Whaley Estate Litigation Newsletter Vol.5 No. 4 July 2015
 

   

    

Whaley Estate Litigation provides litigation, mediation and dispute resolution to clients throughout Ontario: 

  • Will, Estate, Trust Disputes
  • Advising Fiduciaries
  • Dependant Support Claims
  • Passing of Estate, Trustee,  Attorney, Guardian and Fiduciary Accounts
  • Capacity Proceedings
  • Guardianships
  • Power of Attorney Disputes          
  • Consent and Capacity Board
  • End-of-Life & Treatment Decisions
  • Elder Law
  • Elder Financial Abuse
  • Solicitor's Negligence
  • Agency Services
  • Representation of Persons Under Disability
  • Probate Applications
  • Mediation  
  • Opinions*
  • Approval Motions under Rule 7 

* Albert Oosterhoff, Professor Emeritus Western University, Counsel to WEL, consults on matters within his areas of expertise, providing opinions concerning Wills, Estates, Trusts and related Property matters. 

 

Please Enjoy, 

 

Kimberly A. Whaley
Whaley Estate Litigation

 

I. WEL NEWS
 

1. STEP CANADA NATIONAL CONFERENCE, TORONTO, JUNE 17-19, 2015

 

WEL attended the 2015 STEP National Conference in June and was also a conference sponsor.

 


 

Kimberly Whaley and John Poyser presented at the STEP 17th Annual Conference on June 19, 2015 on: "New Spouse/Old Money: Claims Arising Out of Later Life Partnerships."

 

Kim's article: "Attacking and Defending Gifts" can be accessed on the WEL blog: link to posting


 

 

II. LAW REVIEW: CASES AND OTHER LEGAL REVIEWS

 

Scalia v. Scalia, 2015 ONCA 492http://canlii.ca/t/gjvc1

  

Scalia v. Scalia: Court of Appeal Upholds Personal Costs Award against Attorney under a POA based on Litigation Conduct

 

Recently the Ontario Court of Appeal[1] upheld a finding that an attorney for personal care and property and litigation guardian was personally liable for substantial indemnity costs in a family dispute. While the appellate court disagreed with the application judge's finding of "bad faith", the appellate court upheld the costs award based on the attorney's conduct during the litigation. This case provides a helpful overview of the test of "bad faith" in the family law context and in Substitute Decisions Act litigation when an attorney may be personally liable for costs, among other legal issues.

 

Facts and Background 

 

This case began with the unfortunate, but familiar, dispute between an adult child of a first marriage and the spouse of a second marriage. An older adult was diagnosed with Alzheimer's disease and one of his sons was appointed as his power of attorney for property and personal care.  The older adult's wife, and the step-mother of the attorney, cared for him in their home until she was no longer able to do so.  Upon consultation with and recommendation of the Community Care Access Centre ("CCAC") the father was moved to a long term care facility. The father was not happy with this move and initially he blamed his wife and refused to see her.

 

The son eventually became concerned that his step-mother was improperly diverting funds that belonged to his father. As his father's attorney for property the son removed all funds in two accounts that were held jointly by his father and step-mother. Eventually, acting as his father's litigation guardian, the son commenced an application against his step-mother seeking, among other things, certain financial information about missing monies and an order requiring the sale of a property in Florida jointly owned by his father and step-mother and that the net proceeds be divided in equal shares. It was the son's position that given his father's "condition" his father and his step-mother were "effectively separated" and that the terms of a marriage contract that they had entered into applied. He argued that as his father's attorney, he was duty-bound to take actions informed by the domestic agreement as well as his father's wishes as expressed in his will. With this in mind, he chose to stop income flowing to his step-mother, froze the money removed from the joint bank accounts, and took steps to sell the Florida property.[2]

 

His step-mother brought a cross-application seeking, among other things, that the Public Guardian and Trustee act as guardian for her husband, that the marriage contract be set aside, an order for spousal support, access to the funds removed by the son from the joint account and an order prohibiting the son from dealing with the Florida property.

 

The father/husband died after the application was heard but before the application judge had released his decision. The application judge was advised of his death and took it into account in his decision. The son was also the estate trustee of his father's estate.

 

The Application Decision

 

The application judge made numerous factual findings that were eventually questioned by the appellate court, including that the father's move into the long term care facility was at the behest of the son. The application judge had questioned the son's motivation behind this move. Also, the application judge found that the wife's income was insufficient over the relevant period to meet her expenses while the husband had excess income. On this basis he awarded support for the wife of $900 per month from October 1, 2012 until the husband's death. The remaining frozen funds from the joint bank account were ordered released to the wife and an order was made that the wife was "free to deal with [the Florida property] as she sees fit in her sole discretion".[3]

 

With respect to costs, the application judge concluded that the son's conduct led to the adversarial proceeding that split the family and that the wife's reasonable settlement offers were met with increasing hostility by the son.[4] The application judge also made a finding of bad faith based on the son's "reprehensible conduct"[5] and relied on s.32(1) of the Substitute Decisions Act, 1992, S.O. 1992, c.30 analysing the son's actions on the basis that the son had a fiduciary duty to perform his duties diligently, with honesty and integrity, and in good faith.

 

It was through this lens, that the application judge held that the son had acted in bad faith in unilaterally withdrawing funds form the joint accounts and holding back support for the wife. The application judge also held that various steps the son took were not in his father's best interests.[6]

 

The application judge awarded substantial indemnity costs against the son personally for $13,500.00. The son appealed.

 

Appellate Decision

 

The Ontario Court of Appeal allowed the appeal in part. The Court set aside the order granting the wife authority to deal with the Florida property at her sole discretion. The Court also set aside the spousal support order of $900 per month and substituted an order of $300 instead. The remaining appeal, including the son's appeal of the costs award against him, was dismissed.

 

However, the Court of Appeal held that the application judge erred in finding that the son's conduct constituted bad faith. First, certain findings of fact on which the application judge based his conclusion that the son acted in bad faith were not supported by the record i.e. that the son forced his father into a long term care facility when really it was the CCAC who was instrumental in the decision. Also,

 

The application judge was obliged to identify and apply the legal test governing bad faith in this context. This he did not do. The legal test for bad faith in the family law context, as set out in S.(C). v. S(M), 38 R.F.L. (6th) 315 (S.C.J.) at para. 17, aff'd 2010 ONCA 196, 2 O.A.C. 225, is that the impugned behaviour must be shown to be carried out with "intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court". In short, the essential components are intention to inflict harm or deceive.[7][emphasis added]

 

Justice Epstein, on behalf of the Court noted:

 

I have concluded that many of the findings upon which the application judge based his conclusion that [the son] acted in bad faith cannot stand. However, even if they were sustainable on this record, I am of the view that these findings do not meet the test for bad faith in the family law context. Although these findings could support a finding of unreasonableness, they do not rise to the level of wrongdoing, dishonest purpose or moral iniquity the test for bad faith requires. [emphasis added][8]

 

The Court of Appeal however did not let the son off completely. It found that while the application judge may not have come to the correct conclusion on bad faith, he also awarded costs against the son personally based on "litigation conduct".

 

The application judge found that [the son], a person entrusted with a power of attorney, took steps of no benefit to the person to whom he owed a fiduciary duty - his father. In addition, the application judge held that [the son] refused to accept reasonable offers to settle. Instead of assisting the family resolve the issues at stake, [the son's] conduct, as the application judge noted, turned the matter "into [an] unnecessarily brittle and adversarial proceeding that split the family."[9]

 

In Justice Epstein's view, the litigation was the result of the son's "ill-advised handling of [the father's] affairs. The litigation was disproportionately costly having regard to [the father's] modest estate. Simply put, from a financial perspective, the litigation was not a responsible reaction to [the son's] concerns about his father's finances."[10] Accordingly, the costs award against the son personally was upheld.

 

Conclusion

 

As an attorney it is sometimes hard not to get emotionally and personally involved, especially when a dispute arises between loved ones and family members. It must be remembered that attorneys have a fiduciary duty to act in the best interests of the person who granted the power of attorney. If a reasonable offer to settle is presented and it is in the best interests of, and for the benefit of, the person to whom an attorney owes a fiduciary duty then that offer should be accepted. All decisions regarding the conduct of litigation proceedings should also be made with the incapable person's best interests in mind. Otherwise, as this case shows, taking litigation personally and forgetting about to whom a fiduciary duty is owed will result in an attorney paying costs personally as well.



[1] Scalia v. Scalia 2015 ONCA 492["Scalia"]

[2] Scalia at para. 25.

[3] Scalia at para. 31.

[4] Scalia at para. 32.

[5] Scalia at para. 59.

[6] Scalia at para. 33.

[7] Scalia at para. 68.

[8] Scalia at para. 69.

[9] Scalia at para. 71.

[10] Scalia at para. 73.

 

III. UPCOMING PROGRAMS

 

1. Ontario Seniors' Secretariat (OSS)- Ontario Elder Abuse Strategy

Burlington, ON,  

July 23, 2015

Dialogue on Ontario's Elder Abuse Strategy, Round table discussion

Kimberly Whaley and Heather Hogan


2. LSUC, Practice Gems, The Administration of Estates 2015

September 10, 2015

Co-Chairs: Kimberly Whaley and Tim Grieve

https://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE15-0090201

 

3. Frontenac Law Association 1000 Islands Legal Conference

Gananoque, September  18-19, 2015

Contested Passings of Fiduciary Accounts and Predatory Marriages

Speaker:  Kimberly Whaley

http://www.cfla.on.ca/cfla/conferencePayment.php

 

4. OBA, YLD, Wills and Estate Planning: A Primer

September 29, 2015

The Initial Client Meeting: Practice Issues - Before the Meeting

Speakers: Kimberly Whaley and Lionel Tupman

 

5. LSUC Estates Summit

October 7-8, 2015

Capacity

Speakers: Kimberly Whaley and John Poyser

https://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE15-0100300

 

6. CBA Wills, Estate and Trust Fundamentals for the Estate Practitioner

October  15-18, 2015

Trends in the Practice of Estates and Trusts: Building on Estates Practice  

Speaker, Kimberly Whaley

https://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE15-0100300
 

7. LSUC, The Intersection of Estates Law and Bankruptcy Law: Administration of the Insolvent Estate

October 30, 2015

Speaker: Kimberly Whaley

Chairs: Frank Bennett and Ben Arkin

https://ecom.lsuc.on.ca/cpd/product.jsp?id=CLE15-0100300
 

8. Osgoode Professional Development, Key Issues -Best Practices - Practical Approaches

Advising the Elderly Client,  November 4-5, 2015

Claims Arising out of Later Life Partnerships

Speaker: Kimberly Whaley

http://osgoodepd.ca/upcoming_programs/advising-the-elderly-client/

 

9. CCEL 2015 Elder Law Conference, Vancouver, BC

Capacity and Predatory Marriages

November 12-15, 2015

Speaker: Kimberly Whaley and Heather Hogan

http://www.bcli.org/ccel/upcoming-events 

 

10. Osgoode Professional Development, Osgoode Elder Law Webinar Series

February 4, 2016

New Spouse/Old Money: Predatory Marriages

Speaker: Kimberly Whaley and Albert Oosterhoff

www.osgoodepd.ca 

 

IV. In Case You Missed It - Last Month's Highlights from Our Blog 

  

Click to link: 

 













V. Newsletter Archive

Past issues of our Newsletter can be viewed on-line by following this link to our Newsletter Archive:

http://whaleyestatelitigation.com/blog/newsletter-archive/ 

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This newsletter is intended for the purposes of providing information only and is to be used only for the purposes of guidance.  This newsletter is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

 

Newsletter Contents
I. WEL News
II. Law Review
III. Upcoming Programs
IV. Recent Blog Posts
V. Newsletter Archive

Quick Links

 
 
 

 






Contact Info

45 St. Clair Ave West
Suite 600
Toronto, ON, M4V 1K9
Tel: (416) 925-7400 
Fax: (416) 925-7464

Kimberly A. Whaley
CS, TEP, LLM
Principal
(416) 355-3250
 
Mark Handelman
Firm Counsel
(416) 355-3254

Albert H. Oosterhoff
Firm Counsel
(416) 355-3266
 
Ameena Sultan
Associate Lawyer
(416) 355-3258

 

Benjamin D. Arkin
Associate Lawyer
(416) 355-3264 

Heather B. Hogan
Associate Lawyer
(416) 355-3262

Lionel J. Tupman
Associate Lawyer
(416) 355-3258

Joanne Hwang
Associate Lawyer
(416) 355-3270
 
Deborah Stade
Office Manager
(416) 355-3252
 
Bibi Minoo
Estates Clerk
(416) 355-3251

Birute Lyons
Law Clerk
(416) 355-3259

Marylin Tait 

Legal Assistant

(416) 355-3255

 

Rita McHorgh
Legal Assistant
(416) 355-3261

Kimberlee Pearce
Legal Assistant
(416) 355-3257

Celine Byer

Office Coordinator

(416) 355-3253


 

 

 

 

 

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