Wednesday, April 08, 2009

B.C. Court of Appeal Finds that Public Guardian and Trustee Fees Are Not Excessive

In a previous post , I wrote about a Supreme Court of British Columbia decision in which the court refused to order that the proceeds of a settlement of a lawsuit brought on behalf of a minor be held by the Public Guardian and Trustee of British Columbia. The Court found that the fees charged by the Public Guardian and Trustee were excessive.

The Public Guardian and Trustee has successfully appealed the Supreme Court decision in British Columbia (Public Guardian and Trustee) v. Strand, 2009 BCCA 158. The Court of Appeal found that the fees charged by the Public Guardian and Trustee over the course of the trust for the minor children would be lower than the fees that comparable trust companies in the private sector would charge.

Mr. Justice Frankel, in the Court of Appeal, wrote:

[26] In my view, the chambers judge did make a palpable and overriding error in his finding that the fees charged by the Public Guardian are excessive. This error is evinced by the chambers judge’s treatment of the 5% “capital commission fee”, which he considered to be an unwarranted set-up-fee. His treatment of that fee indicates that he misapprehended its purpose. It is not simply a file-opening fee. Rather, it is part of the overall fees that the Public Guardian charges to cover his services during the period of a trust. Those services include providing money management, trust officer services, accounting, and issuing documents required for tax purposes.

[27] The chambers judge also fell into error by failing to properly consider how fees are charged by the Public Guardian over the life of a trust. In this case, the trusts will be administered over several years. The affidavit evidence presented both to the chambers judge and to this Court indicates that, over the long-term, the Public Guardian’s fees will be substantially less than those charged by a private trust company such as the Bank of Nova Scotia (assuming such a company would be prepared to act, which appears not to be the case). This differential will exist regardless of the rate of return generated by the trust funds.

[28] Given that fees charged by the Public Guardian are not excessive, and appear to be significantly lower over the life of the trust than those charged by private sector trustees, there is, in my view, no foundation for the critical language used by the chambers judge in his characterization of the manner in which the Public Guardian fulfilled his statutory duties.

No comments: