Court File and Parties
Barrie Court File Nos.: CV-17-1537-00 and CV-17-1795-00 Date: 20181115 Ontario Superior Court of Justice
Between:
Brenda Deshevy, Applicant – and – Irene Deshevy, Linda Deshevy and the Office of the Public Guardian and Trustee, Respondents
Counsel: Corey Wall, for the Applicant Daniel C. Sirois, for the Respondent, Irene Deshevy Barrie Hayes, for the Respondent, Linda Deshevy
And Between:
Linda Deshevy, in her personal capacity and as Power of Attorney for Irene Deshevy, Applicant – and – Brenda Deshevy, Jeffrey Deshevy, Irene Deshevy and the Office of the Public Guardian and Trustee, Respondents
Counsel: Barrie Hayes, for the Applicant Corey Wall, for the Respondent, Brenda Deshevy Jeffrey Deshevy, Respondent, on his own behalf Daniel C. Sirois, for the Respondent, Irene Deshevy
Heard: October 26, 2018
Reasons for Decision on Costs
VALLEE, J.:
[1] This concerns costs with respect to two applications that were issued relating to the care of Irene Deshevy and management of her property. Some background is required to understand why these two applications were issued, the positions that the parties took and how the matter was resolved. The following evidence is set out in the affidavit of Brenda Deshevy, sworn October 3, 2017, and the affidavit of Linda Deshevy, sworn December 6, 2017.
[2] Irene is 90 years old. She has lived in a long-term care facility in Sudbury, Finlandia Village, since March 29, 2017. She has seven children, Art (wife Linda), Bruce (wife Sue), Daniel (wife Cathie), Martin, Jeffrey, Thomas and Brenda.
[3] According to Linda’s affidavit, prior to Linda’s retirement, she had been the Director of Clinical Records at a hospital in Sudbury. Irene required heart surgery in 2012. Linda printed blank power of attorney forms from the government of Ontario website. She assisted Irene to use the forms in which Irene appointed Linda as her attorney for property and personal care before her surgery. The powers of attorney were not revoked.
[4] Prior to being placed in Finlandia Village, Irene lived in her own home in Sudbury and spent time with her various children. Jeffrey also lived in Irene’s home from time to time and assisted her. Brenda, Bruce and Sue live in Barrie. Art, Linda, Daniel and Cathie live in Sudbury.
[5] In late 2016, Irene began to have memory problems. In November, her driver’s licence was revoked.
[6] Brenda stated that on January 24, 2017, Irene called her in tears saying that Art was yelling at her about papers and that Linda and Art “wanted her out”. Brenda told Irene that she would come and get her in three days. Two days later, Art called Brenda and told her that Irene was arguing with him and had hit him on the head with her purse. Irene tried to leave Linda and Art’s house. She went to the hospital via ambulance where she presented in a state of confusion and was admitted.
[7] On February 12, 2016, after Irene had been hospitalized, Linda sent an email to Brenda and Sue, indicating that the hospital had recommended that Irene undergo a capacity assessment. Linda stated, “I will of course share this report with all of you when available.” Linda stated that she had fully assumed her duties as attorney by January 31, 2017. On March 3, 2017, Irene was assessed pursuant to the Substitute Decisions Act, 1992 and was found incapable regarding property and personal care except for hygiene.
[8] Linda stated that in March 2017, she asked Brenda to stop calling her because Brenda would, “yell scream and cry on the phone.” Linda asked Brenda to contact her only by email so that they would both have a record of the conversation.
[9] Linda stated that various long-term care facilities were considered, some in the Barrie area; however, they were either too expensive or had long waiting lists. A bed became available at facility in Midland but Sue stated that it would be too far to travel from Barrie. Exhibits to Linda’s affidavit show that between March 5 and 28, 2017 she sent emails to Brenda, Cathie and Sue, as a group, regarding the efforts being made to find a spot for Irene. In a further email dated March 28, 2017, Linda advised Sue and Brenda that a bed was available for Irene at Finlandia.
[10] Brenda stated that on March 29, 2017, Linda moved Irene to Finlandia Village on a temporary basis against Irene’s wishes. Irene wanted to be in Barrie closer to Brenda, Bruce and his family. Irene’s placement at Finlandia Village has now become a permanent arrangement.
[11] Brenda stated that in April 2017, Irene had asked her to get some things for her from a safe in the house. Brenda looked in the safe but the items were not there. Brenda sent Linda an email dated April 8, 2017, in which she appears to be shocked that the contents of the safe were removed. Subsequently, Cathie asked her if she had any of Irene’s jewelry. She did not have any of it. Cathie advised her that Linda had taken all of the jewelry that was in the safe, as well as other papers including Irene’s will. Brenda’s email went on to describe the jewelry in some detail and asked for reassurance from Linda that she had Irene’s items and that they would be kept safe for Brenda. Brenda stated that she had only spoken to Sue about the matter. The email concludes with, “I’m very sentiment [sic] right now… Please don’t take this email in the wrong way… Some days I hope I die with her… And I’m sure there will be part of me that does!! Just like my daddy!!! Then life goes on… Bren xo.”
[12] Linda had attended at Irene’s house with Cathie and cleaned out the safe. It did contain Irene’s papers and jewelry. Linda replied to Brenda’s email [1]. It appears that Linda had received a phone call from Martin who was upset that someone was taking things from Irene’s house. Linda stated to Brenda, “Yes I do take your email wrong.” Linda stated that contrary to what Brenda had said in the email, she had already talked to Martin about this. Linda acknowledged having “all the legal papers” because as attorney, it was her responsibility to secure them until Irene passed away. She stated that she would allow Brenda and Art to have access to them when Irene passed away [2]. Linda stated that she had been concerned about Irene’s jewelry for some time because Irene did not know where her wedding rings were. She acknowledged that the safe was empty and that she had taken the jewelry. She went on to state, “You insult me if you think I would ever take one piece of mom’s jewelry. That stuff is not important to me and there is nothing I want.” She also said, “I was going to give you this jewelry now, but in retrospect, I will keep it until such time as the will is probated. You will get everything I have at that time. However I do not have most of the items you’ve listed.”
[13] This seems to be the beginning of the family disagreement that led up to litigation. On October 16, 2017, Brenda issued a notice of application in which she requested, among other things: (a) an order removing Linda as attorney; (b) an order requiring Linda to produce copies of the power of attorney documents and Irene’s Last Will and Testament; (c) an order that Linda provide an accounting along with a complete list of assets; (d) an order that any capacity assessment carried out on behalf of Linda be produced; (e) a declaration that Irene is incapable with respect to property and personal care; and, (f) an order appointing Brenda as guardian of property and personal care.
[14] In her affidavit, Brenda made a number of allegations against Linda including that she had failed to act in Irene’s best interests. She stated that her application for guardianship was supported by her brothers Martin, Bruce and Jeffrey. Brenda, who was not working, wanted to bring Irene to her home and care for her personally along with the assistance of her partner.
[15] On December 1, 2017, Linda issued a notice of application in response in which she requested, among other things: (a) an order declaring the powers of attorney valid; (b) an order dismissing Brenda’s application; (c) an order appointing counsel for Irene; (d) an order for possession and a writ of possession with respect to Irene’s residential property; and, (e) an order that Jeffrey pay occupation rent.
[16] Linda disputed a number of Brenda’s allegations calling them vague and unsubstantiated. She stated that her application was supported by Art, Thomas and Daniel who also swore affidavits that were included in Linda’s application record.
[17] At this point, the family lines were drawn.
[18] After Linda issued her notice of application, Irene’s doctor sent a letter, dated December 4, 2017, regarding Irene’s current medical diagnoses. He stated that Irene had sustained a hip fracture in 2017 which required an operation. Since then, she had not been able to walk. She required one or two people to transfer her from her wheelchair to her bed. His prognosis was that she would not walk again. He stated that she was suffering from “Dementia - Alzheimers type” and was totally dependent on care for all of her activities of daily living and required supervision 24 hours per day. It appears that Irene required more care than could be provided by Brenda in her home.
[19] After certain events occurred which are set out below, Brenda withdrew her application.
The Issue
[20] Are Linda and Irene entitled to recover their costs from Brenda?
Applicable Law
[21] Rule 38.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, states that where an application is abandoned or deemed to have been abandoned, the respondent on whom the notice of application was served is entitled to the cost of the application, unless the court orders otherwise.
[22] Rule 57.01 of the Rules sets out a number of factors that the court ought to take into account in exercising its discretion regarding awarding costs.
[23] The modern approach to fixing costs and estate litigation is to carefully scrutinize the litigation and, unless the court finds that one or more public policy considerations applies, to follow the cost rules that apply in civil litigation. Considerations may include where the litigation arose as a result of the actions of the testator or those with an interest in the residue of the estate or where the litigation was reasonably necessary to ensure the proper administration of the estate. If there were reasonable grounds upon which to question the execution of the will or the testator’s capacity in making the will, it is again in the public interest such questions be resolved without costs to those questioning the wills validity. (See Canada Trust v. Gooderham, at paras 78-80)
[24] In an unsuccessful will challenge, a plaintiff may be ordered to pay partial indemnity costs to the estate. A plaintiff should be given reason to pause and reflect upon the consequences of unsuccessful litigation before commencing it. (See Beaurone v. Beaurone, (1997), 31 O.T.C. 236 (Gen. Div.))
Irene’s Position
[25] Irene’s counsel, Mr. D. Sirois, was appointed to represent her. He stated that he met with her twice. Even though she lacks capacity, she could share her views. She advised him that she was content with her care at Finlandia and was content with having named Linda as her attorney.
[26] Mr. Sirois stated that he had to seek costs because of the nature of his retainer. This matter was important with respect to Irene. Brenda was asking to substitute her wishes in contrast to Irene’s intention. Brenda did not specifically attack the power of attorney nor did she attack Irene’s capacity to grant the power of attorney. Mr. Sirois acknowledged that Brenda is Irene’s only daughter and believed that she should be taking care of her mother. Irene’s dementia meant that she could not be cared for by Art and Linda. He acknowledged that Brenda did not have bad intentions with respect to commencing her application.
[27] According to his costs outline, Mr. Sirois’ first work was done on January 11, 2018. He did not file any documents in either application. His work consisted of reviewing emails and correspondence from other counsel, preparing correspondence, attending meetings and attending on this motion. He requests costs of $10,000 on a partial indemnity basis against Brenda. His bill of costs shows $13,134.27 for full indemnity.
Linda’s Position
[28] Linda’s counsel stated that Brenda’s application was without merit. Linda brought her application in which she requested that Brenda’s application be dismissed. A meeting was held in which there was a discussion that Brenda would be well advised to withdraw her application. Nevertheless, there were three more appearances before this occurred. They related to Jeffrey’s living in Irene’s house, a writ of possession and occupation rent. Brenda’s materials, the consent and the motion to withdraw, were not ready until August 2018 [3].
[29] Counsel relies on Fiacco v. Lombardi, 2009 ONSC 4500, specifically para 33 in which the court stated, 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 incapable person, a court must examine what, if any, benefit the incapable person derived from the legal work which generated those costs.
[30] Counsel submits that there was no benefit to Irene from any of the legal fees incurred. Linda’s cost should be paid by Brenda. Her application had no merit. Linda put forward a strong response to Brenda’s application. She tried to stop it in order to avoid costs. Linda actually incurred $28,000 of legal fees. Partial recovery would be $13,000. Substantial recovery would be $20,000. Linda requests $17,000 all-inclusive.
Brenda’s Position
[31] Brenda’s counsel acknowledged that she abandoned the application. Therefore, the opposing parties are presumptively entitled to costs. He submitted that this court should exercise its discretion under Rule 57 and order either no costs or a reduced amount of costs to reflect fairness and reasonableness. Rule 57.01(1)(0.b) provides that the court may consider as a factor, the amount of costs that an unsuccessful party could reasonably expect to pay.
[32] Brenda brought her application in good faith. She wanted an accounting from Linda. Linda only provided financial information after Brenda commenced the application. A codicil was an issue. Brenda did not receive it until after her application was commenced, despite the fact that she is a co-trustee. Irene is one of the most important people in Brenda’s life. A lack of communication compelled Brenda to bring the application. Brenda believed that Irene wanted to live in Barrie, not at Finlandia.
[33] The report was contrary to what Brenda understood to be Irene’s views. It came as a surprise to her. When she received it, she determined that continuing with the litigation was not feasible. She offered to withdraw the application without costs, which was not accepted by the respondents. Brenda did not take a vexatious or unreasonable position.
[34] The responsibility for the proceedings is somewhat mixed. No information had been provided to Brenda. This spurred the proceedings. Had Linda provided the information that was requested in Brenda’s affidavit, the application might not have been required.
[35] With respect to complexity, this was a straightforward application to obtain information because it was not being provided by the attorney.
[36] Rule 57 sets out guidelines for maximum rates for lawyers. These must be adjusted for inflation. Counsel analysed the rates of Mr. Hayes, his associate Ms. Hayes, his clerk and assistant. He adjusted them for inflation. He submitted that fees requested for the assistant should not be allowed because her work is properly accounted for in Mr. Hayes’ overhead. Counsel stated that after considering the maximum amount for fees in the guideline and then adjusting those amounts for inflation, full indemnity amounts to $9,942.41 where as partial indemnity based on fifty percent amounts to $4,971.21. With respect to disbursements, $187.50 was listed as “client disbursement” and $746.96 was listed as “administrative disbursement.” These amounts should not be allowed because one cannot properly determine their nature.
[37] Counsel stated that Brenda has a limited ability to pay costs. Her income consists of Ontario Disability Support Plan payments. He stated that this court should exercise its discretion and make an order of no costs or reduced costs, given the circumstances.
Analysis
[38] The facts in this matter are quite different from those in Fiacco. A mother had appointed four of her children to act jointly as guardians. At the time of litigation, she was elderly, suffered from dementia and lived in a nursing home. Difficulties arose among the children specifically with respect to assets that they variously held jointly with the mother. Two of the children brought a motion seeking directions. The court found that the respondents’ misconduct was serious and strained the ability of the estate to pay for the mother’s ongoing needs. In the end, both sides sought costs. The respondent sought costs payable by the estate. The court found that substantial indemnity costs against the respondents was justified because otherwise the mother’s estate would have been required to bear these costs. This would be unjust, given that the sole cause of the litigation was the respondents’ conduct.
[39] In this matter, Brenda believed, although incorrectly, that Irene wanted to live in Barrie. She appears not to have accepted Linda’s response that a specific facility in Barrie was beyond Irene’s means. Some friction developed between Brenda and Linda. I note that the first information that Linda provided with respect to Irene’s finances was set out in Linda’s affidavit sworn December 6, 2017, after Brenda commenced her application.
[40] Linda states that Brenda became emotional in March, 2017. She was yelling and crying during phone calls. Linda’s emptying Irene’s safe and taking away the testamentary documents and jewelry without any notice to Brenda was perhaps ill advised. It appears to have been very upsetting to Brenda. There was a spiteful element in Linda’s comment that she was going to give the jewelry to Brenda but then changed her mind and decided to keep it until Irene passed away.
[41] An attorney who is also a family member sometimes has a difficult job. She must act in the best interests of the incapable person but she must also address the concerns of other family members in an objective manner.
[42] I find that Brenda’s application was brought in good faith. The litigation resulted because the parties failed to communicate. I accept Brenda’s counsel’s submissions that when Brenda received the s. 3 report, she realized that her perception of her mother’s wishes was incorrect. She did not pursue the application once she had all of the relevant facts. She agreed to withdraw the application on March 8, 2018, four months after it was issued, which was appropriate in the circumstances [4]. There were no cross-examinations on the affidavits.
[43] Irene did not benefit from the litigation; however, both Brenda and Linda were doing what they thought was in Irene’s best interest. This is not a case of misconduct or bad faith.
[44] Brenda has a very modest income from ODSP. She will be responsible for her own legal fees. She has no ability to pay a significant costs award.
Conclusion
[45] The court’s discretion to fix costs is found in s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. A costs award should reflect what the court views as a fair and reasonable amount to be paid by the unsuccessful party. Ultimately, in fixing an amount for costs, the overriding principles are fairness and reasonableness. See Boucher v. Public Accountants, 71 O.R. (3d) 291.
[46] Based on the record before me, in my view, a fair, reasonable and proportionate costs award for Linda’s application is $4,000 all inclusive, which Brenda shall pay to Linda. If Brenda needs time to pay this amount, the court expects that counsel will work out an arrangement.
[47] Irene’s fees shall be paid from her estate.
Madam Justice M.E. Vallee
Released: November 15, 2018