to December 31, 2014. The fees charged are $12,297. Again, this account shows many entries of “review matter” but most are associated with other meaningful and progressive work. Contrary to what was suggested at the hearing, the parties were not simply in a holding pattern at this point waiting for approval of financing to fund the Folkins/Irvin settlement with Ms. Johnstone. Mr.

Forbes was pursuing discussions with counsel and drafting documentation associated with the settlement before it fell apart in February 2015. [ 69 ] However, the account does contain more non-descriptive entries when compared with other accounts, making it difficult to argue against a more significant discount than expressed thus far. I would reduce this account by 30% or $3,689.10. [ 70 ] The fifth account, dated September 1, 2015, covers the 6.5-month period from January 2, 2015, to July 15, 2015. It is a larger account for $71,626.50, reflecting time entries by Mr. Forbes of 165.7 hours and by Mr.

Girard of 125.5 hours. This account deals with land title issues and the drafting of numerous documents. There are intra-office consultations associated with other work done by both solicitors, and I discerned no unnecessary duplication. I also note the more time-consuming tasks were done by Mr. Girard, as should be expected. [ 71 ] There were many ongoing meetings and discussions with counsel and accountants, again focused on trying to achieve resolution. Counsel spent much time with Mr. Meldrum in preparing financial information which required dealing with a bank in Sackville.

These entries would suggest some, if not most, of this work should have been done by Mr. Meldrum himself. [ 72 ] It was during this period counsel for Folkins/Irvin filed an application seeking an

interpretation of the Will and the removal of Mr. Meldrum as executor. He also filed another application to force Mr. Meldrum to pass his accounts. Tax issues would very much have been at the centre of many discussions, according to the evidence. [ 73 ] It was also during this time that counsel for Ms. Johnstone filed a motion to permit withdrawal of her earlier application to enforce the Johnstone settlement with Folkins/Irvin, which she had filed in mid-August 2015. [ 74 ] Counsel spent a great deal of time discussing settlement issues and drafting closing documents.

However, a number of these entries are repetitive in terms of the work done and, without further explanation, suggest duplication. Much time was spent preparing a settlement conference brief, the first of several more to come. This was mostly done by Mr. Girard. Time was also spent reviewing the briefs received from other parties. [ 75 ] Counsel also dealt with voluminous materials relating to a further application to enforce a settlement. There were also many new pleadings exchanged. Some of these, however, related to actions against debtors who owed money to the estate.

These should more properly have been handled by Mr. Meldrum. [ 76 ] I noted definite duplication of effort relating to preparation time for and attendances at settlement conferences and at least one management conference. Having considered this account as a whole, always being mindful of the above principles applicable to assessing the reasonableness thereof, I would reduce this account by 30% or $21,487.95. [ 77 ] The sixth account is dated December 9, 2015, and covers the 5-month period from July 15, 2015, to December 9, 2015. It is for $39,492.50.

It covers work done moving toward the third case management conference. All parties were trying to settle as many issues as possible to minimize what were acknowledged as mounting costs for all of them. This included ongoing discussions with the accountants. [ 78 ] I noted some duplication of effort, but most of the preparation time was logged by Mr. Girard. There is a heavy concentration of time worked in November 2015 in preparation for the hearing of November 24, as well as the subsequent follow up work.

There then followed another settlement conference. [ 79 ] In my view, a reduction of this account by 30%, or $11,847.75, would reasonably reflect the value of the work done during this period.

[ 80 ] The seventh account, of April 21, 2016, covers 1.4 hours of Mr. Forbes’ time from June 2015, which had not been picked up in the previous account, and then covers the time worked by both lawyers from December 9, 2015, to April 13, 2016. The fees charged for this four-month period come to $64,555. It is very detailed and at the hearing, Mr. Meldrum testified he had no basis to dispute it. [ 81 ] It deals with Ms. Johnstone’s employment and marital property issues. There are many entries reflecting frequent dealings with all counsel.

There was preparation time for briefs related to additional hearings, including a motion and application which were later postponed and dealt with at a case management conference. [ 82 ] Although I again note a similar pattern of some duplication of effort, it is readily apparent from reviewing this account that it reflects a significant amount of productive work, including reviewing opposing counsel’s briefs leading up to a March 4, 2016 hearing. There were continuing significant discussions with accountants.

Finally, a good deal of time was spent considering the arbitration option. [ 83 ] In my view, a reduction of 30% of this account, or $19,366.50, is warranted to account for duplication and reflect reasonable value. [ 84 ] The eighth account, dated July 14, 2016, covers the period of April 14 to June 29, 2016. It reflects 59 hours of time for Mr. Forbes and 31 hours for Mr. Girard. The fees total $23,232.50. [ 85 ] It covers the work in the lead up to the fourth settlement conference which finally resolved the claims between Ms. Johnstone and Ms. Folkins and Ms. Irvin for $800,000 all inclusive.

This was less than half the amount which had been earlier negotiated but which had not led to a settlement. Mr. Meldrum acknowledged at the hearing that tax considerations largely drove this $800,000 settlement. It resulted in financing of some $320,000 secured by properties owned by Birchwood Holdings Ltd. The settlement would eventually lead to a Consent Order signed in November 2016. [ 86 ] The account then covers all work done following the May 2, 2016 hearing to deal with issues which were discussed on that occasion.

This led to further meetings and discussions with accountants, particularly relating to the tax issues. The employment contract issues for Ms. Johnstone were also the subject of ongoing discussions. This contract would later be the subject of further discussion and amendment. Work continued in the lead up to a further settlement conference held June 20, 2016. This included work on the brief as well as numerous ongoing consultations with outside counsel. There are, however, many intra-office consultations without any further description, suggesting duplication of effort and overlap.

For instance, both lawyers attended the settlement conference of June 20, 2016, and no justification is shown for this. [ 87 ] In my view, in order for this account to be reasonable, it requires a deduction of 25%, or $5,808.13. [ 88 ] The ninth and last invoice is dated November 16, 2017, and covers the period from June 30, 2016, to November 2, 2017. Mr. Forbes was ill during much of this period and only logged 11.9 hours. The bulk of this invoice reflects Mr. Girard’s 81.9 hours of time. Total fees came to $18,312.

As earlier noted, this invoice was not paid but I refer to it as part of the overall relevant history. [ 89 ] Following the May 2016 settlement, the main outstanding issues were Mr. Meldrum’s bequest and CRA tax issues, the latter of which were not dealt with by the probate judge. Although much is made in the judge’s decision about Mr. Meldrum’s bequest, it was, as I noted earlier, a simple calculation of 5% of the asset value of the estate, whatever that number might ultimately be. It did not involve any “negotiation” except that, in the end, all parties agreed to the amount of $200,000 for this bequest.

I agree with the judge that this bequest was to be in lieu of executor or proctor fees and the judge was correct in disallowing the amount charged for the same. [ 90 ] This last account deals with finalizing Ms. Johnstone’s employment issues, preparation and attendance at a court hearing, continuing with a settlement conference and many discussions with opposing counsel. There were also the ongoing discussions with CRA and finalizing the financing issue for the settlement. All of this involved significant research and drafting of Orders, Minutes of Settlement and Releases.

[91] Finally, there was work done with respect to the passing of accounts hearing and eventual transition andbriefing of Mr. Tompkins when he took over representation of Mr. Meldrum. [92] In my view, this account is entirely reasonable. [93] As a result, from the total amount of $325,806.50 of fees charged, I would deduct $75,822.73. This reflects areduction of just over 23%, which establishes a reasonable reflection of the value of the work done. This work was required because ofthe multiplicity of litigation initiated by the beneficiaries, including Ms. Johnstone.

All parties were well aware the entire process wouldbe costly as matters progressed. [94] There were allegations of incompetence levied against Mr. Meldrum during the hearing, but this action was notagainst him personally in negligence. None of these allegations can deter from the focus of this appeal. We are strictly concerned withthe assessment of the reasonableness of the fees in light of the principles set out above. Indeed, it would be rare for a court to permitparties to litigate a substantive claim for negligence or breach of fiduciary duty of the executor at a passing of accounts.

See Simone v.Cheifetz, (ON CA), [2000] O.J. No. 4191 (C.A.) (QL). B. Loss of interest income [95] Finally, with respect to the loss of interest income award, the probate judge awarded $20,000. While Mr.Meldrum argued he had not deposited the amount of approximately $1,000.000 in an interest-bearing account because he was expectinghaving to access these funds to conclude the settlements for Ms. Irvin and Ms. Folkins, that argument does not pass scrutiny. The probatejudge concluded it may have been appropriate to hold the funds for that purpose for several months, but not for almost one year.

I agree. [96] However, as to the amount the funds should have earned in interest income, the judge selected a figure of$20,000, based on an arbitrary presumptive interest rate of 2%, without any supporting evidence. The only evidence in the record was tothe effect that interest of approximately $3,000 had been generated on roughly the same amount of $1,000,000 during a similar timeperiod while Mr. Meldrum was executor. Given the lack of any better evidence, I would reduce that award to $3,000. V.

Disposition [97] I would allow the appeal in part and set aside the probate judge’s Order of Reimbursement of legal fees by Mr.Meldrum to the estate in the amount of $288,953.89. I would substitute that Order with an Order of Reimbursement in the amount of$75,822.73 with the HST adjustment. [98] I would further set aside the award of loss of interest income in the amount of $20,000, and I would replace itby an award of $3,000. [99] I would dismiss the appeal of the decision to postpone the determination of outstanding matters to a later date. [100] Finally, given the circumstances, I would make no award of costs.

Version française de la décision de la Cour rendue par

Version française de la décision de la Cour rendue par LE JUGE LEBLOND I. Introduction [1] L’appelant, Wynn W. Meldrum, était l’exécuteur testamentaire de la succession de Donald Lindsay Johnstone, qui est décédé le 11 juin 2013. Dans son testament, M. Johnstone léguait à M e Meldrum 5 % de la valeur des actifs de sa succession, part qui devait lui être payée en priorité sur tous les autres legs. Ce legs devait tenir lieu d’honoraires d’exécuteur testamentaire. [2] M.

Johnstone léguait ensuite une maison à sa fille, Danica Johnstone, sous réserve de certaines conditions. [3] Le reliquat de sa succession était divisé en trois parts égales qui étaient léguées à son épouse, l’intimée Deborah Johnstone, et à ses deux filles issues d’un mariage antérieur, Jennifer Dawn Irvin et Kelly Anne Rose Folkins. [4] M e Meldrum a présenté une demande d’homologation du testament de M. Johnstone le 24 juin 2013. Il a déposé un inventaire estimant la valeur de la succession à 2 700 000 $.

Le juge de la Cour des successions disposait d’une preuve indiquant que la succession pouvait avoir une valeur pouvant aller jusqu’à 6 500 000 $, mais il ne s’est pas prononcé sur sa valeur réelle. Les principaux éléments d’actif de la succession étaient les actions de deux sociétés ayant leur siège à Sackville, au Nouveau-Brunswick, qui appartenaient entièrement à M.

Johnstone : la Birchbark Holdings Ltd., qui exploitait une salle de quilles, et la Birchwood Holdings Ltd., une société de location de biens résidentiels et commerciaux. [5] En juillet 2013, M me Johnstone a informé M e Meldrum qu’elle s’élevait contre le fait qu’un tiers seulement de la succession lui avait été légué. Le 11 septembre 2013, elle a déposé un avis de requête dans lequel elle demandait des mesures réparatoires sous le régime de la

Loi sur les biens matrimoniaux , L.R.N.-B. 2012, ch. 107, et de la

Loi sur la provision pour personnes à charge , L.R.N.-B. 2012, ch. 111. Cette instance avait pour objectif de permettre à M me Johnstone d’obtenir à son profit une plus grande part de la succession.

Par conséquent, dans la mesure où les actions des deux sociétés seraient en jeu, en ce qui concerne leur répartition à des fins de distribution, des questions relevant du droit des sociétés, du droit successoral et du droit fiscal seraient soulevées. [6] D’autres litiges sont venus s’ajouter, à savoir, d’abord, une première requête dans laquelle on sollicitait l’exécution d’un règlement à l’amiable des revendications de M me Johnstone, M me Irvin et M me Folkins, puis une requête dans laquelle on sollicitait l’interprétation du testament.

Au total, trois avis de poursuite, six avis de requête et plusieurs avis de motion ont été déposés, ce qui représente plusieurs milliers de pages de documents, et ils ont donné lieu à plusieurs audiences ainsi qu’à un certain nombre de conférences de gestion d’instance et de conférences de règlement amiable. [7] M e Meldrum, un avocat en exercice, n’avait jamais participé à un litige successoral de cette nature et il a donc retenu les services de Brian Forbes, c.r., pour l’aider.

Lors de son témoignage, il a déclaré que la demande de M me Johnstone relative aux biens matrimoniaux ainsi que les litiges engagés par M me Folkins et M me Irvin risquaient de compliquer considérablement les choses et qu’il avait besoin de l’expertise et des ressources que M e Forbes pouvait offrir. [8] Les honoraires versés à M e Forbes par la succession sont au cœur du présent appel. Compte tenu des complexités du litige, M e Forbes a joué un rôle très actif.

L’examen de la décision du juge permet clairement de conclure qu’à son avis, M e Meldrum n’avait pas une bonne compréhension des nombreuses questions associées à l’homologation de la succession en cause, et c’est la raison pour laquelle il avait retenu les services de M e Forbes. [9] Du 11 juillet 2013, date à laquelle les services de M e Forbes ont été initialement retenus, au 17 novembre 2017, date de son dernier relevé de compte, il a facturé à M e Meldrum des honoraires de 325 806,50 $ plus la TVH. Il a en outre facturé ses débours, mais aucun d’eux n’est en litige.

Neuf relevés de compte ont été remis et les huit premiers ont été payés par

M e Meldrum au moyen de fonds de la succession. Le dernier relevé n’a pas été payé. Au total, M e Forbes a reçu la somme de 409 929,38 $, honoraires, débours et TVH inclus . [10] En ce qui concerne le litige au sujet des honoraires que M e Forbes a facturés, une analyse raisonnée et méthodique des relevés de compte de M e Forbes s’imposait manifestement en l’espèce. Le dossier dont nous disposons établit que l’avocat de M e Meldrum, lors de l’audience de la reddition de comptes, a demandé au juge s’il demandait la taxation des notes d’honoraires et, si c’était le cas, quel processus il désirait suivre.

Bien que l’avocate de M me Johnstone ait fait valoir que le délai imparti pour procéder à une taxation en bonne et due forme était expiré, le juge s’est d’abord dit d’avis qu’il n’y avait pas de problème de prescription aux termes du libellé applicable de la Loi de 1996 sur le Barreau , L.N.-B. 1996, ch. 89 , et il s’est demandé s’il devait attendre les conclusions d’un agent de contrôle à l’issue d’une taxation formelle avant d’aller plus loin. [11] Encore une fois, l’avocate de M me Johnstone a soutenu que la cour était compétente pour entendre la question en litige et qu’une taxation ne permettrait pas d’obtenir une meilleure information.

Selon moi, c’est à bon droit que le juge a souligné qu’un agent de contrôle examinerait les notes d’honoraires en détail et que, comme il avait annoncé qu’il n’avait aucune intention de le faire lui-même, une taxation constituerait la meilleure option. Manifestement, si le juge décidait d’évaluer lui- même si les notes d’honoraires étaient raisonnables, comme il était certainement en droit de le faire, il aurait alors été tenu, en droit, de les examiner soigneusement sans être nécessairement obligé de procéder ligne par ligne.

Cependant, un examen superficiel des notes d’honoraires ne suffirait pas. [12] Au lieu de retenir l’option de la taxation, le juge a choisi de commencer à entendre la preuve lors de la reddition de comptes, mais il a indiqué que les parties devraient rester disposées à une taxation à une date ultérieure. [13] Environ à mi-chemin du contre-interrogatoire de M e Meldrum par l’avocate de M me Johnstone au sujet des notes d’honoraires de M e Forbes, le juge a de nouveau soulevé la possibilité d’une taxation.

De fait, l’avocat de M e Meldrum a expressément demandé au juge si M e Forbes devrait être informé des préoccupations soulevées par M me Johnstone , à quoi le juge a répondu qu’il ne le savait pas. [14] L’avocat de M e Meldrum a alors proposé de faire comparaître M e Forbes pour introduire l’affidavit qu’il avait déposé à l’appui de ses notes d’honoraires et permettre son contre-interrogatoire. En réponse, l’avocate de M me Johnstone, je tiens à le préciser, a déclaré ce qui suit : [TRADUCTION] Cela n’est pas nécessaire.

Nous ne contestons pas l’admission [en preuve] de l’affidavit de M e Forbes tel qu’il a été présenté et nous n’avons pas l’intention de contre-interroger M e Forbes sur son affidavit. [15] Le juge a choisi d’évaluer lui-même le caractère raisonnable des notes d’honoraires. Comme je l’ai dit plus haut, il lui était tout à fait loisible de le faire, mais, comme on le verra, son analyse ne s’est pas fondée sur les principes de droit appropriés et il a donc commis une erreur justifiant l’infirmation de sa décision. [16] L’audience s’est poursuivie, la majeure

partie de la preuve soumise au juge de la Cour des successions étant censée constituer une taxation des notes d’honoraires de M e Forbes, menée sous forme de contre-interrogatoire de M e Meldrum par l’avocate de M me Johnstone , et ce, sans le bénéfice du témoignage de M e Forbes.

Bien que, dans un premier temps, l’avocate de M me Johnstone ait pensé que M e Meldrum était en mesure de répondre aux questions concernant les notes d’honoraires de M e Forbes, en raison de son incapacité à répondre de façon satisfaisante à la plupart d’entre elles, il en a été réduit à indiquer qu’il ne pouvait pas répondre ou à se livrer à des conjectures. [17] Le juge de la Cour des successions a conclu que les honoraires de M e Forbes étaient [TRADUCTION] « extrêmement excessifs » compte tenu du travail qui avait été exigé de lui.

Il a arbitrairement conclu que seulement 25 % des honoraires devaient être à la charge de la succession et il a ordonné à M e Meldrum de rembourser personnellement à la succession, sans délai, les 75 % restants qui, selon ses calculs, s’élevaient à 288 953,89 $, TVH incluse. Autrement dit, il a conclu que, selon ses calculs, la valeur du travail d’envergure effectué sur une période de quatre ans qui comprenait toutes les activités décrites plus loin n’était que de 83 784,76$ plus la TVH. Selon mes propres calculs, ce montant devrait être de 81 451 $. La cour disposait d’une

preuve selon laquelle les honoraires d’avocat de M me Johnstone dépassaient les 200 000 $ pour cette même période, mais personne n’a mis en cause leur caractère raisonnable. Il est indubitable que le travail exigé de M e Forbes était bien plus considérable que celui qui était exigé de l’avocate de M me Johnstone . [18] Le juge de la Cour des successions a également conclu que M e Meldrum avait omis d’investir une somme de l’ordre d’environ 1 000 000 $ appartenant à la succession dans un compte portant intérêt pendant plus d’un an, privant ainsi la succession de ce revenu de placement.

Il a évalué cette perte à 20 000 $ et a encore une fois ordonné à M e Meldrum de payer cette somme à la succession. [19] M e Meldrum interjette appel des deux ordonnances et allègue qu’il existe d’autres erreurs sur lesquelles je reviendrai plus loin. [20] M e Meldrum a facturé à la succession des honoraires d’exécuteur testamentaire de 8 594,78 $, mais le juge de la Cour des successions en a refusé le paiement pour le motif énoncé au paragraphe 1; son legs devait tenir lieu d’honoraires d’exécuteur testamentaire . Cette

partie de la décision n’est pas portée en appel. [21] Finalement, le juge a ordonné que les questions non réglées, le cas échéant, soient tranchées à une date ultérieure et il a conservé la compétence en la matière. M e Meldrum porte en appel cette

partie de la décision. [22] Pour les motifs qui suivent, j’accueillerais l’appel, en partie, en ce qui concerne les ordonnances de remboursement des honoraires d’avocat et de paiement du revenu en intérêts. En me fondant sur le principe de la proportionnalité énoncé à la règle 1.02.1 des Règles de procédure (voir l’ arrêt Johnson c.

State Farm Fire and Casualty Company , 2015 NBCA 4 , 429 R.N.-B. (2 e ) 251 ), dans le but de ne pas augmenter davantage les dépenses engagées par les parties en renvoyant l’affaire pour qu’il soit procédé à une évaluation appropriée , j’ai effectué ma propre évaluation en me fondant sur la preuve figurant au dossier. J’annulerais l’ordonnance de remboursement de la somme de 288 953,89 $ et je la remplacerais par une ordonnance de remboursement de 75 822,73 $ plus la TVH, conformément à l’analyse qui suit.

J’annulerais l’ordonnance relative à la perte d’intérêts de 20 000 $ et je la remplacerais par une attribution de 3 000 $. Finalement, je rejetterais l’appel de la décision de trancher les questions non réglées à une date ultérieure. II. Contexte factuel [23] Dès le moment où les services de M e Forbes ont été retenus pour aider M e Meldrum relativement aux questions en litige découlant de l’administration de la succession en cause, il a assumé la fonction de principal porte- parole de celle-ci.

En plus de conseiller M e Meldrum sur l’administration de la succession et sur la façon de faire face aux multiples procédures judiciaires, M e Forbes s’occupait également du legs fait à M e Meldrum à

titre personnel. Il existe également une preuve selon laquelle M e Forbes faisait peut-être du travail dont il aurait été plus normal que M e Meldrum se charge en sa qualité d’exécuteur testamentaire. [24] Au début de l’administration de la succession, un projet de règlement amiable a été négocié entre M me Johnstone et ses belles-filles, M me Irvin et M me Folkins, afin de payer les legs faits aux deux dernières. Cette entente exigeait que les sociétés qui appartenaient à M. Johnstone et qui étaient maintenant exploitées par M me Johnstone obtiennent un financement bancaire pour payer M me Irvin et M me Folkins.

En raison de retards et de facteurs qui ont compliqué les choses, le projet de règlement a échoué et a été abandonné. Le paiement envisagé aurait produit d’importantes conséquences fiscales. [25] Le 19 juillet 2018, M e Meldrum a démissionné de ses fonctions d’exécuteur testamentaire et a été remplacé par M me Johnstone .

Dans l’affidavit étayant sa position à l’audience de reddition de comptes, M me Johnstone a déclaré qu’elle éprouvait de la difficulté à comprendre les notes d’honoraires de M e Forbes, mais elle n’a pas donné de détails au sujet de la nature de ses préoccupations, se contentant de faire une observation générale au sujet du fait que deux avocats travaillaient sur le dossier. Elle soulève bel et bien le fait que M e Forbes faisait du travail lié au legs dont bénéficiait M e Meldrum à

titre personnel, mais elle ne fait mention d’aucune inscription précise à ce sujet dans l’une quelconque des notes d’honoraires.

[26] La seule preuve dont disposait le juge de la Cour des successions au sujet du caractère raisonnable des honoraires facturés par M e Forbes était l’affidavit de ce dernier dans lequel il expliquait pourquoi, à son avis, toutes les sommes facturées étaient raisonnables. Il faut rappeler que bien que M me Johnstone se soit fermement élevée contre les sommes facturées, son avocate n’a émis aucune réserve au sujet de l’affidavit de M e Forbes et a consenti à son admission en preuve.

De plus, l’avocate de M me Johnstone a informé le juge de la Cour des successions qu’elle n’entendait pas contre-interroger M e Forbes sur ses relevés de compte ou son affidavit. Finalement, M e Forbes n’a pas témoigné. III. Moyens d’appel [27] Bien que l’avis d’appel énumère huit moyens, M e Meldrum fait valoir que ces moyens peuvent utilement être répartis entre les catégories suivantes. Selon sa formulation de l’appel, il s’agit en l’espèce de répondre aux cinq questions clés suivantes : 1. Le juge du procès a-t-il commis une erreur de droit en omettant de motiver sa décision comme il se devait

a) relativement à la perte de revenu sur les fonds de la succession?

b) relativement au caractère raisonnable des honoraires d’avocat?

c) relativement au caractère raisonnable des débours? 2. Le juge du procès a-t-il commis une erreur de droit et de fait

a) en faisant abstraction des éléments de preuve substantiels et/ou

b) en interprétant mal les faits, plus particulièrement en ce qui concerne le caractère raisonnable des honoraires d’avocat? 3. Le juge du procès a-t-il commis une erreur de droit en omettant d’appliquer la règle formulée dans l’arrêt Browne c. Dunn (1893), 1893 CanLII 65 (FOREP) , 6 R. 67 (Ch. des lords du R.-U.)? 4. Le juge du procès a-t-il commis une erreur de droit en omettant d’appliquer la norme de diligence appropriée à laquelle un exécuteur testamentaire est tenu conformément à la législation et à la jurisprudence applicables? 5.

Le juge du procès a-t-il commis une erreur de droit en reportant la décision à rendre sur certaines questions tout en permettant l’audition d’autres questions? IV. Analyse [28] L’appel peut être tranché en répondant aux questions 1

a) et

b) et 2

a) et b). La question du caractère raisonnable des débours facturés par M e Forbes n’a pas été soulevée par le juge de la Cour des successions et nous n’en sommes pas saisis. Elle n’a donc pas besoin d’être traitée. [29] La question 3, qui vise la règle formulée dans l’arrêt Browne c. Dunn , ne s’applique pas en l’espèce. On peut présumer qu’elle a été soulevée relativement à l’affidavit de M e Forbes qui, comme je l’ai indiqué, a été admis en preuve sans aucune objection. Le fait que l’affidavit ait été utilisé afin de contre-interroger M e Meldrum n’emporte pas pour autant l’application de la règle. Voir l’ arrêt Gillis c. R. , 2014 NBCA 58 , 426 R.N.-B. (2 e ) 1 .

[30] La question 4 porte sur les allégations de négligence soulevées au cours de l’audience à l’égard de M e Meldrum en sa qualité d’exécuteur testamentaire. Cependant, ce point est incorporé dans les questions débattues plus loin et il est donc inutile qu’il fasse l’objet d’un traitement distinct. [31] Enfin, je conclus qu’aucune erreur n’a été commise dans le report de la décision à rendre sur certaines questions tout en permettant l’audition d’autres questions .

En effet, le juge de la Cour des successions jouit d’une compétence suffisamment large pour rendre une telle ordonnance. [32] Je passe maintenant à l’analyse des quatre questions qui doivent être tranchées pour pouvoir statuer sur le présent appel. A. Honoraires [33] L’analyse de l’affidavit de M e Forbes à laquelle le juge de la Cour des successions s’est livré semble commencer au paragraphe 38 de sa décision. Il accompagne son résumé de cet affidavit d’un bref commentaire.

Il ne se prononce pas sur les facteurs à prendre en considération pour évaluer le caractère raisonnable des notes d’honoraires des avocats en général, ou de celles de M e Forbes en particulier. Je reviendrai sur ces facteurs. [34] Le juge renvoie aux notes d’honoraires, mais il se contente de paraphraser l’affidavit de M e Forbes relativement à chaque note, sans tirer aucune conclusion précise quant aux raisons pour lesquelles une

partie ou la totalité de ces notes pourrait être déraisonnable. [35] La décision est émaillée d’impressions du juge au sujet du fait que M e Forbes a fait du travail que M e Meldrum aurait dû effectuer en sa qualité d’exécuteur testamentaire, sans aucune référence à une inscription précise quant à une tâche ou au temps qui devrait être déduit. [36] Le juge mentionne également le [TRADUCTION] « cadeau » correspondant au legs fait à M e Meldrum dans le testament de M.

Johnstone ainsi que le fait que M e Forbes facturait à la succession le temps qu’il consacrait à la défense des intérêts de M e Meldrum, mais, là encore, le juge ne fait aucune évaluation du temps, s’il en est, qui devrait être déduit pour ces tâches et pour quelle raison. Bien que, comme le juge l’a noté, il n’y ait rien dans l’affidavit de M e Forbes qui traite de ces tâches, la preuve indique que tout travail effectué relativement au legs que M e Meldrum a reçu à

titre personnel l’a été dans le cadre des négociations et des litiges relatifs à tous les legs faits à tous les bénéficiaires. Après tout, en fin de compte, le legs revenant à M e Meldrum exigeait une simple opération mathématique : 5 % de la valeur de l’actif de la succession. [37] C’est peut-être le moment de souligner qu’il n’y a rien de mal en soi à ce qu’un avocat fasse, pour le compte d’un exécuteur testamentaire, du travail concernant un legs reçu par ce dernier. Cela fait en effet

partie de l’administration de la succession dont l’exécuteur testamentaire est tenu de rendre compte, tout autant qu’il devrait le faire relativement à sa rémunération à

titre d’exécuteur testamentaire. On peut donc affirmer que l’exécuteur testamentaire a droit au moins à un certain dédommagement au

titre des honoraires d’avocat engagés dans le cadre du travail associé au legs. Bien que la jurisprudence ne soit pas unanime sur ce point, je souscris aux principes énoncés dans l’affaire Kanee Estate (Re) , [1991] B.C.J. No. 3018 (C.S.C.-B.) (QL) , autorisation d’appel à la C.A.C.-B. refusée, [1991] B.C.J. No. 2857 (QL) , confirmée à [1992] B.C.J. No. 1480 (C.A.C.-B.) (QL) ; et Furtney c. Furtney , 2014 ONSC 3774 , [2014] O.J. No. 3063 (QL) , qui appuient la proposition susmentionnée. [38] Dans son analyse juridique, le juge commence par reconnaître que le par. 71(1) de la

Loi sur la Cour des successions , L.N.-B. 1982, ch. P-17.1 , lui confère un large pouvoir lors d’une audience de reddition de comptes. Il souligne à bon droit qu’un juge est expressément habilité à « […] intervenir, enquêter […] aussi en détail qu’[il] juge à propos […] » au sujet de l’administration et de la répartition des biens du défunt et qu’« […] à cette fin, la Cour peut recueillir tout témoignage […] ». Le juge a également cité les dispositions des par. 71(2) , (3) et (9), qui prévoient ce qui suit :

Power of the Court to make inquiry 71

(2) The Court, on passing any accounts under this section, has power to inquire into any complaint or claim, by any person interested in such accounts, of misconduct, neglect or default on the part of the personal representative occasioning financial loss to the estate or trust fund, and the Court, on proof of such claim, may order the personal representative to pay such sum by way of damages or otherwise as it considers proper and just to the estate or trust fund, but any order made under this subsection is subject to appeal. 71

(3) The Court may order the trial of an issue of any complaint or claim under subsection (2), and in such case it shall make all necessary directions as to pleadings, production of documents and otherwise in connection with the issue. 71

(9) Where accounts submitted to the Court are of an intricate or complicated character and in the opinion of the Court require expert investigation, it may appoint an accountant or other skilled person to investigate and to assist it in auditing the accounts. Pouvoir de la Cour d’enquêter 71

(2) La Cour, avant l’approbation des comptes en vertu du présent article, peut s’enquérir de toute plainte ou réclamation adressée par toute personne intéressée aux comptes qui invoque la mauvaise gestion, la négligence ou le défaut du représentant personnel causant une perte financière à la succession ou à son fonds de fiducie; la Cour peut, si elle est convaincue du bien-fondé de la demande, ordonner au représentant personnel de verser à la succession ou à son fonds de fiducie, à

titre de dommages-intérêts ou autre, toute somme qu’elle estime raisonnable pour la succession ou fonds de fiducie; toutefois, toute ordonnance rendue en application du présent

article est susceptible d’appel. 71

(3) La Cour peut ordonner qu’une plainte ou qu’une réclamation fasse l’objet d’un procès en application du paragraphe (2) et, dans ce cas, elle donne toutes directives nécessaires quant aux mémoires, documents à produire ou autres pièces utiles se rapportant au litige. 71

(9) Lorsque la Cour estime que la complexité des comptes qui lui sont soumis requiert les services d’experts, elle peut nommer un comptable ou autre spécialiste pour étudier les comptes et l’aider à en faire la vérification. [39] Je remets à une autre occasion la question de savoir si le juge aurait pu exiger la présence de M e Forbes à l’audience sur la reddition de comptes, ou encore renvoyer les notes d’honoraires à la taxation, le tout conformément aux pouvoirs que lui confère cette loi. [40] Au par. 126, le juge cite l’ouvrage Oosterhoff on Wills and Successions , 7 e éd. (Toronto : Thomson Reuters Canada Limited, 2011), à la p. 57, relativement aux honoraires payables à l’avocat de la succession : [TRADUCTION] « Le juge est habilité à modifier l’état de frais ou à le soumettre à une taxation » (le soulignement est de moi).

Comme je l’ai déjà indiqué, bien que le juge ait soulevé en début d’audience la possibilité de procéder à une taxation, il ne l’a pas fait. [41] Au lieu d’invoquer les pouvoirs étendus dont il disposait pour évaluer le caractère raisonnable des notes d’honoraires de M e Forbes, le juge a choisi de faire des observations arbitraires dont voici des exemples : [TRADUCTION] […] De plus, à tous les moments pertinents et selon toute vraisemblance , M e Forbes a toujours mis le legs de M e Meldrum et la manière de le quantifier au premier plan dans toutes les discussions visant la conclusion d’un règlement entre les bénéficiaires.

Par conséquent, M e Meldrum n’a pas exercé la diligence requise comme le ferait une personne prudente en s’acquittant de ses obligations liées à l’exercice de ses fonctions d’exécuteur.

Selon toute vraisemblance , M e Meldrum a aveuglément fait passer son propre intérêt devant celui des autres bénéficiaires. […] La Cour croit que tous les retards occasionnés dans l’administration de cette succession sont imputables à M e Meldrum, et il doit accepter sa responsabilité à cet égard . [Par. 121, 122 et 125] [Le soulignement est de moi.] Les croyances ou les vraisemblances exprimées qui ne sont le produit ni d’un exercice régulier de sa compétence ou de son pouvoir discrétionnaire, ni d’une évaluation adéquate de la preuve, ne résistent pas à l’analyse.

C’est sur ce fondement que je vais maintenant examiner les quatre questions qui doivent être tranchées dans le cadre du présent appel. [42] Le juge s’est fondé sur de simples spéculations ou conjectures pour arriver à sa conclusion finale. Par exemple, au lieu d’analyser comme il se doit la raison pour laquelle M e Forbes avait décidé de se faire aider par un avocat junior, il a écrit : [TRADUCTION] « Il [M e Forbes] ne peut pas être sérieux » (par. 134).

Manifestement, en sa qualité d’officier de justice, M e Forbes est réputé avoir été tout à fait sérieux et franc dans toutes les déclarations qu’il a faites dans son affidavit. Il s’agissait de la seule preuve dont le juge était saisi. En décidant de ne pas se prévaloir des outils que lui offrait le par. 71(2) de la

Loi sur la Cour des successions pour pousser plus loin son enquête, le juge a tiré une conclusion arbitraire. [43] Le juge a cité l’affaire Re: Eisenbeis (Estate of) , 2005 ABQB 229 , [2005] A.J. No. 341 (QL) , à l’appui de la proposition selon laquelle l’exécuteur testamentaire peut être personnellement responsable des honoraires d’avocat lorsqu’ils sont supérieurs à ce qui est raisonnable dans les circonstances. Cet exposé du droit est correct.

Toutefois, bien qu’il reconnaisse que M e Meldrum était incapable d’expliquer les inscriptions de temps que renfermaient les notes d’honoraires de M e Forbes, le juge n’a pas été convaincu par les explications que M e Forbes a données dans son affidavit.

Afin de déterminer si les notes d’honoraires étaient raisonnables, il était nécessaire pour le juge de se prévaloir de la compétence étendue dont il a été question plus haut et de décider, à l’issue d’une analyse raisonnée et méthodique, quels honoraires étaient à bon droit imputables à la succession. [44] L’exercice consistant à déterminer si les honoraires facturés étaient raisonnables dans les circonstances doit se faire judicieusement. Dans la mesure où le juge pouvait avoir besoin d’aide pour effectuer cette évaluation, une telle aide est prévue au par. 71(9).

Il n’est pas loisible au juge d’effectuer une évaluation arbitraire sans le bénéfice d’un examen sérieux des notes d’honoraires. [45] En fin de compte, le juge a conclu que les honoraires facturés étaient [TRADUCTION] « extrêmement excessifs » (par. 136). Néanmoins, rien dans la décision n’indique précisément aux parties quels éléments des notes d’honoraires de M e Forbes le juge a estimé déraisonnables et pour quelles raisons. Son omission à cet égard constitue une erreur justifiant l’infirmation de sa décision car, en choisissant un montant arbitraire à

titre d’honoraires raisonnables sans effectuer une analyse complète de la preuve, il a omis de donner des motifs appropriés pour expliquer sa décision et a soit fait abstraction de la preuve dont il disposait, soit l’a mal interprétée, commettant ainsi une erreur manifeste et dominante. [46] Les facteurs que le juge était tenu d’évaluer sont notamment les suivants : 1. le nombre d’heures de travail; 2. la complexité de l’affaire; 3. la compétence ou l’expérience exigée pour traiter des questions en cause; 4. les tarifs habituels pour des services analogues; 5. le recours à des procédures superflues ou la perte de temps de la part des avocats;

6. la répétition déraisonnable des travaux par les avocats; 7. les résultats obtenus. [47] L’affaire Tepper Holdings Inc. (Re) , 2011 NBBR 311 , 381 R.N.-B. (2 e ) 1 , constitue un bon exemple du processus qui devrait être suivi dans des causes comme celle-ci. Il s’agissait d’une affaire de restructuration de sociétés sous le régime de la

Loi sur les arrangements avec les créanciers des compagnies , L.R.C. 1985, ch. C-36 . Il fallait déterminer si le cabinet d’avocats représentant les sociétés en cause avait facturé des honoraires raisonnables pour ses services. La Cour était arrivée à la conclusion que le cabinet avait agi de manière inappropriée en se livrant à des procédures superflues, en perdant du temps et en effectuant des chevauchements. La juge devait déterminer un montant raisonnable pour les honoraires facturés dans cette affaire. Elle s’est acquittée de cette tâche en procédant à un examen détaillé de chacune des notes d’honoraires.

Un grand nombre de ses observations sont pertinentes en l’espèce. Elle a conclu qu’[TRADUCTION] « [i]l convient que le principe premier, ici, soit un principe de raisonnabilité. Bien qu’il soit approprié de s’arrêter au temps consacré à l’affaire et aux taux horaires, il y a lieu d’adopter un point de vue plus large, de tenir compte du résultat obtenu et de se demander si, dans l’ensemble des circonstances, ce résultat est correct et raisonnable » (par. 72). [48] Sur la question des procédures superflues, elle a conclu qu’au moins trois motions précises n’auraient pas dû être déposées par les avocats.

Sur la question du chevauchement, l’examen des détails des relevés de compte lui a permis de constater que neuf avocats différents, dont trois avocats seniors, avaient tous travaillé à ce dossier et discuté de l’affaire entre eux. Bien que je prenne bonne note que, dans la prés

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