Less Diligence Means Less Reimbursement
Trustees and guardians of represented adults need to diligently manage and record the finances of adult they oversee if they want to be reimbursed. The Applicant in Resek (Re), 2018 ABQB 497, should have heeded that advice long before he came before the Court.
The Applicant, Ernest Resek, was appointed guardian and trustee of his mother, Anne Resek, for a period of approximately 5 years beginning in December 2011. After his guardianship and trusteeship ended, Ernest applied for compensation and reimbursement worth most of Anne’s estate ($470,000 vs $660,000). Mary Resek, another relative of Anne’s and the Respondent, called Ernest’s compensation claims “outrageous” in response. The Court, for its part, was not impressed, stating:
“The Applicant failed to properly separate all the Adult's accounts and expenses from his own and to maintain adequate records. This, and the unavoidable sharing of expenses by sharing accommodation, has resulted in a blending of finances, created suspicion and caused difficulty in now reconciling.”
The Adult Guardianship and Trusteeship Act, SA 2008, c A-4.2, provides at section 64 that trustees are “entitled to be reimbursed for the direct expenses incurred and disbursements made on behalf of the represented adult”. Trustees may also elect to be compensated according to a regulated fee schedule or have a Court decide it in proportion to “the trustee’s effort, care and responsibility and the time expended on behalf of the represented adult.” At section 37, guardians are also “entitled to be reimbursed for direct expenses incurred in exercising the authority and carrying out the duties and responsibilities of a guardian.” However, guardians are “not entitled to any remuneration, compensation, fees or allowance for effort made or for time expended on behalf of the represented adult in exercising the authority and carrying out the duties and responsibilities of a guardian.”
As trustee, Ernest was claiming for expenses made for Anne ranging from professional bookkeeping and home maintenance to meals and prescriptions. Due to Ernest’s inadequate records however, which the Court called “poor to non-existent”, there were holes in his evidence. The blending of his finances with Anne’s made calculation difficult. He had to rely on generalizations and assumptions to justify some of his expenses, which the Court broadly did not accept. He also claimed for expenses from before he became trustee, for home care expenses in violation of a previous Court Order, and certain unjustifiable legal fees, none of which the Court would compensate. Ernest also did not pay rent to the estate, requiring the Court to offset it against what it would award. The Court only gave a small portion of what Ernest asked in the amount of $4,935.44.
The Court, being already unhappy with Ernest’s trusteeship, nevertheless recognized that he performed the task for 5 years and loaned the estate money when cash flow was low. Ernest was entitled to recover on his loan of $37,300 to the estate but was awarded only a nominal $5,000 for his trustee services because:
“He failed to properly discharge the responsibilities of trustee.”
For Ernest’s guardianship, the Court denied all compensation according to the Act. The expenses he claimed as guardian were entirely legal fees, which the Court deferred to its costs decision.
Resultantly, in addition to the loan, the Court only awarded $9,935.44. This amounted to a mere 2% of what Ernest claimed he was entitled to after 5 years.