In 2005, the BC Supreme Court appointed a retired investment manager ("Sanders"), as committee of Ms. Wickham, who was mentally infirm. Sanders used securities advisers at HSBC to assist him in managing her portfolio for which HSBC charged a separate annual fee of 0.75% of her portfolio. In 2010, the Public Trustee determined that his remuneration as committee for the period from 13 May 2008 to 31 May 2010 should be $19, 425 for income management and $25,783 for asset management; however, he charged only $40,000, which was paid to him in 2011 before her death in 2011.
The Minister denied her deduction of the fees on the basis that his services, which included arranging for home and health care, were personal in nature; and that in any event they did not qualify under s. 20(1)(bb) as he was not carrying on a business.
After stating (at para. 19) that "since the management services provided by Mr. Sanders related to capital assets held by Ms. Wickham, the fees would be non-deductible capital expenditures unless otherwise provided," Paris J found that the fee were deductible under s. 20(1)(bb). The Public Trustee's letter authorizing Sanders' compensation specified that the payment was for asset and income management, and its amount was based on the performance and size of the portfolio - that is, any other help he gave to the deceased did not relate to his compensation. Sanders' "principal business" was investment management because managing the deceased's assets and investments was his only business at the time (para. 22-23).
However, as about 20% of the $1.8 million portfolio was in a RRIF, deduction of 20% of the fee was denied under s. 18(1)(u).