ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Substitute Decisions Act, 1992, S.O. 1992, c. 30, sections 39 and 68, as amended; and
IN THE MATTER OF the Powers of Attorney of GERALD THOMAS LEVERS; and
IN THE MATTER OF THE ESTATE OF GERALD THOMAS LEVERS, deceased, late of the City of Brampton, in the Regional Municipality of Peel, Province of Ontario.
B E T W E E N:
JAYNE L. ARVANITIS and LEE G. LEVERS
Self-represented
Applicants
- and -
THE ESTATE OF THE LATE GERALD THOMAS LEVERS, DECEASED, BY HIS ESTATE TRUSEE, MATTHEW CHARLES JAMES LEVERS, and MATTHEW
CHARLES JAMES LEVERS
Sean Graham, for the Respondents
Respondents
HEARD: October 27, 2016
at Brampton, Ontario
APPLICATION UNDER sections 39 and 68 of the Substitute Decisions Act, 1992, S.O. 1992, chapter 30, as amended, and under rules 74.16, 74.17 and 74.18 of the Rules of Civil Procedure.
Price J.
ENDORSEMENT
OVERVIEW
1Jayne Arvanitis, Lee Levers, and Matthew Levers (collectively, “the siblings”) are the adult children of Gerald Levers, who died in 2015. In 2006, Mr. Levers signed a Will naming Matthew as his Estate Trustee and bequeathing his property, valued at approximately $600,000, equally to Jayne, Lee and Matthew. A few days later, he signed a Power of Attorney for Personal Care naming Jayne as his sole Attorney for Personal Care and a Continuing Power of Attorney for Property naming Lee and Matthew as his joint Attorneys for Property. Differences among the siblings soon rendered them unable to accommodate this apportionment of responsibilities for property and personal care among them.
2In 2011, Mr. Levers moved to a retirement home. In 2012, he was diagnosed with Alzheimer’s. This led to a dispute among the siblings as to where he should live. Matthew favoured his remaining in a retirement home; Jayne and Lee favoured a secure long-term care facility.
3In 2015, Jayne and Lee moved Mr. Levers to Sandalwood Village Park, a secure long-term care facility. The dispute among the siblings intensified and ultimately, Matthew suspended payments to Sandalwood for its fees. He also denied Lee access to Mr. Levers’ bank accounts, to which Matthew had caused his own name to be added. When Jayne and Lee were unable to persuade Matthew to relent, they began the present proceeding under the Substitute Decisions Act, 1992, S.O. 1992, c. 30 (“SDA”) to remove Matthew as a joint Attorney for Property.
4Matthew impeded Jayne in her role as Attorney for Personal Care by failing to pay Sandalwood’s fees and the invoices for services that Mr. Levers received there. Additionally, he refused to share authority with Lee over their father’s property, or information about his bank accounts.
5Several months after the SDA proceeding began, the Court ordered the siblings to retain a gerontologist, selected by Mr. Levers’ family doctor, to give them an opinion as to which facility was best for Mr. Levers. The gerontologist, after conducting an investigation, recommended that Mr. Levers remain at Sandalwood, and that Jayne be the sole decision-maker regarding his care. Matthew disagreed with the opinion and failed or refused to pay the gerontologist’s invoice, as well as invoices from caregivers who had provided supplementary care to Mr. Levers.
6On July 21, 2016, two days before the Court was to hear a motion by Jayne and Lee to have Matthew found in breach of the Court’s orders, Mr. Levers died. The Court issued a Certificate of Appointment to Matthew as Estate Trustee with a Will and ordered him to deliver his accounts, both as Attorney for Property, for the period up to the time of Mr. Levers’ death, and as Estate Trustee, for the period following his death.
7On October 27, 2016, the Court heard motions to settle the Orders previously made, and for directions regarding the passing of Matthew’s accounts. The Court reserved judgment on the motions, as well as on the costs of the SDA proceeding. The Court will now deliver its decision on the issues reserved.
BACKGROUND FACTS
8Gerald Levers and his wife, Ruth, adopted Jayne, Lee and Matthew. Ruth died in 2002. Mr. Levers later entered into a common law relationship from 2003 until 2011.
9On May 10, 2006, Mr. Levers signed a Continuing Power of Attorney for Property naming Matthew and Lee as joint attorneys for property. On the same date, he signed a Power of Attorney for Personal Care, naming Jayne as his sole Attorney for Personal Care.
10In 2011, Mr. Levers began to suffer periods of incontinence as a result of treatment he had received for prostate cancer in 2001. His common law partner was unable to cope with his condition and in November 2011, Mr. Levers was moved to a retirement residence in Brockville. While there, he was frequently sick as a result of infectious illnesses at the home. Jayne and Lee wanted to move Mr. Levers to a retirement home in Brampton or Toronto, closer to their family. Matthew wanted to move him to Milton.
11In April 2012, Mr. Levers was diagnosed with Alzheimer’s. In May 2012, Matthew arranged for him to try a one week stay at a retirement home in Milton. Mr. Levers’ monthly income was sufficient to cover the costs. He received $4,196.37, collectively, from a Canadian Public Service pension, a Quebec Pension, Old Age Security, and a Registered Investment Fund (RIF).
12Mr. Levers’ income was deposited to a chequing account which he had once operated at the Bank of Montreal. In 2012, Matthew had his own name added to the account, making it a joint account. Mr. Levers owned assets worth approximately $600,000, consisting of RRIFs, RRSPs and two bank accounts.
13In October 2012, the Milton retirement home contacted the Community Care Access Centre (“CCAC”), which completed an assessment of Mr. Levers and recommended that he be moved to a secure long-term care facility. Jayne and Lee accepted the recommendation but Matthew did not, insisting that Mr. Levers remained capable of making his own decisions.
14The CCAC referred Jayne to the Halton Geriatric Mental Outreach Program (“HGMOP”) for a cognitive assessment. In December 2012, on the recommendation of HGMOP, Jayne obtained a capacity assessment from a designated capacity assessor, Ms. Postoff.
15Ms. Postoff concluded that Mr. Levers was incapable of decision-making in all six domains of personal care (health care, safety, nutrition, shelter, clothing and hygiene). She concluded that the retirement home in Milton was unable to meet his ongoing and future needs and recommended that his family consult a geriatric psychiatrist for future planning.
16Following the capacity assessment, the lawyer who had prepared Mr. Levers’ Powers of Attorney advised Jayne that, as a result of Mr. Levers’ condition, the Powers of Attorney were in effect. On April 23, 2013, Jayne gave Ms. Postoff’s capacity assessment to Matthew, together with written notice that Mr. Levers’ Power of Attorney for Personal Care was now in effect. At the same time, Lee gave Matthew written notice that the Continuing Power of Attorney for Property was also in effect.
17Matthew and Lee were nominally Mr. Levers’ joint Attorneys for Property. However, Matthew, in fact, assumed sole management of his property, refusing to share authority with Lee.
18On April 30, 2013, Halton Police found Mr. Levers wandering alone and escorted him back to his retirement home. On May 23, 2013, Jayne emailed Matthew and Lee that the retirement home suggested hiring a companion/personal support worker for Mr. Levers until he could be moved to a long-term care facility. Jayne provided details as to the cost and the care that a companion could provide.
19Mathew refused to authorize hiring a companion for Mr. Levers. He also advised Jayne that she herself was not authorized to enter into the financial agreement that this would entail. He told her that she required authorization from both Attorneys for Property in order to hire a personal support worker.
20Matthew refused to acknowledge the capacity assessment. He continued to tell Jayne and Lee that he was acting at Mr. Levers’ direction, and on that basis, refused Lee access to their father’s financial information. On June 1, 2013, he informed Jayne and Lee:
…”I’ve never managed Dad’s personal financial affairs in the past or do I currently. I do not have access to all of his financial records. I’m not in a position or authorized to release Dad’s personal financial documents to anyone.
21At a family meeting on June 2, 2013, Matthew refused to authorize a GPS tracking device for their father, which the Alzheimer’s Society had recommended. He cited legal and ethical concerns.
22On June 7, 2013, staff at the retirement home sent Mr. Levers to the Milton Hospital after he collapsed at the home. That same day, Mr. Levers was accepted into the Village of Sandalwood Park (“Sandalwood”), a long-term care facility in Brampton. Matthew refused to sign a termination of Mr. Levers’ lease at the Milton retirement home, so Jayne and Lee signed the termination, which the retirement home accepted, in spite of Matthew’s objections. Matthew later accused Jayne and Lee of criminal conduct for failing to obtain his authorization.
23On June 10 and 11, 2013, Jayne and Lee moved Mr. Levers from the Milton retirement home to Sandalwood. On June 15, 2013, Matthew and Lee signed the financial admission documents for Sandalwood. However, Matthew refused to sign a pre-authorized payment agreement and another form for expenses not covered by Mr. Levers’ rent. He also insisted that Mr. Levers have money in his wallet, despite Sandalwood’s policy that a resident could not have valuables or cash in their possession or in their room.
24Matthew continued to resist Jayne’s decisions in relation to Mr. Levers’ personal care. In August 2013, he refused to reimburse her for new clothing that she had purchased for Mr. Levers. On September 24, 2013, he refused to authorize hiring a recreational worker for Mr. Levers without up-to-date written reports on Mr. Levers’ medical condition. On November 18, 2013, he took Mr. Levers out of the facility for over four hours, contrary to Jayne’s request and Sandalwood’s advice that such outings be limited to two hours. The nurse reported that Mr. Levers returned exhausted and went to bed without eating dinner. Matthew disagreed with her report.
25On December 2, 2013, Matthew refused to reimburse Jayne $230.00 for dental care Mr. Levers had received because she had failed to obtain his prior approval, notwithstanding that Matthew had signed documents with Sandalwood to have dental services provided. When this was pointed out, Matthew claimed that the amount charged was excessive for the service provided. He continued to refuse to pay the dental bill until a family discussion later that month where all of his questions were answered.
26On December 6, 2013, Matthew met with Sandalwood’s managers to discuss his concerns, which he claimed were validated by Government reports concerning the facility. He informed the managers that he would decide whether to open an inquiry with the Ministry of Health and Long Term Care concerning their facility.
27At a family meeting in January 2014, Matthew informed Jayne that he was going to suspend funding for Sandalwood’s fees as of February 1, 2014, because Jayne had not given him personal care and wellness reports that he required, and was making decisions without consulting him. On January 30, 2014, he sent a letter notifying Sandalwood of his decision. In his letter, he stated that the reason for the suspension of payments was his concerns over inconsistent care, similar to those he said were outlined in Government reports.
28On February 5, 2014, Jayne and Lee advised Sandalwood that they did not agree with Matthew’s decision to suspend payment of its fees. That month, Jayne arranged a personal line of credit in the amount of $20,000 so that she could provide post-date cheques to Sandalwood to allay its concerns over non-payment.
29As a result of Matthew failure to provide payments, and his refusal to add Lee as a signatory to Mr. Levers’ bank accounts or give him information about the accounts on the ground that Mr. Levers was capable of managing the accounts, Jayne arranged for an assessment of Mr. Levers’ capacity to manage property. Ms. Postoff performed that assessment on February 28, 2014, and on March 1, 2014, released a report in which she concluded that Mr. Levers was incapable of decision-making in relation to his property.
30Matthew proposed to move Mr. Levers from Sandalwood to Marleigh Retirement Residence in Unionville, north of Toronto.
Proceeding under the Substitute Decisions Act 1992
31Jayne and Lee complained to Matthew about his suspension of payments to Sandalwood, and about his failure to pay the fees of the personal support worker Jayne had arranged to provide supplementary care for Mr. Levers. Their complaints failed to elicit a change in Matthew’s conduct.
32On April 2, 2014, Jayne and Lee applied, pursuant to ss. 29 and 68 of the SDA, to remove Matthew as Mr. Levers’ joint Attorney for Property. They named Matthew and Mr. Levers as respondents to their application, and delivered an affidavit sworn by Jayne, setting out the events that had led to the proceeding, including the outcomes of the assessments of Mr. Levers’ capacity to manage his personal care and property.
33By the time Jayne and Lee began the SDA proceeding in April 2014, Mr. Levers was 90 years old. Having no living siblings, he was dependent on his children for his well-being. Jayne had spent $1,523.61 of her own funds for Mr. Levers’ care, for which Matthew had failed to reimburse her, consisting of the following:
a) Recreational Respite ($1,124.64);
b) Direct Dentistry ($230.00);
c) Clothing ($112.97); and
d) Onsite Foot Care specialists ($56.00).
34On April 24, 2014, Bielby J. adjourned the SDA application to October 8, 2014, when it was to be heard as a long motion. Justice Bielby set a timetable for the exchange of evidence and factums and ordered that, pending the hearing of the motion, Mr. Levers would remain at Sandalwood and that Matthew would pay the cost of his care, including all arrears.
35On October 8, 2014, upon hearing the motion, I concluded that the dispute would benefit from mediation. With the consent of the parties, I adjourned the hearing to enable them to explore that option. With the parties’ consent, the Court ordered Matthew to give Lee joint signing authority over Mr. Levers’ bank accounts so that both their signatures would be required for clearing any cheques and both would have access to the account information.
36The Court ordered that Bielby J.’s temporary Order would continue, and that Matthew would, upon receipt of invoices from third parties, reimburse Jayne $1,800 and Lee $215 for expenses they had incurred for Mr. Levers’ care and the SDA proceeding. The Court adjourned the hearing of the Application to December 16, 2014.
37On November 21, 2014, the siblings attended a mediation, where they agreed to terms regarding their father’s care. They agreed that Matthew would request a history of Mr. Levers’ care from an expert, and would set aside $600 per month for recreational activities and quality of life activities for him. Greater expenses, up to $1,200 per month, would be pre-approved by the siblings, who would meet on a bi-monthly basis to discuss Mr. Levers’ care. They further agreed to consult an expert in geriatric psychology for guidance in the choice of a suitable facility for Mr. Levers.
38On December 16, 2014, the Court made an Order implementing the siblings’ agreement, and setting out a procedure for selecting a qualified expert to advise them. The parties returned to court on January 27, 2015, for further directions regarding the implementation of the Order. Matthew had learned that in order to obtain an opinion from a gerontologist, the siblings would require a referral from Mr. Levers’ family doctor, and that the gerontologist would need to review Mr. Levers’ medical records, which required Jayne’s consent, as his Attorney for Personal Care. The Court ordered Jayne to produce the records, and to arrange a meeting with Mr. Levers’ family doctor for the purpose of obtaining a referral.
39As Matthew indicated that he had produced his accounts, the Court provided a timetable for Jayne and Lee to serve their Notices of Objection, and for Matthew to deliver his Response to their Objections. The Court adjourned the hearing of the motion to February 24, 2015.
40On February 24, 2015, I noted, in my endorsement, “the parties have resolved the concerns about the accounts under the Power of Attorney for Property Management.” The only accounts that Matthew had provided, to that point, were invoices from third party care providers, the non-payment of some of which had precipitated the SDA proceeding.
41I noted that the siblings had obtained a referral from Mr. Levers’ family doctor to a gerontologist, and would be arranging for him to make site visits at the Sandalwood and Marleigh facilities, which could take as long as 10 months to occur. The Court granted the parties leave to return the Application to court once the gerontologist had made his report. It ordered that, in the meantime, Matthew and Lee would continue to pay for the supplementary care that Jayne had arranged for her niece, a Personal Service Worker, to provide to Mr. Levers.
42The gerontologist, Dr. von Schlegell, delivered his report on June 15, 2015. He recommended that Mr. Levers remain at Sandalwood and that Jayne be the sole decision-maker regarding his care.
Motion by Ms. Arvanitis and Lee Levers to continue the proceeding against the Estate, and Motion by Matthew for appointment as Estate Trustee
43On June 30, 2015, Jayne and Lee served Matthew with a motion to have him found in breach of the Court’s Order dated February 24, 2015, which required him to pay for the supplementary care arranged by Jayne for Mr. Levers. The motion was to be heard July 23, 2015. On July 21, 2015, Mr. Levers died.
Passing of Matthew Levers’ Accounts as Attorney for Property
44On July 23, 2015, upon being advised of Mr. Levers’ death, the Court advised the siblings of the provisions of Rule 11.01, which had the effect of staying the SDA proceeding until an Order was made continuing it against the Estate Trustee. Matthew agreed to produce Mr. Levers’ Will to Jayne and Lee, and to apply for the issuance of a Certificate of Estate Trustee with a Will for Mr. Levers’ Estate to him. Jayne and Lee agreed to make a motion to continue the proceeding against the Estate and to add Matthew as Estate Trustee, as a respondent.
45With the consent of the parties, the Court made an Order directing Matthew, as joint Attorney for Property, to deliver his accounts for the period up to July 21, 2015.
46On November 12, 2015, Matthew served a motion for the issuance of a Certificate of Appointment of Estate Trustee with a Will to him, and for directions. He did not deliver his Accounts in the form prescribed by Rule 74.17(1), but moved to pass accounts as Attorney for Property from October 1, 2014, to July 21, 2015. His motion was served on Jayne and Lee by courier on November 12, 2015. The motion was scheduled to be heard on December 2, 2015.
47Matthew’s motion record contained an affidavit, sworn by him on November 6, 2015, which attached as exhibits the monthly statements for Mr. Levers’ investments accounts for the period from October 1, 2014 to July 21, 2015, and the monthly statements for Mr. Levers’ chequing and savings accounts for the period from December 20, 2014 to July 21, 2015.
48Although Matthew did not deliver his own accounts, he stated, in his affidavit:
The filing of statement of investment accounts by Matthew Charles James Levers to pass accounts for the reporting period from July 1, 2012, to September 30, 2015, was completed and served on Jayne and Lee on January 10, 2015, and filed with the courthouse on January 13, 2015.
To date, form 74.45 Notice of Objection to Accounts or Form 74.46 Notice of No Objection to Accounts has not been served by Jayne and Lee. The Honourable Mr. Justice Price in his endorsement of February 24, 2015, indicated the parties have resolved the concerns about the accounts under the Power of Attorney for Property’s management for this reporting period.
The filing of bank statements and third-party expense receipts by Matthew Charles James Levers, a joint attorney for the Continuing Power of Attorney for Property for the late Gerald Thomas Levers to pass accounts for the period from July 1, 2012, to December 19, 2014, was completed and served to Jayne and Lee on January 10, 2015, and filed with the courthouse on January 13, 2015.
To date, form 74.45 Notice of Objection to Accounts or Form 74.46 Notice of No Objection to Accounts has not been served by Jayne and Lee. The Honourable Mr. Justice Price in his endorsement of February 24, 2015, indicated the parties have resolved the concerns about the accounts under the Power of Attorney for Property’s management for this reporting period. [Emphasis added.]
Continuation of Proceeding against Matthew as Estate Trustee
49On November 17, 2015, Jayne and Lee served a motion on Matthew for an Order continuing their SDA proceeding against him both in his personal capacity and as Estate Trustee for Mr. Levers’ Estate, and requiring him to deliver his accounts as Estate Trustee for passing. That motion was also scheduled to be heard on December 2, 2015.
50On December 2, 2015, the Court made an Order for issuance of a Certificate of Appointment of Matthew as Estate Trustee with a Will and continuing the SDA proceeding against him in his personal capacity and as Estate Trustee.
51At the hearing on December 2, I noted that there were no objections to the accounts (investment accounts, bank accounts, and receipts from 3^rd^ party care providers), subject to the recognition of debts that had accrued prior to Mr. Levers’ death, which had not yet been paid, as follows:
a) Dr. von Schlegell: $4,913.33
b) Athanasia Arvanitis: $9,510.00
c) Staff Relief Health Care Services Inc: $7,376.82
52With regard to those expenses, I stated:
There being no dispute by Lee Levers and Jayne Arvanitis to those debts, sufficient time has passed since Mr. Levers’ death to afford Matthew Levers ample time to address his concerns regarding the accounts and to bring his concerns forward. Continued non-payment of the accounts exposes the Estate to the risk of litigation and un-necessary costs. Accordingly, an order will be made today for the payment of those debts and the accounts of Matthew Levers and lee Levers as Attorneys for Property will be approved. [Emphasis added.]
53Based on the foregoing, the Court made an Order on December 2 in the following terms:
- The accounts filed by Matthew Levers, as joint Attorney for Property of Gerald Thomas Levers from October 1, 2014, to July 21, 2015, are approved, subject to the immediate payment of the following debts by Matthew Levers on behalf of the Estate:
a) Dr. von Schlegell: $4,913.33
b) Athanasia (Sia) Arvanitis: $9,510.00
c) Staff Relief Health Care Services Inc.: $7,376.82
54The Court adjourned the balance of the motions to January 22, 2016, when the issue of Matthews’ accounts as Estate Trustee was to be addressed. On February 2, 2016, the Court issued a Certificate of Appointment as Estate Trustee with a Will to Matthew.
Costs of the SDA Proceeding
55In its Order dated December 2, 2015, the Court directed that any of the parties to the proceeding could submit a Bill of Costs for their costs of the SDA proceeding to Matthew, as Estate Trustee, attaching any relevant invoices, paid or outstanding. The Order provided that if Matthew disputed any of the amounts claimed, he could deliver a written response within seven days after receiving the Bill of Costs, and the Court would address the matter after Matthew delivered his Accounts for passing.
56Jayne and Lee delivered an initial Bill of Costs dated December 10, 2015. Matthew delivered his response on January 7, 2016.
57On February 23, 2016, when the passing of Matthew’s Estate Trustee’s Accounts was adjourned to give him additional time to respond to Jayne’s and Lee’s Objections, Jayne and Lee sought the Court’s further directions regarding Matthew’s breach of the Order the Court had made on December 2, 2015, directing Matthew to pay the outstanding invoices of Dr. von Schlegall, Athanasia Arvanitis, and Staff Relief Health Care Services Inc.
58The Court stated, in its endorsement:
With regard to the payments to Dr. von Schlegall, Attanasia (Sia ) Arvanitis, and Staff Relief Health Care Services Inc., Matthew Levers advises the court that Dr. von Schlegall has today confirmed his receipt of payment, although it was apparently sent with a letter requesting a release and waiver. Such release and waiver were apparently also requested from Ms. Arvanitis, whose payment has apparently still not been sent to her, and from Staff Relief Health Care Services Inc.
The Court telephoned Barnaby Henderson today from the courtroom and directed him and Matthew Levers to send payment to the remaining recipients today and to send a letter today withdrawing the request for a release, or waiver, or such other conditions that may have been imposed on the payment. Such conditions were in direct violation of this Court’s order which was that payment be made to those individuals immediately. [Emphasis added.]
59In its Order, the Court indicated that the costs of the hearing would be dealt with on March 15, 2016. The Court directed that Costs Outlines be delivered by March 1, 2016. On March 4, 2016, Jayne and Lee delivered Costs Submissions, a Costs Outline, and an updated Bill of Costs.
60On February 23, 2016, the Court reserved the issue of Jayne’s and Lee’s costs and adjourned the balance of the Application and motions to July 5, 2016.
Matthew’s Accounts as Estate Trustee
61Matthew delivered his Accounts as Estate Trustee, and Jayne and Lee delivered their Notice of Objections, as follows:
a) He delivered the first Estate Passing of Accounts Record dated December 23, 2015, for the period from July 21, 2015 to December 9, 2015.
b) The proceeding was adjourned from January 22 to February 23, 2016, to give Jayne and Lee additional time to deliver Notice of Objections.
c) Matthew delivered the second Estate Passing of Accounts Record dated February 11, 2016, for the period from December 10, 2015, to February 9, 2016.
d) Jayne and Lee delivered their Notice of Objection to Accounts in Form 74.45 dated February 17, 2016. The Notice of Objection by Jayne and Lee dated February 17, 2017 was sent to Matthew by mail. Although he received it the following day, the Rules did not deem them to have been served until February 23, 2016 (5 days after the date when it was mailed). Matthew requested a further 7 days to deliver his response to the Notice of Objection, which was granted.
e) The Court on February 23, 2016, ordered Matthew to deliver his response in seven days and adjourned the hearing to March 15, 2016.
f) On March 15, 2016, Jayne and Lee objected to the amount of fees and disbursements charged by the lawyer Matthew had consulted as Estate Trustee, which they considered should not exceed $8,000 inclusive of HST and disbursements. Matthew indicated that he would consult the law firm in an effort to reach agreement on their fees and disbursements, failing which the Court indicated that any of the parties could seek directions to have the lawyers’ accounts referred for assessment or fixed.
g) Matthew delivered his Response to the Notice of Objection on February 29, 2016. On March 15, 2016, Matthew advised the Court that he had consulted an outside service provider to prepare the Estate’s tax returns for an estimated cost of $1,200. Once the returns were filed and the CRA issued a certificate, Matthew said he expected to be in a position to submit his final accounts by the end of June 2016. Having regard to the attention that the siblings had given to Mr. Levers’ affairs up until his death and the short period of time that had elapsed since his death, the Court concluded that there was no likelihood of outstanding claims by creditors and accordingly, dispensed with publication of a notice to creditors.
h) On March 15, 2016, the siblings agreed that pending the final passing of accounts, Matthew could make an interim distribution of $100,000 to each of the siblings and would retain the remainder in trust. They agreed that, for this purpose, Matthew could liquidate the mutual funds held by the Estate, and could dispose of Mr. Levers’ personal belongings, which he had placed in storage.
i) Matthew submitted a third Estate Passing of Accounts Record dated June 16, 2016, for the period February 9, 2016 to June 16, 2016, and moved for approval of all three of his Accounts. The Accounts that he submitted left his own compensation, as Estate Trustee, and the accounts of the lawyer he had consulted in connection with the Estate “TBD” (To Be Determined). Jayne and Lee continued to dispute Matthew’s claim to compensation and the amount of fees and disbursements charged by the lawyer he consulted. They moved for directions in connection with the accounts.
62On July 5, 2016, the Court noted that the siblings had been unable to agree on Matthew’s compensation as Estate Trustee and on the fees and disbursements of the lawyer he had consulted. The Court directed Matthew to have the lawyers’ accounts assessed, but at the ensuing assessment, Jayne and Lee, who had not been given notice, were not present, and it appears that Matthew made no objection to the fees and disbursements, which were therefore assessed in the amount the lawyers had invoiced.
63On August 24, 2016, Matthew appointed A. Sean Graham to act as his lawyer in the SDA/Estate proceeding, and the motions returned to court for further hearing on October 27, 2016. Jayne and Lee continued to dispute Matthew’s entitlement to compensation and the amount of the lawyer’s fees and disbursements, and applied to the Court for directions. Additionally, they tendered draft Orders of the Court dated December 2, 2015, February 23, 2016, March 15, 2016 and July 5, 2016, which they asked to be settled and signed.
64Court reserved its judgment on the directions requested.
ISSUES
65The parties’ motions require the Court to determine the following issues:
a) Who is entitled to the costs of the proceeding under the Substitute Decisions Act, up to the time of Mr. Levers’ death on July 21, 2015 and in what amount should costs be paid?
b) Has Matthew Levers submitted his Accounts as Estate Trustee in the required form and, if so, should the accounts be passed?
POSITIONS OF THE PARTIES
a) Costs of the proceeding under the Substitute Decisions Act
66Jayne and Lee seek their costs of the SDA proceeding on a full recovery basis, in the amount of $50,307.95, inclusive of fees, H.S.T., and disbursements or, in the alternative, in the amount of $34,388.36 on a partial indemnity scale. Matthew submits that he properly performed his role as Attorney for Property and should not be required to pay the costs of the proceeding. If costs are awarded, he submits that they should be fixed on a partial indemnity scale.
b) The passing of Matthew’s accounts
67Jayne and Lee dispute Matthew’s Estate accounts. They submit that he should be required to submit revised accounts, specifying the amount he claims as compensation, which they oppose, and the amounts charged by the lawyer he consulted, which they submit are excessive.
ANALYSIS AND LAW
a) Costs of the proceeding under the Substitute Decisions Act
(i) Entitlement to costs
Legislative framework
68The Substitute Decisions Act does not deal specifically with the costs of applications to remove an Attorney or of motions for directions. Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, and Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, therefore govern.
69The Courts of Justice Act gives the Court its general discretion to fix costs.1 Rule 57 sets out factors the Court should consider in making its determination.
Jurisprudence – Costs in Estate litigation
70The principles the Court has articulated for determining liability for costs in estate litigation apply equally to proceedings under the SDA. In both types of proceeding, trustees owe a fiduciary duty to act for the benefit of others. In both, the purposes of costs orders generally (indemnifying the successful party, sanctioning unreasonable conduct and encouraging settlement) must be balanced with the public policy objectives of giving effect to the intentions of grantors or testators, who are no longer able to speak for themselves, and to ensure that their estates are properly administered.
71Historically, the courts ordered the costs of litigating executor and beneficiaries to be paid from the estate. This approach entailed a risk that estates would be unreasonably depleted by unwarranted or needlessly protracted litigation.
72This Court, in Salter v. Salter Estate (2009), adopted a modified approach, by which a trustee is required to pay the costs of litigation from the estate unless the litigants have acted unreasonably, in which case the litigants themselves bear the costs. This approach helps ensure that estates are not depleted through the costs of unnecessary litigation. Justice D. M. Brown, in Salter, stated:
Given the charged emotional dynamics of most pieces of estate litigation, an even greater need exists to impose the discipline of the general costs principle of “loser pays” in order to inject some modicum of reasonableness into decisions about whether to litigate estate-related disputes.2[Emphasis added.]
73The jurisprudence under the modified approach initially suggested that costs in estate litigation must either be ordered to be paid by the estate or be determined according to Rule 57 of the Rules of Civil Procedure, governing the costs of civil proceedings generally, but not both.3 However, the Court of Appeal, in Sawdon Estate (2014), supported a “blended approach,” by which the Court determines costs in the conventional manner by applying the factors set out in Rule 57 unless public policy considerations require otherwise.4
74The public policy considerations in estate litigation are principally:
a) the need to give effect to valid wills that reflect the intention of competent testators; and
b) the need to ensure that estates are properly administered.
75The Court of Appeal, in McDougald Estate v. Gooderham (2005), set out the current approach to costs in estate litigation.5 Gillese J.A., speaking for the Court, stated:
The modern approach to awarding costs, at first instance, in estate litigation recognises the important role that courts play in ensuring that only valid wills executed by competent testators are propounded. It also recognises the need to restrict unwarranted litigation and protect estates from being depleted by litigation. Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation.6[Emphasis added.]
76In an estate case, if the litigation was unavoidable, but the losing party’s unreasonable conduct unnecessarily increased the costs, the Court may order that party to pay part of the estate trustee’s costs, and the Estate to pay the remainder.7
77Where litigants’ unreasonable conduct has resulted in avoidable litigation or where their conduct has unnecessarily increased the costs, the Court may decline to order that their costs be paid, either by the Estate or by the other litigants. In Jimenez v. Romeo (2009), Master Short ordered that no costs be paid in order to avoid depleting a modest estate by requiring it to pay the legal costs caused by unnecessary delays, reminiscent, he said, of the interminable case of Jarndyce v. Jarndyce depicted by Charles Dickens in the opening chapter of Bleak House.8
78In White v. Gicas (2014), the Ontario Court of Appeal re-affirmed the approach it took in McDougald Estate v. Gooderham. Watt J.A., speaking for the Court, stated:
The modern approach to the award of costs in estate litigation is exemplified by the decision of this court in McDougald Estate v. Gooderham (2005), 2005 21091 (ON CA), 255 D.L.R. (4^th^) 435 (Ont. C.A.), at paras. 78-80. The approach begins from a premise that estate litigation operates subject to the general civil litigation costs regime except in those limited cases in which public policy considerations mandate a different result: Sawdon Estate, at para. 84.
In estate litigation, there are two predominant public policy considerations at play:
i. The need to give effect to valid wills that reflect the intention of competent testators; and
ii. The need to ensure that estates are properly administered.
In practical terms, the demise of the testator leaves recourse to the courts as the only viable method of rectifying any difficulties or ambiguities created by the testator and of ensuring that the estate is properly administered: Sawdon Estate, at para. 85.
It logically follows that where the problems giving rise to the litigation were caused by the testator, it is appropriate that the testator, through his or her estate, bear reasonable costs associated with their resolution. Indeed, to saddle the estate trustees personally with legal costs in such situations might well discourage them from initiating reasonably necessary legal proceedings to ensure due administration of the estate: Sawdon Estate, at para. 86.9 [Emphasis added.]
79I interpret the above passage to mean that the Court should not order an unsuccessful Estate Trustee personally to pay the costs of those who have litigated issues concerning the estate, provided the Trustee has acted reasonably. Such litigation is sometimes necessary to ensure that estates are properly administered, and to interpret and implement the wishes of the testator, who can no longer speak for him/herself, and thereby resolve the disputes among the beneficiaries.
80In cases where the testator caused the dispute by ambiguous drafting or careless reading of the Will, or by making bequests that are calculated to cause conflict among beneficiaries, it can be appropriate to require his Estate to bear the costs of resolving the conflict, and not to require the estate trustee to pay the costs personally. Otherwise, estate trustees might decline to accept appointment, or might avoid legal proceedings that are needed to ensure that the estate is properly administered.10
Costs in proceedings under the SDA
81As noted above, the principles the Court has articulated for determining costs in estate litigation apply equally to SDA proceedings. In such proceedings, the public policy objectives that must be balanced against the purposes of costs orders generally are to give effect to the intentions of persons, when competent, to name those who, in the event of future incapacity, are to be entrusted with their personal care and property, and to ensure that those they choose as their attorneys for property administer their estates properly.
82In Fiacco v. Lombardi (2009), D.M. Brown J. stated the central issue that must be addressed when dealing with costs in an SDA proceeding:
The question can be simply stated: when a parent is declared incapable and a guardian appointed over her property, to what extent must the incapable parent’s assets bear the costs of continuing litigation amongst her disputatious children? 11
83Justice Brown, citing the modified approach to costs which he had articulated in Salter, by which the Estate was required to pay the costs of the litigation unless the litigants acted unreasonably, in which case the litigants themselves were ordered to pay the costs, stated:
…Those comments apply with equal force to capacity litigation involving incapable persons, with some modification to fit the particularities of guardianship applications.
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.12 [Emphasis added.]
84Fiacco v. Lombardi was an SDA proceeding among children who were joint Attorneys for Property and Personal Care over disputed guardianship of their mother, D.M. Brown J. stated:
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.13[Emphasis added.]
85Ziskos v. Miksche (2007), involved an SDA proceeding in which the capacity of the grantor of continuing Powers of Attorney for Property was in dispute, and the grantor died while the Court’s decision was reserved. In disallowing a large portion of the costs claimed by lawyers whom the grantor had hired by a general retainer, and who resisted an application to have the grantor found incapable, Spies J. stated:
The court has a responsibility to ensure that legal costs incurred on behalf of vulnerable persons are necessary and reasonable and for that person’s benefit, before ordering that such costs be paid by the assets or estate of the vulnerable person.14 [Emphasis added.]
86In The Bank of Nova Scotia Trust Company and Hodgins v. Zo (2011), a Guardian for Property applied for approval of a settlement. Justice Swinton, in denying the application, stated:
The Rules of Professional Conduct state that a lawyer shall not stipulate for a fee that is not “fair and reasonable” (Rule 2.08(1)). Some of the factors to be considered in determining whether a fee is fair and reasonable include the time and effort required and spent, the difficulty and importance of the matter, the amount involved, and the results obtained.
As Spies J. stated in Ziskos v. Miksche, 2007 46711 (ON SC), 2007 ONSC 46711, [2007] O.J. No. 4276 (S.C.J.) at para. 75,
The court has a responsibility to ensure that legal costs incurred on behalf of vulnerable persons are necessary and reasonable and for that person’s benefit, before ordering that such costs be paid by the assets or estate of the vulnerable person.15 [Emphasis added.]
87In Teffer v. Schafers (2009),16two nieces applied under the SDA to remove a lawyer whom their aunt, an incapable person diagnosed with Alzheimer’s in 2006, had appointed Attorney for Property in a continuing Power of Attorney for Property that same year. Justice Fragomeni removed the lawyer as Attorney for Property and appointed an institutional trustee in his place to manage the aunt’s estate. In addressing the issue of costs, Fragomeni J. drew the applicable principles from two estates cases in which the Court had ordered the Estate to pay the costs,17and another estate case in which the Court ordered a Trustee, who had breached his fiduciary duty, to pay the costs personally.18
88In Sentineal v. Sentineal (2011), Hambly J., in determining costs in an estate case, applied Fragomeni J.’s reasoning in Teffer v. Schafers, and Spies J.’s reasoning in Ziskos v. Miksche, notwithstanding that they were SDA proceedings. Justice Hambly stated:
On the issue of costs in estate cases, in Teffer v. Schafers [2009] O.J. No. 1762 Justice Fragomeni quoted from the decision of Justice Spies in Ziskos v. Miksche, 2007 46711 (ON SC), 2007 ONSC 46711, [2007] O.J. No. 4276. These cases were conducted under the Substitute Decision Act. However, the principle is the same.19
89In Wercholoz v. Tonellotto (2013) Glithero J. determined costs in an SDA proceeding in which the litigants eventually settled the substantive issues. The grantor, Katherine Wercholoz, had signed a Power of Attorney for Property in 1994 which named her son, Bob, and her daughter, Joan, as joint Attorneys for Property. Litigation arose six years later, when Joan, without Bob’s knowledge, caused Katherine, now 90 years old, to sign a new Power of Attorney naming Joan and her son as joint Attorneys for Property, and gave notice to her retirement home that the grantor would be leaving to live with them. A later capacity assessment disclosed that Katherine was no longer capable of understanding the nature or effect of a Power of Attorney.
90Justice Glithero noted that the main issue in the case had been who would act as guardian of Katherine’s property and personal care. Ultimately, Bob and Joan agreed that they would continue managing her property together as her joint Attorneys for Property under the 1994 Power of Attorney. They also agreed on arrangements for her care. The only remaining issues was costs. Bob sought his own costs of a full indemnity basis in the amount of $85,729.98, and proposed that those costs, as well as the full indemnity costs of Joan and her son, amounting to $80,447.75, be paid from Katherine’s assets. Joan and Joe sought an order requiring Bob to pay their costs and his own. The total costs represented 1/3 of Katherine’s entire estate.
91Justice Glithero found that only 25 hours of the time spent in the litigation had benefitted Katherine. On that basis, he made a “blended costs order,” requiring Katherine’s estate to pay only that portion of the costs, being approximately $8,000 for each of Bob and Joan. He stated, “the balance of the costs claimed fall to be determined on the more normal considerations relevant to the adversarial process as developed in Rule 57.”
92Justice Glithero found that Bob had unreasonably and unnecessarily increased the costs by making unwarranted allegations and by refusing reasonable offers to settle. He therefore ordered Bob to pay $40,000 of Joan and Joe’s costs himself, and the entire balance of his own costs, and that Joan and Joe would receive no reimbursement of their remaining costs of $32,000. Justice Glithero stated:
37In 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 perspective.
50In my opinion the factor of the amount claimed compared to the amount recovered is relevant here. The respondent, Katherine, has the right to enjoy her capital, and to distribute as she wishes the portion thereof not required to maintaining her standard of living while she is alive. Squabbling between two of her children which puts at risk approximately one-third of her capital is simply unreasonable.
51In terms of the complexity of the proceeding, in my opinion it is not very complex. These kinds of disputes are not unique as amongst families. There is no family business or family trust or such complicating features here. It was simply a battle of wills between siblings. Any level of reasonable compromise ought to have sorted these issues out quite quickly.
[55]…While much of the costs here were incurred as a result of the litigious stance adopted by both sides, some of the time spent by both sides was legitimately in Katherine’s best interests. Obtaining and considering the capacity assessments was a worthwhile step. So too were the development and consideration of the management plan in respect of property and the terms of the personal care plan as developed and incorporated into the minutes of settlement.20
[Emphasis added.]
93In Lily Man-Lee Chu v. Kin Kwok Chang (2010), D.M. Brown J, in dismissing a Co-Guardian of Property’s motion to remove his uncle as Co-Guardian and to appoint himself as sole Guardian for his grandmother’s personal care, and the uncle’s motion to remove the nephew and for interim directions, removed both the nephew and the uncle and appointed an institutional guardian of property. He stated:
Neither side sought an award of costs payable out of Mrs. Chang’s estate. That was an appropriate approach to take. The motion was a reflection of the discord between Dr. Chu and his uncles and aunts; there was nothing of value in the motion in respect of Mrs. Chang’s interests. I conclude that the general principle of costs following the cause should apply, and Dr. Chu should pay the reasonable costs of the respondents: Fiacco v. Lombardi, 2009 46170 (ON SC), 2009 46170 (ON S.C.).
As to the scale of costs, counsel for Dr. Chu submitted that the partial indemnity scale was the appropriate one since there was no “reprehensible, scandalous or outrageous” conduct that would attract substantial indemnity costs. I disagree… I have found that Dr. Chu misled the court about his fluency in Cantonese and, in fact, he could communicate in Cantonese with the caregivers. Rule 57.01(1)(g) provides that one factor I may consider in fixing costs is a party’s denial of anything that should have been admitted. Dr. Chu should have admitted to his ability to converse in Cantonese. Dr. Chu’s failure to do so resulted in him advancing an argument to the court when he knew there was no proper factual basis to support it and which resulted in Dr. Chu misleading the court. That was highly improper conduct rising to the level of reprehensible, scandalous and outrageous. This is an appropriate case in which to award costs against Dr. Chu on a substantial indemnity basis.21
94In Ziskos v. Miksche,22 Spies J. concluded that she had jurisdiction to award costs of SDA proceedings, notwithstanding that the grantor of the continuing Power of Attorney for Property died while the decision on the substantive issues, involving a conflict between competing guardians, was reserved, with the result that the applications were not decided on the merits. She stated:
42…It is also important to note Rule 57.01(4), which provides that nothing in Rule 57 affects the authority of the court under section 131 of the Courts of Justice Act, to among other things, award all or part of the costs on a substantial indemnity basis and to award costs in an amount that represents full indemnity.
43Although the parties did not take issue with my jurisdiction, I have considered whether the fact that these applications were not decided on the merits affects my jurisdiction. I am not aware of any case that decides this point directly, which is perhaps not surprising since usually costs are negotiated as part of a settlement. Given the broad jurisdiction the court has in determining costs provided by s. 131 (1) of the Courts of Justice Act and my jurisdiction pursuant to Rule 77.11 (1) (e) to award costs as the case management judge, I have concluded that I do have jurisdiction to award costs of these applications notwithstanding the fact that they were resolved without a hearing on the merits. Essentially it could be said that when the various orders were made that led to a resolution of all outstanding issues, the expectation of all parties was that costs would be fixed by the court.
44Not only were the applications never decided on the merits, there were no cross examinations on the many affidavits filed. Although this leaves me with no ability to make findings of fact on contested evidence,23 my jurisdiction to fix costs is not otherwise affected.
[55] I have concluded that as a matter of law I can decide whether or not any of the parties should pay costs of another party. If any authority is needed for this proposition, I refer to the Court of Appeal decision in Neill v. Pellolio24 where the court on appeal overturned an award of solicitor-clients costs against an unsuccessful party in a case over competing powers as between co-attorneys because of a finding the conduct of the losing party did not justify the higher scale of costs, not because of any lack of jurisdiction.
56This is consistent with my observation that it can no longer be said in estate matters, and in this regard I would include matters under the SDA, that parties and their counsel can reasonably expect all of their costs to be paid for by the assets or in this case now from the estate of Johanna Miksche. The trend for some time now has been to examine the nature of the dispute and the conduct of the parties. Although in most cases it is also possible to consider which party is the “successful” party, that is not as significant a factor in these types of cases provided it can be said that the parties are properly motivated by the best interests of the person under a disability and are acting reasonably.
95Justice Spies based her order requiring the nephews who resisted the application for guardianship to pay the applicants’ costs on her finding that no reasonable person would have concluded that their grandmother was capable of making decisions regarding her own care or property. Justice Spies stated:
57In Smither v. Smither,25 G. Campbell J. of this court referred to the Estates Manual for judges, which provides in part, in connection with contested will applications, that “where no reasonable person would have considered the validity of the will in issue but chose to bring or continue an attack clearly unsupported by the known facts, the court will likely order the unsuccessful parties to pay the costs of the successful parties with those of the executor on a substantial indemnity basis (solicitor and client).”
58I see no reason why I should not approach this case on the same basis notwithstanding the fact there is no successful party. This is consistent with the factors set out in Rule 57.01 which include the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding, whether any step in the proceeding was unnecessary or taken through excessive caution and a party’s denial of or refusal to admit anything that should have been admitted. These factors should be considered in addition to the more commonly considered factors of the complexity of the proceeding, the importance of the issues and the principle of indemnity.
59Another factor in Rule 57.01 is a consideration of the amount that an unsuccessful party could reasonably expect to pay. Although I have found that no party was unsuccessful, I see no reason why I should not consider what the parties reasonably could expect to receive or pay for costs and whether or not they could reasonably expect to recover costs from the estate of Johanna Miksche or any of the parties. This is particularly important in estates and SDA matters where the payment of at least some of the costs from the estate is common.
96In explaining why she ordered the nephews, who had resisted a finding of incapacity, to pay costs of $41,800.00 to the parties who applied for guardianship, Spies J. stated:
[101] Perhaps one of the most troubling reasons for why this litigation was so protracted and costly is that the nephews and Polten & Hodder refused to acknowledge the overwhelming views of those independent professionals who had assessed Johanna Miksche and determined that she lacked capacity to make personal care and property decisions. As is stated in their written submissions, Polten & Hodder sought to uphold the competence of Johanna Miksche and their application for guardianship was intended as a shield against the proceedings brought by Mr. Warren’s clients.
102What I find particularly troubling is the belief held by Mr. Polten, that his opinion and the opinion of members of his firm and the nephews who swore affidavits in support of the application, opining that in their personal opinions Mrs. Miksche was competent to make property and personal care decisions, were what mattered, notwithstanding what was obvious from the reports of the healthcare professionals who had already assessed her. In fact Mr. Polten went so far as to suggest before me in oral argument, that the views of the bar should trump those of the healthcare professionals and the court!
103This is a preposterous and startling proposition and as Ms. Spencer pointed out, an extremely dangerous one. Courts are not equipped to make assessments of someone’s capacity to manage property or make personal care decisions without the assistance of qualified professionals. Often when assessments are done, all concerned accept the opinions of those professionals and there is no need for involvement of the courts. In those cases where there is an issue, the court makes the ultimate decision. In all cases, however, the courts have regard to the opinions of experts who are suitably qualified. Where there are conflicting opinions, the court must choose which one to accept. This however was not the case here as generally all of the assessments concluded that Mrs. Miksche was incapable of managing her property and making personal care decisions. It was only Mr. Polten and his clients who took a different view. Although I do not dispute the fact that finding a person to be incapable of personal care and property decisions is a very serious step, where there is credible evidence to support such a finding it is irresponsible for presumably well-meaning relatives and their counsel to run up over $1 million in fees to fight such a finding, relying instead on their own personal lay opinions as to capacity.
104Mr. Polten argued that he was entitled to rely on the presumption of capacity but that presumption did not entitle him to ignore credible and reliable evidence that Johanna Miksche was not capable to make personal care and property decisions. To put this in context I have considered what information the nephews and Polten & Hodder had concerning the capacity of Johanna Miksche and when that information became known to them.
127The fact that the nephews relied on lay opinions is of great concern to me particularly as these views were used as a springboard for the extremely costly litigation that followed. If the nephews were acting reasonably and wanted to challenge the assessments prepared by the health care professionals that knew Mrs. Miksche, they had an obligation to have her assessed by a qualified person and do so quickly. [Emphasis added.]
97Justice Spies’ approach can be contrasted with that of André J., in Lisowick v. Alvestad (2015). In an SDA proceeding, André J. ordered the costs of Ms. Rivera, who had successfully resisted her sister, Ms. Lisowick’s, application to remove her as joint Attorney for Property and Personal Care for their mother, who suffered from Alzheimer’s, to be paid from the mother’s estate. Instead of removing Ms. Rivera, Justice André removed Ms. Lisowick, leaving Ms. Rivera or, if she was unable to act, a bank, as sole Attorney for Property and Personal Care. Ms. Listowick claimed her costs of $76,897.50, on the basis that she had “protected” her mother and her property. Ms. Rivera claimed her costs of $93,683.31, on the basis that she had successfully resisted Ms. Lisowick’s application to remove her and had been named as their mother’s sole Attorney for Property and Personal Care. In awarding Ms. Rivera her costs in the amount of $50,000 to be paid from the mother’s estate rather than by Ms. Lisowick personally, André J. stated:
As 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.
On 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.
It 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.26 [Emphasis added.]
98I prefer the approach taken by Spies J. The parent who names his/her children as joint attorneys for property or personal care should not be required to pay the unnecessary costs that result when one of the children fails to perform his/her duty, making the arrangement untenable. The purpose of the SDA is to protect the personal wellbeing and property of a grantor whose vulnerability lies in the fact that he/she later becomes incapable of managing his/her own care and property, and is dependent on his children to do so. A person named as Attorney for Property or Personal Care can apply to the Court to be relieved of that position. As long as he/she maintains the position, the Attorney must perform the duties in a responsible and reasonable manner.
Applying the legal principles to the facts of the present case
99Ms. Arvanitis and Lee Levers base their claim for costs against Matthew Levers on two grounds, namely:
a) Matthew caused the litigation, which began in April 2014, by making it impossible for Ms. Arvanitis to perform her role as their father’s sole attorney for personal care and by making it impossible for Lee Levers to perform his role as joint attorney for property.
b) Matthew conducted himself unreasonably during the proceeding, by failing to produce documents, and failing to comply with court orders.
Did Matthew cause the litigation?
100I find that Matthew interfered with Jayne’s ability to perform her role as Mr. Levers’ sole Attorney for Personal Care in the following ways:
a) by refusing to release monies required to fund the services and programs she had engaged; and
b) by suspending payment of Sandalwood’s fees beginning February 2014.
101I find that Matthew interfered with Lee’s ability to perform his role as Mr. Levers joint Attorney for Property by refusing to give Lee access to the records of their father’s finances and, particularly, Mr. Levers’ bank and investment accounts. Matthew had his own name but not Lee’s added to the accounts in 2012.
102I do not accept Matthew’s explanations for the conduct that precipitated the SDA proceeding. First, he gives conflicting accounts of when and by what means he was informed of the capacity assessments. He states, in his affidavit sworn April 22, 2014:
Jayne made a decision to begin exercising the Power of Attorney for Personal Care in July 2012 before any discussion or consultation with Gerald or all family members. A Letter of Opinion Regarding Capacity to Manage Personal Care was not completed for Gerald until December 10, 2012. The first date that I was made aware that an assessment was completed was on April 23, 2013, when I received a letter from Jayne with the enclosure.
Jayne never advised or discussed with me the arrangement of our father’s capacity assessment to manage personal care that she arranged in December 2012. I was first informed of the personal care assessment and the results in our April 23, 2014, meeting at Martindale Gardens.
I have a concern and cannot accept the endless capacity assessments that Jayne has requested to be completed for our father. These multiple assessments have upset our father and contributed to trigger events that jeopardized our father’s wellness care and choice for living residence. [Emphasis added.]
103With regard to his failure to respond appropriately to Jayne’s concerns about Mr. Levers’ wandering, and the inadequacy of security at the Milton retirement home, Matthew misattributes the wandering to intentional conduct of their father rather than to incapacity, and uses it as an occasion for casting blame on Jayne and Lee. He states:
- I was advised by Lee by e-mail on April 30, 2014, that Gerald was returned to Martindale Gardens by the Milton police. I was concerned the effect that receiving the Village of Sandalwood Park letter and the ongoing discussions about long term-care would have on our father. I responded to Lee and Jayne to understand what is triggering our father to wander. No reply received from Lee or Jayne. [Emphasis added.]
104Matthew failed to give a reasonable explanation for suspending payment of the rent charged by Sandalwood. He did not appear to appreciate the fact that Jayne was the person responsible for Mr. Levers’ personal care, including shelter, or the risk he caused by not paying the facility or the caregivers Jayne had arranged to provide care for Mr. Levers. He states:
The reasons for the suspension of our father’s co-payment funding for private accommodation at the Village of Sandalwood Park is a result the worrisome care concerns and Jayne’s refusal to provide any reporting on our father’s care model or plan of care. This decision was taken after careful consideration of information and efforts to work with Jayne and the Village of Sandalwood Park to provide the requested care information.
Zoie Mohamed, General Manager, The Village of Sandalwood Park is very much aware of my care concerns. I am in frequent contact with Zoie and she is also aware of the outstanding balance owing on our father’s account. [Emphasis added.]
105Matthew seeks to justify his failure to give Lee joint signing authority over Mr. Levers’ bank accounts, and access to information about his property, to Lee’s failure to respond to Matthew’s demands for reasons for asking to be added and to be given access. Lee’s requests, as joint Attorney for Property, were clearly justified by Mr. Levers’ incapacity. In his affidavit, Matthew states:
I do not refuse to attend at Gerald’s bank with Lee to present the Continuing Power for Property. I requested Lee provide me with written reasons that we need to go to the Bank of Montreal. No response received.
Lee has requested that all our father’s bank accounts be re-registered in the name of Lee G. Levers and Matthew CJ Levers because our father does not have capacity to manage his property. I confirmed with Lee and Jayne that this re-registration of Gerald’s account information is not an option and requested to be provided the reason(s) that we needed to go to the Bank of Montreal.
Lee and Jayne have requested that our father’s bank and investment accounts be re-registered in the names of Lee G. Levers and Matthew C.J. Levers because our father does not have capacity to make decisions about his property or is able to manage it. Lee has also suggested that we need to access our father’s safety deposit box.
I have confirmed that this account re-registration will not happen. All our father’s financial accounts will remain registered in his name or jointly as he has instructed. I have advised that our father has made sound financial decisions and structured his personal financial affairs to meet his current and future needs. I have requested and need a valid reasons why we need to access our father’s safety deposit box. [Emphasis added.]
Was Matthew’s conduct in the SDA proceeding reasonable?
106Additionally, Matthew conducted himself in an unreasonable manner in the SDA proceeding. He repeatedly failed to comply with the Court’s Orders. After persuading the Court to grant leave to hire a geriatric specialist, Dr. von Schlagell, to assess Mr. Levers and advise as to the most suitable facility for him, Matthew failed to honour Dr. von Schlagell’s invoice promptly, even when ordered to do so by the Court. The invoice, issued on June 22, 2015, was not paid until February 23, 2016, notwithstanding the Court’s Order, made in Matthew’s presence, on December 2, 2015, directing him to pay the invoice immediately.
107As of February 23, 2016, Matthew still had not paid Athanasia Arvanitis, after a total of 20 invoices, 10 written requests, and two oral requests, from both Jayne, Athanasia, and Lee, and notwithstanding the Court’s Order on December 2, 2015, that she be paid immediately.
108Matthew was ordered on July 23, 2016, to deliver his accounts as joint Attorney for Property. He never did deliver his own accounts in the form required by Rule 74.17. On November 12, 2015, he delivered only an affidavit in which he purported to submit his accounts, but simply attached Mr. Levers’ investment account statements, bank statements, and third-party expense receipts which he had delivered to the Court in January 2015.
109The SDA proceeding did not result in any benefit to Mr. Levers. Dr. von Schlegel’s opinion confirmed that the decision Jayne had made, in her capacity as sole Attorney for Personal Care, and that Lee had concurred in, as joint Attorney for Property, was correct. It was a costly and time consuming exercise which, ultimately, proved unnecessary. For this reason, Matthew will be required to pay Jayne’s and Lee’s costs personally, and on a full indemnity basis.
(ii) The amount of costs
Legislative framework
110Rule 57.01 of the Rules of Civil Procedure gives the Court guidance in the exercise of its discretion by enumerating factors that the Court may consider when assessing costs.27
111Among the factors set out in rule 57.01(1) are the following:
(i) The complexity of the proceeding;
(ii) The importance of the issues;
(iii) The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(iv) Any offers to settle;
(v) The principle of indemnity;
(vi) The concept of proportionality, which includes at least two factors:
(a) The amount claimed and the amount recovered in the proceeding; and,
(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;
(vii) Any other matter relevant to the question of costs.
Jurisprudence
112Justice Perell summarized the purposes that costs orders serve in 394 Lakeshore Oakville Holdings Inc. v. Misek (2010). He stated:
Modern costs rules are designed to advance five purposes in the administration of justice: (1) to indemnify successful litigants for the costs of litigation, although not necessarily completely; (2) to facilitate access to justice, including access for impecunious litigants; (3) to discourage frivolous claims and defences; (4) to discourage the sanctioning of inappropriate behaviour by litigants in their conduct of the proceedings; and (5) to encourage settlements.28 [Internal citations omitted.]
113Ultimately, in determining the costs to be awarded, the Court applies fairness and reasonableness as overriding principles.29 In assessing what is fair and reasonable, it does not engage in a mechanical exercise but, rather, takes a contextual approach, applying the principles and factors discussed above, and sets a figure that is fair and reasonable in all the circumstances.30 Rule 1.04(1.1) requires the Court to consider proportionality; that is, the amount of costs ordered should be proportional to the amount of money and other interests at stake in the proceeding.31
114The Court's role in assessing costs is not necessarily to reimburse a litigant for every dollar spent on legal fees. The Court of Appeal pointed out in Boucher that the award of costs must be fixed in an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceedings rather than an exact measure of actual costs to the successful litigant.32
115In reviewing a claim for costs, the Court does not undertake a line by line analysis of the hours claimed, and should not second-guess the amount claimed unless it is clearly excessive or overreaching. It considers what is reasonable in the circumstances and, taking into account all the relevant factors, awards costs in a global fashion.33
116The general rule is that costs follow the event and will be awarded on a partial indemnity scale.34 In special circumstances, costs may be withheld from the successful party or be ordered to be paid to the unsuccessful party – and the scale of costs may be higher. Those cases are exceptional and generally involve circumstances where one party to the litigation has behaved in an abusive manner, brought proceedings wholly devoid of merit and/or has unnecessarily run up the cost of litigation.35
Applying the legal principles to the facts of the present case
Indemnification – the amounts claimed
117Jayne and Lee seek their costs of the SDA proceeding on a full recovery basis, in the amount of $50,307.95, inclusive of fees, H.S.T., and disbursements or, in the alternative, in the amount of $34,388.36 on a partial indemnity scale. Based on Matthew’s unreasonable conduct, as described above, he should be required to pay Jayne’s and Lee’s costs on a full recovery basis.
Indemnification - The hourly rates charged and the time spent
118In determining the appropriate hourly rates to be assigned to the lawyers involved in the motion, the Court follows the approach taken by Aitkin J. in Geographic Resources Integrated Data Solutions Ltd. v. Peterson (2013).36 That is, the starting point is the successor of the Costs Grid, namely, the “Information for the Profession” bulletin from the Costs Sub-Committee of the Rules Committee (the “Costs Bulletin”), which can be found immediately before Rule 57 in the Carthy or Watson & McGowan edition of the Rules, which sets out maximum partial indemnity hourly rates for counsel of various levels of experience.
119The Costs Bulletin suggests maximum hourly rates (on a partial indemnity scale) of $80 for law clerks, $225 for lawyers of less than 10 years’ experience, $300 for lawyers of between 10 and 20 years’ experience, and $350 for lawyers with 20 years’ experience or more.37 The upper limits in the Costs Bulletin are generally intended for the most complex and important of cases.
120The Costs Bulletin, published in 2005, is now dated. Aitkin J. considered adjusting the Costs Subcommittee’s hourly rates for inflation, as Smith J. did in First Capital (Canholdings) Corp. v. North American Property Group,38 but the unadjusted rates of the lawyers in her case were only slightly less than the actual fees they charged, so she elected to use their unadjusted rates. Normally, however, it is appropriate to adjust the hourly rates in the Costs Bulletin to account for inflation since 2005.
121Based on the Bank of Canada Inflation Calculator,39 the 2017 equivalent of the hourly rates in the Costs Bulletin are $97.86 for law clerks, $275.00 for lawyers of under 10 years’ experience, $367.00 for lawyers of between 10 and 20 years’ experience, and $428.00 for lawyers of over 20 years’ experience.
122The Court is guided by the rates in the Costs Bulletin, not the actual hourly rates charged. The actual rates charged are relevant only as a limiting factor in preventing the costs awarded from exceeding the actual fees charged. The Costs Subcommittee’s rates apply to all lawyers and all cases, so everyone of the same level of experience starts at the same rate.
123The Court adjusts the hourly rate, or the resulting fees, to reflect unique features of the case, including the complexity of the proceeding, the importance of the issues, and the other factors set out in Rule 57.01(1). If an excessive amount of time was spent, or too many lawyers worked on the file, the Court reduces the resulting amount of fees accordingly. As long as the resulting amount does not exceed the amount actually charged to the client, the actual fee that the client agreed to pay is irrelevant.
124Amanda Dale, the lawyer who invested the greatest amount of time on behalf of Jayne and Lee, was called to the Bar in Ontario in 2002. She had practiced law for between 13 and 14 years during the SDA proceeding. Based on the Costs Bulletin, adjusted for inflation, Ms. Dale is entitled to claim a maximum hourly rate of $367.00 on a partial indemnity scale, for the time she spent on the case.
125Frederick Streiman, the most senior lawyer assisting Jayne and Lee, was called to the bar in 1978 and had practiced law for over 20 years during the proceeding. He is entitled to claim a maximum hourly rate of $428 on a partial indemnity scale.
126Ms. Dale and Mr. Streiman were assisted by three law clerks. They are entitled to claim a maximum hourly rate of $97.86 on a partial indemnity scale.
127Rule 1 of the Rules of Civil Procedure defines substantial indemnity costs as meaning "costs awarded in an amount that is 1.5 times what would otherwise be allowable in accordance with Part I of Tariff A" - i.e. 1.5 times the partial indemnity rate. Costs calculated on a substantial indemnity scale represent something less than full indemnity. Justice Power, in Hanis v. University of Western Ontario (2006), stated that in that case, they represent approximately 90% of the fees actually charged.40 Ms. Dale’s substantial hourly rate, based on Rule 1, is $550, and her full recovery rate, if 10% higher, would be $605. Mr. Streiman’s substantial indemnity rate is $642, and his full recovery rate would be $706. Their law clerks substantial indemnity rate is $146.79, and their full recovery rate is $161.
128Jayne and Lee claim the fees of their lawyers, on a full recovery basis, in the amounts of $300 per hour for Ms. Dale, $400 per hour for Mr. Streiman, and $125 per hour for their Law Clerks. These rates are lower than the maximum rates they are entitled to claim, even on a substantial indemnity scale, and I find them to be reasonable.
129Jayne and Lee do not provide a detailed breakdown or dockets with individual time entries to support the time they claim, but they do provide a list of the tasks the lawyers performed and the totals claimed for each of the lawyers. Mr. Streiman spent a total of 9.87 hours, Ms. Dale spent 62.08 hours, and the Law Clerks spent 17.33 hours on tasks other than drafting motion materials and Court attendances. Those included meetings, telephone calls, correspondence, drafting memos, giving instructions, reviewing endorsements and making costs submissions, including preparing the bill of costs, costs outline and arranging for service and filing of documents.
130Mr. Streiman spent 4.2 hours and Ms. Dale spent 40.30 hours in the preparation of motion materials, research, and preparation for the motion. These tasks included drafting the Application Record, Notice of Application and supporting affidavits with exhibits, drafting the Applicants’ factum and preparing their Book of Authorities for use at the hearing on August 28, 2014, and the Motion Record, affidavits and Notice of Objection to Accounts for the motion heard December 2, 2015.
131Mr. Streiman spent 2.5 hours in the attendance at court before Bielby J. on April 24, 2014, and assisting Jayne and Lee to prepare for their attendances in court before me on October 8, October 28 and December 16, 2014, on January 27, February 24, July 23 and December 2, 2015, and on January 21, February 23 and March 15, 2016. Ms. Dale spent 9.2 hours reviewing the client ledger and preparing their Ball of Costs and Costs Outline.
132I find the time spent to have been reasonable and proportionate to the issues at stake in the proceeding. Additionally, I find that the time spent by each of the lawyers reflects an appropriate delegation of tasks to Ms. Dale and their Law Clerks, where possible, and that Jayne and Lee’s delivery of a Notice of Intention to Act in Person dated September 30, 2014, and their subsequent appearances representing themselves reflects an effort to utilize the resources of their lawyers selectively and keep their costs to a minimum.
133Matthew sets out no time spent by any lawyers he consulted during the SDA proceeding. The absence of dockets from lawyers representing him does not permit a detailed comparison of the time spent by lawyers on behalf of Jayne and Lee with the time spent by or on behalf of Matthew. For all of these reasons, I allow the time spent by Jayne and Lee’s lawyers as claimed.
Other factors - Disbursements
134The disbursements claimed by Jayne and Lee consist of $909.93 plus HST for process serving and courier charges, $857.13 plus HST for faxes, photocopies, binding, and mail, and $485 plus HST for court filing fees. These disbursements are not disputed by Matthew and I find them to be reasonable and proportionate.
Proportionality and the reasonable expectation of the unsuccessful parties
135I have referred above to the costs incurred in similar litigation among Attorneys for Property and Personal Care, and between Estate Trustees and beneficiaries in cases involving similar issues to those that were involved here. The costs of such cases should have informed Matthew’s expectation of the costs he would face in the present proceeding. I find the costs claimed by Jayne and Lee to be reasonable in comparison to those cases, and proportionate to the issues that were at stake in the SDA proceeding, which involved not only the appropriate care of Mr. Levers but the safeguarding of his property. That property, as noted, amounted to approximately $600,000.
b) Has Matthew Levers submitted his Accounts as Estate Trustee in the required form and, if so, should the accounts be passed?
Legislative framework
136Rule 74.17(1) of the Rules of Civil Procedure sets out the duty of estate trustees in relation to the keeping of accounts and filing them with the Court. Rule 74.17(1) provides, in part:
74.17(1) Estate trustees shall keep accurate records of the assets and transactions in the estate and accounts filed with the court shall include,
(d) an account of all money disbursed, including payments for trustee’s compensation and payments made under a court order, but excluding investment transactions recorded under clause (e);
(h) a statement of all the liabilities of the estate, contingent or otherwise, at the closing date of the accounts;
(i) a statement of the compensation claimed by the estate trustee and, where the statement of compensation includes a management fee based on the value of the assets of the estate, a statement setting out the method of determining the value of the assets;41
137The procedure to be followed in the passing of accounts is set out inter alia in Rule 74.18(7) and (12) as follows:
74.18(7) Notice of Objection to Accounts
Subject to subrule (8) a person who is served with documentation under subrule (4) or (5) and who wishes to object to the accounts shall do so by serving on the estate trustee and filing with proof of service a notice of objection to accounts (Form 74.45) at least 60 days before the hearing of the application.
74.18(12) No objection shall be raised at the hearing that was not raised in a notice of objection to accounts, unless the court orders otherwise.
Jurisprudence
138Justice Shaughnessy, in Newell v. Newell (2010), granted leave to appeal from the decision of the motion judge on the basis that he had ordered such a cross-examination on the Trustee’s accounts. Justice Shaughnessy stated:
22Rule 74.18 deals extensively with the process of passing of accounts. The passing of accounts is not a motion, trial or a reference and the Affidavit of Verification of the Accounts is filed in compliance with the rules in order to obtain an appointment from the Court.
23The process then on passing of accounts is an informal procedure which is governed by section 49 of the Estates Act. There is a power granted to the Court at the hearing of a passing of accounts under Rule 75.06 and a motion for directions to inter alia direct the trial of issues to be decided (Rule 75.06(3) (a)). The hearing judge may, under this rule, determine who is the plaintiff and the defendant and who is submitting rights to the court; who shall be served with the Order for directions and the procedures for bringing the matter before the court in a summary fashion, where appropriate. There are other provisions relating to the trial of an issue including such other procedures as are just (Rule 75.06(3) (g).
24The Respondent in support of their position of a pre-hearing cross-examination on the Affidavit of Verification of Accounts have referred to the text “Compensation and Duties of Estate Trustees, Guardians and Attorneys” by Jennifer J. Jenkins and H. Mark Scott (Canada Law Book 2010). At page 6-13 of this text Counsel for the Respondent cites:
6:40.10.20 Practice and Strategies
Generally, as a matter of practice, the pleadings will consist of the affidavit verifying the accounts, together with the accounts themselves and the notices of objections. Given the summary nature of an application to pass accounts and the obligation upon the personal representative to satisfy the court that the accounts and compensation are proper, a party challenging the accounts has somewhat of an advantage as he or she may choose to cross-examine the trustee on his or her affidavit, which incorporates the accounts as an exhibit. (emphasis added).
25Based on the narrative in this text Counsel for the Respondent states “that cross-examination on an Affidavit of Verification has become standard practice.” If the authors of the text are referring to the power of a hearing judge to direct a trial of an issue which may include a provision to cross-examine on the Affidavit of Verification then they are correct. Indeed, in the passage quoted and relied upon the authors reference “pleadings” which suggests that their comments are made in the context of an order for trial of an issue. I have serious doubts that it is “standard practice” to bring a motion for directions for a pre-hearing cross-examination on the Affidavit of Verification of Accounts. Indeed such a notional practice would seem contrary to the “summary nature of passing of accounts” referred to by the authors.
26The statement contained in paragraph 4 of the Factum of the Respondent Donald Gerard Newell is quite troubling:
A review of the Notices of Objection filed by the Respondents Donald Gerard Newell (“Donald”) and Patricia Ann Lombardi (“Patricia”) shows even more issues being taken. It is certainly easy to assume that further objections will be raised as the evidence is unearthed. (emphasis added).
27Leaving aside the provisions of Rule 74.18(12), the statement made at paragraph 4 of the Respondent’s Factum strongly suggests that the pre-hearing cross-examination is the type of “fishing expedition” that the Court of Appeal in the Willumsen v Robinson supra wished to discourage.
28Therefore, I find that under the second branch of Rule 62.02(4) (b) there is good reason to doubt the correctness of the Order of August 24, 2010 only as it relates to the direction for a pre-hearing cross-examination on the Affidavit of Verification of the Accounts.
[29] The passing of accounts procedure should be informal and summary in nature and only after a hearing judge decides that there are issues requiring a trial should the process as detailed under the Rules be directed. In the present case the Order of August 24, 2010 directs that “Amended Notices of Objections” are to be served and filed on or before November 1/10. It would then appear that it was premature to order anything more until the Amended Notices of Objection were filed and then for the Applicant’s response were put before a hearing judge. After conducting a hearing the judge could determine whether a trial of an issue(s) should be directed.42 [Emphasis added.]
Applying the legal principles to the present case
139Matthew’s Passing of Accounts Records are not in the proper form. They do not begin with a Statement of Assets and Liabilities or continue with a statement of all receipts and expenditures, and they fail to quantify his claim for his own compensation as Estate Trustee, or such amounts he claims as disbursements to be made to solicitors he consulted as Estate Trustee.
140Jayne and Lee, as beneficiaries of Mr. Levers’ Estate, were entitled to notice of the Assessment of the account of the solicitor Matthew consulted as Estate Trustee, and should be given an opportunity to question the solicitor, if they wish. In Elfrieda Bott v. Macaulay, (2005), Cullity J. stated:
- Can the Fees of an Estate Solicitor be Challenged only on a Passing of Accounts?
19Mr. Bott, and not his mother's estate, was the Solicitor's client. Although references to an estate solicitor are deeply ingrained in estate practice in this jurisdiction, they are descriptive only of the work a solicitor is retained to perform for his client. An estate is not a juridical person and cannot retain anyone, or incur liabilities. An estate solicitor is one performing services to a personal representative acting as such.
20It follows that the estate trustee, and not the estate, is personally liable to the estate solicitor. Such liability exists whether [page428] or not the estate trustee is entitled to an indemnity -- or to be reimbursed -- from the estate (i.e., from its assets) for the amounts owing to the solicitor. Whether a right to indemnity or reimbursement exists is a matter between the estate trustee and the beneficiaries of the estate and is to be determined either by agreement with them, or on a passing of accounts. In itself, the existence -- or non-existence -- of such a right does not affect the liability of the estate trustee to the estate solicitor.
21If the estate trustee wishes to challenge the fees or disbursements charged by the estate solicitor, the appropriate procedure is by an assessment pursuant to the Solicitors Act unless, on a passing of accounts, the beneficiaries have challenged the reasonableness of the fees as an expense incurred by the estate trustee in administering the estate, or unless the estate trustee wishes to have an order approving the right to an indemnity or reimbursement. In either event, the court may order an assessment or, in some cases, may review the reasonableness of the accounts at the passing. This jurisdiction was formerly explicit in -- but its existence was not, I believe, dependent on -- the provisions of s. 62 of the surrogate court rules. Neither approach involves any recognition that the solicitor rendered services to the estate or to the beneficiaries -- or that either has rights or obligations to the other or others -- but, rather, that the estate trustee is entitled to charge the estate only for expenses and liabilities reasonably incurred. As Leach Surr. Ct. J. stated in Re Smith, 1972 580 (ON SC), [1972] 2 O.R. 256 (Surr. Ct.) [at p. 261 O.R.]:
The solicitor is solicitor for the executor and not of the estate; and costs recoverable by him against the executor can be charged against the estate by the executor only if he shows they are necessary and proper charges against the estate.43
[Emphasis added.]
141The fact that Matthew had his solicitor’s accounts assessed and may not have raised any real issue as to the reasonableness of those accounts does not entitle Matthew to automatic indemnification from Mr. Levers’ Estate. The Court must still examine the solicitor’s account to determine whether the services rendered were necessary to the Estate and whether the amounts charged were reasonable, having regard to their value to the Estate (that is, on a quantum meruit basis).
142Matthew’s lawyer, Mr. Graham, fairly acknowledged that the accounts that Matthew delivered, before retaining counsel, do not conform to the requirements of Rules 74.16 to 74.18 of the Rules of Civil Procedure. He proposed that Matthew be given an opportunity to deliver revised Accounts that conform to those requirements and indicated that he would require three months to do so. The ensuing adjournment has afforded Matthew seven months for that purpose.
143Mr. Graham proposed that the Court provide directions consisting of a timetable for steps to be taken in connection with the passing of the Accounts. He proposed that the timetable comprise the following steps:
a) 90 days for Matthew to deliver of revised Accounts;
b) 30 days for Ms. Arvanitis and Lee to deliver a Notice of Objections;
c) 30 days for Matthew to deliver his Response to the Objections;
d) 30 days for Ms. Arvanitis and Lee to cross-examine Matthew on his Affidavit of Verification of the Accounts and the Accounts;
e) 30 days for motions arising from undertakings and refusals; and
f) A hearing for the passing of Accounts.
144An out-of-court cross-examination of the Trustee on his Affidavit of Verification of the Accounts and on his Accounts does not invariably occur in a passing of accounts and there is not unanimity among judges that it is appropriate, in all circumstances, to direct such a cross-examination. I find that it is premature to order such a cross-examination, at least until Matthew has delivered his Accounts in proper form, Jayne and Lee have delivered their Notice of Objections, and Matthew has responded to their Objections.
145While an Attorney for Property can claim compensation for his services, pursuant to s. 40(1) of the SDA, Matthew did not do so.44 This was appropriate, in the circumstances. Such a claim, if made, would likely have been disallowed based on the five factors which the Court of Appeal set out in Laing Estate v. Hines (1998): the size of the trust, the care and responsibility involved, the time occupied in performing the duties, the skill and ability displayed, and the success resulting from the administration.45The skill and ability displayed and the results of Matthew’s administration would likely have foreclosed compensation.
146Matthew has not yet advanced a claim for compensation as Estate Trustee for Mr. Levers’ Estate. Entitlement to such compensation for estate trustees is found in s. 61 of the Trustee Act, R.S.O. 1990, c. T.23 (the “TA”). Subsections 61(1) and 61(3) provide:
61(1) A trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice.
61(3) The judge, in passing the accounts of a trustee or of a personal representative or guardian, may from time to time allow a fair and reasonable allowance for care, pains and trouble, and time expended in or about the estate.
147While the TA does not set out a method to calculate compensation, the courts in Ontario have developed percentage guidelines to assist in quantifying trustee compensation. Since 1975, the Ontario guidelines or tariff provide for 2½% on capital receipts and disbursements, 2½% on revenue receipts and disbursements, and a care and management fee of 2/5 of 1% per annum on the gross value of the assets under administration.
148The judge conducting the passing of accounts tests the compensation claimed using the percentages approach and then cross-checks the amount against the five factors set out in Laing Estate. If and when Matthew makes a claim for compensation as Estate Trustee, it will be subject to that analysis.
149In the Estate of Stefanie Aber (2015), Swinton J. stated:
The Issue of Compensation
20In the present case, the trial judge set out the correct legal principles in her reasons, observing at para. 26:
Really, then, neither care and management fees nor any other part of an estate trustee’s compensation should be awarded as a matter of routine adherence to fixed percentages. Every case requires a careful examination of the facts to determine whether the compensation sought would be fair and reasonable.46 [Emphasis added.]
150I will set out a timetable below, to be followed in the passing of Matthew’s Accounts as Estate Trustee. I am not seized of that aspect of the proceeding and, accordingly, will schedule the hearing at the earliest date when the Court can accommodate a hearing which I estimate will require three hours. The date will be subject to Mr. Graham’s availability, provided that if his calendar cannot accommodate the date set, he shall forthwith consult the Trial Office, and Jayne and Lee, regarding an alternative date, and bring a motion without delay to amend the timetable that follows.
CONCLUSION AND ORDER
151For the reasons stated above, it is ordered that:
Matthew Levers shall pay the costs of Jayne Arvenitis and Lee Levers to March 4, 2016, in the proceedings pursuant to the Substitute Decisions Act, 1992, in the amount of $50,307.95, by August 15, 2017.
Matthew Levers shall, by July 15, 2017, serve on Jayne Arvanitis, by email at zakyn@rogers.com, and on Lee Levers, by email at leelevers@hotmail.com, his revised accounts for the period from July 21, 2015 to the present; verified by Affidavit, in the form prescribed by Rule 74.17(1), (2) and (3) of the Rules of Civil Procedure, and file a copy of same with the Court.
Jayne Arvanitis and Lee Levers shall, by August 15, 2017, serve and file their Notice(s) of Objection to Accounts, if any.
Matthew Levers shall, by August 31, 2017, deliver his reply, if any.
The hearing of Matthew Levers’ Application to pass his Accounts as Estate Trustee is adjourned to October 31, 2017 at 10:00 a.m.. Three hours have been reserved for that purpose. The parties are to contact the Brampton Trial Office to confirm five days prior to October 31, 2017.
The hearing date of October 31, 2017 will be subject to Mr. Graham’s availability, provided that if his calendar cannot accommodate the date set, he shall forthwith consult the Trial Office, and Jayne and Lee, regarding an alternative date, and bring a motion without delay to amend the timetable that follows.
Price J.
Released: July 16, 2017
CITATION: Arvanitis v. Levers, 2017 ONSC 3758
COURT FILE NO.: CV-14-1459-ES
DATE: 2017-06-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JAYNE L. ARVANITIS and LEE G. LEVERS
Applicant
- and –
GERALD THOMAS LEVERS and MATTHEW CHARLES JAMES LEVERS
Respondent
ENDORSEMENT
Price J.
Released: July 16, 2017
Footnotes
- Courts of Justice Act, R.S.O. 1990 c. C.43, s. 131.
- Salter v. Salter Estate , 2009 28403 (ON SC), 50 E.T.R. (3d) 227, at para. 6.
- Reid Estate v. Reid Estate, 2010 ONSC 3800, at para. 3.
- Geffen v. Goodman Estate, 1991 69 (SCC), [1991] 2 S.C.R. 353.
- McDougald Estate v. Gooderham, 2005 21091 (ON CA), 255 D.L.R. (4th) 435, at paras. 78-80. See also: Sawdon Estate, 2014 ONCA 101, at paras. 82-107, particularly para. 84.
- McDougald Estate, supra, at para. 85.
- Sawdon Estate, supra, at paras. 95 to 99.
- Jimenez v. Romeo, 2009 68472 (ON SC), at paras. 62 to 64.
- White v Gicas, 2014 ONCA 490, at para. 70 to 72.
- Penney Estate v. Resetar, 2011 ONSC 575, per Kruzick J., at para. 19.
- Fiacco v. Lombardi, 2009 ONSC 46170, at para. 1.
- Fiacco, supra, at paras. 32-33.
- Fiacco, supra, at para. 36.
- Ziskos v. Miksche, 2007 46711 (ON SC), 2007 ONSC 46711, [2007] O.J. No. 4276 (S.C.J.) at para. 75.
- The Bank of Nova Scotia Trust Company and Hodgins v. Zo, 2011 ONSC 5201, at paras. 16-18.
- Teffer v. Schaefers, 2009 21208 (ON SC), at paras. 33 and 34.
- Brillinger v. Brillinger-Cain, 2007 23331 (ON SC); and Glen v. Brennan, 2006 343 (ON SC).
- Wilson (Attorney of) (Re), [2000] O.J. No. 2068 (Q.L.), at paras. 17, 28-31 (Sup. Ct.).
- Sentineal v. Sentineal, 2011 ONSC 7679, at para. 8.
- Wercholoz v. Tonellotto, 2013 ONSC 1106.
- Lily Man-Lee Chu v. Kin Kwok Chang, 2010 ONSC 294, at paras. 37-38.
- Ziskos v. Miksche, 2007 46711 (ON SC).
- See for example Vopni v. Norris, (1994) 73 O.A.C. 305 (Ont. Div. Ct.), where the court found a motions judge erred in relying on conflicting affidavits upon which no cross-examinations had taken place in finding that a party’s conduct warranted solicitor and client costs.
- Neill v. Pellolio, 2001 ONCA 6452.
- Smither v. Smither (2002), 45 E.T.R. (2d) 304, at para. 18.
- Lisowick v. Alvestad, 2015 ONSC 257, at paras. 28-30.
- Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
- 394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238, [2010] O.J. No. 5692 (Q.L.) (Sup. Ct.), at para. 10.
- Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291; and Moon v. Sher, 2004 39005 (ON CA), 246 D.L.R. (4th) 440.
- Gratton-Masuy Environmental Technologies Inc. (c.o.b. Ecoflow Ontario) v. Building Materials Evaluation Commission, 2003 8279 (ON SCDC), at para. 17.
- Patene Building v. Niagara Home, 2010 ONSC 468.
- Boucher, supra.
- See the cases referenced in Fazio v. Cusumano, 2005 33782 (ON SC), at para. 8.
- Bell Canada v. Olympia & York Developments Limited et. al., 1994 239 (ON CA).
- Standard Life Assurance Company v. Elliott , 2007 18579 (ON SC).
- Geographic Resources Integrated Data Solutions Ltd. v. Peterson, 2013 ONSC 1041, at paras. 7, 11-16.
- “Information for the Profession” bulletin (“the Costs Bulletin”) from the Costs Sub-Committee of the Rules Committee (that the Costs Sub-Committee of the Rules Committee issued to replace the Costs Grid, which it repealed in 2005). The Costs Bulletin has advisory status only and not statutory authority, as it was not included in the Regulation that repealed the Costs Grid.
- First Capital (Canholdings) Corp. v. North American Property Group, 2012 ONSC 1359.
- Available online at http://www.bankofcanada.ca/rates/related/inflation-calculator/.
- Hanis v. University of Western Ontario, 2006 ONSC 23155, at para. 46.
- Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
- Newell v. Newell, 2010 ONSC 5010
- Elfrieda Bott v. Macaulay, 2005 29341 (ON SC), at paras. 19-21.
- In the Estate of Stefanie Aber, deceased, 2015 ONSC 5123, at paras. 15-16; Armitage v. The Salvation Army, 2016 ONSC 2043, per T.D. Ray, J, at para. 12.
- Laing Estate v. Hines, 1998 6867 (ON CA), at para. 8.
- Estate of Stefanie Aber, supra, at paras. 20, 31.
