COURT FILE NO.: CV-09-00005684-0000
DATE: 2012-03-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THUY NGUYEN-CRAWFORD
Neil D. Cameron, for the Applicant
Applicant
- and -
TUYET NGOC NGUYEN, THANG NGUYEN, NGOC-TAM (“TAM”) NGUYEN, NGOC-THUY (“LISA”) AL-ITAWI, THAO (“TIFFANY”) BUI and THE PUBLIC GUARDIAN AND TRUSTEE
Tuyet Ngoc Nguyen, Thang Nguyen, Ngoc-Tam Nguyen, Ngoc-Thuy Al-Itawi, and Thao Bui, Self-Represented
Richard Ashok Coutinho, for the Public Guardian and Trustee
Respondents
HEARD: July 12, 2011, at Brampton, Ontario
Price J.
COSTS ENDORSEMENT
NATURE OF PROCEEDING
[ 1 ] The children of Tuyet Ngoc Nguyen (“Mother”), who is now 81 years old, disagreed as to which of them should be responsible for Mother’s care and the management of her property after she suffered a stroke in 2008 which rendered her incapable of managing her own health care and property. Following the court’s decision in December 2011, which resolved that dispute, the children were unable to agree as to what costs, if any, should be paid in connection with the proceeding. These reasons will address that issue.
BACKGROUND FACTS
[ 2 ] Following Mother’s stroke in 2008, her youngest daughter, Ms. Crawford, sought to assume management of her property under Powers of Attorney that Mother had signed ten years earlier (“the 1998 POA’s”). This arrangement was unacceptable to Mother’s other children, who claimed that Ms. Crawford and her husband had mismanaged Mother’s funds for their own gain and were now impeding their access to Mother. In 2009, they removed Mother from Ms. Crawford’s home and had her sign new POA’s, giving them management of her health care and property (“the 2009 POA’s”).
[ 3 ] Ms. Crawford applied to this Court for a declaration that the 1998 POA’s were valid and for an Order restoring her access to Mother and her management of Mother’s property. Her siblings responded by seeking a declaration that their 2009 POA’s were valid or, in the alternative, an order appointing them as Mother’s guardians pursuant to the Substitute Decisions Act. They also sought an order requiring Ms. Crawford to account for the funds that she had managed for Mother during the ten years when Mother had been in her care. They alleged that Ms. Crawford and her husband had depleted Mother’s assets by approximately $206,000.00 while she was in their care.
[ 4 ] On December 10, 2010, I held that the 1998 POA’s were invalid because Mother had been under Ms. Crawford’s influence when she had signed them and had not been given the benefit of an independent interpreter. I also held that the 2009 POA’s were invalid because Mother had lacked capacity when she had signed them. I named the respondent siblings as Mother’s guardians for personal care and property, on the ground that their plan, the only one that had been submitted, entailed Mother living with her family, who were able to care for her, speak Vietnamese, and provide her with the Vietnamese food she enjoyed, rather than having her enter a long-term care facility which the siblings agreed would be unsuitable for her. I did not require Ms. Crawford to account for the funds she had managed for Mother because Ms. Crawford had not been acting under the authority of the 1998 POA’s during that period and Ms. Crawford’s siblings had not met the onus they bore in those circumstances of establishing that Ms. Crawford and her husband had acted dishonestly in their management of Mother’s funds.
[ 5 ] After my order was issued, the guardians disagreed among themselves as to whether Mother should continue living with them. Ngoc-Tam Nguyen (“Tam”) proposed that she become sole guardian and that Mother live with her. Her siblings by then favoured Mother entering a long-term facility and, in any event, expressed misgivings about Tam’s ability to manage Mother’s care alone. Faced with this new dispute, I made Tam guardian of Mother’s health care and made her elder brother, Thang Nguyen, guardian of her property, with responsibility to hire a professional care-giver to help Tam care for Mother.
[ 6 ] Ms. Crawford now seeks an order requiring her siblings to pay her costs of the proceeding, which she says have amounted to $67,379.31 on a substantial indemnity scale.
POSITIONS OF THE PARTIES
[ 7 ] Ms. Crawford submits that she should be fully indemnified for her costs based on the following:
a) She achieved her most important goal, which was to regain access to Mother.
b) She avoided having to account for the expenditures that she and her husband had made with Mother’s funds from 1998 to 2008.
c) Her siblings failed to prove the allegations of fraud they made against her.
[ 8 ] No submissions were received from Ms. Crawford’s siblings, who were self-represented. The Public Guardian and Trustee took no position, other than to draw the Court’s attention to the decision of this Court in Fiacco v. Lombardi [1] [2009] O.J. No. 3670, which held that it is not automatic that the costs of an estate proceeding are to be ordered paid by the estate.
ANALYSIS
a) Principles to be balanced
[ 9 ] In awarding costs, the court must balance two conflicting principles, namely, to indemnify the successful litigant for the cost of enforcing or defending his or her rights, and to avoid making potential litigants feel unduly hesitant to defend their rights by requiring them, as unsuccessful litigants, to bear all the costs of the successful party as well as their own. [2] The ultimate objective in balancing these principles is to ensure that the justice system works fairly and efficiently. [3]
b) Discretion to be exercised
[ 10 ] The awarding of costs is governed by section 131 of the Courts of Justice Act [4] and by Rule 57.01 of the Rules of Civil Procedure. [5] Section 131 confers on the court its general discretion to determine costs. Rule 57.01 provides guidance in the exercise of that discretion by enumerating factors that the court may consider when determining costs.
c) Objectives of a costs order
[ 11 ] The Indemnification of the successful party is the paramount objective, but not the only one, to be served by a costs order. Other objectives that the court has recognized include encouraging settlement, discouraging frivolous proceedings and unnecessary steps in litigation, and preserving access to justice. [6]
[ 12 ] The overriding principles that the court must apply when determining costs are fairness and reasonableness: Boucher v. Public Accountants Council for the Province of Ontario [7] and Moon v. Sher. [8] The overall objective is “to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.” [9] This is a “fundamental concept in fixing or assessing costs.” [10]
d) Factors to be considered in awarding costs
[ 13 ] Rule 57.01(1) provides, in part:
57.01(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the Court may consider…
(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;
(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;
(a) the amount claimed and the amount recovered in the proceeding;
(c) the complexity of the proceeding;
(d) the importance of the issue;
(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(f) whether any step in the proceeding was
(i) improper, vexatious or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(i) any other matter relevant to the question of costs. [Emphasis added]
[ 14 ] I will review the factors which I consider most relevant in arriving at the appropriate costs order in the present case.
e) Indemnification
[ 15 ] Costs generally follow the event. In other words, a successful party is generally entitled to an assessment of his or her costs. Exceptions are sometimes made where the successful party has forfeited his or her right to costs by acting unreasonably in the conduct of the action or by refusing a reasonable offer to settle. These circumstances do not obtain in the present case and there is therefore no reason to depart from the general rule that costs should follow the event. That said, a determination must be made as to which party was successful. In cases of divided success, each party may be required to bear their own costs or costs may be apportioned between the parties in accordance with their relative successes.
[ 16 ] Ms. Crawford argues that she should be indemnified fully for her costs because she was successful in achieving her major goal of having her access to Mother restored. While Ms. Crawford may have regarded the restoration of her access to Mother as her major goal in the proceeding, I cannot rely entirely on her after-the-fact characterization of her priorities in assessing whether she was successful in her application. I must also consider the overall nature of her application, what priorities emerge from the manner in which she conducted the proceeding, the goals that the respondents were seeking to achieve, and the importance of the issues in which each party achieved success in relation to the overall outcome.
(i) Restoring Ms. Crawford’s access to Mother
[ 17 ] Ms. Crawford was successful in having her access to Mother restored. She had alleged that her siblings had used their 2009 POA’s to deny her contact with Mother as of February 2009. On August 19, 2009, Justice Hourigan ordered the respondent siblings to take all reasonable steps to foster and facilitate regular personal contact between Ms. Crawford and Mother. My order dated December 10, 2010, required them to continue doing so. It also required them, after consulting with Ms. Crawford, to deliver an amended Guardianship Plan making specific provision for regular personal contact between Ms. Crawford and Mother.
[ 18 ] While Ms. Crawford was successful in having her access to Mother restored, this goal cannot be isolated from the other remedies she sought, particularly the declaration she sought as to the validity of the 1998 POA’s which she said entitled her to continuing managing Mother’s financial affairs. It was, in large part, the exclusive control that Ms. Crawford and her husband had exercised over Mother’s financial affairs since 1998, the lack of transparency with which they had done so, and the catastrophic consequences that this had had on Mother’s assets, that caused Ms. Crawford’s siblings to take the steps that gave rise to Ms. Crawford’s application and that caused them to oppose the application so vigorously.
[ 19 ] Ms. Crawford was unsuccessful in this key aspect of her application. I found that Ms. Crawford did not meet her burden of proving that Mother had known that what she was signing in 1998 were Powers of Attorney or that the 1998 POA’s were a clear expression of Mother’s wishes, having regard to the evidence that Mother was substantially dependent on Ms. Crawford at the time and was not given the benefit of an independent translator.
[ 20 ] Ms. Crawford was also unsuccessful in her effort to be named as Mother’s guardian for the management of property. Her mismanagement of Mother’s financial affairs in the past, and the profound distrust toward her and her husband that this had engendered among her siblings, disqualified her from assuming this role in the future.
[ 21 ] If Ms. Crawford had sought only to restore her access to Mother, it is likely that she would have been entitled to indemnification for her costs. Because she sought also to re-assert her financial control over Mother, which her siblings successfully resisted, she cannot expect to be indemnified by them for her costs solely because her access to Mother was restored.
(ii) Not having to account for Mother’s funds
[ 22 ] Ms. Crawford additionally relies on the fact that my order dated December 10, 2010, did not require her to account for the funds she and her husband had managed for Mother from 1998 to 2008. Ms. Crawford was able to avoid this accountability because she was not acting under the 1998 POA’s at the time and because her siblings failed to discharge the heavy onus that the law cast on them, in these circumstances, to show “clear and compelling evidence” of mismanagement, theft or financial abuse. [11]
[ 23 ] The evidence did, however, establish that Ms. Crawford had exercised undue influence over Mother. I made the following findings in this regard:
a) Mother was dependent on Ms. Crawford.
b) The 1998 POA’s had the effect of conferring extensive powers on Ms. Crawford to act on Mother’s behalf.
c) Ms. Crawford herself provided the only translation of the 1998 POA’s and of the legal advice which the lawyer, Ms. Lewis, gave to Mother concerning them.
d) Ms. Crawford and her husband had used Mother’s funds as if they were their own.
e) If the signatures on Mother’s investment documents were indeed Mother’s, she had not understood what she was signing.
f) Mr. Crawford had invested Mother’s funds in speculative stocks which were beyond Mother’s known risk tolerance, with the result that Mother’s property had been almost entirely depleted.
[ 24 ] Ms. Crawford argued that it was unlikely that she and her husband would have been able to dupe both Mother and her financial institutions over the ten-year period in which the transactions occurred. I rejected this argument and found that because Ms. Crawford was Mother’s daughter and, due to Mother’s lack of fluency in English, her spokesperson, and had acted with Mother’s apparent authority in relation to the financial institutions in question, she would not have been detected in committing the offences which her siblings suspected her of having committed.
[ 25 ] Ms. Crawford further argued that the investment of Mother’s funds in iTrades transactions was not intended to diminish their value and that it was only with hindsight that they could be said to have been unwise. The evidence, however, satisfied me that the investments were, by their nature, beyond Mother’s risk tolerance, as a person who had always been frugal and conservative with her finances.
[ 26 ] Notwithstanding that Ms. Crawford and her husband had dealt with Mother’s funds without her knowledge and authority, in a manner that was inconsistent with her known frugality, and had thereby depleted her property, I was not satisfied on a balance of probability that she had acted with a dishonest intent. The evidence fell just short of establishing dishonesty. Had dishonesty been established, it would have justified requiring Ms. Crawford to account for the funds that she and her husband had managed for Mother and lost.
[ 27 ] Ms. Crawford’s mismanagement of Mother’s funds deprived her siblings of their share of what would otherwise likely have been Mother’s legacy to all five of her children. It would add insult to injury to require the respondent siblings to pay Ms. Crawford’s costs based on the fact that she avoided having to account for the funds of Mother’s that she and her husband mismanaged.
f) Unproven allegations of fraud
[ 28 ] Ms. Crawford argued, finally, that she should be indemnified for her costs, and on a substantial indemnity basis, based on her siblings’ failure to prove the allegations of fraud that they had made against her. In Bargman v. Rooney, [12] Blair J. (as he then was) described the rationale for such an award of costs:
The cost sanction should be imposed sharply and firmly by the courts, in my opinion, at any stage in the proceedings when unsupported and unproven allegations of fraud and dishonesty are put forward. As Brockenshire J. noted in Goulin v. Goulin 1995 7236 (ON SC), (1995), 26 O.R. (3d) 472 (Gen. Div.) at pp. 475-476 :
…The point is to chastise or punish reprehensible conduct, and to save harmless an innocent litigant other from the otherwise unnecessary expense of litigation... [13]
[ 29 ] In the present case, Ms. Crawford was not an innocent litigant, and her siblings were not guilty of reprehensible conduct for imputing dishonesty to her and her husband. There was, in fact, evidence, that Ms. Crawford or her husband had inscribed Mother’s signature on some of her cheques although they were, for the most part, cheques written for expenses incurred for Mother’s benefit and likely signed more for convenience than dishonesty. There were also, as noted above, investments made on Mother’s behalf without her knowledge and beyond her known risk tolerance.
[ 30 ] In Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, Arbour J., for the Supreme Court of Canada, held that an unsuccessful attempt to prove fraud or dishonesty does not lead inexorably to an award of substantial indemnity costs against the unsuccessful party. Arbour J. stated at para. 26:
In Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p. 134, McLachlin J. (as she then was) for a majority of this Court held that solicitor-and-client costs "are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties". An unsuccessful attempt to prove fraud or dishonesty on a balance of probabilities does not lead inexorably to the conclusion that the unsuccessful party should be held liable for solicitor-and-client costs, since not all such attempts will be correctly considered to amount to "reprehensible, scandalous or outrageous conduct". However, allegations of fraud and dishonesty are serious and potentially very damaging to those accused of deception. [Emphasis added]
[ 31 ] In the present case, it was not unreasonable for the respondent siblings to allege forgery based on the fact that either Ms. Crawford or her husband had apparently inscribed Mother’s signature on cheques, and iTrades had been made on her behalf and without her knowledge. It was not frivolous for Ms. Crawford’s siblings to argue that these facts supported an inference of dishonest conduct by Ms. Crawford and her husband. Potential litigants must not be penalized for failing to meet their onus of proof where they have alleged facts responsibly based on credible evidence that could support an inference of such facts. They also must not be made to feel unduly hesitant to defend their rights by requiring them, wherever they are unsuccessful in respect to one or more issues in the litigation, to bear the costs of the successful party as well as their own.
g) The principle of encouraging settlement
[ 32 ] It was open to Ms. Crawford at any time to offer to settle the proceeding on terms that would have restored her access to Mother and absolved her from having to account for her management of Mother’s funds in the past and abandoned her request for a declaration as to the validity of the 1998 POA’s. There is no evidence that she made such an offer. I conclude from this absence of evidence that she regarded her goal of establishing the validity of the 1998 POA’s, as a means of re-asserting her financial control over mother’s affairs, to be a significant one, as did her siblings. Her failure to achieve it should reasonably be reflected in the court’s disposition of the costs of the proceeding.
CONCLUSION AND ORDER
[ 33 ] It was, in large part, the fact that Ms. Crawford and her husband had assumed exclusive control over Mother’s financial affairs in the past and exercised that control with such lack of transparency and catastrophic consequences that alienated Ms. Crawford’s siblings from her and caused them to take the steps that led to this application, namely:
a) removing Mother from her care;
b) arranging for Mother to sign new Powers of Attorney;
c) opposing Ms. Crawford’s reliance on the 1998 POA to re-assert control over Mother’s finances.
[ 34 ] The tragedy in this family is that Mother’s children allowed their desire to control Mother’s assets to become intertwined with and, ultimately, inseparable from, their relationships with her. Had Ms. Crawford acknowledged that she had not managed Mother’s funds successfully in the past, and disavowed any claim to do so in the future, had she sought only to restore her access to Mother, even if she had also resisted being held accountable for Mother’s past financial losses, she would likely have been entitled to her costs. As it is, the costs she incurred must be regarded as the heavy price she paid for unwisely persisting in her effort to continue asserting financial control over Mother. It would not be fair, in all the circumstances, to require the respondent siblings to share these costs.
[ 35 ] For the foregoing reasons, there shall be no costs paid in this proceeding.
D.G. Price J.
Released: March 12, 2012
COURT FILE NO.: CV-09-00005684-0000
DATE: 2012-03-12
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
THUY NGUYEN-CRAWFORD Applicant
- and –
TUYET NGOC NGUYEN, THANG NGUYEN, NGOC-TAM (“TAM”) NGUYEN, NGOC-THUY (“LISA”) AL-ITAWI, THAO (“TIFFANY”) BUI and THE PUBLIC GUARDIAN AND TRUSTEE Respondents
COSTS ENDORSEMENT
Price J.
Released: March 12, 2012
[1] Fiacco v. Lombardi [2009] O.J. No. 3670
[2] Mark Orkin, The Law of Costs (2 nd edition) (2001 Canada Law Book), p. 23
[3] British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 at paras. 25 and 26
[4] Courts of Justice Act, R.S.O. 1990 c. C.43, s. 131
[5] Rules of Civil Procedure, R.R.O. 1990, Reg. 194
[6] 1465778 Ontario Inc. v. 1122077 Ontario Ltd., 2006 35819 (2006), 82 O.R. (3d) 757 (ON C.A.), per Feldman J.A., at para. 45
[7] Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579, O.J. No. 2634, 71 O.R. (3d) 291 (ON CA)
[8] Moon v. Sher, 2004 39005 (ON CA), (2004), 246 D.L.R. (4 th ) 440 (Ont. C.A.)
[9] Boucher v. Public Accountants Council for the Province of Ontario, above, at paras 24 and 26.
[10] Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission, 2003 8279 (ON SCDC), [2003] O.J. No. 1658 (Ont. S.C.J. Div. Ct.) at para. 16. See also Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), (2004), 71 O.R. (3d) 291 (C.A.) at para. 38; Davies v. Clarington (Municipality), 2009 ONCA 722.
[11] Bishop v. Bishop, above, at para 46
[12] Bargman v. Rooney, (1998), 8 C.B.R. (4 th ) 190 (Ont. Gen. Div.)
[13] Bargman v. Rooney, above, at para. 20
[14] Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303