BARRIE COURT FILE NO.: 12-0356

DATE: 20121101

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Herta Barron, Applicant

AND:

Ron Barron and Shirley Barron, Respondents

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: M.E. Vallee, Counsel for the Applicant

C.F. Ruttan, Counsel for the Respondents, Ron Barron and Shirley Barron

J.L. Turner, Counsel for Roy Barron

HEARD: By written submissions

ENDORSEMENT ON COSTS

[ 1 ] The applicant, Herta Barron, and the respondents, Ron Barron and Shirley Barron, arrived at a consent with respect to these proceedings, which involved the assets of Roy Barron. Both parties seek their costs from his assets. The consent order confirmed that the respondents would continue to act as power of attorney for Roy Barron. The Application, brought by Herta Barron, sought directions from the court with respect to the validity of a Power of Attorney made by Roy Barron in favour of the respondents. The consent order settled the issue and provided a degree of transparency with respect to the respondents’ role as his power of attorney by providing quarterly financial reports to the applicant. The applicant was also entitled to obtain financial and health care information from financial institutions or medical professionals about Roy Barron.

[ 2 ] Both parties sought to recover their costs from the assets of Roy Barron. Mr. Barron is 80 years of age and is living in a retirement home. He has assets in excess of $1,000,000. It is clear that he requires the assistance of a power of attorney to manage his financial affairs. In connection with this Application, the parties agreed that Roy Barron would receive advice from independent counsel. Roy Barron made representations on costs through his counsel. He does not oppose the costs sought of the respondents Ron Barron and Shirley Barron, sought in the amount of $20,530.35 on a full indemnity basis to August 31, 2012. These respondents seek a further sum of $1,329.38 from that day to the date of these submissions, therefore the respondents seek costs of $21,859.73 in total.

[ 3 ] The applicant seeks costs on a partial indemnity basis of $20,000. Roy Barron opposes paying the applicant’s costs. As his counsel sets out in Costs Submissions:

It is Roy Barron’s position that Herta Barron has stirred up “trouble” throughout this Application and that, as she made the decision to start the litigation which he considers to be unnecessary, she should pay her own legal costs in connection with it.

HISTORY OF THIS LITIGATION

[ 4 ] This litigation has a brief history. The applicant brought her Application on March 22, 2012. The Application questioned the validity of a Power of Attorney made by Roy Barron in September of 2011. Prior to bringing her Application, she obtained a capacity assessment from Dr. Carol Corlis McMaster, a registered psychologist.

[ 5 ] The respondents provided a detailed affidavit in response to the Application. To the credit of all parties, they negotiated a consent order without the necessity of any further protracted legal proceedings. The only unresolved issue was the issue of costs. Roy Barron, through his counsel, does not oppose costs to the respondents and therefore it is ordered that the respondents shall have their costs on a full indemnity basis fixed at $21,859.73, inclusive of HST. As they continue to act as power of attorney, their ongoing costs are provided for in the consent order.

[ 6 ] I am satisfied on the material before me that the applicant was justified in bringing the Application. Further, she acted reasonably in consenting to the draft order upon receiving and reviewing the respondents’ affidavit. I reach this conclusion on the following basis. Herta Barron is the sister-in-law of Roy Barron. She resides in Saskatoon. In 1995, Roy Barron prepared a Power of Attorney appointing her husband, Frank Laurie Barron, as power of attorney. When Frank Laurie Barron passed away, the Power of Attorney was changed to appoint Herta Barron as his power of attorney.

[ 7 ] Mr. Barron was hospitalized in May of 2011. Shortly thereafter, he prepared a new Power of Attorney with the benefit of legal advice, appointing Herta Barron and his brother, Ron Barron, jointly as attorneys. It is clear that those two individuals did not get along and were not prepared to work together. Herta Barron visited Roy Barron in 2011, and arranged that he visit a number of retirement homes. She also attended with him to a number of his banks to assist him in arranging for pre-authorized transactions for his bills.

[ 8 ] In the fall of 2011, Roy Barron went to a new lawyer, the solicitor for Ron Barron and his spouse, Shirley Barron. He prepared a new Power of Attorney appointing them as his attorney. He sent a typed letter to his previous solicitor, explaining his reasons for the change. He did not inform Herta Barron directly. The respondents acknowledged that they prepared this letter.

[ 9 ] Herta Barron then learned that the respondents had closed all of Roy Barron’s bank accounts without any notification to her. Herta Barron then arranged for a capacity assessment with Dr. McMaster. Dr. McMaster found Roy Barron to be “a vulnerable older adult”. She concluded her opinion by stating:

It would be the opinion of this evaluator that Roy Barron was not capable of making the revocation and appointment of Power of Attorney at present, nor was he likely capable of doing so in September of 2011.

ANALYSIS

[ 10 ] The applicant relies on Smither v. Smither, [2002] O.J. No. 1227 . In Smither, Campbell J. acknowledged the usual rule that costs follow the event, but noted an exception in estate litigation. As Campbell J. stated at para. 19:

I am, therefore, persuaded that in estate litigation, as long as the issues raised by the challenging party are a reasonable question that require a court to intervene, including the capacity and/or undue influence of the incapable or deceased person (as in the Power of Attorney here), the court may exercise its discretion that “the losing party should not have to bear the costs of that issue”.

[ 11 ] In Draper v. Fader, [2009] O.J. No. 5538 , Parayeski J. noted the Smither decision and stated at para. 7:

According to the case law (e.g. Smither v. Smither ) and an article by Ian M. Hall cited to me by Draper’s counsel, the appropriate approach in cases such as this is one that, unless the applicant acted unreasonably or in bad faith, she should be granted her costs out of the estate and, it follows, not be required to pay anyone else’s costs herself.

[ 12 ] In Estate Litigation, [1] the author, Brian A. Schnurr, discusses the tension that exists between the general rule that costs follow the event and the exception that may exist in certain estate litigation. At para. 19.10, the author suggests that before bringing applications, parties and their counsel should consider the following:

(i) the degree of merit to the position taken or claim being made;

(ii) Which party bears the onus of proof;

(iii) The increased likelihood that the court will deny costs out of the estate where the estate is relatively modest;

(iv) The extent of reasonable efforts to settle the matter;

(v) the professional obligation of counsel to his client and perhaps to the court to discuss fully with the client the hazards of proceeding with unmeritorious litigation and the possible costs consequences to the client.

[ 13 ] I am satisfied that the applicant’s steps in bringing this Application were reasonable. She had been removed as power of attorney by Roy Barron without notice from him. She had attended with him to assist him in finding him a nursing home, and attending at a number of his banks to organize his affairs. After she was removed as his power of attorney, she had no information available to her about the substantial assets of his estate. She then obtained a capacity assessment which clearly raised issues about his vulnerability. To her credit, she arrived at a consent order with the respondents, which continued their role as his power of attorney, but provided regular reporting to her. I am satisfied that she acted reasonably, with a view to protecting the interests of Roy Barron.

QUANTUM OF COSTS

[ 14 ] I have reviewed the Bill of Costs, which are sought on a partial indemnity basis. I am satisfied that they are reasonable under the circumstances and they are reasonably comparable to the respondents’ own costs. Roy Barron has substantial assets, exceeding $1,000,000. The costs sought are proportional to the quantum of this estate. It is ordered that the applicant have her costs fixed on a partial indemnity basis of $20,000 including HST.

[ 15 ] The respondents shall have their costs fixed at $21,859.73 including HST.

CONSENT TO AMENDMENT OF THE ORDER OF AUGUST 21, 2012

[ 16 ] Paragraph 5(a) of the consent order of August 21, 2012 provides as follows:

(a) The value of Roy Barron’s investments and accounts and the location of them within thirty days of the end of each quarter, namely, April 30, July 31, September 30 and January 31, annually. This information shall be provided with a commencement date of September 1, 2011.

[ 17 ] On consent, para. 5 is amended as follows:

(a) The value of Roy Barron’s investments and accounts and the location of them within thirty days of the end of each quarter, namely, April 30, July 31, October 31 and January 31, annually. This information shall be provided with a commencement date of September 1, 2011.

MULLIGAN J.

Date: November 1, 2012

[1] Brian A. Schnurr, Estate Litigation, (2d ed.) Looseleaf (Toronto: Thomson Reuters Canada Limited, 2011).