SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER FOR SVERRE MARGIDO DRYER ALVESTAD, incapable
RE: CAROL LYNN LISOWICK – and – SVERRE MARGIDO DRYER ALVESTAD, KAREN ANN RIVERA, and the PUBLIC GUARDIAN AND TRUSTEE
BEFORE: André J.
COUNSEL: Rick Bickhram, for the Applicant
Marion Sweatman, for the Respondents
RESOLVED: October 6, 2014
COSTS ENDORSEMENT
1This matter involves claims for costs related to competing guardianship applications brought by the two daughters of 92-year-old Sverre Margido Dryer Alvestad who suffers from dementia. The parties resolved the issue of the future guardianship of their ailing father but are hopelessly deadlocked on the issue of costs which should be payable. Each party is claiming success in resolving the guardianship issue and costs associated with that success. I must therefore decide whether an award of costs is appropriate in this matter and if so, what quantum can be considered fair and reasonable.
FACTUAL BACKGROUND
2On July 16, 2009, Mr. Alvestad executed a Continuing Power of Attorney for Property and or Power of Attorney for Personal Care. Both documents named his daughters, the applicant, Carol Lisowick and Respondent, Karen Ann Rivera, as his attorneys, jointly and severally.
3On March 6, 2013, Ms. Lisowick commenced an application seeking a court ordered assessment of Mr. Alvestad and an order that she be appointed Mr. Alvestad’s Guardian of his personal care and property.
4Carol Ann Rivera then brought a similar application for an order declaring her, rather than Ms. Lisowick, as Mr. Alvestad’s Guardian for personal care and his property.
5A court ordered assessment of Mr. Alvestad released on February 10, 2014, found Mr. Alvestad to be capable of managing his property but incapable of managing his personal care.
6On June 27, 2014, Tzimas J. ordered that both guardianship applications should be heard on October 6, 2014. In July 2014, a capacity assessor found Mr. Alvestad capable of revoking his powers of attorney and executing new powers of attorney.
7Mr. Alvestad executed new powers of attorney on July 17, 2014 appointing the respondent, Karen Ann Rivera, as his attorney for property and personal care, with the alternate attorney for property being TD Canada Trust.
MINUTES OF SETTLEMENT
8On September 19, 2014, Ms. Rivera served an offer to settle the proceedings. Ms. Lisowick accepted the offer on September 30, 2014. The terms of the settlement included the following conditions:
Karen Ann Rivera shall manage Sverre’s personal care and property in accordance with the conditions and restrictions contained in Sverre’s Powers of Attorney.
Ms. Rivera shall have sole decision making authority with respect to the management of Sverre’s assets.
Ms. Rivera shall act as attorney for personal care and retain sole decision making authority.
Ms. Rivera shall provide Ms. Lisowick with quarterly information on Mr. Alvestad’s health and well-being by email, as soon as reasonably possible after the conclusion of each quarter.
VALUE OF MR. ALVESTAD’S PROPERTY
9Mr. Alvestad’s home is valued at $550,000. He also has liquid assets of approximately $400,000.
SUBMISSIONS
10Ms. Lisowick seeks costs in the amount of $76,897.50 against the respondent, Ms. Rivera. She maintains that she should be awarded her “reasonable” costs given that she was successful in achieving her objective of protecting Mr. Alvestad and his property.
11Ms. Rivera seeks costs against Ms. Lisowick in the amount of $93,683.31 on a complete indemnity basis. She submits that the following factors justify an award of costs in that amount:
Ms. Lisowick unnecessarily complicated the proceedings with a number of unfounded allegations against Ms. Rivera.
Ms. Lisowick’s motion was entirely unwarranted and clearly contrary to the interests and well-being of Mr. Alvestad.
Ms. Lisowick’s adamant refusal to recognize and honour her father’s July 2014 powers of attorney unnecessarily prolonged the proceedings and concomitantly increased the costs involved.
Ms. Rivera was entirely successful in the resolution of the issue of guardianship as it involved Mr. Alvestad.
The hourly rate of Ms. Rivera’s counsel, given her 1992 year of call, is reasonable as are the number of hours, some 220.1 hours, spent on resolving the matter.
ANALYSIS
12The court’s discretion to award costs is governed by Rule 57.01(1) of the Rules of Civil Procedure which provides that:
57.01(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,
(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;
(b) the apportionment of liability;
(c) the complexity of the proceeding;
(d) the importance of the issues;
(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;
(g) a party’s denial of or refusal to admit anything that should have been admitted;
(h) whether it is appropriate to award any costs or more than one set of costs where a party,
(i) commenced separate proceedings for claims that should have been made in one proceeding, or
(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and
(i) any other matter relevant to the question of costs.
13The indemnification of legal costs in contested power of attorney litigation has been governed by the following principles enunciated by Brown J. in Fiacco v. Lombardi, [2009] O.J. No. 3670 at paras. 33 and 36:
33 The exercise of the court's discretion in respect of cost claims in capacity litigation should reflect the basic purpose of the SDA - to protect the property of a person found to be incapable and to ensure that such property is managed wisely so that it provides a stream of income to support the needs of the incapable person: SDA, sections 32(1) and 37. To that end, when faced with a cost claim against the estate of an incapable person, a court must examine what, if any, benefit the incapable person derived from the legal work which generated those costs.
36 Contested guardianship applications are more problematic. While bona fide disputes may exist amongst those interested in the well-being of the incapable person as to who should be appointed her guardian, a significant risk exists that a contested guardianship application may lose sight of its purpose - to benefit the incapable person - and degenerate into a battle amongst siblings or other family members, some of whom may have only their own interests at heart. In such circumstances courts must scrutinize rigorously claims of costs made against the estate of the incapable person to ensure that they are justified by reference to the best interests of the incapable person.
14Additionally, in Wercholoz v. Tonellotto, 2013 ONSC 1106, [2013] O.J. No. 997, Glithero J. noted at para. 36 that:
In my opinion, this case represents a sad example of the hefty amounts that can be spent by siblings who choose to litigate rather than negotiate their differences in respect of a parent's wellbeing. In terms of an appropriate costs order, I must be concerned not only with the usual considerations as between the combatants, but also, most importantly, with what is fair from Katherine's (The grantor of the power of attorney) perspective.
15Furthermore, Spies J. noted in Ziskos v. Miksche, 2007 46711 (ON SC), [2007] O.J. No. 4276, at para. 75 that: “The court has a responsibility to ensure that legal costs incurred on behalf of a vulnerable person are necessary and reasonable and for that person’s benefit, before ordering that such costs be paid by the assets or estates of the vulnerable person”.
16Applying those principles to the facts of this case, Ms. Lisowick submits that she should be awarded reasonable costs, given that she was successful in achieving her objective of protecting her father and his property.
17In my view, that conclusion does not accord with her June 2013 application or the terms of the Minutes of Settlement. In her application, Ms. Lisowick sought an order declaring her as Mr. Alvestad’s guardian or alternatively, the Public Guardian and Trustee. Ms. Lisowick made a number of allegations of financial impropriety and neglect allegedly perpetrated by Ms. Rivera as being the reasons for her application.
18The Minutes of Settlement however, indicate that Ms. Rivera, rather than Ms. Lisowick, would be Mr. Alvestad’s Attorney for Property and Personal Care. This settlement therefore represents a repudiation of the position advanced by Ms. Lisowick in her original application. Second, the Public Guardian and Trustee was not appointed as an alternative Attorney on behalf of Mr. Alvestad.
19Additionally, while the Minutes of Settlement oblige Ms. Rivera to provide Ms. Lisowick with quarterly updates on Mr. Alvestad’s health and well-being, it did not grant her any involvement in his daily care and upkeep. Rather, it invested that responsibility in Ms. Rivera. In other words, the Minutes of Settlement placed Mr. Alvestad’s personal care and property in the very person whom Ms. Lisowick attempted to disqualify as her father’s guardian. Accordingly, the Minutes of Settlement Ms. Lisowick agreed to on the issue of the guardianship of her father essentially repudiates her position regarding who should be appointed Ms. Alvestad’s Attorney for Personal Care and for his property.
20That said, I am obliged to apply the factors enumerated in Rule 57.01(1) of the Rules of Civil Procedure and the legal principles enunciated in cases such as Fiacco v. Lombardi, Wercholoz v. Tonellotto and Ziskos v. Miksche to determine what is the appropriate quantum of costs which can be considered fair and reasonable in this matter.
21First, the $450 hourly rate of Ms. Rivera’s counsel, given her year of call and her expertise in this legal area, cannot be considered to be unreasonable. However, I am concerned about the amount of time spent at various stages of these proceedings.
22For example, the amount claimed for preparatory work and attendance at court on June 27, 2014 is $18,162.50, based on a total of 47.1 hours spent by Ms. Sweatman, a colleague and a law clerk.
23Another $9,110.00 is claimed for preparation and attendance at court on October 16, 2014, despite the fact that the parties resolved the issue of guardianship of Mr. Alvestad without the necessity of a hearing.
24Similarly, the claim for $11,817.50 based on 43 hours of preparatory work and an additional expense of $9,827.50 for the preparation of settlement offers, a draft bill of costs, correspondence with counsel and meeting and correspondence with Ms. Rivera appear to be excessive.
25Second, this matter was not particularly complex. The ramifications were serious insofar as the personal care of Mr. Alvestad and the protection of his property was concerned. However, the matter did not involve any complex legal issues or the interpretation of legislation.
26Third, the care of Mr. Alvestad was undoubtedly serious but as the parties themselves have illustrated, the vexing problem of guardianship of Mr. Alvestad and the protection of his property could easily have been resolved without the necessity of the litigation.
27Fourth, it is clear that the applicant initiated the legal proceedings in an attempt to remove Ms. Rivera as a legal guardian of Mr. Alvestad. Furthermore, she brought an additional motion for an order that the Public Guardian and Trustee be appointed as her father’s guardian. She did so despite Mr. Alvestad’s July 2014 Power of Attorney which appointed Ms. Rivera as his attorney.
28As noted by Brown J. in Fiacco, the paramount consideration in the exercise of the court’s discretion in cost claims arising from capacity litigation is the protection of the property of the individual whose capacity is being challenged. The property of such persons must not be significantly depleted by cost awards which undermines its ability to generate income for the care of the incapable person.
29On the other hand, the quantum of costs awarded must not be tantamount to a judicial licence for siblings to opt for litigation in contested guardianship cases rather than resolving their differences in a manner that reflects the best interests of the incapable relative. The fact that a parent or relative has a sizeable estate, therefore increasing the chances of costs recovery, should not be construed as an incentive to commence litigation in these types of cases.
30It may be suggested that in as much as Ms. Rivera is seeking costs against Ms. Lisowick rather than against Mr. Alvestad’s property, that the court should not be guided by the legal principles set out in Fiacco, Wercholoz and Ziskos. However misguided Ms. Lisowick may have been in initiating the guardianship application, she did so on behalf of Mr. Alvestad and her scrupulous desire to ensure his personal wellbeing and to protect his property. Furthermore, she brought the application in her capacity as Mr. Alvestad’s Attorney for Personal Care and for Property. To that extent, any costs awarded in this case should be paid from Mr. Alvestad’s property, rather than against Ms. Lisowick.
31Based on the above, I award Ms. Rivera costs of these proceedings in the amount of $50,000 inclusive, to be paid from the property of Mr. Alvestad.
André J.
DATE: January 16, 2015
CITATION: Lisowick v. Alvestad, 2015 ONSC 257
COURT FILE NO.: CV-13-975-00
DATE: 20150116
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CAROL LYNN LISOWICK – and – SVERRE MARGIDO DRYER ALVESTAD, KAREN ANN RIVERA, and the PUBLIC GUARDIAN AND TRUSTEE
BEFORE: André J.
COUNSEL: Rick Bickhram, for the Applicant
Marion Sweatman, for the Respondents
COSTS ENDORSEMENT
André J.
DATE: January 16, 2015