SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 11-51747

MOTION HEARD: February 12, 2013

RE: Suzanne Morley et al., Applicants (Moving Parties)

AND:

Donald Morley et al., Respondents (Responding Parties)

BEFORE: Master Pierre E. Roger

COUNSEL:
Christian Pilon, counsel for the Applicants

Marc E. Smith, counsel for the Respondents

HEARD: February 12, 2013

REASONS FOR DECISION

[1] This is a motion to determine costs resulting from the Applicants’ abandoning their application. Rule 38.08 (3) of the Rules of Civil Procedure[^1] is primarily applicable. Although the materials and oral submissions were made to the court in both English and French, both parties have requested that written reasons be delivered in English. Should the Applicants have a change of heart on this last point, reasons in French may be requested from the court.

Background Information:

[2] This application arises to some extent as a result of family issues between two sisters, Suzanne Morley and Christine O’Connor, over their parents, Donald Morley and Gisele Morley. On this motion, the sisters have filed many conflicting affidavits (by them and others) over their respective relationship with their parents, over their parents’ relationship with the other sister and over an incident involving the parents’ banking arrangements.

[3] Interestingly, more materials were filed on this motion dealing with costs than on the application. Affidavits were filed on the application but no cross-examination was conducted, no factum prepared and three case conferences were held to set a schedule and date, which led to some disclosure by the Respondents and the application being abandoned thereafter.

[4] The Respondents seek costs on a substantial or full indemnity basis. The amounts sought range from $48,363.72 on a partial indemnity basis, $77,428.12 on a substantial and $85,731.00 on a full indemnity basis.

[5] Too many details were provided to the court on this motion. The following overview of the evidence should be sufficient to understand the court’s disposition.

[6] Suzanne and others on her behalf testified by affidavits that she enjoyed a good relationship with her parents up to the 2009 banking “incident”.

[7] Suzanne indicates that in December 2009, her mother Gisele raised some concerns about changes to their wills and banking authority. Suzanne states that together with her husband she accompanied her parents to the bank on December 2, 2009. There, her parents revoked the power of attorney in favour of Christine, gave instructions to a bank employee regarding their investments and added the mother’s signature as a requirement to cheques being signed by Christine. She states that both parents understood and acted of their own free will. She states that her parents were happy to have made these changes.

[8] Thereafter, the parents either had a change of heart or in time realized that they disagreed over the changes made at the bank and from there their feelings and their relationship with Suzanne cooled. It appears from the materials that Suzanne believed that this was, to some extent, caused by Christine’s interference.

[9] By the summer 2010 the relationship between Suzanne and her parents was non-existent. Suzanne wrote to them to suggest a meeting with a neutrally selected mediator. By this point, the parents appear to have had serious trust issues with Suzanne flowing from the bank incident. They appear to have been worried that Susanne and her husband were trying to gain control of their finances.

[10] By November 2010, the father, Donald, wrote to Suzanne expressing his worries that Suzanne’s husband, Marc Tessier, was trying to gain control of their financial affairs and, as a result, indicated that they were cutting all communication with Suzanne and Marc. In December, Suzanne wrote back to her parents outlining her issues and perspective.

[11] Donald was hospitalized in May 2011 and Suzanne visited. She indicates that they had a good visit but that within a few days thereafter she received a telephone message from her mother asking that she not visit Donald at the hospital. At paragraph 54 of her affidavit Suzanne indicates that she could hear Christine in the background. She was informed by her mother that Donald did not want to see her but only Christine who was also looking after his financial affairs. On May 26 she nonetheless visited her father whom she says was happy to see her. Again her mother subsequently called asking that she not visit.

[12] On June 2, 2011, she received a letter from a lawyer, acting for her parents. This lawyer asked her not to visit her father at the hospital and not to visit her mother. He informed her that Christine would provide updates on their health and that questions relating to their affairs should be directed to him. Suzanne indicates that she was worried that her parents may not be able to express their wishes and might be controlled by Christine.

[13] Marc also provided his version of events, generally to the same effect.

[14] France, Suzanne’s daughter provided an affidavit. As is the case with the affidavit of Yvon, Gisele’s brother, it adds to this perception (right or wrong) by Suzanne that her parents might to some extent have been under Christine’s control.

[15] The application was issued on June 30, 2011, and served on July 5, 2011, shortly before Donald Morley passed away. This unfortunate coincidence has not been helpful and has played a part in how this application was dealt with by the Respondent.

[16] The application seeks, amongst others, an order for a capacity assessment of both Donald and Gisele, an order for production of their medical files, if required an order that their independent wishes regarding communication and contact with the Applicants be ascertained, an order that they produce a copy of any power of attorney, if none an order for the appointment of a legal guardian to person and property and an order that their guardian encourage contact with all family members and consult with all family members.

[17] It is obvious from reading the application and supporting affidavits, filed both with the application and with this motion, that Suzanne could not accept her parents’ attitude and actions towards her nor accept that either reflected their wishes, independent of those of Christine. As a result, she brought the application.

[18] Suzanne describes the application, in her affidavit, as a last ditch effort at resolving issues with her parents and claims that it was made necessary by the conduct of Christine who delayed in providing her affidavit and information that resulted in this application being abandoned. She claims that the application was abandoned when she learned that Gisele was incapable and when a letter was provided confirming that Gisele’s independent wishes were to cut off communication with her.

[19] Indeed, following a number of case conferences, the Respondents provided a letter from a treating psychologist confirming the wishes of Gisele. By June 2012 the Respondents had produced a doctor’s letter confirming that Gisele was incapable and another letter from a treating psychologist confirming that while capable Gisele had quite clearly and independently indicated to this psychologist that she did not want any contact with Suzanne. This letter from the psychologist also reported that Christine was supportive and that Gisele’s condition deteriorated as of March 2012 to the point of being deemed incapable.

[20] The application was subsequently abandoned.

[21] The Respondents indicate that it should have been clear for over a year before the Application was started that Donald and Gisele no longer wished or desired to have a relationship with Suzanne and Marc.

[22] The Respondents state that in June 2010, Suzanne was advised that Christine had been named as her parents’ attorney to property and personal care. They indicate that as of April 2010, Donald and Gisele had given directives at their retirement residence that Suzanne and Marc were not allowed to visit without prior permission.

[23] Christine states, in her affidavit, that she was contacted in June 2011 by an investigator with the Ottawa Police Elder Abuse Section, that an investigation was conducted and that she was cleared of any improper conduct. Christine indicates that on June 22, 2011, she informed her siblings that their father was chronic palliative with no quality of life. Donald suffered a stroke on July 4, 2012 and passed away on July 5, 2012.

[24] It is obvious from reading Christine’s affidavits (filed on this motion and for the application) that she believes that the Applicants were kept aware of all relevant facts, including the wishes and desire of their parents to cease ties with Suzanne and Marc. In addition to her affidavit, Christine served as part of her responding materials to the application an affidavit by her parents’ lawyer, dated November 23, 2011, generally to the effect that the parents acted throughout quite independently of Christine.

[25] It is as well obvious from the materials that Suzanne and Christine did not enjoy a good relationship. There appears to have been many trust and communication issues between the sisters.

[26] Like many family disputes, the situation is factually complicated with each side bearing some responsibility for the dispute and for how things were perceived by the other.

[27] The first issue on this motion is whether the Respondents are entitled to the costs of the abandoned application or whether the court should order otherwise. Secondly, if the Respondents are entitled to costs, then on what scale.

Law and Analysis

[28] Rule 38.08 (3) provides:

“Where an application is abandoned or is deemed to have been abandoned, a respondent on whom the notice of application was served is entitled to the costs of the application, unless the court orders otherwise.”

[29] This rule is similar to rule 37.09 (3) and to former rule 23.05.

[30] Although this court was provided with over 20 cases, with the exception of Datta v. Datta 2009 CarswellOnt 7650, provided by the Respondent, none was provided to address the first issue. On this kind of motion, each party should not provide 20 or more cases but should be selective and ensure that only important cases are provided on all issues.

[31] In Provincial Crane Inc. v. AMCA International Ltd. (1990), 44 C.P.C. (2nd) 46, a case dealing with the former rule 23.05, Henry J. granted leave to the plaintiff to discontinue without costs:

The rule thus contemplates that, while the defendant will ordinarily be entitled to costs when the plaintiff discontinues the action, the court has a discretion to depart from the ordinary rule. That is a matter for the exercise of the court's discretion to be made in accordance with principle on the facts of the particular case.

In order to establish that it ought to be relieved of costs in the court's discretion it is my opinion that, at this early stage of the action, the plaintiff must satisfy the court that the material filed discloses a bona fide cause of action that is not frivolous or vexatious which the plaintiff has some justification to commence, having regard to the conduct of the defendant. Since the court cannot, at this early stage, make final findings of fact or credibility, the court is left to determine if, notwithstanding conflict, there is some evidence to justify the commencement of the action whether or not it can be said that the action may or may not ultimately succeed.

[32] Each case is to be decided on its own facts, looking at the circumstances to determine whether it is appropriate to depart from the ordinary rule.[^2]

[33] Exceptional circumstances are not necessarily required in order to depart from the ordinary rule. Rather, what is required is assessing the circumstances to determine, on a balance of probabilities, whether the plaintiff or applicant has satisfied the court that it had a bona fide cause of action that was not frivolous or vexatious and that there was some justification to commence the proceeding.[^3]

[34] “Unless the court orders otherwise” requires the court to look at the circumstances and, in the exercise of its discretion over issues of costs, assess whether the plaintiff has established the above.[^4]

[35] In assessing the circumstances, the court will as well assess the circumstances surrounding the abandonment. Why the proceeding was abandoned and in what circumstances, are relevant considerations.

[36] On the second issue to be addressed or on the scale of costs issue, two of the most informative cases contained in the parties book of authorities are probably Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3rd) 66 (C.A.) and Forbes & Manhattan Inc. v. USRA Major Minerals Inc., 2011 ONSC 3911.

[37] As indicated in the above two decisions, the fixing of costs is a discretionary exercise to be conducted on a principled basis with costs on an elevated scale available in two circumstances: (1) if specifically allowed or authorized such as for offers to settle under rule 49.10 or (2) if “the losing party has engaged in behaviour worthy of sanction.”[^5]

[38] I have reviewed the factum and other relevant authorities referred to by the parties.

[39] After considering the authorities and reviewing the evidence, I have come to the conclusion that, in the circumstances of this case, a fair and principled exercise of the court’s discretion on the issue of costs is to allow the Applicants to abandon this application on a without costs basis. As indicated in more detail below, the circumstances of why the application was initiated and abandoned merit that an exception be made to the loser pays principle reflected by the general rule provided at rule 38.08 (3).

[40] The Applicants were justified in issuing this application. From the perspective of Suzanne, she had exhausted other measures and was concerned that her parents were being unduly controlled by Christine. We are dealing with a family situation and dispute, including a dispute between sisters where one sister was closer to the parents and the parents completely excluded all contact with one of their daughters, Suzanne. From Suzanne’s perspective this required further investigation. While not necessarily always the best option, particularly in a family setting, in these circumstances Suzanne had “some justification” to commence the application. It was not an unreasonable investigative tool for someone who feared that her parents might be unduly controlled, considering that we are dealing with elderly parents refusing all contact and considering that because of the poor relationship between Suzanne and Christine, Suzanne’s other options to obtain independent verification of her parents’ intentions were limited.

[41] I appreciate that whether or not Suzanne did or did not have sufficient information that her parents were capable and not under any undue influence by Christine before the application was started is very much in dispute. However, at this stage on such a motion, the court is not to determine which side would succeed but rather to assess whether there were some justifications, as indicated above.

[42] Although some of the relief sought in the application might not have been available, the materials filed disclose a bona fide cause of action that is not frivolous or vexatious. We have to remember that on such a motion dealing with costs, we cannot and should not embark on an assessment of the merits such as would be done when the application is argued as we should not at this early stage weigh the evidence or make findings of facts or of credibility. As indicated above in Provincial Crane: “the court is left to determine if, notwithstanding conflict, there is some evidence to justify the commencement of the action whether or not it can be said that the action may or may not ultimately succeed”.

[43] To seek an assessment of capacity of elderly parents in circumstances where they refuse to communicate with one of their daughters, while possibly being controlled by another sibling, appears to disclose a bona fide cause of action that is not frivolous or vexatious. The essence of the application is a concern by the Applicants for some independent verification of the parents’ intention. In this most unfortunate of family setting, leading up to when this application was issued, seeking such independent verification by legal means could not be considered frivolous or vexatious. Even if not all of the remedies sought might have been available, the essence of the application disclosed a bona fide cause of action.

[44] As well, considering the circumstances that led to the application being discontinued, it appears that it was discontinued shortly after such independent verification was finally provided as a result of a case conference.

[45] For the above reasons, I believe that the most just result is for this court to exercise its discretion over costs as indicated above. On a balance of probabilities, the Applicants have satisfied the court that it should order otherwise, as provided at rule 38.08 (3). Note that if I had decided the first issue differently, I would have awarded costs on a partial indemnity scale considering the factors outlined in Davies.

[46] This brings me to the costs of this motion. Ordinarily, I would allow the costs of this motion to the successful party. However, in these circumstances, I believe that an exception to the ordinary rule is warranted.

[47] In deciding this motion I have been extremely careful not to cast blame on one or the other sister, as deciding the outcome of the application is not what is required. I have stressed that each sister had her own perspective of reality. I have decided, in applying the analysis outlined in Provincial Crane, that it was reasonable for Suzanne to have started and abandoned the application in these circumstances. In reviewing all relevant factors and circumstances, I reviewed and analyzed the evidence of both parties and both parties’ perspective. However, ultimately in deciding whether the Applicants had satisfied the court, on a balance of probabilities, that the materials filed disclose a bona fide cause of action that is not frivolous or vexatious which the Applicants had some justification to commence, having regard to the conduct of the Respondent, the court focused to some extent on the perspective of Suzanne as she started the application. In deciding the issue of the costs of this motion the court is focusing on both of their perspectives however, from Christine’s perspective, this application was not required as Suzanne should have been aware that their parents were acting independently free of any undue influence. From her perspective the Respondents were put to significant legal expenses for no valid reasons. While I disagree with this, as indicated and decided above, I understand it. Therefore, I understand that the Respondents felt very strongly that they were entitled to their costs for this abandoned application on an increased scale. While I might disagree, I understand why they opposed this motion to abandon the application without costs and find that, in these circumstances, they acted reasonably in doing so.

[48] Moreover, although this is not really similar, it is somewhat analogous to a situation where a party seeks an indulgence from the court. In a case where a party seeks an indulgence from the court (which this is not but, as indicated, is somewhat analogous) courts occasionally award costs to the party who unsuccessfully opposed the indulgence in part on the basis that the price of the indulgence is the payment of costs. As this is only somewhat analogous to that situation (as the Applicants had to convince the court to order otherwise) it would not be appropriate in these circumstances to award costs of the motion to the unsuccessful Respondents but it would be, when considering as well what is outlined at the above paragraph, to make an order that there be no costs to either party for this motion.

[49] Considering rules 57.01, particularly 57.01 (i) and also 57.02, such a disposition is the most just result in these very specific and particular circumstances.

Disposition

[50] The Applicants are allowed to abandon this Application on a without costs basis, with no costs for this motion to either party.

Master Pierre E. Roger

Date: March 15, 2013

[^1]: R.R.O. 1990, Reg. 194.
[^2]: Economy Forms Ltd. v. Aluma Systems Corp (2000), 50 C.P.C. (4th) 372 at para. 15.
[^3]: Glanopoulos v. Olga Management Ltd. (2004), 2 C.P.C. (6th) 362 at paras. 10 and 20 and Golda Developments Inc. v. Dawe (2008), 64 C.P.C. (6th) 128 at paras. 13 – 24.
[^4]: See Glanopoulos and Golda above.
[^5]: Forbes citing from Davies at para. 11.