Giovanni Scalia, in his personal capacity and as Executor for the Estate of Giuseppe Scalia v. Giuseppina Scalia Giuseppina Scalia v. Giovanni Scalia, in his personal capacity and as Executor for the Estate of Giuseppe Scalia, et al.
[Indexed as: Scalia v. Scalia]
Ontario Reports
Court of Appeal for Ontario,
Weiler, G.J. Epstein and D.M. Brown JJ.A.
July 2, 2015
126 O.R. (3d) 241 | 2015 ONCA 492
Case Summary
Banks and banking — Accounts — Applicant becoming concerned that respondent (who was married to applicant's elderly and incapacitated father) was diverting funds that belonged to father — Applicant exercising his authority under power of attorney to withdraw funds from respondent's and father's joint bank accounts and place them out of respondent's reach — Funds subsequently frozen — Application judge not erring in releasing frozen funds to respondent — Applicant not entitled to take funds from joint bank accounts on basis that respondent was not providing him with information about her financial affairs.
Family law — Costs — Applicant taking steps as his incapacitated father's power of attorney to protect his father's assets from respondent (who was married to father) — Applicant commencing litigation against respondent as his father's litigation guardian and respondent commencing her own application in response — Application judge allowing respondent's application in part and dismissing applicant's application — Application judge awarding respondent her costs on substantial indemnity basis to be paid by applicant personally — Applicant's appeal from costs order dismissed — Application judge erring in finding that applicant acted in bad faith as applicant did not act with intent to harm respondent or to deceive respondent or court — Costs order sustained on ground of applicant's litigation conduct as litigation was disproportionately costly in light of father's modest estate and was not responsible reaction to applicant's concerns about father's finances.
Family law — Property — Partition — Respondent and her elderly and incapacitated husband jointly owning Florida property — Application judge erring in finding that respondent was free to deal with that property as she saw fit — Applicant having authority as husband's power of attorney to sever joint tenancy and force sale — Applicant not behaving maliciously, oppressively or with vexatious intent in bringing application for partition and sale — Applicant entitled to order for partition and sale at time application was heard — Husband dying before application judge delivered his decision and property passing to respondent — Court of Appeal making order for partition and sale nunc pro tunc as of date of hearing of application.
Family law — Support — Spousal support — Application judge failing to take husband's capacity to pay into account in awarding wife spousal support of $900 per month — Award reduced to $300 per month. [page242]
The respondent was married to the applicant's father, J. After their marriage, they moved into half of a duplex owned by J. The other half was rented out. They also jointly owned a Florida property. J was diagnosed with Alzheimer's disease in 2006 and moved into an extended care facility in 2012. The applicant was J's power of attorney for property and personal care. He became concerned that the respondent was diverting funds that belonged to J. As a result, he arranged for funds in two accounts jointly held by J and the respondent to be put out of the respondent's reach. Those funds were subsequently frozen. The applicant brought an application as J's litigation guardian for an order requiring certain banks to deliver information about the respondent; an order requiring the respondent to account for proceeds of the rental property and funds allegedly missing from her and J's joint account; an order releasing the frozen funds so that the applicant could repair the rental property, pay interim support to the respondent, pay J's living expenses and retain the balance in trust for J; and an order requiring the sale of the Florida property and division of the net proceeds between the respondent and J in equal shares. The respondent commenced her own application seeking, among other relief, an order for support, an order directing that the frozen funds be released into her and J's joint account, and an order prohibiting the applicant from dealing with the Florida property. The application judge released the balance of the frozen funds to the respondent, ordered that she be given an unrestricted right to deal with the Florida property, and awarded her monthly support of $900 to the date of J's death. (J died after the application was heard and before the decision was released.) He awarded the respondent her costs on a substantial indemnity basis to be paid by the applicant personally. He dismissed the applicant's application and awarded the respondent her costs on a partial indemnity basis, to be paid by J's estate. The applicant appealed.
Held, the appeal should be allowed in part.
The application judge did not err in ordering that the frozen funds be released to the respondent. Money on deposit in joint bank accounts is presumed to be property held as joint tenants. Nothing in the record rebutted the inference that throughout their 20-year marriage, J and the respondent intended those joint accounts to be used for the benefit of both and to have a right of survivorship. The applicant was not entitled to take the funds from the joint bank accounts and put them out of the respondent's reach on the basis that she was not providing him with information he requested about her financial affairs.
The application judge erred by finding that the respondent was free to deal with the Florida property. Contrary to the application judge's finding that the respondent alone had funded the purchase of the property, J contributed half the purchase price from his own funds. Even if the application judge's finding of fact were correct, the respondent was not entitled to deal with the property at her sole discretion. As J's power of attorney, the applicant had the authority, pursuant to s. 31(1) of the Substitute Decisions Act, 1992, S.O. 1992, c. 30, to sever the joint tenancy and force a sale. Under s. 2 of the Partition Act, R.S.O. 1990, c. P.4, courts should compel partition and sale unless the applicant had behaved maliciously, oppressively or with a vexatious intent. There was no evidence that the applicant had acted in such a manner by bringing the application for partition and sale. The applicant was entitled to an order for partition and sale at the time the application was heard. Title to the property passed to the respondent upon J's death while the parties were waiting for the application judge's decision. The order for partition and sale should be made nunc pro tunc as of the date of the conclusion of the hearing of the application. [page243]
In making the support order, the application judge erred by not considering J's capacity to pay. The quantum of the support order should be reduced to $300 per month.
The application judge did not err in awarding costs against the applicant personally in the respondent's application. The evidence did not support the application judge's finding that the applicant acted in bad faith. The legal test for bad faith in the family law context is that the impugned behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party, to conceal information relevant to the issues, or to deceive the other party or the court. The applicant's conduct did not rise to the level of wrongdoing, dishonest purpose of moral iniquity that the test for bad faith requires. However, the elevated costs award against the applicant personally was premised not only on a finding of bad faith, but also on litigation conduct. The award was sustainable on that basis. The litigation was the result of the applicant's ill-advised handling of J's affairs and was disproportionately costly having regard to J's modest estate. It was not a responsible reaction to the applicant's concerns about J's finances.
Cases referred to
Gunn v. Harper (1902), 3 O.L.R. 693, [1902] O.J. No. 218 (C.A.); Hislop v. Canada (Attorney General), [2007] 1 S.C.R. 429, [2007] S.C.J. No. 10, 2007 SCC 10, 278 D.L.R. (4th) 385, 358 N.R. 197, J.E. 2007-477, 222 O.A.C. 324, 153 C.R.R. (2d) 173, 37 R.F.L. (6th) 1, EYB 2007-115536, 154 A.C.W.S. (3d) 362; McDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), [2005] O.J. No. 2432, 255 D.L.R. (4th) 435, 199 O.A.C. 203, 17 E.T.R. (3d) 36, 140 A.C.W.S. (3d) 220 (C.A.); S. (C.) v. S. (M.), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164, 38 R.F.L. (6th) 315, 157 A.C.W.S. (3d) 923 (S.C.J.), affd [2010] O.J. No. 1064, 2010 ONCA 196, 262 O.A.C. 225, 76 R.F.L. (6th) 14; Silva v. Silva (1990), 1990 CanLII 6718 (ON CA), 1 O.R. (3d) 436, [1990] O.J. No. 2183, 75 D.L.R. (4th) 415, 42 O.A.C. 5, 30 R.F.L. (3d) 117, 23 A.C.W.S. (3d) 1224 (C.A.)
Statutes referred to
Family Law Act, R.S.O. 1990, c. F.3, ss. 14 [as am.], 33(9)(d)
Partition Act, R.S.O. 1990, c. P.4, s. 2
Substitute Decisions Act, 1992, S.O. 1992, c. 30, ss. 7(2), 31(1), 32(1)
Rules and regulations referred to
Family Law Rules, O. Reg. 114/99 [as am.]
APPEAL from the order of Carey J. of the Superior Court of Justice dated June 11, 2014 allowing the respondent's application in part and dismissing the applicant's application.
Jasmine T. Akbarali and Jameel Madhany, for appellants.
Josephine Stark and David M. Sundin, for respondent.
The judgment of the court was delivered by
G.J. EPSTEIN J.A.: —
Overview
[1] This appeal involves a dispute over the financial affairs of Giuseppe Scalia ("Joe"), who died on March 13, 2014. The dispute [page244] is between Joe's son from his first marriage, the appellant, Giovanni Scalia ("John"), and Joe's widow, the respondent, Giuseppina Scalia ("Pina"). John is the executor of his father's estate.
[2] Joe and Pina were married in 1993. Joe was 64 years old and a widower; Pina was 54 years old and divorced. Each had four children from their previous marriages. Both Joe and Pina were retired. They entered into a marriage contract, married and then moved into half of a duplex owned by Joe. The other half was rented out. In 1994, Joe and Pina purchased a modest home in Florida. They sold this property in 2005 and repurchased it in 2007. At the time of Joe's death, the property was held jointly by Joe and Pina.
[3] Joe was diagnosed with Alzheimer's disease in 2006. John was appointed as Joe's power of attorney for property and personal care ("POA") in August 2007. Pina cared for Joe in their home until 2011. When, in 2011, Pina was no longer able to manage on her own, John stepped in.
[4] John became concerned that Pina had been diverting funds that belonged to Joe. As a result, he arranged for funds in two accounts jointly held by Joe and Pina to be put out of Pina's reach. These diverted funds were subsequently frozen by the bank into which John transferred them. John also sought financial information from Pina about the whereabouts of certain moneys, including funds Pina was receiving from the rental of the other half of the duplex.
[5] In March 2012, following discussions with Joe's children and with an agency known as the Community Care Access Centre, Joe was moved to a long-term care facility. Joe was unhappy with this move. Initially, he blamed Pina for the decision.
[6] As a result of their various disputes, Pina and John brought applications against each other.
[7] On January 22, 2013, John, acting as Joe's litigation guardian, commenced an application seeking
(a) an order requiring certain banks to deliver information about Pina;
(b) an order requiring Pina to account for proceeds of the rental property and funds allegedly missing from her and Joe's joint account;
(c) an order releasing the frozen funds so that John could repair the rental property, pay interim support to Pina, pay for Joe's living expenses, and retain the balance of funds in trust for Joe; and [page245]
(d) an order requiring the sale of the Florida property and division of the net proceeds between Pina and Joe in equal shares.
[8] In her application, commenced on March 18, 2013, Pina sought
(a) the appointment of the Office of the Public Guardian and Trustee in place of John as Joe's POA;
(b) an order setting aside the marriage contract;
(c) an order for interim support retroactive to October 1, 2012 to the date of Joe's death;
(d) an order directing that the frozen funds be released into Joe and Pina's joint account;
(e) a declaration that Pina was a dependent of Joe and that proper provision had not been made for her needs;
(f) an order for support and/or an order that Pina be compensated for care provided to Joe on a quantum meruit basis; and
(g) an order prohibiting John from dealing with the Florida property.
[9] The application judge granted Pina's application in part. Specifically, he (1) released the balance of the frozen funds to Pina; (2) ordered that Pina be given an unrestricted right to deal with the Florida property; and (3) awarded Pina monthly support of $900 from October 1, 2012 to the date of Joe's death in 2014. The application judge also awarded Pina her costs on a substantial indemnity basis that he fixed in the amount of $13,500 to be paid by John personally.
[10] The application judge dismissed John's application and awarded Pina her costs of $9,450 on a partial indemnity basis, to be paid by Joe's estate.
[11] On behalf of Joe's estate, John appeals (1) the finding that Pina had exclusive title to the frozen funds; (2) the finding that Pina had the sole right to deal with the Florida property; and (3) the quantum of retroactive spousal support. On his own behalf, John appeals the costs awarded against him, personally.
[12] I would allow the appeal in part. For the reasons that follow, I would set aside the order granting Pina the authority to deal with the Florida property at her sole discretion and order partition and sale nunc pro tunc as of the date the hearing of the application concluded -- December 16, 2013. I would also set [page246] aside the spousal support order of $900 per month and substitute an order in the monthly amount of $300, covering the time period from October 1, 2012 to Joe's death in 2014. I would dismiss the balance of the appeal.
Additional Background
[13] The following is a summary of the additional background facts and associated evidence relevant to this appeal.
The documents
[14] The pertinent terms of the marriage contract entered into by Joe and Pina are
all property acquired during the marriage would be shared equally;
Pina waived any rights, either in law or equity, over the duplex and Joe's RRSPs except those allowed by the marriage contract. The contract expressly provided that Joe's duplex and his RRSPs would not be included in any calculation of net family property;
upon Joe's death, Pina would receive a life interest in half of the duplex; and
Joe and Pina would be equally responsible for living expenses.
[15] In his will, Joe gave Pina a life interest in the duplex. Joe's will provided that the remainder of his estate would be divided equally among his children.
The finances
[16] At the time of the application, Joe's assets consisted of the duplex, his joint interest in the Florida property and a relatively small amount of money, including his interest in the frozen funds.
[17] During their marriage, Joe and Pina deposited their income -- Joe's gross monthly income of roughly $2,100 comprised of pension income and old age security and Pina's pension income of approximately $1,300 -- into a joint account.
[18] The monthly cost of maintaining the duplex was approximately $1,000. According to Pina, the rent from the duplex's rental unit was collected in cash and put towards common expenses. It was never deposited into the bank. Pina's evidence is that she and Joe were not in the habit of keeping receipts. [page247]
[19] John's evidence is that he had been warned by one of Pina's children that he should look into Pina's financial dealings. There were concerns that Pina had been improperly dealing with Joe's money. It was for this reason that, as previously noted, in June 2011, John withdrew $36,000 from bank accounts held jointly by Joe and Pina and placed these funds in a trust account in Joe's name to which Pina had no access. While these funds were subsequently frozen by a court order, $10,000 was released to John pursuant to an interim order to allow for repairs to be made, under John's supervision, to the rental unit in the duplex.
[20] Pina's evidence is that in response to John's actions in relation to the joint bank accounts, she moved her income streams to a different bank.
[21] John tried to get information from Pina to placate his concerns about what she was doing with Joe's money. He kept asking Pina for more information about where moneys were going and what bank accounts she had. Pina provided John with information and disputed his allegations that she had hidden anything in relation to her handling of financial matters. John was not satisfied with Pina's responses.
[22] As Joe's POA, John felt he had a duty to intervene. And so, in August 2012, John stopped depositing Joe's pension income into the joint account. In September 2012, the tenant moved out of the duplex's rental unit. According to Pina, John changed the locks of the unit and refused to find a new tenant. As a result, as of at least October 2012, Pina was receiving little to no income from Joe.
[23] In early 2013, John, as Joe's POA, commenced an application against Pina. Shortly thereafter, Pina commenced her own application against Joe and John. Both applications were heard together over two days in June and December 2013.
The Application Judge's Decision
[24] Joe died on March 13, 2014, after the application was heard but before the application judge released his endorsement regarding both applications on June 11, 2014.1 The application judge was advised of Joe's death and took it into account in his decision.
[25] Before the application judge, John argued that given Joe's condition, his father and Pina were effectively separated and the [page248] terms of the marriage contract applied. Therefore, as POA, he was duty-bound to take actions informed by the domestic agreement as well as his father's wishes as expressed in his will. It was against this background that John stopped income flowing to Pina, froze the bank accounts, and took steps to have the Florida property sold and the proceeds divided equally between Pina and Joe's estate.
[26] Pina relied on the continuing relationship between her and her husband. She took the position that John's actions had interfered with the financial arrangements under which she and Joe had been living their entire marriage. She challenged the applicability and, if necessary, the validity of the marriage contract. Finally, she argued that the Florida property was purchased with her funds and therefore belonged to her.
[27] The application judge rejected John's view that he had an obligation to manage his father's affairs under the terms of the marriage contract. Pina had cared lovingly for Joe through his illness. When Pina asked for help, the response she got was John's interference with her financial affairs. More importantly, the marriage had not ended.
[28] The application judge found that the decision to move Joe into the long-term care facility was primarily made by John and his siblings. When Joe became angry at Pina for moving him into the facility, John did nothing to help his father understand that it was his children, not Pina, who were behind the move. The application judge questioned the motivations of John and his siblings.
[29] The application judge further found that Pina's income was insufficient over the relevant period to meet her expenses. As a result, Pina had become dependent on her children. Conversely, Joe had an excess of income. On this basis, the application judge held that Pina was entitled to support of $900 per month from October 1, 2012 to Joe's death on March 13, 2014.
[30] The application judge found no basis to require Pina to account for her actions in relation to the joint account with Joe or to any other bank account. The application judge ordered that the remaining frozen funds of $26,000 be released to Pina.
[31] With respect to the Florida property, the application judge held that the property was primarily purchased with the proceeds from the sale of Pina's former home. He therefore found that she was "free to deal with that property as she sees fit in her sole discretion". The application judge concluded that there was no convincing reason to sell the Florida property, especially given its then reduced value and the fact that it was generating rental income. [page249]
[32] In dealing with costs, the application judge found that John's conduct led to this adversarial proceeding that split the family. Pina's settlement offers, which the application judge found to be reasonable, were met with increasing hostility.
[33] Relying on s. 32(1) of the Substitute Decisions Act, 1992, S.O. 1992, c. 30, the application judge analyzed John's actions on the basis that John had a fiduciary duty to perform his duties diligently, with honesty and integrity, and in good faith. Through this lens, the application judge held John had acted in bad faith in unilaterally withdrawing funds from Joe and Pina's joint accounts and holding back support from Pina. The application judge also held that various steps John took were not in his father's best interests.
[34] For these reasons, the application judge concluded that John should be personally liable, on a substantial indemnity basis, for Pina's costs associated with her application -- costs that the application judge determined to be $13,500.
[35] The application judge also concluded that the costs of Joe's application should be payable by Joe's estate. Since the application was not unreasonable and was not brought in bad faith, the application judge concluded that this portion of the costs of the application should be payable on a partial indemnity basis in the amount of $9,450.
Analysis
[36] On appeal, John submits that the application judge erred by
(1) releasing the frozen funds to Pina;
(2) finding that Pina was free to deal with the Florida property;
(3) ordering that Joe's estate pay Pina $900 per month in retroactive spousal support; and
(4) ordering $13,500 of costs personally against John.
1. Did the application judge err by releasing the frozen funds to Pina?
[37] John submits that the application judge provided no reasons for releasing the frozen funds to Pina.
[38] John further argues that allowing Pina to have the frozen funds results in unjust enrichment, as there is no juristic reason for the consequent benefit to her and the deprivation to Joe.
[39] I agree that the application judge, in his brief endorsement, did not explain the basis of his decision that the frozen [page250] funds be released to Pina. However, I find no fault with that decision. The money in issue came from two joint bank accounts. Money on deposit in joint accounts is presumed to be property held as joint tenants: Family Law Act, R.S.O. 1990, c. F.3, s. 14. There appears to be nothing in the record that rebuts the inference that throughout their 20-year marriage, Joe and Pina intended these joint accounts to be used for the benefit of both and to have a right of survivorship. I see no unjust enrichment in Pina's having funds to which she was, during Joe's lifetime, fully entitled to access.
[40] John also contends that Pina should not be allowed to use the funds given her lack of co-operation in responding to his legitimate requests for financial disclosure.
[41] I find no merit in John's contention that, unbeknownst to Pina, he was entitled to take the funds from the joint bank accounts and put them out of Pina's reach on the basis that she was not providing him with information he requested about her financial affairs. I simply do not see the connection between Pina's conduct and John's argument.
[42] John further submits that he has plans to use the frozen funds to make improvements to the rental unit -- something he says he can do pursuant to the authority he has under s. 7(2) of the Substitute Decisions Act.
[43] However, John's evidence does not support a finding that this is necessary. Moreover, John has not accounted for the $10,000 that was already released to him from the frozen funds that he says were for this purpose.
[44] I would therefore not give effect to this ground of appeal.
2. Did the application judge err by finding that Pina was free to deal with the Florida property?
[45] John argues that the application judge's conclusion that Pina is entitled to deal with the Florida property as she sees fit is based on palpable and overriding errors of fact -- the primary finding's being that the Florida property was not purchased with proceeds from Pina's previous matrimonial home.
[46] I agree that this finding of fact is not supported by the evidence in the light of the uncontradicted evidence that when Joe and Pina repurchased the Florida home in 2007 for $75,000, Joe contributed approximately half the purchase price from his own funds.
[47] Even if the application judge were correct in determining that Pina alone had funded the repurchase of the Florida property, this does not mean that she is entitled to "deal with" the property at "her sole discretion". Joe's name remained on title. [page251] John, as POA, had the authority, pursuant to s. 31(1) of the Substitute Decisions Act, to sever the joint tenancy and force a sale, as s. 31(1) permits a POA to do "anything in respect of property that the person could do if capable, except make a will". Under s. 2 of the Partition Act, R.S.O. 1990, c. P.4, courts should compel partition and sale unless the applicant has behaved maliciously, oppressively or with a vexatious intent: Silva v. Silva (1990), 1990 CanLII 6718 (ON CA), 1 O.R. (3d) 436, [1990] O.J. No. 2183 (C.A.), at para. 15.
[48] In my view, there is no evidence to support the notion that John, in bringing an application for partition and sale of the Florida property, behaved maliciously, oppressively or with a vexatious intent. It was in Joe's interests to partition and sell the Florida property. Due to his illness, Joe would likely never be in a position to enjoy the property again. The property was not generating income. And maintenance costs associated with the property were being incurred. While John's own affidavit demonstrates that Joe's income exceeded his expenses, as will be set out below, the surplus was modest. This was the situation with the Florida property at a time when John had to take responsible measures to ensure resources were available to properly provide for Joe's needs for an unknown period of time.
[49] I conclude that John was therefore entitled to an order for partition and sale of the Florida property at the time the application for the order was heard.
[50] However, title to the Florida property passed to Pina upon Joe's death while the parties waited for the application judge's decision. As a result, John, on Joe's behalf, suffered prejudice to his position during the time his application was under reserve.
[51] In the light of the long-standing principle that a litigant should not be prejudiced by delays occasioned by the court, in my view, the order for partition and sale should be made nunc pro tunc as of the date the hearing of the application concluded, namely, December 16, 2013: see Hislop v. Canada (Attorney General), [2007] 1 S.C.R. 429, [2007] S.C.J. No. 10, 2007 SCC 10, at para. 77, in which the court wrote, "Based on this principle, in cases where a [party] has died after the conclusion of argument but before judgment was entered, courts have entered judgment nunc pro tunc as of the date that argument concluded . . . We affirm the correctness of this approach". In Gunn v. Harper (1902), 3 O.L.R. 693, [1902] O.J. No. 218 (C.A.), at para. 14, this court summarized the principle in this way: "[T]he Court may pronounce judgment as of the day of the argument, for the reservation of judgment is for the [page252] convenience of the Court, and should not be permitted to operate to the prejudice of any of the parties."
3. Did the application err by ordering that Joe's estate pay Pina $900 per month of retroactive spousal support?
[52] John argues that the application judge erred in making a support order before Pina complied with the requirements mandated by the Family Law Rules, O. Reg. 114/99 that she serve and file a financial statement.
[53] No authority was identified that supports the proposition that, absent breach of a court order, failure to comply with family law production obligations disqualifies an otherwise deserving spouse of his or her right to support. Moreover, while Pina did not file a financial statement or account for the $12,000 that she withdrew from the joint account between June 2011 and July 2012, she did provide a considerable amount of detail about her financial circumstances.
[54] John goes on to argue that if Pina is entitled to support, while he takes no issue with the time period over which support was ordered, given the evidence of Joe and Pina's finances, the amount awarded constitutes an error in law.
[55] I agree. In my view, the application judge erred by not considering Joe's capacity to pay. Pursuant to s. 33(9) (d) of the Family Law Act, the court "shall consider . . . the respondent's capacity to provide support" in determining the amount of a spousal support order. Since the application judge provided no explanation for how he arrived at the monthly sum of $900, the award is not entitled to the considerable deference a spousal support order normally attracts.
[56] Both parties tendered fairly scant evidence concerning Joe's and Pina's monthly income and expenses during the period for which Pina was claiming spousal support. What can be ascertained is this. There was no rental income from the duplex during this time as it needed repair. John's evidence was that Joe's income was $2,099, with net medical expenses of approximately $750 and monthly costs of maintaining the duplex of $982, leaving a monthly surplus of roughly $360. Pina's evidence was that her monthly income was $1,367, with expenses of $2,370, leaving a monthly shortfall of $1,003.
[57] The average monthly amount of support to Pina suggested by the Spousal Support Advisory Guidelines is approximately $250. In the circumstances, including the lack of any other assistance as to Pina's financial affairs, in my view, the amount of spousal support John proposes -- that is, $300 per month -- is appropriate. [page253]
[58] I would therefore allow John's appeal of this aspect of the order, set aside the award of $900 per month, and substitute the amount of $300 per month for the agreed-upon period of time, namely, from October 1, 2012 to March 14, 2014.
4. Did the application judge err in ordering $13,500 of costs personally against John?
[59] The application judge awarded costs personally against John in Pina's application because of "the reprehensible conduct of John Scalia and the finding of bad faith".
[60] John argues that the application judge erred in finding that his conduct constituted bad faith.
[61] I agree.
[62] First, certain findings of fact on which the application judge based his conclusion that John acted in bad faith are not supported by the record. I refer to the following findings: John withheld support from Pina; John "unilaterally" withdrew funds from the joint account; John was responsible for forcing Joe into the long-term care facility against his will; John effectively allowed Joe's resultant hostility against Pina for causing the relocation to continue; John cut off visitation to Joe by Pina and her family; and John commenced his application in response to Pina's request for support.
[63] The record does not support a finding that John withheld all forms of support from Pina. The only income he withheld from her was Joe's pension income and this was after Pina refused, for a period of 15 months, to explain why funds were missing from the account. Even then, Pina was permitted to reside in Joe's duplex during this time and to receive the rental income from the property. The funds John withdrew from the joint account were transferred to a new account in Joe's name and Pina was informed of this fact. Some of these funds were used to pay expenses associated with the duplex.
[64] I would also attribute less significance than the application judge did to the fact that John "unilaterally" withdrew the frozen funds. As previously noted, John had a duty to protect his father's estate, particularly in the light of mounting and uncertain health care costs. John was also required by the Substitute Decisions Act to review his father's will and be mindful of how his father intended his estate to be distributed.
[65] With respect to Joe's being moved to the long-term care facility, the evidence is clear that the Community Care Access Centre was instrumental in this decision. And the evidence is far from clear that it was John and his siblings that perpetuated Joe's anger toward Pina. [page254]
[66] As for the application judge's finding that John chose "to completely cut off visitation by [Pina] and her children and grandchildren", in my view, this finding does not accurately reflect the evidence. Joe had expressed the desire not to see Pina. And John engaged a gerontology consultant to help decide whether or not it was advisable for Pina to visit Joe at the time.
[67] Finally, I note the application judge found that John commenced his application "in response to [Pina's] request for support". In fact, John commenced his application first, prior to Pina's application in which she requested support.
[68] 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.), 2007 CanLII 20279 (ON SC), [2007] O.J. No. 2164, 38 R.F.L. (6th) 315 (S.C.J.), at para. 17, affd [2010] O.J. No. 1064, 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.
[69] I have concluded that many of the findings upon which the application judge based his conclusion that John 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.
[70] However, as I read the application judge's reasons, the elevated costs award against John personally was premised not only on a finding of bad faith but also on litigation conduct.
[71] The application judge found that John, 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 John refused to accept reasonable offers to settle. Instead of assisting the family resolve the issues at stake, John's conduct, as the application judge noted, turned the matter "into [an] unnecessarily brittle and adversarial proceeding that split the family".
[72] It is no longer the case that the estate should routinely bear the costs of litigation. In MacDougald Estate v. Gooderham, 2005 CanLII 21091 (ON CA), [2005] O.J. No. 2432, 199 O.A.C. 203 (C.A.), at paras. 77-92, this court held that the traditional rule that all costs be paid by the [page255] estate is limited to two situations: (1) the litigation arose as a result of the testator; or (2) the litigation was reasonably necessary to ensure the proper administration of the estate.
[73] In my view, neither of those exceptions applies in the circumstances of this case. The litigation was the result of John's ill-advised handling of Joe's affairs. The litigation was disproportionately costly having regard to Joe's modest estate. Simply put, from a financial perspective, the litigation was not a responsible reaction to John's concerns about his father's finances.
[74] Given the considerable deference owed to the application judge's decision as to costs, I would not interfere with any aspect of his costs awards.
Disposition
[75] I would allow the appeal, in part. I would order partition and sale of the Florida property nunc pro tunc as of December 16, 2013. I would set aside the spousal support order of $900 per month and substitute it with the monthly sum of $300. Otherwise, I would dismiss the appeal.
[76] In the light of the divided success, I would order no costs of the appeal.
Appeal allowed in part.
Notes
1 The application judge released corrections to his endorsement on June 12, 2014, June 18, 2014 and September 4, 2014. The application judge also released an addendum to his endorsement on June 13, 2014.